On Monday 4th May 2020, the National Bureau of Statistics (NBS) released the executive summary of its 2019 poverty and inequality report in Nigeria. The report measures and estimates the poverty rate and living standards in Nigeria by making use of the Nigerian Living Standards Survey (NLSS). It is representative at the state level with a sample size of 22,110 households, focusing on increasing the understanding of living conditions of the Nigerian population. The survey collected data on household and individual demographics (age, gender, marital status, among others), access to education, health and basic services, employment, assets, and income.

These are the key things learnt from the report:

82.9 Million Nigerians Live on N377 in a Day

The report shows a poverty line equal to N137,430 per person in a year. This explains that anybody living less than that amount per year, is considered to be poor by national standards. Dividing the figure by 365 days in a year, translates to approximately N377 per day. With an estimated population of 206 million and the NBS poverty rate of 40.1%, it therefore shows that approximately 82.9 million Nigerians are living below the poverty line. It also means that on the average, 4 out of every 10 Nigerians have their real per capita expenditure less than N137,430 in a year. In the urban regions, 18% of the population live on less than N377 per day while 52.1% of the population in the rural region live on that same amount in a day.

88% of the 17 States above the National Poverty Average are in the Northern Region

With the exception of Ebonyi (79.76% poverty rate) and Enugu (58.13% poverty rate), the remaining 15 states with poverty rate above 40.1% are situated in the Northern part of the country. From the data, Sokoto state has the highest proportion of people living on less than N137,430. This is because it has a poverty rate of 87.73% followed by Taraba state which has poverty rate of 87.72%, which is just 1bps less than Sokoto state.
States with the lowest poverty rate (poverty rate below the national average) are prevalent in the southern part of the country, with Lagos state having the lowest poverty rate (4.5%) in the country, followed by Delta state which has a poverty rate of 6%. Osun state surprisingly, has the third lowest level of poverty in the country. The poverty rate in the state is 8.5% followed by Ogun state which has a poverty rate of 9.3%. The Federal Capital Territory (FCT) has a poverty rate of 38.7%. Even though this is below the national average of 40.1%, it is well above the urban average of 18%.

There is a Negative Relationship between Level of Education and Rate of Poverty

The poverty report reveals that the rate of poverty is high among those with no level of education. Where the head of a household is a male and has no level of education, the rate of poverty is higher than where the head of the household is a male and is educated up to the post-secondary level. The same also applies to the female. On the aggregate level, poverty rate among those with male head and no form of education is 66.17% and 34.72% in households where the household head is a female and has no form of education.
The rate of poverty is however 18.13% in households where the head is a male and has post-secondary level of education. Where the head of the households is a female and has post-secondary level of education, the rate of poverty is 5.66%. This therefore also reveals that households with female heads tend to fare better than those with male as the head.

You can read more from the link below:

https://giftedanalysts.com/five-things-we-learnt-from-the-2019-nbs-poverty-and-inequality-report/

Due to the outbreak of Covid-19, countries have resorted to restricting movements, closing their borders as well as closing down the domestic economy (with the exception of essential services being allowed to move). Elsewhere, there was an oil price war between Saudi Arabia and Russia, which sent the price of headline crude oil to the lowest since 2002 while the price of WTI went negative for the first time due to storage problems. A major result of the different measures was halting of the operations of global airlines, limited activities of domestic airlines, which have reduced the demand for crude oil to a very low level. The International Energy Association (IEA) projects global demand for crude oil to drop by 29 million barrels per day.

Since the end of March 2020, airline operators have embarked on laying off their workers as cash flows were not coming in. they have also reported huge decline in their earnings. American Airlines in specific are said to be losing more than $10 billion in cash every month due to the current situation. In the United States, more than 3,000 aircraft have been grounded and this is about 51% of the active fleets of airlines in the United States.

