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Research Analysis

#PMBMid-term: 3.5 million join unemployed Nigerians during Buhari administration

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The effects of the recession were once again brought to the fore as the National Bureau of Statistics (NBS) yesterday released the fourth  quarter 2016 Underemployment/Unemployment report.

Here are key highlights from the report:

In percentages

  • Unemployment rose by 14.2 % in Q4 2016, showing an increase for the third consecutive quarter. Nigeria’s unemployment rate stood at 10.4% at the end of 2015 and 7.5% when the government of Buhari came into power.
  • Unemployment rate for Nigerian youth’s rose to 25.2%
  • Underemployment rate, which measures the number of Nigerians who are employed in positions lower than their qualifications rose to 21% from 19.7% in the third quarter of 2016.
  • About 61.6% of Nigerian Youth were either unemployed or underemployed.
  • 61.1% of Nigerians aged 15-24 were unemployed as at Q4 2016 compared to 59.9% in Q3 2016.

In absolutes

  • In actual numbers, the number of unemployed people increased from 11.1 million in Q3 2016 to 11.59 million in the fourth quarter of 2016.
  • The number of Nigerians who were unemployed before the Buhari administration were about 8 million Nigerians. Thus we have added about 3.5 million people to the unemployment pool.
  • The economically active population increased 0.5% quarter on quarter from 108.3 million in Q3 2016 to 108.59 million in Q4 2016.
  • In the fourth quarter of 2016, the labour force population( those within the economically active population that are willing and able to work) increased from 80.67 million in 2015 to 81.15 million.
  •  Data also shows that about 2.9 million graduates in Nigeria are out of jobs and another 5 million who attended either primary or secondary school education.
  • About 3.4 million uneducated Nigerians are also unemployed
  • About 6.8 million of the unemployed population reside in the rural areas.

The statistics show the government will need to redouble its efforts to get the economy going again. The 2017 budget which is key to the country recovering from recession is yet to be passed.

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Labour force table.
Source: NBS

 

Below is a copy of the report.

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Download (PDF, 24.68MB)

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

1 Comment

1 Comment

  1. Anodebenze

    June 6, 2017 at 3:10 pm

    hip hip well done my young friend onome.2.9 million graduates in Nigeria.THERE IS A LOT OF WORK TO BE DONE IN NIGERIA DUE TO CRIMINAL GROSS NEGLEGENCE AND MIS-MANAGEMENT OF NIGERIA ECONOMYnow what is production or happiness index in Nigeria.now you look at inflation in Nigeria,there have no attempt to control inflation in Nigeria for 30 yrs.look at the cbn plan to control inflation ,they deregulates bank interest,and the next thing to do is to give us high bank interest.
    we thought that this govt will give hope with this graduate a self-employment scheme,instead they start to humiliate then,by give THEM an advising scheme paying pocket money.IN NIGERIA ON THE BANK OF RIVER NIGER,THIS GOVT IS FORCING THIS JOBLESS GRADUTE TO BE WASHING THEIR FACE WITH SPITTLE.
    The list is endless if they want to have a mentoring scheme through this gradute scheme,why not you fund local govt area,if deficit to fund local library.local primary healthcare.you cannot force somebody to love another,which he do not wants to do.when I was in my teen,my old man uses to force me to borrow books from our local library,he also uses to import books from abroad.i uses to visit Enugu city library or Onitsha library,as when where we locates.
    some of my comment,you find I made in nairametric,did not come from Nigeria educational system,but from books i read in Nigerian local library,and some of those books did influenced my thinking

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Exclusives

Lafarge, Nigerian Breweries, Stanbic IBTC, others top best performing stocks in Q3 2020

Nairametrics reviews the best stocks in Q3 2020, judging by their performance.

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Lafarge, Nigerian Breweries, Stanbic IBTC, others top best performing stocks in Q3 2020

Lafarge Africa, Nigerian Breweries, Stanbic IBTC, United Capital, and FTN Cocoa made the list of best-performing stocks in the third quarter of 2020 (July – Sept’20).

