19 Apr

Daily Watch – IMF tips Nigeria to grow 0.8% in 2017, ABV is back

  • The IMF on Tuesday forecast 2.6 percent growth in sub-Saharan Africa this year, aided by a modest recovery in large economies South Africa, Nigeria and Angola. “Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016,” the IMF said its latest World Economic Outlook report. A slump in commodity price in 2016 and devastating drought had affected growth in several countries in the region, resulting in 1.4 percent growth of GDP. Nigeria, the continent’s most populous nation and a leading oil producer, was expected to return to growth in 2017 after a challenging 2016 characterised by a recession, a dip in oil prices and energy shortages. “Output in Nigeria is projected to grow by 0.8 percent in 2017 as a result of a recovery in oil production,” said the report, also citing sustained growth in the agricultural sector. Double-digit inflation was forecast for Nigeria following a sharp depreciation in the naira in recent months.
  • The prices of some petroleum products, especially diesel and kerosene have increased by over 50.44 percent and 39.50 percent in the past year, according to the NBS. Although the agency’s data showed a slight decrease in the prices on a month-on-month basis by 5.94 percent and 11.59 percent respectively, the commodities are still largely beyond the reach of average income earners. The NBS said the average price paid by consumers for diesel decreased by 5.94 percent month-on-month from ₦249.38 in February to ₦234.55/litre in March. Generally, petroleum product prices have remained high due to the high cost of forex, which made many marketers abandon importation and leaving the NNPC almost as the sole importer of products. NBS data identified states with the highest average price of diesel as Kwara, ₦263.57/litre; Kogi ₦260, and Abuja ₦255. States with the lowest average price of diesel were Bayelsa ₦205.56; Plateau ₦209.17; and Rivers ₦212.14. Furthermore, the states with the highest average price per litre of kerosene to include Taraba ₦347.22; Plateau ₦340.48; and Cross River ₦399.71 while the lowest average price per litre of kerosene could be found in Gombe ₦273.81; Zamfara ₦271.57; and Oyo ₦267.54. According to the Bureau, states with the highest average price of petrol were Yobe, ₦161.7; Bayelsa, ₦161.3 and Enugu, ₦154.5. “States with the lowest average price petrol were Oyo, ₦145.7, Osun, Kwara, Kano, Gombe, Ekiti, Delta, and Abuja, ₦145, and Ogun ₦144.9.
  • Nigeria reopened Abuja’s airport on Tuesday, officials said, following a six-week closure for runway repairs that disrupted international air traffic to the country. During the shutdown, authorities diverted flights to Kaduna, 160 km away, where carriers including British Airways, Lufthansa and South African Airways refused to fly on security grounds. Ethiopian Airlines was the only foreign carrier to use Kaduna airport during the closure. Other international airlines continued to fly into Lagos. There have been no official estimates of the economic impact of the closure, but Abuja International Airport handled 812 flights in December 2015, the last month for which the Federal Airport Authority of Nigeria has figures. The comparative figure for Kaduna was 12. Announcing Abuja airport’s reopening, FAAN spokeswoman Henrietta Yakubu said an Ethiopian Airlines flight from Addis Ababa would land on the renovated runway. FAAN, on its Twitter feed, later said the flight arrived around 12 pm local time. The repairs to the badly damaged runway, carried out by construction firm Julius Berger, were scheduled after airlines threatened to stop flying to Abuja. Passengers who landed in Kaduna were transported to the capital on guarded buses along a road where kidnappings have taken place in recent years. The six weeks of transfers passed without incident. FAAN said 43,000 passengers passed through Kaduna airport in its first 11 days of operation as the alternative to Abuja airport. About 10,000 passengers used the shuttle buses during that period.
  • The CBN cut the amount of paperwork small and medium-size businesses must provide to buy dollars on Tuesday, to improve liquidity and the ease of doing business and help narrow the gap between official and black market exchange rates. Faced with a shortage of dollars and numerous requirements to fulfil when buying hard currency from the central bank, most small and medium-size enterprises use the black market instead, even though the naira is much weaker there. To address this, the CBN said it was switching to a new application form for those seeking to buy forex at its official window that would require only an invoice and account details of the suppliers providing the goods to be bought with foreign currency. Its previous system had required more detailed supporting documents, it said. “The objective of this new guideline is to ease the obstacles encountered by the SMEs and improve retail business access to the foreign exchange market,” the bank said in a statement, adding that the changes were taking immediate effect. The bank has said it aims to offer SMEs up to $20,000 each per quarter to prop up businesses whose access to foreign currencies has been overshadowed by larger companies.