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Tag: GDP

  • NCC contributes N2.272 trillion to GDP – Danbatta

    NCC contributes N2.272 trillion to GDP – Danbatta

    The telecommunication sector contribution to the Gross Domestic Product (GDP) has risen from 8.5 percent in 2015 to 14.3 percent as at September 2020, amounting to N2.272 trillion.

    Executive Vice Chairman of the Nigeria Communications Commission (NCC) Umar Garba Danbatta disclosed this when members of the House of Representatives Committee on Telecommunication visited the Commission on an oversight.

    He also disclosed investments in the sector have risen from $38 billion in 2015 to over $70 billion.

    He told the lawmakers that the commission paid over N344 billion into the Consolidated Revenue Fund of the federation within the period under review, an average of N70 billion annually.

    He put the figure of active telecom subscribers in the country at about 205.25 million with a tele density of 107 percent as at the end of September 2020.

    He explained even though the population stands at about 200 million, it was possible to have such a figure of active subscribers because “while some people have one active line, others have two or three active lines”.

    He told the lawmakers: “We generated these monies from Spectrum fees, operating surplus and we have also embarked on spectrum option. We have conducted one of the most successful spectrum options as well expanding the spectrum to optimize the system.

    “We have participated actively with results in the promotion of financial inclusivity of the federal government. All our mobile network operators and licensees participated in the provision of money mobile services to the extent that today, it is unthinkable for the banking sector to function or flourish in the way it is doing without leveraging on the telecommunication sector.

    “Indeed, we are seeking support of this committee to participate and attain the target of the federal government of 80 percent financial inclusion by 2023.”

    Chairman of the House Committee on Telecommunication Akeem Adeyemi said the oversight was aimed at ensuring that the commission was working in line with the provisions of the constitution in the implementation of government programmes of policies.

    He said: “We choose oversight to hold government accountable and ensure their actions are legitimate. The oversights are targeted at assisting President Muhammadu Buhari in his quest to lift millions of Nigerians out poverty, a determination which we understand the NCC will play a pivotal role. The committee will fact check every subhead in the budget of agencies under the committee.”

  • Hon Nwawuba addresses intricacies of PIB

    Hon Nwawuba addresses intricacies of PIB

    Given the delay in the passage of the Petroleum Industry Bill (PIB), the Deputy Chairman, House of Representatives Committee on the Niger Delta, Hon Henry Nwawuba has said care must be taken for the National Assembly (NASS) not to pass a bill that will not be of any good to the Nigerian oil and gas industry.

    TheNewsGuru.com (TNG) reports Hon Nwawuba, at an event organized by the Nigerian Natural Resource Charter (NNRC) on Friday, stated this, while also addressing the intricacies of the much-awaited PIB that was recently forwarded to the NASS by President Muhammadu Buhari.

    Noting that petroleum sector reforms started in Nigeria over 18 years ago, the Lawmaker said the entire PIB document forwarded to the NASS by Buhari was yet to be committed to the technical committee for legislative fireworks to commence.

    He said, “Petroleum sector reforms started in Nigeria over 18 years ago. Most of the other countries we started this journey with have moved along in the sector with transparency and accountability while Nigeria is still struggling with the PIB.

    “We have been trying to pass this particular piece of legislation since the 6th Assembly. This matter is now of a certain urgency. We must be nimble but we must be thorough. Since we started the journey, the oil industry landscape has changed significantly.

    “Care must be taken so we do not end up passing an obsolete bill. Having taken so long, it is critical that we get it right first time, particularly with the Host Community Bill. An “inclusive” bill that captures the aspirations of all stakeholders”.

    The member representing Mbaitolu/Ikeduru Federal Constituency of Imo State further stated that a paradigm shift was needed to guarantee that the right stakeholders are consulted as against the method of speaking with a few representative groups who have hijacked the process to further personal agenda.

    “The entire PIB document is yet to be committed to the technical committee for legislative fireworks to commence and believe me, we will be thorough.

    “However, as part of our bill making cycle we will be conducting a public hearing to allow for all interested groups, civil societies, religious bodies, youth groups etc to send in memoranda and representations.

    “The final PIB we will produce will be a harmonised document. The process of making this bill will be exhaustive. It will recognize a broad spectrum of stakeholders that will hopefully include unborn children and infants, adolescents, women, youth, chiefs and traditional rulers,” the Lawmaker stated.

