Recently released power sector report by the National Bureau of Statistics records a total average energy generation of 2,548GWH by 25 power stations, from October 2016 to December 2016. Daily Energy generation, attained the 2016Q4 highest level of 3,859.6MW in October 2016, and a lowest level of 2522MW in the same month. On the average, current daily energy generated which is below 3,000MW, prompts system malfunctions. Thus, the irregular power generation and supply experienced in recent times is attributable to shortage of gas owing to non-functional major pipelines, in addition to the inability of GENCOs to make payments for the available gas supply. Given the recent challenges to power supply, efforts should be geared towards the diversification of electricity generation. Government should consider investment in renewable as well as coal energy to complement gas power supply.

Latest figures of FDI flows to Nigeria show a decline of 27 per cent from $4.7 billion in 2014 to $3.4 billion in 20152, representing its lowest value since 2005. This decline is largely attributed to the oil price slump, which has generally increased uncertainty in the economy, with adverse effects on investors confidence. The fall in FDI flows was witnessed in most resource based economies in Africa, as FDI flows to the continent fell by 31 percent in 2015. The forex controls in place in Nigeria has also exacerbated the uncertainty in economy, and created obstacles for both domestic and foreign investors. Thus a review of the forex restrictions could send positive signals to investors.

The Naira continued to depreciate in the review week. At the parallel market, naira exchanged for N498/$ on January 27, 2017 and N500/$ on February 3, 2017. Despite the weekly sales of forex to BDCs and the significant improvements in the external reserves, the naira has continued to lose value to other currencies. The pressure on the naira has been triggered by escalating scarcity of forex in the spot market, likely due to forex hoarding. However, in the preceding week, the CBN sold $660 million in forwards contract in an attempt to manage liquidity and stabilize the naira. In the face of growing speculation in the parallel market, the monetary authority should institute mechanisms that would discourage excessive forex hoarding among licensed BDC operators. An initiative that monitors transaction dealings in the parallel market would go a long way in detecting erring BDC operators.