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Better Growth Expectations for 2022 Per the World Bank – Coronation Merchant Bank



Lagos Nigeria - Investors King

Today we shed some light on the recently published Nigeria Development Update by the World Bank titled “The Continuing Urgency of Business Unusual”. The publication provides an overview of recent social and economic developments in Nigeria, as well as forward-thinking views and recommendations on select economic and policy challenges.

The report covers the weakening macroeconomic indicators despite higher oil prices and an analysis on economic and policy reforms that could support macroeconomic stability in the long-term.

For national output, the World Bank expects growth at 3.4% y/y and 3.2% y/y in 2022 and 2023 respectively. The improvement in growth prospects is on the back of higher oil prices as well as sustained growth in agriculture and a robust recovery in services (mainly telecommunications, and financial services). These sectors posted growth above prepandemic levels in recent quarters. The 3.4% y/y GDP growth forecast is in line with our projection for same indicator in 2022.

Although growth prospects have improved, domestic macroeconomic indicators have weakened. This can be attributed to high inflation, heightened global risks on the back of the Russia-Ukraine crisis, the impact of monetary tightening by central banks in advanced economies, national security and policy direction concerns due to the upcoming 2023 elections.

Based on the report, between 2020 – 2021, the “inflation shock” alone is estimated to have pushed c.8 million more Nigerians below the poverty line. The food inflation rate has been a major driver of Nigeria’s headline inflation. Given its importance in the production of staples such as bread and pasta, the shortage of wheat triggered by the Russia-Ukraine crisis has contributed to steady upticks in food inflation. As at April ‘22, the price of wheat flour had
increased by 36% y/y.

The World Bank provides some recommendations to combat rising inflation in the shortterm. They include – (i) fully reopen land borders to trade and remove fx and import restrictions on staple foods and medicines (ii) signal the CBN’s commitment to price stability as the primary goal and reduce subsidized lending to medium and large firms (iii) reduce CBN overdrafts for fiscal deficit financing to their legal limit (5% of previous year’s actual collected revenue). Our estimate for inflation for end-2022 is 20.6% y/y.

On fiscal, despite higher oil price, the World Bank expects oil revenue to be lower in 2022. This is mainly due to increased petrol subsidy payment and low oil production. The estimated total cost of petrol subsidy was revised from the initial N443bn to N4trn this year. Based on data from the NBS, average crude oil production (condensates inclusive) in Q1 ’22 was 1.5mbpd, below the revised FGN 2022 budget oil production benchmark of 1.6mbpd.
Nigeria’s oil production has been hampered by production shut-ins as a result of crude oil theft, vandalism, prolonged repairs, and community issues.

Regarding trade, the report highlights Nigeria’s path towards greater integration and policy reform through the active participation in African Continental Free Trade Area (AfCFTA) negotiations and its efforts to develop a domestic implementation plan. The World Bank notes that the AfCFTA implementation will require substantial preparation and engagement across sub nationals, the private sector, and other stakeholders.

From our vantage point, to maximise the benefits of the AfCFTA agreement, Nigeria’s manufacturing sector needs to be strengthened. The cost of transportation, power and logistics which is fundamental to production and competitiveness is significantly high and deepens cost of production for manufacturers.

Furthermore, local manufacturers need to significantly improve their service delivery and product standards if they are to be competitive in a burgeoning intra-continental marketplace. Nigeria’s manufacturing sector accounts for c.10% of total GDP. This compares with 11% in South Africa, 15% in Egypt and 13% in Ghana. Similar to the views expressed in this World Bank update report, we note that a handful of reforms are essential to boost domestic manufacturing competitiveness.

These include creating an enabling regulatory environment for technology to be incorporated in trade operations; developing a cohesive strategy to formalise the informal sector which should also focus on reducing government bureaucracies, improving fiscal policies and accountability, while providing training, technology, and access to financial services. Strengthening customs and border patrol to minimize smuggling and dumping of substandard products is also important.

