Nigeria’s Q3 GDP Grows 2.54% – NBS

In the third quarter of 2023, Nigeria’s Gross Domestic Product (GDP) grew by 2.54 per cent (year-on-year) in real terms. This growth rate is higher than the 2.25 per cent recorded in the third quarter of 2022 and higher than the second quarter 2023 growth of 2.51 per cent. In its Gross Domestic Report Q3 2023, released on Friday, the statistics bureau noted that Q3 performance was driven mainly by the Services sector, which recorded a growth of 3.99 per cent and contributed 52.70 per cent to the aggregate GDP. The agriculture sector grew by 1.30 per cent, from the growth of 1.34 per cent recorded in the third quarter of 2022. The growth of the industry sector was 0.46%, an improvement from -8.00% recorded in the third quarter of 2022. In terms of share of the GDP, agriculture, and the industry sectors contributed less to the aggregate GDP in the third quarter of 2023 compared to the third quarter of 2022. In the quarter under review, aggregate GDP stood at N60,658,600.37 million in nominal terms. This performance is higher when compared to the third quarter of 2022 which recorded aggregate GDP of N52,255,809.62 million, indicating a year-on-year nominal growth of 16.08%. The NBS noted that in real terms the oil sector growth was –0.85 per cent (year-on-year) in Q3 2023, indicating an increase of 21.83 percentage points relative to the rate recorded in the corresponding quarter of 2022 (-22.67%). Growth also increased by 12.58 percentage points when compared to Q2 2023 which was –13.43 per cent. On a quarter-on-quarter basis, the oil sector recorded a growth rate of 12.47 per cent in Q3 2023. Nigeria recorded an average daily oil production of 1.45 million barrels per day (mbpd), higher than the daily average production of 1.20mbpd recorded in the same quarter of 2022 by 0.25mbpd and higher than the second quarter of 2023 production volume of 1.22 mbpd by 0.23mbpd. According to the NBS, “the sector contributed 5.48 per cent to the total real GDP in Q3 2023, down from the figure recorded in the corresponding period of 2022 and up from the preceding quarter, where it contributed 5.66 per cent and 5.34 per cent respectively.” The non-oil sector grew by 2.75 per cent in real terms during the period under review. This rate was lower by 1.52 percentage points compared to the rate recorded in the same quarter of 2022 and 0.84 percentage points lower than the second quarter of 2023. “The sector was driven in the third quarter of 2023 mainly by Information and Communication (Telecommunication); Financial and Insurance (Financial Institutions); Agriculture (Crop production); Trade; Construction; and Real Estate, accounting for positive GDP growth. In real terms, the non-oil sector contributed 94.52% to the nation’s GDP in the third quarter of 2023, higher than the share recorded in the third quarter of 2022 which was 94.34% and lower than the second quarter of 2023 recorded as 94.66%,” the report stated.

Naira Depreciates To N827.83/$1 At Official Market

The naira again declined against the US dollar at the official market on Thursday, exchanging for N827.83 to one U.S dollar after a slight appreciation on Wednesday which saw the local currency exchanging at N818.99/$1. This is still a slight gain when compared to the N850.22 it recorded on Tuesday. However, the naira closed flat at the parallel forex market where forex is sold unofficially, the exchange rate closed at N1140/$1 as against the same N1140/$1 it quoted on Wednesday, representing 0.00 per cent, while peer-to-peer traders quoted around N1127.01/$1.  The intraday high recorded was N1100/$1, while the intraday low was N751.00/$1, representing a wide spread of N348.78/$1. Similarly, the naira also fell to the Euro, exchanging at N1,175/€1 at the parallel market, while it goes for N898.44/€1 at the official market. Also the pound sterling goes for N1,370 and N1029.7441 at the parallel and official market respectively. According to data obtained from the official NAFEM window, forex turnover at the close of the trading on Wednesday was $173.51 million, representing a 20.87 per cent increase compared to the previous day.  The local currency struggle at the foreign exchange market is coming on the heels of rising inflation in the country which saw the inflation rate jump to 27.33 per cent in October 2023 as prices of foodstuff continued to increase in the aftermath of the removal of fuel subsidy by the President Bola Tinubu administration. This was according to the October 2023 Consumer Price Index (CPI) and Inflation Report released by the National Bureau of Statistics (NBS) on Wednesday. The CPI, which measures the changes in the prices of goods and services, rose from 26.72 per cent to 27.33 per cent showing an increase of 0.61 per cent points. “In October 2023, the headline inflation rate increased to 27.33 per cent relative to the September 2023 headline inflation rate which was 26.72 per cent,” the report partly read. “Looking at the movement, the October 2023 headline inflation rate showed an increase of 0.61 per cent points when compared to the September 2023 headline inflation rate. “Furthermore, on a year-on-year basis, the headline inflation rate was 6.24 per cent points higher compared to the rate recorded in October 2022, which was (21.09 per cent). “This shows that the headline inflation rate (year-on-year basis) increased in October 2023 when compared to the same month in the preceding year (October 2022).”

