Business
Global Weakness Threatens Japan Recovery
TOKYO — The sharp drop in the Japanese stock market underscores a big vulnerability of the Abenomics recovery: weakness in overseas economies may undermine the success of measures to jump-start growth at home.
“Economies are all connected, and we’re really worried about how far the impact will reach” from the recent emerging market turbulence, Toyoaki Nakamura, chief financial officer of Hitachi Ltd., told reporters Tuesday, even as the electronics giant raised its earnings forecast for the fiscal year ending next month, predicting a record profit.
Much of the boom engineered by Prime Minister Shinzo Abe in 2013 was driven by a dramatic expansion in monetary stimulus from his handpicked Bank of Japan governor, who pushed down the value of the yen against the dollar and other major currencies. That gave the country’s manufacturers a lift in global markets by lowering the relative price of their goods. It also helped bring about higher profits and a stock market rally, which in turn lifted domestic spending.But one month into the new year, markets are moving in the opposite direction because of renewed concerns over the health of the U.S. and Chinese economies as well as emerging markets—and how that might filter back to Japan. The yen rose to its highest level in over two months versus the dollar, as investors see the Japanese currency as a safe investment at times of economic turbulence, casting a new shadow over exports.
Following the new yen strength and spreading worries about growth abroad, the Nikkei Stock Average dropped over 4% Tuesday to 14008.47, its lowest closing level in four months.
The market reversal and signs of fragility in overseas demand pose major challenges to Japan’s economy, which is just about to become more dependent on exports and the weak currency for growth. In April this year, the government plans to raise the national sales tax by three percentage points to 8%, a move expected to sap strength off consumption given lackluster growth in wages.The sudden bout of Japanese stock weakness follows a number of positive reports, for domestic firms and for the economy.
As companies have reported earnings for the October to December quarter over the past two weeks, they’ve shown a dramatic recovery thanks to the yen’s nearly 20% drop over the past year. Earnings reports released thus far by 517 listed Japanese companies have shown an average 45% jump in operating profits, according to SMBC Nikko Securities. Honda Motor Co., Japan’s third biggest car maker by volume, posted a net profit of ¥160.7 billion ($1.6 billion) in the quarter through December, more than double its year-earlier result, partly because of a weaker yen.
Government economic data in recent weeks has almost all been upbeat. The most recent figures were released Friday—ahead of this week’s two-day Nikkei plunge of nearly 7%–and showed surprising strength. The most closely watched index for consumer prices was positive in 2013 for the first time in five years, signaling an end to the deflation that has sapped the economy, while the unemployment rate dropped to 3.7%, its lowest level in six years.The Japanese economy regained some momentum in the final three months of last year after a slowdown over the summer, likely expanding 2.4% on reaccelerating consumer spending, according to 12 economists polled by The Wall Street Journal.
Japanese policy makers have urged calm in recent days, insisting the country’s recovery remains on track, despite jitters abroad. “I want market participants to be sure…that there is no need for Japanese markets to move in sync with the U.S. market,” Economy Minister Akira Amari said at a regular news conference Tuesday.
“There is no major change in the economic fundamentals” of the U.S. and Japan, and weakness in the latest ISM data is due to unusually cold weather in the U.S., said Yoshimasa Maruyama, a senior economist with Itochu Economic Research Institute. “You shouldn’t overreact to this.”
But the economy is almost certain to sink, at least temporarily, after one-off rush spending ahead of the sales tax increase runs its course. In December, households boosted spending on autos by 50%, refrigerators by 164% and watches by nearly 200% compared with year-earlier levels, according to government data.The question is whether exports and business investment will gather enough steam to cover the slack to be left by consumption, as forecast by the BOJ.
Export volumes show little sign of life. They rose a meager 2.5% on year in December, slower than a 6.2% in November, as shipments to the U.S. fell and those to Asia moderated. Honda has cut its forecast for global sales for the full year to 4.385 million vehicles from 4.430 million previously, citing uncertainty in emerging markets.
Some economists worry that the new bout of market weakness could undercut support for Mr. Abe’s ambitious economic reform program, seen as crucial for sustaining longer-term growth. “The Japanese public has until now supported economic reforms because of rising stock prices and the falling yen,” which have worked favorably for the nation’s economy, said Ryutaro Kono, chief Japan economist at BNP Paribas. But structural overhauls have made little progress. And with the market now turning unstable, “it could become politically more challenging” to carry out such reforms, which often involve pains, Mr. Kono added.
