Saturday, April, 2021 08:00 AM / Proshare Content / Header Image Credit: EcoGraphics
Nigeria: Economic Dashboard @ 090421
Source: Proshare Research - April 10, 2021
- In the first quarter of 2021, the Ports and Terminal
Multiservices Limited Command of Nigeria Customs Service stated that it
recorded total revenue of N46.85bn in the first quarter of 2021 which is +3.19% higher
than N45.4bn collected in Q1 2020. A breakdown of the monthly collection
reveals that the sum of N15.21bn was collected in January 2021 while in
February and March the amount collected was N11.71bn and N19.94bn,
- According to the Fiscal Responsibility Commission's
Debt sustainability analysis of state governments', the debts of Lagos,
Osun, Cross River, and Ogun state exceeded their net revenues by more than
400% in 2019. It reported that all 36 states and FCT exceeded the DMO
threshold of 50%. Lagos State recorded the highest Debt-to-Total Net
Revenue as of the end of 2019, with 712.94% while Osun, Cross River, and
Ogun State recorded Debt-to-Total Net Revenue of 650.94%, 597.36%, and
402.3% respectively. Furthermore, the commission noted that it cannot be
concluded that such states have overborrowed, as the overall debt limits
of the governments in the federation has not been set. According to FRC
â€œIt is on record that the overall limits of consolidated debts of federal,
states and local governments are yet to be set since the enactment of the
Fiscal Responsibility Act, 2009, though the commission has continually
engaged the Honourable Minister(s) of Finance, Budget and National
Planning on the issueâ€.
- The International Monetary Fund (IMF) in its World
Economic Outlook update released made an upward adjustment of Nigeria's
growth forecast for the Nigerian economy in 2021 to +2.5% from
its earlier projection of +1.5%
it announced in January. The
new growth projection is 1.0 percentage points higher than the
multilateral institution's 2021 forecast in January. It should be noted
that the Nigerian economy exited recession in the fourth quarter of 2020
with a modest growth of +0.11%.
- The Board of Directors of the World Bank has approved a
$500m loan to Ethiopia's government. The financing would be provided via
the bank's subsidiary, the International Development Association (IDA).
The funds will enable the Ministry of Water, Irrigation, and Power to
Implement its Access to Distributed Electricity and Lighting in Ethiopia
(ADELE) project. The ADELE project is a component of Ethiopia's National
Electrification Programme (NEP). The project is being implemented by the
Ethiopian Electric Utility and aims to provide universal electricity to
Ethiopians by 2025.
- According to the Federal Statistical Office (Destatis),
Germany recorded a budget deficit of 189.2bn euros in 2020, the first
deficit since 2013 and the highest since German reunification after
recording a surplus of 45.3bn euros. It was revealed that spending by the
federal and state governments, municipalities, and social security funds
increased by +12.1% in 2020 compared to 2019, as the state attempted to
cushion the financial fallout of the pandemic. In total, the federal
government paid out around 17.8bn euros to the federal states, which was
then passed on as coronavirus aid to small businesses and self-employed
workers. At the same time, state revenue fell by -3.5% to
around 1.5trn euros last year. The main reason for this was that income
from taxation and tax-like charges fell by -3.8%.
- IMF has predicted that the stronger recoveries from the
coronavirus pandemic in the US, the UK, and other rich western countries
will result in faster than expected growth for the global economy. After
contracting by -3.3% in 2020, the IMF has projected that the global economy
would grow by +6% in 2021 and a further +4.4% in 2020. It had
initially predicted an expansion of +5.2% in 2021 and +4.2% in October
2020. The October forecast for 2021 was later upgraded to +5.5%
growth in January 2021. It noted that successful vaccine programs,
businesses adapting to the challenges of lockdown, and Joe Biden's $1.9trn
stimulus package were key factors in the upgrade.
- The executive board of the International Monetary Fund
approved the third tranche of grants for debt service relief for 28 member
countries under the Catastrophe Containment and Relief Trust.
This approval followed two prior tranches approved on April 13, 2020, and
October 2020, respectively. It enabled the disbursement of grants from the
CCRT for payment of all eligible debt services falling due to the IMF from
its poorest and most vulnerable members from April 23, 2021, to October
15, 2021, estimated at SDR 168 ($238m). This tranche of grants for debt
service relief would continue to help free up scarce financial resources
for vital emergency health, social, and economic support to mitigate the
impact of the coronavirus pandemic.
- The Caixin/Markit services Purchasing Managers' Index
(PMI) for China rose to 54.3, the highest since December, from 51.5 in
February. This indicates that recovery in China's services sector
picked up speed in March as firms hired more workers and business optimism
surged, although inflationary pressures remained. Firms reported the
sharpest increases in activity and overall sales in three months. New
export business continued to contract but at a slower pace. A sub-index
for employment rose back into positive territory as businesses hired more
price of Nigeria's Bonny Light, on Monday, dropped to $61.54 per barrel
over fears of Coronavirus pandemic resurgence in India, a major importer
of the nation's crude. Brent crude, which is hovering around $60per barrel
had continued to push Nigeria's revenue upward. Using that average, oil
revenue in February stood at $2.39bn compared to the budgeted revenue of
Monday, Centre for Peace and Environmental Justice insisted that Chevron's
claim that the oil spill between Otunana and Abiteye at NANA River was not
from its assets, was not tenable.
Wednesday, NNPC signed the contract with Tecnimont SPA for the $1.5bn
rehabilitation programme of the PHRC. The contract covers the provision of
engineering, procurement, construction, installation, and commissioning
services for the refinery rehabilitation project.
