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Macro-Economic News

Latest Nigeria’s Manufacturing Purchasing Managers’ Index (Updated May 2018)

Nigeria’s Purchasing Managers’ Index was 56.5 in May 2018

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Nigeria’s Manufacturing Purchasing Managers’ Index (PMI) was 56.5 for the quarter ending May 2018. This compares to a Manufacturing Purchasing Managers’ Index (PMI) of 56.9 for the immediate past month ended April 2018.

This is according to data recently published by the Central Bank of Nigeria.

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According to the CBN, The Manufacturing and Non-Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the current month compared with the preceding month.

Patricia

Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

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Macro-Economic News

Katsina State records fastest growth in mobile internet subscribers in Nigeria

Nigeria has a total of 136.2 million mobile internet subscribers as at 2020 Q1.

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Katsina State records fastest growth in mobile internet subscribers in Nigeria

Katsina State recorded a massive 41.46% jump in the number of mobile internet subscribers the fastest growth by any state in the country. This is according to data from the National Bureau of Statistics. The data focus on mobile internet subscribers via GSM phones.

Katsina state recorded 3.679 million internet subscribers in the first quarter of 2020 compared to 3.17 million and 2.6 million subscribers in the 4th quarter and 1st quarter of 2019 respectively. This represents a 15.8% jump quarter on quarter and 41.5% jump year on year. No other state comes close.

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Edo State was however second year on year recording a growth of 36.8% to 4.3 million internet subscribers. Katsina was also recorded the fastest growth quarter on quarter followed by Sokoto State.

READ MORE: Telecoms operators fined N2.9 billion over infractions 

Nigeria’s Mobile Internet Subscribers Data

According to the data from the NBS, the total number of internet subscribers in Nigeria as at the first quarter of 2020 is 136, 203, 231. This compares to 126, 078, 999 in the 4th quarter of 2019 and 116, 310, 154 in the first quarter of 2019. This represents a QoQ growth of 8.03% and year on year growth of 17.1%.

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Nigeria’s commercial cities of Lagos, Rivers State, FCT and Kano also recorded growth in internet subscribers year on year.

Lagos State 

Subscribers – 17.02 million

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YoY Growth – 7.16%

Rivers State

Subscribers – 5.12 million

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YoY Growth – 9.77%

Kano

Subscribers – 8.33 million

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YoY Growth – 33.19%

FCT

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Subscribers – 6.13 million

YoY Growth – 13.3%

Internet Subscribers by Geopolitical Zones

We also observed the South West still retains the number one position in terms of internet subscribers per geopolitical zone with 39.1 million subscribers out of a total of 136.2 million in the country. The North-Western part of the country recorded the fastest growth of 29.9%. See below;

Internet Subscribers by Geo-Political Zones. Source: Compiled by Nairametrics

Internet Subscribers by GSM Companies

MTN continues to lead with 57.2 million subscribers. They also grew the fastest YoY by 23%

MTN – 57,282,123
GLO – 33,871,456
AIRTEL – 36,827,677
9MOBILE – 7,762,068
Others – 459,907
Total – 136,203,231

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Upshots: Internet subscriber’s growth in Nigeria continues to record double-digit growth and one of the fastest in the world. The competition for mobile data subscription is intense and could end up being a winner take all activity. As GSM companies move in search of growth, the North seems the area with the most potential for double-digit subscriber growth.


Correction: An earlier version of this article stated that the North West has 46 million subscribers while the North East recorded the fastest growth. The correct data is 26.1 million for the North West making the South West the zone with the most internet subscribers. The North West also recorded the fastest growth and not the North East. The error is regretted. 

Patricia
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Macro-Economic News

FPI and FDI drop to $68 million and $18 million respectively in April, lowest since 2016

The Covid-19 economic lockdown impacted negatively on investor inflow into Nigeria.

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FDI, foreign direct investment, Covid-19: Nigerian government explains how it will fund proposed N2.3 trillion stimulus

Nigeria attracted just $67.9 million in Foreign Portfolio Investment (FPI) inflow for the month of April 2020, the lowest inflow recorded this year. This is contained in the latest capital importation data obtained from the Central Bank of Nigeria (CBN).  

A cursory look at the Central Bank data shows that FPI sharply reversed from $2.30 billion at the beginning of the year (January) to just $67.9 million inflow in April 2020. Nigeria like most emerging markets relies heavily on foreign portfolio investments to shore up its external reserves and manage its exchange rate position.  

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Nigeria shut down its economy in the whole of April as part of its measures to contain the spread of the COVID-19 pandemic.  

READ MORE: UPDATED: Inflation rate jumps to 12.40%, highest in over 2 years

FPI and FDI hit 2016 recession low 

The outbreak of the COVID-19 pandemic has affected the global economy with emerging markets like Nigeria feeling the full brunt from a fiscal and monetary perspective  

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With the pandemic projected to spread recession across major countries including G20 nations, investors are wary of pumping money into poorer countries like Nigeria. This is despite trillions of dollars in stimulus packages injected by the likes of Japan, the US, Europe, and Canada. Foreign investor apathy is also due to the global lockdown which is still in full force in many sub-Saharan countries like Nigeria.  

In total, Nigeria attracted only $316.8 million capital inflow in April, a 113.5% drop representing a significant decline when compared to the $2.30 billion capital inflow received in January 2020. Total capital importation was $2.4 billion and $615 million in February and March respectively. The majority of the inflows recorded in January and February flowed into Money Market Instruments.

