- The IMF has blamed Nigeria’s double-digit inflation rate on forex challenges, adding that the CBN’s efforts to defend the naira by forex rationing haven’t been successful. In its policy paper on macroeconomic developments and prospects in low-income developing countries, unveiled at the weekend, IMF said the economy’s underperformance were due to “delayed/poorly managed policy adjustment”. “There were sharp movements in currencies across many LIDCs during 2015. Further sizeable depreciations were recorded in 2016 in commodity exporters under stress,” the paper read. The global monetary body said this includes “Mongolia, where reserve levels have been significantly eroded, and Nigeria, where efforts to support the naira through foreign exchange rationing have gradually crumbled”. Inflation has risen to troubling levels in a handful of cases, concentrated in sub-Saharan Africa. Among commodity exporters, large exchange rate depreciations were a key contributor in Mozambique, Nigeria, and Zambia”. Domestic policy failures cited include delayed/poorly managed policy adjustment to lower commodity prices — as in Nigeria, where foreign exchange rationing adversely affected debt service capacity of many corporates. Nigeria (is) affected by Boko Haram-led attacks in the north and disruptions to oil production in the Niger Delta region. Aside from direct damage and increased security outlays, conflict situations undermine business confidence, investment, and tourism.” The fund also said Nigeria’s financial developments affected neighbouring countries like Chad, which also plunged into a recession, and Benin.
- The 54.8 percent depreciation of the naira at the interbank foreign exchange market in 2016 resulted in a ₦330.99 billion drop in the value of the Nigerian equities market. The equities market posted a ₦604 billion nominal loss in 2016 as the market closed at ₦9.246tn capitalisation from the ₦9.850 trillion recorded a year earlier. The CBN data showed that the interbank exchange rate of the naira to the United States dollar as of the end of last year was ₦305; while for 2015, it stood at ₦197. Therefore, a 54.8 percent year-on-year depreciation of the naira against the greenback led to a market loss of ₦330.99 billion in currency terms. Thus, in real/aggregate terms, the market posted ₦934.99 billion loss in 2016, with the fall in the value of the naira playing a major role. The President of the Funds Managers Association of Nigeria, Ore Sofekun, said the country’s equities market had suffered a serious downturn over the last 36 months, adding that companies seeking to raise fresh or additional capital in the Nigerian capital market are finding it increasingly difficult to attract the attention of stock market investors at the moment.
- Eight Nigerian airlines delayed 32,121 or 58% of 54,682 flights operated between January and December 2016, cancelling 1,207 flights, new findings published by the Daily Trust newspaper show. In the year under review, the airlines, including Aero Contractors, Arik Air, Azman Air, Med-View, Dana Air, First Nation, Air Peace and Overland, conveyed 4,024,387 inbound passengers and 4,171,191 outbound passengers. According to the executive summary of the 2016 flight operations obtained by the paper, 31 international airlines also operated 15,465 flights, delayed 6,430 and cancelled 199. Altogether foreign carriers flew 1,952,657 inbound passengers and 2,011,705 outbound passengers last year. International airlines had a slight number of delayed and cancelled flights compared to their domestic counterparts but they had more cases of delayed or missing baggage as well as pilferage. A total number of 2,236 complaints were received against foreign airlines and 71 against domestic carriers, according to the NCAA report. At the domestic level, Arik Air topped the list with the highest delayed or cancelled flights. The airline conveyed 1,163,056 inbound passengers and 1,177,176 outbound passengers in 19,064 flights last year, delayed 10,996 representing 57.6% and cancelled 507 flights. Aero Contractors operated 5,668 flights, delayed 3,394 and cancelled 286; Azman Air operated 4,140 flights, delayed 3,039 and cancelled 32; Dana Air carried out 6,037 flights, delayed 3,798 and cancelled 32; Med-View operated 4,575 flights, delayed 2,648 and cancelled 100. Also, Overland operated 2,227 flights, delayed 1,631 and cancelled 167; First Nation did 2,002 flights, delayed 634 and cancelled 21; while Air Peace did 10,969 flights, delayed 5,543 and cancelled 72. The director of the NCAA’s Consumer Protection Directorate, Adamu Abdullahi attributed the high rate of flight delays and cancellations to hostile weather and scarcity of Jet A1 fuel.
- PwC, a global financial consultancy, has revealed in its Project Blue report that Nigeria has the highest percentage of its population living in poverty, with its financial system showing the least progress of all the seven emerging markets: Nigeria, Brazil, China, India, Indonesia, Mexico and South Africa covered by the report. It stressed that the lack of an efficient and resilient financial system is still holding back inclusive and sustainable growth in emerging markets across the globe including Nigeria. The report said, “In five of the eight key areas, Nigeria’s financial system scores significantly below PwC’s fit-for-purpose targets, holding back inclusive and sustainable growth. However, the success of Nigeria’s auto-enrolment pension model is a bright spot.” The PwC assessment highlights that “While growth in emerging markets continues to outstrip developed counterparts and hundreds of millions of people have been lifted out of poverty, developing a well-functioning financial system remains critical to tackling poverty and sustaining economic growth over the long term. This can’t be said about the other African countries in PwC’s assessment. Not only has Nigeria by far the highest percentage of its population living in poverty, its financial system is also showing the least progress of all seven emerging markets. Emerging markets need a robust and broad-based financial infrastructure to channel funds efficiently, draw people into the market economy and enable them to share in the benefits,’’ it said.