The third quarter of the year was a recovery period for the Exchange, as the All Share Index grew by 9.61% to close the gap caused by the negative performance it endured in the first quarter of the year – during the heat of the COVID-19 pandemic. It also recorded a 14.92% positive growth in the second quarter.

READ: Mixed fortunes for Nigerian Breweries Plc as the Brewery sector moribunds

READ: UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

As Company stocks is one of the popular means of short-term investments in Nigeria and a look at persistent inflationary pressures; it is imperative to assess the performances of the stocks listed on the exchange during the covid era, to ascertain the profitability of investors in this period.

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To determine the best-performing stocks, we looked at the stock prices as of the last trading day in June 2020 and compared to their prices as of the last trading day of September 2020. Here are the top 5:

READ: MTN shareholders have made approximately N1 trillion since April 2020


Lafarge Africa Plc

The Cement manufacturing company grew its stock value by as much as 50% between July and September 2020. As at 30th June 2020, the stock of Lafarge was worth N10 per unit of share but grew to N15 as at the last trading day of September – with a market capitalization of N241.6 billion.

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A cursory look at the Q2 2020 financial performance, shows a 5% year-on-year decrease in revenue generated. However, a reduced cost of sales helped improved the company’s gross profit by 10% and a subsequent 78% increase in profit before tax at N19.38 billion.

READ: PMI: Nigeria’s manufacturing sector gains momentum in November 

READ: These industries drove business activities in September

June 30th – N10

September 30th – N15

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Return – 50%

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Ranking – First


Nigerian Breweries Plc

The second on the list is the brewery giant, Nigerian Breweries – the makers of Star Lager, Fayrouz, Goldberg, and many other consumables. It grew its stocks by 35.73% from N36.1 as of 30th of June to N49 per share at the end of Q3 2020. The market capitalization also closed at N391.8 billion as at the review period, being the second most capitalized consumer goods firm – only behind Nestle Nigeria.

A look at the Q2 2020 financials, shows that the company endured a downturn, mostly affected by the COVID-induced lockdown, which halted all social gatherings, as it posted a profit before tax of N69.8 million – 99% decline compared to N7.95 billion recorded in the corresponding quarter of 2019.

However, with the lifting of lockdown nationwide, the outlook for the Q3 and Q4 2020 appears to be positive, as investors have shown confidence in the brand, which has translated into a positive stock performance in the quarter.

READ: GDP: Nigeria’s manufacturing sector on tight ropes

June 30th – N36.1

September 30th – N49

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Return – 35.73%

Ranking – Second

app

Stanbic IBTC Plc

The third most capitalized bank on the stock exchange is also the third on the list of best performing stocks in Q3 2020, growing its stock by 33.88% from N30.25 per unit of share recorded as of June 30th to N40.5 at the end of trading in September – with a total market capitalization of N449.8 billion.

In the same vein, the Q2 performance of Stanbic IBTC indicates an 11% increase in gross earnings, which permeates into 32.2% increase in profit before tax – from N21.1 billion recorded in Q2 2019, as against N27.9 billion in the review period.

READ: Heineken scoops more Nigerian Breweries shares in insider disclosure

June 30th – N30.25

September 30th – N40.5

Return – 33.88%

Ranking – Third


United Capital Plc

The financial and investment service firm recorded a 30.59% increase in its stock value, as it moved from N2.55 per unit of share as at June 30th to N3.33 as at the end of September. This growth places United Capital in fourth position, as one the best performing stocks between July and September 2020.

The investment firm displayed firm resolve against the effects of COVID-19 in the second quarter of the year – as it posted a profit before tax of N1.5 billion, as against N1.2 billion reported in the corresponding quarter of 2019. This indicates a 22.9% increase in profit.

