FAAC meeting, IMF economic outlook… 7 things to track in business this week

Here are the seven top business news you need to track this week — July 25 to July 30.

TIME FOR FAAC 

This week, the federal account allocation committee (FAAC) will present national expenditure and revenue for June.

Last month, the committee shared N680 billion amongst the federal, state and local governments.

Over the past months, Nigeria has witnessed a decline in revenues accrued into the federation accounts due to low oil production and huge subsidy payments.

IMF TO RELEASE UPDATE ON ECONOMIC OUTLOOK JULY 26

International Monetary Fund will, on Tuesday, release the World Economic Outlook (WEO) update.

In its April outlook, IMF highlighted that the war in Ukraine triggered a costly humanitarian crisis demanding a peaceful resolution. 

It added that war-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7 percent in advanced economies and 8.7 percent in emerging markets and developing economies — 1.8 and 2.8 percentage points higher than projected last January.

On Friday, Russia and Ukraine signed separate agreements with Turkey and the United Nations to enable the export of millions of tons of grains needed across the world.

The deal hopes to restart grain exports from Ukraine’s Black Sea ports that have been blocked since Russia’s invasion and ease the ravaging global food crisis.

FG TO SPEND N6.7 TRILLION ON PETROL SUBSIDY IN 2023

The federal government has projected to spend N6.7 trillion on petrol subsidy payments in 2023

In January, the federal government postponed the planned petrol subsidy removal for 18 months, citing “high inflation and economic hardship”.

In the first five months, Nigeria spent N1.27 trillion on petrol subsidy — with a plan to spend N4 trillion this year.

BENCHMARK LENDING RATE AT 14%

The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 13 percent to 14 percent to tame the surging inflation rate.

At the meeting, Godwin Emefiele, CBN governor, kicked against people, mostly politicians, who use naira to buy dollars for campaigns.

NAIRA ON FREE FALL, TRADES ABOVE N650/$ AT PARALLEL MARKET

Nigerian naira has dropped to N658 per dollar at the parallel market amid higher dollar demand.

The figure represents a depreciation of N38 or 6.13 percent from the N620 it traded last week.

Bureaux De Change operators (BDCs) blamed the depreciation on ongoing foreign exchange (FX) supply constraints.

Foreign exchange trading firm AZA Finance sees a further drop in the coming days due to higher dollar demand and ongoing FX supply constraints,

PASSENGERS TO EXPERIENCE FLIGHT DELAYS, CANCELLATIONS

Nigerian airlines, under the aegis of Airline Operators of Nigeria (AON), say there will be disruptions of flights due to scarcity of aviation fuel, also known as JET-A1.

Passengers are advised to call airlines as the current situation would lead to cancellations and prolonged delays across all airports.

NIGERIAN STARTUP BILL

The Nigerian senate has passed the Nigerian startup bill 2022.

The bill seeks to create and develop an enabling environment for technology-enabled startups in the country.