Steep Price Pressures Limit Business Growth in Nigeria

Image

By Modupe Gbadeyanka

Growth in the Nigerian private sector was stunted by steep price pressures in July, as the citizens struggled with growing hardships triggered by the removal of fuel subsidy and the devaluation of the Naira by the federal government.

The Purchasing Managers’ Index (PMI) readings of Stanbic IBTC Bank showed that last month, the sector scored 51.7 points, lower than the 53.2 points achieved in June.

However, it was the fourth month running that the index has remained above the 50.0 mark, signalling a further improvement in business conditions in the Nigerian private sector during the month.

The lender said overall input costs rose at a pace unsurpassed in more than nine-and-a-half years of data collection, with selling prices up rapidly in response.

Rising price pressures impacted demand, with growth of both new orders and business activity softening as the second half of the year got underway.

Meanwhile, business confidence hit a new low.

There was more positive news on the employment front, however, as the rate of job creation quickened to the fastest since January.

It stated that the softer improvement in the health of the private sector reflected trends in output and new orders during July.

In both cases, rates of growth eased to the weakest since the respective returns to expansion following the cash crisis at the start of the year.

While some firms reported having been able to secure new contracts amid rising customer numbers, others highlighted the negative impact on demand of rising prices. July data signalled a steep increase in overall input prices, with the rate of inflation the joint-fastest since the series began in January 2014, equal to that posted in November 2021.

Purchase costs were a key driver of overall input price inflation. Higher fuel costs following the subsidy removal and currency weakness were the main factors leading purchase prices to rise.

Meanwhile, staff cost inflation hit a six-month high as firms increased pay to help staff deal with rising transport costs. With input costs up rapidly, companies increased their output prices accordingly and at one of the strongest rates on record.

More than half of companies increased their charges over the month. More positively, employment increased for the third month running in July, and at a solid pace that was the fastest since the start of the year.

Backlogs of work continued to rise, however, as some firms reported delays while checks were made to make sure customers were able to pay for orders. Input buying and stocks of purchases rose further, but rates of increase softened.

Finally, business confidence continued to trend downwards in July and was the lowest in just over nine-and-a-half years of data collection.

Share
Related Stories
Image
04-March-2024

Annual Tax Return Submission: LIRS Reminds Taxpayers of March 31 Deadline

In compliance with the stipulations outlined in the Personal Income Tax Amendment Act (PITA) Cap P8 2011, the Lagos State Internal Revenue Service (LIRS), has issued a formal notification to all individual taxpayers, including self-employed individuals and employees under the PAYE Scheme to file their Annual Tax Returns on or before March 31, 2024. Mr Ayodele Subair, the Executive Chairman of the LIRS, announced this in a statement signed by the Head of Corporate Communications, Ms Monsurat Amasa-Oyelude, on Sunday. Under Section 41 of the Amendment Act, all taxable entities must submit a return reflecting their total income from all

Image
03-March-2024

Dangote Cement’s African Subsidiaries Contribute 41.2% to FY 2023 Sales

By Dipo Olowookere Dangote Cement Plc has revealed that sales from its factories outside Nigeria, its base, improved in the 2023 fiscal year by 12.7 per cent, contributing about 41.2 per cent to its total volume for the period under review, with its Nigerian operations accounting for the rest. In its audited financial statements for the year ended December 31, 2023, filed to the Nigerian Exchange (NGX) Limited, the cement maker said revenue generated from its pan-African operations increased by a record 123.2 percent to N925.9 billion, while EBITDA surged by over four-fold to N263.7 billion. Business Post reports that

Image
03-March-2024

Alake Lures Qatari Investors With Nigeria’s Lithium Reserves

By Adedapo Adesanya Nigeria has called on Qatari investors to tap into the country’s Lithium, with comprehensive data on its reserves, available at the Nigerian Geological Survey Agency, according to the Minister of Solid Minerals Development, Mr Dele Alake. The Minister disclosed this in Doha, Qatar, on Saturday, at a meeting with Qatari businessmen on the sidelines of the visit of President Bola Tinubu to the Arab country. He is part of the delegation that accompanied President Tinubu on the visit to Doha, Qatar to strengthen cooperation between the nations in several sectors, including economic development. In a statement by

