INTELLIGENT NUMBERS – DOING BUSINESS IN NIGERIA
Nigeria is in a recession. This means that Nigeria has recorded 2 consecutive quarters of negative growth. But rather than generalise, keeping an eye on the numbers can help businesses plan how to deal with sector-specific dynamics; different sectors of the economy tell different stories, and even in a slide, it is possible to climb.
This is a brief report focusing on three areas of Nigeria's economy from latest Q2 figures released by the National Bureau of Statistics. The three areas of focus are: merchandise trade, telecommunication sector and foreign capital importation.
Telecommunication sector continues to hold steady despite the tumults of the economic recession. MTN and Etisalat record growths amid negative YOY growths. Capital importation into Nigeria is at is record lowest, FDI and FPI have plunged. China has a strong hold on Nigeria and it would get stronger.
1. Merchandise Trade Index
This is simply an index of trade, exports out of, and imports into Nigeria. Between Q1 and Q2 2016 the volume of trade in Nigeria grew by 49%. Q1 - ?2,645.5 billion and Q2 - ?3,942.0 billion.
Imports grew in Q2 by 38.1% compared to Q1, from ?1,498.4 billion to ?2,069.2 billion.
Most importations into Nigeria came from:
- China - ?493.5 billion or 23.9%,
- Netherlands - ?285.7 billion or 13.8%,
- United States - ?199.0 billion or 9.6%,
- India - ?124.9billion or 6.0% and
- United Kingdom - ?119.3 billion or 5.8%
- Import trade from Africa stood - ?89.1 billion or 4.3%
Exports grew in Q2 by ?725.6 billion or 63.3%.
Crude oil represented 79.7% of exports; and mineral products combined for 92.9% of exports
The top importations were:
1. Machinery and appliances - 34.9%
2. Mineral products - 15.8%
3. Vehicles, aircraft vessels and parts - 14.7%
2. Capital Importation in Q2 stood at $647.1 million a fall of 8.98% from Q1 figures, and a fall of 75.73% from 2015 Q2 figures.
- The lowest level of capital importation into Nigeria, ever!
- The Services Sector recorded the most capital importation at $130.98 million, or 20.24%.
- Six sectors did not record any capital importation - Fishing, Marketing, Hotels, Tanning, Transport and Weaving.
- Telecommunications Sector recorded a $64.10 million increase from Q1
- Electricity Sector recorded a decline of $61.32 million
3. Telecommunications
- Contributed N 1,580 billion to GDP in the second quarter of 2016, about 9.8%.
- Over a 10 year period, telecoms subscribers have increased on an average of 13,149,809 every year.
- By end of 2015 - there were 151,017,244 subscribers
- By end of Q2 – there were 149,803,714 subscribers due to a decrease between January – April, 2016
- Between June 2015 – June, 2016 CDMA subscribers fell from 2,105,981 to 454,092
- GSM subscribers accounted for 99.58% ; CDMA - 0.30% ; fixed wired - 0.08% and wireless - 0.03% .
MNO Growth -
- MTN
- subscribers grew from 57,045,721 to 58,409,767 between March and June 2016
- but still saw a year on year negative growth of -7.01%
- Etisalat
- subscribers grew from 21,877,542 to 22,469,896 between March and June 2016
- year on year growth was negative at-1.67%
- Airtel
- ended Q2 with 31,978,848 subscribers with year on year growth of 8.17%]
- Glo
- Ended Q2 with 36,320,572 subscribers
- Year on year growth of 16.20% - The best performance of any MNO
Internet Subscriptions
· 92,181,978 subscribers representing 61.79% of active GSM lines in Nigeria
*all the figures and data are from the National Bureau of Statistics
Associate at Diaz, Reus & Targ, LLP
8 年I heard over the past week of a retail chain executive who was adamant about expansion when the business was far behind its obligations to suppliers and sales were sluggish. And when the pressure of not meeting targets began to pile, he resorted to blaming everyone, except himself. Businesses must keep an eye on the numbers especially when the economy is in a downward *spiral* and when the government does not seem to have a clue about what needs to be done. One rule of thumb in macroeconomics is that in moments of recession, government must spend to keep the economy afloat. But this government seems to have other ideas: 1. it is not spending(enough) 2. it is "rightfully" squeezing stolen funds out of banks but then holding them, thereby limiting credit available to banks do business. 3. its priorities are an utter waste of scarce resources, at a time when the realities of our mono-economy press for diversification into other productive ventures, the government is encouraging state oil prospecting in the dry basins of Northern Nigeria. 4. sound development economics dictates that governments identify areas of relative strength, and invest in those areas. 5. further, every sensible developing economy allocates resources to areas that meet strategic policy goals of the country. But does Nigeria have an economic development agenda that is at the centrepiece of its policy making? If it does, how does spending billions on space exploration fit into a sensible economic agenda in a country with life expectancy of 53 and where citizens have no access to food and clean drinking water?