9th May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,579.52 0.22% 2.59% Brent Crude Oil 76.68 3.86% -10.74% Natural Gas 2.20 2.71% -46.34% I&E FX Window 462.78 -0.02% -3.29% Parallel Market 742.00 -1.37% -0.27% Gold 2,024.48 0.38% 11.59% Cocoa 3,178.00 2.22% 21.96%
8 May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,465.31 0.33% 2.37% Brent Crude Oil 75.3 3.86% -11.73% Natural Gas 2.14 1.71% -47.80% I&E FX Window 462.25 0.08% -3.16% Parallel Market 732.00 0.68% 1.08% Gold 2,016.28 -1.70% 11.14% Cocoa 3,109.00 1.87% 19.31%
5th May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,290.75 0.16% 2.03% Brent Crude Oil 73.39 1.47% -14.81% Natural Gas 2.11 -4.2% -48.54% I&E FX Window 463 -0.02% -3.34% Parallel Market 732.00 0.68% 1.08% Gold 2,045.07 0.32% 12.72% Cocoa 3,052.00 1.26% 17.12%
4th May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,207.77 -0.17% 1.87% Brent Crude Oil 72.35 -3.9% -16.19% Natural Gas 2.12 -4.2% -48.29% I&E FX Window 462.33 -0.03% -3.22% Parallel Market 737.00 -0.55% 0.41% Gold 2,022.00 0.33% 11.45% Cocoa 2,990.00 -4.47% 14.74%
3rd May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,296.48 -0.2% 2.04% Brent Crude Oil 75.24 -5.13% -12.52% Natural Gas 2.22 -4.14% -46.34% I&E FX Window 462.33 -0.07% -3.19% Parallel Market 733.00 0.36% 0.95% Gold 1982.35 1.73% 11.15% Cocoa 3,130.00 -2.19% 20.12%
2 May 2023 Africa Markets Roundup
Markets % Change YTD (%) NGX ASI 52,403.51 0.32% 2.25% Brent Crude Oil 79.15 -1.14% -7.87% Natural Gas 2.31 -4.18% -43.7% I&E FX Window 463 -0.22% -3.44% Parallel Market 735.67 0.45% 0.59% Gold 1982.35 -0.39% 9.27% Cocoa 3,200.00 0.82% 22.80%
Why Nigeria’s Revenue from Solid Minerals is miserable
The Nigerian Extractives Industry Transparency Initiative (NEITI) stated that Nigeria made only US $1.4 billion from solid minerals in 13 years, a miserable average of about US $100 million per year. This was said at the launch of the initiative’s 2022–2026 Strategic Plan in Abuja recently.
All three economic recessions in Nigeria’s history were under President Buhari
After leaving office in May, President Muhammadu Buhari has the honour of being just one of two people that ruled Nigeria in two different times – the other being President Olusegun Obasanjo. But there is a record that only he has – He is Nigeria’s only President that has presided over the country’s periods of economic recession – not one, not two, but three economic recessions in 1984, 2016 and 2020. After the National Bureau of Statistics (NBS) released the final GDP growth data before President Buhari left office on the 29th of May, it is symptomatic of his presidency that the Q1 2023 of 2.31%, compared to 3.52% in Q4 2022 was self-inflicted – cash crunch. Nigeria’s GDP and Oil Price Dynamics 2014 – 2023 From the data and graph above, President Buhari presided over an average quarterly growth rate of 1.3% in 8 years, compared to an estimated 2.4% annual growth rate in population. Every child born under President Buhari’s eight years in office was born in a poorer Nigeria than when he or she was conceived. The data also shows that President Buhari presided over two cycle of economic recessions – 20016 and 2020, both driven by declining oil prices. In 2016, the economy contracted by 1.6%, recording the first recession in the country since 1984. Therefore, Nigeria has recorded only three economic recessions since record began, and they have all been under President Muhammadu Buhari – what an economic record! The quarter-on-quarter growth gives a better description of the yoyo dynamics of growth under President Buhari. As depicted by the figure below, the M-shaped pattern of quarterly growth has not changed in the last 8 years. The Yoyo Nigeria’s Quarterly GDP Growth 2014 – 2023 Given the last 8 years, President Bola Ahmed Tinubu’s preoccupation is macroeconomic stability. The government is attempting to focus on credible measures and convince both domestic and international investors that Nigeria is open for business.
