Macroeconomic Report & Economic Updates

March 15, 2019

Nigeria Economic Update (Issue 8)

The total amount of non-performing loans (NPL) of Nigerian banks declined for the year 2018, relative to 2017. At N1.79 trillion, the stock of NPL fell by 24.2 percent from N2.36 trillion in 20171. Also, gross loans as of the end of 2018 stood at N15.35 trillion, as against N15.96 trillion as at the end […]

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The total amount of non-performing loans (NPL) of Nigerian banks declined for the year 2018, relative to 2017. At N1.79 trillion, the stock of NPL fell by 24.2 percent from N2.36 trillion in 20171. Also, gross loans as of the end of 2018 stood at N15.35 trillion, as against N15.96 trillion as at the end of 2017. The reduction in NPL shows that debtors may have relieved more of their indebtedness in 2018 compared to 2017; this may have been complemented by the Asset Management Company of Nigeria’s (AMCON) resolve to achieve its recovery mandate against erring debtors2. AMCON is saddled with the statutory responsibility, among others, of recovering the NPL hitherto disbursed by eligible banks to their customers. The decline in non-performing loans is expected to continue as the overconcentration of banking sector loans to the unpredictable and volatile oil and gas sector has been reduced to a great length.  Monetary authorities should tighten mechanisms to ensure that commercial banks strictly adheres to the macroprudential guidelines that stipulate a 5 percent NPL benchmark.




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Nigeria Economic Update (Issue 24)

Crude oil price increased, in the week under review, to its highest price in 2016. Nigerias bonny light increased by $1.38 from $48.02 per barrel on May 20, 2016 to $49.64 per barrel on May 27, 2016, while Brent crude was sold for $50 per barrel on May 26, 2016. The catalyst for price gains in the period under review is the supply-side contractions, with unplanned production shortages in Nigeria, Canada and Iraq. The upward trend of prices may unlock more supplies in subsequent weeks, but the OPEC meeting scheduled for June 2, 2016, could moderate the effect. Nigeria is expected to benefit from crude oil price rising above the $38 per barrel benchmark. Unfortunately, supply disruptions continue to negatively affect oil revenue and may have contributed to the depletion of external reserve by over $153 millionthis week. The federal government, in collaboration with relevant security agencies, should find a lasting solution to the vandalism of oil pipelines and production facilities.

FDI, FPI And Other Investments 2

FDI, FPI and other Investments: The unusual fall in overall capital importation, especially in equity investment, in the late 2015 and early 2016 is attributable to the tougher macroeconomic and finan