More Stories
Image
29-October-2016

N6.06tr 2016 Budget: N3.6tr Released So Far By FG

By Modupe Gbadeyanka Minister of Budget and National Planning, Mr Udoma Udo Udoma, has informed the Senate Committee on Appropriation that so far, the Federal Government has spent N3.577 trillion out of the full year budget of N6,060 trillion for the 2016 fiscal year. Mr Udoma, at an interactive session with members of Committee in Abuja on Thursday, explained that this translates to a 79 percent performance of the prorated budget for the three quarters up to September 30, 2016. He said in addition to the total of N2,439.9trn so far released for Capital, Non-debt Recurrent and Service-wide Vote expenditures,

Image
03-August-2022

Omobayo Azeez Decries Reliance of Telecommunications Sector on Foreign Inputs

By Dipo Olowookere A renowned tech journalist, Mr Omobayo Azeez, has called on stakeholders in the telecommunications sector to urgently take actions that will reduce the reliance on foreign inputs in the industry. Speaking in Lagos last Thursday at the third edition of the Policy Implementation Assisted Forum (PIAFo), Mr Azeez said this was putting more pressure on the Naira in the foreign exchange (FX) market. Though he said the telecoms sector has unarguably become one indispensable economic enabler for the country and its people, efforts must be made to use this channel to boost local production and stop the

Image
27-April-2021

Oil Dips on Fears Over Surging Cases in India, Japan

By Adedapo Adesanya Oil prices dropped on Monday, April 26 as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) raised concerns about surging cases of the coronavirus in India and other countries and its likely impact on demand of the commodity. At the market yesterday, the Brent crude went down by 46 cents or 0.70 per cent to trade at $65.65 per barrel, while the West Texas Intermediate (WTI) reduced by 18 cents or 0.29 per cent to sell at $62.09 per barrel. The Joint Technical Committee of OPEC+ is not happy with the growing cases of

Image
18-September-2020

Oil Firm Builds Skills Acquisition Centre for Physically-Challenged in Ekiti

By Adedapo Adesanya Total Upstream Nigeria Limited has partnered with the Nigerian National Petroleum Corporation (NNPC) to build a skills-acquisition centre in Ado Ekiti, the Ekiti state capital as part of its effort to empower women and the physically challenged. The objective of the Women and Youth Skill Development Centre is to train physically challenged persons and women in various skills in four core vocations to empower them and take them out of poverty. The facility which is part of the corporate social responsibility of the company will provide accommodation for beneficiaries during the training. It consists of four training

Image
03-January-2020

Investors Gain N13bn on First Trading Day of 2020

By Dipo Olowookere The Nigerian Stock Exchange (NSE) started the year 2020 on a positive note after it appreciated by 0.10 percent on the first trading day of the decade on Thursday. Business Post observed that the local bourse was looking like it would kick off the year on a wrong foot, but stocks in the insurance space came to the rescue, closing as the only sub-sector of the exchange that ended strong by appreciating by 0.97 percent. The energy sector lost 5.01 percent, industrial index depreciated by percent, banking index declined by 0.39 percent, while the consumer goods sector

Image
18-October-2023

NNPC Appoints Femi Soneye as Chief Corporate Communication Officer

By Modupe Gbadeyanka The publisher of an online news platform, Per Second New (PSN), Mr Femi Oladapo Soneye, has been appointed as the Chief Corporate Communications Officer (CCCO) of the Nigerian National Petroleum Company (NNPC) Limited. The appointment of the veteran journalist was announced on Wednesday night by the state-owned oil agency, which said it looked “forward to his valuable contributions to our company.” The new spokesman will be in charge of the corporate communications of the NNPC, leading the organisation’s “corporate communications team and drive our brand penetration, strategic communications initiatives, and stakeholder management.” According to the statement, Mr

