Connect with us

Economy

Nigeria’s Consumer Sentiment Makes Positive Gains

Published

on

Against the backdrop of the unprecedented COVID-19 pandemic, West African consumer sentiment has experienced a lift of 8 points in the Nielsen Consumer Confidence Index (CCI) for Quarter 3, 2020 with Nigeria CCI increasing to 116, up from the previous quarter’s 108 points.

Nielsen West Africa Retail Intelligence Lead Ged Nooy comments; “The latest consumer sentiments reflect the country’s continued cautionary concerns albeit with some practical fine-tuning. As the global pandemic continues to affect world economies and put pressure on consumers’ pockets, Nigerians consumers are making lifestyle adjustments and taking actions to protect their long-term economic future.”

Equitable optimism by Nigerian consumers also sees improved confidence around the opportunity of job prospects, with 55% of consumers saying they will be good or excellent in the next 12 months – a 12-point increase from the previous quarter. In terms of the state of their personal finances over the next 12 months, 67% say they are excellent or good, showing a substantial 8-point increase from the previous quarter.

Nigerian propensity to purchase has seen a continued decrease quarter on quarter, with the number of those who think now is a good or excellent time to purchase what they want or need rise just 1 percent from 32% to 33% in the third quarter.

Once they meet their essential living expenses, however, the highest number of consumers (75%) put their spare cash into savings, a drop from 81%1 percent from last quarter, followed by 72% who choose to invest in stocks and mutual funds.

One of the most significant increases in discretionary spending is the purchase of tech up from 51% to 57% – a clear indicator of consumers’ mindset shift away from non-essential services and their desire to make necessary work/life changes under the pandemic protocols.

Sluggish Recovery

To reduce expenses, 50% of consumers said they spent less on new clothes, 54% spent less on out of home entertainment, with the same figure deferring on the replacement of major household items. As much as 33% of Nigerian consumers said they had spare cash, up 1% from last quarter.

When looking at the practical factors that are affecting their outlook, the top consumer concerns over the next twelve months are increasing food prices at 34%, followed by life/work balance at 20% and the economy at 17%.

Nooy comments; “Nigerian economic recovery is of concern to consumers and may be more gradual than expected due to a drop in oil prices and restricted trade opportunities. The country has opportunities to transform its economy however, particularly in agro-processing beyond the pandemic.”

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

Nigeria Allotted $3.35bn From IMF’s Special Drawing Rights(SDRs)

Published

on

IMF

Nigeria has secured about $3.35 billion as part of a historic general allocation of Special Drawing Rights (SDRs) of the International Monetary Fund (IMF).

This is part of the general allocation of about SDR456 billion – an equivalent of $650 billion – by the IMF Board of Governors.

This will help to boost liquidity in Nigeria that is currently battling declining revenue.

The allocation which was approved on Monday aims to boost global liquidity at a time when the world is grappling with the coronavirus (COVID-19) pandemic.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis,” said IMF Managing Director, Kristalina Georgieva.

Although it is not a currency, the SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

It is a potential claim on the freely usable currencies of IMF members and can provide a country with liquidity. The SDR is defined by the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

The amount allocated to Nigeria is as a result of the exchange rate of reference which is 0.702283 SDR to a dollar as of July 1, 2021, and Nigeria has 2.4545 billion SDRs.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy,” the IMF managing director added.

“It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

According to the IMF, the general allocation of SDRs will become effective on August 23 and the newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.

It stated that about $275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

Continue Reading

Economy

UN Chief Welcomes Historic’ IMF Liquidity Boost for Governments in Need

Published

on

crisis

As the COVID-19 crisis continues to exacerbate restrictions on government spending throughout the world, the UN chief on Tuesday welcomed the decision by the International Monetary Fund (IMF) to approve a $650 billion allocation of Special Drawing Rights to “boost liquidity”.

Secretary-General António Guterres issued a statement on the policy change towards Special Drawing Rights or SDRs, a type of foreign reserve asset that is IMF defined and maintained, as additional funding that could help to pay down debts.

He also underscored that economies not in need of access to cash should “consider channeling these resources to vulnerable low and middle-income countries that need a liquidity injection by replenishing the IMF’s Poverty Reduction and Growth Trust Fund”.

‘Historic decision’

Yesterday’s IMF’s allocation makes new borrowing available to the fund’s 190 member countries, roughly in proportion to their share of the global economy.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis”, said IMF Managing Director Kristalina Georgieva.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

Halting debt default

The Secretary-General stressed that it is also “critical to quickly establish the proposed Resilience and Sustainability Trust at the IMF…[for] a comprehensive response and recovery, including providing more support for vaccinations and debt management and to support the efforts of developing economies in restructuring for inclusive growth”.

Last month, he urged the world’s largest economies to spearhead a global COVID-19 vaccination plan and expand debt relief to developing countries battered by the pandemic.

Bulwark against default

He also advised supporting a new $50 billion IMF investment roadmap aimed at ending the pandemic and driving a fast recovery.

As many developing countries are “teetering on the verge of debt default”, the UN chief encouraged the G20 leading industrialized nations to channel unused SDRs to the Fund’s new resilience and sustainability plan, for these nations.

“Special Drawing Rights also need to be considered as additional funding, not deducted from Official Development Assistance”, he reminded.

Continue Reading

Economy

IMF Approves Largest SDR Allocation In History to Boost Global Liquidity

Published

on

IMF - Investors King

The Board of Governors of the International Monetary Fund (IMF) has approved a general allocation of Special Drawing Rights (SDRs) equivalent to US$650 billion (about SDR 456 billion) on August 2, 2021, to boost global liquidity.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis. The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis,” IMF Managing Director Kristalina Georgieva said.

The general allocation of SDRs will become effective on August 23, 2021. The newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.

According to the IMF, about US$275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

“We will also continue to engage actively with our membership to identify viable options for voluntary channeling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth”, Ms. Georgieva said.

One key option is for members that have strong external positions to voluntarily channel part of their SDRs to scale up lending for low-income countries through the IMF’s Poverty Reduction and Growth Trust (PRGT). Concessional support through the PRGT is currently interest-free.

The IMF is also exploring other options to help poorer and more vulnerable countries in their recovery efforts. A new Resilience and Sustainability Trust could be considered to facilitate more resilient and sustainable growth in the medium term.

In April last year, Nigeria collected $3.4 billion—equivalent to 100 percent of its quota— under the IMF’s Rapid Financing Instrument, RFI, to tackle the funding gaps created by COVID-19, especially when the crude oil market stagnated.

The financial support, approved by the IMF Executive Board on April 28, 2020, provided critical support to shore up Nigeria’s healthcare sector and shielded jobs and businesses from the shock of the COVID-19 crisis while helping to limit the decline in the nation’s external reserves.

Continue Reading




Advertisement
Advertisement
Advertisement

Trending