In February 2024, the customer price level is predicted to settle at 30.34% year over year. Since the country traditionally relies more heavily on post-harvest food purchases, an analyst at Cordros Capital Research predicts that the increased conflicts in the North and the growing cost of transportation will have a short-term negative impact on food access and distribution networks.
“At the same time, we anticipate that the ongoing pressure on currencies and rising energy prices will maintain the pressure on the core basket. As a result, we predict that consumer prices will end the year at 30.34%,” the statement read.
According to the analyst, below-average harvests and higher gasoline and diesel prices are the primary causes of the significant food demand-supply imbalance and the synchronization of rising consumer prices with the effects of persistent FX pressures.
As a result, they observed that while core inflation increased by 53bps to 23.59% y/y, broad-based pressure across the food inflation (+148bps to 35.41%) remained at a 19-year high.
Consumer prices rose by 35 basis points (bps) month over month to 2.6% (December 2023: +2.23% M/M), the highest level in five months.
Furthermore, Nigeria’s upstream oil and gas industry released a three-year regularity action plan (RAP) by Cordros Capital Research to raise crude oil output (including condensates) levels to 2.60mbpd by 2026.
Nevertheless, it said that despite the FG’s efforts to prevent crude oil theft and vandalism, regular pipeline breaches and sporadic oil terminal shutdowns for repairs could pose negative risks to crude oil production soon.
“As a result, we maintain our estimate that crude oil production (including condensate) will settle at an average of 1.59mb/d in 2024 (vs FGN’s estimate of 1.78mb/d),” it said.
The overall turnover for the week ending on February 16, 2024, in the foreign exchange (FX) spot and options market was $1,065.55 million, a decline of 56.2% ($1,369.47 million) from the $2,435.13 million reported for the previous week.
The week-over-week (w/w) decline in the overall turnover was primarily caused by the 48.2% ($990.63 million) and 99.41% ($378.84 million) declines in FX Spot and FX derivatives turnover, respectively, according to FMDQ Securities Exchange.
The overall value of transactions on the FX Spot Market for the week ending February 16, 2024, was $1.063 billion. This is a 48.23% (990.63 million) reduction from the amount of transactions completed in the week ending February 9, 2024 ($2.05 billion).
