Finance minister, Zainab Ahmed has said that the coronavirus pandemic may have affected 21 million jobs in Nigeria. Speaking through Sarah Alade, a former deputy governor of the CBN, at a webinar organised by the Nigerian Economic Summit Group, Ahmed said that the FG projects the economy will contract by four percent in the best-case scenario, and in the worst-case scenario contract by eight percent. Ms Ahmed said the economic sustainability plan of the FG will help mitigate against the effects of the lockdown and ensure stability through the support of MSME’s, accelerating infrastructural development, deregulation of refined petroleum products, incentivising the use of pension funds and supporting states to access external funds amongst others. A report published this month by a government pandemic committee led by Vice President Yemi Osibanjo says that unemployment in the country is expected to rise to 34 percent by the year’s end if urgent steps are not taken. Nigeria’s official unemployment rate was 23 percent at the end of 2018.
The Senate President, Ahmad Lawan, says consumers should be properly metered before any increase in the electricity tariff. On Monday, the National Assembly asked DisCos to halt the proposed increase in tariff for power consumers, and speaking on Tuesday after a visit to the presidential villa, Lawan said President Muhammadu Buhari and Vice-President Yemi Osinbajo have agreed on the deferment of electricity tariff hike. Lawan noted that the COVID-19 pandemic has impacted people negatively and the situation requires that everything possible is done to make life easy for Nigerians. In January, the Nigerian Electricity Regulatory Commission (NERC) had announced that there would be an upward review of electricity tariff across the country from 1 April but suspended it as a result of the pandemic. However, a few weeks ago, power minister, Sale Mamman, said the proposed hike will take effect from 1 July. According to NERC, only 3.9 million of the registered 10.3 million subscribers in the country have prepaid meters.
Data from the Nigeria Interbank Settlement System shows that the value of cheque transactions fell by 55.7 percent year-on-year to ₦178 billion in May 2020 from the ₦401.8 billion in the corresponding period of 2019. Also, the volume of cheque transactions plunged by 63 percent to 266,335 in May 2020 from 718,139 in May 2019. The development happened at the backdrop of a significant rise in the number of bank accounts opened in the country in the same period. The NIBSS Payment Channels report shows that a total of 38 million bank accounts were opened during the period under review, about 31 percent to 160 million in May 2020 from 122.1 million in May 2019. The breakdown of the figure showed that Mobile Interscheme transfer had the highest percentage of transactions in value and volume during the period. The value of mobile transfer transactions in May 2020 rose by 390 percent to ₦230 billion from ₦46.9 billion in May 2019, while its volume rose by 428 percent to 9.5 million from 1.8 million in May 2019. The value of NIBSS Instant Payment transactions, analysis of the data showed, rose by 16 percent to ₦10.4 trillion in May 2020 from ₦9 trillion in May 2019, while its volume rose by 47 percent to 141.3 million from 96 million in the corresponding period of 2019. The value of Point of Sale transactions in May 2020 rose by 39 percent to ₦358.1 billion from ₦257.7 in May 2019, while its volume rose by 36 percent to 48.4 million from 35.5 million in May 2019. Going by the report, the number of savings accounts rose by 46 percent to 129.9 million in May 2020 compared to 89.6 million recorded in May 2019. However, the number of current accounts fell by 14 percent to 25.2 million in May 2020 from 29.2 million in May 2019. In the focused period, May 2020, the number of active bank accounts grew by 53 percent to 111.5 million from 72.9 million in May 2019. The number of inactive bank accounts, however, declined marginally by 1.4 percent to 48.5 million in May 2020 from 49.2 million in May 2019.
Fitch Ratings has warned that government debt burdens are rising across sub-Saharan Africa at a faster pace, and to higher levels than elsewhere in emerging markets. This is heightening the risk of further rating downgrades and defaults. According to the ratings agency Tuesday, emerging markets including Nigeria, have been battered by the fallout from the coronavirus pandemic, with a coinciding oil price rout adding to the pain for smaller and often riskier developing countries, many focussed on crude exports and having few fiscal or monetary buffers. Economies of Africa’s main oil exporters, Angola, the Republic of Congo, Gabon and Nigeria, have been badly hit particularly hard given their high reliance on oil revenues for fiscal and external financing, and the dependence of the rest of their economies on crude earnings. Fitch predicted that the median of government debt-to-GDP for the 19 sovereigns it rated in the region would rise to 71 percent by end-2020 from 26 percent in 2012, while the median debt ratio across other emerging markets is expected to climb to 57 percent. It said that countries with a concentration on tourism, particularly Cabo Verde and Seychelles, have also been badly affected. The ratings pointed to more stress ahead for Mozambique and Republic of Congo that already defaulted recently, with Zambia at ‘CC’ and Gabon, Mozambique and Republic of Congo ‘CCC’. Another 13 sovereigns were in the single ‘B’ range, with seven sovereigns having a ‘negative’ outlook on their rating.