The Nation Newspaper

Tag: Economy

  • Too much politicking; little thought on economy

    Too much politicking; little thought on economy

    It is amazing how much time and effort Nigerian leaders spend on the revolving doors of who will be chief of state and the ethnicity of the person and little thought of the resources in the hands of those who are charged with affairs of state and the provisions for the citizens of the country. It seems that what is important for the so-called leaders of our country is state capture by those at the top while the development of the country is kicked forward to the future.

    All the news one hears is the plotting against the president using all means available including regional, ethnic and religious slurs to damage those at the top of government without caring for the irreparable damage caused to the individual concerned and the whole  country itself as long as their goal of pulling down government edifice is concerned.  The people doing this were either those in the 16-year dominance of the PDP or those who were in government for eight years under President Muhammadu Buhari and who just exited positions of power two years ago and who have been shoved aside just for two years, and whose insatiable appetite  for resources and power need to be satiated.

    These people forget that they do not own Nigeria and that this country belongs to all of us and not just to a regional and religious clique and their satraps. Most of these people also served in the various military governments preceding the so-called civilian government beginning in 1999 which was really a militarised civilian government. These people do not care about the future of the country. They have no economic plan for the future of the economy coming after the end of the petroleum and gas economy which the country has been enjoying since 1970. It is either they are too dull or stupid or just don’t give a damn as long as they get power and loot whatever is left of the economy and the future of Nigeria.

    Whatever we may say about the military governments of General Yakubu Gowon and his military successors, they had plans for the future of Nigeria.

    Read Also: Tinubu’s reforms boosting Nigeria’s economic recovery – FG

    Before the military take-over of Nigeria in 1966, our country had well thought-out development plans and manpower plans to go with them. The civilian government only had six years to implement its plans before it was overthrown. Some of its plans were a carryover  from regional plans which were well thought-out and based on the comparative advantages of the regions in agricultural produce of cocoa and timber in the West; palm oil in the East, and groundnuts and hides and skin in the North. Petroleum production was at its infancy then. There was coal in Enugu and cement at Nkalagu in the East, tin and columbite production in the North and the West seemed to thrive on agricultural produce of cocoa, rubber and timber even though there was gold in one or two places but they were not significant in production.

    All the regions including the newly created Midwest Region relied on their agricultural boards for planned development. When prices of their agricultural produce were high, the excess price was saved and when prices fell, the various boards were able to pay reasonably good prices that would not destroy the agricultural economy. When the military took over in Nigeria in 1966 and despite having to fight to keep the country together for three years, it kept the marketing boards. From 1970 when the war ended and oil began to flow in large quantity and Nigeria became an oil economy and it abandoned the marketing boards, it replaced them with the petroleum oil marketing boards, gas production board and fertilizer production company. The military also set up car and trucks assembly plants with Mercedes Benz in Enugu, Volkswagen in Lagos, fiat in Kano, Rover in Ibadan and Peugeot in Kaduna, and batteries, windshields-making in Ibadan, and agricultural ploughs and army tanks in Bauchi and manufacturing of rifles and even trainer aeroplanes in Kaduna, and above all, steel and iron and aluminium complexes in Ajaokuta and Ikot Abasi respectively.

    The military was responsible for roads and flyover construction in Lagos and building of the military training institutions in Abuja, Kaduna and a strategic training institution in Kuru as well as military barracks and several universities and polytechnics. I am not saying the military did an excellent job in the years of their monopoly rule because corruption was rife but they left landmarks for the eyes to see!

    Thank God for President Tinubu who seems determined that his civilian regime will leave landmarks marks behind in the Lagos-Calabar express road and the Badagry-Sokoto express road.  He should be encouraged to complete these two projects because on their completion the civilian landmark depends. If only for these two landmarks he deserves to be re-elected in 2027.  I personally feel it is too early to start campaigning for 2027 when the present regime still has two years to go. The creation of regional commissions, which I hope are precursors of the regional governments many have been campaigning for, should be seen as the way to create weaker central government away from the present octopus and leviathan in which power is concentrated in one centre  to which all states run to for support is just not sustainable nor equable.

    One man cannot be expected to use too much power judiciously without stepping on the toes of others. We must constitutionally work for a system where power is diffused and politics is decentralised and all the political squabbling and fighting are localised and therefore not as destructive as they are today.

    We need a decentralised economic system run by forward looking people probably made up of technical experts chosen by politicians but not bogged down by the revolving doors of who is in  or who is out  of power. This system must be headed by a transparently honest men, surrounded by other visionary people who will think more about the people and their future and not the pockets of the politicians who need help to be satisfied with what they have already rather than hankering after what they honestly don’t need for which they want to kill or be killed. This is a country where the economic path to growth is confusing; it cannot be socialism or state capitalism because we have tried it in the past and failed. We do not have too many people with capital to embrace capitalism as the system of economic growth unless we go with the South Korean way whereby the state deliberately creates a group of capitalist companies which then help build the country’s economy and which are beholden to the country. Whatever economic plan we adopt must be debated before adoption. This is the serious task before the nation and not the political noise we usually engage in.

  • Economy: Between green numbers and red realities

    Economy: Between green numbers and red realities

    • By Oladoja M.O

    The Tinubu administration has unarguably embarked on a bold and unapologetic mission to retool Nigeria’s economy. From the abrupt removal of petrol subsidies to the floating of the naira, the unification of multiple forex windows, and most recently, the signing of the landmark tax reform and fiscal policy bill into law, there is no denying that the government has chosen a macro-to-micro economic approach. That is, fix the big picture first and then let the gains gradually filter to the people.

    And indeed, the “green lights” are beginning to blink. Global credit rating agencies such as Fitch and Moody’s have upgraded Nigeria’s outlook. Foreign investors are expressing renewed interest. Oil production is improving, forex liquidity is easing, and fiscal buffers are being rebuilt. From a purely macroeconomic standpoint, Nigeria appears to be reclaiming its place as a serious economy with a reform-minded leadership.

    But there’s a contradiction that cannot be ignored: on the streets of Agege, Aba, Makurdi, and beyond, the economy is still red; red markets, red household budgets, red transport fares, and red faces of frustration. Prices have tripled in some cases. Wages have barely moved. Many are struggling to pay their children’s school fees. Traders are losing capital to inflation. Food is fast becoming a luxury. Amid this hardship, Nigerians are asking the most honest, piercing question of the moment:

    “If the economy is growing, why am I still shrinking?” “If the economy is growing, where is the growth in my pocket?”

    This is not a question borne out of ignorance. It is a legitimate cry that speaks to the disconnect between macroeconomic progress and microeconomic relief. Yes, the big numbers are looking better, but the lived realities of the majority are not funny at all. To understand this discrepancy, we must first understand the difference between macroeconomics and microeconomics.

    Read Also: ADC coalition a desperate alliance of failed politicians – Tinubu Media Force

    Macroeconomics concerns itself with the national economy, things like GDP growth, inflation rates, budget deficits, and foreign exchange reserves. These are the indicators investors, multilateral organizations, and economic analysts watch. Microeconomics, on the other hand, deals with everyday realities; how much you earn, what you can buy with that income, whether your small business can survive, and whether prices of food, fuel, and medicine are manageable. In theory, macroeconomic stability should, over time, trickle down and improve microeconomic conditions. But in practice, especially in a country like Nigeria, that process is rarely smooth or automatic.

