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Buhari Gets China’s Support for 3,050MW Mambila Hydropower Project

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  • Buhari Gets China’s Support for 3,050MW Mambila Hydropower Project

President Muhammadu Buhari on Wednesday secured the support of the Chinese President, Xi Jinping, for the building of the 3,050 megawatts Mambila hydroelectric power project.

The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said this in a statement from Beijing, China, where Buhari met with Jinping on Wednesday on the sidelines of the China-Africa Cooperation summit.

The summit was attended by other African leaders and entrepreneurs.

Shehu stated that during the meeting between Buhari and Jinping, the Nigerian leader also sought additional Chinese funding for four airport terminals as well as the Abuja light rail project.

Buhari was said to have noted that the Mambilla project remained a key priority to Nigeria.

The President, while celebrating the brotherly relationship between China and Nigeria since his visit to the Asian country in 2016, sought the support of the Chinese government for the Mambilla power project.

He said, “In the past 24 months, the Chinese government has provided humanitarian aid to our conflict-affected areas, scholarship to Nigerian youths, military training and security support to our personnel and agricultural modernisation training.

“Mr President, as we celebrate these successes, I would like to once again solicit your support for the Mambilla hydropower project, which remains a key priority for my government. Our hope is to fund the project with concessionary loans from China as any alternative funding arrangement will adversely impact the project’s viability.

“We have been informed that our submission on this project is undergoing assessment by the relevant Chinese agencies. We hope that with your kind intervention, this assessment will be expedited. Your Excellency, Mambilla is Nigeria’s equivalent of the Three Gorges Dam. My wish is that you join me for the ground-breaking ceremony of this project in the not too distant future.”

Buhari also thanked China for accepting to support the international efforts to recharge the Lake Chand Basin.

“The inclusion of this project in the FOCAC Action Plan 2019 to 2021 will go a long way in supporting our efforts to rehabilitate and resettle the conflict-impacted North-East region,” he said.

Similarly, the President advocated easy movement of citizens of both countries, which he said would complement the currency swap agreements recently signed by the central banks of both nations.

He stated, “Since our last meeting two years ago, Nigeria has relaxed its visa requirements for Chinese citizens. Today, I am pleased to inform your Excellency that Chinese citizens receive Nigerian visas in less than 48 hours.

“Another measure that will improve our trade volumes will be to introduce import duty waivers on Nigeria’s commodity exports to China. Today, our commodities such as sesame seeds, hibiscus and cassava, among others, attract import duty in China.”

The Nigerian leader also lauded China’s support for two permanent seats for Africa at the United Nations, noting that the reform of the security council would ensure equitable representation for the continent.

In his remarks, President Jinping, who commended Nigeria’s fight against terrorism and the progress that had been made so far, promised China’s support in capacity building and intelligence sharing.

He also pledged 50 million yuan support to Nigeria’s military, noting, “Buhari is as decisive in dealing with terrorism as China.”

Jinping said China would import more agricultural products from Nigeria and expressed gratitude to Buhari for Nigeria’s interest to participate in the forthcoming Chinese Import Fair.

On the Mambilla hydropower project, the Chinese leader told Buhari, “We understand how critical the project is to your country and we will take a serious look at it and ensure that it succeeds, because of its social and economic benefits.”

Shehu stated that Nigeria and China also signed a $328m agreement for the Information and Communication Technology Infrastructure Backbone Phase II project.

He said the concessional loan agreement between Galaxy Backbone Limited and Huawei Technologies Limited was signed by Nigeria’s Minister of Finance, Kemi Adesoun, and the Director General, International Development Agency, Wang Xiaotoa.

Buhari and Jinping were said to be present during the signing.

The presidential media aide said Nigeria and China also signed a Memorandum of Understanding on the One Belt One Road Initiative.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets

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The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs

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Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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Inflation to Climb Again in June, but at a Reduced Pace, Predicts Meristem

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Nigeria's Inflation Rate - Investors King

As Nigeria awaits the release of the National Bureau of Statistics’ report on June 2024 inflation, economic analysts project that while inflation will continue its upward trajectory, the pace of increase will moderate.

This comes after inflation rose to a 28-year high of 33.95% in May, up from 33.69% in April.

Meristem, a leading financial services company, has forecasted that June’s headline inflation will rise to 34.01%, a slight increase from May’s figure.

The firm attributes this persistent inflationary pressure to ongoing structural challenges in agriculture, high transportation costs, and the continuous depreciation of the naira.

Experts have highlighted several factors contributing to the inflationary trend. Insecurity in food-producing regions and high transportation costs have disrupted supply chains, while the depreciation of the naira has increased importation costs.

In May, food inflation grew at a slower pace, reaching 40.66%, but challenges in the agricultural sector, such as the infestation of tomato leaves, have led to higher prices for staples like tomatoes and yams.

Meristem predicts that food inflation will persist in June, driven by these lingering challenges. Increased demand during the Eid-el-Kabir celebration and rising importation costs are also expected to keep food prices elevated.

Core inflation, which excludes volatile items like food and energy, was at 27.04% in May. Meristem projects it to rise to 27.30% in June.

The firm notes that higher transportation costs and the depreciation of the naira will continue to push core inflation up.

However, they also anticipate a month-on-month moderation in the core index due to a relatively stable naira exchange rate during June, compared to a more significant depreciation in May.

Cowry Assets Management Limited has projected an even higher headline inflation figure of 34.25% for June, citing similar concerns.

The firm notes that over the past year, food prices in Nigeria have soared due to supply chain disruptions, currency depreciation, and climate change impacts on agriculture.

This has made basic staples increasingly unaffordable for many Nigerians, stretching household budgets.

As inflation continues to rise, analysts believe the Central Bank of Nigeria (CBN) will likely hike the benchmark lending rate again.

The CBN’s Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR) by 650 basis points this year, bringing it to 26.25% as of May 2024.

At a recent BusinessDay CEO Forum, CBN Governor Dr. Olayemi Cardoso emphasized the MPC’s commitment to tackling inflation, stating that while the country needs growth, controlling inflation is paramount.

“The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilize the naira. Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” Cardoso said.

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