    Speaking on the National Oil Spill Detection & Response Agency (NOSDRA) amendment bill, Nwawuba said, “the bill was passed by both chambers in 8th Assembly but was denied assent by Mr. President. We have taken advantage of our House Rule (Order 12) and re-introduced it in this 9th Assembly. It has now passed 1st and 2nd reading.

    “One of the mandates of NOSDRA is to restore and preserve our environment by ensuring best oil fields, storage and transmission practices in exploration, production and use of oil in the quest to achieve sustainable development in Nigeria.

    “We are working to have a technical committee set up to harmonize all the grey areas raised by Mr President, particularly the regulatory overlaps, and hopefully an emergency fund to react to environmental emergencies”.

    The Lawmaker also addressed the fate of the Niger Delta region after oil is long a thing of the past just like Enugu and Benue States stopped being relevant after the coal age.

    “Nigeria has a proven deposit of about 40 billion barrels of crude. By my calculation, if we drill at an average of 2 billion barrels a day, we will run out of crude by the year 2075. Our population by then will be well over 500 million people.

    “Our focus must be on those things that are necessary to navigate the future. There should be zero tolerance for wastage of resources. We need financial planning models to withstand future internal and external shocks in the event of depletion of our crude reserves.

    “So far we have failed to add value to our crude oil resources. We need to diversify the oil economy itself before talking about other sectors. If we had a robust mid stream industry we wont be where we are today.

    “Assuming 50% of our [crude oil] production is refined domestically we wont be here today. This is all down to policy failure. Why are refineries not working? Because we have the wrong policies. If we had the capacity to refine 1 million bpd think of how many jobs that will create.

    “Oil currently contributes about 60% to our economy earnings but only about 6-8% of our GDP. Have we used our oil resources well? The answer is no. We need to sterilize crude oil from our national budget so that our oil earnings will be used to build for the future.

    “We need to be shifting away from what we have been doing to what we must be doing. Our dependence on the extractive industries and fossil fuel deposits has exposed and alienated our economy from growth,” Nwawuba stated.

    Also speaking on the current state of the Strategic Implementation Work Plan (SIWP), Nwawuba said, “the SIWP was designed to pool all ongoing interventions in the Niger Delta and donor activities in order to stop the duplication of projects by institutions and the misapplication of those funds by reinvesting in projects already undertaken by another entity.

    “It was about the different ongoing live projects and monitoring those projects, so that they’re actionable. The SIWP was put forward at the Federal Executive Council (FEC) but was not approved.

    “So the duplicity continues unchecked leading to those in Niger Delta not benefitting. The National assembly will continue to advocate for the SIWP to be approved. I commit to be at the forefront of that push”.

  • ICT sector grows as Nigeria’s GDP sees biggest decrease in a decade

    ICT sector grows as Nigeria’s GDP sees biggest decrease in a decade

    The Information and Communications Technology (ICT) sector of the Nigerian economy contributed an unprecedented 17.83% to the nation’s total real gross domestic product (GDP) in Q2 2020.

    TheNewsGuru.com (TNG) reports this is 20.54% higher than its contribution a year earlier and in the preceding quarter, in which it accounted for 14.07%, according to the National Bureau of Statistics (NBS).

    The ‘Nigeria’s Gross Domestic Product Report’ for Q2 2020 released by the NBS on Monday showed that Nigeria’s GDP decreased by -6.10% (year-on-year) in real terms in the second quarter of 2020, the biggest decrease in a decade.

    According to the NBS, the decrease was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

    An analysis of the NBS report showed that only 13 activities recorded positive real growth compared to 30 in the preceding quarter. While the non-oil sector contributed 91.07% to the nation’s GDP in Q2 2020, the oil sector contributed 8.93% to total real GDP, the ICT sector leading the way in the non-oil sector.

    When compared with the second quarter, 2019, which recorded a growth of 2.12%, the second quarter, 2020 growth rate indicates a drop of -8.22% points, and a fall of -7.97% points when compared to the first quarter of 2020 (1.87%).

    Consequently, for the first half of 2020, real GDP declined by -2.18% year on year, compared with 2.11% recorded in the first half of 2019. Meanwhile, quarter on quarter, real GDP decreased by -5.04%.