    The truth is that reforms, especially big, structural reforms create what economists call a “lag effect.” That is, the pain comes first; the relief comes much later. Floating the naira made the exchange rate more transparent and investor-friendly, but it also instantly raised the price of imported goods. Removing fuel subsidy fixed a long-standing fiscal leak, but it also sent transport and food prices soaring. And because Nigeria imports a significant share of its consumption, inflation spiked, with devastating effects on the poor. Salaries have not caught up. Social safety nets are thin. Informal workers who make up over 60% of Nigeria’s labour force are largely left to fend for themselves.

    Yet, this is the path the government has chosen. And it is important to say this clearly: choosing a macro-first approach is not inherently wrong. In fact, for a country like Nigeria, plagued by decades of financial mismanagement, it is even necessary. Fixing subsidies, unifying the exchange rate, and rebuilding fiscal credibility are long overdue. Every administration must work with the strategy it believes in, and this government has opted to “stabilize the roof before fixing the foundation.” That, in itself, is a policy choice one with clear upsides.

    However, macroeconomic success without visible microeconomic impact is a hard sell to a hungry population. People don’t live in GDP. They live in garri, transport fares, and electricity bills. While international investors applaud the courage of reforms, local citizens are asking: where is the evidence that my own life is getting better?

    To be fair, the administration is not blind to this concern. The recently signed Tax Reform and Fiscal Policy Bill is part of a broader effort to expand the tax net and capture the informal sector, both to raise revenue and bring more economic players into visibility. But again, for the everyday Nigerian, these reforms are abstract. What matters is how they translate into food on the table, money in the pocket, and hope in the future.

    So, how do we build a bridge between this macro-level retooling and the micro-level reality of the people?

    First, we must move beyond tokenistic interventions like cash transfers and instead design smart relief tools that tie micro-support to long-term productivity. For example, introducing community-based digital vouchers that support food or fuel purchases, but are redeemable only when tied to school attendance, digital payments, or participation in a training program, would ease the current pressure while also boosting the long-term human capital of the country.

    Second, the government must decentralize economic adaptation. Nigeria is too diverse for a one-size-fits-all economic playbook. Establishing “Local Reform Chambers” committees made up of state governments, market leaders, and community associations can help interpret macro policies at a local level and propose area-specific interventions. If subsidy removal causes a shock in Zaria or Owerri, let those communities co-design their own response, be it cooperative transport schemes or communal food banks, funded partially by the government and partially by local actors.

    Thirdly, data must become a feedback tool, not just a planning tool. The government should publish a monthly Macro-to-Micro Progress Report showing in clear terms how reforms are improving incomes, lowering costs, or reaching underserved communities. Let people see the path of change, even if it’s still under construction.

    Finally, the government must actively invest in skills, tools, and local infrastructure. Don’t just train youths to code, train them to fix machines, install solar panels, manage cooperatives, and build homes. Make markets more productive with solar lighting, shared storage, and water access. These are the enablers that convert national growth into grassroots empowerment.

    It is fair to acknowledge that the current administration is taking steps previous governments only danced around. The reforms are not without merit and frankly, not without courage. But reforms are not complete until they reach the people.

    The Nigerian people are not impatient; they are simply in pain. And when they ask, “If the economy is growing, why is my pocket not?” they are not being unreasonable. They are asking for what every citizen deserves: a place in the progress. Now is the time to move beyond balancing spreadsheets and begin balancing lives. Because growth is only real when it is felt.

    And no reform is complete until the people rise with the numbers.

    •Oladoja writes from Abuja.

  • FG promises to watch oil prices closely, keep economy stable, inclusive

    FG promises to watch oil prices closely, keep economy stable, inclusive

    The federal government has told the International Monetary Fund (IMF) that it will keep a close eye on changes in global oil prices and trade conditions, and take action when needed to protect Nigeria’s economy and keep growth on track for everyone.

    This promise came after the IMF warned in its latest review in April 2025 Article IV Consultation that sharp swings in crude oil prices could affect Nigeria’s 2025 budget.

    Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, explained that the government is implementing the 2025 budget carefully, with a focus on protecting the progress made through economic reforms and making sure the economy stays steady.

    He said the government remains fully committed to managing the economy in a way that keeps prices stable, supports broad growth, and improves the quality of life for all Nigerians.

    Edun welcomed the IMF’s new report on Nigeria, saying it shows that the government’s reforms over the last two years are paying off. According to him, these efforts have strengthened Nigeria’s finances, attracted more investor confidence, and made the economy stronger against external shocks.

    The Minister also pointed to the IMF’s positive view of progress in agriculture, especially the increase in food production, which has helped bring down food prices.

    Read Also: How generative AI can transform economy, by expert

    As of May 2025, overall inflation had slowed to 22.9 per cent, while food inflation had dropped to 21.4 per cent — both better than earlier levels during the IMF’s last visit.

    Edun noted that the IMF’s report suggests Nigeria’s economic reforms are helping the country cope better with unexpected global challenges.

    In its April report, the IMF welcomed several steps taken by the government, such as removing fuel subsidies, improving revenue collection, and making the foreign exchange market work better. These steps have helped to stabilise the economy and make it more resilient.

    Still, the IMF warned that Nigeria faces risks from unpredictable oil prices and rising global borrowing costs, which could hurt government finances and economic growth.

    In response, Edun said the government is actively watching the situation and ready to act if needed, to make sure the economy stays on course.

    He added that the government’s long-term goal is to keep reforms moving forward so that growth reaches all parts of the country, with more jobs, better infrastructure, and stronger support for farmers and vulnerable households.

  • Why Naira-for-crude policy is best for the economy

    Why Naira-for-crude policy is best for the economy

    By Arabinrin Aderonke

    The oil sector in Nigeria has always been the topic of the day. Online. Offline. On the radio. Even in public transport. If you want to start a heated conversation anywhere in this country, just mention “fuel.” The reactions will start coming in. The price. The scarcity. The queues. The corruption. It’s personal for everyone because we have built a whole nation that depends on oil as if it’s the only thing keeping Nigeria alive. We cannot discuss infrastructure, healthcare, education, or even pay salaries in many states without relying on oil revenue.

    Before the removal of fuel subsidy under the current administration (President Bola Ahmed Tinubu), Nigeria was already burdened by an unsustainable level of debt. Year after year, billions were spent to maintain the appearance of affordable fuel. 

    This reality disproportionately benefited the wealthy and even some politicians while leaving the poor at a disadvantage. It was a system that forced the country to import what it could produce. In an attempt to correct this longstanding imbalance, the government introduced a new approach: the Naira-for-Crude policy.

    The policy emerged as a response to Nigeria’s over-reliance on imported refined petroleum products, persistent FX pressures, and underutilized local refining capacity. It was approved by the Federal Executive Council to promote the sale of crude oil and refined petroleum products in Naira, specifically for domestic consumption, to strengthen local production, reduce dollar demand, and support broader reforms following the removal of fuel subsidies.

    It is one of those things that sounds very technical on paper, but when you break it down, it’s about making Nigeria act like a country that actually owns oil. The idea is this: sell our crude oil to local refineries in Naira. Refine it. Sell the products within Nigeria, still in Naira. Not dollars. Not IOUs. Actual Naira transactions. No more running around trying to source dollars just to trade our own resources at home.

    In August 2024, the federal government inaugurated the Implementation Committee for the Naira-for-Crude policy. The policy officially commenced on October 1, 2024, when the Nigerian National Petroleum Company Limited (NNPCL) began supplying approximately 385,000 barrels per day of crude oil to the Dangote Refinery, with payments made in Naira.

    Many stakeholders are involved in the Naira-for-Crude policy. The Implementation Committee oversees its rollout, with Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), leading the Technical Sub-Committee. 

