News Economy

News Economy (99)

The National Bureau of Statistics, NBS, has said that the nation’s Gross Domestic Product, GDP, grew to 1.81 percent (year-on-year) in real terms in the third quarter of 2018 compared to the 1.50 in the second quarter of the same year.
 
This, the NBS said in a report released on Monday, was aided by the non-oil sector of the economy.
 
According to the report, in nominal terms, aggregate GDP stood at N33.36 trillion while real GDP was estimated at N18.08 trillion.
 
Growth in Q3 was largely helped by the non-oil sector, which contributed 90.62 per cent to total GDP while the oil sector contributed 9.38 per cent to growth in the review period.
 
However, Oil GDP contracted by -2.91 per cent compared to -3.95 per cent in Q2 and 23.93 per cent in Q3 2017.
 
The report also showed that average daily oil production fell to 1.94 million barrels per day (mbpd), higher than that of the 1.84mbpd recorded in Q2 by 0.10 mbpd- but lower than the 2.02 mbpd recorded in the same quarter of 2017 by -0.08mbpd.
 
The report further showed that real growth of the oil sector was –2.91 per cent (year-on-year) in Q3, indicating a decrease of –25.94 percentage points relative to rate recorded in the corresponding quarter of 2017.
 
The non-oil sector however grew by 2.32 per cent in real terms in Q3, representing 0.28 percentage points higher than the 2.05 per cent in preceding quarter and by 3.08 percentage points higher compared to the -0.76 per cent recorded same quarter of 2017.
 
The NBS report said the non-oil sector was mainly driven by Information and communication sector while other drivers include agriculture, manufacturing, trade, transportation and storage and professional, scientific and technical services.
 
For the sectoral contribution of GDP growth in the period under review, The NBS report showed that information and communication sector contributed 10.55 per cent to real GDP while agriculture 29.25 per cent to real GDP.
 
Manufacturing contributed 8.84 per cent to growth while services accounted for 48.79 per cent as well as industries which contributed 21.97 percent to real growth.
 
Also, trade contributed 15.80 per cent to real GDP while finance and insurance 2.52 per cent to growth as well as construction which recorded 3.01 per cent to GDP.
 
 
Source: PmNews
Market capitalization on the Nigeria Stock Exchange shed N39.89bn on Wednesday as the gains recorded in the previous session were pared.
 
The market capitalisation, which stood at N11.255tn on Tuesday, dropped to N11.215tn on Wednesday, while the All Share Index declined by 0.35 per cent to settle at 30,704.98 basis points.
 
Major benchmarks closed in the red at the end of trading on the floor of the Exchange on Wednesday.
 
The NSE Oil/Gas Index slid by 2.99 per cent, emerging the biggest loser as sinking oil prices hit energy companies.
 
Sell pressures were witnessed in Seplat Petroleum Development Company Plc and Total Nigeria Plc.
 
The NSE Industrial Index was the second biggest loser, with a 1.14 per cent loss due to sell-offs in Dangote Cement Plc.
 
Similarly, the NSE Banking Index depreciated by 0.21 per cent on the back of major losses witnessed in Guaranty Trust Bank Plc and Zenith Bank Plc.
 
The NSE Consumer Goods Index was however the highest gainer, with a 1.18 per cent gain as major stocks such as Nestlé Nigeria Plc and Nigerian Breweries Plc recorded price appreciation.
 
The NSE Insurance Index trailed, gaining a meagre 0.23 per cent on the back of gains recorded in Lasaco Assurance Plc and Wapic Insurance Plc.
 
The volume and value traded weakened by 36.4 per cent and 19.5 per cent to 200.997 million units and N4.098bn, respectively.
 
Top traded stocks by volume were Zenith Bank (51.895 million units), Lafarge Africa Plc (38.652 million units) and FBN Holdings Plc (15.852 million units), while Zenith Bank (N1.2bn), Dangote Cement (N502.7m) and Lafarge Africa (N457.3m) were the top traded stocks by value.
 
Investor sentiment took a further dip to 1.3x from 1.8x recorded on Tuesday as the year-to-date loss dipped to -19.7 per cent.
 
There were twenty-three gainers and 18 lossers at the end of trading on Wednesday.
 
Forte Oil, which was the second highest gainer on Tuesday, advanced to top the list as the highest gainer on Wednesday, with a 9.85 per cent increase to N26.20 per share.
 
Diamond Bank Plc’s share price appreciated further, gaining 9.65 per cent as it closed at N1.25.
 
Access Bank Plc reversed the losses it made on Tuesday as it emerged the 12th highest gainer, with a 2.60 per cent increase to close at N7.90 per share.
 
