- Investment Inflow to Nigeria Drops to 10-year Low
The Nigerian economy recorded its worst investment inflow in 10 years with the country attracting a total investment of $5.12bn in the 2016 fiscal period.
The $5.12bn investment figure, when compared to the $9.64bn that the economy attracted in 2015, represents a decline of $4.52bn or 46.86 per cent.
The decline was confirmed in the Capital Importation Report, which was released on Wednesday by the National Bureau of Statistics.
There are three major categories of investment that make up the total investment inflow into the country. They are portfolio investment, which attracted $1.81bn in 2016; foreign direct investment, which attracted $1.04bn; and $2.26bn in other investments.
The bureau explained in the report that investor apathy about the Nigerian economy was symptomatic of the economic crisis currently being experienced in the country.
For instance, it said that the weak value of the naira was one of the reasons for the low investment inflow into the country, adding that this affected the level of portfolio investment negatively.
The report stated, “The total value of capital imported into Nigeria in the fourth quarter of 2016 was estimated to be $1.54bn, which represents a decrease of 15 per cent relative to the third quarter, and a fall of 0.52 per cent relative to the fourth quarter of 2015.
“The level of capital imported was similar in each month of the quarter, but the highest was in December at $555.37m. In the year 2016, capital importation fell by 46.86 per cent from $9.64bn in 2015 to $5.12bn.
“This was the lowest value since the series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016. The weakening of the naira may have had an impact, as a weaker naira means more can be purchased with each dollar and, therefore, investment projects requiring naira payments cost less in dollar terms.”
The report stated that portfolio investment was the most badly affected investment class in 2016 as it recorded a decline of 69.81 per cent owing to the current market conditions.
It stated that foreign direct investment followed with a decline of 27.83 per cent last year.
However, the report stated that other investments recorded a marginal increase of 3.48 per cent, adding that the increase in loans was a major reason for the rise.
In terms of country of origin of the investment inflows, the report stated that the country from which Nigeria imported by far the most capital was the United Kingdom, which accounted for $482.89m or 31.18 per cent of the total.
It added that since 2010, the UK had accounted for the highest value of capital importation to Nigeria.
This was followed by the Netherlands, which accounted for $296.52m, or 19.14 per cent of the total.
Trade Expert Calls For Increased Investments In AfCFTA to Boost The African Economy
There have been calls for more investments in the African Continental Free Trade Area (AfCFTA) agreement to boost the African economy.
At a recent virtual conference organised by the African Public Relations Association (APRA), an expert on trade and finance, Mr. Jesuseun Fatoyinbo, Head of Trade, Transactional Products and Services at Stanbic IBTC Holdings PLC, highlighted the benefits of increasing investments in the AfCFTA agreement during one of the sessions held as part of the three-day virtual conference.
Jesuseun stated that the AfCFTA agreement will allow African-owned enterprises to enter new markets, expand their customer base and create new commodities and services in the continent. The agreement was created in 2018, and a total of 54 African countries have signed up. Of these, 30 countries have ratified the agreement and 28 countries have deposited their instruments of ratification.
AfCFTA holds great promise for the African economy as it seeks to eliminate tariffs on intra-African trade, making it easier for businesses to trade within Africa and benefit from its emerging markets.
Speaking on the impact of trade on economic development, Jesuseun said: “The status of intra-regional trade within the European, North American and Asian economic corridors is currently estimated at 64 percent, 50 percent and 60 percent respectively.
“However, the status of intra-African trade currently stands at 17 percent, which is significantly lower than other continental regions. This limits business investments within the African continent while increasing trade dependence on foreign markets.” He emphasised the need for improvement in order to expand the African economy.
According to him, increased investments between African countries will trigger trade growth in Africa which will, in turn, promote industrialisation, economic development and subsequently lead to increased employment opportunities across the continent.
