Navigating Nigeria's latest economic challenges

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Welcome to today’s edition of 234Digest! I’m Samuel Okocha, the curator and editor. As the clock ticks past midnight, I’m excited to bring you this Tuesday's comprehensive round-up of the latest key stories. Already in the early hours of Wednesday, we're delving into Nigeria’s rising inflation, the naira's competitive edge, and the ongoing power grid challenges. Recently, I transformed 234Digest from a weekly highlight to a daily staple, publishing from Tuesdays to Fridays, with deeper dives on Sundays. Pumped to see what more we’ll uncover together as I strive to deliver timely, nonpartisan updates on Nigeria’s economic and business landscape.

Today’s briefs

Inflation rises again

Nigeria’s annual inflation rate climbed for the first time in three months in September, driven by a spike in gasoline prices and severe floods in food-producing areas. Consumer prices rose to 32.7% from 32.2% in August, according to the National Bureau of Statistics. This surge underscores the ongoing economic challenges and the impact of external factors on the cost of living.

Naira's competitive edge

Amid these inflationary pressures, Nigeria’s currency remains historically competitive. “The naira’s real exchange rate is at its most competitive in at least 20 years,” said Chief Economist Indermit Gill at the Nigerian Economic Summit Group in Abuja. Currency and fuel subsidy reforms by President Bola Tinubu last year have played a crucial role in stabilizing the economy.

Power grid collapse

Nigeria faced another setback with the collapse of its power grid on Monday night, plunging the nation into darkness. The Transmission Company of Nigeria is working to restore power after generation fell to zero. By Tuesday morning, some plants in Abuja and parts of the commercial city were coming online. The daily average supply has recently hovered around 4,500 megawatts until this sixth collapse of the year. Aging power infrastructure, vandalism, and inadequate gas supply for thermal plants, which account for over 75% of output, are key factors behind the grid's instability.

Banks boost capital

Meanwhile, five of Nigeria’s largest banks have successfully issued fresh capital to meet tough new regulatory requirements, well ahead of a 2026 deadline. Lenders including Guaranty Trust Holdings Plc raised a total of 1.26 trillion naira ($770 million) in the last two months. “The banks that came to the market are fully subscribed and even oversubscribed,” said SEC Director General Emomotimi Agama. The other lenders were Zenith Bank Plc, Access Holdings Plc, Fidelity Bank Plc, and FCMB Group Plc.

World Bank COVID-19 grant

The World Bank has announced a $500 million grant to support Nigeria's recovery from the COVID-19 pandemic. The funds will be utilized through the Nigeria Community Action for Resilience and Economic Stimulus (NG-CARES) programme, which aids poor and vulnerable households and micro-small enterprises. Speaking in Port Harcourt, Dr. Lire Ersado, World Bank Task Team Leader for NG-CARES, emphasized the grant's role in broader economic recovery initiatives.

Belemaoil resumes operations

In the oil sector, Nigerian independent producer Belemaoil Producing has resumed operations at its Oil Mining Lease 55 after a three-year shutdown due to theft-related damage. The block, acquired from Chevron Corp in 2015, contains five oilfields producing about 14,000 barrels per day and over 70 million standard cubic feet of gas per day. Operations were halted in 2021 due to rampant oil theft from its delivery line to the Bonny terminal.

Quote of the day: "The only way to achieve the impossible is to believe it is possible." - Charles Kingsleigh

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