The World Bank highlights the importance of further continental integration to enhance competitiveness of Nigeria’s manufacturing sector. Furthermore, given the growing trend of investors seeking green opportunities, the report suggests that Nigeria can remain competitive by reducing gas flaring, venting, and fugitive methane emissions.

Based on the report, Nigeria’s remittance flows has recovered to pre-pandemic levels. In 2021, remittances to Nigeria grew by 11.2% to USD19bn.

Since some transactions pass through informal channels, the actual amount of remittance flows into the country is arguably higher. We note that there was increased usage of official channels by Nigerians in diaspora in 2021, this contributed to the growth recorded in remittance inflow.

Furthermore, it is likely that the CBN’s Naira-4-Dollar policy assisted with boosting remittances in the period under review. There was a strong need among migrants to assist their respective families in Nigeria due to the economic downturn triggered by the coronavirus pandemic, this also contributed to remittance growth during this period. According to local media, 70% of remittances from Nigerians in the diaspora went into family support, while 30% was channelled towards investments in 2021.

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

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CBN Offers Farmer N131 Billion Loan Guarantee

The Central Bank of Nigeria (CBN) through its Agricultural Credit Guarantee Scheme Fund (ACGSF) has guaranteed loans estimated at N13.903 billion for farmers across the country.



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The Central Bank of Nigeria (CBN) through its Agricultural Credit Guarantee Scheme Fund (ACGSF) has guaranteed loans estimated at N13.903 billion for farmers across the country.

The CBN disclosed this on Thursday at the national award ceremony for the 2021 Best Farmer of the Year Award organised by the ACGSF in Abuja.

According to Mr Stephen Okon, the Chairman ACGSF, “A total of 1,232,326 loans valued N130.903b were guaranteed from inception to May 2022 out of which 973,646 beneficiaries had repaid a total of N98.91b.”

In the Federal Capital Territory (FCT), ACGSF guaranteed a total of 82 loans worth N22.580 million between January to May 2022. This, according to Okon, brought the total loans guaranteed in FCT from the begining of the scheme in 1978 to May 2022 to 14,258 and at a value of N1.748 billion.

In terms of loan recovery, the Chairman said FCT farmers have repaid 11,726 loans worth N801.058 million since inception, adding that the positive result showed a high level of commitment of loan offers in FCT as well as the determination of the farmers.

“We do hope that before long, participants in the agricultural value chain in the FCT will take advantage of the opportunities provided in the Amended Act,” he said.

The ACGSF was created under in April, 1978 to de-risk agricultural loans by providing guarantees to deposit money banks offering loans to the agricultural sector.

Speaking on Thursday ceremony, Michael Onyeka Ogbu the Abuja Branch Controller, said the gathering shows CBN commitment to supporting hard work, innovation, and productivity in the agricultural value chain.

“To this end, the CBN challenges Nigerian farmers to explore our various agricultural interventions aimed at enhancing value addition to their output towards attaining food self-sufficiency, provision of raw materials to our manufacturing industries and also for export, which ultimately assists in diversifying and improving the foreign exchange earnings base of our economy,” he said.

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Banking Sector

FirstBank Launches Single-Digit Loan for Women-Owned Businesses, Reinforces its Role in Strengthening Gender Inclusion in Nigeria

First Bank of Nigeria Limited, has announced the launch of the FirstGem fund (FirstGem loan); a single-digit loan scheme, exclusively designed to put women at an advantage in contributing to the socio-economic development of the country.



FirstBank Headquarter - Investors King

In furtherance of its role in promoting female entrepreneurship across the country, Nigeria’s premier banking institution and leading financial inclusion services provider, First Bank of Nigeria Limited, has announced the launch of the FirstGem fund (FirstGem loan); a single-digit loan scheme, exclusively designed to put women at an advantage in contributing to the socio-economic development of the country.

