The nation’s gross domestic product (GDP) grew by 1.93% in 2018, data made available by the National Bureau of Statistics has shown, TheCable Reports.
According to the report, which was released by the bureau on Tuesday, the fourth quarter GDP grew by 2.38% as against the 1.81% recorded in the third quarter.
The figure is 1.6 percentage points less than the 3.0% projected by the federal government in the 2019-2021 medium-term expenditure framework and fiscal strategy paper (MTEF).
However, the figure aligns with the projection of the World Bank Group and International Monetary Fund, which had projected that the economy will grow by 1.9% in 2018.
Both Bretton Wood institutions had cut Nigeria’s growth projections to 1.9% from 2.1%; with the World Bank blaming the herder-farmer crisis.
The non-oil sector recorded an annual growth rate of 2%, higher than the 0.47% recorded in 2017.
“The non-oil sector grew by 2.70% in real terms during the fourth quarter of 2018. This is 1.25% points higher than the growth rate recorded in Q4 2017, and 0.38% points higher than the growth rate recorded in Q3 2018,” the report read.
“The oil sector recorded a real GDP growth rate of –1.62% (year-on-year) in Q4 2018, indicating a decline of –12.81% points relative to the growth rate recorded in the corresponding quarter of 2017. However, when compared to Q3 2018, growth increased by 1.29% points.
“On an annual basis, real GDP growth for the oil sector stood at 1.14% as against 4.69% recorded in 2017.
“In the fourth quarter of 2018, average daily oil production stood at 1.91 million barrels per day (mbpd). This was lower than the 1.95 mbpd recorded in the same quarter of 2017, and 1.94mbpd in Q3 2018.”
Fellow Nigerians and the global business community,
Interesting & progressive days lie ahead in Nigeria’s business space. But I must say, brace up because the days ahead will be tough, very tough and quite tougher than the last few years. You may be wondering what the hell he is saying.
Simple! I was at the Deloitte Nigeria Economic Outlook event held last Thursday where two ministers (Budget & the Finance Minister) were present. Thanks Deloitte!
One positive takeaway was how much work Nigeria is doing in the ease of doing business. While we are yet to get there, a lot of progress has been made; targets top 100 in Global Ease of Doing Business Index.
But I was so worried listening to the two ministers, especially as it relates to the Budget and how to close the Funding gap. Put mildly, “the government is unable to figure out any other way to fund the budget, so be ready to come to their aid”. In other words, expect more taxes!!!
2018 Budgeted Fiscal Deficit – N1.95 trillion (Actual deficit – N3.26 trillion – 67% higher; in other words, additional N1.31 trillion was borrowed in excess of budget)
2018 Budgeted Revenue from sale of Crude Oil N2.999 trillion (Actual crude revenue – N2.08 trillion – 69% of budget).
Ok, these are 2018 numbers.
In 2019, proposed budget will be slightly lower than 2018 budget by N294 billion.
Thus, proposed 2019 Expenditure is N8.827 trillion.
Proposed capex spend – N2.86 trillion (considering that only 43% performance was achieved in 2018, what do you expect in 2019?)
Proposed fiscal deficit – N2.45 trillion Did you notice that we borrowed to fund recurrent spend in 2018? And that we had abysmal performance on capex at 43% (in fact, as at 14 Dec 2018, only N820.57 billion was released for capex, in other words, about3 410 billion was released between 14 & 31 Dec 2018 for capex spend.)?
So we are at it again, I can’t foresee the time the government will start investing in critical infrastructure (thanks to the Executive Order No. 007). Even the EO No 007 poses its own challenge. Despite missing Corporate Tax Revenue budget by N134 billion, and the commencement of this new Executive Order, the Government still budgets N150 billion more than actual collections in 2018.
Can you guess where this excess will come from? You and I will pay, simple.
Despite hitting only 69% of crude oil revenue, the proposed 2019 budget projects N3.69 trillion from sale of crude oil; N690 billion more than the 2018 budget and N1.6 trillion more than actual revenue from crude in 2018.
.. another threat… while we hope to produce 2.3 million bpd of crude, OPEC pegged Nigeria’s production at 1.69 million bpd (i.e., without going to town, the core driver of our budget revenue, the production quantity was cut by 36% by our OPEC masters. But the minister says we may have to re-discuss this with OPEC or shore up with concentrates (hope I got this term).
So with all these, what is the point? Our government has lost ideas on how to fund our budget, not just for this year, but for years to come. If you know how best to assist, please do suggest to the FG. But in the mean time, there is a quick fix, the only constant in the equation is you and I…
In brief, please prepare for more taxes, the quickest fix is to raise VAT.
The Honourable Minister of Finance mentioned the carbonated drinks as one area to generate more revenue… So Sugar taxes will come on-board. Taxes on Tobacco and the likes is a given. More taxes will come on the very rich; so if you have private jets & yachts, get ready. Are you a musician? More will come knocking from all angles. Sportsman? Sure, you are not forgotten. I envisage an update on PITAM in few years from now, not sure it will go beyond three years away.
But my biggest concern is that even if VAT revenue increases by 200%, we will be way short of our needs. Even if we raise Corporate tax income by 100% (including a 200% increase in VAT income, we will still be far away). You recall that Customs suggested a reduction of duty on imported cars from 70% to about 45%? Maybe that’s why the 2018 customs budgeted revenue is higher than 2019 by about N22 billion.
Expect the hammer to fall after the elections, true, we can’t run away. I advise that you start stress-testing your numbers against increase of VAT to 10% and see what impact that will have on your price. This will be happening despite our weak buying power due to loss of currency value.
