Amidst several projections of challenging economy in the year 2016 by many economists and the International Monetary Fund, IMF, the National Bureau of Statistics, NBS, has outlined its own position on all key economic indicators, not just for 2016 but also in the next four years to 2019.
The projections covers the annual growth rate of real Gross Domestic Products, GDP, annual Inflation rate, and the annual growth rate of the Value of Total Trade, VTT.
Gross Domestic Product, GDP
In a report released last weekend NBS said “growth in 2016 is expected to be tepid at best”. Economic tepidity is one characterised by dull activities in key market segments and performance areas. NBS’ prediction was based on the happenings in the economy recently especially in 2015 marked by huge negative impact of its dependency on oil revenue amidst price shocks.
It noted “years prior to 2015, the Nigerian economy was largely supported by the non-oil sector as supply disruptions hampered oil output. In 2015 however, various factors including political uncertainty prior to and six months after the elections, and intermittent supply shocks of refined petroleum products, and others weighted on both oil and non-oil output. The entire economy took a hit”.
Consequently GDP which is the key indicator of economic health of a country was on the downside, declining in the first and second quarter with marginal recovery in the third quarter 2015.
However, NBS stated that “in 2016, the economy is expected to grow by 3.78 per cent, as output in the oil and non-oil sectors are expected to perform marginally better relative to 2015”. According to the Bureau, Federal Government’s main economic research agency, “the declines in prices of crude oil and related refined products give the Nigerian government the opportunity for some potential savings as subsidies payments on PMS and other refined products may be diverted into more productive aspects of the economy”.
It noted that “the government has taken a step further to repeal subsidies on kerosene products. As it stands there are no subsidies on PMS and this should bode well for government coffers going forward. “In the near term, support to the non-oil sector is expected to come through initiatives by the Central Bank of Nigeria, CBN, and the Government at Federal and State levels.
“One of such initiatives is the N300 billion Naira export stimulation fund by the CBN. Increased efforts by State governments to boost internally-generated revenue, when combined with more prudent and targeted infrastructure spending, is likely to lead to better output performance”.
Going forward NBS said the 2017 to 2019 period is expected to reap the benefits of the extra N1.6 trillion into capital expenditures in the 2016 budget, adding that in particular, plans by the government authorities to increase power supply by developing critical infrastructure to transport gas to the power plants in order to add 2,000 mega watts to the country’s stock of power within the next 12 to 15 months will have multiplier effects on both the manufacturing and services sectors.
NBS stated “other measures expected to spur growth include fiscal measures such as the implementation of the Treasury Single Account, TSA, improvements in tax collection efforts and the creation of an Efficiency Unit in the Federal Ministry of Finance to ensure that scarce resources are adequately deployed. With hopes on the salutary effects of these measures NBS said over the 2017 to 2019 period, growth is expected to average 5.42 per cent.
Another key economic variable examined and projected by NBS is the inflation rate. In this report NBS has projected that inflation may rise to 10.16 by end of 2016.
But it also indicated a gradual decline such that over the 2017 to 2019 period, inflation is expected to average 9.01 per cent. NBS’s outlook for the previous year predicted that curbing inflation would be harder to achieve as a result of the devaluation of the Naira, which occurred in November 2014. Indeed the first half of the year recorded more macroeconomic volatility as the headline rate, year-on-year, recorded a wider range relative to the second half of the year.
In the Second half of the year speculative pressure on the Naira compounded supply shocks exhibited in the first half of the year. Though administrative measures by the CBN helped curb some inflationary pressure, according to NBS, speculative pressure on the Naira is likely to exist in 2016 in light of the current state of foreign reserves.
The Bureau noted, ‘’while administrative measures will help provide some cover, the downside risk of such measures is that by making imported goods more difficult to obtain, they increase the price of such goods, leading to higher inflation. “We expect that the Central Bank’s adjustment of the foreign exchange management framework will be steady in the year and will thus mean a gradual easing in prices beyond 2016”.
Value of Total Trade
2015 saw a decline in both the values of imports and exports. Exports were weighed upon by the decline in the price of crude, while overall sluggish growth as well as foreign exchange restrictions weighted on the value of imports. NBS stated that “going forward the relative lower price of the Naira is expected to result in cheaper prices of non-oil exports, and again curb increases in imports. “Nevertheless, Value of Total Trade is forecast to increase on the margin, increasing by 2.41 per cent as Imports increase by 2.88 per cent and exports increase by 2.16 per cent.
