General News
Nigeria’s Gradual Road to Economic Recovery
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.
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.
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.
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…
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.
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.
General News
Afe Babalola University Partners with New Horizons to Integrate 4IR Skills into Academic Curriculum
The institution has been lauded for its rapid ascent in academic rankings and its dedication to producing socially relevant graduates since its establishments in 2009 by legal luminary Aare Afe Babalola. It has consistently demonstrated excellence in education and research, and has been recognized as Nigeria’s best university for three consecutive years.
Deputy Director, ICT, Afe Babalola University (ABUAD), Ado Ekiti, Muyiwa Oladimeji (left); Vice Chancellor,
Prof. Smaranda Olarinde; Managing Director, New Horizons Nigeria, Tim Akano and the University Bursar,
Pastor Dupe Babatola, during the signing of Memorandum of Understanding between New Horizons and the varsity for the integration of 4IR skill sets into ABUAD’s academic curriculum in Ado-Ekiti, Ekiti State.
Afe Babalola University has entered into a strategic partnership with New Horizons Nigeria to integrate Fourth Industrial Revolution (4IR) skill sets into its academic curriculum. This collaboration aims to empower ABUAD students with globally relevant competencies in Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, 3D Technology, and the Metaverse, Web 3.0, Full Stack, Cyber Security among others. By embedding these cutting-edge technologies into its programs, ABUAD reinforces its commitment to producing graduates who are not only job-ready but also poised to be innovators and wealth creators in the global tech ecosystem.
The Memorandum of Understanding (MoU) was signed by Prof. Smaranda Olarinde, Vice Chancellor of ABUAD, and Mr. Tim Akano, CEO of New Horizons Nigeria. The University Bursar Pastor Dupe Babatola, and Mr. Muyiwa Oladimeji, the Deputy Director of ICT were also present at this meeting.
According to Prof. Olarinde, she stated that the partnership aligns with ABUAD’s vision of fostering innovation and excellence and by integrating 4IR skills into the academic curriculum, students are being prepared to meet the demands of the modern workforce and to drive technological advancement.
Also, Mr. Akano asserted that “New Horizons is proud to collaborate with ABUAD, an institution that shares its commitment to technological empowerment. Together, we will provide students with the tools and certifications necessary to excel in today’s digital world. It could be recalled that in the first three global industrial revolutions, Africa was not present at the parties of Agric revolution of the 17th century, Industrial revolution of the 18th century, and Information Communication revolution of the 20th century, Africa got late to the party. This explains the large-scale hunger, poverty, and diseases that Africa is battling with today. We are in a new era, the age of Artificial General Intelligence (AGI). AGI will determine the trajectory of every profession, going forward. Regardless of whatever course or profession one chooses, there is a component of AGI in it that will decide who is a modern lawyer or obsolete lawyer, who is a modern Doctor or Obsolete Doctor, who is a modern Engineer or obsolete engineer, and who is a modern art student or obsolete art student. Any university today that produce graduates without relevant 4IR skills and certifications attached during their undergrad years is producing obsolete graduates. The four major global challenges confronting humanity are not permanent problems but rather TECHNICAL/Technological problems. A case in point was smallpox, which had killed over 400 million people worldwide. However, when Edward Jenner invented a vaccine, using technology, smallpox got killed itself. Therefore, all the key problems in the world today: hunger, poverty, disease, Climate Crisis, Youth Unemployment are all technological problems that need technological solutions. This is why ABUAD’s partnership with New Horizons is necessary, critical and urgent with a view to ensuring that going forward, the ABUAD graduates have what it takes to compete with the Chinese, Americans and Japanese when it comes to 4.0IR innovations”.
This strategic partnership with New Horizons Nigeria signifies a pivotal step in ABUAD’s mission to remain at the forefront of educational innovation, and to ensure that its students are well-equipped to navigate and lead in the evolving technological landscape.
New Horizons Nigeria is Africa’s largest ICT training organization with over 200 training centres in various universities, high schools, and retail locations across Nigeria, empowering over 100,000 students yearly. New Horizons Nigeria is a franchise of New Horizons International, the world’s largest ICT training institute with Head Office in California and offices in 90 countries worldwide. The institution pioneered the integration of International ICT certification into the Nigeria academic curricular twenty years ago and some of the students that passed through New Horizons training in their respective universities are managing global corporations today in Silicon valley and working with global IT giants like Microsoft, MasterCard, Oracle, Google and Amazon among others.
United Bank for Africa (UBA) celebrated its 75th anniversary during its 65th Annual General Meeting, highlighting decades of resilience, innovation, and commitment to service.
Mr. Tony Elumelu, Group Chairman, reflected on the bank’s journey, emphasizing its ability to adapt and transform over three-quarters of a century.
He announced UBA’s impressive financial performance for 2024, including a gross revenue of ₦3.2 trillion and profit after tax of ₦767 billion.
The bank’s total deposits grew by 42% to ₦24.6 trillion, while its loan book expanded by 35% to ₦7.5 trillion.
Mr. Elumelu also addressed UBA’s efforts to meet the Central Bank of Nigeria’s directive to increase the minimum capital requirement for international commercial banks.
Following a successful rights issue, UBA’s capital now stands at ₦355.2 billion, with plans to raise the remaining ₦144.8 billion later this year.
GMD/CEO, Mr. Oliver Alawuba, reiterated UBA’s commitment to enhancing customer experience through digital banking.
He highlighted the bank’s focus on leveraging artificial intelligence and advanced technology to serve its 45 million customers across 24 countries more effectively.
UBA’s dedication to environmental stewardship and social progress was evident in its 2024 initiatives, including planting 4,550 seedlings to offset carbon emissions and distributing over 13,000 books through the Read Africa Initiative.
The bank’s efforts were recognized with multiple awards, including “Bank of the Year” in five African countries.
As UBA continues its journey, Mr. Elumelu and Mr. Alawuba expressed gratitude to shareholders, customers, staff, and regulators for their unwavering support.
The bank remains committed to innovation, financial inclusion, and driving economic growth across Africa and the globe.
Sextortion scams have become so widespread that the Federal Bureau of Investigation (FBI) is sending agents to Nigeria to help track down the perpetrators.
The agency’s “Operation Artemis” has led to the arrest of 22 Nigerians, half of whom are “directly linked” to sextortion incidents in which victims died by suicide.
Sextortion scams often begin on social media, where perpetrators pose as attractive young women to lure victims—typically unsuspecting teenage boys—into sending nude photos or explicit videos.
Once the images are obtained, the scammers turn to blackmail, threatening to leak the content unless the victim pays up.
In some cases, the sextortion results in teenage victims taking their own lives over fear of the nudes leaking.
In Thursday’s announcement, the FBI noted it’s been “observing a significant increase over the last three years in financially motivated sextortion schemes targeting young males ages 14-17, resulting in more than 20 minor victims dying by suicide.”
The agency is also facing a 30% year-over-year increase in sextortion-related tips.
“According to the FBI’s Internet Crime Complaint Center or IC3, there were over 54,000 [extortion-related] victims in 2024, up from 34,000 in 2023,” it said.
“Over the last two years there have been nearly $65 million dollars in financial losses due to this crime.”
In response, the FBI says 55 agency field offices came together to identify “nearly 3,000 victims of financially motivated sextortion,” which led investigators to track down the culprits in Nigeria.
The US has since extradited at least three suspects from Nigeria.
“These subjects will now be held accountable in the American justice system, with more subjects still awaiting extraditions in Nigeria,” the FBI added.
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