Five other banks ― Unity Bank Plc, Wema Bank Plc, United Bank for Africa Plc, FBN Holdings Plc and Stanbic IBTC Holdings Plc ― were on the gainers’ list, despite the 0.21 per cent decline recorded in the banking index.
 
Abbey Mortgage Bank Plc was the biggest loser, with a 7.55 per cent share price depreciation.
 
Abbey Mortgage Bank, Seplat, Jaiz Bank Plc, Japaul Oil & Maritime Services Plc and Julius Berger Nigeria Plc, were the top five losers.
 
They recorded price depreciation of 7.55 per cent, 6.53 per cent, 6.12 per cent, 4.76 per cent and 4.29 per cent.
 
 
Source: The Ripples
Nigeria’s 2019 Budget may face hiccups as the current crude oil prices in the international market has fallen below the Budget benchmark.
 
On Monday, crude oil price dropped from $66.00 to $57.00 per barrel in the international market, indicating $3.00 below the $60 benchmark of the 2019 budget.
 
The price of Brent fell by as much as 4 per cent, hitting a low of $57.20 a barrel, in its third straight day of decline, while West Texas Intermediate, the US benchmark, weakened as much as 4.1 per cent to $47.84, the lowest level since September 2017.
 
Similarly, the price of Organisation of Petroleum Exporting Countries, OPEC, basket of 15 crudes stood at $58.24 a barrel, compared with $59.07 the previous Friday, according to OPEC Secretariat calculations.
 
According to reports, the situation was not anticipated as stakeholders, who rose from the recent 5th OPEC and non-OPEC Ministerial Meeting, were optimistic that stability would be achieved in the global market.
 
OPEC stated in a statement after its meeting in Vienna: “Following deliberations on the immediate oil market prospects and in view of a growing imbalance between global oil supply and demand in 2019, hereby decided to adjust the overall production by 1.2 mb/d, effective as of January 2019 for an initial period of six months.
 
“The contributions from OPEC and the voluntary contributions from non-OPEC participating countries of the ‘Declaration of Cooperation’ will correspond to 0.8 mb/d (2.5%), and 0.4 mb/d (2.0%), respectively.”
 
However, the current situation was said to have been fuelled by weaker oil demand amid over-supply from producing nations, currently not involved in OPEC and Non-OPEC accord.
 
 
Source: NAN
China's November industrial production growth eased sharply from 5.9% to 5.4%, the lowest level since 2009. Global stocks plunged.
Retail growth also eased, growing at 8.1%, which is the weakest pace in 15 years.
Cracks are also continuing to show in Europe, with Italy, Germany, car sales, France, and Brexit all weighing on sentiment.
Fear has taken hold in equity markets after China's industrial production plummeted, sparking a selloff that spread globally. Cracks in the European economy are also continuing to show, weighing on those region's equities.
 
China's November industrial production growth eased sharply from 5.9% to 5.4%, the lowest level since 2009. The data pointed to weak performance in key export sectors such as computers, electronics and autos.
 
Retail growth also eased, growing at 8.1%, which is the weakest pace in 15 years, says Russ Mould, investment director at AJ Bell.
 
China's November trade data indicated signs of weaker growth in the rest of the world. Export growth declined from 15.5% to 5.4% with shipments to the EU and ASEAN countries showing weakness while exports to the US dropped to 9.8% from 13.2%, according to Societe Generale.
 
"There have been some troublesome figures coming out of China in 2018 and another batch has now served to drag down markets in Asia and Europe," Mould said. "China is finding it hard to sustain high levels of economic growth. There is some concern that the impact of the US-China trade war has yet to be properly felt, suggesting that China's economic data could be in for more shocks in early 2019 unless the countries secure a permanent truce."
 
Problems are also rumbling in Europe. Fears about Italy's budget remained front and center on Friday after the European Union suggested there was more to be done on the country's budget deficit. British Prime Minister Theresa May was rebuffed by EU leaders in her attempts to renegotiate her Brexit deal. Germany's problems continued with composite PMI numbers sliding in December.
 
It follows an already subdued mood in Europe. The European Central Bank announced Thursday that it cut its economic growth forecasts and would end its bond buying stimulus program. France's yellow-vest protests are harming the country's economy.
 
Here's a roundup of markets:
 
The JSE was down 1% and the rand slumped 1.5% to R14.37/$ early afternoon on Friday.
In Asia, the Shanghai Composite closed down 1.7%. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.3%. Japan's Nikkei also fell 2% Friday.
 
