Economy
World Bank Forecasts 3.4% Growth for Nigeria in 2022
By Adedapo Adesanya
Nigeria’s economy has been forecast to grow by 3.4 per cent this year by the World Bank in its latest outlook for global economies. This is in comparison to 3.6 per cent recorded in 2021.
The global lender noted that the growth in Sub-Saharan Africa (SSA), which Nigeria falls into, has weakened this year as domestic price pressures, partly induced by supply disruptions owing to the war in Ukraine, are reducing food affordability and real incomes, especially in low-income countries (LICs).
Generally, the region rebounded last year by 4.2 per cent in 2021 but the silver lining is that limited direct trade and financial linkages with Europe and Central Asia have helped contain some of the negative effects of the war in Ukraine on SSA.
In the report published on Tuesday, it was revealed that the sharp deceleration of global growth and war-related shortages of food and fuel are creating substantial headwinds for the region, even more so in countries reliant on wheat imports from Russia and Ukraine (Democratic Republic of Congo, Ethiopia, Madagascar, Tanzania).
In many SSA countries, increasing living costs have also tempered gains from looser social restrictions and higher commodity export prices.
The global lender noted that growth in the three largest SSA economies—Angola, Nigeria, and South Africa—was an estimated 3.8 per cent in 2021 supported by the 4.9 per cent rebound in South Africa.
For this year, growth in SSA is expected at 3.7 per cent in 2022 and 3.8 per cent in 2023 – on par with January projections.
Yet, excluding the three largest economies, growth was downgraded by 0.4 percentage points both in 2022 and 2023.
Although, elevated commodity prices would underpin recoveries in extractive sectors, in many countries rising inflation would erode real incomes, depress demand, and deepen poverty.
Growth momentum carried on in Angola and Nigeria, where high oil prices, the stabilization of oil production, and recovery in non-resource sectors supported activity in the first half of this year. Nevertheless, persistently high domestic inflation, power cuts, and shortages of food and fuel have been weighing on recoveries.
In South Africa, growth has moderated substantially amid policy tightening, high and rising unemployment, and recurring power shortages.
The World Bank also painted that infrastructure damage to the country’s main port following severe floods has also exacerbated supply chain disruptions related to the war in Ukraine and lockdowns in China.
Elsewhere in the region, the boost from a waning of the pandemic and a gradual rebound in tourism is being muted by rapidly rising living costs and weakening domestic demand.
In some countries, debt distress, policy uncertainty, social unrest, and violence still hamper recoveries, especially in fragile and conflict-affected LICs.
For 2022, growth in LICs was revised down by almost a full percentage point this year as food price inflation and food shortages are expected to take a particularly severe toll on vulnerable populations, further worsening food insecurity in those countries.
The growth slowdown in SSA could also intensify pandemic-induced losses in per capita incomes. The region is now expected to remain the only Emerging Market and Developing Economy (EMDE) region where per capita incomes will not return to their 2019 levels even in 2023.
In about 45 per cent of the region’s economies and in half of its fragile and conflict-affected countries, per capita incomes are forecast to remain below pre-pandemic levels next year.
Surging food and fuel import bills could also reverse recent progress in poverty alleviation across the region, especially in countries where vulnerable populations are sizable (Democratic Republic of Congo and Nigeria), and dependence on imported food is high (Benin, Comoros, The Gambia and Mozambique).
Looking at the risks, the outlook is predominantly to the downside with prolonged disruption to global trade in cereals and fertilizer due to the war in Ukraine set to significantly worsen affordability and availability of staple foods across the region.
In addition, insecurity and violence pose a threat to the outlook, especially in LICs, while rapid increases in living costs risk escalating social unrest.
A faster-than-expected slowdown of the global economy, which could be triggered by the accelerated policy tightening in advanced economies and the global resurgence of the COVID-19, would hurt many SSA commodity exporters.
The Washington-based bank warned that persistent domestic inflation could speed up monetary policy tightening, escalating stagflation risks across the region.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended rallied by 1.18 per cent on Friday, May 8, its fifth in a row for this week.
During the session, the market capitalisation increased by N28.96 billion to N2.488 trillion from N2.459 trillion, and the NASD Unlisted Security Index (NSI) jumped by 48.39 points to 4,158.77 points from the 4,110.38 points recorded a day earlier.
The growth witnessed yesterday was spurred by the gains recorded by six securities, led by 11 Plc, which chalked up N11.00 to sell at 221.10 per unit versus Thursday’s closing price of N210.10 per unit. FrislandCampina Wamco Nigeria Plc added N10.26 to close at N132.98 per share compared with the previous day’s N127.06 per share, and Central Securities Clearing System (CSCS) Plc rose by N2.82 to N75.90 per unit from N73.08 per unit.
In addition, Lighthouse Financial Services Plc appreciated by 7 Kobo to 86 Kobo per share from 81 Kobo per share, UBN Property Plc climbed higher by 5 Kobo to N2.25 per unit from N2.20 per unit, and First Trust Mortgage Bank Plc gained 2 Kobo to close at N2.32 per share, in contrast to the previous session’s N2.30 per share.
