A report by Fitch Solutions’ on Nigeria claims that the country will struggle to return to the robust levels of economic growth it witnessed prior to the 2014 collapse in global oil prices, due to the economic policies of President Buhari. The contraction and slow projection in Nigeria’s growth will be driven by its challenging operating environment and back economic policies, despite need to develop alternative sectors, the Country Risk report said. Factors that are expected to lead to the likely contraction and slow growth outlook for Nigeria’s economy in the next 10 years, according to the agency include low expectation of oil production returning to the level witnessed between 2010-2014. The unfriendly business environment in the country and the instability of commodity-dependent economy will keep fixed investment below the levels required to move the country away from its oil dependence. Buhari’s victory in the February 2019 elections suggests little scope for structural reform in the years ahead, weighing on the economy’s long-term growth prospects. Hence, Fitch puts Nigeria’s economic growth forecast at 3.4 percent per year over the long-term outlook from 2019 to 2028, compared with 6.1 percent in the 2010-2014 oil boom years.
The prices of drugs in Nigeria may double following the recent hike in the price of registering drugs in the country. The National Agency for Food and Drug Administration and Control had recently attempted to increase the cost of registering new prescription drugs by 350 percent to ₦1.05 million, from ₦350,000. The chairman of the Pharmaceutical Society of Nigeria, Lagos chapter, Bolanle Adeniran, said that if NAFDAC increased its drug registration levy, the prices of drugs across the country will increase by 100 percent by August this year. Adeniran described NAFDAC’s fee hike as “damaging”. The proposed increase by NAFDAC includes ₦1.05 million to register a prescription-only medicine, while over-the-counter drugs increased from a hitherto expensive ₦1 million to ₦4 million. According to the PSN, Lagos State Branch, this policy will have grave consequences of morbidity and mortality to consumers’ health in the country. Meanwhile, the PSN boss called on NAFDAC to find a way to fast-track the registration process for new drugs, a process which currently takes two years.
The most recent data from Nigeria’s power sector shows that the country could not generate a total of 3,109.5 megawatts of electricity its power grid last Wednesday due to gas, frequency and water management constraints. The grid lost 1,709.5MW of power to the gas, major constraint. Frequency issues stopped the generation of 1,150MW, while water management challenges prevented 250MW from getting to the grid. According to the Advisory Power Team in the Office of the Vice President, on 19 June, 2019, the average energy that was sent out was 4,087MWHour/Hour, down by 64.53 MWH/Hour from the previous day. It said zero megawatt was not generated due to the unavailability of transmission infrastructure. The power sector lost an estimated ₦1.5 billion on 19 June, 2019, due to constraints from the insufficient gas supply, distribution infrastructure and transmission infrastructure. The power sector has continuously witnessed constraints that keep preventing the generation of substantial quantum of electricity.
Nigeria has grown its sovereign wealth fund by $350 million in value, the Nigeria Sovereign Investment Authority has told the Punch. According to Uche Orji, the NSIA’s chief executive, over $300 million has been so far added to the $1.5 billion seed capital, almost six years after operations began. However, Orji noted that compared to other countries, Nigeria was still far behind the rest of the world in terms of savings into its funds. He expressed optimism that the National Assembly would pass legislation to promote consistency in contribution to the fund. Orji said that the agency reported six straight years; 2012 to 2018 of profitability in all its funds with core profits, excluding FX translation gains, of ₦28.45 billion ($87.5million) for 2018. The NSIA is shifting focus towards infrastructure and direct investment in Nigeria as returns would incubate longer and consequently, cash available for market driven investments would decline. Despite this development, the NSIA’s total profits increased from ₦22.55 billion in 2017 to ₦46.50 billion (including FX translation gains) in 2018. By the end of 2018, NSIA had assets under management of $1.9 billion (₦617.69 billion). The agency also invested about $25 million into through its InfraCredit, which has attracted over $60 million. Currently, the equity on the InfraCredit from the NSIA is $25 million and matching funds from the Africa Finance Corporation is $25 million. Orji said the agency also has $35.5 million gained from KfW; a long-term debt. The agency is expecting to get close to $40 million in the next 12 months from other parties, which it is still negotiating with.