Economy
How the Nigerian Economy is Reacting to the Global Crisis
The COVID-19 pandemic is still in full swing. Since the early months of 2020, it has been affecting countries on all continents.
Nigeria is no exception, despite the relatively low death toll. Here is how the global crisis has influenced the national economy so far.
Current Statistics on COVID-19
As of this writing, Nigeria has 4,399 confirmed cases and 143 deaths. This is incomparable to the six-digit figures observed in the US, but the numbers are still growing. Developing countries, in general, have seen relatively few cases, although the danger is still very real.
Declaring of the pandemic sent shock waves across financial markets in early March. However, it is not the only cause of downtrends. In fact, negative dynamics began even before the outbreak. Forecasts of global GDP in 2020 were quite dismal, with only 2.5% growth. The outlook for the emerging markets was especially gloomy.
The Preceding Troubles
Even before the crisis, the local government had a lot to grapple with. The country was still recovering from the oil shock of 2014, and GDP growth was limited — just 2.3% in 2019. The figure was later changed to just 2% by the International Monetary Fund, as a result of oil price collapse and fiscal restrictions.
The debt profile was yet another reason for alarm. According to recent estimates, the debt service-to-revenue ratio stands at 60%. The dismal situation with oil prices is likely to send the figures further down. All these factors should be considered when evaluating the nation’s response to the pandemic.
Key Policy Changes
The Central Bank of Nigeria (CBN) has implemented a fiscal stimulus package. The support scheme provides a credit of 50 billion naira for small and medium-sized businesses, as well as households affected by the crisis. The healthcare industry has been provided with a loan of 100 billion naira. The manufacturing segment has received 1 trillion naira.
Secondly, the institution revised its interest in interventions. The rate has been almost halved, now fixed at 5%. Since March 1, all intervention facilities are put on hold by a one-year moratorium.
Another major issue is the collapse of global demand for crude. Oil is one of the country’s key sources of revenue and foreign exchange. The sharp decline has caused significant damage. Officially, the rate was adjusted from 306 to 360 naira.
Household Consumption: Looming Decrease
Experts predict households to reduce consumption due to several reasons. Spending will be mostly limited to the most essential goods and services. This is inevitable because:
- The population are restricted in movement, either partially or fully;
- Predictions of future income are discouraging, especially for workers in the gig and informal economy;
- The gradual erosion of wealth, but actual and expected, is observed due to downtrends on the stock market and in home equity.
In such desperate times, the population will be looking for alternative sources of income. Online trading, which has recently been embraced by the nation, may see significant growth. For many consumers, it may offer the only source of profit.
FXTM, an international MetaTrader 5 broker, expects more accounts to be opened by residents of Nigeria. The range of instruments includes currency pairs, stocks, CFDs, and other derivatives. Through a licensed broker, these may be traded in Nigeria legally.
Investments by Firms
These are expected to shrink due to the pandemic. It is not yet clear how long it will last, what effect the policies will have, and how economic players will react. The overall turmoil in the finance markets reflects unfavourable market sentiments.
In the realm of stocks, the country has seen a dramatic collapse. The Nigerian Stock Exchange has recorded the deepest fall since 2008. Investors have been hit hard. Given the general uncertainty surrounding the pandemic, and the joyless profit outlook, firms are unlikely to pursue any long-term investment schemes.
Government Expenditure: Projections of Growth
Government spending is predicted to expand as more stimulus packages are released. The measures should compensate for the drop in consumer spending. At the same time, fiscal deficits may soar. This will be exacerbated by the oil prices.
Nigeria is heavily dependent on oil. The commodity accounts for 90% of the country’s exports. The national budget for 2020 was built around predictions of $57 per barrel. However, the price of Brent has been fluctuating around $29 since early April. Since March, the government has already cut its planned expenditure.
A Wake-Up Call?
Overall, Nigeria is bound to experience the dramatic effects of the pandemic and lockdown measures. Despite the government’s efforts to help key industries, its resources are limited. The crash of oil prices is detrimental to the health of the national economy. It remains to be seen whether policymakers can learn from their mistakes and diversify the country’s revenue in the future.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.04 per cent appreciation on Tuesday, January 14 after the share prices of six stocks on the platform recorded movements.
Business Post reports that the bourse ended with four price gainers and two price losers during the session trading session of the week.
FrieslandCampina Wamco Nigeria Plc lost N2.50 yesterday to finish at N39.50 per share versus the previous day’s N42.00 per share and Central Securities Clearing System (CSCS) Plc dropped N1.15 to wrap up the day at N22.05 per unit compared to Monday’s N23.20 per unit.
On the flip side, 11 Plc gained N25.53 to close at N280.84 per share versus N255.31 per share, UBN Property Plc increased by 20 Kobo to N2.20 per unit from N2.00 per unit, Industrial and General Insurance (IGI) Plc added 10 Kobo to close at N16.20 per share compared with the previous day’s N16.30 per share, and Geo-Fluids Plc gained 10 Kobo to settle at N4.66 per unit versus N4.56 per unit.
When trading activities ended for the day, the market capitalisation went up by N410 million to remain relatively unchanged at N1.061 trillion as the NASD Unlisted Security Index (NSI) inflated by 1.19 points to 3,096.19 points from 3,095.00 points.
