Connect with us

General News

Nigeria’s Gradual Road to Economic Recovery

Published

on

Kindly share this post

By Lukman Otunuga, Senior Research Analyst at FXTM

Africa’s largest economy has displayed resilience over the past few months.

From defending against the Covid-19 menace to battling untamed inflation and shouldering domestic risks. Initially, the economic outlook was bleak during 2020 after the economy sunk back into its second recession in less than five years. Lockdown restrictions caused significant disruptions in the value chain, halted most aspects of the economy while crippling the manufacturing sector. A growing sense of alarm and unease over surging coronavirus cases added to the uncertainty, ultimately fanning fears around Nigeria experiencing a prolonged economic recession.

However, the economic expansion of 0.11% in Q4 2020 came as a breath of fresh air and offered some light at the end of the tunnel. Although the economy contracted 1.92% for the full year, the rebound during the final quarter raised hopes that Africa’s largest economy was exiting from the Covid-19 induced recession.

image.png

World Bank projects Nigeria to expand 1.1% in 2021

According to World Bank, economic growth is expected to expand by 1.1% this year while Bloomberg forecasts GDP to contract by 1.5% in Q1 2021. Nigeria certainly has the potential to exceed these growth estimates due to rising oil prices and improving global economic conditions. It must be kept in mind that earnings from oil exports account for over half of government revenues and about 90% of foreign-exchange earnings. As oil prices appreciate, this provides the government with ammunition to attack domestic risks threatening the country’s fragile economic outlook. In regards to other key metrics, inflation is seen averaging around 14% while the Central Bank of Nigeria (CBN) is forecast to hike interest rates at least once this year as economic conditions improve.

No love for the Naira

The past few months have certainly not been kind to the local currency. It has weakened considerably on the black-market exchange, trading around 482N per Dollar compared to the 380N official rate. An unappetizing combination of depressed oil prices, dollar shortages, and rising inflationary pressures exposed the emerging market currency to downside risks.

image.png

Devaluation third time lucky?

Unfavourable domestic conditions forced the Central Bank of Nigeria (CBN) to devalue the Naira twice in 2020 with CBN governor Godwin Emefiele recently confirming another devaluation to N410 against the dollar. Indeed, a weaker rate would boost government revenue from oil exports – a welcome development for the energy producer. If the Naira weakens, this could bolster revenues from crude, which is sold in Dollar but converted to Naira.

image.png

It does not end here. Nigeria’s economic prospects could brighten if the devaluation opens doors to fresh discussions with the World Bank regarding a $1.5 billion loan. Confusion around Nigeria’s multiple exchange rates has hindered investor attraction with major institutions requesting currency reforms to rekindled investment.

Inflation remains a cause for concern

But a weaker Naira may lead to untamed inflation…

image.png

Inflationary pressures have punished consumers and threatened the country’s fragile recovery. In January, consumer prices jumped to 16.47% more than double the target of 7.5% thanks to supply disruptions, dollar restrictions, and removal of oil subsidies.

Nigeria is dealing with a cost-push inflation scenario where overall prices have increased due to the rising cost of production and raw materials. The government could pursue deflationary fiscal policy or monetary authorities could increase rates, but this may do more damage than good.

Diversification & oil reliance

It is widely known that diversification has the potential to cure Nigeria’s dependence on oil. However, the country’s economic outlook remains heavily influenced by the commodity’s performance. The good news is that oil prices have appreciated over 25% since the start of 2021 thanks to OPEC+ cuts, optimism over US stimulus, and robust demand from China. But the bad news is that West Africa’s biggest oil producer has seen its shipments fall in recent months thanks to infrastructure issues with production falling to 1.50 mbpd according to data from Bloomberg.

image.png

OPEC+ meeting in focus

The OPEC+ meeting in March may indirectly impact Nigeria’s economic outlook.

                                                                      

While Saudi is publicly urging fellow members to be extremely cautious despite prices rebounding to pre-pandemic levels, Moscow on the other hand is indicating that it still wants to proceed with a supply increase. Another question is whether Saudi Arabia will continue its voluntary production cuts of 1 million barrels per day. Market expectations are rising over OPEC+ easing supply curbs after April thanks to rising oil prices. But given the nature of OPEC+ and the outcome of previous meetings – anything could be on the table.