Jesuseun advised stakeholders on the need to observe other continental trade trends, as continental trade usually yields positive results. He said, “All sectors need to be involved in AfCFTA to promote industrial development and sustainable socio-economic growth in order to deepen the economic integration of Africa.”
The Stanbic IBTC Head of Trade cited some nations in East Africa which were insulated from economic recession as a result of intra-trade activities. He noted that “despite the severe issues caused by the COVID -19 pandemic in 2020, Tanzania and Ethiopia avoided economic recession, due to their ever-improving trade policies.”
Jesuseun advocated the replication of their strategies across other African nations, to boost Africa’s income and lift millions of Africans out of poverty. Speaking on Stanbic IBTC’s capabilities to boost trade, he said, “Stanbic IBTC is leveraging world-class digital technologies to make commercial imports and exports easier. The organisation is committed to making trade processes seamless and easier with technology.”
The trade expert stated that the pandemic unearthed the possibility of remote verification as against the prevalent practice of physical documentation. He cited examples of African trade’s past experiences, where many trade processes had experienced inefficacies and bottlenecks because of physical documentation.
Jesuseun concluded that trade processes need to be digitized, to enable seamless multilateral trade between African countries. He urged other stakeholders to create awareness about the usefulness of the AfCFTA agreement.
Ogun Records N13.3B Internally Generated Revenue Monthly in Q1 of 2021
Ogun State Government has recorded an average of N13.3billion monthly as Internally Generated Revenue (IGR) in the first quarter of 2021.
The government said it is also planning to raise its yearly Gross Domestic Product (GDP) rate from the current single digit by 25 percent.
The Commissioner for Finance, Dapo Okubadejo disclosed this to newsmen in Abeokuta ahead of the state’s investment summit tagged: ‘OgunIseya21: Becoming Africa’s Model Industrial and Logistics Hub’, slated for July 13th-14th, 2021.
Okubadejo who doubles as the State’s Chief Economic Adviser noted that the state’s IGR had experienced an upward movement after last year’s shortfall due to the Covid-19 pandemic and the attendant lockdown.
“We had a significant turnaround in the first quarter of this year. In fact, as of April, we have done almost N40bn in the Internally Generated Revenue. Our target this year is to exceed all the previous records we have set in IGR. That’s why we have put in place, all these transformation initiatives, friendly policies and also facilitate this investment summit to further showcase Ogun State as the preferred industrial destination,” he said.
The Finance Commissioner was supported in highlighting the investment potentials of the summit by his counterparts from the Ministries of Industry, Trade and Investment, Mrs. Kikelomo Longe; Works and Infrastructure, Ade Adesanya; Culture and Tourism, Toyin Taiwo; Budget and Planning, Olaolu Olabimtan and the Director-General, Public-Private Partnership, Dapo Oduwole.
Unemployment To Push More Nigerians Into Poverty – NESG
On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.
The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.
It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.
“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.
“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”
The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.
“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.
According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.
The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.
It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”
According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.
It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.
“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.
“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”
The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.
It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.
“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.
Cryptocurrency4 weeks ago
Can cryptocurrency survive regulators? Here’s what Ripple CEO says about XRP’s future
Sport Business1 week ago
Cristiano Ronaldo Snubs Coca-Cola Drink in Euro 2020 Press Conference, Wipes $4B Off Market Value
Cryptocurrency4 weeks ago
BankDhofar Launches Mobile Banking Payments from Oman to India with RippleNet
Cryptocurrency2 weeks ago
Wei Zhou, Binance’s Chief Financial Officer Resigns
Cryptocurrency4 weeks ago
US SEC To Work With Congress To Regulate Crypto Exchanges
Government3 weeks ago
Buhari Talks Tough; Threatens IPOB, Others
Education3 weeks ago
Senate Passes Bill To End HND/BSc Discrimination
Cryptocurrency2 weeks ago
Anonymous Goes After Elon Musk, Blamed the Billionaire for Bitcoin Woes