The Euro Stoxx 50 down 1.1% as of 10.20 am in London (5.20 am EST). The DAX, FTSE, and CAC were all down more than 1%.
US stock index futures are following suit. The Nasdaq, S&P 500 and Dow 30 all down about 1% in premarket.
 
China's woes weighed on commodities. Copper futures are down 1% while Brent crude continued to tumble despite agreed OPEC and Russian cuts last week. Oil is down 0.6%.
 
European car stocks also plunged after data showed new EU licenses fell 8.0% year-over-year in November following a 7.3% fall in October. Renault is down 3.6% while Volkswagen, Peugeot, Daimler are trading down 2.4%. Germany's BMW is down 1.9% and Fiat Chrysler is down 2%. Full year car sales are expected to drop to 2% in 2018, down from 5% in 2017.
 
US dollar index futures are up 0.5%.
 
 
Source: Business Insider
A report by the Central Bank of Nigeria (CBN) has shown that Nigeria recorded $4.54 billion in deficit in the provisional Balance of Payments estimates for Q3, 2018.
 
The figure showed a significant downturn in the country’s position when compared to surpluses of $503m and $2.78bn recorded in the preceding quarter and the corresponding period of 2017, respectively.
 
The balance of payment is a summary of all monetary transactions between a country and the rest of the world. These transactions are made by individuals, firms and government bodies.
 
The CBN third quarter 2018 brief on balance of payment statistics released on Friday, also showed that Current Account Balance also worsened from a surplus of $4.45bn in Q2, 2018 to a deficit of $3.1bn in Q3 2018.
 
The financial account balance indicated an increased net incurrence of financial liabilities of $10.72bn in the review period as against $2.57bn recorded in the preceding period.
 
The CBN brief also noted that the current account indicated a negative outcome during the review period, recording a deficit of $3.10bn as against surpluses of $4.45bn and $1.97bn in the previous quarter and the corresponding period of 2017, respectively.
 
This, the brief said is because of increased payment for imports.
 
Export earnings rose by 2.8 per cent to $16.21bn in Q3, 2018 when compared with Q2, 2018.
 
The brief also showed that crude oil and gas dominated export arnings, accounting for 94.4 percent for the review, increasing by 9.5 per cent to $15.301bn in Q3, 2018, when compared with the preceding quarter.
 
Earnings from non-oil and electricity exports decreased by 49.3 per cent to $909m in Q3, 2018 when compared with the preceding quarter.
 
Available data showed that payments for the import of goods (fob) to the economy in the review period increased by 70.5 per cent to $14.085bn above the level recorded in the preceding quarter.
 
This was largely as a result of 79.7 per cent increase in the imports of non-oil products.
 
Direct Investments inflow increased by 0.7 per cent to $438.84m when compared with the preceding quarter of 2018.
 
It, however, indicated a decline of 45.0 per cent when compared to the corresponding period of 2017.
 
Similarly, portfolio investments inflow to the economy decreased significantly to $1.79bn in Q3, 2018 from $4.233bn and $3.320bn in the preceding quarter and the corresponding period of 2017, respectively.
 
The brief also showed that other investment liabilities increased slightly to $4.28bn when compared with $3.226bn recorded in the preceding quarter.
 
The stock of external reserves as of the end of September 2018 stood at $42.60bn indicating a depletion of 9.6 per cent when compared with the level in the preceding quarter.
 
 
Source: The Ripples
The First Deputy Managing Director of the International Monetary Fund, IMF, David Lipton, Tuesday, warned that `storm clouds’ were gathering over the global economy.
 
According to Lipton, who said governments and central banks might not be well equipped to cope, the fund had been urging governments to “fix the roof” during a sunny last two years for the world economy.
 
“But like many of you, I see storm clouds building, and fear the work on crisis prevention is incomplete,” he said.
 
Lipton, who spoke at at banking conference hosted by Bloomberg, also warned that strains could leave policymakers under pressure and in uncharted water.
 
“Central banks would likely end up exploring ever more unconventional measures.
 
“But with their effectiveness uncertain, we ought to be concerned about the potency of monetary policy”, he said.
 
 
Source: Premium Time
The National Information Technology Development Agency (NITDA) has said that startups in the information technology sector contributed $101 million to the Nigerian economy in the first three quarters of 2018.
 
This was disclosed by the Director General of NITDA, Dr Isah Ibrahim, during a pitch by new ICT companies at a programme tagged Start-up Friday in Abuja.
 
The programme, organised by the NITDA, was meant to galvanise innovations in the ICT sector.
 