Even if oil prices appreciate following the OPEC meeting, gasoline prices will remain unchanged in March indicating that the costly fuel subsidies are back. With inflation at a 12-year high, rising fuel costs could pour fuel into the fire – leading to further uncertainty.

CBN rate hike in 2021?

The million-dollar question is not “if” but “when” the CBN will hike interest rates.

Globally, fiscal policy has been labelled as a more effective weapon against covid-19. However, a large share of Nigeria’s revenues is spent on repaying debts. This has left little room for critical social and infrastructure spending to shield the economy from the negative impacts of Covid-19.

Monetary policymakers remain in a tricky spot after the Covid-19 menace spread its poisonous tentacles across the economy. The pandemic resulted in lockdowns, reduced activity, a weakened Naira, and stagflation. While a rate hike will increase the cost of borrowing, effectively reducing inflation – this may result in a bigger fall in GDP. However, the options are limited within the monetary policy toolbox with unconventional tools such as loan to deposit ratio, liquidity ratio, and cash reserve ratio in focus.


Kindly share this post

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. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

General News

NIMC Sets 48-hour Deadline for Diaspora Partners to Activate New Licences

Published

on

Kindly share this post

The National Identity Management Commission (NIMC) has given its Diaspora Front-End Partners (FEPs) 48 hours to obtain and activate their National Identification Number (NIN) enrolment licences on its newly upgraded diaspora enrolment platform.

The commission said the deadline followed the successful completion of a major upgrade aimed at improving the security, efficiency and reliability of NIN registration for Nigerians living abroad.

According to NIMC, the upgraded platform will offer a more seamless and robust service to diaspora applicants, ensuring faster processing and better data protection. To prepare for the transition, all FEPs have been onboarded onto the new system and taken through intensive training to equip them with the knowledge needed for effective management of the platform.

Once compliant partners activate their licences, Nigerians abroad will be able to access NIN enrolment services through them without disruption.

“The Commission apologises for any inconvenience the upgrade process might have caused and has set up a dedicated service team to resolve all issues related to diaspora enrolment,” NIMC said in a statement signed by Dr. Kayode Adegoke, its head of corporate communications.

Diaspora applicants experiencing difficulties have been advised to contact the commission for prompt assistance.

While the new system rolls out overseas, NIN enrolment continues across all centres in Nigeria, with applicants able to locate their nearest centres on the NIMC website. Nigerians at home or abroad can also modify their NIN data via the online self-service portal.

NIMC further encouraged NIN holders to download the NIMC NINAuth App on iOS or Google Play to instantly verify their NIN, control who can access their information, and enjoy secure authentication services.

 


Kindly share this post
Continue Reading

General News

Why Youth Engagement is Nigeria’s Agricultural Imperative

Published

on

Kindly share this post

By Diana Tenebe, Chief Operating Officer, Foodstuff Store

Nigeria stands at a critical juncture, faced with a demographic reality that is both its greatest asset and a significant challenge. With a population where almost 70% are under the age of 30, the nation’s future is undeniably in the hands of its youth.

Yet, the agricultural sector, the traditional backbone of the economy, is in a state of crisis, with an aging farming population and a notable disinterest from the younger generation. This disconnect poses a serious threat to our food security, economic stability, and long-term sustainable development. To navigate this, Nigeria must embark on a deliberate and multi-faceted mission to transform agriculture from a career of last resort into a dynamic, profitable, and respected profession for its youth.

The perception of farming as a life of drudgery, poverty, and limited opportunity is deeply ingrained in the minds of many young Nigerians. This is not without reason. The sector is often associated with backbreaking labor, outdated methods, and significant financial risk. The lack of access to land, credit, and modern technology creates a formidable barrier to entry, pushing aspiring young people towards often non-existent or poorly paid urban jobs. This exodus from rural areas exacerbates the issue, leaving an agricultural sector in need of fresh ideas and a renewed workforce.