    Meanwhile, the Minister of Communications and Digital Economy, Dr Isa Ali Pantami has expressed excitement over the contribution of the ICT sector to the nation’s GDP.

    In a statement by Dr Femi Adeluyi, Technical Assistant (Information Technology) to the Minister, Pantami noted that the contribution of ICT was unprecedented.

    He attributed the growing contribution of the ICT sector to the GDP to a direct result of the focused and committed effort of the administration of President Muhammadu Buhari.

    He said the strategic policy directions of the Federal Government include the inclusion of Digital Economy in the mandate of the Ministry, the unveiling and implementation of the National Digital Economy Policy and Strategy and the National Broadband Plan, amongst others.

    “As at July 2020, the broadband penetration in the country was 42.02%, translating to a percentage increase of almost double digits in less than 1 year. This is another remarkable achievement.

    “The unprecedented contribution of ICT to Nigeria’s GDP can also be attributed to dynamic and results-oriented leadership which has been acknowledged and appreciated by a wide spectrum of the stakeholders in the sector.

    “The support of President Muhammadu Buhari, GCFR, has contributed immensely to the impressive developments in the sector. Mr President is excited about the growth of the sector and commended the Honourable Minister when he heard of these achievements.

    “The GDP Report has shown how critical the ICT sector is to the growth of our country’s digital economy and, by extension, the general economy,” the statement read.

    The Minister called on all sectors to take advantage of the federal government’s new focus on the digital economy to enable and improve their processes through the use of ICTs.

    “This would enhance the output of all the sectors of the economy and boost Nigeria’s GDP,” he said.

  • Nigeria’s GDP decreases by –6.10% in Q2 2020

    Nigeria’s GDP decreases by –6.10% in Q2 2020

    The National Bureau of Statistics (NBS) says Nigeria’s Gross Domestic Product (GDP) decreased by –6.10 per cent (year-on-year) in real terms in the second quarter of 2020.

    This is according to the Nigerian Gross Domestic Product Report (Q2 2020) published on the NBS website on Monday.

    The report said that the decrease in GDP ended the three-year trend of low but positive real growth rates recorded since the 2016 and 2017 recession.

    The decline was largely attributed to significantly lower levels of both domestic and international economic activities during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

    The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets, among others.

    These efforts, according to NBS, affected both local and international trade.

    The efforts, led by both the Federal and State governments, evolved over the course of the quarter and persisted throughout.

    When compared with the second quarter of 2019, which recorded a growth of 2.12 per cent, the second quarter of 2020 growth rate indicated a drop of –8.22 per cent points.

    The rate also showed a fall of –7.97 per cent points compared to the first quarter of 2020 (1.87 per cent).

    Consequently, for the first half of 2020, real GDP declined by –2.18 per cent year on year, compared with 2.11 per cent recorded in the first half of 2019.

    Quarter on quarter, real GDP decreased by –5.04 per cent.

    Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter.

    In the quarter under review, aggregate GDP stood at N34,023 million in nominal terms, or -2.8 per cent lower than the second quarter of 2019 which recorded an aggregate of N35,001,877.95 million.

    Overall, the nominal growth rate was –16.81 per cent points lower than recorded in the second quarter of 2019, and –14.81 per cent points lower than recorded in the first quarter of 2020.

    According to the report, the Nigerian economy has been classified broadly into the oil and non-oil sectors.

    An average daily oil production of 1.81 million barrels per day (mbpd) was recorded in the second quarter of 2020.

    This was -0.21mbpd lower than the daily average production of 2.02mbpd recorded in the same quarter of 2019, and –0.26mbpd lower than the first quarter of 2020 production volume of 2.07mbpd.

    Real growth of the oil sector was –6.63 per cent (year-on-year) in the second quarter of 2020 indicating a decrease of –13.80 per cent points relative to the rate recorded in the corresponding quarter of 2019.

    Growth decreased by –11.69 per cent points when compared to the first quarter of 2020 which recorded 5.06 per cent.

    Quarter-on-Quarter, the oil sector recorded a growth rate of –10.82 per cent in the second quarter of 2020.