READ: Custodian Investment Plc posts Profit After Tax of N1.5 billion in Q3 2020

READ: NFF receives $1 million from FIFA as COVID-19 palliative

June 30th – N2.55

September 30th – N3.33

Return – 30.59%

Ranking – Fourth


FTN Cocoa Processors Plc

A unit of FTN Cocoa shares was valued at 20 kobo as at June 30th. However, it grew by 30% to N26 kobo as at the end of trading on 30th September 2020, leaving its total market capitalization at N572 million.

Data obtained from Nairalytics – the research arm of Nairametrics, showed that FTN Cocoa has not released its financials since Q1 2019. However, the cocoa processing company was able to post a positive stock performance in the third quarter of the year to sit fifth on the list.

READ: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN 

The company was formerly registered as Fantastic Traders Nigeria Limited, a Limited Liability Company, which was incorporated in 1991. It commenced cocoa processing business in a third-party arrangement (Toll Processing) with Stanmark cocoa processing company limited in 1995. They converted cocoa beans into cocoa butter and cocoa cake/powder, and later extended their activities to Ile-oluji, Cocoa Cooperative etc.

READ: Togo, Niger, Benin remit N2.04 billion to Nigeria for power supply

June 30th – N0.20k

September 30th – N0.26k

Return – 30%

Ranking – Fifth


Bubbling Under

The following stocks make up the rest of the top 10 in descending order:

6. Guaranty Trust Bank Plc

7. University Press Plc

8. Eterna Plc

9. Unity Bank Plc

10. Fidson Healthcare Plc

Explore some Advanced Financial Calculators on Nairametrics


Bottom line: With a double-digit growth in the following stocks, Investors who bought these stocks would be delighted to see their investments appreciate during this period and will look forward to gaining more in the subsequent periods.

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Research Analysis

Market Survey: Price of tomatoes, maize, and melon spikes, as scarcity hits Lagos markets

The report contains information on items that witnessed price increase, price decrease, as well as insights.

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Market survey, FSDH Merchant Bank Ltd, Inflation rate, private sector loans, NBS

Prices of major household food items have increased significantly across major markets in Lagos State, as a result of low harvest and scarcity. This is according to the latest Household Market Survey conducted by Nairalytics – the research arm of Nairametrics.

The persistent rise in the price of food items has been enabled by dwindling harvest, which has caused scarcity of commodities across major markets in Lagos State. Some of the items that surged as a result of the scarcity include tomatoes, melon and maize.

READ: Prices of frozen Fish, Yam, Pepper, others jump as traders lament low sales in major markets

The report shows that a big basket of Oval-shaped tomatoes now sells for an average of N17,000, indicating a 6.3% increase in price when compared to N16,000 recorded in September. A big bag of Melon increased by 22.4%, to sell for an average of N46,500.

The report contains information on items that witnessed price increase, price decrease, as well as information on special markets, and insights.

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READ: Alert: Tomato prices are up by over 80% in these Lagos markets

Items that witnessed price increase

  • A carton of Turkey increased by 5.8% to sell for an average of N18,333, compared to an initial average of N17,333 recorded in September 2020.
  • A carton of full Chicken that was sold for an average of N14,000 two weeks ago, now sells for an average of N14,500. This represents 3.6% increase in price.
  • A carton of Chicken laps increased by 2.4% to sell for an average of N14,333, compared to N14,000 recorded in September.
  • A big bag of Bush mango seed, popularly known as “Ogbono” now sells for N100,000 at Mile-12 market. A 5.3% increase compared to N95,000 reported earlier.
  • A big bag of dry Onions increased by 48% to sell for an average of N55,500, compared to an initial average of N37,500.
  • A big bag of new Onions spiked by 60.8% to sell for an average of N41,000. It was initially sold for an average of N25,500.
  • A big bag of Yellow Maize that was initially sold for an average of N17,667 now sells for an average of N20,167 – a 14.2% increase in two weeks.
  • A big bag of White Maize also increased by 17.7% to sell for an average of N20,000, compared to an initial average of N17,000.
  • A big bag of Pepper increased by 9.7% to sell for an average of N17,000, while a medium-sized bag sells for an average of N9,000 – a 38.5% increase in price.
  • A Mackerel fish, popularly known as “Kote” sells for an average of N663. An increase of 3.9% from an initial average of N638.
  • A big basket of Oval-shaped Tomatoes now sells for N17,000 at Mile-12 market, compared to N16,000 recorded in the later part of last month. A small basket increased by 5.6% to sell for N9,500.
  • A pack of 500g Dangote Pasta increased marginally by 1.21% to sell for an average of N4,175, compared to an initial average of N4,125.
  • A big bag of Melon increased by 22.4% to sell for an average of N46,500, compared to an initial N38,000 recorded in September.