    The policy is built on four main principles: crude oil allocation to local refineries, transactions conducted in Naira, the Central Bank of Nigeria setting a reference exchange rate, and the Nigerian Ports Authority (NPA) overseeing the process through a One-Stop Shop for clearances and levies. 

    The Technical Sub-Committee ensures these principles are upheld while managing the regulatory process and aligning the policy with national objectives such as reducing reliance on foreign currency, achieving self-sufficiency, and maintaining market stability.

    The Naira for Crude policy is meant to ease the burden on our economy while strengthening relevant sectors. For Nigeria, as a country, it reduces the pressure on the dollar, helps us save our foreign reserves, and makes room for a more stable financial system. 

    Read Also: Naira-for-crude: Shareholders call on Dangote to reciprocate by listing on stock market 

    For stakeholders such as refineries, marketers, and government bodies, it simplifies how business is done, makes transactions easy, and encourages more investment. And for the everyday Nigerian, the goal is to ensure fuel is more available, reduce how much we rely on imports, and secure our energy needs in a way that actually works for us.

    The naira for crude policy fosters a conducive business environment, reduces monopoly power, and ensures competitive pump pricing. It provides citizens with a strong sense of inclusion and the freedom to choose.

    Naira-for-Crude makes a lot of sense. We have been doing things the hard way for too long, buying back what we produce and spending dollars we don’t have. This new policy is Nigeria finally saying, “Let us fix this from inside.” As mentioned earlier, It’s not just policy. It’s common sense.

    The policy is a blueprint for the future. By changing how we handle our resources, we are taking back control. It’s time for Nigeria to move from just managing to thriving. We are doing it big, no going back!

    Arabinrin Aderonke Atoyebi is the technical assistant on broadcast media to the executive chairman of the Federal Inland Revenue Service.

  • Poll: Majority of Americans disapprove of handling of economy

    Poll: Majority of Americans disapprove of handling of economy

    As many as 58% disapprove of U.S. President Donald Trump’s handling of the economy, dropping to its lowest level since December of 2017, according to a poll released by the AP-NORC Centre for Public Affairs Research.

    The poll, conducted on March 20-24 among 1,229 adults, found that about seven in 10 describe the state of the economy as “poor,” a level of negativity that has remained unchanged since the final weeks of Joe Biden’s presidency in December 2024, when the question was last asked.

    “Trump’s overall job approval is essentially the same as it was when he took office for the first time in 2017, though lower than Joe Biden’s at the beginning of his term,” the poll said.

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    The survey also examined Trump’s policies on migration, foreign conflicts, and trade.

    Asked about the president’s handling of immigration, 49% said they approve, while 50% disapproved.

    On the “Israeli-Palestinian conflict,” 54% disapprove of Trump’s approach, while 44% approve.

    His handling of “trade negotiations with other countries,” amid international criticism of tariffs, received 60% disapproval compared to 38% approval.

    On the Russia-Ukraine war, 56% said they disapprove of Trump’s stance, while 41% approve.

  • $1trillion economy beckons in Lagos

    $1trillion economy beckons in Lagos

    With its Gross Domestic Product now at $259 billion, based on Purchasing Power Parity, the Lagos State Government is well on course to attaining its $1 trillion economy dream by 2052, writes, Group Business Editor, SIMEON EBULU

    As part of its drive and yearning, the Lagos State Government has set an ambitious task for itself of attaining an $800 billion to $1 trillion economy in the next 27 years. A tall order you might say, but achievable given the state’s record of accomplishments. The government recently launched its 2025 economic roadmap, the Lagos Economic Development Update, a comprehensive report offering a data-driven assessment of the state’s economic performance and strategic policy directions, designed to actualise it’s long term future dreams.

    Last week, it emerged that the Gross Domestic Product (GDP) of Lagos State reached $259 billion, based on Purchasing Power Parity (PPP), placing it as the second-largest economy in Africa, second only to Cairo. This feat did not happen by accident, the state did not arrive at this position overnight, it took years of diligent planning and resilience to accomplish. The outcome has made Lagos, Nigeria’s commercial centre, one of the top economic hubs, not only in the West African region, but indeed, Africa.

    This economic stride can be validated from the National Bureau of Statistics’ (NBS’) and Lagos Bureau of Statistics’ (LBS’) data base that showed put the National Gross Domestic Product (GDP) at N234.43 trillion, with Lagos contributing N43.06 trillion, representing 18.38 per cent of the national economy in 2023. For the first half of 2024, the national economy recorded a GDP of N122.51 trillion, with Lagos accounting for N27.39 trillion or 22.36 per cent of Nigeria’s GDP.

    Improvement in the business environment and remarkable resourcefulness of the state’s workforce (both public and private), have the combined effects of positioning Lagos State at the forefront of the nation’s economic prowess.

    In line with its set target of attaining an economic size of $800billion -$1trillion by 2052 (barely 20years after the central government’s $1tr mark in 2030), as enunciated in the Lagos State Development Plan (LSDP),  the state is on the path to achieving this objective, given global investors appetite to invest in Lagos State. As Nigeria’s commercial hub, Lagos State has consistently attracted a substantial share of foreign investments, thereby playing a pivotal role in shaping the broader national economic trajectory. The capital importation figure for the third quarter of 2024 represents a robust increase of 110.59 per cent. This sustained year-on-year growth underscores the underlying resilience of Lagos State economy amid fluctuating quarterly trends headwinds.

    According to the Lagos Economic Development Update (LEDU) 2025 report, for ten consecutive quarters, the state has demonstrated consistent and commendable budgetary performance. Revenue performance stood at 79.5 per cent in 2021 and 77.8 per cent in 2022 respectively, but it rebounded a year later in 2023 to 85.8 per cent, and an impressive 106.6 per cent in 2024.

    This remarkable improvement can be attributed to several key initiatives, including the implementation of the Lagos Revenue Portal, frequent updates to the tax register, and increased federal transfers resulting from the removal of the fuel subsidy.

    On the expenditure side, the performance index is as follows: it declined from 84.8 per cent in 2021 to 72.7 per cent in 2022, it moved to 86.8 per cent in 2023, and 78.3 per cent in 2024. Notwithstanding these fluctuations, the strong revenue performance in the third quarter of 2024 is worthy of note, as it highlights the effectiveness of the state’s revenue enhancement strategies.

    The findings underscore resilience of the state in revenue generation and its commitment to fiscal innovation. The steady improvement in revenue performance reflects the effectiveness of strategic reforms, including digitised revenue collection and an enhanced fiscal transparency. There’s been a revolution, so to say, in  the fiscal year 2024 Appropriations as several interventions, policies, and projects were captured in the document, drawing from the previous year’s budgetary experience. Accordingly, several areas of the economy, such as transport, security, food security, housing, youth employment, entertainment, health, education, public order and safety, energy, and social protection, were captured in the 2024 budgetary provisions.

    Read Also: FAAC disburses N1.678tr to FG, States, councils

    LASG Economic Outlook

    The LEDU report projected the Lagos State economy to expand from N43.06 trillion in 2023 to N54.77 trillion in 2024 and N66.47 trillion in 2025. This upward trend, it added, is primarily driven by the continued expansion of the services sector, although the agriculture and industrial sectors are also experiencing growth. “The services sector has remained the key driver of the state’s economy, reflecting Lagos’s position as the commercial hub of Nigeria and West Africa. Over the past four years, the trade, transport, information and communication, arts, entertainment and recreation, and financial and insurance sub-sectors have recorded substantial expansion. Given the state’s growing potential in innovation and the significant digital transformation driven by start-ups, the services sector is expected to further strengthen its contribution to nominal GDP.