The Losses in their Numbers

Delta Airline

For Delta Airlines, total revenue was down by 17% in the first quarter of 2020 (Q1 2020) as the company recorded $8.6 billion in revenue. There was also no profit sharing during the quarter (compared to $220 million in Q 2019) as the company recorded a net loss of $534 million (compared to net income of $730 million in Q1 2019) mainly brought about by increase in costs related to salaries, depreciation and contracted services.
Looking forward, the company says that as a result of the travel restrictions and stay-at-home orders, it expects the Q2 revenue to plummet by 90% when compared to the revenue in Q2 2019. On the expenses side, Delta Airlines expect costs to decline by 50% (approximately $5 billion) in Q2 2020, and this will be due to reduced capacity, lower fuel and cost initiatives including parking more than 650 aircraft, Consolidating airport facilities, with temporary concourse and Delta Sky Club closures, Instituting a company-wide hiring freeze and offering voluntary leave options with 37,000 employees (41% of total employees) taking short-term unpaid leave as well as reducing salary expense through pay reductions for executive management and reduced work schedules across organization.

American Airline

American Airlines which operates about 6,800 flights in a day to about 365 destinations in 61 different countries, reported $2.24 billion net loss (first loss since 2013) in the first quarter of 2020. Revenue from passenger flights dropped by 20.5% to $7.68 billion as cargo flights revenue plummet by 32.7% to $147 million while revenue from other sources declined by 2.9% to $687 million from $708 million recorded in Q1 2019. According to the CEO of the Group, the airline has never before faced such a significant challenge as it is facing now. Total operating expenses however grew by 8.4% to $11.06 billion in Q 2020 (compared to $10.21 billion in Q1 2019) and this was aided by growth in expenses related to other rent and landing fees, other expenses as well as depreciation and amortization.

Going forward, American airlines expect to burn through $70 million per day in cash and in June, it expects it to narrow down to $50 million to be lost per day. This is because it expects a reduced system capacity by 80% in April and May while system capacity is estimated to be reduced by 70% in June. Just like Delta Airlines, about 39,000 American Airlines employees (approximately 30% of total employees) have volunteered for partially paid leave as well as unpaid leave.

Air France-KLM

In France, Air France-KLM reported 16% decline in operating revenue even as passenger unit revenue went up marginally by 0.8% at the end of February 2020. Operating revenue went down to €5.02 billion in Q1 2020 from €5.94 billion in Q1 2019. Majority of the total costs associated with operation were also down during the period under review while the company recorded a loss of €861 from operating activities. Consequently, Loss After Tax for Air France-KLM during the first quarter of 2020 was €1.80 billion.

Transvania (a part of the France Airline group), has already been grounded since late March and this is expected to last until 27th May. For the Group, all the airlines have been operating at about 5% in April and it expects to be at that level throughout Q2 2020. As such, the Group expects system capacity to be reduced by 80% in Q3 2020, which means it only expects to be operating at 20% level in Q3 2020. The company also expects to cut its costs up to €500 million in full year 2020, as well as termination of most of the temporary contracts. Lastly, operational cash burn for Air France-KLM after protection measures, is expected to be €400 million per month in Q2 2020.

Continue reading in the link below:

https://giftedanalysts.com/in-their-numbers-financial-and-job-losses-in-the-aviation-sector-around-the-world/

Ever since recording the first Coronavirus (COVID-19) case on February 27, Nigeria has gone to record 1,337 cases as at April 27, including 40 death and 255 discharged patients. The government locked with two options of locking down the economy or opening the economy cautiously, went for the first option on 30th March when the country had 131 cases. The press conference of the President Buhari was majorly about locking down Lagos, Abuja and Ogun state in order to reduce the spread of the virus.

Fast forward to April 18, Nigeria recorded its first 500 cases when it registered 541 total cases including 166 deaths. This shows that it took 52 days for Nigeria to record its first 500 cases. By April 24, Nigeria had registered 1,095 cases. This shows that while it took 52 days to register the first 500 cases, it only took six days to register the next 500 cases.

On Monday 27 April, the President in his address to the nation, announced that starting from May 4, the country will ease the lockdown and normal activities will be from 6:00am to 8:00pm with ban on social, school and religious activities still in place till further notice. Furthermore, interstate lockdown shall exist, with Kano state in a total lockdown.

