Nigeria’s economy lost out on an estimated 207.4 billion naira due to an eight day strike this month prompted by a dispute over fuel import subsidies, the national bureau of statistics said on Wednesday.
The biggest losses were sustained in the retail and the oil and gas sectors, a report by the bureau said.
Nigeria’s consumer inflation edged down slightly year-on-year in December to 10.3 percent, from 10.5 percent the month before, it also said. Food inflation rose 11 percent in December, up from 9.6 percent in November, the bureau’s data showed.
Nigerian trade unions called off strikes and protests on Monday, ending a major confrontation overfuel prices after President Goodluck Jonathan said he would cut them by one third.
But a week of total shutdown was massively damaging to Nigeria’s economy, especially in its two biggest cities of Lagos and Kano, where protests were most widespread.
“The sector, which accounts for about 18 percent of GDP, was worst hit by the crisis was the Wholesale and Retail Sector, which recorded a loss of approximately 86,981.84 million naira,” the bureau report said.
“This sector accounted for 42 percent of the overall total loss in output during the period. This was followed by the Crude Petroleum and Natural Gas Sector, the largest source of government revenue accounting for N28,710.87 million, and 14 percent of economic losses,” it said.
This was despite the fact that oil workers did not carry out a threat to shut down production. Most oil majors say their production was not affected during the strike at all.
“Our production wasn’t touched at all. We made no losses,” said an official at one oil major.
Jonathan reinstated part of a subsidy on petrol after Nigerians took to the streets in anger at an attempt on January 1 to scrap it completely, which doubled the pump price of petrol overnight to around 150 naira per litre from 65 naira.
The compromise, settling on 97 naira per litre, still slashes the cost of the benefit to the government and leaves the way open to talks on phasing it out again later.
Analysts said December’s inflation figure was broadly in line with expectations, but warned that they expected January’s figure to be affected by the hike in fuel prices.
“The market will now be anxiously awaiting the Jan 2012 inflation data given the recent 50 percent increase in fuel prices,” said Standard Bank’s Samir Gadio.
“We see inflation rising by up to 200 bps this year, with highs of 14 percent to 14.5 percent y/y in Jul-August”
But he added that this would most likely spur monetary tightening, which could make the bond market more attractive.
“For now, we would recommend a carry trade at the short end of the curve (the 364-day T-bill yield has fluctuated around 20 percent lately,” Gadio said.