    “Additionally, the industrial sector, largely propelled by the manufacturing sub-sector, has followed an upward trajectory over the past four years. This expansion is expected to continue through the end of 2024 and into 2025, supported by the rapid development of modern infrastructure across the state. Several key road infrastructure projects have been completed in 2024, alongside the commissioning of the Red Rail Line and the ongoing expansion of the Blue Rail Line. These public investments are anticipated to enhance the productivity of the manufacturing sector, further bolstering Lagos’s economic growth trajectory,” it said.

    Sustainable Economic Development

    Speaking during the launch of the Lagos Economic Development Update (LEDU) in the state capital last week, Commissioner, Ministry of Economic Planning and Budget, Ope George described LEDU as a comprehensive report that provides a data-driven assessment of Lagos State’s economic performance and outlines strategic policy directions for sustainable growth. The report, he added, is designed to pave the way for a 21st-century economy in Lagos State.

    “The update focuses on key areas such as revenue mobilisation, economic diversification, and fiscal sustainability. It aims to enhance the state’s economic growth, improve living standards, and reduce poverty among its residents,” he said.

    He noted that, “The Lagos Economic Development Update (2025) themed ‘Lagos Economic Outlook: Charting a Resilient Path Towards a Sustainable Future’, stands as a testament to the unwavering commitment of the Lagos State Government to transparency, evidence-based policymaking, and sustainable economic growth.

    “As the Honourable Commissioner for Economic Planning and Budget, it is my privilege to present this second edition, which provides an in-depth analysis of the dynamic interplay between global, national, and local economic landscapes and their implications for Lagos State.

    “Lagos remains the economic nerve centre of Nigeria and a hub of innovation, investment, and opportunities within Africa. In a rapidly evolving global economy, maintaining this leadership position requires forward-thinking policies, a deep understanding of emerging trends, and the ability to anticipate and mitigate risks.

    “This update provides actionable insights into key economic developments, including sectoral performance, fiscal sustainability, social protection, and the labour market, while highlighting the policies driving progress and the challenges that require our urgent attention.

    “The 2025 edition builds on the successes of the maiden edition, delving further into critical issues such as capital importation, inflation, and macroeconomic outlook. It also underscores the importance of building resilience against possible vulnerabilities such as food insecurity, climate change, revenue gap, energy deficit and skill gaps in a manner that ensures inclusive and sustainable future.”

    Bridging the Revenue Gap

    Delivering the keynote address titled: “Bridging the Revenue Gap in Lagos: Innovative Pathways to Enhanced Revenue Mobilisation,” Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, emphasised the urgency of bridging the revenue gap in Lagos through innovative and transformative strategies.

    He noted that while Lagos remains Nigeria’s economic powerhouse, its current revenue generation, “less than two per cent of the GDP, lags behind comparable economies worldwide.”

    He stressed that despite its size and economic influence, the state is not generating enough revenue to match its ambitions and that now is the time to change this narrative.

    “Lagos is big, but its revenue is small, collecting less than two per cent of GDP. While some progress has been made, we still have a big room for improvement, and the time to change this narrative is now,” Oyedele opined.

    Oyedele outlined three key pathways for revenue mobilisation. First, he highlighted the potential of property taxation, pointing out that cities like Bogotá in Colombia generate over $1 billion annually from property tax, while Lagos, with one of the most valuable real estate markets in the world, collects far less.

    He attributed this gap to inefficiencies in land titling, property valuation, and enforcement and proposed reforms that could help the state generate at least N1 trillion annually. Recommendations included improving land titling processes, incentivising compliance, and ensuring a transparent property valuation system.

    The second pathway focused on personal income tax expansion, leveraging technology to capture high-income earners who should be contributing more to the system.

    Oyedele underscored the need to formalise the informal sector, particularly in Lagos’ thriving digital and creative industries, ensuring that entrepreneurs, event planners, content creators, and entertainers contribute fairly without being overburdened. He advocated for a fair presumptive tax regime, allowing small businesses to grow before being taxed heavily on their successes.

    Significance of Data-driven Policies

    In her welcome address, the Permanent Secretary of the Ministry of Economic Planning and Budget, Mrs. Olayinka Ojo, underscored the significance of data-driven policy decisions in shaping Lagos’ economic trajectory.

    She stated that as the economic nerve centre of Nigeria, “Lagos must navigate global and national economic complexities with foresight and strategic planning.”

    She reiterated that, “the 2025 LEDU report provides critical insights into fiscal sustainability, labour market dynamics, and revenue generation,”

    Ojo, therefore, stressed that the state’s future prosperity depends on collective efforts to enhance fiscal governance, strengthen revenue mobilisation, and create an enabling environment for businesses to thrive.

    Commenting, Governor Babajide Sanwo-Olu said, “Lagos is not just growing; we are leading. With a GDP of $259 billion based on Purchasing Power Parity (PPP), we have cemented our place as Africa’s second-largest city economy. This milestone is more than a number; it reflects the strength of our economy, the resilience of our people, and our city’s role as a hub for investment, trade, and opportunity.

    “Economic indices like PPP are crucial. They highlight real economic strength, competitiveness, and the cost-of-living advantage. From infrastructure to technology, tourism to manufacturing; we are driving sustainable growth. Lagos remains at the forefront of Africa’s economic transformation, and the best is yet to come.”

  • Nigeria, Saudi Arabia sign pact to on $7.7tr halal economy

    Nigeria, Saudi Arabia sign pact to on $7.7tr halal economy

    Nigeria has signed a strategic cooperation agreement with Saudi Arabia’s Halal Products Development Company (HPDC) to position itself as a major player in the global halal market, which is valued at $7.7 trillion.

    The agreement, signed at the Makkah Halal Forum in Saudi Arabia would promote investment, technical collaboration, and market access across key sectors such as food production, pharmaceuticals, finance, and livestock.

    Vice President Kashim Shettima, represented at the event by Deputy Chief of Staff to the President, Office of the Vice President, Senator Ibrahim Hassan Hadejia, described the deal as a transformative step for Nigeria’s economy.

    According to a statement issued by Senior Special Assistant to the President on Media and Communications, Office of the Vice President, Stanley Nkwocha, Shettima said “this collaboration is an important step in our ambition to not only tap into the lucrative halal market but to establish Nigeria as a leading global player.

    “We are committed to leveraging this collaboration to create jobs, attract foreign investment, and diversify our economy in line with the Renewed Hope Agenda of President Bola Ahmed Tinubu.”

    The agreement was executed with HPDC, a subsidiary of the Saudi Public Investment Fund, represented by its Chief Executive Officer, Fahad Alnuhait, in the presence of Saudi Arabia’s Minister of Commerce, Dr. Majid bin Abdullah Al-Qasabi; Chairman of the Makkah Halal Forum’s Organizing Committee, His Excellency Mr. Fawaz bin Talal Al-Harbi, and Chairman of Makkah Chamber of Commerce and Industry, His Excellency Mr. Abdullah bin Saleh Kamel.

    Also speaking, Special Assistant to the President on Export Promotion, Aliyu Bunu Sheriff, said the partnership builds on Nigeria’s growing Islamic finance sector, which has seen success through Sukuk bonds for infrastructure financing and the establishment of Islamic banks like Jaiz Bank, Taj Bank, and Lotus Bank.

