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Nigeria’s inflation expected to maintain double digit in the next one year

Nigeria’s inflation rate which has dropped for three consecutive months in 2019 is expected to moderate around the double-digit for the next one year.

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Nigeria's Inflation, Headline inflation jumps to 11.61% in October on border closure

Nigeria’s inflation rate which has dropped for three consecutive months in 2019, is expected to moderate around the double-digit for the next one year.

This is revealed in the latest  Central Bank of Nigeria (CBN) monthly business expectation survey for the month of April.

According to the CBN survey, even though inflation is declining, the level is still expected to hover around double digit in the next one year.

The Business Expectations Survey for the month of April 2019 was conducted with a sample size of 1050 businesses comprising small, medium and large corporations covering both import- and export-oriented businesses nationwide.

Also, the survey report shows firms expected borrowing interest rates to rise in the next six months, while the exchange rate is expected to appreciate in coming months.

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Business Outlook in the economy: In the survey, businesses expressed optimism in the overall confidence index (CI) of the Nigerian economy in the month of April 2019.

The businesses outlook for May 2019 showed greater confidence in the macroeconomy

According to the survey report, the optimism in the macroeconomy in April was driven by the opinion of respondents from services, industrial, wholesale/retail trade, and construction sectors.

However, the major drivers of the optimism for next month were services, industrial, wholesale/retail trade and construction.

The expectations of businesses also conform with the latest manufacturing Purchasing Managers’ Index (PMI) which shows that Nigeria’s manufacturing sector expanded for the 25th consecutive months.

Access to finance and employment outlook remains positive:  Businesses remain optimistic in their outlook on financial conditions Outlook for April 2019. Similarly, on the volume of total order and business activity in April 2019 remained positive. The average capacity utilization as the indices stood at 22.4 index point.

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On the other hand, the employment outlook index by sector showed that the industrial sector indicates the highest prospects for creating jobs followed by wholesale/retail trade sector, construction sector and services.

Just as previously reported, Nigeria’s manufacturing sector continues to build momentum to reducing the high unemployment rate in Nigeria.

[Also Read: Latest PMI shows Nigeria’s manufacturing sector expands yet again in April]

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Similarly, analysis further shows that expansion plans by sector in the next month showed that the services sector indicates a higher disposition to expansion, followed by the construction sector and the industrial sector.

However, the wholesale/retail trade sector indicated no intention of expansion in the next 12 months.

Insufficient Power supply still a bane: Just as reported in the previous month, the April survey showed insufficient power supply remains the leading factor hindering businesses in Nigeria. The surveyed firms identified insufficient power supply, high-interest rate, unfavourable economic climate,  financial problems unclear economic laws, unfavourable political climate, insufficient demand and access to credit as the major factors constraining business activity in April.

Inflation expectations in Nigeria to moderate around 11 percent: Businesses expect inflation to maintain double digits in the next one year and hover around 11.43 and 11.37 percent respectively. However,  firms are satisfied with the management of inflation by the Government with a net satisfaction index of 4.7 percent in April 2019.

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Hence, businesses owners were optimistic of better economic conditions as their
expectations on the growth of the economy rose steadily in the short run.

Some implications of double-digit inflation: The consumer price index, which measures inflation has dropped for the third consecutive month to 11.25% in March 2019, according to the monthly inflation report released by the National Bureau of Statistics (NBS).

Despite falling inflation, Nairametrics reported that Nigeria’s Consumer Price Index increased by more than 207% between 2009 and 2019. Nigeria has recorded a double-digit inflation rate far more than it has with single digit inflation eroding much of the purchasing power available to Nigerians.

In fact, Nigeria’s minimum wage of N30,000 today was probably worth about N9,000 in March 2009. Nigeria’s last minimum wage of N18,000 signed into law in 2011. The equivalent of the latest N30,000 minimum wage was about N21,000 in March 2011. Thus the N18,000 minimum wage of 2011 is the equivalent of N25, 632 today.

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Business

Jumia sees competition from startups in growing African e-commerce market

Investors have experienced a couple of twists and turn since the stock debuted in New York.

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Q3 ’19: Jumia grows revenue by 52%, Five gone, more to follow as Jumia shuts down Tanzania operation for 2022 projection 

One of Africa’s leading e-commerce firms, Jumia Technologies AG, is facing a new set of competition from startups in the Africa e-commerce and logistics market, after the coronavirus pandemic increased the demand for online deliveries.

The Co-Chief Executive Officer of Jumia, Sacha Poignonnec revealed that the restrictions and lockdown, which were implemented by various countries as part of measures to contain the spread of the coronavirus, have attracted more entrepreneurs into the e-commerce business. He, however, demonstrated good sportsmanship, saying:

“Greater competition is to be welcomed, given there are still so few people in the region that transact online. I would rather grow the market than just try to take everything.’’

READ MORE: Chelsea Football Club owner sells gold mining stake for $1.4 billion

Nairametrics had reported that Jumia reported a loss after tax of 37.6 million euros (N17 billion) in the second quarter of 2020. E-commerce firms were expected to be one of the major beneficiaries of the coronavirus pandemic as consumers, during the lockdown, moved towards online transactions to meet their essential needs.

