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Oil Rebound Takes the Edge Off Covid-19 Slump in Nigeria

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Oil Rebound Nigeria

Oil Rebound Takes the Edge Off Covid-19 Slump in Nigeria

Africa’s largest economy had a week of good and bad news as the oil price rebounded to the highest level in two months, while the negative impact of the coronavirus pandemic on consumers and business activity became clearer.

Crude prices have doubled since hitting a two-decade low in April, climbing past $40 a barrel after OPEC+ cuts started taking excess supplies from the market.

With oil bringing in 90% of foreign exchange revenue for the continent’s largest producer, this will boost government income and dollar liquidity. Ironically, Nigeria is among the countries accused by the production group of not fully complying with the reductions that helped push up prices in the last month.

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The following four charts show some of the bad and the good for Nigeria.

A crude-price rally has eased concerns of a currency devaluation for Nigeria

If oil prices stabilize close to the current levels until the end of the year, it would add modest upside risks to forecasts for economic growth, public finances and international reserves, said Mahmoud Harb, a director at Fitch Ratings. A 10% rise in the full year’s average crude price above the company’s current forecast of $35 per barrel would improve Nigeria’s current-account deficit by about 1.5% of gross domestic product, he said.

Lower Nigerian bond yields signal improved investor appetite

Yields on Nigerian bonds maturing in 2047 fell from an all-time high of 13.2% on March 19 to 8.6% on Friday, a sign that investor concern has eased. Although the West African nation has ruled out going to international bond markets this year, the cost of raising new debt will be relatively lower now if it chooses to.

Nigeria's PMI levels signal the economy probably will contract in second quarter

Although the purchasing managers index of Stanbic IBTC Bank and IHS Markit’ rose last month, it remained below 50, suggesting the economy of Africa’s largest crude producer will shrink in the second quarter. The central bank said last week Nigeria may avert a recession and that the drop in GDP could be less than the 3.4% projected by the International Monetary Fund, but its own manufacturing PMI fell to 42.4 in May after staying above 50 for 36 consecutive months. The manufacturing PMI compiled by Lagos-based FBNQuest Capital fell to 43.3 in May from 45.8, with all sub-indices in contracting territory.

“The recession this year will be smaller than in advanced and many peer economies because of the limits to Nigeria’s integration within the global economy,” analysts at investment banking firm, FBNQuest wrote in a note on Friday. “For the same reason its U-shaped recovery in 2021 is likely to disappoint. Household demand remains squeezed.”

Widespread Impact

Many Nigerians have lost sources of livelihood due to the virus

Nigeran consumers are feeling the impact of the disruption in economic activities, data released Friday by the statistics agency shows.

At least 79% of respondents in a survey said their incomes have decreased since mid-March, when restrictions were imposed to curb the spread the pandemic. More than 42% who were working before the pandemic now say they no longer do and 51% of households were forced to buy less food due to higher costs.

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Business Africa

President Buhari Warns ECOWAS Against Tenure Elongation

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President Buhari Warns ECOWAS Against Tenure Elongation

President Muhammadu Buhari has strongly warned that with the enormous socio-economic and security challenges confronting west Africa, the sub- region cannot afford another political crisis in the guise of tenure elongation.

Buhari said this while addressing the 57th Extraordinary Session of the Authority of ECOWAS Heads of State and Government in Niamey, the Republic of Niger.

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“It is important that as leaders of our individual member states of ECOWAS, we need to adhere to the constitutional provisions of our countries, particularly on term limits. This is one area that generates crisis and political tension in our sub-region.

“As it is, the challenges facing the sub-region are enormous; from socio-economic matters to security issues, the ECOWAS sub-region cannot therefore afford another political crisis, in the guise of tenure elongation,’’ he said.

He also expressed worry over the premature adoption of ECO as a single currency by French speaking West African Countries, stressing the need for them to return to the agreed roadmap.

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Business Africa

Nigerian Stocks Beat Global Slowdown With N154B Gain

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Nigerian Stocks Beat Global Slowdown With N154B Gain

Nigerian stocks continued to increase as investors took advantage of low share prices and continued to buy bargain stocks throughout the week, resulting in the stock price closing with an average return (increase) of 1.17% at the weekend, the second highest gain among global advanced and emerging markets. Kenya recorded an average return (increase) of 3.4%

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Trading reports at the Nigerian Stock Exchange (NSE) at the weekend showed the overall consensus across the market was for buying stocks across major sectors as investors continued to react positively to news of how much money is being made by companies in the first half of 2020. The benchmark index for Nigerian equities, the All Share Index (ASI), closed weekend with average increase of 1.17 per cent, equivalent to a net increase across all the shares in the index of N154 billion

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COVID-19 AND ITS IMPACT ON THE NIGERIA AVIATION SECTOR – SONI-ODOH

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nigeria aviation sector

COVID-19 AND ITS IMPACT ON THE NIGERIA AVIATION SECTOR By SONI-ODOH

The corona virus has impacted world economies negatively and has caused terror in major sectors , especially the Nigeria aviation sector.

The sector is one of the major income earners in the world ,even for a developing country like Nigeria.

Over the last couple of years, the Nigerian aviation sector has contributed massively to the country’s gross domestic profit(GDP). Both government and private individuals invest yearly into the sector.

According to the national bureau of statistics, the Nigerian aviation sector contributed nearly 150billion naira to the gdp in 2018 which saw a 33 percent increase by the last quarter of 2019 but it was recently revealed by the Minister of aviation,Hadi Sirika that Nigeria has recorded a massive loss of over 21billion Naira in the aviation sector due to coronavirus in Nigeria.

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With domestic airlines already implementing salary cuts and retrenchments of workers, over 125,370 jobs are at risk. For an industry which relies on flight and cargo shipping, the question becomes, how does the Nigerian government save its aviation industry so it doesn’t get beyond recovery, how does it ensure private airline owners don’t run out of business and that hundreds of citizens don’t become unemployed.

With flight operations suspended, it is necessary for the government to look into other options like direct financial support and tax wavers for the airlines as a way of sustaining the aviation sector.

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COVID-19 PREVENTION

infectious diseases in your community. It is very important to wash your hand frequently with soap under running water.

COVID-19 IS REAL

Inside Nigeria's Covid-19 wards

“I can’t bury my sister”The pain of Covid-19 is real.Watch and share video 👇BBC News Africa

Posted by BBC Media Action Naija on Wednesday, July 8, 2020

#COVID19NIGERIA Situation Report

The #COVID19Nigeria situation report for 21st July, 2020 has been published. Our daily reports provide a summary of the epidemiological situation & response activities in Nigeria

The #COVID19Nigeria situation report for 21st July, 2020 has been published. Our daily reports provide a summary of the epidemiological situation & response activities in Nigeria

@Africa CDC

The African Union and Africa CDC will virtually rollout the Partnership to Accelerate COVID-19 Testing (PACT) in Africa tomorrow 4 June, 2020 at 11.00 am Eastern Africa Time.

The African Union and Africa CDC will virtually rollout the Partnership to Accelerate COVID-19 Testing (PACT) in Africa tomorrow 4 June, 2020 at 11.00 am Eastern Africa Time.

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"Also found worthy of honour was Bashir Abubakar, an Asst Comptroller-General of Customs, who rejected a bribe of $412,000 per container offered him by drug traffickers seeking to bring 40 containers of Tramadol into Nigeria. A fine example of incorruptibility, worthy of emulation"

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