– WALLSTREET JOURNAL
Business
Nigeria Records Biggest Rise in Multidimensional Poverty Among Five Countries – UN
Nigeria recorded the largest increase in the number of people experiencing multidimensional poverty among five countries that registered increases over their latest measurement periods, according to the United Nations Development Programme (UNDP).
The finding was contained in the 2026 Global Multidimensional Poverty Index report, released on Monday by the UNDP and the Oxford Poverty and Human Development Initiative (OPHI).
According to the report, Nigeria’s multidimensional poverty rate rose from 33 per cent in 2021 to 38.7 per cent in 2024, representing an increase of 5.7 percentage points.
SEE MORE: NNPC’s 30-Day Petrol Discount Is Not a Policy – Sowunmi
The number of Nigerians living in multidimensional poverty increased from 72.2 million in 2021 to 90.1 million in 2024, leaving an additional 17.9 million people affected.
The report noted that the latest increase reversed the progress Nigeria recorded between 2018 and 2021, when the proportion of people living in multidimensional poverty declined.
Nigeria’s Multidimensional Poverty Index value also increased from 0.175 in 2021 to 0.208 in 2024, reflecting a rise in both the incidence and intensity of deprivation.
The intensity of deprivation among multidimensionally poor Nigerians increased from 52.9 per cent to 53.6 per cent over the same period.
Unlike income-based poverty measures, which assess poverty based on how much people earn or spend, the Multidimensional Poverty Index examines overlapping disadvantages experienced in daily life.
The index measures deprivation across three dimensions: health, education and standard of living.
Its 10 indicators include nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing and household assets.
A person is classified as multidimensionally poor when their household experiences deprivation in at least one-third of the weighted indicators.
The report showed that Nigeria had made progress in reducing multidimensional poverty before the latest increase.
The country’s index value declined from 0.230 in 2013 to 0.202 in 2018 and 0.175 in 2021 before rising to 0.208 in 2024.
Similarly, the proportion of Nigerians living in multidimensional poverty fell from 42.3 per cent in 2013 to 37.2 per cent in 2018 and 33 per cent in 2021 before increasing to 38.7 per cent in 2024.
The number of affected Nigerians also declined from 76.3 million in 2018 to 72.2 million in 2021 before climbing to 90.1 million in 2024.
The report further highlighted significant differences in multidimensional poverty across Nigeria’s subnational regions, with incidence ranging from 3.7 per cent to 88.3 per cent across the regions covered by the analysis.
It compared Yobe and Sokoto, two of Nigeria’s poorest subnational regions with similar Multidimensional Poverty Index values, to illustrate how the forms of deprivation experienced by communities can differ despite comparable overall poverty levels.
Globally, the report estimated that 1.2 billion people across 108 countries lived in acute multidimensional poverty.
Sub-Saharan Africa accounted for 616 million people living in multidimensional poverty, while South Asia followed with 393 million.
The report also found that 83.3 per cent of the world’s multidimensionally poor population, equivalent to approximately 998 million people, lived in rural areas, compared with 200 million in urban areas.
Children below the age of 18 accounted for 617 million, or 51.5 per cent, of the world’s multidimensionally poor population.
In sub-Saharan Africa, 355 million children lived in multidimensional poverty, accounting for 57.7 per cent of the region’s poor population.
Business
ADF Targets 5 Million Students, 2 Million Vulnerable Women
In a bold move to deepen retail participation in Nigeria’s capital market, the Aliko Dangote Foundation (ADF) has unveiled a share grant initiative aimed at helping up to five million tertiary students and two million vulnerable women become shareholders in Dangote Petroleum Refinery and Petrochemicals (DPRP) through its Initial Public Offering (IPO).
Managing Director and Chief Executive Officer of ADF, Zouera Youssoufou, disclosed that the Foundation will match qualifying share subscriptions by eligible beneficiaries. Under the programme, students who subscribe for the minimum 10 shares worth N5,250 will receive an additional 10 shares funded by the Foundation, subject to the approved process and allocation, effectively doubling their holdings to 20 shares.
Speaking during a television interview, Youssoufou said the initiative was designed to turn the refinery’s “People’s IPO” vision into reality by giving traditionally underserved groups a direct stake in one of Africa’s largest industrial assets.
“When Aliko announced the IPO, he described it as the IPO of the people and wanted as many Nigerians as possible to participate,” she said.
READ ALSO: FG Lacks Capacity to Meet Dangote Refinery Crude Demand
According to her, students and vulnerable women were specifically selected because they have historically been underrepresented in the capital market.
