[Nigeria Business Week] Andrea Ayemoba: Gas price triggers ripple effect across industries
Nigeria’s inflation as of the month of May stood at 17.71%, but economists are now predicting just a month later a new figure we can expect at the end of this year. And the blame for this ever-rising inflation has been placed on recurring fuel shortages; costly transportation will directly result in costly goods. In the capital, Abuja, at least, the government reached a reimbursement agreement with marketers that has led to higher fuel deliveries.
The marketers of cooking gas (primarily the method of cooking across the country) are also agitated over the rise in prices of this product as well and have pointed fingers at the supposed cause for hike. With cooking gas not readily available and affordable, food insecurity is a constant worry in the population and experts have linked this shortage to low power supply. But electricity has been a work in progress in Nigeria for a decades now and optimism for a quick solution is very low, given the size of the country and all the interests involved. To this end, a handful of renewable energy firms came together this week to propose a solar integration enterprise.
Financing for petroleum projects ran high this week, with the major regional import-export bank inking a finance deal with UTM Offshore worth over $11b. The continent’s wealthiest man, Alike Dangote, is also in the process of raising an additional N300b to finance his refinery being built in Lagos.
MTN spent the entire week making headlines, first for its major lawsuit against 18 Nigerian banks over faulty transfers and then for the impressive performance of its shares 6 months after the original IPO. The Commission overseeing Telecoms operations in Nigeria has noted that the industry’s operating costs have seen a sharp increase between 2020 and 2021. Once again, high diesel costs are directly responsible for this, according to the Commission President.
Other developments during the course of the week include the Naira reaching a 6-month low against the dollar and the Federal government raising taxes on cigarettes. An industry chief called for cross-sector collaboration toward the deployment of 5G in Nigeria, a technology with enormous potential. Lagos made a case for women and youth in Agriculture and for those interested in investing, a list of stocks has been recommended as potentially profitable.