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    Sheriff explained that the Islamic Development Bank (IsDB) and the Arab Bank for Economic Development in Africa (BADEA) will support the initiative through capacity building, regulatory framework development, and financing opportunities.

    “This agreement aligns perfectly with the Renewed Hope Agenda by creating new jobs, attracting foreign direct investment, and diversifying our economy.

    “The halal economy extends beyond Muslim consumers. Non-Muslim majority countries like Brazil, Australia, and Thailand are already leveraging the sector for substantial export growth,” he said.

    The Nigerian delegation also included the  Chairman of Dar Al Halal Group, Alhaji Muhammadu Ladan Dikko; Chairman of the Board of Directors, Bank of Industry, Dr. Mansur Muhtar; Minister of Trade and Investment, Dr. Jumoke Oduwole who was represented by Ambassador Nura Rimi; Minister of Foreign Affairs, Ambassador Yusuf Tuggar, represented by Ambassador Mahmoud Lele, and R’representative of the Standard Organization of Nigeria, Hajiya Amina.

    Others are the Chairman, Nigeria-Saudi Chamber of Commerce, Engr. Ibrahim Usman; Minister of Finance, Mr. Wale Edun, represented by Nur Muftau Baba Ahmed; CEO of Nigeria Export Promotion Council, Mrs. Nonye Aneyi, represented by Mustapha Aminu; Deputy President of NACCIMA, Alhaji Jani Ibrahim, and Managing Director of Bank of Industry, Mr. Olasupo Olusi, represented by Mrs. Jelilat Ismaila-Ayinde.

    VP Shettima had during the Halal Economy Stakeholders Engagement Programme held at the Banquet Hall of the Presidential Villa, Abuja, in September last year emphasized the economic potential of the sector, noting that “increasing Nigeria’s halal exports to OIC markets from 2% to 6% could boost the country’s GDP by $540 million, while strategic import substitution could add nearly $1 billion by 2027.

  • Rebasing of economy: will it bode well for Nigerians?

    Rebasing of economy: will it bode well for Nigerians?

    The rebasing of the Consumer Price Index, according to the National Bureau of Statistics dropped headline inflation to 24.48 percent in January, up from 34.80 percent as at last December. But significant as this development seems, opinions are divided as to the propriety and otherwise of this new policy regime, reports Ibrahim Apekhade Yusuf

    When last Tuesday, the Statistician-General of the Federation, Adeyemi Adeniran officially released the rebased Consumer Price Index report in Abuja, he was filled with excitement.

    But ironically, since that announcement a lot of analysts have put the NBS boss to task.

    According to the report, Nigeria’s headline inflation dropped to 24.48 per cent in January 2025 following the rebasing of the CPI by the National Bureau of Statistics, NBS.

    This represents a decline from the 34.80 per cent recorded in December 2024.

    According to the latest NBS report, urban inflation stood at 26.09%, while rural inflation was recorded at 22.15%.

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    Adeniran said, “The All-Items Index which is used to measure headline inflation for January 2025 was 110.7, resulting in a headline inflation rate of 24.48 per cent on a year-on-year basis.

    “This increase was mainly driven by Food and Non-Alcoholic Beverages, Restaurants and Accommodation Services and Transport.”

    He explained that the rebasing was necessary to ensure a more accurate reflection of inflationary pressures in the country.

    Adeniran said the CPI rebasing involved shifting the base year from 2009 to 2024 to better capture changes in consumption patterns, pricing, and household expenditures.

    He noted that Nigeria had not rebased its CPI in over a decade, even though the exercise is typically conducted every five years to reflect economic realities.

    With the rebasing, the methodology for computing inflation has been refined, including the adoption of the Classification of Individual Consumption according to the Purpose 2018 version, which improves the categorisation of household expenses.

    The Statistician-General also highlighted the exclusion of own-production, imputed rents, and gifted items from the inflation calculations to ensure the CPI only measures actual monetary expenditures.

    Food inflation for January 2025 stood at 26.08 per cent year-on-year, showing a decline from 39.84 per cent in December 2024.

    Adeniran attributed the inflationary trend to food, beverages, clothing, and footwear, which were the major contributors to price movements during the period.

    Further analysis by the NBS showed that Urban Inflation was 26.09 per cent, while Rural Inflation stood at 22.15 per cent.

    Core Inflation, which excludes farm produce and energy, was 22.59 per cent in January 2025.

    The rebased CPI also introduced new special indices to enhance inflation tracking, including a Farm Produce Index of 10.50 per cent, Energy Index of 8.9 per cent, Services Index of 10.41 per cent, Goods Index of 10.79 per cent, and Imported Food Index of 11.47 per cent.

    Adeniran said the rebasing involved consultations with key stakeholders, including the Central Bank of Nigeria, International Monetary Fund, World Bank, United Nations Economic Commission for Africa, BudgiT, and the Nigerian Economic Summit Group.

    The Statistician-General urged journalists and analysts to report the rebasing results accurately to avoid misinterpretation, emphasising that the changes were not a manipulation of inflation figures but an effort to present a more realistic measure of price levels.

    Adeniran assured all that the new CPI methodology would improve the credibility of Nigeria’s inflation data, making it more reflective of current economic conditions and aligned with global best practices.

    PwC projection on 26% inflation decline in 2025

    Interestingly, ahead of the rebasing, professional services firm PwC has projected that inflation in Nigeria will drop to 26 per cent in 2025 due to tighter monetary policies.

    This was revealed in Nigeria’s 2025 Budget and Economic Outlook published recently.

    The 2025 Appropriation Bill presented by President Bola Tinubu at the National Assembly projected that inflation will drop to 15 per cent this year.

    PwC, in its outlook, stated, “Inflation is forecasted to decrease to about 26 per cent in 2025, driven by tighter monetary policies, improvements in Nigeria’s foreign exchange dynamics, and baseline effects. Nigeria’s GDP is projected to grow by 3.3 per cent in 2025, supported by sustained policy reforms. However, growth prospects may be constrained by persistent economic pressures.

    “The exchange rate is anticipated to stabilise in 2025, supported by ongoing foreign exchange reforms by the Central Bank of Nigeria, which are expected to boost foreign exchange inflows.”

    The Governor of the Central Bank of Nigeria, Olayemi Cardoso, at the Nigerian Economic Summit Group 2025 macroeconomic outlook launch, disclosed a projected GDP growth of 4.1 per cent in 2025.

    PwC also called for businesses to adopt new strategies to meet the challenges of the year.

    Some of the strategies include: “Reinvent your business model: Adapt your business model to new economic realities, focusing on agility, customer-centricity, and value creation in evolving markets. Reignite your market play: Revitalise your go-to-market strategies by leveraging customer insights, enhancing competitive differentiation, and exploring untapped growth opportunities.

    “Rethink costs through core capabilities: Optimise costs strategically by aligning spending with core capabilities, investing in areas that drive competitive advantage, and eliminating non-value-adding expenses. Reimagine your tech, digital, and AI play: Harness emerging technologies, advanced digital platforms, and AI-driven solutions to innovate processes, enhance customer experiences, and drive efficiency.

    “Redefine your funding and capital strategy: Reevaluate your funding approach to ensure resilience, explore innovative financing options, and optimise capital allocation for sustainable growth.

     “Re-evaluate your talent strategy: Align your workforce with future needs by building critical skills, fostering a culture of innovation, and retaining top talent through targeted development and engagement strategies, and reassess your stakeholder relationships: Strengthen engagement with regulators, customers, social media audiences, and strategic partners by fostering trust, transparency, and collaborative value creation.”