    The oil sector contributed 8.93 per cent to total real GDP in the second quarter of 2020, down from figures recorded in the corresponding period of 2019 and the preceding quarter, where it contributed 8.98 per cent and 9.50 per cent respectively.

    Furthermore, the non-oil sector declined by –6.05 per cent in real terms in the second quarter of 2020 which was the first decline in real non-oil GDP growth rate since the third quarter of 2017.

    The recorded growth rate was –7.70 per cent points lower compared to the rate recorded during the same quarter of 2019, and –7.60 per cent points compared to the first quarter of 2020.

    Nevertheless, non-oil sector output was driven by financial and insurance (financial institutions), information and communication (telecommunications), agriculture (crop production), and public administration which moderated the economy-wide decline.

    On the other hand, sectors which experienced the highest negative growth included transport and storage, accommodation and food services, construction, education, real estate and trade, among others.

    In real terms, the non-oil sector accounted for 91.07 per cent of aggregate GDP in the second quarter of 2020.

    The figure is slightly higher than the share recorded in the second quarter of 2019 which was 91.02 per cent and also the first quarter of 2020 which was 90.50 per cent.

  • Nigerians to start enjoying Internet speed of 25 Mbps at N390 per 1GB

    Nigerians to start enjoying Internet speed of 25 Mbps at N390 per 1GB

    The federal government has designed a new broadband plan for Nigerians to start enjoying Internet speed of minimum 25 Mbps in urban areas and 10 Mbps in rural areas, with effective coverage available to at least 90% of the population at a price not more than N390 per 1 GB of data.

    TheNewsGuru.com (TNG) reports a committee known as the Broadband Implementation Steering Committee to achieve this aim was inaugurated on Thursday by Dr Isa Ali Pantami, the Minister of Communications and Digital Economy.

    The Internet speed of 25 Mbps in the country means that Nigerians can have Internet fast enough to stream 4k videos without any buffering, about 15 people could happily watch a different Netflix film, and a company employing 40 people would not complain about the internet speed.

    The Broadband Implementation Steering Committee is expected to monitor the implementation of the Nigerian National Broadband Plan (2020-2025) which was unveiled and launched by President Muhammadu Buhari in 2019.

    According to the Minister of Communications and Digital Economy, in order to achieve the target, the broadband plan focused on recommendations in 4 critical pillars: infrastructure, policy/spectrum, demand drivers and funding/incentives.

    “The plan targets the deployment of nationwide fibre coverage to reach all State capitals, and a point of presence in at least 90% of Local Government Headquarters. It also targets tertiary educational institutions, major hospitals in each State and 60% of base stations by 2025 at statutory rates of N145/meter for Right of Way (RoW).

    “Our engagement with the Nigeria Governors’ Forum has inspired several state governments to adopt the N145/meter and a few of these States have even waived the fee altogether. His Excellency, President Buhari, GCFR also directed the security agencies to protect all Critical National Infrastructure,” Pantami stated.

    The Minister highlighted a report by Ericsson titled “How Important Are Mobile Broadband Networks for Global Economic Development”, stressing that 10% increase in mobile broadband penetration results in approximately 0.6% to 2.8% rise in gross domestic product (GDP).

    He stated that broadband supports the development of the digital economy and that a focus on growing the national digital economy will also improve the nation’s traditional economy.

    According to the National Bureau of Statistics (NBS), the contribution of ICT to the Gross Domestic Product of Nigeria was 14.07% in the 1st Quarter of 2020; this Pantami said was unprecedented and that it reflects how much of an impact technology, including broadband, can have on the economy, if channelled properly.

    “The growth that results from affordable and reliable broadband will enable us get a slice of the Global Digital Economy, which Oxford Economics values at $11.5 trillion dollars or approximately 16% of the Global Economy. This value is expected to grow significantly over the coming years.

    “The World Economic Forum predicts that over 60% of global GDP will be digitized by 2022 and that over the next decade, digital platforms will be used to create close to 70% of new value. Most nations are prioritizing the need to develop their digital economies because they realize the multiplier effect that this can have on all other sectors of the economy.

    “For instance, according to a 2018 Report by the Bureau of Economic Analysis (BEA) on “Defining and Measuring the Digital Economy”, the digital economy in the United States contributed 6.9% to the nation’s GDP in 2017. It also contributed 5.1million jobs in that year. The 2019 Digital Trade and U.S. Trade Policy also noted that almost two-thirds of all the jobs created in the United States since 2010 required medium or advanced levels of digital skills. In Nigeria, we are keen to develop a digital economy that will have a great impact on every sector of Nigeria’s economy.

