Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

95% of Nigerians Have Less Than N500,000 in Savings – Analyst Warns

By Otobong Gabriel, Abuja 

Financial analyst Kalu Aja has claimed that the vast majority of Nigerians have less than N500,000 saved in their bank accounts, highlighting the widening gap between economic indicators and everyday reality.

Aja made the comment while reacting to news that Nigerian Treasury Bills recently recorded subscriptions of N4.59 trillion — almost four times the amount initially offered by the Central Bank.

While some government supporters celebrated the strong investor demand, Aja argued that high yields should not be seen as good news. According to him, elevated interest rates often signal rising inflation and greater borrowing risks.

He explained that when government borrowing costs go up, small businesses and consumers also face higher lending rates, which slows economic growth.

Aja added that only wealthy investors with large sums of cash benefit from such returns, stressing that most Nigerians lack the financial capacity to take advantage of high-yield instruments.

Recent data also shows Nigeria’s public debt has climbed above N152 trillion, while the proposed 2026 budget carries a significant deficit, raising concerns about continued borrowing.

IMF Forecasts Strong Growth for Nigeria, Eyes Third-Largest Economy Spot in Africa

By Otobong Gabriel, Abuja 

Nigeria’s economy is set for a significant boost, with the International Monetary Fund (IMF) projecting the country’s Gross Domestic Product (GDP) to hit approximately $334 billion in 2026.

If achieved, the figure would position Nigeria as Africa’s third-largest economy, climbing ahead of several regional peers and reinforcing the country’s renewed economic momentum.

The positive outlook comes amid ongoing reforms aimed at stabilising the financial system and improving investor confidence. Analysts say stronger oil production, rising foreign exchange inflows, and tighter monetary policies are beginning to yield results, supporting broader economic recovery.

Recent measures to improve exchange-rate management, boost revenue generation, and attract foreign investment are also expected to drive growth across key sectors, including energy, manufacturing, and services.

While challenges such as inflation and cost-of-living pressures remain, the IMF’s projection signals growing optimism about Nigeria’s medium-term prospects and its ability to reclaim a leading position among Africa’s largest economies.

Naira Extends Rally, Gains Further Against Dollar in Official and Parallel Markets

By Otobong Gabriel, Abuja 

The Nigerian naira continued its upward climb against the United States dollar in early trading on Thursday, February 5, 2026, building on the steady gains recorded since the start of the week.

The local currency strengthened across both the official and parallel markets, buoyed by improved liquidity, reduced speculation, and ongoing interventions by the Central Bank of Nigeria (CBN).

Official Market Shows Strong Recovery
At the Nigerian Foreign Exchange Market (NFEM), the naira opened the day at ₦1,368.56 per dollar before adjusting slightly to ₦1,371.40 by mid-morning trading.

This represents a notable appreciation from the ₦1,388 level recorded just 24 hours earlier.
Market analysts attribute the sustained recovery to the CBN’s aggressive efforts to stabilise the market through direct liquidity support and improved price discovery. 

The introduction of the Electronic Foreign Exchange Matching System (EFEMS) has also enhanced transparency, helping to tighten bid-ask spreads and reduce volatility in the official window.

In addition, rising external reserves have helped cushion pressure on the currency, providing further support for the naira’s performance.

Parallel Market Narrows the Gap

The improvement was also reflected in the parallel, or informal, market.
Across major commercial centres including Lagos, Abuja, and Kano, the dollar currently trades between ₦1,450 and ₦1,465.

While the black-market rate still sits above the official rate, the gap has narrowed to one of its smallest margins in months — a sign of easing demand pressure.

Bureau De Change operators report that demand remains steady but largely free of the speculative rush that previously drove sharp fluctuations. 

Increased dollar availability from diaspora remittances and small-scale exporters is also helping to stabilise the segment.

Exchange Rate Snapshot (February 5, 2026)
NFEM Opening: ₦1,368.56
NFEM Midday: ₦1,371.40
Parallel Market: ₦1,450 – ₦1,465

Outlook

Analysts remain cautiously optimistic about the naira’s trajectory. If current liquidity levels are maintained and external pressures stay moderate, the currency could test the ₦1,350 mark before the end of the week.

For businesses and consumers involved in foreign transactions, the recent stability offers a welcome break after months of volatility.

