[Nigeria Business Week] Andrea Ayemoba: Clean energy gets funding amid inflation and trade deficits
Oil and Gas has been a pillar supporting the Nigerian economy for a very long time. Rich in this natural resource, Nigeria may be guilty of neglecting other promising sectors, like Agriculture and even Insurance. With lands as fertile as can be, the food inflation in country today could be avoidable – food prices are said to have risen to over 18% in the month of April alone.
As a direct result of this hike in food prices, the World Bank predicts a substantial surge in diasporan remittances this year. There is a parallel increase in energy cost as well, this only serving to further weaken the economic structure.
But Nigeria is large, and therein lies its sustainability. Where one sector fails, another carries the weight. Despite the odds, companies are recording high revenues and margins. Dangote Cement for example came in with billions in profits in the first quarter.
In the same quarter (Q1), Nigeria’s trade deficit saw a worrying increase, according to the Central Bank. A working theory for the cause of this is the country’s inability so far to minimize imports and diversify its export portfolio, relying more on local production. The Eurobond did show a favorable yield as of end of last month, April.
Returning to Oil and Gas, a major player in the industry has confirmed the sale of its stake in the SPDC and NNPC joint venture, and the Lagos Free Zone has inked a 10bn naira gas deal with partners for natural gas production and distribution within the Free Zone.
Clean energy also made headlines this week, with a tech plastic waste recycling firm raising millions of dollars in seed funding.
In Banking, FBN Holdings and Access Bank finalized an acquisition deal this week and the Central Bank issued guidelines for open banking in its quest to enhance competition and innovation in the system.
Andrea Ayemoba is a Senior Editor at Africa Business Communities.