According to Ibrahim, start-ups in the industry contributed a total of $9m to the economy in the first three months of the year. The contribution of the start-ups went up to $57m in the second quarter but dipped to $35m in the third quarter of the year.
 
He said: “With the little efforts we have put in place, a lot has been achieved in the ICT sector today. In the case of our ICT start-ups, within the first quarter of 2018, start-ups generated $9m; in the second quarter, they generated $57m and recently in the third quarter, they generated $35m.
 
“This is only within 2018. This achievement is unprecedented in the history of ICT sector in Nigeria.”
 
The NITDA boss further disclosed that the patronage of locally manufactured IT products and services had increased as a result of the implementation of buy Nigeria policy articulated by the Federal Government.
 
The NITDA boss said the agency had to report some defaulting agencies to the Economic and Financial Crimes Commission, adding that after EFCC had grilled some defaulting heads of MDAs, government purchase of locally made ICT products and services witnessed a tremendous increase.
 
 
Source: NAN

Nigeria’s inflation rate is expected to rise to about 11.4 per cent for the rest of this year till mid-2019, the Central Bank of Nigeria has said.

The CBN Governor, Godwin Emefiel*e, disclosed this while speaking on Nigeria’s outlook and policy thrust for 2019.

He said, “Inflation expectations are rising on the backdrop of anticipated politically related liquidity injections. For the rest of 2018 and towards mid-2019, Nigeria’s rate of inflation is projected to rise slightly to about 11.4 per cent and then moderate thereafter.”

The consumer price index, which measures inflation decreased to 11.26 per cent (year-on-year) in October2018, according to latest report by the National Bureau of Statistics on its ‘CPI and inflation report October 2018’.

The statistics revealed that this was a 0.02 per cent points lower than the rate recorded in September 2018 (11.28 per cent).

While speaking on the exchange rate, he said that although the CBN had so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets were expected to continue to exert considerable pressure on market rates.

This pressure, he added, could be amplified by the forthcoming elections, especially as the political marketplace heats up.

He said notwithstanding those pressures, the CBN was determined to maintain its stable exchange rate policy stance over the next few months, given the relatively high level of reserves.

“Gross stability is projected in the foreign exchange market given increased oil-related inflows and contained import bill. I would like to make it categorically clear that sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves,” he said.

While speaking on the balance of payments, he said it was expected to remain positive in the short term, and that oil prices continue to recover, adding that it was expected that the current account balance would strengthen even further.

“This will be supported by improved non-oil performance as diversification efforts begin to yield results to reduce undue imports,” he added.

Emefiele also said that the apex bank would explore the possibility of leveraging technology to enhance credit to critical sectors of the economy, especially agriculture and manufacturing.

 

Source: Punch

Strengthening mechanism for increased internal revenue generation is critical to the expected increased revenue in the non-oil sector, Yue Man Lee, World Bank Senior Economist, has said.
 
Lee said this on Tuesday in a paper she presented at the ongoing 3-day National Council on Finance and Economic Development conference, holding in Kaduna.
 
The paper was entitled “Strengthening States Revenue Performance through Transparency and Open Government.’’
 
Lee observed that Nigeria’s revenues were very low due to contraction in oil revenues and the stagnancy in the non-oil revenues which she attributed to the absence of stable tax policy reforms and weak tax administration.
 
She said that with no improvement in revenue collection, total spending would decline; debt would increase while fiscal space would shrink.
 
The expert noted that the government could not deliver on its social and development agenda without it increasing total public spending.
 
According to her, the only mechanism to increase government expenditure in a sustainable way is to triple total revenue through mobilising non-oil revenue.
 
“However, Nigerian tax perception survey shows low tax compliance due to weak transparency and accountability.
 
“Corporate income tax is less than six per cent of registered taxpayers, personal income tax shrinks to two per cent, while compliance in the case of VAT varies between 15 and 40 per cent.
 
“This is worrisome because low tax compliance reduces states revenues and strengthening revenue and increasing expenditure efficiency needs to be underpinned by an increase in transparency and accountability.”
 
Lee, however, said that the Nigerian states could increase transparency and accountability to strengthen IGR through harmonisation of revenue collection and automation of tax payment.
 
“Kwara and Kaduna States are good example of states where such reforms were initiated with a significant increase in IGR,” she said.
 
Meanwhile, the Accountant-General of the Federation, Ahmed Idris, said that automated collection and management of non-oil revenue was critical to increasing its performance in revenue generation and sustenance.
 
 
(NAN)
 
  1. Opinions and Analysis

Calender

« November 2019 »
Mon Tue Wed Thu Fri Sat Sun
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30