The ADF said it is prepared to support up to five million students enrolled in Nigerian tertiary institutions, including universities, polytechnics and colleges of education. Eligible applicants must be at least 18 years old and enrolled in a recognised institution. The Foundation is working with relevant educational authorities to verify beneficiaries.
Youssoufou revealed that about N25 billion has been earmarked for the student component of the scheme, while the broader programme for students and vulnerable women is valued at approximately N40 billion.
She emphasised that the intervention is a grant, not an investment, with all shares ultimately belonging to the beneficiaries.
“The shares end up with the beneficiary. Our goal is to help people who may never have had the opportunity to own shares begin building long-term wealth,” she said.
Beyond students, ADF plans to support up to two million vulnerable women, including widows, women living in extreme poverty, persons with disabilities, and widows of members of the Armed Forces. The Foundation is partnering with state governments, the Ministry of Women Affairs, the Armed Forces and other institutions to identify eligible participants.
According to Youssoufou, the initiative is not only about widening ownership in the refinery but also about promoting financial literacy, encouraging a culture of savings and investment, and helping Nigerians build sustainable wealth through participation in the capital market.
Business
FG Lacks Capacity to Meet Dangote Refinery Crude Demand
Nigeria’s efforts to increase production and curb crude oil theft still leaves her short of meeting the demands of the 700,000 barrels demand of the Dangote Petroleum Refinery and Petrochemicals (DPRP).
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the disclosure during an interview on Channels Television’s Politics Today at the weekend.
The disclosure comes amid renewed debate over government intervention in the petroleum market, with proposals for production subsidies, the 30-days petrol discount and other measures to support domestic refining and reduce the cost of petroleum products.
READ ALSO: Fuel Discount: Presidency Explains Why Atiku’s Production Subsidy Proposal May Fail
He explained that Nigeria’s total crude oil production does not translate into an equivalent volume available for allocation by the government.
Oyedele said Nigeria’s crude oil production of about 1.8 million barrels per day was shared among parties operating under production-sharing contracts and joint ventures, while production costs, royalties and other obligations further reduced the volume available to the government.
“Under the production-sharing contract and joint venture, they share these things, and the ratios vary. Let’s say roughly 45:55,” he said.
He explained that oil producers first recover eligible production costs through cost oil, while royalties and contractual sharing arrangements also determine the quantity ultimately accruing to the government.
“The long and short of what I’m telling you is whatever is left for Nigeria, we exhaust it almost entirely because of fuel subsidy,” he said.
According to the minister, the situation was particularly severe before President Bola Tinubu introduced the economic reforms in May 2023, when the Nigerian National Petroleum Company Limited (NNPC Ltd), which holds the country’s crude on its behalf, had less than 100,000 barrels of freely available crude remaining.
He said the government had exhausted much of its revenue and resorted to printing money before turning to future crude oil production to secure commitments used to finance present consumption.
“That was a ticking time bomb,” Oyedele said, describing the arrangement under which future oil production was committed to support current fuel consumption.
The minister, however, acknowledged improvements following increased production, efforts to reduce crude oil theft and the renegotiation of some existing commitments that had tied down the country’s crude.
He cited comments by business leader Tony Elumelu, who had previously expressed frustration over the scale of crude oil theft in Nigeria, and subsequently reported an improvement in the situation.
Despite these gains, Oyedele said the country was yet to attain the level of freely available crude required to supply the Dangote refinery with its full daily requirement.
“But we are still not at the point where we can give Dangote 700,000 barrels,” he said.
The minister dismissed proposals for the government to supply the refinery with discounted crude or at production cost, arguing that such proposals failed to recognise the constraints on the volume of oil available for allocation.
“We don’t have enough to service Dangote. Dangote imports crude,” he said.
He added that the naira-for-crude arrangement introduced by the Federal Government had helped provide some stability but had not eliminated the supply constraints.
According to him, sustained increases in crude oil production and the release of additional barrels from existing commitments would eventually enable Nigeria to meet the requirements of Dangote and other domestic refiners.
“As we ramp up production and we free up some barrels, we’ll get to a point where we’ll be able to give Dangote everything he wants and other refiners will be able to get enough,” he said.
Oyedele also expressed hope that Nigeria would eventually refine all the crude oil it produces domestically and export refined petroleum products rather than crude.
The disclosure comes amid renewed debate over government intervention in the petroleum market, with proposals for production subsidies and other measures to support domestic refining and reduce the cost of petroleum products.
Oyedele further maintained that achieving that ambition will depend not only on the expansion of refining capacity but also on sustained growth in crude oil production and the availability of additional volumes for domestic processing.





