Nigeria’s consumer price index, which measures inflation increased to 11.24% in September 2019. This was disclosed in the latest inflation report released by the National Bureau of Statistics (NBS).
According to the NBS report, inflation rose by 0.22% points, higher than the 11.02% recorded in August and 11.08% for July 2019.
Similarly, food inflation rose to 13.51% compared to 13.17% in the previous month. Also, Core inflation rose to 8.94% from 8.68% recorded in August 2019.
The Food Index
In September 2019, food inflation rose to 13.51% from 13.17% recorded in the previous month. The average change of the food sub-index over the 12 months average was 13.47%, which was 0.01% higher than the average annual rate of change (13.46%) recorded in August 2019.
According to the Bureau, the rise in the food index was caused by increases in prices of bread and cereals, oils and fats, meat, potatoes, yam and other tubers, fish and vegetables.
On a month-on-month basis, the food sub-index increased by 1.30% in September 2019, up by 0.08% points from 1.26% recorded in August 2019.
Nigeria’s core inflation, which proxies all items less farm produce, stood at 8.94% in September 2019 as against 8.94%. On a month-on-month basis, the core inflation sub-index increased by 0.89% from 0.67% recorded in August.
Details provided by the NBS showed that the highest increases were recorded in prices of cleaning, repair and hire of clothing, repair of household appliance, hospital services, major household appliances, glassware, tableware and household utensils, spirits, clothing materials, other articles of clothing accessories, garment and repair and hire of footwear.
Rural and Urban Inflation
The report showed that the urban inflation rate increased by 11.78% (year-on-year) in September 2019 from 11.48% recorded in August, while the rural inflation rate increased by 10.77% in September 2019 from 10.61% in August 2019.
On a month-on-month basis, the urban index rose by 1.13% in September 2019, up by 0.09 from 1.04% recorded in August 2019, while the rural index also rose by 0.96% in September 2019, up by 0.03 from the rate recorded in August 2019 0.93%.
The latest inflation report implies a fast rise in the prices of overall goods and services in the economy. According to the latest inflation report, it showed that Nigeria’s inflation rose to three months high.
Basically, the country’s inflation rate had dropped from 11.40% in May to 11.02% recorded in August 2019. The drop in inflation rate in August represented the slowest inflation rate recorded in over three years.
- Meanwhile, the NBS noted in its August inflation report that the border closure had not started to reflect on the economy as the border was only closed on 20th August 2019 with only 11 days of 31days
- Hence, the rise in inflation suggests that the significant impact of border closure has started to reflect on commodity prices.
- Recall that since the border closure, Nairametrics reported that prices of food items like rice, frozen chicken, tomatoes and other food items had snowballed.
- The rise in inflation may not necessarily come as a surprise as analysts expected the rise due to the recent policy measures which include complete closure of the Nigerian land borders.
In the meantime, the latest increase in the inflation rate means the purchasing power of consumers to buy goods and services deteriorated. That is, the ability of consumers to buy the same quantity of goods with the same income level has worsened.
While this affects the consumers, firms producing consumer goods and other services may also witness a slowdown in inventory, as demand is expected to drop, which may affect revenues generated overtime.
Seplat gives notice of board meeting, to consider Q2 financial result
The notification is in conformity with the rules of the Nigerian bourse on the obligations of the issuer.
The indigenous oil and gas firm, Seplat Petroleum Development Company Plc has given notice of its board of director meeting which has been scheduled for Tuesday, July 28, 2020 through a teleconference in Lagos between 10 am and 3 pm.
This was disclosed in a notification that was sent to the Nigerian Stock Exchange (NSE) on July 3, 2020 and signed by the oil firm’s Company Secretary, Edith Onwuchekwa.
The notification is in conformity with the rules of the Nigerian bourse on the obligations of the issuer, in this case, Seplat, to notify the Exchange at least 14 days ahead of the due date and time when the board of directors hopes to meet to discuss its financial results.
The notification from Seplat states, ‘’In line with the rules of the NSE on the obligation of the Issuer to notify the Exchange at least 14 days in advance, in respect of the date and time when the board of directors will meet to discuss its Q2 2020 Financial Results, we wish to state the meeting details as follows,’’
‘’Date: Tuesday 28th July 2020, Venue: Via Teleconference, Lagos, Time: 10.00am – 3.00pm’’
Seplat, in its statement, also said they were going to notify the Exchange of the details of the Board’s decision on the 2020 second-quarter financial results immediately after the meeting as required by the rules.
Nairametrics had earlier reported that following the global oil crisis triggered by the coronavirus pandemic, the oil and gas firm, in its released financial statement, announced that revenue declined from $159.5 million in Q1 2019 to $130.5 million in Q1 2020. That represented an 18.2% drop.
The gross profit dropped from $81.4 million in Q1 2019 to $33.1 million in Q1 2020. This shows a drop of 59.3%. The profit before deferred tax showed a loss of $105.8 million in Q1 2020 as against the profit before deferred tax of $35.8 million that was achieved in Q1 2019. This represented a huge drop of 395.5%.
The company’s CEO, Austin Avuru, said that as part of its strategy, Seplat was shifting focus to its gas business which is less exposed to the oil price drop which is currently ravaging the upstream sector.
