The Central Bank of Nigeria (CBN) Business Expectation Survey (BES) Report for the month of March 2019 reveals that insufficient power supply has remained the leading factor hindering businesses in Nigeria.
According to the CBN report, insufficient power supply recorded the highest points of 63.9 for the period under review. Despite this, the report shows that Nigeria’s industrial sector witnessed the highest prospects for job creation.
The CBN survey was conducted with a sample size of 1050 businesses nationwide, including small, medium, and large corporations covering both import- and export-oriented businesses.
- Businesses’ outlook showed greater confidence on the macroeconomy
- Operators in industrial and service sectors expressed the greatest optimism for growth
- Business activity and financial condition outlook remain positive
- The industrial sector recorded the highest employment outlook
- Insufficient power supply remains a major constraint to business activity in Nigeria
- Expectations on the growth of the economy rose steadily in the short run
Industrial and service sectors driving Business Outlook
Recall that despite the consecutive drop in the industrial sector gross domestic product (GDP) in Q2 and Q3 of 2018, the sector showed a sign of recovery and recorded growth in Q4. Overall, Nigeria’s industrial sector grew at 1.94% in 2018.
The optimism on the macroeconomy in the current month was driven by the
operators in the service sector (16.8 points), industrial (8.6 points),
wholesale/retail trade (2.3 points), and construction sectors (0.5 points).
Similarly, the major drivers of business optimism were service sector (37.0 points), industrial (19.4 points), wholesale/retail trade (6.2 points), and construction sectors (2.2 points).
Also, service sector recorded greatest optimism on own operation with an index of 7.1 points, followed by the industrial sector with 3.3 points. Also, the wholesale and retail trade recorded 2.0 points and the construction sector with 0.5 points respectively
Businesses continue to witness power supply glitch
Low capacity utilisation, insufficient power supply, and huge importation have remained recurring decimal and bane causing a downward trend in Nigeria’s manufacturing sector.
To substantiate this, the CBN business survey report identified insufficiently
power supply (63.9 points) as the leading factor constraining businesses in the country.
According to the report, other factors include high interest rate (55.3 points), unfavourable economic climate (54.6 points), financial problems (51.8 points), unfavourable political climate (50.0 points), unclear economic laws (49.4 points), insufficient demand (42.8 points), and access to credit (41.8 points)
Poor power supply has tendencies to slow Country’s growth
Poor electricity supply, for instance, has diminished most economic activities. It has also forced companies to generate their own alternatives to power sources, which adds to the overhead cost.
In a recent power sector’s stakeholders, the Manufacturers Association of Nigeria’s (MAN’s) and Association of Nigerian Electricity Distributors (ANED) in Lagos reportedly stated that Nigeria needs 180,000 megawatts (Mw) of electricity over the next 10 years to drive real and sustainable economic growth.
‘”South Africa with 67 million people generates 48,000Mw and they are now working to increase the generation to 79,000 Mw. In Nigeria, 5,150 Mw was the peak we generated since 1980. Let us be sincere with ourselves, to generate power is expensive. To do 1,000Mw, you will need about $1.2billion”
In a separate report from the Rural Electricity Agency, it was revealed that businesses spend almost $14bn (N5tn) annually on an inefficient power generation (N140/kWh or more). As this continues to linger, tendencies to slow the country’s growth is inherent.
Despite this, the Industrial Sector still shows the highest prospect for job creation
Despite the power supply glitch, the CBN report employment outlook index by sector showed that the industrial sector (31.5 points), indicates the highest prospects for creating jobs. Followed by services (23.8 points), wholesale/retail trade sector (23.6 points) and construction sector (16.7 points).
Why it matters?
Nairametrics had earlier reported that the latest manufacturing Purchasing Managers’ Index (PMI) covering the month of March 2019, indicates that Nigeria’s manufacturing sector expanded for the 24th consecutive month.
The outcome of the survey underscores the fact that sufficient power supply is a very important component required for businesses to function properly and to expand. Higher electricity costs drive business costs higher and reduce business competitiveness.
Boosting the manufacturing sector could contribute to jobs creation and reduce unemployment which is currently high at around 23 per cent. Growth in the industry is the future, and Nigeria must fix the perennial problem of insufficient power supply to adequately provide power for the sector to achieve its full potential for growth and development.
