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Tinubu Admits Reforms Weakening Nigerians’ Purchasing Power

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Tinubu IMF president Kristalina Georgieva

By Modupe Gbadeyanka

President Bola Tinubu on Wednesday confessed to the chief executive of the International Monetary Fund (IMF), Ms Kristalina Georgieva, that the reforms his administration has implemented have weakened the purchasing power of Nigeria.

Immediately Mr Tinubu assumed office on May 29, 2023, he announced an end to the petrol subsidy and a month later, he devalued the Naira.

These two policies have affected the country’s economy, with some businesses, including multinationals, closing shops.

But the government has consistently assured that things would get better, arguing that the initial pains were necessary to enjoy the gains of its reforms.

Speaking with Ms Georgieva at the G20 Summit in Brazil, Mr Tinubu sought the support of the organisation to bring succour to Nigerians.

“We have started seeing positive results from our reforms, and the Nigerian people now understand the need for them, but we have to reduce the hardship that has resulted from the implementation,” the President told the IMF chief.

He also said, “We have too many children out of school, and we know that education is a way out of hunger and poverty. That is why we are designing ways and incentives to keep these children in school, and we need your support for these kids who want to stay in school.”

President Tinubu stressed that substantial resources must be invested to stimulate the much-needed infrastructural development in the country. The President further noted that  Nigeria is working on tax reforms to stimulate the economy further.

“We are engaging stakeholders and sensitising Nigerians to expand the economy’s tax base for inclusive developmental growth. We are doing this without necessarily increasing the taxes on our people who have already given a lot. We will require your support on this,” he noted.

In her remarks, Ms Georgieva who expressed a desire to visit Nigeria, commended the Tinubu administration’s economic reforms and their positive indicators, assuring him of further support in diversifying the Nigerian economy.

She specifically lauded the social investment programmes as a way of cushioning the effects on the most vulnerable and promised the assistance of the body in this regard.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Economy

Oil Prices Jump as Trump Revokes Chevron’s Venezuela Licence

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oil prices driving up Trump

By Adedapo Adesanya

Oil prices rose more than 2 per cent on Thursday amid supply concerns after the US President, Mr Donald Trump, revoked a licence granted to US oil major, Chevron, to operate in Venezuela.

The news led Brent crude oil futures to spike by $1.53 or 2.1 per cent to $74.06 a barrel while the US West Texas Intermediate (WTI) crude oil futures increased by $1.64 or 2.4 per cent to $70.26.

The Chevron licence revocation means the company will no longer be able to export Venezuelan crude.

However, if Venezuelan state oil company, PDVSA, exports oil previously exported by Chevron, US refineries will be unable to buy it because of U.S. sanctions.

President Trump said this was due to the lack of electoral reform in the South American country alongside with insufficient action on migration.

Chevron has been exporting around 240,000 barrels of Venezuelan crude to the US daily after former US President Joe Biden granted them a waiver.

The amount constitutes around 25 per cent of the country’s total oil production and generates substantial revenues that stay in the Venezuelan economy.

Meanwhile, market analysts noted that the move could also lead to the negotiation of a fresh agreement between the Chevron and PDVSA to export crude to destinations other than the US.

This development could also impact the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, to which Venezuela is a member.

Chevron’s exit could reduce Venezuela oil’s production, giving OPEC+ capacity to increase output.

However, investors were still keeping an eye on signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows.

President Trump said Ukrainian President Volodymyr Zelenskiy will visit the US on Friday to sign an agreement on rare earth minerals.

However, the Ukrainian leader said the success of talks would hinge on continued US aid.

The market was pressured by news that US economic growth slowed in the fourth quarter amid cold weather and concerns that tariffs will hurt spending through higher prices.

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Economy

NASD Exchange Closes Flat Despite Posting Six Price Movers

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NASD Exchange bullish

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, February 26 with the Unlisted Security Index (NSI) static at 3,268.81 points and the market capitalization unchanged at N1.851 trillion.