    Like the PwC, a couple of agencies had last month foretold that the services sector is projected to constitute about 55 to 60 per cent of the rebased Gross Domestic Product data when launched.

    In the current GDP, the services sector constituted about 53 per cent, while the oil sector and agriculture comprise 5.57 and 28.65 per cent, respectively.

    Specifically, in its post-rebasing projections by Meristem Securities in its 2025 Full Year Outlook titled ‘Mining Gold in the Grit’ indicated that services will range between 55 and 60 per cent of the rebased GDP.

    The oil sector will stay within 5 to 10 per cent while the contribution of agriculture is projected to decline to less than 25 per cent.

    The full-year report read, “A rebasing exercise in 2025 could bring emerging sectors like fintech, tech startups, and digital services into sharper focus while improving the capture of underreported areas such as arts and entertainment. Additionally, it could offer a more accurate representation of recent economic activities and supply chain dynamics in agriculture and services, potentially spurring growth in these sectors. However, the contribution of sectors like oil and agriculture might decline in relative terms due to the likely higher weight of the services sector.

    “Furthermore, while nominal GDP figures are expected to grow significantly, this may not translate into corresponding continued increases in real GDP due to prevailing economic challenges that could dampen actual improvements in the economy.”

    The last rebasing in 2014 unveiled a much larger economy, with GDP rising by approximately 90 per cent to N80.22tn from N42.40tn. This increase was largely attributed to the inclusion of both new and previously under-represented sectors, such as information and communication, real estate, healthcare, social services, and professional services.

    The new additions to the rebased GDP, as announced by the National Bureau of Statistics, were digital economy activities, pension funds, National Health Insurance Scheme, Nigerian Social Insurance Trust Fund, the activities of modular refineries, domestic households as employers of labour, quarrying and other mining activities, and illegal and hidden activities.

    Also, experts at Afrinvest Securities warned that while the rebasing of GDP might enhance overall nominal GDP size, “policymakers must look beyond statistical effects to drive sustainable growth. Similarly, a potential decline in debt-to-GDP must not derail efforts to enhance fiscal discipline and sustainable debt growth.

    “On the CPI side, the improvement in services sector coverage (services index) and inclusion of the Insurance & Financial Services sector (0.5 per cent weight) should improve the proximity of inflation reading to reality relative to the previous structure. Also, the increase in the number of items captured in the basket will provide legroom to capture activities relevant to consumers.”

    In conclusion, the analysts said, “We anticipate significant statistical changes in data upon the release of the new GDP and CPI reports based on the aforementioned structural changes. While we expect some positive gains from the revisions, the underlying contexts and drivers for the economy would require sustained and quality economic reform based on coordinated fiscal and monetary efforts.”

    For multi-asset investment and capital management firm CFG Advisory, the “ongoing exercise to rebase GDP and CPI might therefore not yield the desired results.”

    Highlighting the reasons for this opinion, the firm in Nigeria’s 2025 Economic Forecast titled, ‘From Reform Fatigue Quagmire to Sustainable Growth’ stated, “Nigeria’s GDP at $195bn has declined over the last decade, losing over $300bn in value due to devaluation, low productivity, and stagflation. The country is no longer the largest economy in Africa, ranking fourth behind South Africa, Egypt, and Algeria. This owing to prolonged policy inconsistency since the economy came out of the post-COVID recession.”

    The forecast signed by the Chief Executive Officer of CFG Advisory, Adetilewa Adebajo, said, “To get the economy back on track, the government must reduce its debt burden, restore its credit rating to investment grade, and tame inflation. This would reduce borrowing costs and provide stimulus for investment, sustainable growth, productivity, and employment. To accomplish this, FGN must restructure its capital structure and balance sheet. Selling down its JV oil assets will raise $30-50bn, which can be applied to reduce the debt burden, improve the foreign exchange regime, provide dollar supply for naira appreciation, restore credit rating, and boost net reserves.”

    Rebasing economy not yet Uhuru

    The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that the drastic reduction in inflation figures following the rebasing of the Consumer Price Index (CPI) does not necessarily translate to lower prices of goods and services.

    In a statement sent by the CEO of CPPE, Dr. Muda Yusuf, emphasised the need for clarity on what a drop in inflation figures signifies.

    Speaking against the backdrop of the newly rebased CPI figures by the National Bureau of Statistics (NBS), which saw a reduction of the inflation rate from 34.80% in December 2024 to 24.48% in January 2025, he said, “It is important to clarify that a drastic reduction in inflation figures is not tantamount to a reduction in the price level. Inflation reduction means a reduction in the rate of increase in the general price level, not a price reduction. The drastic deceleration in inflation should, therefore, be cautiously celebrated.”

    Yusuf further stressed that despite the new inflation metrics, the reality of high prices remains a significant challenge for businesses and households alike.

    “The reality of high prices has not changed and remains a major factor in the cost of doing business, cost of living, and poverty equation in the country. Households and firms are still concerned about high energy costs, the strength of the naira, high interest rates, cost of imports, transportation costs, and insecurity,” he stated.

    Price moderation, not inflation figures reduction

    The CPPE urged policymakers to focus on strategies that will lead to actual price moderation rather than merely celebrating reduced inflation rates.

    “What businesses and households desire at this time is a reduction in the general price level from the incredibly high levels in 2024 to a substantial moderation in 2025, which is defined in technical parlance as disinflation.”

    He, however, acknowledged that there are early signs of price moderation in key sectors.

    “The good news, however, is that we are beginning to see indications of such reductions in PMS, diesel, some food items, and pharmaceutical products. It is hoped that this trajectory will be sustained in the course of the year,” he added.

    Rippled effects on economy

    Earlier, Dr. Yusuf had set his expectations for the upcoming Monetary Policy Committee meeting. He said, “My expectation from the MPC meeting is to maintain a hold. However, my preference is to begin relaxing some of the tightening measures due to the excessively high interest rates,” Yusuf stated.

    CBN says everything on course but warns on cautious optimism

    The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has expressed optimism about the country’s economic trajectory, stating that inflation is on a downward trend and key economic indices are showing positive signs.

    Speaking at the latest Monetary Policy Committee (MPC) meeting on Thursday, Cardoso noted that recent macroeconomic developments are expected to have a positive impact on price stability in the near to medium term.

    “At this meeting, the Monetary Policy Committee noted with satisfaction, recent macroeconomic developments which are expected to positively impact the price dynamics in the near to medium term. These include the stability in the foreign exchange market with the resultant appreciation of the exchange rate and the moderation in the price of PMS,” Cardoso stated.

    Despite the positive outlook, the CBN governor acknowledged that inflationary pressures remain, particularly due to rising food prices. The MPC took note of the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which adjusted the weight of various items to better reflect current consumption patterns.

    “Members, however, were not oblivious of the persisting inflationary pressures, driven largely by food prices. The Committee noted the recent rebasing of the commodity price index (CPI) by the National Bureau of Statistics (NBS), which reviewed the weights of items to reflect current consumption,” he added.

    While inflation has been moderating, Cardoso cautioned that this does not mean the country has reached a low inflation level.

    “Nobody should infer that inflation has fallen to that level,” he said, urging stakeholders to remain patient as economic policies continue to take effect.

    The National Bureau of Statistics (NBS) adjusted the methodology for calculating inflation, leading to a sharp drop from 34.80% recorded in December 2024 under the previous system.

    Recently, the CBN has introduced several measures to stabilize the foreign exchange market and curb inflation in the country.

    The apex bank has, in January 2024, introduced the FX Code for market operators.