Image
01-September-2021

PenCom Commences Online Enrolment of Retirees

By Ashemiriogwa Emmanuel Retirees/prospective retirees of treasury-funded federal government Ministries, Departments, and Agencies (MDAs) can now proceed for registration as the National Pension Commission (PenCom) has announced the commencement of online enrolment of retirees from Wednesday, September 1, 2021. Recall that Business Post reported that the Commissioner, Technical, PenCom, Mr Anyim Nyerere, at a workshop organised by the commission for Pension Desk Officers (PDOs) on Enrollment Application in June, announced that 21,000 prospective retirees would be registered soon on its newly developed online enrollment portal across the nation. As a prelude to its formal deployment, the agency carried out a

Image
29-November-2021

NDLEA Intercepts 12,385kg of Indian Hemp

By Adedapo Adesanya The National Drug Law Enforcement Agency (NDLEA) has seized 12,385 kilograms of an Indian hemp variant known as Loud smuggled into Lagos from a neighbouring country through the waterways. The Director, Media and Advocacy of the NDLEA, Mr Femi Babafemi in a statement described the drug as a strong variant of Indian hemp, explaining that the 12,385 pellets of the drug were brought in through the Atlantic Ocean and ferried in boats to the Eko Atlantic Beach, Victoria Island. The Indian hemp would have been distributed from the beach to drugs hotspots such as Lagos Island, Peti

Ad
Ad
Recent Stories
Image
05-March-2024

Oil Market Falls Despite OPEC+ Cut Extension

By Adedapo Adesanya  The oil market fell slightly on Monday, as demand headwinds outweighed a widely expected extension of voluntary output cuts through the middle of the year by the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Brent futures dropped 81 cents to quote at $82.74 a barrel while the US West Texas Intermediate (WTI) weakened by $1.22 to trade at $78.75 a barrel. The OPEC+ producers agreed over the weekend to extend their voluntary oil output cuts of 2.2 million barrels per day into the second quarter to cushion the market amid global economic concerns and

Image
05-March-2024

Investors Mop up Nigerian Stocks on Economic Optimism

By Dipo Olowookere The Nigerian Exchange (NGX) Limited witnessed a 0.10 per cent growth on Monday amid optimism that the trip of President Bola Tinubu to Qatar over the weekend will yield positive results. At the Nigeria-Qatar Business and Investment Forum in Doha, Mr Tinubu assured Qatari investors that they would not face any bottleneck while attempting to repatriate their funds. This assurance was welcomed by stock investors, who saw light at the end of the tunnel for the nation’s economy, which is currently suffering because of the shortage in the supply of foreign exchange (FX) into the market. Since

Image
04-March-2024

UK Announces £37.3m to Boost Livelihoods in Nigeria, Others

By Adedapo Adesanya The United Kingdom has announced new funding for the Mobile for Development Programme to help more people access mobile and digital technologies to find new opportunities and boost their livelihoods in Nigeria and other developing countries. UK’s Minister for Development and Africa, Mr Andrew Mitchell MP, during a speech at Mobile World Congress last week, announced that the UK is providing £37.3 million of new support for the Mobile for Development Programme. The new UK funding for innovative mobile phone technology will help change lives in developing countries around the world by harnessing AI technology to provide

Image
04-March-2024

Newly-Listed Transcorp Power Targets N500bn Revenue by 2031

By Adedapo Adesanya The latest company to join the Nigerian Exchange (NGX) Limited, Transcorp Power Plc, has announced a revenue target of N500 billion by 2031, tapping opportunities in the capital market and sustainable energy. This was disclosed by the Managing Director of the firm, Mr Peter Ikenga, during the Facts Behind the Listing held at bourse on Monday. The firm, owned by businessman and Chairman of UBA Plc, Mr Tony Elumelu, listed its stocks on the Main Board of the nation’s flagship exchange by introduction. It listed 7,500,000,000 ordinary shares of 50 Kobo each at N240.00 per share. Speaking

