Business
IMF ranks Nigeria’s economy 26th globally, biggest in Africa
- USA leads 10 largest world economies with $19.4tn GDP
Nigeria maintains its lead as the biggest economy in Africa, in terms of Gross Domestic Product (GDP) of $442.9bn, the latest report of the International Monetary Fund has revealed.
The IMF, in its recently released World Economic Outlook, ranked Nigeria the 26th largest economy, with an average GDP of $442.976 billion.
The United States remains the biggest world economy with $19.48tn GDP; followed by China, $12.23tn; Japan, $4.87tn; Germany, $3.69tn; India, $2.65tn; United Kingdom, $2.63tn; France, $2.58tn and Brazil in 10thh position with $2.05tn GDP.
The figures were based on nominal GDP, which do not take into account differences in the cost of living in different countries.
South Africa’s GDP put at $358.839bn is the second biggest economy in Africa; Egypt has $302.256bn GDP; Algeria, $172.781bn; Morocco, $119.04bn and Kenya’s GDP is put at $99.246bn.
Nigeria’s GDP is mainly driven by abundant crude oil, finance, transport and infrastructure.
The country records around 1.6 million barrels of crude oil a day, according to OPEC, making it the largest exporter of crude oil in Africa. The petroleum exports make up 10 per cent of the total GDP and over 80 per cent of the export sector revenue.
Notwithstanding the rankings, the IMF has just returned a gloomy verdict on the Nigerian economy for 2020, noting that the outlook was challenging.
The multilateral institution, in its recently released 2020 Article IV Consultation on Nigeria, had stated that the country’s economy “is buffeted from side to side by a cocktail of issues, including the uncertainty over the COVID-19 pandemic, low oil prices, capital outflows and balance of payment challenges.”
The IMF stated, “The COVID-19 global pandemic is exacting a heavy toll on the Nigerian economy, which was already experiencing falling per capita income and double-digit inflation, with limited buffers and structural bottlenecks.
“Low oil prices and sharp capital outflows have significantly increased balance of payments (BOP) pressures and, together with the pandemic-related lockdown, have led to a large output contraction and increased unemployment.”
The IMF said supply shortages had pushed up headline inflation to a 30-month high.
It said, “Under current policies, the outlook is challenging. Real GDP is projected to contract by 3¼ per cent in 2020. The recovery is projected to start in 2021, with subdued growth of 1½ per cent and output recovering to its pre-pandemic level only in 2022.”
Although the IMF report acknowledged the efforts of the Central Bank of Nigeria to rein in inflation, it maintained that despite an expected easing of food prices, inflation would remain in double digits and above the CBN’s target range.
“Following a significant decline in revenue collections – from levels that were already among the lowest in the world – fiscal deficits are projected to remain elevated in the medium term,” the report stated.
The IMF believes there is a need to put in place more broad market reforms in order to address the pressing balance of payment pressures in Nigeria.
Business
Forex: FG to delist naira from P2P platforms
Forex: FG to delist naira from P2P platforms
The Federal Government is set to delist the naira from all Peer-to-Peer platforms to reduce the manipulation of the local currency value in the foreign exchange market.
Director General of the Securities and Exchange Commission, Emomotimi Agama, made this known on Monday at a virtual conference with blockchain stakeholders.
The goal of this resolution is to combat manipulation of the value of the local currency in the foreign exchange market.
In past months, the nation’s regulatory bodies have started looking into and closely examining cryptocurrency exchanges.
This is part of a number of regulations to be rolled out in the coming days.
He said, “That is one of the things that must be done to save this space. The delisting of the naira from the P2P platforms to avoid the level of manipulation that is currently happening.
“I want your cooperation in dealing with this as we roll out regulations in the coming days.”
The SEC DG decried how some market players were manipulating the value of the naira.
This, he said, was why the commission was “seeking collaboration and help in making sure that the crypto environment is respected globally”.
Business
Ikeja Electric cuts tariff for Band A customers
Ikeja Electric cuts tariff for Band A customers
The Ikeja Electricity Distribution Company has announced a reduction in the tariff for customers under Band A classification from N225 per kilowatt-hour to N206.80kw/h
This is coming about a month after the Nigerian Electricity Regulatory Commission (NERC) approved an increase in electricity tariff for customers under the Band A category to N225 per kwh — from N66.
The commission has clarified that customers under Band A receive between 20 and 24 hours of electricity supply daily.
Ikeja Electric said in a circular on Monday the cut in the new tariff rate would take effect from May 6, 2024.
Business
Finally, NERC unbundles TCN, creates new system operator
Finally, NERC unbundles TCN, creates new system operator
The Nigerian Electricity Regulatory Commission (NERC) has set up the Nigerian Independent System Operator of Nigeria Limited (NISO) as it unbundles the Transmission Company of Nigeria (TCN).
The transmission leg of the power sector has over the years been seen as weakest link with obsolete equipment.
The unbundling announcement is contained in an Order dated April 30, 2023 and jointly signed by NERC chairman, Sanusi Garba, and vice chairman, Musiliu Oseni.
By this order, the TCN is expected to transfer all market and system operation functions to the new company.
The commission had previously issued transmission service provider (TSP) and system operations (SO) licences to the TCN, in accordance with the Electric Power Sector Reform Act.
The Electricity Act 2023, which came into effect on June 9, provided clearer guidelines for the incorporation and licensing of the independent system operator (ISO), as well as the transfer of assets and liabilities of TCN’s portion of the ISO.
In the circular, the commission ordered the Bureau of Public Enterprises (BPE) to incorporate, unfailingly on May 31, a private company limited by shares under the Companies and Allied Matters Act (CAMA), 2020.
NERC said the company is expected “to carry out the market and system operation functions stipulated in the Electricity Act and the terms and conditions of the system operation licence issued to the TCN.
“The name of the company shall, subject to availability at Corporate Affairs Commission, be the Nigerian Independent System Operator of Nigeria Limited (“NISO”),” NERC said.
Citing the object clause of the NISO’s memorandum of association (MOU) as provided in the Electricity Act, NERC said the company would “hold and manage all assets and liabilities pertaining to market and system operation on behalf of market participants and consumer groups or such stakeholders as the Commission may specify.”
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