    However, analysts argue that structural issues—such as supply chain disruptions, insecurity affecting food production, and fiscal pressures—still pose challenges to achieving sustainable price stability.

    According to the latest report by the NBS, urban inflation was 26.09%, while rural inflation stood at 22.15%, reflecting changes in the method used to measure price movements in the economy.

    Pan-African Credit Rating Agency, Agusto & Co, has said that increased crude oil production can help Nigeria resolve the twin challenges of inflation and volatility in the foreign exchange market.

    This was disclosed by Jimi Ogbobine, Head of Agusto Consulting, a subsidiary of Agusto & Co, during his presentation at the 2025 Economic Roundtable to discuss Nigeria’s economic trajectory, held recently in Lagos.

    The event held in honour of its founder, the late Olabode Agusto, provided an in-depth analysis of trends, policy developments, and investment opportunities shaping Nigeria’s economic landscape. Discussions explored banking, finance, manufacturing, energy, and regulatory reforms critical to business and investment growth in 2025.

    While analysing the Nigerian economy, Ogbobine listed 10 key areas of uncertainties, including debt sustainability, oil sector performance, global energy dynamics, global economic outlook, energy transition and subsidy reforms, sociopolitical instability, food security and agriculture resilience, government fiscal performance (revenue and spending priorities), exchange rate management strategy, and inflation and interest rate management strategy.

    He said, “All our foreign exchange issues can be resolved with increased oil production. If Nigeria’s oil production increases materially today, you can land on your second foot irrespective of the inflation rate. So, production matters. Why?

    There is a simple way to look at the revenue of any organisation. For a country like ours that sells crude oil, it is a matter of the price of crude oil and the quantity of crude oil sold. You want to see the naira at the level you desire; produce more.”

    He added that there was a need to resolve structural issues driving inflation, “especially in the area of farming and food security. In petrol subsidy management, we have to sleep with one eye open and ensure it is not coming back. Crude oil production level is very important.”

    The January 2025 oil production status data published by the Nigerian Upstream Petroleum Regulatory Commission indicated that the aggregate output increased by 3.6 per cent to 47.7 million barrels, implying a daily average output of 1.54 million barrels excluding condensates of 198,783 bpd—the highest output level in three years. Against this backdrop, Nigeria surpassed its OPEC quota for the month by 3.0 per cent, the first of such an episode in several months.

    On Nigeria’s debt sustainability, Ogbobine said that the current administration of President Bola Tinubu was a big-spending government, hence heightened concerns about fiscal deficit.

    He said, “For Nigeria, we have about 10 key uncertainties, the first being our debt sustainability. Nigeria’s debt sustainability is a key worry point for us, so we have to pay attention to it. Many of us say that our political parties do not have ideologies, but that is not absolutely true. They may not have it in theory, but they have it in practice. This current party is a big government party, and that is why debt sustainability is a key concern. Nigeria’s Fiscal Responsibility Act says that the fiscal deficit should be three per cent of the GDP. It is not a law; it is guidance even though it is written in a law. Today, we are at 4.5 per cent of the GDP.”

    At the event, Managing Director, Agusto & Co., Yinka Adelekan, emphasised the importance of fostering a deeper understanding of Nigeria’s economic realities and leveraging credible insights to drive sustainable growth.

    “As Nigeria navigates an evolving economic climate, businesses and policymakers must engage in meaningful dialogue,” Adelekan said. “This economic roundtable provides an essential platform to navigate the challenges and opportunities ahead, shaping our collective economic future.”

    Also expressing his optimism about the potential of Nigeria’s recent economic reforms, the chairman of the event, Fola Adeola, stated that “The unification of exchange rates and the removal of subsidies are bold and necessary steps towards a stronger economy. Now, the focus must be on effectively implementing these policies to ensure they deliver significant benefits for all Nigerians.”

    How rebasing will turn Nigeria’s debt-to-GDP ratio to slow to 40%

    Nigeria’s plans to rebase its economy could potentially see its rising debt as a share of gross domestic product (GDP) fall to at least 40 percent, a situation that could increase fiscal sustainability.

    “Whilst Debt to GDP for Nigeria was 56.23% as at June 2024, the recent GDP rebasing exercise is expected to push this ratio to 40% area, thus providing a suitable debt sustainability buffer,” Lagos-based Renaissance Capital Africa said in a report.

    The investment bank and research firm noted that Nigeria has a low government revenue as a percentage of GDP which stood at 14 percent, placing it amongst the weakest globally. “The ratio will shrink with the GDP rebasing.”

    The country is expected to release reports from its consumer price index (CPI) and GDP exercise due last month in a move to put into account certain developments given the current realities after over a decade left unrevised.

    The National Bureau of Statistics had in a session in January said the revaluation of the country’s economy will see tax-to-GDP and debt-to-GDP ratios decline, allowing for more fiscal balance while per capita income which is about $877 will improve.

    In its report, Renaissance Capital Africa said Nigeria’s debt levels appear to be relatively okay using the International Monetary Fund (IMF) standards. It however warned that the conventional IMF measures are not a true reflection of debt sustainability.

    Data from the Debt Management Office (DMO) revealed that Nigeria’s debt stock increased by N8.02 trillion to N142 trillion in the third quarter of 2024, representing a 5.97 percent increase from N134.3 trillion recorded between April to June last year.

    The continued surge in debt, experts say, is driven by the depreciation of the naira that has continued to affect the country’s cost of external obligations.

    “Nigeria’s debt position continues to expand as a policy of borrowing to spark growth is pursued. Whilst positive in the short term, the rapid expansion of both external and domestic debt is happening at relatively high rates given current global and domestic macroeconomic conditions,” Renaissance Capital Africa said.

    The report made known that the country’s rising debt is exacerbated as a result of constrained revenue growth — lower collections from oil and non-oil sources — higher Federal Government aggregate expenditure, and the result is continued deficit financing.

    While Africa’s most populous nation is grappling with piling external obligations that are tanking its net reserves, its debt service pressures are mounting.

    According to the report, the pressures on debt service have been evident since 2023, with debt service to federal government revenue surpassing 100 percent in 2023 and expected to remain in the same context in 2024.

    The rate of growth is also rapidly expanding with debt service as of June 2024 rising by 38 percent to N3.419 trillion from N2.479 trillion as of March 2024.

    “As borrowing by the Federal Government, its Ministries and Agencies increases, the velocity of increase is expected to also expand.

    “There is certainly a need to reduce borrowing – particularly from commercial and bilateral sources, increase revenue and allow more equity participation in infrastructure projects,” it said.

    Turning the tides lies in shooting up the revenue base and lowering recurrent expenditure as this will allow for less new issuance and the early prepayment of highly priced loans in the immediate term.

    “The ability to also reduce dependence on both domestic and international funding markets also arises from higher revenues,” the report stated.

    “This is however a medium-term structural focus and in the short term the pressures are very evident. There is a need to reduce debt service, and this can be done conventionally (debt re-profiling) or non-conventionally (financial repression) with each solution impacting investor classes differently.”

  • Manufacturers’ CEOs confidence in economy rises

    Manufacturers’ CEOs confidence in economy rises

    The confidence of Chief Executive Officers (CEOs) of Manufacturers Association of Nigeria (MAN) on the economy showed moderate improvement, rising to 50.7 points in Q4 2024.

    MAN CEO Confidence Index (MCCI) report released yesterday said despite the prevailing macroeconomic and operational challenges manufacturing companies in Nigeria faced, the CEOs remained resilient.

