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Nigeria’s Economy Still Tied to Oil’s Fortunes

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By Lukman Otunuga

 

The Nigerian economy was exposed to an array of risk factors during H2 ranging from severely depressed Oil prices, falling external reserves, geopolitical tensions, and prospects of higher US interest rates.

 

With economic growth staging a fragile rebound and heavy hitters such as the IMF even downgrading growth forecasts from 2.1% to 1.9%, some may feel Nigeria’s growth prospects remain quite discouraging. Recent reports from the World Bank predicting growth to hover slightly below 2% due to an underinvestment in human capital is likely to rub salt into the wound. With the recent decline in Oil prices negatively impacting government revenues and possible complications to properly enact the 2019 budget, all signs point to tough times ahead.

 

However, the fact that Nigeria remains on the path to diversifying away from Oil reliance suggests there is still some light at the end of this dark tunnel. It must be kept in mind that the largest economy in Africa has all the required ingredients needed to positively surprise global markets in the coming years. With a population of near 200 million, a youthful workforce and an incredible abundance of natural resources that seem to be underexploited, agricultural development may be the medicine to Nigeria’s illness. If the nation is able to elevate the agriculture sector to a respectable point of self-sufficiency, this will be the first step in creating a stable and sustainable macroeconomic environment.  This is part of the government’s increased efforts to develop infrastructure to stimulate growth further.

 

The presidential elections in February will certainly be a double-edged sword for the Nigerian economy. Economic growth has the potential to expand next year thanks to increased government spending ahead of the elections. However, increased spending will inevitably rekindle inflationary pressures ultimately forcing the Central Bank of Nigeria (CBN) to re-evaluate its monetary policy stance. While speculations were initially rife over the CBN cutting interest rates in an effort to support growth, rising interest rates in the United States and Dollar strength resulted in the CBN missing the window of opportunity. With the new minimum wage in Nigeria likely to stoke inflationary pressures and falling Oil prices weighing on the Naira’s peg against the Dollar, higher interest rates may be enforced to maintain reserves.

 

Focusing on foreign exchange, the Naira’s stability against the Dollar remains the product of repeated intervention by the CBN. Higher Oil prices during the third trading quarter helped the CBN defend the Naira against an appreciating Dollar. With market conditions changing drastically and Oil weakness currently a dominant market theme, the CBN may face difficulties supporting the Naira.

 

As we head into the final trading month of 2018, the outlook for the Nigerian economy is poised to remain heavily influenced by Oil prices, the Dollar, global trade developments and pre-election jitters. Although consumer prices in Nigeria eased in October to 11.26%, government spending, and the new minimum wage are seen rekindling inflationary pressures. With the Fed expected to raise interest rates in December, Nigeria is at risk of experiencing capital outflows. Oil prices remain gripped by concerns over excessive supply in the markets and fears of falling demand – themes that may translate to falling government revenues and vulnerable Naira exchange.

 

Investors will be keeping a very close eye on the pending GDP report for Q3 which should provide fresh insight into the health of the largest economy in Africa. Sentiment towards the nation could end the year on a positive note if economic growth during the third trading quarter meets or exceeds expectations.

 

Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University.

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ACSIS Urges President Buhari to Sign Digital Rights Bill

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The African Civil Society for the Information Society (ACSIS), a Non-Governmental Organisation (NGO), has urged President Muhammadu Buhari to give presidential assent to the Digital Rights and Freedom Bill.

Mr Peter Akinyemi, ACSIS West Africa Regional Coordinator, made the appeal in an interview in Abuja on Friday.

The bill was transmitted to the president on Feb. 5, by the National Assembly.

Akinyemi said timely assent to the bill would protect rights of every Nigerian on the internet and strengthen the security within the nation’s cyber space.

According to him, this digital rights and freedom bill will effectively protect the rights of Nigerians on the internet and in the digital environment.

“It will also attract investments when the investors see that the environment is safe.

“The bill will provide a comprehensive framework for the advancement, protection and enjoyment of human rights on the internet.

“This is very necessary in consistence with Nigeria’s regional and international obligations under various international human rights instruments,’’ he said.

Akinyemi also called on the Federal Government “to priotise ICT, come up with workable and inclusive framework and policies and strive for more PPP engagements.”

According to the regional coordinator, this will create enabling environment for the technology sector and ensure that government services are driven in a digital economy.

He said ACSIS, which was established in 2003 as a Pan-African civil society organisation, has membership of over 500 around the world.

It would be recalled that the bill, which has been in the National Assembly since 2016, was passed by both Senate and House of Representatives in 2018.

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Heineken Makes Dream Come True For Football Fans

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World’s most international beer brand, Heineken®, has revealed that it will be delighting football fans across Nigeria with unique, premium viewing experiences for the rest of the UEFA Champions League Campaign, while also giving consumers an opportunity to watch the semi-finals and finals matches live in Europe.

The announcement of these exciting new plans by Heineken was made on Tuesday, the 5th of March 2019 during one of the premium viewing experiences hosted at Farm City Lounge, Lekki, Lagos.

The UEFA Champions League is one of the most followed sports competition in the world with with an audience of about 1.1Billion.

With the 2018/2019 season approaching the final stage in the next few months, Heineken is set to back up its 25-year sponsorship of the prestigious tournament by providing fans with exciting and entertaining ways to enjoy the football matches.

As part of this commitment to providing fans and consumers with the most remarkable and unmissable moments from this year’s Champions League, Heineken has partnered with hundreds of outlets across Nigeria to deliver premium viewing experiences to consumers nationwide.

The premium viewing experiences have kicked off as the UEFA Champions League resumes the second leg matches of the second round fixtures. These viewing experiences will see fans in across Nigeria experience the UEFA Champions League in a new and exciting way as Heineken seeks to give fans a truly premium and unmissable experience.

Speaking on the announcement of the UEFA Champions League Trophy Tour, Marketing Director, Nigerian Breweries Plc, Emmanuel Oriakhi had this to say; “The UEFA Champions League is the most coveted trophy in club football competition, and one of the most followed sporting spectacles in the world.

“Heineken’s rich history with UEFA has brought us some of the most iconic and unmissable moments in the history of football.

“From the unforgettable volley by Zidane to seal the 2001 Champions League final to the miracle of Athens where Liverpool overturned a 3-goal deficit.

“These are the moments that make football such a passionate sport and we want to share these moments and experiences with fans across Nigeria.

“This campaign will see Heineken provide hundreds of experience centers where fans can view the Champions League matches in a premium ambiance that only Heineken can deliver.

We also plan to reward lucky fans with opportunities to watch the UEFA Champions League Semi-finals and finals. We’ve had a tremendous relationship with our consumers and we want to share in the passion for the game.”

Heineken has been proud sponsors of the UEFA Champions League since 1994. This illustrious relationship with UEFA has seen Heineken become one of the most recognizable brands in sports, particularly in European football.

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Dangote Cement Expects London Listing in 2020

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Nigeria’s biggest listed firm Dangote Cement said over the weekend it has been in talks with several banks over a stock market flotation in London which it expects to be in 2020.

The cement company, owned by Africa’s richest man Aliko Dangote, said the plans were under consideration but that banks had not been selected yet, it said.

 

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