Media highlights suggest that leading manufacturers quoted in the Nigerian Stock Exchange, NSE, which operate across sectors have recorded significant upsurge of 20.2 percent in their operating expenses, OPEX, in the first half of 2018. Specifically, compared to the corresponding half-year in 2017, costs incurred rose from N194.6 billion to N233.9 billion in 2018H11. The firms also operated on short term borrowings of N101 billion, up by 1.8 percent in 2017. The rising expenses may be at the backdrop of general rise in cost of: products distribution, running campaigns and innovations, and brand marketing in a bid to increase sales volume. To reduce operating expenses and support non-oil sector growth which is yet to pick up, there is need for the government to quickly implement Focus Lab projects.
Macroeconomic Report & Economic Updates
The paper analyses the impact of public debt on an economy using Nigeria as case study and identifies steady states in the model of a closed economy.
Naira appreciated in the week under review. At the parallel market, naira gained 0.54 percent to exchange at N368/$ on June 23, 20175. This is at the backdrop of injections into the forex market by the CBN to the tune of $195 million at the beginning of the review week, to meet various forex demands. This is amid a slight week-on-week increase in the external reserves (by 0.1 percent to $30.23 billion). Despite the recent naira appreciation, the long-term prospects seem bleak given that the ongoing intervention that seeks to stabilize naira by depleting reserves is unsustainable.
Nigerias domestic crude production increased significantly in April 2017. OPECs Month-on-Month data shows a 22.6 percent increase to 1.5 million barrels per day constituting the biggest increase among oil producing group. Crude production increased at the backdrop of completion of scheduled maintenance/repairs at the Bonga oil field, implying resumption of crude production by an additional 225,000 barrels. Remarkably, Nigeria is progressively moving towards meeting daily output benchmark/target (2.2 million barrels per day). Given recent boost in domestic crude oil production, considerable effort should be made to improve the countrys refining capacity in order to reduce fuel importation and conserve foreign exchange.