Dear Subscriber,
Christmas is finally here with a stronger naira
The Nigerian market is going through dramatic changes while simultaneously transitioning into a market-driven economy. This Christmas, like many before, we have seen volatile commodity prices and significant changes in consumer behavior. PMI is contracting, and GDP is expanding.
PMS prices have declined by 12% from ₦1,065 per litre to ₦940 in the Lagos Metropolis, driven by the recent price war between Dangote Refinery (price leader) and NNPC (price follower). Additionally, the naira has gained 0.48% this week to trade at N1,652/$ at the parallel market. This follows the CBN’s introduction of weekly FX sales of $25,000 to Bureau De Change Operators from December 19th at prevailing market rates.
The expected increase in forex supply will likely alleviate demand pressures on the naira at the parallel market. However, the CBN’s policy, which expires on January 30, 2025, is temporary, raising concerns about speculative hoarding and a potential return to volatility once supply becomes constrained.
On the Right Track: Rail Infrastructure could alleviate Housing and Transportation Crises
Nigeria’s urban housing crisis and strained transportation network are two interconnected infrastructure challenges that a robust rail system can address simultaneously. As rents in cities like Lagos, Abuja, and Port Harcourt skyrocket, suburban areas offer affordable alternatives. However, the lack of efficient transportation prevents many from making this shift. Affordable, fast rail connections would reduce the demand for urban housing by enabling workers to live in less costly suburbs while accessing city jobs. This would ease pressure on city-center rents and promote suburban development. Japan’s Shinkansen lays a perfect model for Nigeria to emulate in developing modern rail systems, which offer a sustainable solution to Nigeria’s housing and transportation woes while driving economic growth and improving quality of life.
In this latest edition of Whispers, the FDC Think Tank takes a deep dive into recent economic developments and their impact on your business and corporate strategy.
Enjoy your read!