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However, the losses were an improvement on the 66.7 million euros that was reported for the corresponding period in 2019. Apparently, the firm is trying to dig itself out of a massive loss hole.

The Lagos-based online market place, which is listed on the New York Stock Exchange, was one of the pioneers of internet trading in sub-Saharan Africa. Unfortunately, the company’s performance falls behind that of its peers around the world due to various challenges ranging from poor internet connection to now competition.

READ ALSO: PZ Cussons relaunches soap brand in desperate bid to re-capture market

Jumia investors have experienced a couple of twists and turns since the stock debuted in New York last year. Allegations of corruption, persistent losses in the Nigerian business and a damning short-seller report contributed to an initial share-price slump. But the coronavirus outbreak has helped to greatly increase market value this year.

It was reported earlier that one of the early investors in Jumia, MTN Group Ltd, was considering selling its stake in the business. Reacting to this, Poignonnec disclosed that Jumia may offer MTN’s shares as part of a potential new equity offer within the next 3 years if the Johannesburg-based firm decides to sell.

READ MORE: COVID-19: Virgin Atlantic files for bankruptcy

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He also revealed that expanding into food delivery business has helped to increase Jumia’s sales and footprint in its African markets, which are led by Nigeria. This includes grocery and pharmacy orders as well as restaurants takeaways.

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The logistics business unit of Jumai is another revenue stream as it is also now open to third parties who wish to use the firm’s network of drivers to deliver packages.

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Ride-hailing: Lagos reduces operational license fee by 20%, as operators meet with Governor

In the meeting with the Governor, all parties agreed to newer resolutions.

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COVID-19: Lagos State to begin curfew on Sunday to disinfect metropolis, Lagos state government discharges 7 more coronavirus patients, Lagos state will reverse to full lockdown, Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office, Lekki regional road: Sanwo-Olu revokes land titles of Elegushi Royal family

The Lagos State Government has reduced the operational license fee placed on ride-hailing companies operating in the state by 20%.

The decision was taken during a stakeholders’ meeting with the State Governor, Babajide Sanwo-Olu on Friday.

Governor Sanwo-Olu’s media aide, Jubril Gawat, who disclosed the outcome of the meeting, also noted that it was attended by operators like Uber, Bolt, and BMP among others.

READ MORE: NIPOST’s new charges could have ruined the e-commerce/logistics industry

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The Backstory: Earlier this week, the Lagos State Government had announced new guidelines designed for ride-hailing operations in the state. According to the new regulatory framework by the state which will take effect from August 20, 2020, ride-hailing companies were required to pay the Lagos State Government a 10% service tax on each transaction.

The new guidelines required operators to pay a provisional license fee of N10,000,000.00 for every 1000 cars in their unit and N25,000,000.00 for every unit above 1000 cars. Annual renewal of the license would cost N5,000,000.00 for every unit of 1000 cars and N10,000,000.00 for units with over a thousand cars in operations.

The guidelines also required that the vehicles must be brand new or within the first three (3) years of its manufacture as specified by the manufacturer.

READ MORE: OPay reacts to office shutdown, N25 million license fee 

Now, during the meeting with the Governor, all parties agreed to newer resolutions which are:

  1. There must be comprehensive insurance cover which will cover drivers and passengers.
  2. A reduction of 20% on the operational licensing fees.
  3. A flat fee of N20 to be known as Road Improvement Fund which will be levied on each ride/trip.
  4. A 90-day compliance with documentation for the drivers – There will be a one-stop shop for all the documentation (especially LASSRA Card- Lagos State Resident Registration Agency.
  5. E- Hailing companies to work with various bodies in the business for a good relationship.
  6. There MUST be due diligence and background checks on all drivers.
  7. Riders should desist from offline trips and transactions.
  8. E-Hailing Firms must make necessary data available to the Govt.

Mr. Gawat also noted that media reports about operators being required to only use cars that are not more than 3 years are incorrect. Instead, the rule only applies to Corporate Cabs.

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“This has nothing to do with the E Hailing business,” Gawat said.

On the requirements for sharing data, the Lagos state government said that data shared would be encrypted, and the personal information of ride sharers would not be disclosed.

READ MORE: 4 key points in the new Lagos 2020 Land Use Charge

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“This will help Government clear up issues around congestion & also calculation for the charge paid to Government,” he added.

Uber had earlier told Nairametrics, after the guidelines were released, that it was willing to engage the government on regulations to ensure “our operations align with best practices locally and internationally.

“We have always been willing to engage with governments on regulations to ensure our operations align with best practices locally and internationally, as we believe regulations need to support innovative technology ideas that fit 21st-century businesses.

“The current proposed regulations are inconsistent and unclear. We are working to better understand how they will impact the future of our business and network of driver-partners. We will give an update in due course,” Uber said.

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The meeting with the governor was needed, as clarifications were required on the execution of the guidelines.

