Q1:2018 GDP Report –Oil Sector Growth Propels GDP amid Non-Oil Sector Vulnerabilities

The National Bureau of Statistics (NBS) published the Q1:2018 Gross Domestic Product data earlier in the week announcing an expansion in real output of 1.95% Y-o-Y. This aligns with consensus expectations of a positive growth as the economy recorded the 4th consecutive quarterly increase since recovery from the economic recession in Q2:2017. This successive growth in output of 1.95% in Q1:2018 reflects a stronger increase of 2.87ppts relative to the first quarter of 2017 (-0.91%) but a slower growth when compared with the preceding quarter (2.11% in Q4:2017).

Pre MPC: Status Quo to be maintained on Downside Risks of Capital Flow Reversals

The Monetary Policy Committee (MPC) is set to have its 2nd meeting for the year on the 21st and 22nd of May, 2018 and as with all meetings since July 2016, we expect the committee to maintain status quo on all policy rates. We expect emphasis to be placed on the need to withstand a possible pass through inflation from rising global inflation as well as protect the economy and financial markets against rising downside risk of capital flow reversals. Below are our thoughts on possible MPC considerations.

Gains of Bilateral Currency Swap Agreement

During the week, the Central Bank of Nigeria (CBN) and People's Bank of China (PBoC) announced the conclusion of a bilateral currency swap agreement between Nigeria and China valued at Renminbi (RMB) 15.0bn or N720.0bn. The 3-year Agreement, signed by respective Central bank Governors on Friday, 27th April 2018, followed a 2-year long negotiation process between the two countries which began during President Muhammadu Buhari’s visit to China in April 2016.

Full Text of President Buhari’s Speech at White House Press Conference

Good day, Ladies and Gentlemen of the media.

It has been a pleasure and honour to visit Washington DC at the kind invitation of President Donald Trump.

Nigeria and the United States share a long history of close and cordial relations, which encompass political, economic, military, social and cultural cooperation. Our two countries maintain a strategic partnership for peace and security, conflict resolution as well as the global fight against terrorism.

Foreign Investors Still Calling the Shots

Saturday April, 21st 2018 marked one year anniversary of the CBN’s (Central Bank of Nigeria) launch of the Investors and Exporters’ (I&E) FX window. Although the policy was pitched almost a year after the CBN originally reneged on the June 2016 announcement of a transition to a flexible foreign exchange framework, initial scepticism which greeted I&E fizzled within weeks post-introduction after FX transactions in the window cumulated to US$1.9bn by May-2017.

The Race for Nigeria’s Presidency in 2019

Nigeria’s President Muhammadu Buhari announced on Monday he wants to seek another term in office in February 2019 elections. With that declaration, the race to lead Africa’s largest democracy is underway. The path ahead could be tough for his All Progressives Congress (APC), the People’s Democratic Party (PDP) opposition and any other party that may contest the vote, Reuters reports.

Buhari’s 2015 victory was built on three promises: to rid Nigeria of its endemic corruption, to fix the economy and to defeat threats to security.

Post-MPC Reaction: Consolidating on Gains in the Economy

The Monetary Policy Committee (MPC) held its first meeting for the year on the 3rd and 4th of April following the recent confirmation of two new Deputy Governors of the CBN (Mrs. Aisha Ahmad and Mr. Edward Adamu) and three Independent MPC members (Prof. Adeola Adenikinju, Dr. Aliyu Sanusi and Dr. Robert Asogwa). In line with consensus expectation for a “rate hold”, the Committee unanimously voted to maintain rates at previous levels, bucking a trend of policy rates cuts by African central banks in recent weeks.

African Continental Free Trade Area Agreement: Pains and Gains of Liberalisation

On Wednesday 21st March 2018, African Leaders gathered at an extraordinary summit of the African Union (AU) in Kigali, Rwanda to sign an agreement which established the African Continental Free Trade Area (AfCTA). The decision to establish the free trade area, which is poised to be the World’s largest free trade area in terms of participating members since the creation of the World Trade Organization, stems from the 18th Ordinary session of the AU in 2012 where member nations agreed to establish the free trade area by 2017.