If one did not know where the rain began to drench him, he would not know at what point his body dried up, says an Igbo adage.

That is why Bounce News has taken time to review business activities of 2017 to help understand how the events that took place within the year shaped Nigeria’s economic landscape.

This would further help to get a grip of the direction the Nigerian economy is headed in 2018.

Below are top 5 trends that shaped economic discourse in Africa’s largest economy in 2017.

1. Naira Depreciation/Appreciation:

Naira note.

The fall and rise of Nigeria’s currency, the Naira, was one of the stories that dominated business headlines within the first and second quarter of 2017.

The Naira’s woes started with the drop in the price of global crude oil prices – Nigeria’s most reliable source of foreign exchange.

Nigeria’s case was even aggravated by attacks on oil facilities by militants which reduced output drastically.

So, with the oil sales receipt at an all-time low and demand for dollars rising to meet import demands, the naira went on free fall.

The monetary authorities, the Central Bank of Nigeria, also failed to act on time as it defied calls for devaluation.

By February, the naira was trading at more than 500 naira per dollar.

Also Read: CBN Injects $210 Million Into FX Market

It was after this time that the CBN introduced some intervention, tapping into the external reserves to meet relevant and genuine demands of dollars and introducing several windows for improved access.

The result was almost instant, as the naira acted as if it was on steroid, appreciating in value rapidly and through sustained intervention by the CBN in the market, the Naira has continued to get stronger.

As at January 1, 2018 the naira exchanges for 306/7 at the official market and about 365 at the parallel market where it is available.

But going into the new year, analysts predict that CBN’s intervention would continue.

But there are fears – and the IMF has warned so as well – that the CBN needs to end its intervention by letting the naira find its true value to attract investors.

However, it is very unlikely that the monetary policy authorities will heed this advice, because the election year is upon Nigeria - 2019.


2. Death of Etisalat Nigeria:

Up until June 2017, former Etisalat Nigeria, now 9Mobile, was the third largest telecommunications company in Nigeria.

But unknown to many, Etisalat had already gotten into serious trouble. It had fallen victim to the currency crisis.

You see, Etisalat borrowed about $1.2 billion from a consortium of 13 local banks.

But then things went south and naira depreciated so badly due to dollar shortages. So, Etisalat Nigeria was unable to find the dollar to pay back the debt.

The banks were on its neck and its parent company – the UAE based Emerging Markets Telecommunication Services Limited, EMTS – were unwilling to help.

Several attempts to renegotiate the debt with the banks failed. At the end of the day, EMTS pulled out.

And then to save thousands of jobs, Nigeria’s banking and telecoms regulators, the CBN and Nigeria Communications Commission, NCC stepped in to save the company. This now necessitated a change of brand name to 9Mobile.

Also Read: Reps Investigate 'Sudden' Collapse Of Etisalat Nigeria

Now, there are several investors interested in taking over the business, including Africa’s richest man, Aliko Dangote and Globacom’s owner Mike Adenuga.

CBN governor, Godwin Emefiele had told Nigerians that 9Mobile’s new investors would be announced in December but the latest news had been the bid.

No new investor has been picked. It is now hoped that a winner would certainly emerge this new year.


3. Food Inflation:

Within this year, general inflation was on consistent decline, from 18.72 year-on-year in January to 15.91% year-on-year in October.

But it was food inflation that had been the thorn in the flesh.

While other indices were down, it remained up. Prices of staple food items such as garri, rice, beans etc remained high for most of the year, as it rose by more than 20% in October, reaching an all-time high of 39.54% in September of 2001

Currently, food prices are relatively down because of the harvest season. But there are no guarantees.

Also Read: #BounceFoodPriceReview: Food Prices Remain Stable Despite Yuletide

As far as inflation is concerned, most Nigerians hope it continues to plummet in the new year.

However, a more pragmatic approach to containing food inflation would be a more vital option as government pursues renewed investment in the agricultural sector.


4. Nigeria’s Rising Debt Profile:

To borrow or not to borrow. That has been the dilemma Nigeria’s economic managers faced within the year.

Before the end of the third quarter of 2017, Nigeria’s debt profile had risen by up to 40% to 19.16 trillion naira, according to the Debt Management Office, DMO.

Yet, Nigeria continues to borrow more with several bonds lined up coupled with regular treasury bills issue that would likely resume in January.

This year alone, the government tapped into several other debt instruments such as the Eurobond, Sukkuk (Islamic bond) and the green bonds, raising hundreds of billions of naira in debt.

Some analysts had predicted that Nigeria’s debt service to revenue ration will hit 70%.

Already the government plans to spend 2.1 trillion-naira servicing debt in the 2018 budget. Within the first half of this year, debt servicing gulped 927.74 billion naira.

Read More: How Govt. Plans To Reduce Borrowing Cost - DMO

Concerns have been raised from several quarters including the International Monetary Fund, IMF but it is highly unlikely that the government will soft-pedal on borrowing.

As 2019 elections approach, the government would be under pressure to prove it is working.

So, more borrowing is still likely to happen in 2018.


5. Fuel Crisis

This one has not left the headlines yet. The device you are reading this report on could have been powered with fuel sourced at 300 naira per litre at the black market.

Nigeria currently faces an embarrassing fuel scarcity that threatens to ground the economy as it moves into a new year.

The government and oil marketers have passed the buck while the scarcity persists.

Also Read: Osinbajo Insists There Is No Plan To Hike Fuel Price

Many hope the scarcity could end in a matter of weeks as the yuletide and new year celebrations come to an end.

But going into the new year, Nigerians would want to see those responsible for the scarcity punished in line with Buhari's zero tolerance for corruption.

Also Watch: Nigeria Has Reopened For Business – Afrinvest