Economy

The Recurring Challenge of Capital Spending

Published

8 years ago

30/10/2017

Having already commented on the revenue side of the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper, we now look at the expenditure and financing projections.

Total FGN spending is projected to rise from N7.44trn in this year’s budget to N8.60trn in 2018. The outturn of N3.10trn in H1 2017, according to the Budget Office of the Federation, was well short of the target of N3.72trn: an overshoot on salaries was more than outweighed by an absence of capital spending.

This sad state of affairs on the capital side can be explained by the delayed passage of the 2017 budget, which was only signed off in June.

The projection of N2.38trn capital spending in 2018 looks fanciful when we consider the slow growth of revenue collection.

On the recurrent side, personnel spending is forecast to rise from N1.88trn to N2.12trn. The outturn in H1 2017 was N1.49trn.

The FGN again allocates N350bn for its special interventions, unchanged from 2017 (although there had been no disbursements by end-June). These are essentially the programmes pledged in the 2015 election campaign.

Those concerned about the vulnerability of oil output to sabotage in the Niger Delta will be pleased to learn that the framework sets aside N65bn for the presidential amnesty programme in 2018, rising to N70bn in each of the two following years.

We note the allocations in the paper of N220bn in each of the three years towards a sinking fund to retire local contractors’ bonds. We are unsure whether these relate to the mountain of arrears accumulated under the previous administration, unearthed in late 2016 and estimated by different sources at +/- N3trn.

The deficit in 2018 is projected at N2.95trn, equivalent to 2.6% of forecast GDP and 52.2% of forecast FGN revenue. The framework has 2018 as the low point fiscally in the period: thereafter the core ratios improve, supported by stronger revenue collection and GDP growth.

There is an interesting section drawing attention to the negative consequences of Nigeria’s transition to middle income status in 2014. The FGN is losing access to the soft-loan windows of partners such as the World Bank and the African Development Bank, and will have to find alternative funding for the substantial vaccination programme. It is therefore working on an aid transition strategy to cushion the impact.

Economy

MRS Oil, Two Others Raise NASD Bourse Higher by 0.52%

Published

1 hour ago

24/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.

The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.

Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.

Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.

Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.

The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.

By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.

In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.

Economy

NGX All-Share Index Soars to 153,354.13 points

Published

2 hours ago

24/12/2025

Dipo Olowookere

By Dipo Olowookere

It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.

The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.

Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.

Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.

At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.

This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.

VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.

In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.

Economy

Naira Firms up to N1,449 Per Dollar at Official Market

Published

2 hours ago

24/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira rallied against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, December 23 by N6.57 or 0.45 per cent to N1,449.99/$1 from the previous day’s N1,456.56/$1.

The domestic currency also improved its value against the Pound Sterling in the official market during the session by N1.30 to sell for N1,956.03/£1 compared with the preceding session’s N1,957.33/£1 and gained N2.94 on the Euro to close at N1,707.65/€1, in contrast to the previous session’s closing price of N1,710.59/€1.

In the same vein, the Nigerian Naira appreciated against the US Dollar by N5 at the GTBank FX counter to sell for N1,465/$1 versus the previous day’s N1,470/$1 but remained unchanged at N1,485/$1 in the black market window.

Sentiment in the FX market continued to improve with market operators attributing the appreciation to increased supply in the official market, supported by sustained interventions from the Central Bank of Nigeria (CBN) and the impact of recent reforms.

Improved liquidity from exporters and foreign portfolio investors has also contributed to easing pressure on the local currency, helping to stabilise trading conditions during the festivities.

Analysts noted that the Naira’s performance has helped narrow the spread between the official and parallel market rates, a development seen as supportive of investor confidence and business planning. This relative stability has reduced short-term volatility risks and encouraged more orderly price discovery in the FX market.

Meanwhile, the cryptocurrency market was down yesterday as analysts suggest tax-loss harvesting and low liquidity are contributing to the action in crypto as the year ends. That means investors selling their underwater positions to realize losses, lowering their tax liabilities.

Some analysts remain cautiously optimistic about a potential rally, though significant recovery is not expected until liquidity returns in January.

Dogecoin (DOGE) crumbled by 3.1 per cent to $0.1281, Solana (SOL) slumped by 2.9 per cent to $121.92, Cardano (ADA) fell by 2.7 per cent to $0.3582, Ethereum (ETH) slid by 2.2 per cent to $2,926.25, and Ripple (XRP) depreciated by 2.1 per cent to $1.85.

Further, Binance Coin (BNB) lost 2.0 per cent to sell for $838.21, Bitcoin (BTC) declined by 1.4 per cent to $86,933.97, and Litecoin (LTC) went down by 0.2 per cent to $76.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded at $1.00 apiece.