- External Reserves Rise by 20% in Three Months
The nation’s external reserves have risen by $4.7bn or 20 per cent in the past three months, according to the latest data from the Central Bank of Nigeria.
Statistics on the CBN website on Sunday revealed that the foreign exchange reserves increased from $24.0bn on November 9, 2016 to $28.7bn on February 9, 2017.
The data also showed that within two months, the reserves increased by $3.8bn or 15.3 per cent from $24.9bn recorded on December 9, 2016 to $28.7bn on February 9, 2017.
In the same vein, the reserves have increased by $2.9bn or 11.2 per cent since the beginning of this year till date. Specifically, the external reserves rose from $25.8bn on December 30, 2016 to $8.7bn recorded on February 9, 2017.
The nation’s external reserves had risen by 15 per cent in three months, the CBN data showed in late January.
Specifically, the foreign exchange reserves increased by $3.6bn from $23.8bn on October 19, 2016 to $27.4bn on January 19, 2017.
The country’s external reserves, which have been increasing significantly in recent months, had risen to $27.3bn on January 17 after hitting $26.9bn on January 13.
Within a period of 11 days, the reserves increased by $1bn, rising from $26.3bn on January 6 to $27.3bn on January 17, according to the central bank’s statistics.
The country’s reserves had recorded $23.89bn low on October 19. The reserves dropped by 15.9 per cent between 2015 and 2016
Following the gradual increase in crude oil price and production output, the foreign exchange reserves have been rising steadily since November, 2016.
Experts, however, said the slowdown in foreign exchange allocation to forex markets by the CBN might have contributed to the reserves accretion.
Currency and economic experts are not sure if the current accretion in the external reserves’ is sustainable amid a falling naira and acute shortage of dollar in the foreign exchange markets and the economy.
The CBN had spent $4bn from the nation’s external reserves to defend the local currency in 2016, despite the staggering fall in the value of the naira against the United States dollar and other major foreign currencies during the period.
The controversial defence of the naira by the CBN has come under severe criticism by economists, who believe forces of demand and supply should be allowed to determine the exchange rate of the naira.
The reserves ended last year with $25.84bn on December 30, 2016.
World Bank Calls on Nigeria to Impose Special Taxes on Alcohol and Tobacco
The World Bank Group has made a call to the Federal Government of Nigeria, urging the government to impose special taxes on alcohol, cigarettes and beverages that are highly sweetened in order to improve primary healthcare conditions in the country.
Shubham Chaudhuri, who is the Country Director for Nigeria in the World Bank Group, said that an improvement in healthcare in Nigeria will come by taxing the things that are “killing us.” He said that the economic rationale for the action is quite strong if lives are to be saved and a healthier Nigeria achieved.
Chaudhuri made the call on Friday, at a special National Council on Health meeting which was organized by the Federal Ministry of Health in Abuja. Chaudhuri stated that placing special taxes on tobacco, sweetened beverages and alcohol would reduce the health risks which come with their consumption and expand the fiscal space for universal health coverage after COVID 19.
The country director also said that investing in stronger health systems for all would make significant contributions to the fight against inequality and the rising poverty situation in the country. He went on to add that increasing health tax would provide an extra advantage of reducing healthcare cost in the future, by hindering the growth of the diseases which are caused by tobacco, alcohol and sugar-sweetened beverages.
The representative of the WHO in Nigeria, Dr Walter Mulombo said that he could confirm the large health needs of Nigerians, as well as the efforts being made to meet those needs. He said this was based on the fact that he had been to over half of Nigeria’s states in less than two years of being in the country.
Mulombo then noted that although the coronavirus exposed weaknesses in the global economy (not excluding health), it could be considered as a unique opportunity for a thorough examination of existing resources and mechanisms to prepare for a more resilient future.
Nigeria’s VAT Revenue Falls to N500 Billion in Q3 2021, Manufacturing Sector in the Lead
In the third quarter of 2021, Nigeria generated a total sum of N500.49 billion as value-added tax which represents a 2.3% decline when compared to the N512.25 billion recorded in the second quarter of the year.
This is as seen in the VAT report which was recently released by the National Bureau of Statistics (NBS). The report revealed that the manufacturing sector was in the lead as it remitted a total of N91.2 billion, representing about 30% of the total local non-import value added taxes in that period.
In spite of the quarter-on-quarter decline of VAT collections in the reviewed period, it grew by a further 17.8% when compared to N424.7 billion generated in the same period of the previous year. The report also shows that an amount of N1.5 trillion has been generated from value added taxes from January 2021 to September 2021.
That is 40.2% higher than the N1.08 trillion recorded in the same period of 2020, and 72.3% higher than what was recorded in the same period of 2019.
To break it down, the Value Added Tax collected in the first, second and third quarter of 2021 was recorded at N496.39 billion, N512.25 billion and N500.49 billion respectively. It is higher than the corresponding figures of 2020, which sat at N324.58 billion, N327.20 billion and N424.71 billion for the first, second and third quarters respectively.
In the third quarter of 2021, the Manufacturing activity accounted for the largest share of total revenue collected across sectors, with a huge 30.87% (N91.2 billion) coming from that sector. The Information & Communication sector came in second with 20.05% (N53.9 billion) contributed, while the Mining & Quarrying sector came in third with 9.62% (N28.4 billion).
Nigeria has continued to ramp up its efforts to increase revenue from non-oil sectors by increasing its tax collection rates, which has recorded largely significant growth since the federal government increased the VAT rate from 5% to 7.5% in the 2019 Finance Act, which was signed and made effective in 2020.
Nigeria’s Economy to Close 2021 at 2.5% Growth Rate
The Lagos Chamber of Commerce and Industry (LCCI) has predicted that the Nigerian economy will close its growth rate for the year at 2.5%.
This was said by the President of the LCCI, Toki Mabogunje at the 133rd Annual General Meeting (AGM) of the chamber in Lagos on Thursday, as reported by the News Agency of Nigeria.
The LCCI leader advised that Nigeria’s monetary and fiscal aspects of the economy should encourage policies that enhance growth and build confidence which would invigorate private capital flows to the economy to achieve the growth. She also encouraged a medium-term recovery plan which is anchored on local productivity, attracting private investment, developing physical and soft infrastructure, and ease of business.
Mabogunje disclosed that Nigeria’s inflation would be maintained at its double digit level within the short to medium term, due to food supply shocks, foreign exchange illiquidity, higher energy cost, social unrest in the Northern region, possible removal of fuel subsidy, and insecurity. She stated that these structural factors will keep on mounting pressure on domestic consumer prices.
She also added that in spite of the non-oil economy’s growth by 5.4%, insecurity problems in some areas of the country may lead to shrinking in production and a disruption of the supply chain. She states that the important drivers of the non-oil sector growth were finance and insurance holding 23.2%, transport and storage 20.6%, trade carrying 11.9% and telecommunications 10.9%.
Others include manufacturing, construction, real estate and agriculture with 4.3%, 4.1%, 2.3% and 1.2% respectively throughout the year.
Speaking on the decision of the Central Bank of Nigeria’s Monetary Policy Committee’s decision to retain policy parameters, she mentioned that although the apex bank has been keen to extend credit to the real economy as a way of supporting it, it is a fact that the provision of credit recently has proven ineffective in improving output growth and stabilizing consumer prices.
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