Nigeria’s Equity Market Gains N6bn

The local equity market, on Thursday advanced by N6 billion as gains recorded in the shares of Nigerian Breweries, C&I Leasing, Northern Nigeria Flour Mills among others lifted market activities. Market capitalisation of listed equities increased by N6 billion or 0.02 per cent to N39.059 trillion from N39.053 trillion reported the previous day. The NGX All Share Index also appreciated by ç basis points to 71025.16 points from 71014.34 points reported the previous day. Volume of transactions increased by 186.494 million, representing 63.72 per cent as investors traded 483.847 million shares valued at N4.378 billion in 6545 deals against 297.353 million shares valued at N6.161 billion in 6172 deals. A review of investment showed that Deep Capital and NSLTech  led gainers table,gaining  10 per cent each to close at N0.44 and N0.33 per unit, C&I Leasing followed with a gain of 9.95 per cent to close at N4.53 per share, Northern Nigeria Flour Mills gained 9.85 per cent to close at N22.75 per unit while SCOA Plc added 9.82 per cent to close at N1.23 per share. On the contrary, ABC Transport recorded the highest loss in percentage terms, dropping by 10 per cent to close at N0.90 per unit, ETranzact trailed with a loss of 9.93 per cent to close at N6.80 per unit, Thomas Way fell by 8.95 per cent to close at N3.46 per share. Guinea Insurance dipped by 8.33 per cent to close at N0.22 per unit, Ellah Lakes fell by 7.89 per cent to close at N3.50 per share. Transactions in the shares of Regal insurance led market activities with 104.341 million shares valued at N36.490 million, Oando Plc followed with account of 55.280 million shares worth N676.637 million, Universal insurance traded 53.351 million shares cost N12.338 million, Japaul Gold exchanged 24.949 million shares cost N46.772 million while United Bank for Africa sold a total of 21.492 million shares cost N445.446 million.

Nigeria’s Equity Sustains Bullish Run, Gains N85bn

The Nigerian equity market closed positively on Tuesday, gaining 133.98 basis points as the market remained favourable. The NGX All Share Index advanced by133.98 basis points or 0.20 per cent closing at N70613.60 points compared to previous day gain of 0.40 per cent which closed at 70479.62 points. Market capitalisation of listed equities also appreciated by N85 billion to N38.787 trillion from N38.712 trillion reported the previous day. The NGX trading result showed that market activities lifted as result of increase in the share price of FBNHoldings, PZ, FCMB, Fidelity Bank Glaxosmith among others. An analysis of the investment showed that PZ Cusson led gainers table in percentage terms, increasing by 10 per cent to close at N22.00, Glaxosmith followed with a gain of 9.93 per cent to N14.95 per unit, Daar Communications added 9.52 per cent to N0.23 per unit, Japaul Gold up by 9.35 per cent to close at N1.52 per share, International Breweries gained 8.43 per cent to close at N4.50 per share. On the contrary, Northern Nigeria Flour Mills topped losers chart, dropping by 10 per cent to N18.00 per share, TIP followed with 9.65 per cent to close at N1.03 per share, Royal Express down by 9.26 per cent to close N0.49 per unit, Omatek fell by 8.77 per cent to close at N0.52 per share while Eterna Plc fell by 8.62 per cent to close at N13.25 per share. Volume of activities during the day rose by 58.27 million, representing 14.90 per cent as investors traded 449.283 million shares valued at N5.444 billion in 7100 deals against 391.013 million shares worth N7.705 billion exchanged hands the previous day in 6837 deals. Transactions in the shares of FBNHoldings led market activities during the day with 52.023 million shares valued at N1.026 billion, Chi Plc followed with account of 49.525 million shares cost N49.462 million, Fidelity Bank traded 42.020 million shares valued at N381.493 million, United Bank for Africa exchanged 41.466 million shares cost N847.006 million while Japaul Gold traded 37.079 million shares cost N55.154 million.

