According to the Central Bank of Nigeria (CBN), the Naira appreciated by 7.62 percent from ₦1661.12 to a US Dollar on 2nd December 2024 to ₦1534.56 to a US Dollar on 3rd January 2025. Since the unification of exchange rates in June 2023, the Naira has been fluctuating. In 2024, the local currency lost about 41 percent of its value against the dollar in the official market, despite a rise in external reserves in the same period. The recent appreciation of the Naira comes a month after the implementation of the Electronic Foreign Exchange Matching System (EFEMS), which was officially launched on 2nd December 2024 to reduce speculation and enhance transparency in Nigeria’s foreign exchange market. With a strengthened domestic currency, it is expected that prices would fall in the short term, especially given that Nigeria is a highly import-dependent country. If the appreciation is sustained over time, it enables the country to concurrently service foreign currency-denominated debts and supply demanded liquidity in the foreign exchange market. To ensure a stable and strong Naira, there is a need to maintain sustainable debt levels, reduce reliance on imports, and boost foreign reserves by increasing exports. Also, there is a need to create a business-friendly climate for foreign investors to attract foreign exchange inflow.

The rising spate of inflation in Nigeria has become worrisome in recent years, considering its implications on the quest for tourism development in the country. This study, therefore, empirically evaluates the effect of inflation on the Nigerian tourism industry. Two tourism indicators (tourism arrivals and tourism receipt) are employed in this study for robustness and quarterly data on relevant variables for the period between 1995Q1 and 2020Q4 were analysed using different econometric approaches. The results of all the estimation methods unanimously revealed a trade-off between inflation and the two tourism indicators, signalling that inflation dissuades international tourist arrival and lower tourism revenue in Nigeria. Hence, the Nigerian monetary authority must ensure price stability by keeping the inflation rate at a desirable level in a bid to foster tourism development in the country.

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Authors: Isiaka Raifu Akande and Joshua Adeyemi Afolabi

Key messages
• Nigeria's exports are recovering from the COVID-19 crisis, but they remain heavily
reliant on raw products, particularly oil and gas, which account for over 80% of export
earnings.
• The country faces challenges in trade competitiveness, including low product
diversification, limited value addition, and inefficiencies in logistics and
infrastructure.
• Stabilizing the national currency and broadening the tax base are crucial for
improving Nigeria’s macroeconomic environment and reducing vulnerability to external
shocks.
• Simplifying trade procedures, improving road quality, and expanding shipping and
logistics services can ease the movement of goods and lower business costs.

AUTHORS

Anthony Okon; Chukwuka Onyekwena ; Bilkis Ceesay and Isatou Jallow 
 

This policy brief was prepared by the participants during a training on Trade Competitiveness and Regional Value Chain Analysis, held in Banjul (The Gambia) from 23 to 27 September 2024.

Free Trade Agreements (FTAs), such as the African Continental Free Trade Area (AfCFTA), can significantly influence biodiversity conservation based on their design and implementation. While AfCFTA may encourage countries to strengthen environmental regulations in line with international agreements like the Convention on Biological Diversity (CBD) and CITES, there are concerns that economic goals might overshadow ecological considerations. This could lead to industrial growth in agriculture and mining, risking deforestation, soil erosion, and water pollution. Using a combination of qualitative and quantitative methods, this study employs the Energy-Environment Integrated CGE (EEICGE) Model to analyze AfCFTA’s impacts on Africa's biodiversity. Simulation results for Nigeria indicate a rise in fossil fuel demand and carbon emissions. Stakeholder insights reveal that increased trade may drive intensified land use, contributing to deforestation and biodiversity loss. The study underscores that the impact of AfCFTA on biodiversity is contingent on specific provisions, enforcement capacities, and implementation contexts. To ensure FTAs support sustainable development, strategic measures are vital, including robust environmental regulation enforcement, local community engagement, and investment in renewable energy to meet rising energy needs while adhering to global commitments like the Paris Agreement.

AUTHORS: Augustine Iraoya, Chukwuka Onyekwena, David Okorie, Adedeji Adeniran

This paper was first published HERE

The National Bureau of Statistics' report showed that in the third quarter of 2024, Gross Domestic Product (GDP) grew by 3.46%, representing a 0.92 percentage point rise from the 2.54% recorded in Q3 2023. The non-oil sector, the largest contributor to GDP, grew by 3.37% in Q3 2024. Growth in the non-oil sector was driven by financial institutions, information and communication technology, agriculture, and trade, among other sectors.

In Africa, the digital economy, which refers to all economic activities facilitated by digital technologies and big data, is booming. This is a result of digital technology’s capability to transform economies and societies, influencing how we work, live, and interact. Africa’s digital economy is a boost to the continent’s economy. International Finance Corporation (2020) reveals that Africa’s digital economy grew from $100 billion to $115 billion, representing a 15% increase between 2019 and 2020. It further projects that Africa’s digital economy has the potential to contribute $180 billion and $712 billion to the continent’s gross domestic product (GDP) by 2025 and 2050, respectively.

The role of data, in the public and private sectors, is central to informing strategy, shaping decision and policy-making, creating value, driving innovation, sustaining profit-making and promoting economic development.

This Brief was written by Kunle Balogun

The National Bureau of Statistics' Liquefied Petroleum Gas (LPG)/Cooking Gas Price Watch for October 2024 showed a 3.2% month-on-month increase in the average cost of refilling a 5 kg cylinder, from N6,699 in September to N6,915 in October. Similarly, the average retail price of refilling a 12.5 kg LPG cylinder rose by 2.58%, from N16,313 in September 2024 to N16,743.55 in October 2024. According to state-level analysis, Borno state recorded the highest petrol prices at N7,939, followed by Yobe state at N7,580, and Benue state at N7,578, while Katsina state had the lowest prices at N6,270, followed by Zamfara state at N6,410, and Delta state at N6,427. The month-on-month increase in petrol prices can be ascribed to global market fluctuations and supply chain interruptions, which have increased the cost of importing LPG. This increase in cooking gas costs has a detrimental impact on household welfare nationwide, particularly for low- and middle-income families that spend a significant portion of their income on cooking fuel. 

According to the National Bureau of Statistics (NBS) Premium Motor Spirit (Petrol) Price Watch report, the average price of Premium Motor Spirit (petrol) rose by 14.98% in October to N1,184.83, from N1,030.46 in September, this reflects an 87.88% increase from N630.63 in October 2023. Across the six zones, the South-East recorded the highest average retail price at N1,256.76, while the North Central zone had the lowest price at N1,132.94. Among states, Ebonyi had the highest retail price at N1,292.86, followed by Jigawa at N1,288.18 and Borno at N1,283.79. In contrast, Delta had the lowest petrol prices at N1,050.00, followed by Nasarawa at N1,063.68, and Lagos at N1,080.95. The government's policy to establish market-based pricing and the withdrawal of subsidies in May 2023 has contributed to the ongoing rise in fuel costs. The high cost of petrol has contributed to the high cost of living by increasing transportation costs, and operational expenses for businesses. This has disproportionately affected small and medium-sized enterprises (SMEs) which lack the resources to absorb these costs, resulting in lower profitability and layoffs. Given the consequences of rising PMS prices, the government needs to provide targeted support for low-income households, encourage private sector investment in refineries, rehabilitate existing refineries to meet domestic gasoline demand, and possibly cut costs.

Public procurement is an important component of governance, as it comprises purchases by a government to ensure quality and efficient public service delivery. The public procurement process requires technical competence in various areas, including financial, legal, administrative, sector-specific knowledge, and an understanding of local and global supply chains from where the public goods and services will be sourced. In this regard, the human resource system and skill development programs, often referred to as human development, are part of extensive public procurement reforms. Appiah (2011) argued that the effective application of procurement regulations requires a well-trained workforce, and human resource development initiatives must be periodic and consistent, given the constant evolution in the budgeting system or political and economic environments.

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