The South African Reserve Bank (SARB) is expected to hold its monetary policy committee meeting on Thursday, where it will either cut rates or hold them steady as inflation has slowed for the second month in a row.
Meanwhile, Nigeria’s naira is tipped to begin moderating following the recent third rate hike by a total of 750 basis points to 26.25 percent by the Olayemi Cardoso-led central bank.
Monday, 27th May, 2024
NBS to release Labour Force Report
The National Bureau of Statistics will release a report on the Nigerian labour force for Q1 2024 on Monday.
The labour force participation rate measures the share of a country’s working-age population that is in the labour force.
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In the third quarter of 2023, the Nigeria Labour Force Survey showed that the unemployment rate rose to 5.0 percent from 4.2 percent in the previous quarter.
It stood at 4.1 percent in the first three months of 2023, down from 5.3 percent in Q4 of 2022.
The percentage of self-employed Nigerians declined to 87.3 percent in the third quarter of 2023 from 88.0 percent in the previous quarter. Wage employment rose to 12.7 percent from 12.0 percent.
“Informal employment in Nigeria and other developing countries seems to be very high when compared to developed countries. The share of employed persons in informal employment was 92.3 percent in Q3, a reduction of 0.4 percent when compared to 92.7 percent in the previous quarter,” the report said.
Experts say the decline in self-employment in Nigeria, also known as a ‘hustle economy’, shows that businesses are shutting down, thereby threatening the country’s entrepreneurship growth and development.
“The reduction in self-employment is an indication that more businesses are going down, particularly the micro and nano ones, which are run as self-employment as a result of harsh economic realities,” Femi Egbesola, national president of the Association of Small Business Owners of Nigeria, said.
“Experts say the decline in self-employment in Nigeria, also known as a ‘hustle economy’, shows that businesses are shutting down, thereby threatening the country’s entrepreneurship growth and development.”
Wednesday, May 29, 2024
NBS to release Company Income Tax Report, Q1 2024
The National Bureau of Statistics will release the Company Income Tax (CIT) data for the first quarter of 2024 on Wednesday.
CIT, also known as corporate tax, declined by 35.40 percent in the fourth quarter of 2023, NBS data shows.
Corporate tax for the fourth quarter of 2023 stood at N1.13 trillion, up from N1.75 trillion in the third quarter.
CIT, one of the government’s revenue sources, is a tax on the profits of registered local and foreign companies operating in Nigeria.
Since President Bola Tinubu announced the removal of the petrol subsidy, pump prices have more than tripled, while the value of the naira has plunged following the floating of the currency, sparking a decline in the bottom lines of companies operating in Nigeria.
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Despite foreign exchange (FX) challenges, the manufacturing sector was the leading contributor to CIT last year, recording N626.4 billion, indicating a 34 percent increase from N468.6 billion collected in 2022.
Analysts expect the CIT to fall slightly in the first quarter on the back of the weak naira and high energy costs.
Thursday, May 30, 2024
South Africa Reserve Bank to hold rate decision
The South African Reserve Bank (SARB) will hold rate decisions on Thursday.
The country’s monetary policy committee is expected to hold its benchmark interest rate at 8.25 percent on May 30, the day after the country’s general election, before likely beginning an easing cycle next quarter as inflation cools.
While some economists believe rates will be cut by 25 basis points to 8 percent either in July or September, others expect no change in the next quarter.
A reading that is stronger than forecast is generally supportive (bullish) for the ZAR, while a weaker than forecast reading is generally negative (bearish) for the ZAR.
According to a poll by Reuters, inflation in South Africa is expected to average 5.1 percent this year and then sit in the middle of the target range at 4.5 percent for the next two years.
While the central banks of other nations are hiking lending rates to tame stubbornly high inflation, consumer prices in Africa’s largest economy, South Africa, eased to an annual 5.2 percent in April from 5.3 percent in March.
Friday, May 31, 2024
NBS to release selected banking sector data for Q1 2024
The National Bureau of Statistics will release the selected banking sector data for the first quarter of 2024 on Friday.
The report outlines the sectoral breakdown of credit allocated to the private sector, the volume of e-payment transactions, and staff strength in the banking sector. The last report published on selected banking sector data was for the year 2021.
Total private sector credit allocation in 2021 totaled N267.11 trillion, with the oil and gas, manufacturing, and general services sectors recording the highest allocations, NBS data shows.
Analysts expect private sector credit allocation to contract off the back of CBN’s hiked interest rate of 26.25 percent.
Read also: Nigerians shift to locally used cars as prices soar on volatile naira
Naira set to moderate as CBN hikes rate again
The naira is expected to moderate at N1,400 per US dollar as the Central Bank of Nigeria continues its aggressive monetary tightening.
Nigeria’s naira has plummeted against the dollar by over 100 percent in a year, flipping from the top-performing currency to the worst.
In its 295th MPC meeting, the central bank hiked the country’s benchmark interest rate by 150 basis points to 26.25 percent, making it the third straight time it will increase lending rates.
As of last Thursday, the naira depreciated to N1,485.66/$ in the official market while it fell to N1,515/$ on the street.
Many analysts believe that the hawkish stance will aid the bruised naira and tame the stubbornly high inflation while projecting the naira to hover around N1400/$ at the official window and N1,500/$ at the parallel market.
If the naira moderates, imported goods may become cheaper since the purchasing power of the naira increases. This can lead to lower prices for products that Nigeria imports too.
It also means that investors will find the Nigerian currency more attractive due to the higher returns on investments. This can lead to increased foreign investment, lower inflationary pressures, and potentially stronger economic growth, benefiting consumers and businesses alike, said a financial market analyst.
