General News
Nigeria Economy – A New Quarter but Same Old Story
By Lukman Otunuga, Senior Research Analyst at FXTM,
Africa’s largest economy entered the new quarter with a strong likelihood of following the same old story, namely COVID-19 headwinds, recessionary trends and widespread local and global market uncertainty.
What are the chances of a plot twist?
In a year full of twists and turns, the Central Bank of Nigeria (CBN) surprised investors with a 100 basis point interest rate cut from 12.5 percent to 11.5 percent. The monetary policy signal is a green light for more affordable lending which could stimulate economic growth and temper recessionary pressures. However, the same green light could speed up the inflationary pressures which weigh on the economy.
The currency markets may view the CBN’s rate cut as a sign that monetary policy no longer prioritises foreign investors seeking high returns on deposits.
Until now, the CBN’s hawkish monetary policy helped to maintain and grow the banking system’s foreign currency reserves, providing the Naira with a cushion against further weakness. The current weakening global and domestic economic outlook does not support a high-interest rate environment in the short term. Faced with a protracted recession or runaway inflation, the CBN appears to have chosen the lesser of two evils. The central bank’s latest statement indicates that high interest rates have not been successful in checking inflation, which the CBN blames on structural factors like rising fuel and electricity prices.
This raises the question of why an Oil-producing country faces inflation in fuel and electricity prices when fossil fuels are locally produced and ought to be more affordable. The answer is the strange economic distortion created by COVID-19. In this case, Nigeria applied to borrow $3.4 Billion from the IMF in order to bail out the economy because of the COVID-19 pandemic. The money will have to be repaid – cue a hike in electricity tariffs to increase government revenues from utilities and bolster its repayment capacity. This would be credit-positive as the last thing Nigeria needs in such extraordinary times are doubts over its creditworthiness.
Weaker global Oil prices make Nigeria’s creditworthiness even more of an important factor because the state is hard-pressed to cover its budgetary needs in the current climate of low demand for crude Oil.
Now that the CBN has put checking inflation lower down in its priorities, does this signal further rate cuts in the near future?
The case for further pandemic-driven rate cuts appears to be strong. The COVID-19 outbreak shows no signs of abating. On the contrary, at the time of writing, the number of new cases in Nigeria is on the rise after lockdowns eased. Further monetary stimulus to the economy appears unavoidable.
Of course, it all depends on what happens with inflation. If the inflation rate keeps rising in sectors like fuel, electricity and food it may drag on consumer spending, outstripping the economic benefits of lower interest rates. Medical costs have also risen because of COVID-19, according to the August inflation statistics.
The pandemic comes at a time when Nigeria is exposed to external and domestic risks. Locally, the drive to diversify the economy stayed stuck in first gear. Border clashes between herders and farmers led to border closures, further dampening economic activity. Externally, Oil prices remain in a slump, the US Dollar is appreciating and global sentiment struggles with the COVID-19 circumstances.
Further elevating fears over a technical recession in Nigeria, the World Bank forecasts an economic contraction of 3.2 percent for the full-year 2020, a five percent drop from its previous projection.
Summing up, Nigeria’s outlook remains influenced by the same old themes. If Oil prices stay depressed, foreign currency reserves and government revenues will likely decline. Low Oil prices also impact the CBN’s capacity to defend the Naira. A falling Naira could accelerate inflation and further weigh on economic growth. Will the final quarter of 2020 see a continuation of these themes, or will the economy offer a positive surprise?
The banking sector remains a bright spot in the cloudy outlook. Easier borrowing terms might boost the banking sector’s income while encouraging economic activity. Another bright spot is that growth in China has returned, promising to hike demand in the Oil markets and further supporting Oil prices.
After the year we’ve had so far, one thing’s sure: surprises are only to be expected.
Authorities in seven African countries have arrested 306 suspects and seized 1842 devices in a sweeping international operation targeting cyber-enabled fraud and scams.
Dubbed Operation Red Card, the effort ran from November 2024 to February 2025, focusing on dismantling cybercrime networks that defrauded over 5000 victims through mobile banking fraud, investment scams and malicious messaging app schemes., according to infosecurity-magazine.com
In Nigeria, police arrested 130 suspects, including 113 foreign nationals, for running fraudulent investment schemes and online casinos.
