Connect with us

Economy

More Nigerians to Lose Jobs as Economic Crisis Worsens

Published

on

With the report that manufacturers’ employment rate will fall below benchmark points to 48.8 points in the first quarter of 2023, there are tendencies that more Nigerians stand the risk of losing their jobs.

This report is coming at a time Nigeria is sliding into more economic crisis.

Investors King had reported that the National Bureau of Statistics (NBS) had said that 20 percent of the full-time workforce in Nigeria lost their jobs due to the COVID-19 pandemic in 2020.

The NBS disclosed this in a study jointly conducted with the United Nations Development Programme (UNDP) adding that since then, there has been an increase in the unemployment rate, moving from 27 percent to 33 percent between Q2 2020 and Q4 2020.

Coupled with the naira exchange crisis currently ravaging the country and its negative effects on small and medium-scale businesses, Nigerians have been expressing worry that their jobs are in the verge of being lost.

The lastest index report by the Manufacturers CEOs Confidence showed a downward spiral from the 49.2 points obtained in the preceding quarter.

Investors King reports that the Manufacturers CEOs Confidence Index of the Manufacturers Association of Nigeria is a quarterly research and advocacy publication of the association, which measures changes in the pulse of operators and trends in the manufacturing sector on a quarterly basis.

The report, it was gathered, is in response to movements in the macro-economy and government policies using primary data gotten from direct survey of over 400 chief executive officers of MAN member-companies.

According to the report, in the fourth quarter of 2022, Aggregate Index Score of the MCCI reduced to 55.0 points down from 55.4 points recorded in the third quarter of the year.

This revelation is a pointer to manufacturers’ increasing loss of confidence in the economy of Nigeria that is nosediving.

The report disclosed that the fourth quarter of 2022 appeared to be more difficult to manufacturers than the level of hardship experienced in the preceding quarter.

This situation is linked to the continued rise in inflation, high cost of energy, worsening erosion in naira value and difficulty in sourcing forex as well including the harsh effect of the Russian-Ukrainian war.

According to the report, current Employment Condition (rate of employment) and production level in the next three months scored above the 50 benchmark points though with a decline in the period respectively.

It further stated that employment conditions for the next three months fell below the benchmark points to 48.8 points which is also below the 49.2 points obtained in the preceding quarter.

MAN further revealed that the redesign of naira notes, which has negatively affected the economy, would also play a significant role in affecting employment in the first quarter of 2023.

The association noted that the report is robust and realistic, adding that Q1 of every year is usually sluggish and employment decision is hardly completed in the quarter.

In order to control the economy, the Central Bank of Nigeria has been struggling to minimise the cash flow in individual hands, as traders and entrepreneurs groan of low patronage.

Continue Reading
Comments

Economy

South Africa’s Inflation Rate Holds Steady in May

Published

on

South Africa's economy - Investors King

South Africa’s inflation rate remained unchanged in May, increasing the likelihood that the central bank will maintain current borrowing costs.

According to a statement released by Statistics South Africa on Wednesday, consumer prices rose by 5.2% year-on-year, the same rate as in April.

The consistent inflation rate is expected to influence the decision of the six-member monetary policy committee (MPC), which is set to meet in mid-July. The current benchmark rate stands at 8.25%, a 15-year high, and has been held steady for six consecutive meetings.

Central Bank Governor Lesetja Kganyago has repeatedly emphasized the need for inflation to fall firmly within the 3% to 6% target range before considering any reduction in borrowing costs.

“We will continue to deliver on our mandate, irrespective of how our post-election politics plays out,” Kganyago stated earlier this month in Soweto. “The only impact is what kind of policies any coalition will propose. If the policies are not sustainable, we might not have investment.”

While money markets are assigning a slim chance of a 25-basis point rate cut in July, they are fully pricing in a reduction by November.

Bloomberg Africa economist Yvonne Mhango anticipates the rate-cutting cycle to begin in the fourth quarter, supported by a sharp drop in gasoline prices in June and a rally in the rand.

The rand has appreciated more than 3% since Friday, following the ANC’s agreement to a power-sharing deal with business-friendly opposition parties and the re-election of President Cyril Ramaphosa.

In May, the annual inflation rates for four of the twelve product groups remained stable, including food and non-alcoholic beverages.

However, transport, alcoholic beverages and tobacco, and recreation and culture saw higher rates. Food prices increased by 4.3% in May, slightly down from 4.4% in April, while transport costs rose by 6.3%, up from 5.7% and marking the highest rate for this category since October 2023.

The central bank’s cautious stance on monetary policy reflects its ongoing concerns about inflation.

Governor Kganyago has consistently voiced worries that the inflation rate is not decreasing as quickly as desired. The MPC’s upcoming decision will hinge on sustained inflationary pressures and the need to balance economic stability with fostering growth.

As South Africa navigates its economic challenges, the steady inflation rate in May provides a measure of predictability for policymakers and investors alike.

Continue Reading

Economy

Ghana Reports Strong 4.7% GDP Growth in First Quarter of 2024

Published

on

Ghana one cedi - Investors King

Ghana’s economy showed impressive growth in the first quarter of 2024 with the Gross Domestic Product (GDP) expanding by 4.7% compared to the same period last year, according to Government Statistician Samuel Kobina Annim.

This represents an increase from the 3.8% growth recorded in the previous quarter and should provide a much-needed boost to the ruling New Patriotic Party (NPP) as the nation approaches the presidential elections scheduled for December 7.

The positive economic data comes amidst a challenging backdrop of fiscal consolidation efforts under a $3 billion International Monetary Fund (IMF) rescue program.

The government has been working to control debt through reduced spending and restructuring nearly all of its $44 billion debt.

This includes ongoing negotiations with private creditors to reorganize $13 billion worth of bonds.

The latest GDP figures are seen as a vindication of the NPP’s economic policies, which have been under fire from the main opposition party, the National Democratic Congress (NDC).

The opposition has criticized the government’s handling of the economy, particularly its fiscal policies and the terms of the IMF program, arguing that they have imposed undue hardship on ordinary Ghanaians.

However, the 4.7% growth rate suggests that the measures taken to stabilize the economy are beginning to yield positive results.

Analysts believe that the stronger-than-expected economic performance will bolster the NPP’s position as the country gears up for the presidential elections.

“The growth we are seeing is a testament to the resilience of the Ghanaian economy and the effectiveness of the government’s policies,” Annim stated at a press briefing in Accra. “Despite the constraints imposed by the debt restructuring and IMF program, we are seeing significant progress.”

The IMF program, which is designed to restore macroeconomic stability, has necessitated tough fiscal adjustments.

These include cutting government expenditure and implementing structural reforms aimed at boosting economic efficiency and growth.

The government’s commitment to these reforms has been crucial in securing the confidence of international lenders and investors.

In addition to the IMF support, the government has also been focused on diversifying the economy, reducing its reliance on commodities, and fostering sectors such as manufacturing, services, and technology.

These efforts have contributed to the robust growth figures reported for the first quarter.

Economic growth in Ghana has been uneven in recent years, with periods of rapid expansion often followed by slowdowns.

The current administration has emphasized sustainable and inclusive growth, seeking to ensure that the benefits of economic progress are widely shared across all segments of the population.

The next few months will be critical as the government continues its efforts to stabilize the economy while preparing for the upcoming elections.

The positive GDP growth figures provide a strong foundation, but challenges remain, including managing inflation, creating jobs, and ensuring the stability of the financial sector.

Continue Reading

Economy

World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

Published

on

world bank - Investors King

The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending