Nigeria's Economy slips into recession

Nigeria has slipped into recession, with the latest growth figures showing the economy contracted by 2.06% between April and June.


The country has now seen two consecutive quarters of declining growth, the usual definition of recession.
Its vital oil industry has been hit by weaker global prices, according to the Nigerian Bureau of Statistics (NBS).

Crude oil sales account for 70% of government income.
The price of oil has fallen from highs of about $112 a barrel in 2014 to below $50 at the moment.

Outside the oil industry, the figures show the fall in the Nigerian currency, the naira, has hurt the economy. It was allowed to float freely in June to help kick-start the economy, but critics argued it should have been done earlier.

Nigeria, which vies with South Africa for the mantle of Africa's biggest economy, is also battling an inflation rate at an 11-year high of 17.1% in July.
"A lot of Nigeria's current predicament could have been avoided," said Kevin Daly from Aberdeen Asset Management.

"The country is so reliant on oil precisely because its leaders haven't diversified the economy.
"More recently, they have tried, and failed, to prop up the naira, which has had a ruinous effect on the country's foreign exchange reserves and any reputation it might have had of being fiscally responsible."

Analysis: Martin Patience, BBC Nigeria correspondent
This economic recession comes as no surprise to millions of Nigerians. Many say they've never known it so tough.
The slump in global oil prices has hit Nigeria hard. The government depends on oil sales for about 70% of its revenues.

But critics say government policies made a bad situation even worse. The decision to delay devaluing Nigeria's currency meant many businesses struggled to get foreign currency to pay for imports, which had a cooling effect on the entire economy.

Following enormous pressure, the government changed tack this summer, allowing the naira to float.
That's led to a spike in inflation, but the hope is that it will attract foreign investors. The government also says the country needs to import less: it wants to see more products made in Nigeria.

Source: BBC

4.58 million Nigerians became jobless under Buhari's administration

The Nigerian Bureau of Statistics (NBS) says the total number of Nigerians who became unemployed within the first and second quarter of 2016 now stands at 2.6 million.

According to the bureau, about 1.46million Nigerians became unemployed in the third quarter of 2015, while another 518,102 became unemployed in the fourth quarter of 2015.

This brings the total freshly unemployed persons in the economy to a record high of 4,580,602, since President Muhammadu Buhari took office in May 2015.

In its second quarter unemployment and underemployment report released on Wednesday, NBS said the country’s unemployment rate grew from 12.1 percent in the first quarter of 2016 to a record high of 13.3 percent in the second.

“During the reference period, the number of unemployed in the labour force increased by 1,158,700 persons, resulting in an increase in the national unemployment rate to 13.3% in Q2 2016 from 12.1 in Q1 2016, 10.4% in Q4 2015 from 9.9% in Q3 2015 and from 8.2% in Q2 2015,” NBS said.

“In view of this, there were a total of 26.06 million persons in the Nigerian labour force in Q2 2016, that were either unemployed or underemployed compared to compared to 24.5 million in Q1 2016and 22.6 million in Q4 2015.”

The economically active population or working age population (persons within ages 15- 64) increased from 106million in Q1 2016 to 106.69 million in Q2 2016, the report added.

Underemployment in the economy was also on the rise, with 15.4 million Nigerians said to be underemployed.

“The number of underemployed in the labour force (those working but doing menial jobs not commensurate with their qualifications or those not engaged in full-time work and merely working for few hours) increased by392,390 or 2.61%, resulting in an increase in the underemployment rate to 19.3 % (15.4million persons) in Q2 2016 from 19.1% (15,02 million persons) in Q1 2016, 18.7% (14.42 million persons) in Q4 2015, from 17.4% (13.2 million persons) in Q3 2015 and 18.3% (13.5 million persons) in Q2 2015.

”There were a total of 26.06 million persons in the Nigerian labour force in Q2 2016, that were either unemployed or underemployed compared to compared to 24.5 million in Q1 2016 and 22.6 million in Q4 2015.

Source: Nairaland.com

CBN reinstate 9 banks suspended from FOREX market

The Central Bank of Nigeria ( CBN ) has reinstated the nine banks that were recently suspended from the foreign exchange market.

They were suspended last week for failing to remit about$ 2.3 billion funds of the Nigerian National Petroleum Corporation (NNPC) to the Treasury Single Account (TSA) of the federal government

The CBN Director of Banking Supervision, Mrs. Tokunbo Martins, who announced the reinstatement in Abuja , Wednesday, explained that the apex bank took the decision after the banks presented repayments plans.

See list of the banks barred from forex transactions


United Bank for Africa (UBA) -$530m;

First Bank of Nigeria (FBN)- $469m;

Diamond Bank Plc-$287m;

Sterling Bank Plc-$269m;

Sky Bank Plc -$221m;

Fidelity Bank -$209m;

Keystone Bank- $139;

First City Monument Bank (FCMB) -$125m;

and Heritage Bank-$85m, totaling .