The Q3:2019 GDP report published by the National Bureau of Statistics (NBS) revealed soft recovery in economic growth at 2.3% Y-o-Y (vs 2.1% Q2:2019 as revised); the highest since Q4:2018, driven by a slow but increasing growth in the non-oil sector. Growth in the oil sector slowed at 6.5% Y-o-Y in Q3:2019 (vs 7.2% Q2:2019). We attribute this to a weak base given a 5.2% Y-o-Y increase in oil production to 2.04mbpd, also higher by 1.0% on a Q-o-Q basis.
The current brouhaha rocking the Nigeria Police Force (NPF) and its Service Commission in the recruitment of 10,000 constables has somewhat shown what the real battle is all about. This is a total contrast to the cheers from the College of Policing in the United Kingdom that greeted the recent plans by Prime Minister Boris Johnson to recruit 20,000 new police officers.
The Managing Director of Wartsila Nigeria, Wale Yusuff, says it is time to question the suitability of a traditional approach to power generation that has clearly shown its limits and is no longer fitted to unleash Nigeria’s clean energy potential.
In a press statement, Mr Yusuff noted that flexible power systems will be instrumental in significantly lowering electricity costs, improving system reliability, as well as boosting the share of renewable energy in the Nigerian power mix.
The September 2019 Consumer Price Index (CPI) report published this week revealed a broad-based increase in consumer prices, partly caused by the recent partial closure in land borders between Nigeria and neighboring countries. This fed into headline inflation which rose sharply to 11.2% Y-o-Y in September (August: 11.0%), bucking the trend of disinflation between June and August 2019. Although the quick uptrend in headline inflation can be attributed to the 6bps M-o-M increase to 1.04% (August: 0.99%), the first increase in five months, we believe a weak base played a major part.
The 2020 appropriation and finance bills of the Federal Government (FG) were presented to the National Assembly by President Muhammadu Buhari on Tuesday, the earliest time for such after November 2017. The quick submission of the bill to the legislators should give ample time for deliberations and hasten final approval, especially as the current leadership of the National Assembly is supportive.
The Q2:2019 merchandise trade report released by the National Bureau of Statistics (NBS) shows that Nigeria’s trade surplus declined to N588.8bn from N831.6bn in Q1:2019 as imports continued to expand faster than exports. Imports sustained the upward trajectory since Q3:2018, rising 8.2% and 65.2% (vs 25.8% and 3.4% in Q1;2019) on Y-o-Y and Q-o-Q basis respectively. This was mainly driven by a sharp rise across the board, but the importation of fuel and lubricant saw a steeper rise at 22.1% and 168.5% to N886.0bn on Y-o-Y and Q-o-Q basis respectively.
The Federal Executive Council (FEC) recently approved an increase in the Value Added Tax (VAT) rate to 7.2% from the initial 5.0% established since January 1, 1994. The increase is primarily to support the finances of states as the new minimum wage of N30,000/month becomes effective. The timeline for the implementation of the new rate is unclear, but the minister of Finance, Budget and National Planning hinted at 2020. As there are plans for wide consultation and amendment to the existing VAT Act, implementation may take longer than expected.
President Muhammadu Buhari finally inaugurated his cabinet and assigned portfolios to the 43 appointed ministers this week, six months post-elections and almost three months into his second term.
Considering that it took President Buhari almost six months to form a cabinet in his first coming, this could be considered an improvement. However, historical evidence suggests that we do not consider this to be a positive signal as the administration’s arsenal resists speedy response to pressing issues.