The breakdown of capital inflow shows that the main components of capital inflow (FPI and Foreign Direct Investment) plunged significantly.  

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READ MORE: Nigeria receives $17.5 billion diaspora remittances in 2019 

Source: CBN

As at the end of April 2020, Foreign Direct Investment (FDI) received was estimated at $18.5 million, down from $110.9 million received earlier in January 2020. FPI, on the other hand, recorded a 3,297% decline from $2.30 billion in January to $67.9 million inflow in April 2020.  

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This is the lowest capital inflow received in the Nigerian economy in a single month since the 2016 recession. In 2016 December, Nigeria recorded $76.15 million FPI and $67.9 million in January 2017 respectively.  

READ ALSO: Nigeria received $96 billion diaspora remittances inflow in 6-years

According to the recent report released by the World Bank on the Nigerian economy, in the first quarter of 2020, the total FPI flows into Nigeria declined by 54%, and this is due to increased risk aversion in global capital markets.  

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While FPI and FDI both declined, the Central Bank continues to offer high yield to foreign investors, causing the share of FPI in total capital inflows to rise to over 50 percent in 2019. The shift from FDI to FPI represents an increase in Nigeria’s reliance on “hot money” to finance the Balance of payment, which exacerbates the vulnerability of the current account.  

Although, the foreign reserves have improved in recent weeks, averaging $36 billion in June 2020. Meanwhile, a sustained reversal in capital flow may further expose the country’s foreign reserves, a situation which may necessitate another round of exchange rate unification (Naira devaluation). 

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Economic Reopening still a longshot 

In the past weeks, major economies of the world have embarked on gradual easing of lockdown, a move targeted at restarting local trade and initiate the recovery process. However, there are new pushbacks on reopening plans as renewed concern about the possibility of a second wave of the COVID-19 pandemic across the globe remains high    

Nigeria has also faced similar pushbacks on reopening the economy further prolonging a restart of full economic activities. Just recently, the federal government approved a N2.3 trillion stimulus package which they will fund from special accounts and a $3 billion loan from the World Bank. This is in addition to the $3.4 billion already drawn from the IMF.  Whilst, these are all geared towards stimulating the economy, the economic devastation from COVID-19 remains a huge concern. 

Both the IMF and World Bank have predicted the Nigerian economy to contract by 3.4% and 5.4% respectively in 2020. According to the World Bank, in 2020, the current account is expected to hold steady at about -3.1 percent of GDP in 2020, although imports and exports are both projected to contract considerably. 

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Also, the World Bank disclosed that Nigeria’s exports are expected to fall by US$40.3 billion, 9% of GDP, because of the drop in global oil prices, and imports are expected to fall by US$50.5 billion, 12% of GDP, due to sluggish demand and disruptions in global supply chains.  

Indeed, Nigeria is in a significantly weaker macroeconomic position than it was during the 2015/16 recession, and it has fewer policy instruments to cushion the shocks induced by the pandemic. 

Patricia
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Macro-Economic News

EFG Hermes highlights sectors that will boom Post-COVID

Investors and executives will nevertheless have to navigate a changed landscape.

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EFG Hermes, Impact of COVID-19 pandemic on consumer packaged goods in Nigeria

EFG-Hermes Holding, a financial service corporation, has said that investments across certain sectors of the Nigerian economy would receive boosts when the COVID-19 pandemic ease by September, 2020.

The sectors, according to the experts, that would attract more investments and patrons  after the pandemic subsided are Agriculture, Digital payments, health, consumer goods and capitalised financial institutions among others.

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This was disclosed by experts during a virtual investors conference organised by EFG-Hermes and attended by Nairametrics.

READ MORE: FG to go ahead with Eurobond payment, seeks debt relief from china, multilateral agencies

Head, Frontier research, EFG-Hermes, Kato Mukuru, explained that the sectors will be investors delights post-COVID, as more investments would be attracted to them and they are essential products/services consumers can not do without. He said,

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The good thing about COVID-19 is that it has forced new sectors to come through. More local and foreign investors will be going into food cultivation, processing, storage and distribution to take advantage of the expansion in the industry.

Mukuru added that Nigeria’s biggest financial institutions would also attract new investments and customers as most lenders are deficient in capital and many will need capital to stabilise after the pandemic.

“There are clients that are looking at very good opportunities and we are discussing with them. I know a local investor who is looking to do hospitals post Covid-19. We have started that dialogue,” he added.

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READ ALSO: SEC expresses worry as banks’ credit to agriculture sector remains low

The lockdown introduced by the Federal Government created opportunities for some operators in the digital payment space, as many moved from cash to digital payments.

Also, a crash in the price of crude oil, the nation’s major revenue earner intensified effort by the government to diversify income sources by supporting investments in agriculture and processing industries.

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Despite current challenges facing the Frontier Emerging Markets (FEM), Mohamed Ebeid, co-CEO of the Investment Bank at EFG Hermes, explained that changes in the macro picture might create new opportunities for countries, markets and companies.

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He said, “We do see the prospect of some relief from immediate pressures, with an easing of FEM portfolio outflows expected as major central banks continuing to implement large expansionary programs.

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‘We could also see a floor put under commodity price drops as major oil producers solidify their commitment to large output cuts. Investors and executives will nevertheless have to navigate a changed landscape, where previously more-or-less hidden structural trends come to the fore and accelerate.”

Ebeid added that the main objective of the Virtual Investor Conference was to provide participants with first-hand insights from key international players, spurring further investment in FEMs.

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Patricia
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