September 16, 2020

Nigeria Economic Update (Issue 35)

Total capital imported into Nigeria decreased by 77.88 percent from $5.85 billion to $1.29 billion between first quarter and second quarter of 2020.1 A disaggregation of the data shows that Foreign Direct Investments (FDI) declined by 30.65 percent to $148.59 million, portfolio investment plummeted by 91.06 percent to $385.32m while other investments also decreased by 42.8 percent to $761.03m in the review period. The United Kingdom, South Africa and United Arab Emirate are the top sources of capital investment in Nigeria. By sectors, shares (35.9 percent), finance (23.9 percent) and banking (10.8 percent) accounted for the most capital inflow into the country. The decline was as a result of the uncertainty associated with the COVID-19 pandemic as investors seek safer assets. Considering that the decline in capital is occurring in a context of low oil prices, foreign exchange inflows will be significantly impaired with implications on the exchange rate. While the government has minimal influence over the trends in capital inflow, alternative sources of generating foreign exchange earnings should be developed in order to induce stability into the foreign exchange market.

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Nigeria Economic Update(Issue 31)

Recent data on Consumer Price Index (CPI) indicates significant increase in general price level for the sixth consecutive month. Headline inflation increased by 0.9 percentage points from 15.6 per cent recorded in May to 16.5 percent in June the highest rate recorded since October 2005 (an 11-year high). The core sub-index increased from 15.1 percent to 16.2 percent while the food sub-index stood at 15.3 percent, an increase of 0.4 percent from the preceding month of May. Higher prices of domestic/imported food and other items, as well as increased energy cost were major drivers of the increase. This is probably explained by the exchange-rate pass-through, given the significant depreciation of the naira.

Nigeria Economic Update (Issue 24)

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Nigeria Economic Update (Issue 37)

OPEC Monthly oil report reveals that Nigeria recorded the highest month-on-month increase in crude oil production among the OPEC member countries in August 2017. Specifically, at an increasing rate of 8 percent, domestic oil production rose to pre-2016 level of 1.86 million barrels per day in August 2017. With ongoing repairs in the sector, oil production could get to 2.2 million barrels per day in the near term, albeit the prior voluntary agreement to cap production at 1.8 million barrels per day. Going forward, there is need to address poor planning and policy inconsistencies in the sector, in order to ensure the influx of investors who have channeled their investments to other African countries due to laxity in policies in the sector.