VenturesNow

Nigeria’s state of business will shortly improve— Central Bank Report

Published

1 month ago

August 22, 2024

The Central Bank of Nigeria’s Business Expectations study has revealed that business owners are confident that business conditions will improve in August 2024 and the following six months.

The optimism score for business owners was 7.6 points, indicating stronger performance in August. Business optimism was 19.3 points for the next three months and 30.7 for the next six months, according to the apex bank.

“Similarly, the outlook for next month, next three months, and next six months all indicated optimism with indices of 7.6, 19.3, and 30.7 points, respectively,” the report read.

It said Mining, Quarrying, Electricity, Gas & Water Supply, Agriculture, Market Services, Manufacturing, and Non-Market Services will boost macroeconomic optimism.

It stated, “The expected drivers for the optimism on the macroeconomy in the next month are Mining, Quarrying, Electricity, Gas & Water Supply (35.3 points), Agriculture (9.9 points), Market Services (7.8 points), Manufacturing (6.3 points), and Non-Market Services (4.8 points).

“Respondents indicated optimism on the overall business outlook in July 2024, as the business conditions in Nigeria are expected to improve. This optimism is driven by the opinion of respondents from the Agriculture Sector.

“Respondents’ outlook for the next month, next 3 months, and next 6 months all indicated optimism. The positive outlook in the volume of business activities of the firms in the next month implied improved prospects for employment in the same period. The sector with the highest prospect for employment is the Agriculture Sector, followed by the Industry and Services sectors.

“The respondent firms opined that insecurity was the major factor constraining the business activity in July 2024. Other constraining factors are high interest rate, insufficient power supply, and high/multiple taxes. Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under

review. Respondents also opined that the current inflation rate of 34.19 is too high.”

The total confidence index in July 2024 was 0.1 points, a decrease of 3.0 points from the confidence levels attained in June 2024.

Click to comment

VenturesNow

Zambia eyes recovery following worst drought

Published

14 hours ago

September 28, 2024

Ifeoluwa Dada

As it emerges from its worst drought in living memory, Zambia hopes to achieve a fast recovery in economic growth and a halving of its budget deficit in the following year, the country’s finance minister announced on Friday.

In contrast to a projected 2.3% growth in 2024, the copper producer aims for 6.6% growth in 2025, according to Finance Minister, Situmbeko Musokotwane, in a budget speech.

The El Nino-caused drought destroyed Southern Africa’s crops, resulting in food shortages and harming the region’s economic prospects this year.

Zambia’s finance minister said on Friday that the nation, which is coming out of the worst drought in living memory, intends to quickly recover economic growth and cut its budget deficit in half the next year.

Finance Minister Situmbeko Musokotwane stated in a budget address that the copper producer is targeting 6.6% growth in 2025 as opposed to a projected 2.3% increase in 2024.

A UNICEF study in March 2024 states that the majority of the country’s central and southern regions have been impacted by the dry spell since mid-January. These regions have gotten less rainfall than usual, which has resulted in the destruction of one million hectares of maize—nearly half of all the corn grown in the nation.

Since hydropower generates more than 80% of Zambia’s electricity, the analysis also predicted that the drought would cause a power shortage of 430 megawatts and have an impact on surface and groundwater levels. These projections would have serious ramifications for industries other than agriculture.

The minister further stated that following the conclusion of a Eurobond restructuring exercise, Zambia was still negotiating restructuring arrangements with certain commercial creditors.

He reported that the China Development Bank and the Industrial and Commercial Bank of China have just struck provisional restructuring agreements with Zambia.

It has been demonstrated that the agreements are in line with Zambia’s IMF program and the “Comparability of Treatment principle,” which aims to prevent the wealthier creditor nations that make up the Paris Club from making disproportionate concessions in comparison to other creditors.

The lengthy debt restructuring process in Zambia has hurt local financial markets and discouraged investment.

VenturesNow

Ghana central bank cuts key rate as inflation cools

Published

1 day ago

September 27, 2024

Ifeoluwa Dada

The governor of Ghana’s central bank has stated that the country’s economy is still recovering strongly and that inflation is continuing to decline, causing the bank to drop its main interest rate by 200 basis points to 27%. This was the first rate cut since January.

At a press conference Friday, Bank of Ghana Governor Ernest Addison stated that economic indicators point to a proceeding disinflation, with price increases continuing to moderate in the direction of the year’s short-term range target of 13% to 17%.

“Such a strong signalling of the monetary policy rate by reducing it by 200 basis points tells you that the central bank is quite satisfied with the progress of recovery of this economy,” Addison said, adding that all indicators including growth, inflation and fiscal policy are improving.

According to Reuters polled economists in July, Ghana’s interest rate is predicted to drop by 200 basis points by year’s end.

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Following the completion of preliminary debt restructuring negotiations with two bondholder groups, Ghana extended an invitation to holders of its approximately $13 billion worth of international bonds to exchange their holdings for new instruments.

Bondholders can accept the offer until September 30.