Economy
Policies to Increase National Disposable Income
By FSDH Research
If an individual, business, government or, by extension, a country wants to increase its spending and savings power, there must be a plan to increase the ability to generate income.
Any entity that desires to increase its spending and savings without a plan to increase its ability to generate income will surely have to borrow to fill the gap, all things being equal. And you know that a borrower can easily become a slave to a lender if he is not able to meet his obligations to the lender.
FSDH Research looks at the total income that was available for use by residents and firms in Nigeria (usually referred to as National Disposable Income or NDI) between Q1 2016 and Q2 2018 and concludes that it was weak and cannot take the country to the ‘Promised Land’.
Therefore, something urgent must be done so that the country will not continue to rely on excessive borrowing or avoid a situation where savings will continue to drop.
The total income available for use by residents in Nigeria comes from four major sources. The total remuneration of employees in the formal sector, operating surplus (profit of businesses), total taxes payable on products, minus any subsidies received for the product, and the net income, transfer and profit from abroad.
Our analysis shows that operating surplus dominated the total national disposable income, which represented an average of 69% during the period.
However, the growth in the inflation rate during the same period, at 37.14%, was higher than the growth in the operating surplus at 32.85%. Therefore, in reality, the operating profit contracted.
Again, household compensation was low. This is made up of salaries of employees in the formal sector including benefits in kind (such as pensions).
Our analysis shows that household compensation contributed on average 27% to the total NDI between Q1 2016 and Q2 2018. A combination of profit of firms and household compensation contributed 96% of total NDI.
Nevertheless, it grew by 38.33% marginally higher than the inflation rate during the period.
The high costs of running businesses in Nigeria caused by ineffective institutions to enforce law and order, insecurity, defective infrastructure, and inadequate support systems for new businesses are the major factors responsible for the weak growth in profit.
The high unemployment level in the country, insufficient new job opportunities and the large informal sector are all responsible for weak growth in household compensation.
FSDH Research offered suggestions into the high unemployment situation in Nigeria in our report entitled ‘High Unemployment Rate in Nigeria – FSDH Research Suggests Solutions’.
The weak NDI limits consumption of households, government and investments by firms. We note that little income is channelled into savings and investments. This is also one of the reasons the interest rate on loans is high, and a single digit interest rate may not be achievable in the short-run. As noted earlier, one can also link the weak income generation to the weak household consumption. Low level of household consumption also reduces government tax, particularly Value Added Tax (VAT). In addition, it reduces the amount that is available to purchase goods and services produced by firms. Ultimately sales drop, profit drops, tax income drops and a firm will not be able to sell as much as it should sell to enable it to expand production; the firm will not be enabled to employ more people.
It is cheaper to stimulate the economy through appropriate policies to grow the NDI, than relying on borrowing. There must be removal of all administrative delays in obtaining licences and approvals.
This includes titles to landed properties for building and agricultural purposes. Government should also invest in data generation in the solid mineral sector. It can sell the data to potential investors interested in the sector. This will reduce the risk inherent in this untapped sector of the economy.
There is the need for human capacity building in business management and leadership. This must not be left to business schools, which are only affordable to a few people.
By Adedapo Adesanya
The National Insurance Commission has issued new guidelines for the collection, management, and administration of the Insurance Policyholders’ Protection Fund.
In a circular issued to all insurance institutions on Tuesday, the regulator also set May 31, 2026, as the deadline for insurers to submit their assessment returns for the 2025 financial year.
Recall that on August 5, 2025, President Bola Tinubu signed into law the Nigerian Insurance Industry Reform Act ( NIIRA 2025).
This landmark legislation repeals the Insurance Act 2003, and consolidates related provisions, ushering in a modern regulatory framework. It lays a strong foundation for sustainable growth and increased investment in the country’s insurance sector.
The commission said the guidelines were issued in exercise of its powers under the 2025 Act and other existing insurance laws and regulations to provide regulatory clarity, improve guidance, and ensure ease of compliance across the industry.
According to NAICOM, the guidelines establish a comprehensive structure for the operation of the IPPF, which serves as a statutory safety net to protect insurance policyholders in the event of distress or insolvency of a licensed insurer or reinsurer. The framework also provides direction on the reimbursement of loans by insurers and reinsurers.