“Beyond 2016, a stabilization in oil prices while not expected to reach 2014 levels in the medium term in combination with a more competitive economy is expected to yield a rebound in both imports and exports.
“Total Trade is projected to increase by 2.41 per cent in 2016, and grow by an average 15.62 per cent yearly over the forecast period 2017 to 2019”.
France, Nigeria to Build New Partnership
France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.
Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.
A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.
“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”
It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.
It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.
It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.
It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”
COVID-19: USAID to Provide $3m Grant, Technical Assistance to Combat Food Insecurity in Nigeria
The United States Agency for International Development (USAID) is providing financial grant and technical assistance worth $3 million to combat food insecurity in Nigeria compounded by COVID-19 pandemic.
A statement by the agency on Monday said: “On April 12, 2021, the U.S. Agency for International Development (USAID) in Nigeria launched a COVID-19 Food Security Challenge that will provide $3 million in grant funding and technical assistance to youth-led and mid-stage companies working in food value chains in Nigeria.”
The statement lamented that Nigeria is experiencing food insecurity compounded by the COVID-19 global pandemic and its effects on the food value chain in the country.
It stated that the pandemic has disrupted the already fragile agricultural value chains, especially smallholder farmers’ ability to produce, process and distribute food, which has disrupted agricultural productivity and markets, and negatively impacted livelihoods, especially among vulnerable households, women and youth.
The USAID Mission Director, Anne Patterson, said: “We are launching the COVID-19 Food Security Challenge to help innovative Nigerians alleviate food insecurity.
“This assistance encourages private sector-led solutions to boost food production, processing and create market linkage along the agriculture value chain in a sustainable way across Nigeria.”
The statement revealed that in launching the challenge, USAID seeks commercially viable youth-led and mid-stage companies already working in food production, processing, and distribution, noting that successful applicants will present ideas that demonstrably help farmers and other stakeholders in the agricultural value chain increase, agricultural productivity and food security within the next six months.
According to the statement, the challenge will award 15 to 25 youth-led companies up to $75,000 each and award 10 to 15 mid-stage companies up to $150,000 each.
Winners will receive funding and technical assistance to rapidly expand their activities to mitigate the effect of COVID-19 on Nigeria’s food value chain and improve the resilience of vulnerable households to the negative impacts of the pandemic.
FG Plans to Deliver Solar Energy to 25M Nigerians
The Nigerian federal government has commenced its plan to deliver electricity through solar energy to Nigerians whose communities are off the national power grid.
Vice President Yemi Osinbajo, who spoke during an event to mark the programme in Jangefe, Roni Local Government Area of Jigawa State, restated the determination of the President Muhammadu Buhari administration to give more Nigerians access to cheap and environmentally friendly renewable power.
Osinbajo said the Solar Power Naija programme would continue across the six geopolitical zones in six states, namely, Edo, Lagos, Adamawa, Anambra, Kebbi and Plateau, in the first phase, and then move to the entire 36 states and the nation’s capital, thus, covering 25 million Nigerians at completion.
Jangefe community got 1,000 solar home system connections for its about 5,000 population, as part of a 100,000 scheme, with a local solar power company implementing aspects of the scheme.
According to Osinbajo, the president had emphasised that Nigeria could no longer rely solely on the grid if government is to electrify the whole country, which meant that an effective strategy had to be developed for decentralising power supply.
The Solar Power Naija programme, which is designed by the Rural Electrification Agency (REA), is an ambitious initiative that aims to create five million connections through a N140 billion financing programme that will support private developers to provide power for five million households, which means providing electricity for up to 25 million Nigerians.
The vice president disclosed that the programme was a Public Private Partnership (PPP) arrangement supported by concessionary lending via the Central Bank of Nigeria (CBN) and commercial banks. He emphasised that structures had been put in place to make the cost of the connections affordable for the target communities.
In addition to the concessionary lending rates, Osinbajo explained that the government had provided subsidies and rebates for private developers to the tune of over $200 million under the REA and World Bank Nigeria electrification programme.
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