Economy
Rewane Predicts High Inflation Rate in 2022
Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane, says Nigeria’s inflation rate will remain structurally high at a full-year average of 13.3 percent in 2022.
Rewane said this at the Nigerian-British Chamber of Commerce (NBCC) January breakfast meeting on Thursday in Lagos.
In November 2021, Nigeria’s inflation rate declined marginally to 15.
40 percent from 15. 99 percent in October — the 8th consecutive monthly decline and the lowest inflation rate recorded in 2021.The National Bureau of Statistics (NBS) is expected to release the last inflation report for 2021 this week.
Rewane predicted that economic activity in 2022 will be similar to 2021, owing to global inflationary trends linked to COVID-19, such as the lingering global supply shortage.
“We can expect to see sustained cost-push factors, including a planned fuel subsidy removal, new electricity tariffs and additional taxes; alongside legacy issues, such as increased debt service burden and exchange rate conversion. Inflation will remain structurally high at an average of 13.3%, with an increase in Q1 and Q2,” Rewane said.
The economist, however, noted that the economic outlook for the country is not gloomy, despite its continued dependence on oil.
He pegged Nigeria’s economic growth for 2022 at 3.4 percent on sustained growth in the information and communications technology (ICT) and the financial services sector.
“Nigeria would be richer and better off in 2022, and key sectors to drive the expected growth are ICT and the financials because other sectors use it to drive productivity,” he said.
“The economy will see a 90 percent surge in e-payment as well as an increased adoption of technology and digitisation.”
Rewane said Nigeria’s gross external reserves would decline towards $39 billion as the Central Bank of Nigeria (CBN) increased foreign exchange supply and allowed naira convergence.
He added that the government would increase borrowing to meet deficit financing needs and may result in a sovereign debt default.
“The World Bank projects economic growth of 2.5% for Nigeria, with a 3.4% annualised growth rate, driven by the ICT, Financial Services, Manufacturing, Trade and Construction sectors,” he said.
“Government expenditure will increase especially because of election spending, and the naira will effectively appreciate in the informal market.”
Bisi Adeyemi, NBCC president, said the essence of the event was to look at the opportunities and challenges that businesses should expect in 2022.
In his remarks, Ben Llewellyn-Jones, British deputy high commissioner to Nigeria, reiterated the United Kingdom’s commitment to strengthening existing trade relations, including its continued support for Nigeria’s efforts to diversify its economy and open up additional areas for potential investments.
The Nigerian Exchange Ltd. (NGX) continued its bullish trend on Wednesday, gaining N183 billion.
Accordingly, the market capitalisation, which opened at N59.532 trillion, gained N184 billion or 0.31 per cent to close at N59.715 trillion.
The All-Share Index also added 0.31 per cent or 303 points, to settle at 98,509.
68, against 98,206. 97 recorded on Tuesday.Consequently, the Year-To-Date (YTD) return increased to 31.
74 per cent.Gains in Aradel Holdings, Zenith Bank, United Bank For Africa(UBA), Oando Plc, Nigerian Breweries among other advanced equities drove the market performance up.
Market breadth closed positive with 34 gainers and 17 losers.
On the gainers’ chart, Africa Prudential, Conoil and RT Briscoe led by 10 per cent each to close at N14.30, N352 and N2.42 per share, respectively.
Golden Guinea Breweries followed by 9.95 per cent to close at N7.18, while NEM Insurance rose by 9.74 per cent to close at N10.70 per share.
On the other hand, Julius Berger led the losers’ chart by 10 per cent to close at N155.25, Secure Electronic Technology Plc trailed by 9.52 per cent to close at 57k per share.
Multiverse lost 7.63 per cent to close at N5.45, Haldane McCall dropped 6.07 per cent to close at N4.95 and Honeywell Flour shed 5.62 per cent to close at N4.70 per share.
Analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 49.44 per cent.
A total of 320.10 million shares valued at N6.48 billion were exchanged in 7,943 deals, compared with 939.41 million shares valued at N12.81billion traded in 9,098 deals posted in the previous session.
Meanwhile, ETranzact led the activity chart in volume with 70.27 million shares, while Aradel led in value of deals worth N1.22 billion.(NAN)
The central parity rate of the Chinese currency renminbi, or the Yuan, weakened 22 pips to 7.1870 against the dollar on Monday.This is according to the China Foreign Exchange Trade System.In China’s spot foreign exchange market, the Yuan is allowed to rise or fall by two per cent from the central parity rate each trading day.
The central parity rate of the Yuan against the dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day. (Xinhua/NAN)
Arewa Youths Initiative for Energy Reforms (AYIFER), has urged Nigeria National Petroleum Corporation Limited (NNPCL) to do everything possible to bring Kaduna Refinery back into operation.
National Coordinator of the group, Mr Bashir Al’Amin, stated this in a statement issued on Friday in Abuja.
Al’Amin specifically called on the Chief Executive Officer of NNPCL, Mallam Mele Kyari, to do all within his powers to rejuvenate the refinery and bring it up to global standard.
He said that having delivered the Port Harcourt refinery, coupled with the establishment of Dangote Refinery in Lagos, attention should be shifted to Kaduna refinery for easy spread of petroleum products.
“We are calling on Malam Mele Kyari to expedite action on Kaduna refinery so we can be at par with other regions in the country.
“We equally beg the NNPCL to do professional work in rehabilitating the old refinery and deliver a standard and functional petrochemical refinery and not a blending plant.
“Kyari should resist any temptation that could make him do something that can jeopardise his good image,” he said.
Al’Amin said that since the extinction of groundnut pyramid and textiles in Kano State as well as PAN in Kaduna State and with the Kaduna refinery getting moribund, a lot of youths had lost their jobs.
According to him, all their hopes in the north are tied to the legacy refinery, expressing the hope that God would use Kyari to deliver it well and on time.
He said that the group was solidly behind NNPCL in prayer and would be ready to celebrate the company if its expectations were met. (NAN)
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