The current share price of Seplat on the Nigerian Stock Exchange is N386 per share as at July 3, 2020.
Just in: NNPC announces top management appointments as top official resigns
The NNPC has effected a major shake-up to enable the corporation to live up to its expectations.
The state-owned oil giant, the Nigerian National Petroleum Corporation (NNPC) has effected some major reorganization in the firm. They have announced some new appointments and redeployments as part of the ongoing efforts to strengthen and reposition NNPC for greater efficiency, transparency and profitability in line with the next level agenda of President Muhammadu Buhari’s administration.
This was disclosed in a press release by NNPC on Sunday, July 5, 2020, and signed by the corporation’s Group General Manager Public Affairs Division Dr Kennie Obateru.
In the statement released by the oil giant, Mr Adokiye Tombomieye, the Group General Manager, Crude Oil Marketing Division (COMD), is now the new Chief Operating Officer (COO), Upstream while Mr Mohammed Abdulkabir Ahmed, the Managing Director of the Nigerian Gas Marketing Company (NGMC), has been appointed the new Chief Operating Officer, Corporate Services, following the retirement of Engr. Farouk Garba Sa’id, last week.
Dr Kennie Obateru stated that reorganization includes the redeployment of Engr. Adeyemi Adetunji, the Chief Operating Officer, Upstream, to the Ventures & Business Development Directorate as COO, following the voluntary resignation of Mr Roland Onoriode Ewubare, from the position last week.
The top-level staff movement also affected Sir. Billy Okoye who has been redeployed from the NNPC Downstream Company, NNPC Retail Limited, as Managing Director, to replace Mr Tombomieye as the Group General Manager, Crude Oil Marketing Division; while Mrs Elizabeth Aliyuda, the General Manager, Sales and Marketing NNPC Retail Limited, takes over from Sir Okoye as Managing Director.
Similarly, Mr Usman Farouk, Executive Director Asset Management and Technical Services at the Nigerian Gas Marketing Company (NGMC) takes over from Mr Ahmed as Managing Director
The statement from NNPC also explained that President Buhari has accepted the resignation of Mr Roland Ewubare, who was the immediate past Chief Operating Officer, Ventures and New Business Directorate of the National Oil Company while the retirement of the immediate past Chief Operating Officer, Corporate Services, Engr. Farouk Garba Said had also received the approval of President who thanked the two former COOs for their meritorious service to the corporation.
The Group Managing Director of NNPC, Mele Kyari, said the new appointments would enable the corporation to live up to the expectation of her shareholders, Nigerians, and give impetus to the ongoing restructuring within the Corporation, which, he said, was in line with the corporate vision of Transparency, Accountability & Performance Excellence (TAPE).
Zenith Bank and GTBank are considering paying interim dividends despite COVID-19
Analysts earlier predicted that banks may hold off on dividend payments as a way of cutting down on costs in view of COVID-19.
Zenith Bank’s board of directors is set to meet on July 23rd, 2020 to consider the tier-1 bank’s audited financial statements for half-year 2020. The directors will also consider “the proposal for recommendation of interim dividend for shareholders,” said a notice that was sent by the company to the Nigerian Stock Exchange.
In a similar development, Guaranty Trust Bank Plc said in a statement to the NSE that “issues relating to half-year dividend may also be discussed” when its board of directors meet later this month.
Zenith Bank and GTBank, which are two of the most profitable banks in Nigeria, have always paid interim dividends to their shareholders. However, analysts earlier predicted that many banks may hold off on dividend payments as a way of cutting down on costs, in view of COVID-19 and its attendant economic implications. It is, therefore, fascinating to see that Zenith Bank and GTBank are considering interim dividends nonetheless.
Elsewhere, banks around the world have either been warned not to pay dividends at all or to be careful with dividend payouts. In April, The Economic Times reported that the Reserve Bank of India advised Indian banks to suspend dividend payments in order to conserve their capital amid the pandemic. In a similar development, regulators in Europe also banned European banks from paying any dividend in 2020. In Australia, banks were advised to slash their dividend payouts. Meanwhile, over in North America, the US Federal Reserve announced in late June that it will temporarily restrict dividend payouts by some of the country’s biggest banks, the New York Times reported.
As Nairametrics had repeatedly reported, the COVID-19 pandemic is expected to adversely impact different sectors of the Nigerian economy, including the financial institutions. An earlier report by Nairametrics quoted Augusto & Co to have predicted how the pandemic would weaken Nigerian banks’ assets. An April report by PwC also highlighted some of the ways COVID-19 could impact Nigerian banks.
In the meantime, the Banking Industry Risk Indicator (BIRI) in Nigeria stands at a score of 12.14 out of 100, according to a recent analysis by Fitch Solutions, as Nairametrics reported.
Do note that Zenith Bank Plc has declared a closed period for the trading in its stock starting from July 6th, 2020. The closed period will last until 24 hours after the company’s half-year 2020 financial report is released to the public. In the meantime, all persons with inside knowledge of Zenith Bank’s affairs shall be prohibited from buying and selling the company’s stock during the closed period.