Zenith Bank Records 114% Growth, 1.33trn In Q3 2023

Zenith Bank Plc has announced its unaudited results for the third quarter ended 30 September 2023, recording a remarkable triple-digit growth of 114% from N620.6 billion reported in Q3 2022 to N1.33 trillion in Q3 2023. According to the bank, the performance demonstrates the Group’s resilience and strong market share despite a very challenging macroeconomic environment. According to the bank’s unaudited third quarter financial results presented to the Nigerian Exchange (NGX),the triple-digit growth in the topline also enhanced the bottom line, as the Group recorded a 149% Year on Year (YoY) increase in profit before tax, growing from N202.5 billion in Q3 2022 to N505 billion in Q3 2023.  Profit after tax also grew by 149% from N174.3 billion to N434.2 billion in the same period. The growth in the topline arose from both interest income and non-interest income.  Interest income grew in the current period by 72% to N670.9 billion from N390.8 billion in Q3 2022, while non-interest income grew by 186% from N212 billion to N607.2 billion. The growth in profit is similarly attributable to the twin effects of the improvement in interest and non-interest income. Interest income increased because of the growth in risk assets as well as the effective pricing thereon. The non-interest income growth is largely driven by the revaluation gain due to the unification of exchange rates during the year. The cost-to-income ratio reduced from 55.8% in Q3 2022 to 37.8% in the current period.  Impairment levels increased due to the deliberate incremental provisions necessitated by the conservative approach towards the heightened risk environment and the creation of a counter-cyclical buffer needed to deal with any impending volatility of exchange rates.  This caused the cost of risk to deteriorate from 1.3% in Q3 2022 to 5.5% in Q3 2023, however this is an improvement from Q2 2023 where cost of risk printed at 8.8% because of prudent management of risk assets. Total assets grew by 48% from N12.3 trillion to N18.2 trillion in the period ended 30 September 2023, mainly driven by growth in customers’ deposits. Customers’ deposits grew by 49% from N8.98 trillion in December 2022 to N13.38 trillion in September 2023.  The growth in customers’ deposits cuts across both corporate and retail segments with the savings portfolio (all currencies) growing from N2.7 trillion in December 2022 to N4.6 trillion in September 2023. The Group is optimistic of finishing the year 2023 strong, with focus on sustainable quick wins that would boost growth across all business segments and enhance stakeholder value.

Despite Slight Appreciation, Naira Still Weak – Report

In spite of the slight appreciation of the Naira at the weekend, the World Bank has listed Nigeria’s local currency as being among the worst-performing currencies in Sub-Saharan African in the first ten months of 2023. According to figures obtained from Aboki forex, the naira was bought and sold for 1,140/$ and 1,150/$1 at the weekend on the parallel section of the foreign exchange market as against the 1,310/$ on Thursday. Over the past two weeks, the Naira has been hitting new lows, as it sold as low as N1300/$ at the black market, and N848/$ at the official market. However, within the past few days, the currency has been on an upward swing, as it appreciated to N789.84/$ on Friday. But in a report by the World Bank the Nigerian Naira has posted a year-to-date depreciation of about 40 per cent, making it the weakest currency in Sub-Saharan Africa, alongside the Angolan Kwanza. Other currencies with significant losses include the South Sudanese pound which has depreciated by about 33 per cent YTD, the Burundian Franc which has depreciated by 27 per cent YTD, the Congolese Franc (18 per cent), Kenyan Shilling (16 per cent), Zambian Kwacha (12 per cent), Ghanaian Cedis (12 per cent), and Rwandan Franc (11 per cent). In the report, it highlighted that between March 2020 and June 2023, there was a widening disparity between the parallel market exchange rate and the official exchange rate. The disparity widened to as much as 80 per cent in November 2022 and dropped to 60 per cent in June 2023. The prioritization of strategic sectors and the imposed price ceilings and trade restrictions pushed transactions to the parallel market, which started to account for a large share of the foreign exchange transactions in the country, including for remittances, tourism, and exports of non-oil products. After the unification and liberalization of the exchange rates in June 2023, the NAFEX rate converged to the parallel one, closing the gap. However, resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the reemergence of the parallel market premium. Figures obtained from the Central Bank of Nigeria on movement of foreign reserves showed that the country’s external reserves recorded $76.82m accretion in one week, after it moved up from $33.249bn on October 19, 2023 to $33.326bn as of the end of October 26, 2023. It had earlier lost $841.75m in three months after it fell from $34.07bn as of July 7, 2023, to $33.23bn as of October 5, 2023. Meanwhile, an economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, attributed the naira appreciation to the Supreme Court judgment that brought finality to the litigation around the presidential election. He said the judgment removed uncertainty in the economy. “The pronouncement that the President made about efforts to boost the liquidity in the forex market may have also affected the level of confidence and influenced expectations because if people have expectations that liquidity will improve and the naira will appreciate, they would quickly begin to offload the dollars they have at a lower rate. “We need to seize the opportunity to push down the demand for foreign goods. We must reduce the demand for the dollars. We can have the naira appreciate better.”

