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Nigeria’s Inflation Declines to 11.23% in June

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  • Nigeria’s Inflation Declines to 11.23% in June

Prices of goods and services in Africa’s largest economy Nigeria declined for a 17th consecutive month in June, the National Bureau of Statistics reported on Monday.

The Consumer Price Index, which measures inflation rate declined from 11.61 per cent in May to 11.23 per cent in June.

Urban inflation also declined from 12.08 per cent year-on-year in May to 11.68 per cent in June, while rural inflation eased to 10.83 per cent.

The food index dropped to 12.98 per cent in June, up from 13.45 per cent recorded in May and more than 20 per cent filed over a year ago.

Since the central bank adjusted its forex policy and introduced Investors and Exporters (I & E) forex window, the ease of doing business has improved and exchange rates moderated enough to sustain declining consumer prices.

The I & E forex window hit a record $1.7 billion transactions in one week in June, further attesting to growing economic activities, especially in the manufacturing sector where the manufacturing PMI sustained growth at 56.5 in May. While this was lower than the 56.9 filed in April, the difference was attributed to a slower increase in inventories that stood at 58.7 in the said month.

However, with the introduction of Chinese Yuan by the Central Bank of Nigeria, procurement of needed inventories should improve and further deepen economic progress.

The CBN has reiterated its commitment to single digit inflation and converging exchange rates, therefore, the apex bank is expected to leave monetary policy rate unchanged in its meeting due later today in Abuja to protect capital inflows and contained exchange rates.

“With the U.S. Federal Reserve projected to increase interest rates two more times this year, it is logical for the monetary policy committee to maintain the current interest rate in order sustain capital importation and economic growth,” said analysts at Investors King Ltd.

“Trade tensions and the possibility of Saudi Arabia flooding the market with more crude oil has increased risks to emerging economies, especially commodity-dependent economies. Therefore, this is not the time to lower interest rates if economic productivity and job creation are priorities.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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