This has generated reactions from the citizens of the country, particularly those in Lagos state who are concerned about how social distancing can be enforced in public transports particularly the Danfo as well as the traffic situation in the state. Hence, the people feel curfew between the period of 8:00pm and 6:00am will be impossible to achieve and that the state will likely experience more cases of coronavirus (COVID-19) due to how it is almost impossible to enforce social distancing in public transportation in the state.

How Lagos State Citizens will Likely React Once the Restriction is Gradually Lifted

For the first week, a lot of people (especially those in the formal sector) are likely to still stay at home, with the intent of watching how events will unfold. In fact, there is the tendency that those in the formal sector in the state will likely remain in voluntary lockdown till the end of the month. Those that have been working from home and are achieving more, will also likely remain at home till the end of the month.
Lots of people are also likely to drive in their own cars. Prior to the ban of okada and keke napep in the state, workers prefer going to work in public transport, as well as through the use of Okada because they tend to reach their places of work and home, faster than when they go in their own cars. With coronavirus (COVID-19), the people will see the need to make use of their private cars so as to reduce the likelihood of contacting the virus from another person.
Majority of those in the informal sector will start going out once the lockdown is eased and this is because they depend on daily cashflows to survive. Hence, it is expected that those that will likely start going on as from May 4 will be the ones in the informal sector. They have been anxiously waiting for this time.
Private cars will not engage in hire services (Cabu-Cabu). Prior to now, it is common for private car owners to engage in using their cars for commercial purposes when they are going to work, or going back home from work. They tend to carry those who pass through their routes, and make money with such activities. However, with the current situation, they will likely not do such again.
The above will lead to more people going for the limited public transportation in the state. Hence, public transportation will be overwhelmed (coupled with the fact that BRTs will likely have less space) once the ease of the lockdown starts on May 4th, 2020.

A Lift on the Ban of Okada and Keke Napep is therefore Needed

With the fear of the people in using public transport, coupled with the fact that the likely consequences above point to the fact that public transport will be overwhelmed and will aid rapid spread of the virus, it is therefore expedient of the Lagos State government to consider the temporary lifting of ban on Okada and Keke Napep at this time in order to slow down and reduce the likely spread of the virus.

First, with Okada, the number of passengers is reduced to one and there is always minimum contact between the driver and the passenger. With OPAY, MAXNG and the likes, they tend to engage more on personal hygiene as well as safety of their passengers. Hence, the Okada riders through the use of sanitizers, helmets and facemasks, tend to help reduce the spread of the virus than when the citizens make use of the public transport.

Second, the use of Okada at this time will appeal more to the people who by nature are fearful and will want to try as much as possible to do things that will protect them from having the virus while they go about their daily economic activities. Thus, the use of Okada minimizes the contact impact of having the virus.

Third, the use of Keke Napep also favours minimum contact because they can be convinced to limit their space to permit three passengers of which there will still be little spaces when compared to the public transport where contact is very possible through limited spaces.

Fourth, it will be very hard to convince drivers to limit their spaces of 4 in a row to 2 in a row, unless there is an avenue for drivers to cover the revenue to be associated with the remaining 2 seats. Hence, the use of Okada becomes a viable option to reduce the spread of the virus once the Lagos state economy begins the ease of lockdown starting from Monday May 4th, 2020.

https://giftedanalysts.com/covid-19-now-is-the-time-for-lasg-to-lift-ban-on-okada-and-keke-napep/

As a result of the outbreak of COVID-19, countries have restricted the movement of its citizens. In California, the residents have been advised to stay at home and only can go out when it is absolutely necessary. Italy and France have also ordered a total lock down while different countries such as the United States, Canada, Morocco, Egypt, Nigeria, have ordered the travel ban on international tourists and non-citizens to prevent the pandemic from spreading. This translates to more than 2 billion citizens staying at home. As such, the following sectors/companies are gaining and still gaining from the Coronavirus Economy:

Internet Service Providers- As a result of citizens staying at home, then the need for using the internet increases as this will not make them to be bored. It will also enable them have something doing. Also, workers have been told to work remotely in some industries. This increases their need for internet more than they were using before because they might be distracted at some points to watch videos online as well as do other things related to the internet.
According to the 2019 mobile internet report, 65% of worldwide mobile downstream traffic is in form of videos while about 12% comes from social media. According to CNN editorials, Netflix and Youtube are slowing down in Europe to keep the internet from breaking. As this constitute pressure on internet service providers, it translates to surge in revenue as a result of increased demand for internet services.

