Nigeria’s currency, the naira, is presently experiencing more pressures than ever before, based on negative macro fundamentals such as plunging crude oil prices which constitute the lion’s share in Nigeria’s export earnings, and the COVID-19 pandemic which has weakened global demand.
Recently, at a financial summit organized by Lagos Business School via teleconferencing, Nigeria’s celebrated economist, Bismarck Rewane on Nigeria’s present and projected situation said that Nigeria is experiencing “economic paralysis” caused by induced “economic coma.”
He spoke on how Africa’s largest economy, with a GDP (Gross Domestic Product) of $420 billion, would experience negative growth in the next three months due to lack of enough cash buffers that made it survive the earlier recessions in 2008, and 2016, coupled with Nigeria’s low productivity level, and poor management of its economy.
Rewane projected an increase in Federal Government spending, thereby spurring inflation, and Nigeria having higher unemployment levels in the mid-term, due to the COVID-19 onslaught, and plunging global demand for Nigerian goods and services.
In addition, he described the high national debt compared to Nigeria’s GDP as worrisome and projected inflation at 19% by the end of the year and remarked that these negative economic indicators further increased the odds against the naira.
Lately, the naira has been hitting new lows on the OTC, black, and spot markets as market liquidity remains very thin after the Central Bank devalued the naira’s official rate by 15%. It closed at a low of N389 on the spot market on Wednesday.
In a telephone interview with Nairametrics, Victoria Njimanze, an investment analyst of a leading investment bank explained in detail how Nigeria’s earnings have fallen, due to weakening crude oil prices, coupled with high inflation set in. She said:
“The oil sector provides around 90% of Nigeria’s foreign exchange earnings and around 70% of its budgetary revenues. With the COVID-19 pandemic, the demand for oil has dwindled due to demand shock and the country has over 50 million barrels for late April and May 2020 unsold, while the overhang is forcing down the value of the country’s crude oil.
“Nigeria’s Qua Iboe and Bonny light were traded at US$12/bbl as at the end of last week. This pales when compared with the revised budget benchmark price of US$30/bbl from US$57/bbl prior to the breakout of the pandemic. The situation has further worsened on the back of the newly agreed OPEC production cuts, with Nigeria’s oil production quota decline to 1.4mb/d from 1.7mb/d.
“As crude oil prices stay low, we also see foreign exchange earnings decline. With CBN (Central Bank of Nigeria) reserves at $33.66 billion, as on the 21st of April, which stands for a year to date decline of 13% and edge close to the $30billion mark? We saw a depreciation of the exchange rate by C.14% in the parallel market, and C.6% officially, and the suspension of foreign exchange sales to BDCs (Bureau De Change).”
Victoria also buttressed her point on how inflation is rising. According to her, on the inflation side, the CPI report by the NBS showed that headline inflation rate rose marginally by 6bps to a 23-month high of 12.26% YoY from 12.20% YoY in February, largely driven by the uptrend in core and food prices.
“Given the lockdown in major commercial hubs in the country, and closure of land borders, which will last the entire month of April, we expect to see headline inflation go even higher to 12.40%,” she added.
(READ MORE: Bears clawing down on the naira, hits N425 to $1)
The naira has dropped to N425 on the black market today, as a fallout of the Central Bank’s earlier decision to stop selling foreign exchange currencies to Bureau de Change dealers, and heighten the clampdown on currency speculators.
Princejoe Nnaji, a financial analyst at one of Nigeria’s Tier 1 banks, in a phone message to Nairametrics, explained how the COVID-19 onslaught has affected the naira. He wrote:
“Nigeria’s economic performance driven by its revenue generation is at the heart of how the odds are against the Naira. The advent of the covid19 pandemic has severely hampered the country’s ability to generate revenue leading to a weak Naira.
“Lower investor confidence which could lower foreign investment flows post-Covid19. The combination of rising inflation and the country’s import dependency which can not only weaken the currency but keep inflation high. Even if economic diversification is achieved overnight, revenue generation is not guaranteed because global consumer demand has been affected with millions out of work, and most important trading partners still are on lockdown.”
Lagos Commissioner of Police dismantles road blocks on Lagos-Badagry expressway
The Commissioner warned the concerned Area Commanders to take action on full compliance as any defaulter will be sanctioned accordingly.
The Commissioner of Police in Lagos State, CP Hakeem Odumosu, has ordered the immediate dismantling of all illegal roadblocks by police teams from the command on the Lagos-Badagry expressway.
The directive is to checkmate the illegal activities of the police on that route which have been condemned by the government, some stakeholders and international bodies and also bring sanity and decency to their operations along that axis.