Image
04-March-2024

DisCos Must Promptly Respond to Customers’ Complaints—FCCPC

By Aduragbemi Omiyale Electricity distribution companies (DisCos) in the country have been charged to respond to customers’ complaints quickly for better service delivery. This task was given to the energy firms by the Federal Competition and Consumer Protection Commission (FCCPC), which said the companies must design a quick response mechanism to address issues from their customers. Speaking last Saturday at a four-day one-stop-shop for addressing billing, metering, transformer, connection, disconnection, customer service and other electricity consumer issues in Ikeja Electric coverage areas, the acting executive chairman of FCCPC, Mr Adamu Abdullahi, said the highest number of complaints received by the

Image
04-March-2024

Omokungbe Wants Implementation of Initiatives on Women’s Entrepreneurship

By Aduragbemi Omiyale A former Rector of Yaba College of Technology (YabaTech), Lagos, Mr Obafemi Omokungbe, has called for the implementation of programmes and initiatives designed to promote women’s entrepreneurship in Africa. Speaking at the just-concluded 10th anniversary of the African Women Foundation for Nation Building (WINBAFRICA) in Lagos, Mr Omokungbe, a fellow of the Nigerian Society of Engineers (NSE), also appealed to African countries to renew their commitment to women’s empowerment, saying it is a crucial step towards nation-building. According to him, the journey toward women’s empowerment in Africa involves a comprehensive approach that spans various sectors, including education,

Image
04-March-2024

NGX Group Declares 75 Kobo Final Dividend Amid 57.4% Surge in FY’23 Earnings

By Aduragbemi Omiyale A final dividend of N1.5 billion, amounting to 75 Kobo per share has been declared by the board of the Nigerian Exchange (NGX) Group Plc for the 2023 financial year. This brings to N1 the total dividend to be paid by the company after paying 25 Kobo (N495.5 million) as interim dividend at mid-year. In its audited financial statements for the year ended December 31, 2023, the NGX Group said its gross earnings increased by 57.4 per cent to N11.8 billion in FY 2023 from N7.5 billion in FY 2022 because its performances in core revenue and

Image
04-March-2024

Red Line Rail: Labour Party Demands Value for Money

By Aduragbemi Omiyale The Lagos State chapter of the Labour Party has tasked Governor Babajide Sanwo-Olu to ensure the recently commissioned Red Line Rail does not turn out to be another failure due to poor maintenance culture. In a statement by its Publicity Secretary, Mrs Olubunmi Odesanya, the opposition party appealed to the state government to ensure its sustainability. While greeting residents of the metropolis on the project, which was commissioned last Tuesday by President Bola Tinubu, the Labour Party faulted the timing of its completion, saying the ruling All Progressives Congress (APC) ought to have put the initiative in

Image
04-March-2024

Access Bank to Give 700,000 MSMEs Access to N50bn Via YouThrive

By Modupe Gbadeyanka An initiative known as YouThrive designed to give entrepreneurs in the micro, small and medium enterprises (MSMEs) access to a N50 billion credit facility has been introduced by Access Bank Plc. The lender disclosed at a media briefing in Lagos that about 700,000 MSMEs would benefit from this programme, which is open to business owners between the ages of 21 and 40 years. YouThrive is a transformative initiative designed by Access Bank to empower, uplift, and accelerate the next generation of MSMEs. According to the Deputy Managing Director of Access Bank, Mr Victor Etuokwu, who addressed journalists

Image
04-March-2024

Peter Obi Laments Nigeria’s Dependence on War-Torn Ukraine for Food

By Adedapo Adesanya The presidential candidate of the Labour Party in the 2023 polls, Mr Peter Obi, has lamented Nigeria’s dependence on Ukraine, a country ravaged by war, for food aid. Mr Obi, in a statement on Monday, expressed dissatisfaction at the current economic realities and recounted times when the Nigerian economy was faring better than that of Ukraine in 2015. “Ukraine cultivates over 60 per cent of its arable land, whereas Nigeria has over 60 per cent uncultivated arable land. “Despite the conflict, Ukraine feeds itself, and exports agricultural products worth over $25 billion which is about the same