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Coronavirus

COVID-19 Update in Nigeria

On the 14th of August 2020, 329 new confirmed cases and 7 deaths were recorded in Nigeria.

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increase as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 48,445 confirmed cases.

On the 14th of August 2020, 329 new confirmed cases and 7 deaths were recorded in Nigeria, having carried out a total daily test of 2,976 samples across the country.

To date, 48,445 cases have been confirmed, 35,998 cases have been discharged and 973 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 344,397 tests have been carried out as of August 14th, 2020 compared to 341,421 tests a day earlier.

COVID-19 Case Updates- 14th August 2020,

  • Total Number of Cases – 48,445
  • Total Number Discharged – 34,998
  • Total Deaths – 973
  • Total Tests Carried out – 344,397

According to the NCDC, the 329 new cases were reported from 21 states- Lagos (113), Kaduna (49), FCT (33), Plateau (24), Kano (16), Edo (15), Ogun (14), Delta (13), Osun (10), Oyo (8), Ekiti (6) Bayelsa (6), Akwa Ibom (5), Borno (4), Enugu (4), Ebonyi (3), Rivers (2), Bauchi (1), Nasarawa (1), Gombe (1) and Niger (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 16,369, followed by Abuja (4,665), Oyo (2,943), Edo (2,414), Rivers (1,993), Kaduna (1,755),Plateau (1,689), Kano (1,677),  Delta (1,639), Ogun (1,535), Ondo (1,373), Enugu (980), Ebonyi (911), Kwara (888), Katsina (746), Osun (729), Borno (702), Abia (677), Gombe (648),  and Bauchi (581).

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Imo State has recorded 494 cases, Benue (430), Nasarawa (373), Bayelsa (352),  Jigawa (322), Akwa Ibom (246), Niger (229), Ekiti (200), Adamawa (185), Anambra (156), Sokoto (154),  Kebbi (90), Taraba (78),  Zamfara (77), Cross River (73), Yobe (67), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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.

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
August 14, 202048445329973735998114747
August 13, 2020481163739661034309128417
August 12, 202047743453956033943128447
August 11, 202047290423956633609127257
August 10, 202046867290950533346125717
August 9, 202046577437945333186124467
August 8, 202046140453942633044121547
August 7, 202045687443936632637121147
August 6, 202045244354930332430118847
August 5, 2020448904579271732165117987
August 4, 2020444333049101431851116727
August 3, 202044129288896820663225707
August 2, 202043841304888520308226457
August 1, 202043537386883420287225677
July 31, 202043151462879119565227077
July 30, 202042689481878519270225417
July 29, 202042208404873519004223317
July 28, 202041804624868818764221727
July 27, 202041180648860218203221177
July 26, 202040532555858217374223007
July 25, 2020399774388561116948221737
July 24, 2020395395918451216559221357
July 23, 2020389486048332016061220547
July 22, 202038344543813815815217167
July 21, 202037801576805415677213197
July 20, 2020372255628011215333210917
July 19, 2020366635567891115105207697
July 18, 202036107653778614938203917
July 17, 202035454600772314633200497
July 16, 202034854595769914292197937
July 15, 202034259643760613999195007
July 14, 2020336164637541013792190707
July 13, 202033153595744413671187387
July 12, 2020325585717401613447183717
July 11, 2020319876647241513103181607
July 10, 2020313235757092012795178197
July 9, 202030748499689512546175137
July 8, 2020302494606841512373171927
July 7, 2020297895036691512108170127
July 6, 202029286575654911828168047
July 5, 2020287115446451111665164017
July 4, 202028167603634611462160717
July 3, 2020275644546281211069158677
July 2, 2020271106266161310801156937
July 1, 2020264847906031310152157297
June 30, 202025694561590179746153587
June 29, 20202513356657389402151587
June 28, 20202486749056579007149957
June 27, 20202407777955848625148947
June 26, 20202329868455458253144917
June 25, 20202261459454977822142437
June 24, 20202202064954297613138657
June 23, 20202137145253387338135007
June 22, 20202091967552577109132857
June 21, 202020242436518126879128477
June 20, 202019808661506196718125847
June 19, 202019147667487126581120797
June 18, 20201848074547566307116987
June 17, 202017735587469145967112997
June 16, 202017148490455315623110707
June 15, 20201665857342445349108857
June 14, 202016085403420135220104457
June 13, 20201568250140785101101747
June 12, 20201518162739912489198917
June 11, 2020145546813875449496737
June 10, 20201387340938217435191407
June 9, 2020134646633654420688937
June 8, 2020128013153617404084007
June 7, 20201248626035412395981737
June 6, 2020122333893429382680657
June 5, 20201184432833310369678157
June 4, 2020115163503238353576467
June 3, 2020111663483151332975227
June 2, 20201081924131415323972667
June 1, 20201057841629912312271579
May 31, 20201016230728714300768687
May 30, 2020985555327312285667267
May 29, 202093023872612269763447
May 28, 202089151822595259260647
May 27, 202087333892545250159787
May 26, 2020834427624916238557107
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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