The FirstGem loan scheme is designed for female-owned or partnered SMEs  in the following sectors  Food/Beverage processing & Packaging, Beauty and cosmetics, Confectionaries, Catering & Restaurants, Transportation (Logistics) and Agric/Agro-Allied (retail value chain). With an interest rate of 9% per annum, FirstGem loan is a collateral-free loan that is available to the bank’s existing and prospective female customers. Based on eligibility, customers can access loans from N500,000.00 to N3,000,000.00.

To access the loan, Female owned or partnered SMEs can visit the Bank’s website – – to download and fill out the Retail Loan Application Form. The completely filled form should be submitted to the nearest FirstBank branch with accompanying documents.

Speaking on the loan Folake Ani-Mumuney, Group Head, First Bank of Nigeria Limited said, “we are delighted with the role our FirstGem product plays in creating an avenue to enlarge the business activities and endeavours of female entrepreneurs across the country. Our FirstGem value proposition offers real solutions to constraints encountered by female entrepreneurs and working professionals, as it exposes women to opportunities for the advancement of their business. We implore every female business-minded individual to take advantage of the FirstGem loan as it puts them at an advantage to contribute their quota to the national economy.”

Launched in 2016, FirstGem has been impactful in driving financial inclusion, influencing women’s empowerment through gender-advancement programmes like savings culture, financial literacy, wealth  management and building an investment portfolio. FirstGem is  designed specifically to meet the needs of the female gender, aged 18 years and above.

FirstGem  is targeted at a broad spectrum of women, working professionals, entrepreneurs or market women through an array of benefits such as free business advisory services, access to finance, specialized training on business development initiatives (virtual  and physicalevents),  regular insights on business / investment  opportunities. and mouth-watering discounts at partner merchant outlets (spas, salons, grocery stores) offering  lifestyle products and services.

Recently, FirstBank announced its partnership with CDC Group, the UK Government’s development finance organisation to economically empower women-owned and led businesses as well as local small and medium-sized enterprises (SMEs) in Nigeria. The facility, which is in the sum of US$100 million will have a minimum of 30% allocated in the form of credit lines to women entrepreneurs. 

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Despite Paying $300 Million Debt, Nigeria’s Foreign Reserves Increased by $250 Million

Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.




Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.

According to the Debt Management Office (DMO), the five-year bond was issued on June 27, 2017 to finance the deficit of the 2017 Appropriation Act.

However, on June 27, 2022 the DMO announced that the Federal Government had redeemed the bond in a show of commitment to its obligations.

An analysis of the nation’s foreign reserves revealed that despite the huge payment, Nigeria’s reserves increased from $38.925 billion on June 24, 2022 to $39.135 billion on June 29, 2022, representing an increase of $250 million.

Still, Nigeria’s rising debt profile remained a concern given the nation’s weak revenue generation and rising population. Many experts have said rising debt and the cost of servicing debt is responsible for the nation’s weak infrastructure growth and other developments.

In the first quarter of 2022 alone, Nigeria spent N896.6 billion on debt servicing, according to data from the DMO. A total sum of N668.69 billion of the amount was spent on domestic debt servicing while another $548.79 million or N227.87 billion was dumped on external debt servicing.

In the first three months of the year, Nigeria’s total debt jumped by N2.04 trillion to N41.60 trillion, up from N39.56 trillion in the fourth quarter of 2021.

In a recent interview, the Deputy President of the Lagos Chamber of Commerce and Industry, Dr Gabriel Idahosa, said, “Essentially, our debt service is almost equal to our revenue. At some point, it was about 96 per cent of our revenue. So, really, we are borrowing to fund the government. Almost all our revenue is going into servicing debts. That’s what the numbers are looking like right now. At the beginning of the year, the estimate was that about 80 per cent of our revenue will go into debt service.

“If you look at revenue generated and debt serviced, they are almost equal. It means that everything we generate is actually going into servicing debts. That’s the situation we find ourselves and it’s going to continue unfortunately because the fuel subsidy estimate of N4trn this year, with the continuous rise in the price of crude oil, fuel subsidy could take as much as N6trn.”

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