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 Senate has passed a bill to repeal and re-enact the law establishing the National Insurance Commission (NAICOM), paving the way for the regulatory agency to be renamed the Insurance Regulatory Commission (IRC).
The legislation, titled the Insurance Regulatory Commission (Establishment) Bill, 2026, was passed after the Senate considered and adopted the report of its committee on banking, insurance and other financial institutions.
The Chairman of the committee, Mr Adetokunbo Abiru, the senator representing Lagos East, who presented the report, stated that the proposed legislation was necessary because the existing National Insurance Commission Act of 1997 had become outdated and no longer reflected the realities of Nigeria’s evolving insurance industry or global regulatory standards.
According to the Senate, the decision to change the Commission’s name was informed by the need to eliminate confusion associated with the existing designation and to better reflect the institution’s regulatory mandate within Nigeria’s insurance industry.
The bill also provides legal protection for the commission and its officers against adverse claims arising from the lawful execution of their statutory duties.
However, he noted that the commission’s enabling law had become obsolete, exposing significant regulatory gaps that required urgent legislative intervention.
‘The current National Insurance Commission Act 1997 is outdated and does not adequately address the emerging economic growth, needs and development of the insurance business,” the lawmaker said.
He explained that the new legislation seeks to strengthen the independence of the commission by empowering it to make regulatory decisions without undue influence in the country’s insurance sector.
According to him, the bill also enhances the commission’s authority to exchange information and collaborate with domestic and international regulatory bodies, issue regulations, guidelines, standards and directives on insurance-related matters, and intervene more effectively in financially distressed insurance companies to protect policyholders and preserve financial stability.
This marks yet another move to strengthen the country’s insurance sector following the enactment of the Nigerian Insurance Industry Reform Act (NIIRA) of 2025 and the industry-wide recapitalisation exercise, which will wrap up by July 31.
By Adedapo Adesanya
About 143 companies that successfully passed the technical and prequalification stages of the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) 2025 Licensing Round will, today, compete for 50 oil and gas blocks at the commercial bid conference in Abuja, the final stage in the allocation process for the assets.
The commission said only the prequalified companies have been invited to attend the event, which will hold at the Conference Centre of the Transcorp Hilton Hotel, Abuja, stressing that participation is strictly by invitation.
The commercial bid conference will determine the successful bidders for oil and gas assets located across Nigeria’s producing and frontier basins.
The 50 blocks comprise 16 onshore blocks and 18 shallow water blocks in the Niger Delta, one deep offshore block, three onshore blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin, and four in the Benue Trough.
According to the commission, the winning bids will be determined through a transparent evaluation process based on clearly defined commercial parameters. These include the signature bonus offered by bidders, the proposed work programme commitment and the level of performance security provided. The final selection will be based on a weighted technical and commercial score.
The licensing round is being conducted under the provisions of the Petroleum Industry Act (PIA) 2021, which requires a transparent and competitive process for the award of petroleum assets.
NUPRC had announced the commencement of the 2025 Licensing Round on November 11, 2025, before opening the online bid portal on December 1, 2025, to enable interested companies to register and participate in the exercise.
To ensure prospective investors fully understood the requirements, the commission organised a pre-bid conference on January 14, 2026, at Eko Hotels and Suites, Lagos. The event provided detailed explanations on the licensing guidelines and bidding procedures to registered participants and other stakeholders.
Registration and submission of prequalification documents closed on February 27, 2026, while the prequalification evaluation was completed on March 16, 2026.
NUPRC disclosed that 286 companies initially submitted applications for prequalification.
Following the evaluation process, 196 companies were cleared to participate in the technical and commercial bid stages.
The prequalified 143 companies eventually submitted a total of 200 bids for the available oil and gas blocks. These companies are now set to compete at the commercial bid conference, where the financial offers will be opened and evaluated to determine the eventual winners.
The licensing round is expected to attract fresh investment into Nigeria’s upstream petroleum sector, boost exploration activities across both producing and frontier basins, increase crude oil and gas reserves, and support the country’s drive to grow production and government revenue.
It also underscores the regulator’s commitment to implementing a transparent, competitive and investor-friendly licensing regime under the Petroleum Industry Act.
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key monetary policy parameters following the conclusion of its two-day meeting on July 21, 2026, on Tuesday, maintaining its tight monetary policy stance to curb inflation and support macroeconomic stability.
According to the Governor of the apex bank, Mr Yemi Cardoso, who chaired the committee, the Monetary Policy Rate (MPR), which serves as the benchmark interest rate, remains at 26.50 per cent. The MPC also retained the asymmetric corridor around the MPR at +50 basis points and -450 basis points.
In addition, the Cash Reserve Ratio (CRR) for commercial banks was left unchanged at 45.00 per cent, while the CRR for merchant banks remains at 16.00 per cent. The committee also retained the CRR on non-Treasury Single Account (Non-TSA) public sector deposits at 75.00 per cent, with the liquidity ratio at 30.00 per cent.
The decision reflects the apex bank’s continued commitment to containing inflationary pressures through a restrictive monetary policy while safeguarding the resilience of Nigeria’s financial system amid ongoing macroeconomic adjustments.
By keeping all policy tools unchanged, the MPC signalled its intention to continue managing excess liquidity in the banking sector and maintain stability in financial markets.
The move is also expected to provide greater policy certainty for investors and businesses monitoring the country’s monetary policy direction.
The latest decision also means borrowing costs are likely to remain elevated in the near term as the central bank continues to prioritise price stability over monetary easing.
Analysts had expected the CBN committee to retain the rate after Nigeria’s headline inflation came in at 15.91 per cent as of June 2026, marking a slight decline from 15.93 per cent in May.
However, even as overall price growth has moderated significantly compared to previous periods, food inflation remains a persistent challenge, accelerating to 17.52 per cent in June.
