Photograph — Voice of America

As the world continues to grapple with the economic impact of the COVID-19 (coronavirus) pandemic, the price of oil rose to $62.43 from the $59.34 at the close of last week. This translates to a rise in inflation for oil-dependent economies like Nigeria.

Higher oil prices lead to inflation, increased input costs and reduced non-oil demand from foreign buyers. It also leads to increased  budget deficits and a drop in tax revenue as a result of rigidities in government expenditure, driving interest rates higher.

Nigeria is now regarded as the world’s poverty capital with an estimated 91 million people (43 percent of its population) living in extreme poverty (below $2 a day). The figure rose 29 percent from 70 million in 2016. However, the country’s poverty level has been projected to reach 106.6 million by 2030. 

Below is the Ventures Africa Weekly Economic Index for the week ending 12th of February, 2021. This economic index gives you a glimpse into other recent activities in Nigeria’s economy as well as changes and prices that could affect the economy.

Nigerian Stock Exchange

The NSE All-Share Index and Market Capitalization depreciated by 3.04 percent to close the week at 40,439.85 and N21.156 trillion respectively.

Similarly, all other indices finished lower with the exception of NSE Growth Index which rose by 0.42 percent while the NSE ASeM and NSE Sovereign Bond Indices closed flat.

Top Five Price Gainers

Mutual Benefits Assurance Plc. 

Morison Industries Plc.

McNichols Plc.

UPDC Real Estate Investment Trust.

UACN Property Development Company Plc.

Top Five Price Decliners

N Nig. Flour Mills Plc.

NEM Insurance Plc.

Royal Exchange Plc.

Guaranty Trust Bank Plc.

Livestock Feeds Plc.

How did the Naira fare?

This picture taken on January 29, 2016 in Lagos shows 1000 naira banknotes, Nigeria’s currency.
Nigeria’s central bank governor, Godwin Emefiele, on January 26 dismissed calls to devalue the naira in his monetary policy committee statement. Instead he chose to continue propping up the currency at 197-199 naira to the dollar and maintain foreign-exchange restrictions. As a result, the naira on the black market is hovering around a record low of 305, fuelling complaints from domestic and foreign businesses who can’t access dollars required for imports. / AFP / PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)

The Naira experienced a downward slope against the dollar at the close of last week. The exchange rate closed at N405.32 per dollar on 12th of February 2021 as against N393.46 per dollar recorded the week before. 

How did the price of oil fare?

Brent oil prices closed out the week on the 12th of January 2021 at $62.43, an increase from the $59.34  per barrel recorded the previous week. 

Elsewhere on Ventures

Triangle arrow