Dear Subscriber,

The Nigerian Stock Market has lost 11.3% of its value since March, effectively moving into a correction territory. It has virtually erased its total gains for 2018. The initial investor euphoria that drove the market is finally waning, compounded by investor uncertainty related to electoral activities.

Nigeria’s gross external reserves has declined 10 times in the month of May after peaking at $47.87bn. This is partly because of the 75% increase in the CBN’s forex intervention to support the Naira. External reserves vulnerability will be further heightened as portfolio flows begin to exit the market in June and July, after the US Fed increases its interest rates again.

The good news is that the Federal Accounts Allocations Committee (FAAC) funds disbursed in May increased by 11.83% to N701 billion, the highest level since June 2014. This means that states should be able to clear their salary arrears especially now that it seems like the minimum wage review is still in limbo.

Nigeria is the world’s 26th largest economy and the largest in sub-Saharan Africa. However, the gross fixed investment level of 14.7% of GDP is way below its peer group and other emerging market economies.

In this edition of the FDC Bi-monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.

Enjoy your read!