    “The new broadband plan is designed to deliver data download speeds across Nigeria of a minimum 25Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90% of the population by 2025 at a price not more than N390 per 1GB of data (2% of median income or 1% of minimum wage).

    “In order to achieve these ambitious targets, the plan focused on recommendations in 4 critical pillars, namely: Infrastructure, Policy/Spectrum, Demand Drivers, Funding/Incentives,” Pantami stated.

    Stressing further on the benefits of increased broadband penetration to the economy, the Minister said it impacts positively on jobs creation, sustainable economic growth and higher standard of living.

    He explained: “According to the Fibre to the Home Council Europe a 25 million EUR investment in information and communications technology (including smart grid and broadband) would create or retain 700,000 jobs, of which 360,000 would be small business jobs; Socio-economic development, leading to growth in e-health, e-education, e-government, etc;

    “According to the International Telecommunications Union (ITU) Broadband Series, broadband contributes to economic growth through “(1) more efficiency in business processes, (2) acceleration of innovation by introducing new consumer applications and services (e.g. new forms of commerce and financial intermediation) and (3) more efficient functional deployment of enterprises by maximizing their reach to labour pools, access to raw materials, and consumers (e.g. outsourcing of services, virtual call centres)”.

  • Digital connection: Kwara State slashes right of way charges

    Digital connection: Kwara State slashes right of way charges

    Gov. AbdulRahman AbdulRazaq of Kwara has directed the slashing of the Right of Way (RoW) fee for telecommunications firms from N5,500 per linear metre to N1 per kilometre of fibre.

    A linear meter is a standard unit of length, symbol m, which is equal to one metre in length.

    This was made known on Sunday in Ilorin in a statement by the Commissioner for Communication, Alhaji Murtala Olanrewaju.

    Olanrewaju, who said the fee was the second lowest in Nigeria after Kaduna, added that the reduction was with immediate effect.

    He added that until now, telecom firms were paying N5,500 per linear metre as the fee for laying fibre cables in the state to strengthen their digital connections.

    The Commissioner said Gov. AbdulRazaq had directed that the RoW fee be slashed to N1 only per kilometer.

    This decision, he said was designed to deepen digital penetration in Kwara, jerk up the state’s ease of doing business ratings, and ease people’s access to the internet and other digital communication even in the remotest parts of the state.

    “Apart from driving up investment in the sector, the long-term effects of this significant step such as strengthening access to digital communications and bringing more businesses to the hinterlands cannot be quantified,” the commissioner said.

    Internet and broadband penetration had been known to have a direct correlation with economic development.

    A study carried out by the International Telecommunications Union (ITU), on Africa reported that a 10 per cent broadband penetration would lead to a 2.5 per cent increment of Gross Domestic Product (GDP).

    The National Economic Council (NEC), had recently resolved to encourage technological advancement as a way to fast track economic development in Nigeria.

    The resolution was hinged on the need to create a favourable business environment for telecommunication companies and to further deepen broadband penetration for social and economic development.

  • COVID-19 shows how critical ICT is to economic growth – Pantami

    COVID-19 shows how critical ICT is to economic growth – Pantami

    Dr Isa Ali Pantami, Minister of Communications and Digital Economy has said the emergence of the Coronavirus disease (COVID-19) has shown how critical the Information and Communications Technology (ICT) sector is to economic growth.

    TheNewsGuru.com (TNG) reports Pantami stated this against the backdrop of ICT’s contribution to Nigeria’s Gross Domestic Product (GDP) in the first quarter of 2020 (Q1 2020), the data of which was released by the Nigeria Bureau of Statistics (NBS) on Monday.

    According to the NBS, the nation’s GDP grew by 1.87% (year-on-year) in real terms in Q1 2020. While the non-oil sector contributed 90.50% to the nation’s GDP in Q1 2020, the oil sector contributed 9.50% to total real GDP.

    It is noteworthy that the ICT sector contributed 14.07% to the total real GDP in Q1 2020, higher than its contribution a year earlier (13.32%) and in the preceding quarter, in which it accounted for 13.12%.