Authorities found that criminals funneled illicit proceeds into digital assets to obscure their financial trails.
Investigations also uncovered signs of human trafficking, with some individuals coerced into participating in the scams.
Law enforcement seized: 26 vehicles; 16 houses; 39 plots of land; and 685 electronic devices
In Rwanda, 45 individuals were arrested for orchestrating a social engineering scam that defrauded victims of more than $305,000 in 2024.
Scammers posed as telecommunications employees and falsely claimed victims had won lotteries to extract sensitive information.
Others impersonated injured family members to request emergency financial assistance.
Authorities recovered $103,043 and seized 292 devices.
South African authorities arrested 40 individuals and confiscated over 1000 SIM cards, along with 53 desktop computers and towers linked to a sophisticated SIM box fraud scheme.
This setup allowed cybercriminals to disguise international calls as local ones, facilitating large-scale SMS phishing attacks.
In Zambia, law enforcement apprehended 14 members of a cyber syndicate specializing in malware attacks.
The criminals sent phishing messages containing malicious links, infecting victims’ devices and taking control of messaging and banking apps. This enabled them to access financial accounts and further spread fraudulent links.
The operation was carried out through INTERPOL’s African Joint Operation against Cybercrime (AFJOC) initiative, which supports law enforcement efforts in combating cyber-threats.
The United Kingdom’s Foreign, Commonwealth & Development Office funded Operation Red Card under the AFJOC initiative, allocating £2.6m to enhance Africa’s law enforcement capabilities in detecting and preventing cybercrime.
The seven participating countries – Benin, Côte d’Ivoire, Nigeria, Rwanda, South Africa, To and Zambia – continue to collaborate on intelligence-led cybercrime investigations.
“The success of Operation Red Card demonstrates the power of international cooperation in combating cybercrime, which knows no borders and can have devastating effects on individuals and communities,” commented Neal Jetton, Interpol’s director of the cybercrime directorate.
“The recovery of significant assets and devices, as well as the arrest of key suspects, sends a strong message to cyber-criminals that their activities will not go unpunished.”
The UK Foreign, Commonwealth & Development Office (FCDO), Nigeria’s Federal Ministry of Innovation, Science & Technology (FMIST) and Ghana’s Ministry of Environment, Science & Technology (MEST) has announced the official launch of Sankore, a £1.9m initiative aimed at boosting science, technology, and innovation (ST&I) ecosystems in West Africa.
Sankore, part of the UK- Africa Technology and Innovation Partnerships (ATIP) Programme will strengthen UK ties with Nigeria and Ghana, supporting key agreements like the UK-Ghana ST&I Strategy (2023- 2027) and the UK-Nigeria Strategic Partnership signed in November 2024 by our Foreign Secretary, David Lammy MP and Nigeria’s Minister for Foreign Affairs, Yusuf Maitama Tuggar.
Focusing on Nigeria and Ghana, Sankore will work closely with actors in West Africa to:
– Support the operationalisation of the Ghana National Research Fund (GNRF) and the Nigeria National Research Fund (NRF).
– Support Nigeria to operationalise its National Research and Innovation Council (NRIC).
– Facilitate the commercialisation of innovative solutions in priority economic sectors such as agriculture and energy;
– Enhance the policy and regulatory environment for innovation, improving data accessibility and transparency for ecosystem actors;
– Establish a demand-driven Helpdesk supporting FCDO and government partners, providing expert guidance and advice.
Speaking at the programme launch in Abuja, UK’s Head of Intergrated Strategy and Delivery Unit, Ms. Susan Mshana, explained that the Sankore programme is an exciting addition that will strengthen the UK’s long-term partnership with West Africa governments and drive economic growth through innovation.
“By leveraging our skills, resources and expertise, we aim to accelerate shared goals of economic diversification job creation and improved service delivery in Nigeria and Ghana,” She added.
