Macroeconomic Report & Economic Updates

October 4, 2016

Nigeria Economic Update (Issue 41)

The
naira continued its downward trajectory in the review week. Specifically, naira
depreciated significantly at the parallel segment by 3.5 percent to a record
low of N440/$ on September 23, 2016. Notably, this was driven by
the worsening liquidity constraints at the interbank market which left the
excess forex demand to be sourced at the parallel market, and thus exerted
downward pressure on the naira. The naira is likely to further
weaken given that most of the liquidity constraints are exogenously determined
and thus forex supply will likely remain subdued by its demand.

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Nigeria Economic Update (Issue 30)

Power sector analysis shows an increase in power generated by 3.01 percent from 2903.5mw to 2991.8mw between July 1, 2016 and July 8, 2016, with a peak of 3260.8mw on July 5, 2016. This is however, still below the highest (5074.7mw) recorded in February, 2016. The increase reflects improved use of hydro (water) for power generation. The easing out of gas constraint occasioned by recent pipeline repairs have also contributed to the increase in power generation. Improvements in power generation would be sustained if hydro measures are complemented with fast-tracked repairs on damaged gas channels and intensified efforts at tackling pipeline sabotage.