NAICOM stated, “The guidelines ensure regulatory clarity, guidance and ease of compliance, as it provides a comprehensive regulatory framework for the collection, management, and administration of the Fund, which serves as a statutory safety net designed to protect insurance policyholders against distress and insolvency of a licensed insurer or reinsurer, including guidance for the reimbursement of loans by an insurer or reinsurer.
“Please be informed that the IPPF Assessment Returns in respect of the year 2025 shall be submitted to the Commission not later than 31st May 2026, while subsequent submissions shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund.”
By Adedapo Adesanya
The Dangote Refinery on Wednesday returned the petrol price to N1,200 per litre, less than 24 hours after it increased it by 5 per cent.
The private refinery had raised the ex-depot price by N75 on Tuesday, citing pressure from volatile global oil markets, but quickly brought it back to N1,200 per litre from N1,275 per litre.
The swift downward review is directly linked to a sharp drop in international crude prices. Brent crude has plunged to $95.05 per barrel, after a 13 per cent decline, while the US West Texas Intermediate (WTI) crude closed at $97.18, recording nearly a 14 per cent drop.
This development comes after US President Donald Trump announced a conditional two-week ceasefire with Iran, which eased fears of immediate supply disruptions in the global oil market.
“This will be a double-sided CEASEFIRE!” Trump said on social media, marking a sharp reversal from his earlier warning that “a whole civilisation will die tonight” if Iran failed to comply with US demands.
Iran’s Foreign Minister, Mr Abbas Araqchi, confirmed that the country would halt attacks provided strikes against Iran cease and transit through the Strait of Hormuz is coordinated by Iranian forces.
Despite the breakthrough, tensions remain elevated across the region, with several Gulf states reporting missile launches, drone activity, or issuing civil defence warnings.
While oil prices have fallen back below $100, they remain significantly elevated after surging by a record amount in March. Market analysts noted that regardless of how successful the ceasefire is, geopolitical risk related to the Strait of Hormuz is likely to remain elevated for the foreseeable future under the control of Iran.
By Adedapo Adesanya
Crude oil deliveries from the Nigerian National Petroleum Company (NNPC) Limited to the Dangote Petroleum Refinery doubled in March, boosting prospects for improved fuel availability.
This was revealed by the chief executive of Dangote Industries Limited, Mr Aliko Dangote, on Tuesday, when he received the Deputy Secretary-General of the United Nations, Mrs Amina Mohammed, at the industrial complex in Ibeju-Lekki, Lagos.
While speaking on feedstock supply, Mr Dangote commended the NNPC for increasing crude deliveries to the refinery in March, noting that volumes rose to 10 cargoes—six supplied in Naira and four in Dollars—to support domestic fuel availability, according to a statement by the Refinery.
“Last month, they gave us six cargoes for Naira and four cargoes for Dollars,” he said.
Despite the improvement, Mr Dangote noted that the supply remains below the 19 cargoes required for optimal operations, with the refinery continuing to bridge the gap through imports from the United States and other African producers.
He also expressed concern over the unwillingness of international oil companies operating in Nigeria to sell to the refinery, stating that their preference for selling crude to traders forces it to repurchase at higher costs, with broader implications for the economy.
Mr Dangote added that the refinery is seeking increased access to domestically priced crude under local currency arrangements as part of efforts to moderate fuel costs and enhance long-term energy and food security across the continent.
On her part, Mrs Mohammed underscored the strategic importance of Dangote Industries Limited -particularly Dangote Fertiliser Limited—in addressing Africa’s mounting food security challenges, while calling for stronger global partnerships to scale its impact.
Mrs Mohammed said the United Nations would prioritise amplifying scalable solutions capable of mitigating the continent’s food crisis, describing Dangote’s integrated industrial model as a critical pathway.
“I think the UN’s job here is to amplify and to put visibility on the possibilities of mitigating a food security crisis, and this is one of them,” she said. “I hope that when we go back, we can continue to engage partners and countries that should collaborate with Dangote Industries.”
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