Highlights from Reuters coverage of Nigeria over the last seven days

Central Bank Governor Godwin Emefiele said seven of the 10 members of the monetary policy committee voted to cut the main lending rate by 100 basis points

In this week’s round-up: Nigeria’s central bank announces biggest interest rate cut in five years, GDP grows 1.87% in Q1, President Buhari sends revised budget to parliament, and Nollywood left reeling by coronavirus-related safety measures.

  • Nigeria’s central bank unexpectedly cut its benchmark lending rate to 12.5% from 13.5%, in a bid to stimulate growth in Africa’s largest economy in the face of the coronavirus pandemic. It is the first rate cut since March 2019 and the largest since 2015. Seven of the 10 members of the bank’s monetary policy committee backed a 100 basis point cut, two voted for 150 basis points and one for 200 basis points, said the governor, Godwin Emefiele. Africa’s top oil exporter faces economic distress from the coronavirus outbreak and sharp falls in crude prices, which have triggered a steep decline in growth. Emefiele said the lower rate would “stimulate credit expansion to critically important sectors”, which in turn would also stimulate employment and revive economic activity for a quick recovery in economic growth. Nigeria’s government expects the economy to contract by as much as 8.9% this year, but Emefiele said the country could avoid a recession. The decision surprised analysts. The central bank has kept interest rates tight for the last two years to curb inflation, support the naira and attract foreign investors to its debt market. As usual, members of the Twitterati weren’t backwards in coming forwards with their opinions.
  • Nigeria’s five-year bond yield dropped more than 200 basis points on Friday, the day after the rate cut, as yields fell across maturities. The yield on the most liquid 5-year paper fell 201 basis points to 6.5% while the 2026 paper, a seven-year bond, with six years to maturity, fell 120 basis points to yield 8.8%. Traders said the rate cut spurred buying interest from domestic funds battling with excess liquidity on the money market which worsened after foreign investors dumped local treasuries due to a plunge in oil prices that was exacerbated by the coronavirus pandemic.
  • And Nigeria’s film industry is creeping back to work after lockdown. Our team visited the set of one of the first productions to resume — a new television series about a highly infectious disease that has ravaged the world. Cameras stopped rolling in Nigeria’s film industry weeks ago due to the coronavirus pandemic, which has killed more than 300,000 people worldwide, including 200 in the West African country. Better known as Nollywood, the multibillion-dollar industry churns out movies and TV shows at a rate second only to India’s Bollywood and employs one million people. But productions have had to be stripped right back. Filming for the TV series Meadows, shot in the capital Abuja, restarted in mid-May after being halted for two months. Its production team, excluding actors, has been cut back to around seven people — around a quarter of the people in a regular Nollywood crew. “I have to do lots of things myself,” said director Samuel Idiagbonya, who is now also in charge lighting. The crew wear face masks, actors keep their distance from one another as they deliver their lines and undergo regular temperature checks. The global pandemic has left Nollywood in deep trouble, according to industry executives. Cinema closures across Nigeria due to the lockdown have been catastrophic for the industry, which gets half of its revenue from ticket sales. Cinemas in Nigeria are still shut indefinitely and the consultancy predicts that up to 250,000 people employed in Nollywood, from designers to box office attendants, could lose their jobs. Moses Babatope, managing director of Film One Entertainment, believes that the pandemic has caused Nollywood losses of around 3 billion naira ($8.33 million) since mid-February. An increase in home viewing has boosted sales to streaming platforms including Netflix, but meanwhile revenue from other clients such as airlines has dried up, said Babatope, who is secretary of a film industry body. The shuttering of the cinema chain he co-founded and which accounts for 60% of his distribution revenue, has forced him to furlough around two-thirds of his staff. “If this goes on much longer, a lot of cinema businesses will struggle to come back, including ours,” said Babatope. In a similar vein, we also heard from workers in Lagos, including a “hype man” and nightclub manager, who lamented the impact of coronavirus-related safety measures on the megacity’s usually bustling nightlife.

Nigeria bureau chief for Reuters. Ghanaian family, British accent. Ex-BBC, before that newspapers.