To reverse this trend, we must begin by transforming the very image of agriculture. Education is the key. Integrating agriculture, food, and nutrition into the national curriculum from primary school upwards can fundamentally change how young people view the sector. By making it a compulsory subject in secondary schools, we can equip students with practical knowledge and foster an appreciation for the vast opportunities within the food system. School gardens and ‘Farm to School’ initiatives can provide hands-on experience, connecting young minds with the processes of food production and the rewards of a healthy community. By promoting farming as a business, not just a means of subsistence, we can highlight its potential for profitability and professionalism.

Crucially, young Nigerians need to see that success in agriculture is not just possible, but a reality. Showcasing successful young farmers and agripreneurs through media campaigns, documentaries, and digital platforms like Agribusiness TV can provide powerful role models. These stories of innovation, resilience, and financial success can inspire a new generation to reconsider their career paths. Peer-to-peer learning, where successful young farmers share their evidence-based success, is an effective way to demonstrate the viability of modern agricultural practices and encourage others to follow suit.

Beyond changing perceptions, we must address the tangible barriers to entry. Access to finance is paramount. Innovative funding models, including grants, subsidies, and venture capital funds specifically for young agricultural entrepreneurs, can ease the initial burden of starting an agribusiness. Policy reforms that simplify land acquisition and promote cooperative farming models are essential to ensure young people have access to the resources they need. Furthermore, providing training in technical, business, and financial literacy will empower them to develop robust business plans and attract investment.

Perhaps the most potent tool for attracting Nigeria’s tech-savvy youth is technology itself. Modern agriculture is a far cry from the old-school image of a farmer with a hoe. Digital technologies, from mobile apps that provide real-time market prices to blockchain for product traceability, can connect young farmers directly to markets and streamline their operations. The introduction of technologies like hydroponics, aquaponics, and automated farm machinery not only reduces drudgery but also offers attractive, quick-return opportunities. By promoting agri-tech startups and establishing ICT training centers for rural youth, we can position agriculture as a hub of innovation.

The government has a vital role to play in fostering an enabling environment. Initiatives like the National Young Farmers Scheme and partnerships such as the one between the Federal Government and Niger State to empower 100,000 youths are commendable steps. Continued public investment, alongside the involvement of youth in policy dialogue, will signal a genuine commitment to their future in the sector.

Engaging Nigeria’s youth in agriculture is not merely an option—it is a national imperative. By transforming perception, enhancing access to resources, and leveraging technology, we can unlock their immense potential, ensuring a sustainable and prosperous future for the entire nation. The time to act is now.


Kindly share this post
Continue Reading

General News

Kuwait Busts Nigerian Cybercrime Ring Targeting Telecom Tower, Banks

Published

on

Kindly share this post

Kuwait’s Criminal Security Sector has dismantled an international cybercrime ring composed of Nigerians responsible for coordinated attacks on telecommunications towers and banks, the Ministry of Interior announced on Sunday.

Kuwait Busts Nigerian Cybercrime Ring Targeting Telecom Tower, Banks

According to Arabic-language daily Al Qabas, the case was initiated after the Communication and Information Technology Regulatory Authority reported cyber intrusions targeting local telecom networks.

Specialised security teams quickly launched an investigation, discovering that the suspects used advanced electronic devices to breach networks and distribute mass phishing messages impersonating banks, aiming to steal account information and siphon funds.

Signal-tracking technology led investigators to a vehicle in the Salmiya area.

When authorities attempted to stop the vehicle, the driver tried to flee, colliding with several cars before being apprehended following a fierce struggle.

A search of the vehicle uncovered sophisticated electronic equipment and various technical tools.

Upon investigation, the suspect confessed to collaborating with an accomplice to hack telecom networks and send fraudulent messages posing as banks and telecommunications companies.

Police subsequently located and arrested the second suspect, and a search of their residence uncovered additional devices used to analyse the stolen data.

Both suspects, along with the seized equipment, have been handed over to the relevant authorities for prosecution.

The Ministry of Interior reaffirmed its commitment to protecting the nation’s cybersecurity and intensifying efforts to combat electronic fraud targeting both citizens and residents.


Kindly share this post
Continue Reading

Trending