COVID-19 Update in Nigeria
On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 56,956 confirmed cases.
On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria, having carried out a total daily test of 2,609 samples across the country.
To date, 56,956 cases have been confirmed, 48,305 cases have been discharged and 1,094 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 482,321 tests have been carried out as of September 18th, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 18th September 2020,
- Total Number of Cases – 56,956
- Total Number Discharged – 48,305
- Total Deaths – 1,094
- Total Tests Carried out – 482,321
According to the NCDC, the 221 new cases were reported from 18 states- Lagos (59), Abia (46), FCT (22), Gombe (20), Plateau (17), Rivers (11), Bauchi (7), Benue (6), Ekiti (6), Imo (6), Kaduna (4), Kwara (4), Ondo (4), Ogun (3), Osun (3), Bayelsa (1), Edo (1), Kano (1)
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,827, followed by Abuja (5,526), Oyo (3,226), Plateau (3,192), Edo (2,611), Kaduna (2,326), Rivers (2,220), Delta (1,799), Ogun (1,758), Kano (1,734), Ondo (1,594), Enugu (1,234), Ebonyi (1,035), Kwara (1,013), Abia (881), Katsina (845), Osun (810), Gombe (799), Borno (741), and Bauchi (689).
Imo State has recorded 557 cases, Benue (473), Nasarawa (447), Bayelsa (394), Jigawa (322), Ekiti (313), Akwa Ibom (288), Niger (250), Anambra (232), Adamawa (230), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (73), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
BREAKING: Fire guts fuel tanker, vehicles at Anthony, Lagos
The tanker conveying PMS lost control while in motion and subsequently fell sideways.
There is a fire outbreak, which has gutted a fuel tanker, at Anthony inward Gbagada, Lagos State.
This was disclosed by the Federal Fire Service via its Twitter handle on Friday evening. The incident, which occurred around 10 pm, has razed at least two vehicles.
First responders and other Emergency agencies are already at the scene of explosion in Anthony, Lagos State, Nigeria. Please avoid the area, take alternative routes.
— Federal Fire Service (@Fedfireng) September 18, 2020
The agency urged road users to avoid the area and take alternative routes.
Also, the Director-General of the Lagos State Emergency Agency, Dr Olufemi Oke-Osanyintolu, confirmed the incident.
He said, “The Agency responded to distress calls and upon arrival at the scene of incident, it was discovered that a tanker with unknown registration number conveying PMS lost control while in motion and subsequently fell sideways.
“This led to an explosion in which two unidentified vehicles were burnt.”
A joint team of responders led by the Federal Fire Service, LASEMA, LASG fire service, LRU fire unit, Nigeria Police and LASTMA are working together to curb the inferno from escalating further.
Details soon …
Facebook to open Lagos office in 2021
When the social media giant comes to Nigeria, it will be its second office on the African continent.
Social Media giant, Facebook announced it would open an office in Lagos in 2021, its second office in the continent and the first in Africa to house software engineers.
This was announced by Facebook Program Manager, Chimdindu Aneke on social media. “We are opening a Facebook office in Lagos, Nigeria later in 2021,” he said.
We are opening a Facebook office in Lagos, Nigeria later in 2021. 😍😍😍
— Chimdi Aneke (@chimdinduaneke) September 18, 2020
He added that the office would be the first in Africa by Facebook for the purpose of engineering and “building for the future of Africa and beyond”.
Media aide to the Presidency, Tolu Ogunlesi quoted Facebook saying, “As part of its continued commitment and ongoing investment in Africa, Facebook today announced it will be opening an office in Lagos, Nigeria – its second office on the African continent.”
“Lagos, Nigeria, September 18, 2020/ — As part of its continued commitment and ongoing investment in Africa, @Facebook today announced it will be opening an office in Lagos, Nigeria – its second office on the African continent.”#InvestNigeria 🇳🇬🇳🇬🇳🇬
— tolu ogunlesi (@toluogunlesi) September 18, 2020
In 2019, Facebook’s biggest market in Africa was Nigeria with 33 million monthly active users.