That disclosure is contained in a statement signed by the Police Public Relations Officer of the Lagos State Police Command, CSP Olumuyiwa Adejobi, on Saturday, April 10, 2021.
Adejobi in the statement said that CP Odumosu gave the order on Friday while addressing Area Commanders and Divisional Police Officers in the command on the general security situation in the state and reviewing the anti-crime strategies of the command in order to sustain its feats on crime control.
What the statement from the Lagos State Police Command is saying
The statement from the Lagos Police Command partly reads, “In his bid to restore sanity and decency to the operations of the police along the ever-busy international route, Lagos/Badargy Expressway, the Commissioner of Police, Lagos State, CP Hakeem Odumosu, has ordered for the immediate dismantling of illegal roadblocks by the police teams from the Lagos State Police Command.
The police boss, while reacting to some complaints from the general public and some security reports on the police activities along the international route, ordered the Area Commanders and Divisional Police Officers whose jurisdictions fall along the Badargy Expressway; Festac and Area K, Marogbo, to withdraw their men from the illegal roadblocks and embark on aggressive motorised patrol and surveillance to police their areas and the route.
The Commissioner of Police confirmed that the illegal police roadblocks along the route have been condemned by the government, international bodies and interest groups and they must be dismantled without delay,” he said.
The Commissioner, however, noted that other police operatives from other police formations, outside the supervision of the Lagos State Police Command who operate along the route, would be contacted to adjust and do the needful to restore sanity to their operations.
The CP Odumosu then warned the concerned Area Commanders to desist and take necessary action on full compliance with his order as any defaulter will be sanctioned accordingly.
REF NO. CZ: 5650/LS/PPRO/VOL.3/85
LAGOS CP DISMANTLES ILLEGAL ROAD BLOCKS ON BADAGRY EXPRESSWAY
*Threatens to Sanction Defaulters*
In his bid to restore sanity and decency to the operations of the police along the ever-busy international route, Lagos/Badargy
— Lagos State Police Command (@LagosPoliceng) April 10, 2021
COVID-19 Update in Nigeria
On the 10th of April 2021, 84 new confirmed cases and death was recorded in Nigeria
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 163,736 confirmed cases.
On the 10th of April 2021, 84 new confirmed cases and 1 death was recorded in Nigeria.
To date, 163,736 cases have been confirmed, 154,098 cases have been discharged and 2,060 deaths have been recorded in 36 states and the Federal Capital Territory.
A total of 1.8 million tests have been carried out as of April 10th, 2021 compared to 1.7 million tests a day earlier.
COVID-19 Case Updates- 10th April 2021,
- Total Number of Cases – 163,736
- Total Number Discharged – 154,098
- Total Deaths – 2,060
- Total Tests Carried out – 1,803,177
According to the NCDC, the 84 new cases are reported from 13 states- Lagos (26), Akwa Ibom (16), Rivers (10), Ebonyi (9), Abia (6), Kano (6), Osun (3), Bauchi (2), Delta (2), Edo (1), Jigawa (1), Kaduna (1), and Ogun (1)
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 57,950, followed by Abuja (19,703), Plateau (9,030), Kaduna (8,984), Rivers (6,986), Oyo (6,838), Edo (4,892), Ogun (4,620), Kano (3,924), Ondo (3,226), Kwara (3,120), Delta (2,615), Osun (2,547), Nasarawa (2,378), Enugu (2,259), Katsina (2,097), Gombe (2,034), Ebonyi (2,008), Anambra (1,909), Akwa Ibom (1,794), and Abia (1,677).
Imo State has recorded 1,655 cases, Bauchi (1,538), Borno (1,337), Benue (1,188), Adamawa (1,051), Niger (930), Taraba (910), Bayelsa (871), Ekiti (868), Sokoto (774), Jigawa (525), Kebbi (450), Cross River (385), Yobe (365), Zamfara (234), 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.
Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.
Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.
On 26th January 2021, the Federal Government announced the extension of the guidelines of phase 3 of the eased lockdown by one month following the rising cases of the coronavirus disease in the country and the expiration of phase 3 of the eased lockdown.
On 28th February 2021, the federal government confirmed that the first tranche of Covid-19 vaccines will arrive in Nigeria on Tuesday, March 2nd, 2021.
On Tuesday, 2nd March 2021, the National Primary health Care Development Agency announced the arrival of the expected COVX Astrazeneca/Oxford covid-19 vaccines.
On Saturday, 6th March 2021, President Muhammadu Buhari and his vice, Yemi Osinbajo received vaccination against the covid-19 as the State House in Abuja.
Nairametrics | Company Earnings
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- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.
- MTN Nigeria raises N73.5 billion from CP Issuance to finance operations.
- Jaiz Bank proposes dividend worth N884 million for shareholders.