16 Dec

The year ahead – What can Nigeria expect in 2017?

2016 proved to be a difficult year for Nigeria which saw the highs and lows of important metrics. Sadly, there were highs where there should have been lows, and lows where there should have been highs. We had highs in inflation, in unemployment and in deaths from famine while the lows were in oil and tax earnings, FDI, in percentage of CAPEX budget spent, and the list goes on. A summary shows that we were spot on in 79% of our projections for the year.

2016 was the................   read more

16 Dec

The week ahead – Old budget, new budget, same tale

President Muhammadu Buhari presented the 2017 budget proposal of ₦7.298 trillion to the National Assembly on December 14. The proposal, named, ‘Budget of Recovery and Growth,’ seeks to increase agriculture output and productivity, promote domestic manufacturing and ‘Made in Nigeria’ goods through intervention funds, eliminate costly cash calls for the NNPC and increase funding for infrastructure, especially roads, rail and power. The budget will also borrow................   read more

16 Dec

Daily Watch – Inflation hits 18%, PENGASSAN shuts ExxonMobil HQ over mass firing

  • Nigeria has seen its crude oil production surpass Angola to first place on the continent, the latest OPEC data shows. Nigeria had in March lost the top spot to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd. The country has seen a rise in militant attacks on its oil facilities in the oil-producing Niger Delta region in recent times, denting oil production. OPEC, in its Monthly Oil Market
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15 Dec

Daily Watch – ₦7.3 trillion budget seeks to end recession, US rate hike hits naira

  • President Buhari presented a 2017 budget proposal of ₦7.298 trillion to the National Assembly yesterday. The proposal aptly titled ‘Budget of Recovery and Growth,’ seeks to increase agriculture output and productivity, promote domestic manufacturing and ‘Made in Nigeria’ goods, through intervention funds, eliminate costly Joint Venture cash calls for the NNPC, and increase funding for infrastructure, especially roads, rail and power. The budget will
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14 Dec

Daily Watch – Reps approve MTEF, Nigerian stocks returned peanuts in 2016

  • The House of Representatives on Tuesday adopted the 2017 to 2019 MTEF and Fiscal Strategy Paper. The House fixed the exchange rate of the naira to the American dollar at ₦350 as against the ₦290 recommended by the executive. The House concurred on the oil benchmark of $42.50 per barrel with a proposed daily production of 2.2 million barrels per day. Consequently, the House mandated its joint committees on Finance, Appropriation, National Planning and Economic
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13 Dec

Review: Assessing our predictions for 2016, and how they fared

2016 has been an eventful year across the world and in Nigeria is particular. As we put finishing touches to our review of 2016 and our forecast of 2017, due for release this Friday at noon, we did a review of our key 2016 predictions from last year and how these have panned out as the year unfolded.

A year ago, we forecast that the following were likely to happen in 2016:



What we said What happened
Consistent and sustainable efforts at resettling 2.5 million people displaced across Nigeria. Spot on
Boko Haram will be dislodged from all their bases in the North-East. Spot on
More Boko Haram attacks, most of them hit and run, will originate from Chad and the Diffa region of Niger Republic. Largely right, but most of Boko Haram’s attacks originated from within Nigeria.
There will be an escalation of the conflict in the Middle Belt. Spot on, more, and bigger attacks happened over 2016, Agatu, Ukpabi-Nimbo, etc.
The Shi’a problem will escalate, but will not get to become a full-blown insurgency. Spot on
There will be a renewal of militancy in the Niger Delta which will lead to an increase in piracy off of the Gulf of Guinea, and kidnapping in South-Eastern Nigeria. Spot on
The economy will affect the police, leading to a worse security situation. Spot on
Crude oil prices will not rise, and Iran’s re-entry into the market will mean a reduction in Nigeria’s earnings. Crude prices did rise eventually, but Nigeria’s earnings went down for other reasons.
The FG will end fuel subsidies and increase taxation. This will lead to a backlash from Nigerians. The FG did announce the end of subsidies before Q1 was over, but by the end of the year, the subsidies were back.
The Naira will be devalued officially. It will fall at least 20% in Q1. Spot on on all counts. Eventually a “managed” float of the Naira happened, but it turned out to be a devaluation, not a float, and we ended the year with six exchange rates.
State revenues will take a hit, and the states will find it harder to borrow from the capital market. Spot on
More states will owe more salaries, and will eventually be forced to reduce their work forces. While more states are owing salaries, over 80% of the states as at last count, the political fall out in Imo, the first state to attempt to downsize its workforce, and that government’s eventual back-pedalling means that others have not followed suit.
The states will come into conflict with organised labour. 2016 will be a year of industrial action. Spot on. However, the lack of support for the unions due to distrust within the populace muted their impact.
Lagos, Abuja, Jos, Bauchi, Gombe and Kano will absorb more migrants, and become more crowded. Spot on. The IDP problem, increasing numbers of migrants to the big cities shows a brewing crisis.
President Buhari’s popularity will take a big hit in all the geopolitical zones except the North-West. Spot on
Summary Spot on – 11 Largely right – 2 Wrong – 1

SBM Intelligence’s forecast for 2017 will be published at noon WAT on Friday, December 16, 2016.

13 Dec

Daily Watch – Forex bill gets 2017 public hearing, Lloyd’s threaten Nigerian airline blacklist

  • A bill proposed by Nigeria’s Senate which seeks to give the CBN legal powers to set exchange rates, effectively rolling back the nation’s six-month-old free float will be put to a public hearing next year, according to its sponsor, John Enoh. The bill is meant to repeal the existing foreign-exchange legislation, under which market rates are “mutually agreed” between counterparties, and allow the CBN to decide those rates. The draft has been through
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09 Dec

The week ahead – Nigeria backs away from the free market

Petrol subsidies are effectively back on the NNPC’s cards following the sharp rise in crude oil prices after OPEC agreed to cut production by 1.2 million barrels per day, on November 30. This effectively means that Nigeria’s current ₦145 per litre retail price template for petrol, set in May is obsolete. “We suspect that the importers, or at least the NNPC, are taking the hit on their books as a result,” analysts at FBN Quest said in a December 2 note. This................   read more

09 Dec

Daily Watch – DisCos warn of imminent collapse, Lagos gives tax deadline

  • The eleven power distribution companies in the country have declared that the Nigerian electricity industry is on the verge of collapse as a result of the poor tariffs being charged consumers. Although they did not call for an increase in the electricity tariffs, the Discos warned that the sector was under grave threat on account of various operational challenges occasioned by the exorbitant and unstable naira to dollar exchange rate. Meanwhile, NERC has fined
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08 Dec

Daily Watch – ECOWAS to debate single currency, Resource Control back on the plate

  • Lawmakers are expected to deliberate on a legislative framework which seeks to grant states the power to control revenues derived from minerals resources during the constitution review exercise which will commence soon. The bill, sponsored by Minority Leader, Leo Ogor during Wednesday plenary session, scaled through second reading on the floor of the House of Representatives. Ogor (PDP-Delta) emphasised the need to amend the Constitution with the view to empower
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