Dangote Refinery does not mean an end to subsidies
After the inauguration of the 650,000 barrels of crude oil daily refining capacity Dangote Refinery, it is widely reported that fuel production will commence August 2023. While production has not started as planned, the excitement from the government is palpable, at least for two major reasons. First, it will mean the preservation of the foreign exchange used in the importation of refined fuel. Second, it is expected that queues at the pumps across the country will be a thing of the past. However, for the average Nigerian, the thought is that this will also mean an end to the narratives by government officials that the government is subsidising the consumption of fuel. Unfortunately, it does not. The refinery is the largest single train in the world with capacity of 650,000 bpd. It has a 900 KTPA Polypropylene plant, and its 435-power plant can meet power requirements of all the South West States, excluding Lagos. When operational, the refinery can meet all of Nigeria’s domestic fuel needs, including AGO and aviation fuel. Dangote refinery would guarantee improved supply of petrol in Nigeria’s domestic market. On the target market and petroleum sufficiency, the refinery could meet 100 per cent of the Nigerian requirement of all liquid products, including gasoline (petrol), diesel, kerosene, and aviation jet, and would also have a surplus of each of these products for export which will enhance the inflow of foreign currency. Also, by reducing Nigeria’s reliance on imported petroleum products, the Dangote Refinery will enhance the country’s energy security. It will help stabilise domestic fuel supplies and reduce the vulnerability of the Nigerian economy to sudden shocks. Furthermore, the presence of the Dangote Refinery is expected to stimulate growth in the downstream oil sector in Nigeria. It will attract investments in related industries, such as petrochemicals and manufacturing, which rely on petroleum products as feedstock. This can lead to the development of ancillary industries and the creation of additional jobs. However, Dangote refinery will not guarantee a cheaper price or necessarily bring down the cost of fuel pump/retail price in Nigeria. Using the most basic template by the Petroleum Products Pricing Regulatory Agency (PPRA), the retail price of PMS includes four main components: The crude oil Cost, averaging US $72 and using the I&E exchange rate, freight cost, landing cost and Refining costs and profits. Using today’s international crude oil price, the average retail price with a Dangote refinery is estimated at N254 per litre, about N80 above the current average pump price. Source: The Petroleum Products Pricing Regulatory Agency (PPRA) The most important difference between imported fuel and the Dangote refinery fuel is the landing cost. Previously, Mele Kyari, the Chief Executive Officer (CEO) of the Nigerian National Petroleum Company (NNPC) Limited, said that Nigeria spends at least N13-N17 as landing cost on every litre of petroleum product imported. The devaluation of the naira against the dollar has, according to some insiders, pushed the cost to about N21. That will now be saved.
Meta launches Threads to compete with Twitter
Meta, the parent company of Facebook and Instagram has now launched Threads, to directly compete with Twitter. The number of those using Twitter has fallen, compared to 2022 by about 4%. It is expected to fall further to 335 million in 2024, according to Obelo. There are currently 2.35 billion monthly active Instagram users. While Instagram is largely visual based, Meta is banking on the possibility of a good chunk of Instagram users finding the option of text based microblogging attractive. In the first four hours after launch, over 5 million people had signed up to Threads. A day after the launch, Meta’s share price went up 4%, reaching the highest in 18 months. The launch of Threads is the greatest signal yet that the battle for platforms rages on. On the App Store, it is called ‘Threads, an Instagram app’, signaling that Meta will rely on its 2.35 billion monthly Instagram users, about 70 millionsof those in Africa as at 2022 to get the app going. It is also expected that people will be able to log in through their Instagram account. Threads will not only compete with Twitter, but also with Bluesky. Currently, Bluesky requires you to have an invite code to be able to join. In the last few months, deepening uncertainty about the direction of Twitter, have left many disillusioned. Twitter, established in 2006, had more than 100 million users by 2012 and became 10 of the most visited websites by 2013. By 2019, it had more than 330 million active users, though about 15% of that was estimated to be fake by 2020. Elon Musk acquired and gained control of Twitter October 2022 for US $44 billion. Before then, growth had slowed. What culminated in the purchase of Twitter was not a business motivated purchase but frustration about the platform’s commitment to free speech and democracy. So, he initially bought shares but was not allowed to join the board – poison pill. Since its purchase, Twitter, at best, has been characterised by volatility, and that is what has “annoyed” users and driven away advertisers. In the space of six months, Twitter has banned platform linkages, stopped tweet Bot working, removed legacy verification badges, and limited the number of tweets users can see. Unsurprisingly, Meta pounced and launched Threads, reaching almost 100 million users in 72 hours, all signing up through their Instagram accounts (the only way to sign up for now). However, the last few weeks has seen Twitter, now X bounced back with payments to content providers, a measure that has proved very popular. While platforms have always been powerful, incredible advancement in technology has made them even more powerful. Platforms (anywhere with the capacity to bring large ‘gathering’ of people) have always been there e.g., Coca Cola or Kodak advertising during world cups before any of these technology platforms started. Advancement in technology has also made competition very. Platform companies can compete faster and at a scale never seen before.
