Connect with us

Economy

Inflation Rate Surges to 12.13% in January

Published

on

consumer goods
  • Nigeria’s Inflation Rises to 12.13% in January

Nigeria’s inflation rate rose for the fifth consecutive month in January as border closure and lack policy clarity bites.

The Consumer Prices Index, which measures inflation rate, rose from 11.98 percent recorded in December to 12.13 percent year-on-year, according to the latest report from the National Bureau of Statistics (NBS).

This was 0.15 percent higher than the 11.98 percent filed in December.

On a monthly basis, headline inflation grew by 0.87 percent in the month under review, up by 0.02 percent when compared to 0.89 percent recorded in December 2019.

Accordingly, average annual Food Index rose by 13.86 percent in January from 13.74 percent in December 2019. While the composite food index expanded by 14.85 percent during the same month, higher than the 14.67 percent recorded in December 2019.

The bureau attributed the increase in cost of food to the surge in prices of bread and cereals, meat, oils and fats, potatoes, yam and other tubers and fish.

The Central Bank of Nigeria led monetary policy committee had said surged in prices due to border closure was reactionary but several months after the decision of president Muhammadu Buhari to close the nation’s land borders, consumer prices continue to rise and expected to surge even further if the CBN’s Open Market Operation policy is not reversed.

Policy uncertainty amid global slowdown continues to hurt the nation’s foreign direct investments in key sectors that could have helped plugged domestic production deficit due to border closure.

The International Monetary Fund (IMF) on Tuesday lowered Nigeria’s growth projection for the year from 2.5 percent to 2 percent, citing weak investment, low household incomes and slow economic recovery.

The fund points to weak declining foreign reserves amid falling oil prices as coronavirus hurts demand of the commodity.

“High fiscal deficits are complicating monetary policy,” the report said.

“Weak non-oil revenue mobilisation led to further deterioration of the fiscal deficit, which was mostly financed by Central Bank of Nigeria (CBN) overdrafts. The interest payments to revenue ratio remain high at about 60 per cent.”

Therefore, rising consumer prices  –with increase in Value Added Tax (VAT) from 5 percent to 7.5 percent –could significantly slow down growth in 2020, especially with foreign reserves declining to from $45 billion in June 2019 to $37 billion this month.

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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

Economy

Citigroup Sees $60 Per Barrel Crude Oil in the Next 12 Months

Published

on

Crude oil

Citigroup Says Crude Oil Will Reach $60 Per Barrel in a year

Despite the current economic downturn and the projected second phase of COVID-19, Citigroup, a New-York based financial service company, has said oil price could hit $60 per barrel in the next 12 months.

Citigroup disclosed this on Thursday during a virtual EMEA Media Summit titled – ‘Navigating the Future: What’s Next in a Post-COVID-19 World’.

“After a substantial underperformance in the last six months relative to several other commodities, crude will eventually bounce back to around $60 per barrel over the next 12 months,” Max Layton, European Head of Commodities Strategy, Citigroup said while giving a presentation on the outlook for commodities in the second half of 2020, and into 2021.

This means Brent crude oil would rise by at least 50 percent from the current level of $42 per barrel in the next 12 months.

“It’s going to be a function of the demand and supply but recently we have been seeing a spike in the demand for some of the commodities,” said Atiq Rehman, Head of EMEA Emerging Markets, Citigroup.

“A lot of these economies are heavily commodity-dependent, and perhaps, in the past have been guilty of not diversifying when they come under pressure. I think perhaps, this recent moves will push them to diversify away from simply commodities,” Grant Carson, Head of TRUK And Non-Presence Countries, Citigroup, stated citing Russian as one of the countries that have recorded success in diversifying away from crude oil.

Continue Reading

Economy

Oil Sustains $42 Price Level as OPEC Output Drops to Over Two-Decade Low

Published

on

Oil price

OPEC Oil Output Drops to Over Two-Decade Low in June

Crude oil sustained $42 per barrel price level following a recent survey conducted by Reuters that showed the Organisation for the Petroleum Exporting Countries (OPEC) managed to cut oil production to over two-decade low in the month of June.

According to the survey, OPEC’s 13 members pumped 22.62 million barrels per day in June, 1.92 million barrels per day below May’s revised figure. The lowest since May 1991.

OPEC and allies, together referred to as OPEC plus, had agreed to cut oil production by 9.7 million barrels per day in the month of April to rebalance the global oil market and prop up prices amid COVID-19 pandemic.

OPEC’s share of the 9.7 million barrels per day production cut was 6.084 million bpd but OPEC delivered 6.523 million bpd cut in the month of June despite the inconsistencies from Nigeria, Angola and Iraq.

In June, Saudi Arabia reduced production by 1.13 million barrels per day to 7.53 million bpd. While Kuwait and the United Arab Emirates met their quota but struggle to fulfill the extra cuts.

Nigeria, Iraq and Angola continue to struggle in the month of June. However, their performance improved compared to May as Nigeria attained 77 percent compliance level, up from 19 percent in May.

While Iraq and Angola achieved 70 percent and 80 percent compliance level, respectively. Nigeria and Iraq have pledged to cut more in July despite their economic challenges. Angola, however, said it would not be able to cut extra oil production until October.

Brent crude oil, against which Nigerian oil is measured, rose to $42.48 per barrel on Friday as at 2:58 pm Nigerian time.

UKOilDaily

Continue Reading

Economy

Nigeria Labour Congress Says No Fuel Increase Amid COVID-19 Pandemic

Published

on

No Fuel Increase During COVID-19 Pandemic, Says Nigeria Labour Congress

The Nigeria Labour Congress (NLC) on Thursday rejected the new fuel price announced by the Petroleum Products Price Regulatory Agency (PPPRA) on Wednesday.

In a statement issued by Ayuba Wabba, the President, NLC, the labour demanded instant reversal to the old price, saying the move will kill businesses and worsen the nation’s poverty level at a time when nations are looking to ease economic burden of their citizens and mitigate negative impacts of COVID-19.

The PPPRA had raised the value band of Premium Motor Spirit, commonly referred to as Petrol, to between N140.80 and N143.80 per litre on Wednesday because of the recent increase in crude oil prices.

Nigeria Labour Congress argued that “PPPRA contradicted itself when it said that the latest price increase described as an “advisory” was meant to regulate a product that government claims had been de-regulated.

“That this new hike in the pump price of petrol was announced without the approval of the board of the PPPRA and the oversight ministry speaks volume of the arbitrariness and public contempt in the operations of PPPRA. We find this deeply disturbing.

“It is also very embarrassing that the PPPRA boss, while trying to defend the indefensible, appeared to be out of sorts and ready to clutch at any available straws to sell his ice block merchandise to Eskimos.

“Apart from contradicting himself that PPPRA is still trying to regulate a deregulated product through ‘advisories’, the PPPRA went on to exert more nails on the coffin of his polemics when he argued that PPPRA was just like the Central Bank of Nigeria, CBN, and the National Insurance Commission, NAICOM, that would always act to protect the public interest.

“That was how far the niceties went. The rest of the statement by the PPPRA boss was about how PPPRA plans to protect investors and increase their profit.”

Continue Reading
Advertisement
Advertisement
Advertisement
Advertisement

Trending