Since 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 main source of revenue. China’s economic slowdown, as well as the United States’ rate hike, also affected its economy adversely. As a result, Nigeria’s economic growth declined drastically, with its currency falling to an all-time low. In order to save the economy from a complete collapse, the Central Bank of Nigeria (CBN) put stringent monetary policies in place, which saw investors pulling out of the country.
However, it looks like the country’s economic situation is about to change as the CBN, which once showed that its decisions were not independent of the federal government, seems to be taking a different turn. But it is still uncertain if the CBN will be able to sustain some of its recent policies, which are geared towards saving the Naira from falling.
Below is the Ventures Africa Weekly Economic Index, for the week ending 21st of August 2017. This economic index gives you a glimpse into the recent activities in Nigeria’s economy as well as changes that could affect the economy:
Did the price of crude oil change?
The OPEC weekly basket price revealed that between 14th and 18th of August 2017, the price of crude oil decreased from $49.46 per barrel to $48.86 per barrel.
Oil prices fell significantly during the week under review but regained some ground on Friday after falling to as low as 48.07 per barrel. The fall in oil price was attributed to reports of weak Chinese demand, a weaker U.S Dollar and a bullish Environmental Impact Assessment (EIA) report. However, Friday’s incrase was attributed to unconfirmed reports of a unit shutdown at one of the largest oil refineries in the U.S. and a falling rig count.
How low is the external reserve?
Data from the website of the Central Bank of Nigeria reveals that as of 16th August 2017, Nigeria’s external reserve increased by $329,152,034 to $31,551,330,610 from $ 31,222,178,576 recorded on 8th August 2017.
According to the Centre for the Study of the Economies of Africa (CSEA), the steady rise in reserve has contributed largely to the sustained appreciation and relative stability of the Naira at all forex market segments. To maintain this, efforts geared towards improving oil supply should be increased. The CSEA further revealed that tackling the factors that impede the competitiveness of exports would go a long way towards diversification of the export basket and eventually an increase in external reserves.
How did the Naira fare?
During the week under review, the Naira depreciated against the dollar at the parallel market as it was sold at 370 Naira/$ on Friday 18th August 2017 from 367 Naira/$ recorded on Friday 11th of August 2017.
In a bid to sustain its intervention and boost liquidity in the foreign exchange market, on Tuesday the Central Bank of Nigeria (CBN) injected $364 million into the interbank foreign exchange market.
However, Traders at the market told Vanguard that in spite of the weekly auction of foreign exchange by the CBN to BDC, the Naira continued to depreciate.
What decisions did the CBN make this week?
The Central Bank of Nigeria (CBN), on 15th of August 2017 released a circular titled “Payment of Port and Nigerian Maritime Administration and Safety Agency charges by oil marketing company. The circular signed by the Director, Trade and Exchange Department, Wuritka Dauda Gotring, directed authorized dealers to accept the request for the payments of port charges from oil marketing companies and forward to the CBN Forex window.
“In a bid to improve foreign exchange availability in the Nigerian Forex Market and ameliorate challenges encountered by critical stakeholders, payment for port charges to the Nigerian Ports Authority (NPA) and other agencies by oil marketing companies can now be accommodated by the Bank using Form A,” the bank stated in the circular.
The Nigerian Stock Market
According to the recent data released by the Nigerian Stock Exchange (NSE), as of 18th August 2017, the market closed trading on a positive note as the all share index decreased by 3.35 percent from the previous week ending 11th August 2017. Market capitalization at the close of trading was N12.726 trillion, which is a 3.35 percent decrease from N13.166 trillion recorded the previous week. The All Share Index for the week under review closed at 36,920.56. This decrease came after the Nigerian Stock Exchange market capitalization crossed the 13 trillion mark since October 2014 last week.
Top five price Gainers and Decliners in the week under review:
Top five price Gainers
- Fidson Healthcare Plc
- Continental Reinsurance Plc
- University Press Plc.
- Berger Paints Plc
- Glaxo Smithkline Consumer Nig. Plc.
Top five price Decliners
- Cement Co. Of North.Nig. Plc
- E.M Insurance Co (Nig) Plc.
- Jaiz Bank Plc
- Total Nigeria Plc.
- Morison Industries Plc.
Dividends announced so far
Tracking companies that have announced their dividends are very important for the country as it affects the share price of the company. This also enables people to know if they are eligible to collect the dividend, when it will be approved and when it will be paid. So far the following companies who have announced their full year reports are:
- Greif Nigeria Plc
- United Capital
- Nigerian Breweries
- Transcorp Hotels Plc
- Africa Prudential
- Zenith Bank
- Dangote Cement
- Nestle Nigeria
- Access Ban
- Guaranty Trust Bank
- Total Nigeria Plc
- Lafarge Africa Plc
- Custodian and Allied Plc
- MRS Oil Nigeria Plc
- United Bank for Africa Plc
- GlaxoSmithKline Consumer Nig. Plc
- Unilever Nigeria Plc
- FCMB Group Plc
- Dangote Sugar Refinery Plc
- Stanbic IBTC Holdings Plc
- Pharma-Deko Plc
- UACN Plc
- AIICO Insurance Plc
- Chemical and Allied Products Plc
- Trans-Nationwide Express Plc
- AXA Mansard Insurance Plc
- Mobil Oil Nigeria Plc
- Beta Glass Plc
- Infinity Trust Mortgage Bank Plc
- Okomu Oil Palm Company Plc
- NASCON Allied Industries Plc
- Gases Plc
- Learn Africa Plc
- NEM Insurance Plc
- Nigerian Aviation Handling Company Plc
- Med-View Airline
- Fidelity Bank
- Okomu oil
- Regency Alliance
- Presco Plc
- Consolidated Hallmark Insurance Plc
- Nestle Nigeria Plc
- Aluminium Extrusion Industries Plc
- Berger Paints Plc.,
- FBN Holdings Plc.
- NPF Microfinance Bank
- Newrest ASL Nig
- UAC of Nigeria Plc
- Chemical and Allied Products Plc
- Continental Reinsurance Plc
- Ashaka Cement
- Smart Products Nigeria Plc
- Lasaco Assurance Plc
- Eterna Plc
- The Initiates Plc
- The Initiates Plc
- Fidson Healthcare Plc
- eTransanct
- Conoil
- UPDC Real Estate Investment Trust
- Redstar Express
- University Press
- Honeywell Flour Mills
- Tripple Gee and Company
- Flour Mills Nigeria
- Stanbic IBTC ETF 30
- Vitafoam Plc
- Rak Unity Petroleum Plc
- Skye Shelter Fund
- Flour Mills of Nigeria Plc
- Custodian And Allied Insurance Plc
- Dangote Sugar Refinery Plc
- McNichols Consolidated Plc