The volume of securities traded in the session was up by 28.4 per cent during the session to 3.97 million units from 3.1 million units, the value of shares jumped by 161.8 per cent to N8.3 million from N3.2 million, and the number of deals declined by 16.7 per cent to 25 deals from 30 deals.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 3.4 million units worth N134.9 million, Geo-Fluids Plc occupied the second spot with 8.9 million units valued at N43.0 million, and the third position claimed by Afriland Properties Plc with 690,825 units sold for N11.1 million.
IGI Plc ended the session as the most active stock by volume (year-to-date) with a turnover of 23.5 million units valued at N5.3 million, followed by Geo-Fluids Plc with 8.9 million units sold for N43.0 million, and FrieslandCampina Wamco Nigeria Plc with 3.4 million units worth N134.9 million.
By Aduragbemi Omiyale
A pioneering agricultural solutions provider based in Kaduna, Nigeria, NaFarm Foods, has been named as the winner of the food category of the 2025 Zayed Sustainability Prize for its Hybrid Solar Food Dryer.
The company clinched the accolade for its groundbreaking innovation in reducing post-harvest losses, improving food security, and promoting sustainable agricultural practices across Nigeria.
Hybrid Solar Food Dryer was designed by NaFarm Foods to address the critical issue of food spoilage by combining solar heat and electricity generated from solar panels for efficient, all-weather drying of food, even during rainy or cloudy days.
With a capacity of 500kg per unit and the ability to retain the nutritional quality of food while minimising energy costs, the technology has already benefited over 80 communities across six Nigerian states.
By reducing post-harvest losses for over 65,000 farmers, the dryers contribute significantly to food security and rural economic empowerment.
The Hybrid Solar Food Dryer is transforming food preservation by reducing spoilage rates, decreasing greenhouse gas emissions from decomposing food, and lowering reliance on fossil fuels.
With a whole-of-life cost of less than 1 cent per 100 litres, the dryers are accessible and economically viable for smallholder farmers and food processors.
By 2030, NaFarm Foods aims to empower two million farmers and reduce carbon emissions by 50,000 metric tonnes annually.
Business Post reports that NaFarms Foods has won $1 million from Zayed to scale its operations by manufacturing and distributing 100,000 dryers across Nigeria and West Africa.
“We are deeply honoured to be recognised as a winner of the Zayed Sustainability Prize. It signifies global recognition of our efforts to tackle food insecurity and promote equitable and sustainable agriculture in Nigeria and beyond.
“This opportunity inspires us to continue pushing boundaries, knowing that our work is not only transforming lives locally but also contributing to a more sustainable and equitable world. For us, this is more than an achievement; it’s a call to action to drive greater impact,” the chief executive of NaFarms Foods, Ms Fatima Jimoh, said.
The Director of the Zayed Sustainability Prize, Dr Lamya Fawwaz, said, “NaFarm Foods’ innovative approach to sustainable food preservation not only improves food security but also empowers rural communities, particularly women and youth, by creating income-generating opportunities. This aligns with the Prize’s mission to drive progress and improve livelihoods.”
NaFarm Foods plans to expand training programmes to empower an additional 25,000 women and youth, fostering entrepreneurship and sustainable economic growth.
Additionally, it intends to establish distribution hubs and implement advanced cluster mapping systems to ensure technology accessibility and improved marketability of produce.
Each year, the Zayed Sustainability Prize rewards organisations and high schools for their groundbreaking solutions, fostering innovation on global challenges. Over the past 17 years, through its 128 winners, the prize has positively impacted 407 million lives worldwide.
By Adedapo Adesanya
The Naira depreciated against the United States Dollar for the third straight session by 0.05 per cent or N1.36 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, January 14.
During the second trading day of the week, the exchange rate closed at N1,549.65/$1 in the official market, in contrast to Monday’s closing price of N1,548.89/$1.
The renewed pressure on the Naira occurred as analysts expected the introduction of the electronic matching FX market system, increasing foreign portfolio inflows, greater access to dollar-denominated debt, rising FX reserves, and a positive current account balance to support the domestic currency in 2025.
Investment banking firm, CardinalStone Securities Limited, said the Naira movement, which has contributed about 20.0 per cent – 30.0 per cent to inflation in the last few years, is likely to be relatively stable in 2025.
Also in the spot market, the local currency weakened against the Pound Sterling yesterday by N2.22 to trade at N1,879.64/£1 compared with the preceding day’s N1,877.42/£1 and against the Euro, the Nigerian currency lost N7.17 to quote at N1,586.05/€1 versus the N1,578.87/€1 it was traded a day earlier.
However, in the black market, the Naira appreciated against the greenback during the session by N5 to finish at N1,650/$1 compared with the previous day’s value of N1,655/$1.
In the cryptocurrency market, the bulls took charge of reports that US President-elect Donald Trump is preparing first-day executive orders that will benefit the crypto industry. The advance continued today, supported by softer-than-expected US Producer Price Index (PPI) readings for December.
Mr Trump’s expected crypto policies and broader economic plans have brought back positive sentiment among traders — bumping up crypto prices.
Ripple (XRP) added 12.1 per cent to its value to close at $2.84, Cardano jumped by 6.8 per cent to trade at $1.02, Dogecoin (DOGE) rose by 5.0 per cent to $0.3589, Litecoin (LTC) grew by 3.2 per cent to $101.80, Bitcoin (BTC) expanded by 2.2 per cent to $96,866.89, Binance Coin (BNB) appreciated by 1.5 per cent to $699.45, Solana (SOL) also gained 1.5 per cent to end at $188.57, and Ethereum (ETH) improved by 1.3 per cent to $3,219.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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