READ: Food items’ stock pile-up across major markets, as prices continue to drop 

Items that witnessed price decrease

  • A big basket of Sweet Potato now sells for an average of N13,500, from an initial average of N14,000 – a 3.6% reduction in price.
  • The price of a big basket of Irish Potatoes reduced by 29.5% to sell for an average of N21,500, compared to N30,500 recorded in September.
  • A 50kg bag of White Beans sells for an average of N25,025. It reduced by 15.9% from an initial average of N29,750.
  • 5 litres gallon of Palm Oil currently sells for an average of N2,375 from an initial average of N2,425. 25 litres gallon sells for an average of N12,125.
  • A big bag (nylon) of Crayfish currently sells for an average of N12,500, compared to an initial average of N13,000.
  • A big Horse Mackerel fish popularly known as “Kote” sells for an average of N625. It was initially sold for an average of N663.

READ: Prices of food items jump across Lagos markets, as traders lament transport fare hike

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Items that maintained initial prices

  • A 50kg bag of Royal Stallion Rice still sells for an average of N30,333, Mama Gold (N29,750), Caprice (N29,667), and Mama’s Pride (N25,500).
  • A big sized bag of Brown Beans still sells for an average of N33,000.
  • The various brands of noodles maintained their initial prices. 305g carton of Indomie still sells for an average of N3,150, 210g of Indomie (N3,200), and 100g of Chikki (N2,200).
  • The price of a 50kg bag of Yellow Garri remains unchanged at an average of N13,000.
  • The price of a 50kg bag of Flour remains on the high, as Dangote sells for an average of N14,333, Honey well (N14,375), and Mama Gold (N14,125).
  • A big basket of Round-shaped Tomatoes still sells for an average of N14,000, while a medium-sized basket sells for an average of N8,500.

READ: Prices of beans, potatoes, palm oil, others jump as traders lament hike, seasonal scarcity

Special markets/items

Nairametrics research found that there are two varieties of pepper at Mile-12 market, a small and a big one. A big bag of the big Pepper sells for an average of N17,000 while that of the small Pepper sells for an average of N10,000. Interestingly, a medium-sized bag of the small pepper sells for an average of N9,000.

Mr. Musa, a Pepper seller at the market, explained that the reason for the difference in price between the two varieties is that the small pepper is more peppery, when compared to the bigger one. He added that most people from the Western part of the country prefer to buy the small ones, as they like to prepare spicy meals.

READ: Data War: MTN edges out Airtel, first time in 5 months as more subscribers dump Glo, 9mobile 

Our agent at Daleko market, told Nairametrics Research that one of the major types of brown beans (Niger beans) is now scarce in the market, same goes for Maiduguri beans. However, she stated that “Oloyin Pelebe” is currently sold for an average of N22,000, Gombe beans (big bag) for an average of N33,000, and the small bag sells for an average of N27,000.

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READ: Prices of tomatoes, frozen foods, onions, others jump, as low demand hits imported rice 

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Market insights

Scarcity of major food items across Lagos markets has caused a significant hike in the price of commodities, as traders highlighted the reasons for the persistent increase.