The alternative stock exchange closed flat at midweek despite recording six price movers, with two in the green region and four in the red territory.

On the gainers’ side Afriland Properties Plc and FrieslandCampina Wamco Nigeria Plc, with the former rising by N1.12 to N22.80 per unit from the preceding day’s N21.68 per unit and the latter expanding by 76 Kobo to settle at N39.86 per share compared with Tuesday’s closing price of N39.10 per share.

However, First Trust Microfinance Bank Plc lost 5 kobo to close at 47 Kobo per unit compared with the previous day’s 52 Kobo per unit, Geo Fluids dropped 34 Kobo to settle at N3.58 per share versus the preceding session’s N3.24 per share, UBN Property Plc went down by 10 Kobo to finish at N1.75 per unit, in contrast to Tuesday’s closing price of N1.85 per unit, and Central Securities Clearing System (CSCS) Plc declined by 14 Kobo to close at N22.01 per share versus N22.15 per share.

During yesterday’s session, the volume of securities transacted by investors jumped by 99.3 per cent to 1.2 million units from the 605,399 units transacted in the previous trading day.

However, the value of transactions slid by 28.5 per cent to N10.6 million from N14.8 million, while the number of deals went up by 58.3 per cent to 38 deals from 24 deals recorded on Tuesday.

At the close of business, Impresit Bakolori Plc was the most active stock by value (year-to-date) with 533.8 million units worth N520.9 million, followed by Afriland Properties Plc with 16.4 million units valued at 335.2 million, and FrieslandCampina Wamco Nigeria Plc with 8.3 million units valued at N329.2 million.

Industrial and General Insurance (IGI) Plc ended the most active stock by volume on a year-to-date basis with 69.7 million units worth N23.6 million, trailed by Geo-Fluids Plc with 10.9 million units sold for N51.9 million, and FrieslandCampina Wamco Nigeria Plc with 8.3 million units valued at N329.2 million.

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Economy

Naira Remains Unchanged at N1,501/$1 at Official FX Market

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Official FX Market

By Adedapo Adesanya

The Naira closed flat on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, February 26 at N1,501.95/$1.

Also, the value of the local currency against the Pound Sterling and the Euro remained unchanged in the official market during the session at N1,894.72/£1 and N1,570.11/€1 apiece.

However, the Nigerian currency depreciated against the United States currency by N10 at midweek to quote at N1,500/$1, in contrast to the preceding day’s N1,490/$1.

The outcome of the local currency comes amid ease in the wider economy and recent moves like clearing backlogs, which have led to the country’s foreign reserves losing over $2 billion in the last month.

However, market analysts fear that the continued drop in the foreign reserves may only offer temporary respite to the Naira.

In the cryptocurrency market, most of the tokens fell on Wednesday after the US President, Mr Donald Trump, said he plans to impose a 25 per cent tariff on the European Union (EU) during his first cabinet meeting.

The price of Bitcoin (BTC) depreciated by more than 3 per cent in the last 24 hours to close at $85,878.47.

After the recent market selloff, there were calls that the drop might have been the bottom but Mr Trump’s EU tariff plans seem to have dampened market optimism.

The American President claimed that the 27-member union does not accept US cars and farm products while the US buys from the bloc.

On its part, the EU said it will react firmly and immediately against “unjustified barriers to free and fair trade”

Ethereum (ETH) slumped by 5.9 per cent to $2,341.69, Ripple (XRP) went down by 3.7 per cent to $2.20, Cardano (ADA) fell by 2.9 per cent to trade at $0.6625, Dogecoin (DOGE) depreciated by 1.3 per cent to $0.2076, Binance Coin (BNB) weakened by 1.2  per cent to $614.13, and Solana (SOL) declined by 1.0 per cent to $140.03.

But Litecoin (LTC) recorded a 6.9 per cent appreciation to quote at $126.46, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

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