Champagne showers in Aso Rock
Nigeria is deep in that foreign bag and the economy is about to feel it
Good morning, Big Brains. I can’t believe I’m saying this but can the rain please give it up already? Anyways, while you were probably all cozied up in your room, enjoying the weather, I was busy pouring my heart into today’s edition so enjoy!
- Margaret
Word count: ~1000
Reading time ~ 3 mins
Let’s get into today’s edition:
Nigeria hits new high in foreign investments
Petrol prices reach ₦937 per litre in Jigawa
Kenya plans to increase borrowing following the withdrawal of new taxes
The Big Deal
Nigeria hits new high in foreign investments
We hope you have a bottle of champagne casually lying around because they’re definitely doing some “sip, sip, hooray!” activities in Aso rock this morning.
Like Lady Donli, the Tinubu-led administration is addicted to cash and according to the National Bureau of Statistics (NBS), they’ve been getting lots of it from foreign investors.
In the first quarter of this year alone, Nigeria raked in $3.38 billion in foreign investments which is 210% higher than the $1.09 billion reported in Q4 2023.
Compared to last year, the amount of money coming into the country from foreign sources increased by 198.06%, rising from $1.13 billion in Q1 2023. The report also showed that during the first quarter, it was mainly two states and the Federal Capital Territory (FCT) contributed to the country’s total foreign investments.
In its typical main character fashion, Lagos State received the most foreign investment, totalling $2.78 billion, which makes up 82% of the total amount. The FCT came next with $593.58 million, while Ekiti State saw a smaller amount of $12,750 in foreign investments.
Why is this a big deal?
For a country that has been deep in financial challenges since the year started, $3.38 billion in foreign investments is definitely a big deal. This inflow of cash from foreign investors will contribute to Nigeria’s economic growth and stabilise the naira by increasing foreign exchange reserves.
For states like Lagos and Ekiti, this could also lead to infrastructural development and increased manufacturing activities that would likely create job opportunities for residents.
Petrol prices reach ₦937 per litre in Jigawa
NBS came with all the tea yesterday – from foreign investments to petrol prices – thanks to them, we now know that petrol prices are rising faster than Ikigai’s streams in some parts of Nigeria.
According to NBS’s report, petrol is currently being sold for about ₦937 per litre in Jigawa, the highest across all Nigerian states. Ondo and Benue States followed closely behind, with average prices of ₦882.67 and ₦882.22, respectively.
But across Nigeria, NBS records the average cost of petrol as ₦769.62, showing a 223.21% increase from the ₦238.11 it was in May 2023 and 9.75% higher than the ₦701.24 it was three months ago.
On the flip side, Lagos, Niger, and Kwara States had the cheapest average prices for petrol, at ₦636.80, ₦642.16, and ₦645.15 respectively.
Looking at the regions, the North-West Zone had the highest average price of ₦845.26, while the North Central Zone had the lowest at ₦695.04.
Who did Jigawa offend?
The NBS reports didn’t go into the details of why petrol price is heading towards ₦1,000 per litre in Jigawa but several factors could have contributed to this. We don’t want to point fingers but if we had to, we’ll have to point one finger at President Tinubu who went through with the bright idea of removing fuel subsidies last year. Other contributing factors could be the long distance from petrol supply points, local tax policies, market competition and the country’s inflation.
Kenya plans to increase borrowing following the withdrawal of new taxes
If President Tinubu and Muhammadu Buhari had a love child, it would be President Ruto.
Young Kenyans have been protesting against ridiculous taxes, like the financial bill which Ruto agreed to withdraw last Wednesday, for the past two weeks now and it doesn’t look like they’re stopping anytime soon.
President Ruto, who doesn’t appear to be shaken by the number of lives lost during the protests, is grieving the loss of the financial bill which never got to see the light of the day. The President said the withdrawal of these taxes has set Kenya back two years. According to him, the extra taxes were supposed to help the country pay its way out of debt.
Now that the tax is gone, Ruto said the country has no other choice but to borrow one trillion shillings ($7.6 billion) just “to be able to run our government”. The President’s initial plan was to borrow 600 billion Kenyan shillings while the extra funds from the taxes were supposed to cover 350 billion Kenyan shillings.
Explaining the economic reality of the country, Ruto said, "I have been working very hard to pull Kenya out of a debt trap... It is easy for us, as a country, to say: 'Let us reject the finance bill.' That is fine. And I have graciously said we will drop the finance bill, but it will have huge consequences.”
He also gave more specific details regarding the “huge consequences” saying the withdrawal of the bill will affect 46,000 junior secondary school teachers on temporary contracts. He added that the government wouldn't be able to help dairy, sugarcane, and coffee farmers by paying off debts owed by their factories and cooperative societies, as previously planned.
But Kenyans aren’t having it…
Kenyans are making it very clear that they are never going to be in support of Ruto taxing the poor to save the economy. These concerned citizens are still protesting but this time with more placards and #RutoMustGo slogans. The protest, which has been compared to the #EndSARS protest of 2020, has been dubbed “the Gen Z protest” by many people because the call to action is being led by young Kenyans who have remained relentless despite the violence.
This Week’s Big Question
“Would you rather never have to work for money or get your dream job?”
Frank’s response -”I’ll choose to never work for money like any other sane Nigerian. But I can’t also stand being idle so I’ll start working for passion.”
You can also share your response here and if it’s as interesting as Frank’s response, we’ll feature it in the next edition.
The Big Picks
Dangote Faults CBN’s 26% Interest Rate: Aliko Dangote, Chairman and Chief Executive Officer of Dangote Group, has voiced criticism over the Central Bank of Nigeria (CBN) raising interest rates to nearly 30 percent.
FG Exempts Farmers, Manufacturers, SMEs From Paying Withholding Tax: The Federal Government has decided to waive withholding tax for farmers, small businesses, and manufacturers.
If you enjoyed this edition of the newsletter, don’t forget to subscribe and share. You can also leave feedback for us in the comments or by filling out this form.