BUSINESS
IMF attributes Nigeria’s economic recovery to govt policy support
International Monetary Fund (IMF) says the Nigerian economy is recovering from a historic downturn benefitting from government policy support, rising oil prices and international financial assistance.
IMF disclosed this in a statement issued from its headquarters in Washington D.C. on Monday.
The organisation said Nigeria exited the recession in fourth quarter 2020 and output rose by 4.
1 per cent (year-on-year) in the third quarter, with broad based growth except for the oil sector, which is facing security and technical challenges.“Growth is projected at 3 per cent for 2021.
“Headline inflation rose sharply during the pandemic reaching a peak of 18.
2 per cent year-or-year in March 2021 but has since declined to 15.6 per cent in December, helped by the new harvest season and opening of land borders.“Reported unemployment rates (end 2020) are yet to come down but more recent COVID-19 monthly surveys show employment back at its pre-pandemic level,’’ it stated.
Despite the recovery in oil prices, the general government fiscal deficit is projected to widen in 2021 to 5.9 per cent of Gross Domestic Product (GDP), reflecting implicit fuel subsidies and higher security spending, according to IMF.
Moreover, it stated that the consolidated government revenue-to-GDP ratio at 7.5 per cent remained among the lowest in the world.
“After registering a historic deficit in 2020, the current account improved in 2021 and gross FX reserves have improved, supported by the IMF’s SDR allocation and Eurobond placements in September 2021.
“Notwithstanding the authorities’ proactive approach to contain COVID-19 infection rates and fatalities and the recent growth improvement, socio-economic conditions remain a challenge.
“Levels of food insecurity have risen and the poverty rate is estimated to have risen during the pandemic.’’
The international body, however, said that the outlook faced balanced risks, saying that on the downside, low vaccination rates expose Nigeria to future pandemic waves and new variants, including the ongoing Omicron variant.
It stated that higher debt service to government revenues (through higher U.S. interest rates and/or increase borrowing) poses risks for fiscal sustainability.
“A worsening of violence and insecurity could also derail the recovery.
“On the upside, the non-oil sector could be stronger, benefitting from its recent growth momentum, supportive credit policies, and higher production from the new Dangote refinery.
“Nigeria’s ratification of the African Continental Free Trade Agreement could also yield a positive boost to the non-oil sector while oil production could rebound, supported by the more generous terms of the Petroleum Industry Act.
According to the statement, under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.
A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies
On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. (NAN)
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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