    According to the report, the CEOs’ resilience was revealed by the tepid rise of 0.5 point in the MCCI from 50.2 points in Q3 2024 to 50.7 points in Q4 2024

    MAN Director-General, Mr. Segun Ajayi-Kadir said the moderate improvement in the Aggregate MCCI was the first since Q1 2024.

    MAN created the MCCI as a gauge for assessing quarterly shifts in manufacturing activities, influenced by macroeconomic trends and government policies.

    MCCI is, therefore, the barometer used by MAN to garner the perceptions of CEOs of manufacturing companies on the impact of changes in the economy on manufacturing operations.

    Ajayi-Kadir said a breakdown of the diffusion indices for Q4 2024 revealed that all current indices recorded improvement due to seasonal demand and relative stability in the exchange rate during the period.

    He, however, said they remained below the 50-point benchmark. “The report also confirmed a downward review of manufacturers’ expectation for the first quarter of 2025 due to the prolonged harsh macroeconomic environment and the predicted slowdown of business activity in the first month of 2025,” he said.

    Nevertheless, the projected indices, according to Ajayi-Kadir, remained above the 50-point threshold due to the expectations of a more stable exchange rate, halt in interest rate hikes, minimal decline in energy prices and the enactment of favourable Tax Reform Bills by Q1 2025.

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    The MAN DG noted that sectoral breakdown of the report revealed that the confidence indices of three Sectoral Groups contracted while seven Sectoral Groups witnessed improvement in confidence levels. However, two of the seven Sectoral Groups dipped below the 50-point threshold.

    The zonal breakdown also showed that five Industrial Zones recorded confidence indices below 50 points, while nine performed above the threshold. However, four of the nine Industrial Zones recorded contracted indices.

    Ajayi-Kadir said against the backlashes of the macroeconomic environment in 2024, “this report ends on a moderate expectation for 2025. In specific terms, the manufacturers’ outlook for 2025 stands at the crossroads of optimism and reality checks.”

    The MAN boss, while pointing out that 2025 is a pivotal year and the outcome will be crucial for this most significant sector, however, said exorbitant electricity tariff hike, high exchange rate, multiple taxation, high interest rate, low credit access and insecurity remain some of the top challenges of manufacturers.

    “The challenges are clear. Macroeconomic reforms must involve actionable plans that take precedence over rhetoric,” he stated.

    He insisted that the President’s ambitious goal of taming inflation down to 15 per cent and stabilizing the naira at N1, 500/$ must be pursued by clearly defined and easily assessable actions, with appropriate timelines.

    Ajayi-Kadir this year is a critical period where government must lead by example by intentionally ramping up domestic industrial production and patronizing Made-in-Nigeria to further reduce the forex demand pressure.

    To boost Nigerian’s trust in locally made products, he said government Ministries, Departments and Agencies (MDAs) must demonstrate by leading the charge and making Nigerian products their first choice.

    Ajayi-Kadir expressed confidence that the restoration of macroeconomic stability can become a reality. He, however, stated that this will depend on a number of factors, including a more stable exchange rate, reliable energy supply, and relaxation of monetary policy stance.

    Other factors, according to him, include complete disbursement of intervention funds, further improvement in the fight against insecurity and the effective implementation of the Tax Reform Bills as well as the National Single Window Project.

  • FG unveils bold maritime reforms to boost economy, create 20,000 jobs

    FG unveils bold maritime reforms to boost economy, create 20,000 jobs

    The federal government is ramping up efforts to position Nigeria’s maritime sector as a key engine of economic growth, aligning with Africa’s Agenda 2063.

    Minister of Marine and Blue Economy, Adegboyega Oyetola, disclosed this during an interactive session with the Nigerian Guild of Editors (NGE) on Thursday in Lagos, highlighting the ministry’s ongoing reforms and infrastructure projects. 

    A major highlight of Oyetola’s address was the modernisation of Nigeria’s key ports.

    “The federal government has approved the award of contracts for the modernisation of the Western Ports, including the Lagos Ports Complex, Apapa, and Tin Can Island Port Complex,” he revealed.

    He further noted that efforts to fast-track the procurement process for the modernisation of the Eastern Ports are underway.

    “These projects will generate over 20,000 jobs, further reinforcing the maritime sector’s role in national prosperity,” he added. 

    Beyond modernisation, the government, the Minister said, is investing in new port projects across the country, including Badagry, Ilaje, Olokola, Agge, Ibaka, Burutu, Snake Island, and Bakassi Deep Seaports. Inland trade, he noted, is also receiving a boost with the commissioning of the Funtua Inland Dry Port in Katsina and operational support from Kaduna and Kano facilities, while similar projects in Abia, Plateau, and Borno are in various stages of completion. 

    Oyetola emphasised that recent policy reforms have led to a significant increase in export volumes, as reported by the National Bureau of Statistics (NBS).

    “We are seeing positive trade balances due to improvements at the export terminals,” he stated. 

    A key initiative driving these improvements is the National Single Window (NSW), a digital platform designed to simplify compliance processes and enhance port connectivity.

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    “To complement this, we are finalising the Port Community System, an electronic platform that centralises and automates all port-related processes, creating a one-stop shop for stakeholders,” the Minister explained. 

    He underscored Nigeria’s success in tackling piracy, with the country recording zero piracy incidents for three consecutive years in the shipping lanes of West Africa and the Gulf of Guinea.

    “This is a result of the Deep Blue Sea Project and Falcon Eye Surveillance Systems, which provide advanced surveillance and rapid response capabilities,” he said. 

    In a bid to strengthen Nigeria’s influence in global maritime governance, President Bola Tinubu, Oyetola said, has approved the country’s candidacy for a Category C seat in the International Maritime Organisation (IMO).

    “We have officially notified the IMO and commenced the necessary preparations for the election,” he confirmed.

    Oyetola also announced progress on the long-awaited Cabotage Vessel Financing Fund (CVFF), which is set to be disbursed soon.

    “NIMASA and other stakeholders are finalising the framework, and Development Banks will oversee disbursements,” he assured. 

    The Minister highlighted strides in Nigeria’s fisheries and aquaculture sector, including 100% compliance during the Turtle Excluder Devices (TEDs) certification exercise conducted by the U.S. Department of State in 2024. He also revealed plans to replicate the Oyan Dam Cage Culture model nationwide in collaboration with the Federal Ministry of Water Resources and Sanitation. 

    In addition, the National Institute of Oceanography and Marine Research (NIOMR), he stated, is spearheading efforts to map the nation’s marine resources, paving the way for sustainable exploration and utilisation.  

    The Ministry’s reforms have also translated into a 77 percent increase in government revenue between January and November 2024.

    Oyetola noted that the Presidential Enabling Business Environment Council (PEBEC) recognised the Ministry’s outstanding performance during the 120-Day Regulatory Reform Accelerator (RRA) in 2024, awarding it a commendation letter. 

    Acknowledging the role of the media in driving awareness and accountability, Oyetola called for a stronger partnership with journalists in advancing the ministry’s mandate.

    “This engagement is not just about presenting our achievements; it is about fostering dialogue and building partnerships,” he told the editors. 

    NGE President, Eze Anaba, commended the Ministry’s efforts, expressing confidence in Oyetola’s leadership.

    “The Minister’s antecedents in the private sector and as Governor of Osun State are pointers to the fact that the marine and blue economy sector will enjoy robust progress under his leadership and guidance,” he remarked.

    Anaba also observed that the engagement will enable both parties to forge mutual understanding and identify and address key concerns while exploring innovative solutions that would propel the marine industry forward.