Mr. KC from Mile-12 market said it is a surprise to traders that Melon is now sold for N48,000 in the market, since it is always cheap at this time of the year. However, he attributed the price increase to scarcity of the commodity. According to him, farmers did not cultivate significant quantity of melon because of the incessant rain in recent times.

“Melon requires sun to dry; however, the northern part of the country witnessed lots of rainfall this year, which really affected the cultivation of the commodity during this period,” he added.

Nairametrics Research met a scanty Onion section of Mile 12 market during visitation this week. In a discussion with one of the sellers named Ismail, he said that the prices of onions have spiked significantly because of its scarcity.

According to Ismail, there has been limited influx of new onions into the market, while dry onions is even more limited. He said the price is also expensive in the north.

Explore Data on the Nairametrics Research Website

ItemsBrandUnitMUSHIN (08/10/2020)DALEKO (08/10/2020)OYINGBO (08/10/2020)MILE 12 (08/10/2020)Average MUSHIN (24/09/2020)DALEKO (24/09/2020)OYINGBO (24/09/2020)MILE 12 (24/09/2020)Average
Bag of RiceMama Gold10kgNA4500450050004666.6666666667NA4500450050004666.6666666667
Bag of RiceRoyal Stallion50Kg30000NA300003100030333.33333333330000NA300003100030333.333333333
Bag of RiceRice Master10kg5000NA450047505000NA45004750
Bag of RiceMama Gold50kg29500295003000030000297502950029500300003000029750
Bag of RiceCaprice50kg30000NA290003000029666.66666666730000NA290003000029666.666666667
Bag of RiceMama's Pride50kg25500255002500026000255002550025500250002600025500
Bag of BeansOloyin50kg20000210002000020333.3333333332000019500200002200020375
Bag of BeansWhite50kg3100320003300032000250253000030000300002900029750
Bag of BeansBrown>50kg32000340003500031000330003200034000350003100033000
Tuber of YamAbuja1 Big Size Tuber10009008501000937.510009008501000937.5
Tuber of YamAbuja1 Medium Size Tuber600600650700637.5600600650700637.5
Carton of NoodlesIndomie305g (Belle full)3200310032003100315032003100320031003150
Carton of NoodlesIndomie210g (Hungry man)3200320032003200320032003200320032003200
Carton of NoodlesChikki100g2200220021002300220022002200210023002200
Carton of NoodlesMinimie70g19001750170018001787.519001750170018001787.5
Carton of NoodlesGolden Penny70g1700150016001600160017001500160016001600
Bag of GarriIjebu50kg14000135001400013500137501400013500135001350013625
Bag of GarriWhite50kg13000125001250013000127501300013000125001300012875
Bag of GarriYellow50kg12500130001300013500130001250013000130001350013000
Basket of PotatoSweetBig Basket13500135001400014000
Basket of PotatoSweetSmall Basket700700700700700700
Basket of PotatosweetSmallest Basket400250325400250325
Basket of PotatoIrishBiggest Basket200002300021500330002800030500
Basket of PotatoIrishSmall Basket2500250025002500
Basket of PotatoIrishSmallest Basket170015001600170015001600
Packet of PastaGolden Penny500g4400440043004200432544004400430042004325
Packet of PastaDangote500g4200415042004150417541004100420041004125
Packet of PastaPower (1 pc)500g250220250220235220220220220220
Packet of PastaBonita (1 pc)500g200220230220217.5200200230220212.5
Gallon of Palm OilLocal5 Litres2700230023002200237527002300230024002425
Gallon of Palm OilLocal25 Litres12000115001250012500121251200011500125001300012250
Gallon of Vegetable OilLocal5 Litres2900300030003500310029003000300035003100
Gallon of Vegetable OilLocal25 Litres14000150001450015000146251400015000145001500014625
Gallon of Vegetable OilKings5 Litres3200300030002800300032003000300028003000
Gallon of Vegetable OilWesson5 Litres4500390039004300415045003900390043004150