    Pantami attributed the growing contribution of the ICT sector to the GDP to the “direct result of the focused and committed effort of the administration of President Muhammadu Buhari”.

    According to him, “the strategic policy directions of the Federal Government include the inclusion of Digital Economy in the mandate of the Ministry, the unveiling and implementation of the National Digital Economy Policy and Strategy and the National Broadband Plan, amongst others.

    “The COVID-19 pandemic has shown how critical the ICT sector is to the growth of our country’s digital economy and, by extension, the general economy”.

    He, therefore, called on all sectors to take advantage of the federal government’s new focus on the digital economy to enable and improve their processes through the use of ICTs.

    “This would enhance the output of all the sectors of the economy and boost Nigeria’s GDP,” Pantami stated.

  • Nigeria’s GDP records highest growth since recession in 2016

    Nigeria’s Gross Domestic Product (GDP) has recorded a growth of 2.55% (year-on-year) in real terms in the fourth quarter of 2019, the highest since the recession in 2016.

    TheNewsGuru.com (TNG) reports GDP of the country grew by 2.55% (year-on-year) in real terms in the fourth quarter of 2019, according to data released by the National Bureau of Statistics (NBS) on Sunday.

    Compared to the fourth quarter of 2018, which recorded a growth rate of 2.38%, this represents an increase of 0.17% points and an increase of 0.27% points when compared with the third quarter of 2019.

    The strong fourth quarter 2019 growth rate represented the highest quarterly growth performance since the 2016 recession.

    Overall, this resulted in annual 2019 real growth rate of 2.27%, compared to 1.91% in 2018. Quarter on quarter, real GDP growth was 5.59%.

    In Q4 2019, aggregate GDP stood at N39,577,340.04 million in nominal terms. This was higher than the fourth quarter of 2018, which recorded an aggregate of N35,230,607.63 million, representing year on year nominal growth rate of 12.34%.

    This rate was -0.31% points lower relative to the rate recorded in the fourth quarter of 2018 and -0.96% points lower than the rate recorded in the preceding quarter.

    Contribution of oil sector to GDP

    During the fourth quarter of 2019, average daily oil production of 2.00 million barrels per day (mbpd) was recorded, indicating a rise of 0.09mbpd over the daily average production of 1.91 mbpd recorded in the same quarter of 2018.

    However, it was -0.04mbpd lower than the production volume of 2.04mbpd recorded in the third quarter of 2019.

    The NBS noted that nevertheless oil production remained consistently at or above 2.0mbpd all through 2019.

    According to the data released by NBS, real growth of the oil sector was 6.36% (year-on-year) in Q4 2019 indicating an increase of 7.98% points relative to the rate recorded in the corresponding quarter of 2018. Growth decreased by -0.13% points when compared to Q3 2019 which was 6.49%. Quarter-on-Quarter, the oil sector recorded a growth rate of –20.87% in Q4 2019.

    On an annual basis, oil recorded 4.59% growth in 2019, higher compared to 0.97% recorded in 2018. The Oil sector contributed 7.32% to total real GDP in Q4 2019, up from figures recorded in the corresponding period of 2018 but down compared to the preceding quarter, where it contributed 7.06% and 9.77% respectively. Oil contributed 8.78% to real GDP in 2019.

    Contribution of non-oil sector to GDP

    The non-oil sector, according to the NBS, grew by 2.26% in real terms during the reference quarter (Q4 2019). This was lower by –0.44% points compared to the rate recorded in the same quarter of 2018 but 0.42% point higher than the third quarter of 2019.

    This sector was driven, during the fourth quarter of 2019, mainly by Information and Communication (Telecommunications), Agriculture (Crop Production), Financial and Insurance Services (Financial Institutions), and Manufacturing.

    In real terms, the Non-Oil sector contributed 92.68% to the nation’s GDP in the fourth quarter of 2019, lower from shares recorded in the fourth quarter of 2018 (92.94%) but higher than the third quarter of 2019 (90.23%). The annual contribution of the non-oil sector stood at 91.22% in 2019.

  • ‘Nigeria’s Capital Market Contributes Less Than 10% to GDP’

    ‘Nigeria’s Capital Market Contributes Less Than 10% to GDP’

    Acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has said Nigeria was not utilising its full economic potential despite being able to accommodate a bigger and more attractive capital market.