Nigeria’s Equity Market Sheds N140bn

Trading on the floor of Nigerian Exchange ((NGX)) on Thursday closed negative, shedding N140 billion following losses recorded by Nigerian Breweries, Stanbic IBTC and other companies which impacted negatively on the market. Market capitalisation of listed equities declined by 0.38 per cent to N36.864 trillion from N37.004 trillion reported the previous day. The NGX All Share Index also depreciated by 254.43 basis points to 67098.80 points from 66353.23 points traded on Wednesday. Learn Africa led gainers table in percentage terms with 10 per cent to N3.30 per share, Daar Communication followed with 9.52 per cent to close at N0.23 per share, UPDC gained 8.00 per cent to close at N1.35 per share, Thomas Way added 6.80 per cent to N3.30 per unit, SUNU Assurance gained 6.67 per cent to close at N1.12 per share. Mcnichols recorded the highest loss, dropping by 8.82 per cent to close at N0.62 per share, Omatek trailed with a loss of 8.70 per cent to close at N0.42 per unit, Stanbic IBTC down by 8.49 per cent to close at N69.55 per unit, Ikeja Hotel declined by 6.98 per cent to close at N2.93 per unit. Volume of trades during the day declined by 98.873 million, representing 24.87 per cent as investors traded 298.687 million shares valued at N4.483 billion in 5453 deals against 397.970 million shares worth N4.699 billion traded in 6165 deals. Transactions in the shares of United Bank for Africa led market activities with 56.287 million shares valued at N1.053 billion, Fidelity Bank followed with account of 33.882 million shares worth N282.308 million, AccessCorp traded 22.173 million shares cost N364.027 million, Transnational Corporation of Nigeria exchanged 21.823 million shares valued at N135.261 million, Ellah Lakes sold a total of 20.195 million shares valued at N81.726 million.

We Won’t Increase Taxes, FIRS Assures Companies

Acting chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, has allayed fears being expressed by corporate organisations that the resolve of FIRS to increase the country’s tax-to-GDP ratio to 18 per cent from 10.86 will lead to a hike in taxes. According to a statement by Special Adviser on Media and Communication to the Ag Executive Chairman, FIRS, Dare Adekanmbi, Adedeji said such resolve would not necessarily lead to increase in taxes or introduction of new taxes as the President Bola Tinubu-led administration is determined to create a wholesome environment for businesses to flourish. The FIRS chairman had said the agency under his leadership would in the next three years achieve an eight per cent raise in tax-to-GDP ratio to surpass Africa’s average of 16.5% without stifling investment or economic growth. The plan had triggered muffled apprehensions among entities corporate that the decision could cause an increase in tax rates or introduction of new ones. Addressing representatives of top large tax-paying companies during a get-together at Four Points by Sheraton in Lagos on Wednesday, Adedeji said, “Our belief, understanding and vision as a revenue-generating agency is not to introduce any new tax as we only want to use data to improve compliance.” A statement by his Special Adviser on Media and Communication, Dare Adekanmbi, quoted the FIRS chairman as saying that the invited companies and those willing to voluntarily carry out their tax obligations have nothing to be afraid of. “Our plan is simple. We want to grow tax revenue and we only want to tax prosperity and not poverty. Therefore, it is not in our interest to kill the trees that bear the fruits. My first ‘love letter’ to you is to appreciate what you have done. So, you don’t have anything to be afraid of. “We will not collect what is not due to us. But we don’t want anyone not to pay what is due to us. Fair engagement is our plan. Rest assured that the 18% tax-to-GDP target will not translate to increase in taxes. “If you have been listening to Mr Taiwo Oyedele who is the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, you will have known that part of the mandate of the committee is to reduce the number of taxes,” he said. According to him, the purpose of the engagement with the companies is to factor their inputs into the strategic action plan being mapped out in order to address challenges hampering tax revenue collection. He lauded the invited companies for their high sense of responsibility, urging them to continue to discharge their tax obligation diligently.   “I must also commend your commitment to upholding high tax compliance standards and responsible corporate citizenship, which sets you apart as the top taxpayers in Nigeria. “This aligns perfectly with our vision of making taxation the pivot of national development through voluntary compliance. Your respective industries play a pivotal role in generating substantial tax revenue for government and in shaping economic and fiscal stability of the nation. “We are not unmindful of the challenges facing businesses in Nigeria with the ongoing reforms to improve economic performance. These are painful but necessary choices we must make as a nation to attain our full potential,” he said. The chairman, while responding to some of the concerns raised by representatives of the companies such as multiplicity of taxes, duplication of tax oversight on corporate entities, promised to address the issues raised. Some of the companies at the event included Nestlé Nigeria Plc, ExxonMobil, Shell, Guinness, Nigerian Breweries Plc, Flour Mills, Dangote Group, MTN, British American Tobacco company, First Bank, Access Bank, Guaranty Trust Bank, Zenith Bank Plc, KC Gaming Limited (Bet9ja), Airtel, Seplat, BUA Cement, Nigeria Liquified Natural Gas, NNPC Limited and others.

