Following the global oil price crash in 2014, Nigeria has been one of the hardest hit economies due to its over dependence on oil as its only source of revenue. China’s economic slow down and the US rate hike also affected its economy adversely. As a result, Nigeria’s economic growth has declined dramatically, with its currency falling to an all time low.

New monetary policies by the country’s apex bank are not helping either, forcing investors to pull out of the country. The Central Bank of Nigeria put in stringent policies to help save the Naira from falling but these policies backfired. unfortunately.

The country’s inflation rate stands at 16.5 percent, its GDP is at -0.36 percent and the rate of unemployment has increased to 12.1 percent. All these vfactors have pushed Nigeria’s misery index to an all-time high of 47.7 percent, placing the country in the fifth position of countries with the highest misery index in the world, in the first half of 2016.

Below is the Ventures Africa Weekly Economic Index, which gives you a glimpse into the recent activities in Nigeria’s economy as well as changes that could affect the economy:

What is the latest in the Nigerian Banking Sector?

UBA

Last week was characterised by several directives from the Central Bank of Nigeria.

On Monday the 22nd of August 2016, the Central Bank of Nigeria (CBN) ordered banks to set aside 60 percent of their total foreign exchange purchases from all sources for manufacturers, while other users are to get 40 percent for the purpose of trade and other transactions. The decision was taken following a review on the disbursement of foreign exchange to end-users. The apex bank also said that banks should continue to publish weekly sales of foreign exchange to end-users in the national newspapers and to provide legal returns to the CBN.

The following day, Tuesday, 23rd August 2016, the CBN barred nine commercial banks from all foreign exchange transactions. According to reports, these banks were barred because they failed to remit about $2.21 billion NNPC/NLNG funds in their possession into the Treasury Single Account. But on Wednesday night the United Bank for Africa (UBA) was readmitted into the Forex market after the bank remitted all outstanding deposits into the Treasury Single Account (TSA). The other affected banks are First Bank of Nigeria Plc, FCMB Plc, Diamond Bank Plc, Skye Bank Plc, Heritage Bank Limited, Keystone Bank Limited, Fidelity Bank Plc and Sterling Bank Plc.

A look at Nigeria’s GDP forecast

Nigeria GDP

On Thursday August 25, the Federal Government of Nigeria initiated preparations towards the adjustment of the 2017 budget by approving the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2017-2019. The government estimated that the nation’s economy will grow at 3.6 percent by 2017, rising to 4.26 percent in 2018 and 4 percent in 2019 due to elections uncertainties; the oil price benchmark will be set at $42.50, exchange rate will be at N290 per dollar and economy will grow by at least three percent.

What happened to the Naira last week?

Nigeria Currency

There was new pressure on the Naira exchange rate as it depreciated to an all time low of N412 per US Dollar on Friday 26th August 2016. On Thursday, the Dollar traded at N315 per Dollar at the interbank market.

Did the Nigerian Stock market perform better last week?

Nigerian-Stock-Exchange

Nigerian stocks closed trading on a positive note as the All Share Index gained 0.26 percent. At the close of trading on Friday, 25th August 2016, market capitalisation was N9.43 trillion compared to N9.40 trillion recorded on Thursday. The volume of shares traded as of Friday was 280 million units, while the NSE All Share Index was down 0.26 percent to 27,450.91. The three top gainers are PRESCO, CAP and Honeywell Flour and top losers are WEMA Bank, FCMB and AIICO.

Elsewhere on Ventures

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