    Head of Corporate Communications of SEC, Mrs Efe Ebelo, quoted Ms Uduk as saying in a statement that the country’s capital market contributes less than 10 percent to the Gross Domestic Product (GDP).

    She said Nigeria needs a larger capital market, pointing out that, “We think our economy is big enough to have a much bigger market.”

    “The capital market makes up less than 10 percent of the GDP of the country. If you look at other countries, even South Africa, it is over 100 percent of GDP.

    “We believe we have a large room for expansion and that is what we are pursuing,” the capital market expert said.

    Giving an update on the electronic filing system that will ensure efficiency, account for unclaimed dividends and curb any foul play in the capital market, Ms Uduk said the commission was working hard to ensure its met its planned commencement.

    The SEC chief said the regulatory body was also in the process of deploying software that would help to actualise the plan, saying, “That will make filing more efficient, easier for capital market operators to send in returns to us and make the market more transparent”.

    Ms Uduk said the commission was excited about electronic offering and was in support hence the need to develop the rules to guide its implementation, noting that, “We believe that electronic offerings will help solve the problems of unclaimed dividends so it is something we are backing seriously.”

    “Through electronic offerings, we will not have the problems of identity as we had in previous listings. It has a lot of advantages; it means that people who are not close by during an offering can invest.

    “We will be able to get the data we need for regulation; the offering is more efficient and it is cost saving. It is something we are working on; the rules will soon be out for everyone to use,’’ she said.

  • Nigeria’s Debt to GDP Ratio Drops to 18.99% – DMO

    The Debt Management Office (DMO) has disclosed that the debt stock to Gross Domestic Product (GDP) of Nigeria reduced to 18.99 percent as at June 30, 2019 from 19.09 percent as at December 31, 2018.

    The agency made this disclosure while rolling out the Medium–Term External Borrowing Plan of the federal government, which is meant to stimulating economic growth, diversify the economy and bring about investments in human capital.

    In the plan, the debt office emphasised that the present level of Nigeria’s debt to GDP ratio was very low when compared with many advanced nations like the United States of America (USA).

    However, it stressed that where the problem lies for the Africa’s largest economy is its debt service to revenue ratio, which the DMO said was high at 57 percent in 2017 and 51 percent in 2018.

    This was attributed to the increase in the debt stock and relatively high domestic interest rates, noting that it was for this reason government has decided to borrow externally through the $30 billion loan is seeks approval for from the National Assembly.

    “Nigeria has a ceiling of 25 percent on the total public debt stock to GDP, which it has operated within,” the debt office said in the plan viewed by Business Post, adding that the debt service/revenue ratio “provides strong justification for the current drive to increase oil and non-oil revenues significantly.”

    According to the DMO, “The United States of America, United Kingdom and Canada had debt/ GDP ratios of 105 percent, 85 percent and 90 percent in 2017 which were much higher than that of Nigeria, but because they generate adequate revenues, their debt service/revenue for the same year were 12.5 percent, 7.5 percent and 7.5 percent respectively.

    “The case was also similar for Brazil, South Africa, Kenya and Mexico who had higher Debt/GDP than Nigeria (74 percent, 53 percent, 57 percent and 46 percent respectively), but had lower debt service/revenue of 32.20 percent, 11.4 percent, 13.2 percent and 13.6 percent respectively.”

    “This is clear evidence that Nigeria’s revenues are low. This is further demonstrated by Nigeria’s tax to GDP ratio of only 6 percent in 2018 compared to: Kenya-15.7 percent, Morroco-21.8 percent, Cameroon-12.2 percent and South Africa-27.5 percent, all for 2017. These, attest to the fact that Nigeria has a Revenue challenge rather than a debt problem,” the DMO added.

    The debt office threw its weight behind the borrowing plan, saying it would be used to develop infrastructure in the country like roads, railways, waterways and power, which it said “will help to unleash the potentials of the Nigerian economy.”

    “Other loans such as those for the educational sector will contribute to the development of Nigeria’s human capital, while loans for agriculture will be used to diversify the economy.

    There will also be funding for development finance institutions to enhance access to finance for micro, small and medium scale enterprises,” the debt office further said.