- On Thursday, Nigeria Customs Service reported
that massive fuel smuggling persists amid opposition to border restriction
by borderline communities.
yearly payment to the Nigerian govt hit six-year low ($3.24bn) despite
being the highest among its 24 countries hosts.
- On Friday, NNPC announced plans to resume active oil
exploration in Sokoto Basin. Other areas to be explored are Benue Trough,
Chad Basin, and Bida Basins.
oil marketers projected that a persistent fall in global oil prices could
lead to a reduction in petrol pump prices although subject to foreign
- The international oil
benchmark, Brent crude, fell the most in nearly two weeks on Monday.
Reasons are growing delays in Europe's reopening (UK delay in global
travel), Italy extended restrictions, and looming Iranian supply against
the US sanction.
- Oil prices traded up on
Wednesday as fears in the market calmed regarding additional supplies that
might be brought onto the market should the talks over the Iranian nuclear
deal end with lifting U.S. sanctions, increased COVID-19 vaccinations, and
report that crude inventories in the US fell.
companies in the oil and gas field have started recording positive results
in the first quarter of 2021 thanks to the strong rally of crude oil in
the international market.
Mexico will establish a statewide community solar program. The community
solar allows electricity customers to opt into solar power from a shared
facility larger than residential solar panels but smaller than a
utility-scale solar farm. The purpose is to reduce pollution in its energy
sectors by increasing use and access to solar power instead of fossil
fuels like oil and gas.
prices were little changed on Thursday as a falling dollar and rising
stock markets offset earlier declines caused by a big increase in U.S.
gasoline stockpiles and subdued demand compared with pre-pandemic levels.
prices trimmed down on Friday as investors considered rising supplies from
major producers and the impact on fuel demand from the COVID-19 pandemic.
is paying a high price for its unofficial ban on coal imports from
Australia, with the cost of domestic and alternative foreign supplies
rising for both thermal and coking grades of the fuel.
- Brent had a weekly decline of -1.98% (see Table 1).
appreciated by 0.76% as the US dollar
and Treasury yields pulled back from recent highs, while Silver also gained
by 1% W-o-W (see Table 1).
- On Tuesday, the insurers of agricultural commodities
stated that the percentage of smallholder farmers that produce over 98 per
cent of food consumed across the country who have access to agricultural
insurance in Nigeria was less than five percent.
- Cocoa prices grew by -2.37% this week.
- Corn prices grew by 5.98% W-o-W while Sugar also
appreciated by 1.98% (see Table 1).
Table 1: Weekly Change in Commodity Prices
Source: Bloomberg, Proshare Research
*Data for 9th Apr 2021 is as of 5:27pm (Nigerian
- In the
coming week, oil prices are expected to decline marginally on rising supplies
from major producers and concerns over the COVID-19 pandemic's impact on fuel
prices are expected to be mixed in the coming week, with a rise in bond yields
likely to put renewed pressure as well as the strengthening dollar.
prices to decline next week on production surplus.
prices are expected to dip next week due to the lack of demand and oversupply.
prices are expected to rise in the coming week on strong demand by China.
Nigerian Capital Market
- The Nigerian bourse closed the week
negative with a decline
of -0.13%. The Nigerian Stock Exchange lost N26.33bn in Market capitalization W-o-W while YTD return and market capitalization currently stands
at -3.49% and N20.34trn respectively.
- The volume
and value of stocks traded on the exchange this week declined by -32.90% and
-44.70% respectively. A
total turnover of 887.04m shares worth N9.19bn in 17,837 deals was traded
this week by investors on the floor of the Exchange.
in the top three equities by volume were ZENITHBANK,
for 259.25m shares worth N4.82bn
in 4,970 deals, contributing 29.23%
and 52.41% to the total equity turnover volume and
across sectors tracked was broadly negative this
week as the NSE Consumer Goods Index was the highest gainer for the week with +1.12% while
NSE-30 recorded the highest loss for the week with -10.83%,
NSE Banking, NSE Insurance, NSE-IND and NSE Oil & Gas declined by -2.25%,
and -0.31% respectively.
- Market breadth was negative for
the week with 17 gainers led by JAPAULOIL and HMARKINS
as against 40 losers led by GUINNESS and STERLING
Chart 1: Movement of
NSEASI Index Points 01 Apr. 2021 - 09 Apr. 2021
Source: NSE, Proshare Research
The NASD OTC Security Index (NSI) and Market
Capitalization closed the trading week with a positive movement in Market
capitalization and NSI. The NSI and Market capitalization closed the week at
755.84 points and N537.26bn with a growth of +1.44% and +1.44% respectively.
Dangote and Toni Index
Dangote Index closed the week positive with
113.99 basis points from 114.01 basis points recorded the previous week, a
decline of -0.02%.
DANGCEM and NASCON closed flat WoW,
while DANGSUGAR dipped by -0.29% WoW. DANGSUGAR recorded the highest
Table 2: Dangote Index W-o-W Change
Furthermore, the Toni Index closed negative
with 86.98 basis points from 87.73 basis points recorded the previous week, a
W-o-W decline of -0.85%.
UBA, TRANSCORP and UBCAP closed the week negative with -0.71%, -2.44% and -1.82% respectively, AFRIPRUD closed positive WoW with +1.89% while TRANSCOHOT closed flat WoW.
Table 3: Toni Index W-o-W Change
the full-year 2020 corporate earnings season has come to an end; as we advance
further into Q2 2020, we expect investors to be cautious of Q1 2020 corporate
earnings, press releases from listed companies and macroeconomic developments
to make investment decisions.
addition, we expect investors' to monitor the movement of yields in the fixed
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