Macroeconomic Report & Economic Updates

July 8, 2016

Nigeria Economic Update (Issue 29)

OPEC weekly basket
price decreased marginally from $45.95 on June 24, 2016 to $45.26 on July 1,
2016,while Nigerias bonny light fell by $1, from $48.90 to $47.91.
The apparent decline in crude oil price was driven by lingering market demand
uncertainty, following the unexpected Brexit referendum. More so, ease
in supply disruptions in Nigeria and Canada may have contributed to the
downward pressure on prices. Going forward, until there is greater regulatory
precision on global oil output levels, prices may likely remain stuck or continue
to exhibit a downward trend. Although, Nigerias fiscal constraints slightly
relaxed with oil production increasing in the review week (following repairs on
sabotaged pipeline channels), potential global crude oil oversupply threatens
governments revenues. However, oversupply threats could be reduced if there is
a consensus on oil production quotas in the upcoming OPEC meeting.

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Nigeria Economic Update (Issue 19)

Internally generated revenue by 35 states for the 2016 fiscal year increased by 17.5 percent to N802 billion from N683 billion generated in the preceding year. A breakdown of the IGR shows that the increase was driven by PAYE, Direct assessment, Road taxes, Revenue from MDAs and other taxes. The highest and lowest revenue generating states were Lagos (38%) and Ebonyi (0.1%) respectively. An improvement in the efficiency of the tax system could improve the contributions of the IGR to overall government revenue. Particularly, incorporating workers in small stores, agricultural and informal businesses into the tax system; building capacity of tax officials and computerizing their operations; as well as investing in quality data collection and access could provide some quick wins.

Nigeria Economic Update (Issue 2)

Inflation rate rose slightly to 9.4 percent in November 2015 from 9.3 percent in the previous month. This rise is attributed to price increase in Food and Non-Alcoholic Beverages, and Transportation costs which extends from shortages of petrol across the country. The food sub-index grew by 0.2 percentage points to 10. 1 percent while, the Core sub-index declined by 0.2 percentage points to 8.7 percent within the period. The inflationary up-tick points to the need to curtail the rising food prices by increasing the supply of petrol in the country. 

Nigeria Economic Update (Issue 6)

The nations foreign reserves have been on a steady rise. In the review week, reserves increased by $415.2 million from $28.3 billion on February 3, 2017 to $28.8 billion on February 10, 2017. The increase is likely the reflection of a sustained crude oil revenue complemented by moderating global crude oil price and increasing domestic production. This should help strengthen the ability of the CBN to foster forex liquidity, and thus help maintain stability in the domestic forex market. If sustained, it should also help improve the value of the naira overtime. Hence, the government should implement proactive and effective policy strategies to, not only, sustain improvements in oil revenue but also boost non-oil revenue.