Conversely, Geo-Fluids Plc went down by 20 Kobo to N2.90 per unit from N3.10 per unit, and Afriland Properties Plc lost 5 Kobo to end at N16.95 per share versus N17.00 per share.
The volume of transactions for the session surged by 41.8 per cent to 528,891 units from 372,916 units, and the value grew by 11.4 per cent to N34.0 million from N30.4 million, while the number of deals slid by 7.4 per cent to 25 deals from 27 deals.
The most traded stock by volume on a year-to-date basis was Great Nigeria Insurance (GNI) Plc, with 3.4 billion units worth N8.4 billion. Resourcery Plc occupied the second spot after trading 1.1 billion units valued at N415.7 million, and the third position was occupied by Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
The most traded stock by value on a year-to-date basis was GNI Plc with 3.4 billion units transacted for N8.4 billion, followed by CSCS Plc with 60.5 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
By Dipo Olowookere
The local stock exchange reversed the previous day’s loss, with a 2.10 per cent surge on Friday as a result of demand for large-cap equities like Dangote Cement, First Holdco and others.
It was observed that apart from the insurance counter, which shed 0.37 per cent, every other sector closed higher yesterday.
The industrial goods index expanded by 7.26 per cent, the banking segment increased by 3.35 per cent, the consumer goods industry rose by 0.21 per cent, and the energy sector soared by 0.14 per cent.
Consequently, the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited improved by 5,041.22 points to 244,775.83 points from 239,734.61 points, and the market capitalisation added N3.235 trillion to settle at N157.094 trillion compared with the preceding session’s N153.859 trillion.
The quintet of Neimeth, Cadbury Nigeria, LivingTrust Mortgage Bank, Mecure, and Dangote Cement led the advancers’ table on Friday, with 10.00 per cent growth each to quote at N9.90, N72.60, N3.52, N72.60, and N1,088.00, respectively.
On the flip side, the duo of UAC Nigeria and Industrial and Medical Gases lost 10.00 per cent each to sell for N171.00 and N42.30, respectively, as Eterna declined by 9.93 per cent to N33.55, Learn Africa slipped by 9.89 per cent to N8.20, and Deap Capital tripped by 9.69 per cent to N5.50.
The most active stock for the day was VFD Group, with a turnover of 102.9 million units valued at N1.1 billion. FCMB transacted 99.4 million units worth N1.1 billion, UBA traded 94.5 million units for N3.8 billion, Access Holdings exchanged 85.4 million units worth N2.0 billion, and Zenith Bank sold 46.5 million units valued at N5.8 billion.
At the close of trades, market participants traded 1.1 billion units worth N55.0 billion in 69,996 deals, in contrast to the 1.8 billion units valued at N72.2 billion transacted in 81,131 deals a day earlier, showing a crash in the trading volume, value, and number of deals by 38.89 per cent, 23.82 per cent, and 13.73 per cent, respectively.
By Adedapo Adesanya
The Naira fell against the US Dollar by N5.54 or 0.41 per cent to N1,361.39/$1 from N1,355.85/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, May 8.
The domestic currency also depreciated against the Pound Sterling in the official market during the session by N8.50 to trade at N1,853.68/£1 compared with the previous day’s N1,845.18/£1, and against the Euro, it lost N9.37 to sell for N1,602.63/€1 versus N1,593.26/€1.
However, at the GTBank FX desk, the Nigerian Naira appreciated against the US Dollar yesterday by N3 to quote at N1,372/$1 compared with Thursday’s closing value of N1,375/$1, and at the parallel market, it traded flat at N1,380/$1.
Despite the volatile outcome of the local currency, it remained within the expected trading range, reflecting sustained FX stabilisation efforts by the Central Bank of Nigeria (CBN), supported by improved liquidity, stronger autonomous inflows, and better price discovery.
Traders point to further gains for the Naira into the coming week, thanks to Dollar supply from foreign investors, exporters and oil companies, while demand is moderate. Nigerian yields are still attractive for foreign investors, serving as a basis for more (FX) flows coming to Nigeria.
Meanwhile, the country’s external reserves dropped by 3.4 per cent to $48.32 billion, from a 2009 high of $50.02 billion recorded on March 11.
In the cryptocurrency market, prices rallied after worries eased, following fresh US airstrikes in Iran that initially sparked a surge in oil prices and a broader risk-off move across crypto markets.
Bitcoin (BTC) added 0.8 per cent to sell at $80,212.54, Solana (SOL) gained 6.5 per cent to sell at $93.76, Cardano (ADA) appreciated by 5.1 per cent to $0.2749, Dogecoin (DOGE) grew by 3.7 per cent to $0.1102, and Ripple (XRP) rose by 3.1 per cent to $1.42.
Further, Binance Coin (BNB) jumped 2.3 per cent to $650.16, Ethereum (ETH) expanded by 1.6 per cent to $2,315.48, and TRON (TRX) increased by 0.1 per cent to $0.3515, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn