Crude oil price continued to increase in the period under review, reaching its 2016 peak at $50.30 on June 2, 2016. Specifically, OPEC weekly basket price increased by 1.43 percent from $44.65 on May 27, 2016 to $45.29 on June 3, 2016. Brent was sold for $49.96 on June 3, 2016. The present rise in crude oil price can be attributed to oil production shocks in several oil-exporting countries, and the general expectation of a further cut in output following the OPEC meeting in Vienna on June 2, 2016. However, the OPEC meeting ended with no agreement on production quotas. In Nigeria, oil production level increased in the period under review, following repairs on some of the damaged oil and gas facilities. Precisely, Nigerias output increased by 200,000 barrels on June 3, 2016 to 1.6 million barrels.

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.

Recent Data on Nigerias Real GDP growth rate (Year-on-Year) declined by 2.47 percentage points, from 2.11 per cent in 2015Q4 to -0.36 percent in 2016Q11. This is the lowest GDP growth rate since 2004Q2 (-0.81 percent). The Oil sector continued to contract, as -1.89 percent growth was recorded in 2016Q1. The negative growth witnessed in the oil sector was likely driven by the fall in global oil prices by $9.732 and decline in domestic crude oil production, relative to preceding quarter. Similarly, the Non-oil sector witnessed a negative growth as it declined by 3.32 percentage points from 3.14 percent in 2015 Q4 to -0.18 percent in 2016Q1. The underperformance in the non-oil sector was driven by significant contractions in financial (by 17.69 percent), manufacturing (by 8.77 percent), and real estate (by 5.48 percent) sub-sectors. Given that the present economic fundamentals point to a likely recession in 2016Q2, the government can stir economic activities by speeding up the budget implementation process to spur growth in the non-oil sector and the economy at large. More so, the domestic production shock in the oil sector needs to be addressed to effectively leverage on the present marginal rise in crude oil prices.

Power sector analysis shows a decline in power generated by 15.07 percent from a peak of 3,424 mw to 2,908 mw between May 8, 2016 and May 15, 20169. The declining power supply is attributable to vandalism of pipelines and gas shortages, which has a debilitating effect on power generation. As part of the efforts by the Federal Government to improve power supply in the country, the Bank of Industry (BoI) is currently funding intervention projects to provide alternative source of energy (solar) in rural areas across the country10. Since the major problem facing power generation in the country is gas shortages, the government should make concerted efforts to combat vandalism.

Recent data from the National Bureau of Statistics (NBS) shows that the value of capital imported to Nigeria declined by 54.34 percent; from $1.56 billion 2015Q4to $710.97 million in 2016Q11. This is the lowest value since the data was first released in 2007. Huge declines in Portfolio Investment (71.54 percent) and other Investment (44.84 percent) were the major drivers of the trend within the period. A myriad of factors have contributed to the decline in investments. The plunge in crude oil prices, and the resultant negative signals on investors confidence, was a key factor. This was exacerbated by the FOREX restrictions and delays in the assentation of 2016 Appropriation Bill. While the slight increases in oil prices and the recent signing of the budget into law could improve the general economic prospects, monetary authorities need to proffer solutions to the negative effects of the current FOREX restrictions on investments.

Power sector analysis shows an increase in power generated by 15.5 percent from 3639.2 megawatt to a peak of 4196.2 megawatt between April 22, 2016 and April 29, 201612, albeit a sharp fall to 25.2 megawatts on April 23, 2016 following a system collapse13. In a bid to attain the targeted 10,000 megawatts by 2019, the Federal Government is set to complete the ongoing 47 power transmission projects across the country, which would boost power supply14. However, the delays in passing the budget into law is a major constraint to the completion of the projects. Thus government needs to speed-up the passage of the 2016 budget to provide the funds to complete the projects.

A recent report by the National Bureau of Statistics (NBS) indicates that Internally Generated Revenue (IGR) at the subnational level decreased slightly between 2014 and 2015. Specifically, the report shows that on the average, the IGR of all 36 states declined by 3.6 per cent from N707.9 billion in 2014 to N683.6 billion in 20157. A further disaggregation reveals that while IGR in 11 states improved in 2015 compared to 2014, IGR in 24 states were below their 2014 levels. As expected, Lagos state generated the most IGR during the period. Given that domestic resource mobilization is the most viable alternative to complement the shortfalls (driven by lower oil prices) in budgetary allocations to states from the federal government, state governments need to do more to improve the effectiveness and efficiency of revenue collection.

There is a link between primary commodity export prices and economic performance. Many African economies are primary commodities export biased, often in few primary commodities. Previous studies focus on the impact of commodity prices on growth in Africa with little attention paid to different primary commodities and level of diversification in primary commodities export. This study, investigates the effect of primary commodity prices on the long-run growth of 24 primary commodities-based African economies; by commodity types and level of diversification in primary commodities exports.

Inflation rate continued its upward trajectory in the week under review. Specifically, the Consumer Price Index (CPI) increased by 1.39 per cent, from 11.38 per cent in February to 12.77 per cent in March, 20161. Remarkably, this is the highest rate since July 2012, representing a 4-year high. While both components of the CPI rose in the period, the food sub-index was largely the main driver of the increase in the CPI, with a growth rate of 1.39 per cent between February and March. The persistent scarcity in petroleum products, especially Premium Motor Spirit (PMS), has increased transportation costs and the price of food items.