Nigeria and China Sign Landmark Deal to Transform Power and Lithium Industries

By Otobong Gabriel,Abuja 

Dubai, UAE – Nigeria and China have taken a major step toward transforming Africa’s energy and lithium sectors as Dr. Orji Uzor Kalu, Chairman of Swiber Africa (Nigeria) Group, and Zhu Gongshan, Chairman of GCL (China) Group, officially signed a strategic cooperation agreement in Dubai. 

The partnership will focus on modernizing Nigeria’s power system and developing its lithium resources.
Nigeria has long faced severe electricity shortages that have constrained industrial growth and living standards.

Under the agreement, GCL plans to introduce advanced clean power technologies and a full-scale virtual power plant system, modeled after its successful deployment in China’s Suzhou Industrial Park. This system provides high-precision energy management, from millisecond-level rapid response to long-term forecasting, aligning directly with Nigeria’s Presidential Power Initiative (PPI).

Planned projects include:

3 GW of gas-fired power plants
4 GW of integrated wind and solar energy projects
Expansion of hydropower and coal-fired stations
Smart grid upgrades to modernize the national electricity network

On the lithium front, Nigeria has abundant resources, but development has been limited to low-value extraction and preliminary processing. GCL will support the establishment of a lithium carbonate facility in Abia State, creating a full industrial chain—from resource extraction and processing to production and global export. 

This initiative aligns with Nigeria’s 2026 policy push to strengthen local lithium processing and mirrors GCL’s successful projects in Ethiopia.
With GCL’s existing global lithium production capacity and access to premium overseas resources, the collaboration promises a stable supply for international markets while boosting Nigeria’s industrial growth and energy transition.

This landmark Nigeria-China partnership represents a major step toward sustainable power, economic development, and global competitiveness in both the energy and lithium sectors.

CBN to Introduce New ATM Rules, Link Debit Card Issuance to Cash Access

By Otobong Gabriel,  Abuja 

The Central Bank of Nigeria (CBN) has announced plans to roll out new regulations aimed at improving access to cash and reducing frequent automated teller machine (ATM) failures across the country.

The proposed rules, expected before the end of the second quarter of 2026, will require commercial banks to align the number of debit cards they issue with the capacity of their ATM networks. 

The initiative is part of broader efforts to strengthen Nigeria’s payment system and restore public confidence in electronic transactions, as many Nigerians continue to depend heavily on cash.

Speaking at the 2026 Committee of Heads of Bank Operations Conference, CBN Governor Yemi Cardoso, represented by his Special Adviser, Fatai Karim, said the policy is designed to address congestion, prolonged downtime, and uneven cash distribution at ATMs nationwide.

According to Karim, excessive card issuance without adequate ATM infrastructure has placed strain on the banking system, making cash withdrawals unreliable for customers.
“When access to cash fails due to extended ATM outages or poor distribution, it weakens trust in the entire payment system,” he said.

The CBN noted that it is currently consulting with key industry stakeholders and expects the new framework to take effect within the coming months.

Industry analysts say the planned regulations will improve ATM reliability, ensure better cash availability, and enhance the overall efficiency of Nigeria’s electronic payment ecosystem.
Rising Cash Outside the Banking System

The announcement comes amid growing concern over the amount of cash held outside Nigerian banks. By the end of 2025, currency outside the banking system rose to a record N5.4 trillion, highlighting Nigerians’ continued preference for physical cash.

CBN data shows that total currency in circulation reached about N5.7 trillion in December 2025, while overall money supply expanded to approximately N124.4 trillion during the same period.
Currency held by households, traders, and businesses outside regulated financial institutions exceeded the previous record of N5.125 trillion recorded in December 2024. 

Experts say this trend reflects a widening gap between formal banking channels and Nigeria’s cash-driven economy, despite ongoing efforts to promote financial inclusion, mobile banking, and digital payments.

Banks Begin VAT Deduction on Card Fees
Meanwhile, Nigerian banks have started deducting a 7.5 percent Value Added Tax (VAT) on card maintenance fees and selected electronic banking charges, effective January 19, 2026.

Under the new structure, a N50 card maintenance fee now attracts an additional N3.75 VAT charge. Some customers have reported seeing the deductions reflected as separate transactions on their accounts.

The CBN says the combination of tighter ATM regulations and broader payment reforms is aimed at improving service delivery, reducing system failures, and rebuilding trust in Nigeria’s financial infrastructure.