Inflation Rate Climbs To 26.72% In September -NBS

In September 2023, the headline inflation rate increased to 26.72% relative to the August 2023 headline inflation rate which was 25.80%, the National Bureau of Statistics has said.  In it’s CPI and Inflation Report for September, released Monday in Abuja, the bureau said the rates showed a showed an increase of 0.92% points when compared to the August 2023 headline inflation rate.  On a year-on-year basis, the headline inflation rate was 5.94% points higher compared to the rate recorded in September 2022, which was 20.77%. This shows that the headline inflation rate (year-on-year basis) increased in September 2023 when compared to the same month in the preceding year (i.e., September 2022). Furthermore, on a month-on-month basis, the headline inflation rate in September 2023 was 2.10%, which was 1.08% lower than the rate recorded in August 2023 (3.18%).  This means that in September 2023, the rate of increase in the average price level was less than the rate of increase in the average price level in August 2023. 

Solid Minerals Will Be Nigeria’s Biggest Revenue Earner –Alake   

The Minister of Solid Minerals Development, Oladele Alake, has said the administration of Bola Ahmed Tinubu is committed to ensuring that the solid mineral sector becomes the biggest revenue generation hub of the country. He said for the present administration to achieve its vision of economic rejuvenation, all hands must be on deck. Alake said, “We have recognised the fortunes of the oil sector, and we are determined to ensure that the solid minerals sector is the Noah’s ark that would take us out of the deluge of economic challenges that Nigeria currently faces.” Speaking during the 22 Annual General Meeting and International Conference of The Nigerian Society of Mining Engineers in Kaduna, Minister Alake enjoined all the stakeholders to be patriotic, saying that the president is determined to take the nation out of the wood. Alake stated that the seven point agenda of the present administration is geared towards promoting the public private company that will galvanise financial and physical access of government in the sector. “It is now that our country needs patriotic and scientific contributions more than any other time, where all hands must be on deck to realise the vision of the Tinubu led administration, aiming at making solid minerals the biggest revenue generation hub among all sectors in the economic structure of Nigeria. “I wish to enjoin your society to be seen and heard in this historic process of rejuvenation and resurgence of the sector that will mature hitherto; our doors are open to ideas and proposals, and we shall re-evaluate all of them and shall reflect with our professional alacrity,” the minister said. Meanwhile, the Nigerian Society of Engineers said that Public Private Partnership (PPP) concession will make the private sector concessionaire responsible for full delivery of specified production and infrastructure services. “Government should intensify efforts in providing an enabling environment to attract investors into the mining sector for PPP agreement especially as it concerns fully explored strategic mineral deposits,” the Society advised. In its communiqué issued at the end of the AGM, the society tasked the federal government on Public Private Partnership, while also urging government and private investors to ensure due diligence before consummating any form of agreement. According to the communiqué, “the government should make deliberate efforts in implementing established roadmaps to fast- track the development of the minerals industry.” In the communiqué jointly signed by the President and Secretary General of the Society, Eng. Benson Jatau and Engineer Tony Ojile, enjoined the government to embrace PPP in its bids for industrial development in order to attract private expertise for service delivery enhancement. The duo however, called on the ministry of solid minerals development to as a matter of urgency resolve the challenge of state interference with the ministry statutory regulatory functions, as otherwise will erode the authority of the minister and also has the tendency of driving away private mining investors.