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Nigeria’s manufacturing sector records 88.2% increase in capital imports

Published

1 year ago

November 18, 2023

During the first half of the year ending June 30, 2023 (H1’23), there was an 88.17% year-on-year increase in capital inflow into Nigeria’s manufacturing sector.

Data from the National Bureau of Statistics (NBS) revealed that investment in the sector increased from $457.66 million in H1’22 to $861.17 million in H1’23.

Additionally, the data demonstrates that during the six months, the manufacturing sector’s share of total capital inflow increased by 25.08 percentage points, from 14.73% in H1’22 to 39.81% in H1’23. In H1’23, the total amount of capital imported was $2.163 billion.

The sector’s inflow rose 136.2% on a quarter-over-quarter basis in Q2’23, reaching $605.04 million from $256.12 million in Q1’22. In Q2 2023; this also accounted for 58.73% of all capital imports.

According to the sectoral breakdown, the manufacturing sector saw the largest inflow during that time, coming in second with $499.14 million, followed by the banking sector.

Economic and investment strategist, Ayorinde Akinloye commented on the development, expressing surprise at the increase in capital flowing into the manufacturing sector and claiming it was more of an anomaly.

He stated, “I don’t think there’s a broad economic explanation for what happened. It is likely a situation whereby a major piece of equipment was imported into the sector. You will recall that sometime in 2018, Aliko Dangote imported one piece of equipment for his refinery, which boosted imported capital and foreign trade at that time. That may be what also happened in this case.”

Akinloye, however, said that the fact that the surge seen during the period was an outlier would make it difficult to sustain the trend as we advance.

“The economic fundamentals that should aid improvement in capital importation through production and manufacturing are not there. Foreign exchange (forex) remains a problem; the business operating environment also remains quite difficult,” he said.

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

8 hours ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

VenturesNow

Libya’s eastern govt accepts petrol subsidy elimination

Published

9 hours ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.