Macroeconomic Report & Economic Updates
September 2, 2016
Nigeria Economic Update (Issue 37)
Recent
data by the CBN shows a decline in manufacturing capacity utilization by 2.0
percentage points to 50.7 percent in 2016Q2. Foreign exchange
challenges in addition to cash squeeze in the review quarter, led to the
decline in capacity utilization. This has hindered activities in the sector
while impacting negatively on business confidence. Nonetheless, the CBN
recently directed authorized FX dealers to dedicate 60 percent of FX purchases
to manufacturers. This policy measure is therefore expected to meet
the sectors critical FX need for the purchase of imported raw material and
other machineries, while boosting the potential for economic growth in the long
term.
Related
Nigeria Economic Update (Issue 16)
Nigerias Bonny light price declined by 7.1 percent from $40.19 per barrel on March 24, 2016 to $37.32 per barrel on April 1, 20162. OPEC weekly basket price also decreased by 3 percent from $35.81 per barrel to $34.74 per barrel within the same period3. The remerged downward trend in crude oil price is traceable to concerns over the likely failure of the oil production freeze deal between Saudi Arabia and Iran4. The outcome of the oil production freeze meeting which is scheduled to hold on April 17, 2016, will give further direction for oil supply regulation.