Economy
Nigeria’s Inflation to Cool to 24.8%, GDP at 3.3% in 2024—World Bank
By Adedapo Adesanya
Nigeria’s inflation rate will drop to 24.8 per cent in 2024, and the Gross Domestic Product (GDP) is expected to expand by 3.3 per cent in the same year, the World Bank has revealed.
In its latest report released on Monday, the Bretton Wood institution said this would happen as inflation cooled in the Sub-Saharan part of Africa, where Nigeria belongs.
According to the most recent data from the National Bureau of Statistics (NBS), inflation increased by 31.7 per cent in February from 29.9 per cent recorded in January.
“Inflation is cooling in most Sub-Saharan African economies but remains high. The median inflation in the region is projected to fall from 7.1 per cent in 2023 to 5.1 per cent in 2024 and 5 per cent in 2025–26.
“The normalization of global supply chains, steady decline of commodity prices, and impacts of monetary tightening and fiscal consolidation are contributing to a lower rate of inflation in the region,” the World Bank stated.
Business Post recalls that the Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, projected that inflation should moderate to 21.4 per cent this year.
In the report released yesterday, the World Bank cut down its economic growth forecast for the country for 2025 to 2026 by 0.1 per cent to 3.6 per cent from its January projection of 3.7 per cent.
“Growth in Nigeria is projected at 3.3 per cent in 2024 and 3.6 per cent in 2025–26 as macroeconomic and fiscal reforms gradually start to yield results,” it added.
“A more stable macroeconomic environment, as the reforms’ initial shock dissipates, will lead to sustained but still slow growth of the non-oil economy.
“The oil sector is expected to stabilize with recovery in production and slightly lower prices. Structural reforms will be needed to foster higher growth.
“Average inflation will remain elevated at 24.8 per cent in 2024, although it is expected to ease gradually to 15.1 per cent by 2026 on the back of monetary policy tightening and exchange rate stabilization,” it further said.
According to the World Bank, food inflation and the weakening of domestic currencies are still major drivers of inflation across countries in the Sub-Saharan Africa region.
“By February 2024, about one-third of the Sub-Saharan African countries with monthly available food price information (14 of 40 countries) had double-digit year-on-year rates of food inflation, with the fastest increases experienced in Ethiopia, Malawi, Nigeria, Sierra Leone, and Zimbabwe.”
It also noted that the rate of poverty reduction in the region is slow and that Nigeria and the Democratic Republic of Congo account for one in three of those living in extreme poverty.
“The region also faces the triple challenges of high extreme poverty, high inequality, and low transmission of growth to poverty reduction.
“The speed of poverty reduction has decreased tremendously since 2014. The rate of reduction was 3.1 per cent between 2010 and 2014, subsequently decreasing to 1.2 per cent between 2014 and 2019,” the World Bank said.
“In contrast, the rest of the world reduced extreme poverty on average by 9.2 per cent per year within the same time horizon, suggesting that the African region is falling further behind.
“In addition, there is substantial regional heterogeneity in where the poor are with Nigeria and the Democratic Republic of Congo accounting for one in three of those living in extreme poverty,” it stated, adding that the region can accelerate growth and poverty reduction substantially by tackling inequality, specifically structural inequality.
By Adedapo Adesanya
Crude oil went down on Tuesday after a projection showed steady demand in the world’s largest oil producer, the United States, for 2025, Brent futures declining by $1.09 or 1.35 per cent to settle at $79.92 a barrel and the US West Texas Intermediate (WTI) crude losing $1.32 or 1.67 per cent to finish at $77.50 a barrel.
On Tuesday, the US Energy Information Administration said the country’s oil demand would remain steady at 20.5 million barrels per day in 2025 and 2026, with domestic oil output rising to 13.55 million barrels per day, an increase from the agency’s previous forecast of 13.52 million barrels per day for this year.
Also, the oil market shrank a few days after prices gained following new US sanctions on Russian oil exports to India and China.
On Monday, prices jumped 2 per cent after the US Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that transport oil as part of Russia’s so-called shadow fleet of tankers.
Analysts say this move could have a significant price impact on Russian oil supplies from the fresh sanctions, however, their effect on the physical market could be less pronounced than what the affected volumes might suggest.
ING analysts estimated the new sanctions had the potential to erase the entire 700,000 barrels per day surplus they had forecast for this year, but said the real impact could be lower.
Uncertainty about demand from China, the world’s largest oil importer, could impact tighter supply this year.
China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.
Meanwhile, the American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 2.6 million barrels for the week ending January 10.
For the week prior, the API reported a draw of 4.022 million barrels in US crude oil inventories amid build season, while product inventories saw a hefty build.
In 2024, crude oil inventories dropped by more than 12 million barrels, according to the API’s inventory data. In the first few weeks of 2025, crude inventories have shed more than 6.6 million barrels.
Official data from the US EIA will be due later on Wednesday, confirming the actual level of stockpiles.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited came under heavy selling pressure on Tuesday, going down by 1.66 per cent as investors embarked on profit-taking after most stocks on the trading platform gained in the past few trading sessions.
It was observed that the industrial goods sector was the most affected yesterday as it went down by 4.99 per cent due to the decline suffered by Dangote Cement and others.
The insurance continued its downward trend during the day as it lost 2.80 per cent, the consumer goods counter fell by 0.27 per cent, and the banking index shed 0.10 per cent, while the energy sector appreciated by 0.29 per cent.
At the close of business, the All-Share Index (ASI) deflated by 1,745.16 points to settle at 103,622.09 points compared with the previous trading day’s 105,367.25 points and the market capitalisation moderated by N1.1 trillion to finish at N63.188 trillion versus Monday’s N64.252 trillion.
Business Post reports that investor sentiment remained weak on Tuesday after the bourse ended with 41 depreciating equities and 23 appreciating equities, representing a negative market breadth index.
Honeywell Flour lost 10.00 per cent to trade at N9.54, Dangote Cement declined by 9.98 per cent to N431.00, Julius Berger crashed by 9.98 per cent to N139.80, Sovereign Trust Insurance decreased by 9.68 per cent to N1.12, and Prestige Assurance tumbled by 9.30 per cent to N1.17.
On the flip side, Northern Nigerian Flour Mills appreciated by 10.00 per cent to N45.10, Livestock Feeds grew by 9.91 per cent to N6.10, Academy Press expanded by 9.90 per cent to N3.22, University Press increased by 9.82 per cent to N4.81, and Neimeth gained 9.76 per cent to quote at N3.15.
During the session, market participants bought and sold 503.3 million shares valued at N12.6 billion in 12,900 deals compared with the 505.8 million shares worth N8.1 billion traded in 14,259 deals a day earlier, indicating a rise in the trading value by 55.56 per cent and a drop in the trading volume and number of deals by 0.49 per cent and 9.53 per cent, respectively.
The most active stock for the session was GTCO with 54.4 million units worth N3.2 billion, Nigerian Breweries transacted 32.2 million units for N1.0 billion, Universal Insurance traded 30.8 million units valued at N22.6 million, AIICO Insurance exchanged 26.6 million units worth N47.2 million, and Chams transacted 20.0 million units valued at N40.9 million.
By Adedapo Adesanya
The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).
In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.
Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.
According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.
These bonds have some special features. They are tax-free under both company and personal tax laws.
Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.
However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.
This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.
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