Annual inflation in Nigeria rose for the eighth straight month in April, lifted by higher food prices, the statistics office said on Thursday, as measures to curb the spread of COVID-19 hindered economic activities and increased costs. Inflation, a measure of living costs, climbed to 12.34% in April, its highest level in more than two years, from 12.26% the previous month, the National Bureau of Statistics said. Food inflation, which accounts for the bulk of the inflation basket, rose at a much faster pace, to 15.03% in April, compared with 14.98% in March. The NBS attributed the rise in the food index to increases in the prices of potatoes, yams and other tubers, bread and cereals, fish, oils, fruits and vegetables. Food inflation has been in double digits for more than three years. On Monday, the government said it would impose targeted lockdown measures in areas that report rapid increases in coronavirus cases, and that a phased reopening of the economy would go ahead more slowly than planned. The measures have created bottlenecks for food and other deliveries, in a country where investment is needed in transport infrastructure. The inflation data comes ahead of next week’s interest-rate meeting where the central bank will weigh inflationary risks and a weaker currency against an economy projected to shrink this year due to the oil price crash caused by the pandemic.

Nigeria’s economy could shrink as much as 8.9% in 2020 in a worst-case scenario without stimulus, Finance Minister Zainab Ahmed said on Thursday, a deeper recession than forecast after oil prices plunged due to the coronavirus pandemic. Ahmed told Nigeria’s highest economic advisory body, the National Economic Council, that the contraction could reach 4.4% in a best-case scenario, without any fiscal measures. But with the stimulus, the contraction could be kept to just 0.59%, she said. The pandemic and an oil price plunge have not only hit growth but also dented the state’s main source of income, creating large financing needs and weakening the naira. “We will go into recession – but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it, come 2021,” Ahmed told the council in a virtual meeting. She said 40% of Nigerians were poor and the crisis would increase poverty. Ahmed said Nigeria had over 6,000 confirmed cases of the novel coronavirus, but that this could rise to almost 300,000 by the end of August. A World Bank director taking part in the meeting said the Bank was planning a package for immediate fiscal relief for Nigeria. Ahmed said the proposal was worth $1.5 billion and intended for Nigeria’s states to provide relief at the sub-national level. She said it could be disbursed by September. Nigeria’s first-quarter revenue from crude sales was ₦940.9 billion ($2.6 billion), missing its target by 31% due to the oil price crash, she said. Ahmed said Nigeria has $72.04 million in its oil savings account as of 21 May, compared to $325 million in November.

Lagos’ Executive Council has approved a downward review of the state’s 2020 budget, the commissioner for economic planning and budget, Sam Egube has said. The budget was cut down by 21 percent to help mitigate the economic and social headwinds precipitated by the COVID-19 pandemic. The review, the commissioner said Thursday, sees the budget cut down from the initial ₦1.169 trillion passed by the State House of Assembly and signed by Governor Sanwo-Olu, to ₦920.5 billion. The breakdown showed that the total budget size is reduced by 21 percent from ₦1,168.562 trillion to ₦920.469 billion. The financing deficit increased slightly by 11 percent from ₦97.533 billion to ₦108.005 billion. The recurrent expenditure; debt and non-debt declined by 10 percent from the initial ₦457.529 billion to N411.608 billion, while total capital expenditure reduced by 28 percent from ₦711.33 billion to ₦508.861 billion. The revised total revenue, Egube said, represents a drop of 24 percent from the projected ₦1,107.029 billion to ₦812.464 billion. Other factors that necessitated the review include the fall in crude oil prices with deleterious effects on statutory allocation expectations, the slide in internally generated revenue and the devaluation of the naira. Egube said others are reduced public and private investment, increased inflation, a decline in the demand for goods and services, and the reduction in manufacturing activities, which portends lower GDP growth and increased unemployment. The Lagos State House of Assembly had in December 2019, passed the ₦1.169 trillion 2020 appropriation bill. The approved budget contained ₦457 billion recurrent expenditure and capital expenditure of ₦711 billion showing a strong preference for capital projects at 60 percent. Egube said the Q1 of the 2020 budget, however, recorded a performance of 56 percent, about ₦163.2 billion which in absolute terms is higher than the 68 percent, about ₦148.3 billion recorded for the same period in 2019.

The Debt Management Office said Nigeria on Thursday offered for subscription ₦150 billion seven-year Sukuk that will be due in 2027. The Sukuk, with a rental rate of 11.20 percent, would open on 21 May 2020, and close on 2 June. The settlement date for the bond will be 9 June 2020, the DMO said adding that the funds from the issued Sukuk will be channelled to funding the construction and rehabilitation of key economic infrastructure projects across the country, including roads, to diversity the sources of government funding, and to offer investors an opportunity to invest in government-issued securities. The unit of sale is ₦1,000 per unit, subject to a minimum subscription of ₦10,000 and in multiples of ₦1,000 thereafter. The rental payment is payable half-yearly, with a redemption bullet repayment on the date of maturity, the office said. Interested investors can subscribe for the Sukuk which is backed by the full faith and credit of the FGN through FBNQuest Merchant Bank and Lotus Financial Service Limited. The DMO listed First Bank of Nigeria, Stanbic IBTC, Jaiz Bank, Taj Bank Sterling Bank Zenith Bank and Unity Bank as the receiving banks. It noted that the instrument type which is Ijarah (Lease) Sukuk, being issued by the FGN Roads Sukuk Company 1 Plc is on behalf of the FG. The DMO said the Sukuk qualifies as securities in which trustees can invest under the Trustees Investment Act. Qualifies as Government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for Pension Funds, among other investors.