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What can the rise in the price of food items and essential commodities tell us? What happens when a global pandemic ravages through a third world country already at the brink of an economic recession? A DATAPHYTE report in June 2020 answers some of these questions.
According to the World Bank’s 2020 Annual Ease of Doing Business Report, Nigeria ranks 179 out of 190 countries in the ease of trading across borders. Furthermore, the report reveals that it is easier to trade across borders in 39 sub-Saharan African countries compared to Nigeria.
Over-dependence on oil resources has led to a neglect of other natural resources in Nigeria. Even the solid mineral sector, which marches closely behind the oil and gas sector have only enjoyed scant attention. In fact, within Nigeria’s oil and gas industry, there are indications that the gas sector performs below its capacity due to insufficient attention. Most of Nigeria’s gas is flared, an action that is commonly connected to economic waste and environmental degradation.
Despite COVID-19 pandemic erasing $79 billion in Africa’s output in 2020, a new report by the World Bank has shown that Africa’s trade pact could boost the region’s income.
Nigeria has been so associated with poverty that the word has almost lost its true meaning for many Nigerians. It seems that the word has even become a national decorative muse with which the country competes for international poverty relief funds.
Between January to May 2020, Nigeria spent ₦1.07 trillion on debt servicing. This is revealed in the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) presentation of the Minister of Finance, Budget and National Planning, Ms. Zainab Ahmed.
Nigeria owes a total of ₦28.63 trillion as public debts. This was revealed in the recently published Nigeria’s Public Debt Stock (Q1 2020) by the National Bureau of Statistics (NBS). Of this sum, a total of ₦9.99 trillion are external debts while ₦18.64 trillion are domestic. States and the Federal Capital Territory owe a total of ₦4.11 trillion. A total of ₦14,53 trillion is owed by the Federal Government alone.
The Federal Government of Nigeria has retained N360 to a dollar as the country’s official exchange rate. This was according to the 2021 – 2023 Medium Term Expenditure Framework and Fiscal Strategy Paper. The details were released by the Ministry of Finance, Ahmed Zainab, during a “Public Consultative Forum,” on Friday.
The Central Bank of Naira (CBN) recently devalued the naira by 5.54 percent. While the new rate has not been readjusted on the website of the apex bank, there are indications that exchange has been raised to ₦381/$1 in place of the previous official rate of ₦360/$1. However, the new rate has been updated on the website of FMDQ OTC Securities Exchange, a platform that oversees foreign-exchange trading.
Nigeria’s foreign reserve increased by 2.94 percent between 31st March and 30th June this year. This was revealed in the latest foreign reserves figures from the Central Bank of Nigeria (CBN). Whereas Nigeria’s gross reserve was valued at $35.16 billion at the end of Q1 2020, it increased to $36.2 billion at the end of Q2 2020. However, there were increases and declines within months and across the quarter. For example, the country’s foreign reserve declined by $373.23 million from $36.57 billion on June 1 to $36.2 billion on June 29.
Nigeria has one of the most competitive markets in Africa. With an estimated population of over 200 million people and a population growth rate of 2.6 percent per annum, Nigeria has the seventh-largest population in the world. The country also sits atop 70 percent of the effective West African market and it is the most competitive destination for the establishment of medium and large manufacturing industries.
The recently published World Economy Outlook (WEO) has indicated a decline in global growth. Due to the impact of COVID-19 pandemic, global growth has been projected to stand -4.9 percent. In Sub-Saharan Africa, a decline of -3.2 percent has been predicted. For Nigeria, economic contraction of as much as -5.4 percent is predicted.
The Federal Government has spent over N10 trillion on subsidy in at least 12 years. This is at the expense of the overall wellbeing of the people. Analysis of the opportunity cost of the subsidy spending far outweighs the direct benefits.
Disbursement data from the Federation Account Allocation Committee (FAAC) between January and April 2020 has revealed the true state of Nigeria’s account in 2020. From the data sourced from the National Bureau of Statistics, total allocation declined by 9.63 percent between January and February. Between February and March, another 10.16 percent decline in total allocation was recorded. However, the total allocation appreciated by over 34 percent between March and April.
The Sectoral Distribution of Value Added Tax (VAT) released by the National Bureau of Statistics has revealed that ₦338.94 billion was generated as VAT in the first quarter of 2020. This amounts to an increase of 15.7 percent from the VAT receipt of ₦293 billion in the first quarter of 2019. Hike in VAT from 5 percent to 7.5 percent is purportedly responsible for this revenue increase.