Gallon of Vegetable OilMamador3.8 Litres25002450250028002562.525002450250028002562.5
Gallon of Vegetable OilPower3 Litres1900180018002200192519001800180022001925
Bunch of PlantainPlantain1 Bunch500500500600525500500500600525
Bag of FlourDangote50kgNA13500150001450014333.333333333NA13500150001450014333.333333333
Bag of FlourHoney well50Kg14500135001450015000143751450013500145001500014375
Bag of FlourMama Gold50kg14000145001400014000141251400014500140001400014125
MilkPeak Powdered (Tin)400g1200120012001200120012001200120012001200
Milkpeak Powdered(Tin)900g23502400240023002362.523502400240023002362.5
MilkPeak milk (Refill)500g1000100010001000100010001000100010001000
MilkDano Powdered (Tin)500g1000100010001000100010001000100010001000
MilkDano Powdered(Tin)900g2600200020002000215026002000200020002150
MilkDano (Refill)500g800800800800800800800800800800
MilkThree Crown (Refill)380g700700750700712.5700700750700712.5
MilkLoya Powdered (Tin)400gNA1000100010501016.6666666667NA1000100010501016.6666666667
MilkLoya (Refill)400gNA800850800816.66666666667NA800850800816.66666666667
MilkCoast (Refill)500gNA750750750750NA750750750750
Cocoa BeveragesMilo (Tin)500g10001100105010001037.510001100105010001037.5
Cocoa BeveragesMilo (Tin)900g2200210021002100212522002100210021002125
Cocoa BeveragesMilo Refill500g10009009009009251000900900900925
Cocoa BeveragesBournvita Refill500g10001000950900962.510001000950900962.5
Cocoa BeveragesBournvita (Plastic)900g2000200020002000200020002000200020002000
Cocoa BeveragesOvaltine Refill500g850800850850837.5850800850850837.5
Cocoa BeveragesOvaltine(Plastic)500g1100110010001100107511001100100011001075
CoffeeNescafe Classic50g600600600600600600600600600600
TeaLipton Yellow label52g300290300300297.5300290300300297.5
TeaTop tea52g300300300300300300300300300300
SugarSt' Loius Sugar(Cube) 500g500550550550537.5500550550550537.5
SugarGolden Penny Sugar (cube)500g300350350400350300350350400350
BreadVal-U1 loaf450450450500462.5450450450500462.5
BreadButterfield1 loaf450450500500475450450500500475
EggN/ACrate1200120012001200120012001200120012001200
Bottled Water (Refill)CwayRefill600600650600612.5600600650600612.5
Juice5 Alive1 litre550550550600562.5550550550600562.5
JuiceChivita1 litre550550600550562.5550550600550562.5
GasRefilling12.5kg3200320034003300327532003200340033003275
GasRefilling5kg1400140014001300137514001400140013001375
TomatoesBig Basketround shaped14000140001400014000
TomatoesMedium Basketround shaped8500850085008500
TomatoesSmall Basketround shaped6000600060006000
TomatoesBig BasketOval Shaped17000170001600016000
TomatoesSmall BasketOval Shaped9500950090009000
FishKote (Horse Mackerel)1 big Fish650600600650625650700650650662.5
FishTitus (Mackerel)1 big Fish600650650750662.5600600600750637.5
PepperBig bag17000170001550015500
PepperMedium bag9000900065006500
MaizeYellow21000200001950020166.66666666718000185001650017666.666666667
MaizeWhite2050019500200002000017000180001600017000
MelonBig bag450004800046500400003600038000
OnionsBig bagDry Onions560005500055500370003800037500
OnionsBig bagNew Onions400004200041000250002600025500
Bush mango seed(Ogbono)1 big bag1000001000009500095000
Frozen foodFull chickenCarton1450014000150001450013500135001500014000
Frozen foodChicken lapCarton14000140001500014333.333333333130001500014000
Frozen foodTurkeyCarton19000180001800018333.33333333317000175001750017333.333333333
Crayfish120001300012500130001300013000

About Nairametrics Food Price Survey

Nairametrics Food Price Watch, is a bi-weekly Household Market Survey that covers the prices of major food items in Nigeria, with emphasis on five major markets in Lagos – Mushin market, Daleko market, Oyingbo market, Idi-Oro market, and Mile 12 market.

