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President Buhari Authorises Release of Food Reserves Amongst Other Plans to Cushion inflation Effect

President Muhammadu Buhari has authorized the National Food Security Council (NFSC) to release reserves to cater to the needs of the citizens.

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Agriculture

As Nigeria’s inflation rate continues to surge, President Muhammadu Buhari has authorized the National Food Security Council (NFSC) to release reserves to cater to the needs of the citizens.

Nigeria’s finance minister Mrs. Zainab Ahmed made the announcement during the presentation of the 2022 National Budget to the house of reps.

She also said the government has mapped out plans to alleviate the plight of the citizens in this unfriendly economic period. The minister disclosed that the federal government has set out plans to decongest ports to facilitate trade and remove roadblocks.

She also said the government has introduced very large scanners that will aid in the rapid clearing process which will effectively contribute to decongesting the ports.

In her words, “From the monetary side, what the CBN is doing to manage inflation is monetary tightening by mopping up liquidity. On the side of the government, President Muhammadu Buhari has authorized the National Food Security Council to release reserves. We held a meeting yesterday evening on how some support will be provided.

“One of the means is releasing stocks from the strategic reserves; we are also looking at how to support inputs like fertilizer production as well as inputs such as feeds.

“The committee will be meeting in the next couple of days to provide recommendations to the president that will be announced for implementation.”

Mrs. Zainab added that there will be an extension of the rail line from Lagos to Abuja to Apapa so that containers can be taken out of the Apapa ports to other locations for inspection.

Investors King understands that the annual inflation rate in Nigeria surged to 20.52 percent in August of 2022, from 19.64 in the previous month.

In September, a report by the National Bureau of Statistics (NBS) showed that Nigeria’s CPI rose by 20.77% year-on-year in September 2022.

On the other hand, the food inflation rate in September 2022 was at 23.34% on a year-on-year basis, from 23.12% recorded in August.

The high inflation rate has been attributed to the continuous depreciation of the naira against the US dollar, with the USD being traded at ₦763 in the Black Market today, Thursday, October 27, 2022, coupled with sustained supply chain disruptions and the global energy crisis.

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Economy

Federal Government Halts Cooking Gas Export to Lower Local Prices

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In a bid to stabilize domestic prices and meet rising demand for cooking gas within Nigeria, the Federal Government has announced a temporary halt on the exportation of Liquefied Petroleum Gas (LPG), commonly known as cooking gas.

This decision follows a significant surge in the cost of cooking gas, which has placed a strain on consumers across the country.

According to reports, the halt in LPG export aims to increase the availability of the commodity within Nigeria’s borders, thereby reducing its local price.

The move is part of broader efforts to address the challenges faced by consumers grappling with the high cost of living.

In recent years, the demand for cooking gas has steadily increased in Nigeria, driven by urbanization, population growth, and a shift towards cleaner energy sources.

However, despite being a major producer of LPG, Nigeria has struggled to meet its domestic demand due to insufficient local production and distribution infrastructure.

Data from the Nigerian Midstream Downstream Petroleum Regulatory Authority reveals that while the total consumption of cooking gas in Nigeria has been on the rise, the country has relied heavily on imports to bridge the supply gap.

The recent decision by the government underscores its commitment to prioritizing the domestic market and ensuring that Nigerians have access to affordable cooking gas.

Consumers have been grappling with escalating prices, with reports indicating a significant increase in the cost of refilling a 12.5kg cylinder of cooking gas in major cities like Abuja, Lagos, and Kano.

The decision to halt LPG exports signals a proactive measure by the government to mitigate the adverse effects of rising prices and alleviate the financial burden on households across the nation.

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Economy

Manufacturing Sector Records 7.70% Quarter-on-Quarter Growth in Q4 2023

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In the fourth quarter of 2023, Nigeria’s manufacturing sector grew by 7.70% year-on-year, according to the National Bureau of Statistics (NBS).

The surge in growth reflects a significant uptick from the preceding quarter and underscores the resilience of the manufacturing industry amid economic challenges.

This growth trajectory indicates positive momentum and signals potential opportunities for economic recovery and development.

The manufacturing sector, comprising thirteen key activities ranging from oil refining to motor vehicles and assembly, demonstrated notable dynamism across various subsectors.

This growth surge is attributed to increased production, enhanced operational efficiencies, and strategic investments across the manufacturing value chain.

Despite facing headwinds such as supply chain disruptions and regulatory uncertainties, the sector’s robust performance underscores its pivotal role in driving economic diversification, job creation, and industrialization efforts in Nigeria.

Moving forward, sustaining this growth momentum will require continued policy support, investment in infrastructure, and efforts to address key bottlenecks hindering the sector’s expansion.

By fostering an enabling business environment and promoting innovation and technology adoption, Nigeria’s manufacturing sector can further catalyze inclusive economic growth and contribute significantly to the nation’s development agenda.

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Economy

Nigeria’s GDP Grows by 3.46% in Q4 2023, Driven by Services

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Nigeria’s Gross Domestic Product (GDP) grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, according to data released by the National Bureau of Statistics (NBS).

The GDP expansion though slightly lower than the 3.52% recorded in the same period of 2022, reflects a positive trajectory for the Nigerian economy amid ongoing challenges.

The growth rate surpassed the 2.54% recorded in the preceding quarter, indicating a rebound in economic activity.

The services sector emerged as the key driver of growth expanding by 3.98% and contributing 56.55% to the overall GDP.

This sector’s resilience underscores its pivotal role in Nigeria’s economic landscape, encompassing diverse industries such as telecommunications, finance, and real estate.

Also, the agriculture sector experienced growth, expanding by 2.10% compared to the same period in 2022.

Meanwhile, the industry sector recorded a notable improvement, growing by 3.86%, a stark contrast to the -0.94% contraction observed in the fourth quarter of 2022.

On an annual basis, Nigeria’s GDP expanded by 2.74% in 2023 compared to 3.10% in the previous year, reflecting sustained but moderated growth.

The positive trajectory in GDP growth reflects resilience in the face of various economic challenges.

However, sustaining and accelerating growth will require continued efforts to address structural bottlenecks, foster investment, and promote inclusive economic policies across sectors.

Nigeria’s Oil Sector Growth

During the fourth quarter of 2023, Nigeria’s oil sector posted a real growth rate of 12.11% year-on-year, signifying a significant improvement from previous periods.

This was driven by the surge in average daily oil production to 1.55 million barrels per day (mbpd), a positive shift in the sector’s performance.

Despite challenges such as global market fluctuations and production constraints, the oil sector contributed 4.70% to the nation’s total real GDP in Q4 2023.

Nigeria’s Non-Oil Sector

Nigeria’s non-oil sector sustained growth momentum, posting a 3.07% real growth rate in Q4 2023.

This growth was primarily attributed to key industries including finance, telecommunications, agriculture, manufacturing, and construction.

Accounting for 95.30% of the nation’s GDP in the same quarter, the non-oil sector continues to drive economic diversification efforts and reduce dependence on oil revenues.

Despite facing challenges, such as infrastructure deficits and regulatory bottlenecks, the sector’s resilience underscores its pivotal role in fostering sustainable economic development and inclusive growth agendas.

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