Nigeria, US to release GDP report

The Nigerian and US economies will be in the spotlight this week as both countries release their second-quarter Gross Domestic Product (GDP) reports.

Monday August 26,

NBS releases Nigeria’s GDP by output report (Q2 2024)

The National Bureau of Statistics (NBS) will release the Gross Domestic Product (GDP) for the second quarter of the year today.

In the first quarter of 2024, the Nigerian economy grew at a faster pace compared to the same period last year.

“The performance of the GDP in the first quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 4.32 percent and contributed 58.04 percent to the aggregate GDP.”

According to the NBS, Africa’s biggest economy saw its GDP rise to 2.98 percent (year-on-year) in real terms in Q1. The growth rate was higher than the 2.31 percent recorded in the first quarter of 2023 and lower than the fourth quarter of 2023 growth of 3.46 percent.

The performance of the GDP in the first quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 4.32 percent and contributed 58.04 percent to the aggregate GDP.

Analysts had earlier projected that the economy would grow faster compared to the same period of last year on the back of the expansion in the monthly Purchasing Managers’ Index (PMI).

In the second quarter, PMI declined in June and July to 50.1 points and 49 respectively.

In June data signalled a broad stagnation of the Nigerian private sector as subdued demand and intense price pressures led to slowdowns in growth of output and new orders. In turn, employment rose only fractionally,” the report said. While in July the report Input costs and selling prices continued to rise rapidly, although there were some signs that efforts to secure sales resulted in a softer pace of output price inflation. Meanwhile, confidence hit a new record low.

Read also: Nigerian GDP growth projected to improve 3.4% by 2025 — AFDB

August 28, Wednesday

NBS to release FAAC disbursement for July

The National Bureau of Statistics (NBS) will release its report on the Federal Account Allocation Committee for the month of July 2024.

According to the Bureau, the Federal Account Allocation Committee (FAAC) distributed N2.32 trillion in June 2024 from the total revenue collected in May 2024 among the Federal Government, States, and Local Government Councils.

It stated that the amount disbursed comprised N1.22 trillion recorded from the Statutory Account, N587.46 billion from Exchange Gain, N15.78 billion from Electronic Money Transfer Levy, EMTL, and N497.66 billion from Value Added Tax.

The FAAC accrual has been on the rise since the second quarter of 2023 after the implementation of the twin policy reform of the President Bola Tinubu administration—subsidy removal and liberalisation of the foreign exchange market.

The allocations to the three tiers of government for June 2024 were: the federal government with a total of N365.81 billion, states with a total of N2.32 trillion, and local governments with a total of N388.42 billion.

The sum of N106.5 billion was shared among the oil-producing states from the 13 percent derivation fund.

The revenue-generating agencies comprising Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS), and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) received N20.85 billion, N36.33 billion, and N19.46 billion, respectively, as costs of revenue collections.

Thursday, August 29

US to release Q2 GDP report

The Bureau of Economic Analysis will release the US gross domestic product for the second quarter of this year on Thursday.

U.S. economic growth was much weaker than expected to start the year, and prices rose at a faster pace, the Commerce Department reported Thursday.

Gross domestic product, a broad measure of goods and services produced in the January-through-March period, increased at a 1.6 percent annualised pace when adjusted for seasonality and inflation, according to the department’s Bureau of Economic Analysis.

The report came with markets on edge about the state of monetary policy and when the Federal Reserve will start cutting its benchmark interest rate.

The federal funds rate, which sets what banks charge each other for overnight lending, is in a targeted range between 5.25 percent and 5.5 percent, the highest in some 23 years, though the central bank has not hiked since July 2023.

Investors had to adjust their view of when the Fed will start easing as inflation has remained elevated.
However, in July the US inflation, a broad-based measure of prices for goods and services, increased 0.2 percent for the month, putting the 12-month inflation rate at 2.9 percent, its lowest since March 2021, which is likely to keep an interest rate cut on the table in September.

Read also: FAAC disburses N1.354 trillion to FG, states, LGs in July, up by N200bn

Friday, August 30

NBS to release Nigeria Labour Force Report (Q2 2024)

The National Bureau of Statistics will be releasing Nigeria’s labour force report for the second quarter on Friday.

The last published report on Nigeria’s labour force was for the third quarter of 2023.

In the third quarter, the unemployment rate rose to 5.0 percent from 4.2 percent in Q2. It stood at 4.1 percent in Q1, down from 5.3 percent in Q4 of 2022.
The statistical agency defined the unemployment rate as the share of the labour force (the combination of unemployed and employed people) who are not employed but who are actively searching and are available for work.

“The unemployment rate increased significantly in Q3 at 5.0 percent. This is an increase of 0.8 percent from Q2. The rate of unemployment among persons with post-secondary education was 7.8 percent in Q3,” the report said.

It said the unemployment rate among youth aged 15-24 years was 8.6 percent in Q3 from 7.2 percent in Q2 and that the unemployment rate in urban areas was 6.0 percent in Q3, a slight increase of 0.1 from Q2 2023.

Naira remains pressured amid increased dollar supply.

The naira has remained under pressure as it edges towards N1,600 per US dollar amid rising supply of the greenback.

The local currency lost 2.74 percent to the USD as it closed at 1,586.11 as against 1,543.84 on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange Limited.

The Central Bank of Nigeria’s (CBN’s) latest attempt to shore up the ailing naira by offloading a record amount of dollars directly to businesses has not delivered the impact many, including the apex bank itself, expected it would.

Since the CBN’s sale of some $815 million directly to businesses from manufacturers to airlines on August 6, the biggest single-day intervention under new governor Olayemi Cardoso, the naira has barely budged.

A recent survey by CBN shows that Nigerian firms expect the naira to depreciate between now and December but have a positive outlook for the local unit next January.