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Research Analysis

Nigeria’s dollar earnings fall by over $7 billion due to Covid-19

Nigeria recorded a whopping 52% drop in exports proceeds in the quarter ending June 2020 mostly due to the effects of Covid-19.

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Petrol importation gulps N1.13 trillion in 2019, as Nigeria fails another deadline 

Nigeria recorded a whopping 52% drop in exports proceeds in the quarter ending June 2020 mostly due to the effects of Covid-19. This is contained in the Current Account Deficit numbers published by the Central Bank of Nigeria. The current account deficit for the quarter fell to $3.2 billion compared to first-quarter data of $5.6 billion, the latest report indicates.

Explore Data on the Nairametrics Research Website

Export drop

According to the data, total exports in the second quarter of the year fell to $6.3 billion from $13.8 billion in the first quarter of 2020 before the Covid-19 lockdown grounded the economy. Crude Oil inflows which Nigeria relies on for 85% of its export proceeds went from $11.2 billion in the first quarter to just $5.2 billion in the second quarter of the year.

READ: PenCom recovers N17.51billion from defaulting employers, imposes penalties

Crude Oil prices fell to as low as $20 per barrel in April as markets panicked as the Covid-19 lockdown spread globally. OPEC members also decided to cut crude oil output with Nigeria’s quota falling from 1.8 million barrels per day to just 1.4 million barrels per day. This culminated in lower export proceeds for Nigeria piling pressure to devalue the currency after the first devaluation in late March.

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READ: Nigeria’s forex devaluation timeline – 2020

Non-oil revenues also fell sharply from $2.1 billion in the first quarter of the year to $1.1 billion in the second quarter of the year revealing how damaging the pandemic has been on the economy. Nigeria earned an average of $2.6 billion per quarter from non-oil exports in 2019, the highest since 2008 when the CBN started publishing figures.

Imports also fall

Nigeria’s dollar outflow for imports also fell from $14.7 billion in the first quarter of 2020 to $10 billion in the second quarter of the year. The fall was also driven by a drop in oil imports falling to just $307 million from $3.7 billion. Non-oil exports which is a major driver of dollar outflows from Nigeria $11 billion to $9.7 billion. This was also due to the impact of the lockdown as most goods imported into the country from other parts of the world fell.

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READ: Samsung Electronics profits increased by 58% in the third quarter

Despite several import substitution policies of the current government, Nigerians spent an average of $12.7 billion on the importation of goods into the country in 2019 compared to $7.3 billion a year earlier. The country’s main non-oil imports are boilers, machinery and appliances gulping over 27% of imports. Vehicle parts are also a major source of dollar outflows with over 12.8% of the value of what is imported into the country.

READ: Nigeria’s worsening current account deficit piles pressure on exchange rate

The government has focussed its ban on accessing forex for the importation of listed items which they believe can be made in Nigeria. Most of these items are food-related.

Why this matters: Nigeria’s exchange rate is mostly determined by how much dollars the country can attract compared to outflows.

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  • With exports proceeds down by over 50% pressure was on the central bank to devalue the naira.
  • However, the CBN also had the option of managing the demand side of the deficit culminating in a drop in current account deficits.
  • The more Nigeria earns from exports compared to imports the higher the chances that the exchange rate will remain stable.
  • For example, in 2018 when the exchange rate was stable at N360/$1, Nigeria earned about $15.3 billion in dollar inflows or exports (mostly from crude oil sales) compared to $10.1 billion in imports.
  • Thus Nigeria will need to either earn more from exports or cut some of its reliance on imports if it is to maintain a stable exchange rate for the country.

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