- The naira has fallen to ₦285 for an American dollar at the interbank market ahead of the release of modalities for the implementation of the adopted flexible exchange rate policy as announced by the CBN. According to the Guardian, this is a reaction to increased perception that CBN has withdrawn from the weekly forex intervention, which forms part of the newly adopted policy, paving the way for banks and BDC operators to source forex autonomously and sell according to market dynamics. The new rate represents about 43.2 percent increase from ₦199 to the dollar it previously traded, which according to analysts suggests that the market is gradually adjusting itself to the new direction, although the details are yet to be unfolded.
- The Minister of Power, Works and Housing, Babatunde Fashola, has said that there will be no going back on the 45 percent increase in electricity tariff. Fashola added that a reversal will cost over ₦575 billion. NERC had in January announced a 45 percent increment in electricity tariff, but the Senate directed that the tariff be reversed to enable it conclude hearing on the case. Fashola however explained that the new tariff could not be reversed as it was necessary for the market to survive. He said a number of indices, such as borrowing rate for investors, exchange rate , availability and cost of gas, among others also contributed to the hike. According to him, even with the recent hike in electricity tariff, Nigeria was still among countries with the lowest electricity tariffs in Africa and the world.
- The NBS released its 2016 First Quarter Balance of Trade report, which showed that Nigeria had a negative trade balance of N184.1 billion. This will be the first time the country will be recording a negative trade balance since data collection began in 2008. According to the report, the total value of Nigeria’s merchandise trade at the end of Q1, 2016 stood at ₦2,723.9 billion. From the preceding quarter value of ₦3,517.4 billion, this was ₦793.5billion or 22.6% less. This development arose due to a sharp decline in both imports and exports. Exports saw a decline of ₦671.1 billion or 34.6%, while imports declined by ₦122.4 billion or 7.8%. The steep decline in exports brought the country’s trade balance down to – ₦184.1 billion, or ₦548.7bilIion less than in the preceding quarter. The crude oil component of total trade decreased by ₦716.7 billion or 46.6% against the level recorded in Q4, 2015.