Also speaking, Ghana’s Minister of Environment, Science & Technology (MEST) Hon. Dr. Ibrahim Murtala Muhammed, said: “Innovation is a key enabler of a strong and inclusive economy. Sankore will be a catalyst to securing Ghana’s future as a hub for scientific advancement and technological innovation in the region, and we look forward to collaborating with the many partners who are bringing knowledge and expertise to this joint endeavour.”
Additionally, the Hon. Minister of Science, Technology, and Innovation in Nigeria, Chief Uche Geoffrey Nnaji said: “Our goal at the FMIST is to foster sustainable development by promoting homegrown innovation while integrating global scientific advancements to ensure Nigeria’s progress on the global stage and Sankore represents an important next phase in our valued and productive partnership with the UK in driving a brighter future for all Nigerians through cutting-edge technology and economic progress.”
Sankore will be delivered by the United Nations Educational, Scientific and Cultural Organization (UNESCO), and Results for Development (R4D) collaborating with local and international partners to ensure effective implementation and knowledge transfer.
The initiative will run for 15-month, concluding by 31 March 2026.
Fidelity Bank Plc, has once again highlighted the importance of promoting non-oil exports as it recently hosted the 18th edition of its dedicated capacity development training tagged Export Management Programme (EMP 18). The programme, which was held recently in Lagos provided a platform for entrepreneurs interested in exploring global trade opportunities to scale and acquire relevant expertise.
L-R: Prof Frank Ojadi, Director, Export Management Program, Lagos Business School; Stella Nwuke, Team Member, Export & Agriculture Division, Fidelity Bank Plc; Emem Bassy, Managing Partner, Peony Dynamic Resource Limited; and Emmanuel Nwalor, Team Lead, Export & Agriculture Division, Fidelity Bank Plc; at the closing ceremony of the 18th edition of the Fidelity Bank Export Management Programme (EMP 18) held at the Lagos Business School recently.
Hosted in partnership with the Lagos Business School (LBS), the 5-day intensive program focused on equipping entrepreneurs with the skills and knowledge needed to explore international market opportunities and strengthen their capacity to thrive in the export sector.
“At Fidelity Bank, our strategy to enhance non-oil exports is guided by the significant opportunities it offers to our customers and the national economy. This is why we offer a comprehensive suite of financial, advisory, and market-access solutions for businesses aiming to engage in international trade.
“Our market-access initiative, EMP, launched in 2016, has trained over 1,600 entrepreneurs. Today, we completed the 18th cohort with high-caliber participants and a 150% oversubscription. This indicates a promising future for Nigeria’s non-oil exports,” explained Isaiah Ndukwe, Divisional Head of Export and Agriculture at Fidelity Bank Plc.
Facilitated by key industry experts in the exports space, EMP 18 took participants through several sessions focused on critical areas in global trade such as Export Finance Instruments, Export Documentation, Accessibility of Export Markets, amongst others.
A key feature of the training was a facility tour of one of Nigeria’s busiest Export Processing Terminals (EPT) located in Ikorodu, Lagos state. The full-day visit, which was anchored by officials of the Nigerian Customs Service (NCS), gave participants a first-hand feel of the necessary procedure and requirements for securing regulatory approval for exporting from Nigeria.
One of the program participants, Patrick Ulayi Awu-Patricks, Managing Director/Chief Executive Officer, Alliance & Frontier Limited, commended Fidelity Bank for its leadership in deploying capacity-building initiatives in the non-oil exports sector. In a discussion with journalists, he stated that EMP 18 provided invaluable exposure to the opportunities in the export business noting that, “There are lots of non-oil exports opportunities and entrepreneurs must be able to identify and capitalize on these to be able to play effectively in the international trade space. This course has given me insights into the power of data which is essential for strategic decision-making.”
Ranked among the best banks in Nigeria, Fidelity Bank Plc is a full-fledged Commercial Deposit Money Bank serving over 8.5 million customers through digital banking channels, its 255 business offices in Nigeria and United Kingdom subsidiary, FidBank UK Limited.
The Bank is the recipient of multiple local and international Awards, including the Export Finance Bank of the Year at the 2023 BusinessDay Awards; the Banks and Other Financial Institutions (BAFI) Awards; Best Payment Solution Provider Nigeria 2023; and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards. It was also recognized as the Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023 and the Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.
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