In the midst of all these is the monetary policy issues. Prof Doyin Salami in his presentation said he can’t bet that Naira will get any stronger. In another fora, some experts say that Dollar will head towards N398 while some entities are planning with N440 to a Dollar.
In other words, all indicators show that Naira will lose value post-election, and may be a deliberate devaluation policy (check it, forex reserve, crude price, crude volume, etc)
Even of bigger concern to me at the event was the signal sent to the global community that the days ahead will be tough. But that’s the truth.
So, I implore you to start planning for the rocky days ahead. Hopefully, we will walk through this furnace without much damage.
A few days ago, the management of PZ Cussons Nigeria hinted that the company is considering limiting the depth of its exposure to the Nigerian market in the midts of what they describe as “extremely challenging” trading conditions.
PZ Cusson’s shares were down 11% in early trade in London on Tuesday at a price of 187.58 pence each. PZ Cussons is a the consumer products firm with a wide range of products that have become household names in Nigeria feor decades.
This is, in addition, to the fact that they had registered a 23% fall in revenue to GBP111.3 million in Africa for the six months leading to November. At constant currency, revenue slipped 13% and the like-for-like decline was also 13%.
PZ Cusson’s Group revenue fell by 10%, or 4.6% constant currency, to GBP335.1 million. Like-for-like revenue also slid 4.6%. Adjusted operating profit fell 3.8%, or 1.1% constant currency, to GBP35.4 million, while statutory pretax profit sank 20% to GBP26.7 million. PZ Cussons declared an interim dividend of 2.67 pence per share, flat year-on-year
While awaiting further details on thier recent disclosure, in an interview reported by Leadership Newspapers Nigeria, the company’s managementz addded the follopwing:
“The group continues to make pleasing progress in Europe and Asia, with new product development and increased support across our key brands delivering positive momentum,” said Chair Caroline Silver.
“Disappointingly, however, the macroeconomic conditions in Nigeria remain extremely challenging and continue to have a significant negative impact on overall group performance. Reflecting this, we now expect group adjusted profit before tax for the year to be towards GBP70 million.”
PZ Cussons posted adjusted pretax profit of GBP80.1 million in its year ended May 2018.
“We anticipate consumer demand in all our key markets will remain subdued,” Silver continued.
“Whilst these conditions prevail, we will maintain our strong market shares in key product categories in Nigeria until growth returns to the market.”
To help streamline its activities and focus on Personal Care and Beauty operations in Europe and Asia, the company has begun some strategic initiatives, it said, which include “limiting exposure to Nigerian volatility”.
After experiencing a 0.2% negative growth in the last quarter of 2018, coming after a similar contraction in the previous quarter, Italy entered a recession.
“Gross domestic product in the eurozone‘s third-largest economy fell 0.2 per cent between October and December, following a 0.1 per cent decline in the third quarter, Italy’s national statistics office ISTAT reported on Thursday”, the Independent reports. .
As reported by the Reuters, experts had predicted a 0.1 per cent fall quarter-on-quarter.
Italy’s economy has been weakening since early 2017 and has recently been hit by a slowdown in key trading partners including Germany and China.
The Ruler ‘Onojie’ in Esan Tradition.
-The Coronation of the Onojie of Urohi by Prince Kelly O. Udebhulu.
Today, 26 day of January, 2019, the Kingdom of Urohi in Esan west local government of Edo state, Nigeria, trado-politically witnessed the coronation and presentation of Staff of Office by the state governor, Mr. Godwin Obaseki, to the new king, popularly known as “Onojie” in Esan dialect and tradition.
Urohi Kingdom has common boundaries with Ekpoma on the North, Ujiogba on the South-East both in Esan west local government, Uhi/ Ugieghudu on the South both in Uhumwode local government of Edo state. Politically, Urohi is ward 8 in Esan west local government of Edo central senatorial district of Edo state. Around twelve kilometers away from Ekpoma, the headquarter of Esan west local government.
An Onojie or traditional ruler according to Esan tradition is defined as an individual who, by virtue of his ancestry, occupies a ‘sacred stool’ of a community and this person will be selected to it in accordance with the traditions and customs of the Esan community. Simply put, he is the traditional leader of a specific traditional community across Esanland who exercises authority over a number of inhabitants of the area in accordance with customary law of a defined jurisdiction.
According to the Traditional Rulers and Chiefs Law as enacted on the 24 day of August, 1979; the Law in its preliminary sections defined a Traditional Ruler as “the traditional head of an ethnic unit or clan who is for the time being the holder of the highest traditional authority within the ethnic unit or clan and whose title is recognized as a traditional ruler by the Government of the state”.
Importantly, to ascend to the throne, this individual must be the heir apparent to the throne being the Crown Prince who is traditionally the first biological male child of the present Onojie whose by nature call, joins his ancestor. Simply put, the Onojie as the ruler of the community derives his traditional position by right of being the first son in the royal lineage. The Onojie’s stool is inherited through kinship ties according to the Esan tradition. It doesn’t deviate away from the kingship’s lineage, if it happens, it is an extraordinary circumstance.
This person has traditional authority over the people who live in that community. He regulates the social behaviour within the community that he has control over. An onojie is not in control of service delivery as it is the local government’s responsibility.
However, an Onojie performs a wide range of functions for his community, ranging from providing safety and security, safeguarding tribal sovereignty, allocating and distributing land and settling land disputes, providing spiritual leadership and the administration of justice among his people.
Conclusively, Urohi Kingdom thanks everyone that contributed to the success of this great coronation ceremony and would remain grateful to you all.