Wireless Telecommunications- Wireless telecommunication companies are also expected to experience surge in the demand for their products. This is because citizens will prefer the use of their products to ease their daily life activities. According to Mike Robuck, among the video conferencing companies that stand to profit from the coronavirus outbreak are Cisco Webex, Zoom, Slack, Microsoft Teams, and Google Hangout Meets. For example, Month to Date, the share price of Zoom has grown by 15% to N130.55 as at March 20. Zoom currently has about 235 vacancies in sales, marketing, support, HR, engineering and Finance.

Manufacturers of Masks and Sanitizers- Since the outbreak of the pandemic, there have been increased demand for masks and sanitizers to keep citizens safe. The personal hygiene level of individuals have also increased and this translates to more revenue for masks and sanitizers manufacturers because they tend to produce more as a result of increase in price caused by the increase in demand. In India alone, the sales of Masks increased by more than 100% to about 1.2 million in February from the usual monthly average of around 600,000. The same for sanitizers and hygienic products as demand has grown more than 10 times in the past one month. This led to a surge in price of masks from $2.03 to about $7 at the beginning of March. In Nigeria, the CBN will be granting naira and FX funding facilities to major pharmaceutical companies such as Glaxosmith, Fidson Health care, Neimeth and Swiss Pharma, in order to support them with the procurement of the materials needed to fast track the local production of drugs in the country.

Life and Health Insurance Companies- It is expected that health and life insurance companies will see a boost in gross premium written due to the high number of people coming to insure their health so as to protect themselves from future occurrence that may arise, especially as it relates to COVID-19.

Jobs that enable quarantine practices such as ecommerce fulfillment, video communication as well as food delivery are also growing significantly, especially with Amazon hiring 100,000 employees and Walmart increasing its number of employees by more than 150,000. Another example is the largest pizza company in the world- DOMINO, announcing job openings (delivery people, customer service representatives, managers, pizza makers as well as assistant managers) globally in order to fulfill the demand of the people at this critical time.

http://giftedanalysts.com/the-biggest-gainers-in-the-coronavirus-economy/

Introduction

The Nigerian economy is one in which the three tiers of government (Federal Government, State Government and Local Government) come together each month to share income that comes to the country among themselves which will be used in the running of operations at the federal, state and local government level for each month. This income being shared is majorly composed on income generated from the sale of crude oil, VAT income, as well as Petroleum Profit Tax (PPT). Because crude oil accounts for more than 60% of government revenue, it is a major influencer of what the three tiers of government shares each month. Needless to say that one of the characteristics of the Nigerian economy is that since it is mono-culture (dependent on a single commodity-crude oil) in nature, it is influenced by the fluctuation in oil prices.

Prior to the beginning of the year, nobody had it in mind to include the influence of COVID-19 on economies of the world when preparing outlooks. With the outbreak of the virus which was declared as a pandemic on 11th March by the World Health Organization, different economies of the world have been affected in terms of health and economy and this will have a major impact as well as shape how different things are being done going forward. As at April 2, cases of COVID-19 have been detected in 47 countries out of the 54 countries in Africa with Nigeria reporting 184 cases, 20 recoveries and 2 deaths (As at April 3). Lock down was also declared in Lagos, Ogun and Abuja starting from March 30.

In Nigeria, the pandemic has reduced Nigeria’s monthly revenue as a result of disruptions in global supply chain, low prices of crude oil, as well as low level of economic activities in the economy. The CBN also feels the heat as the dollars are not coming (foreign investors leaving emerging economies and low dollars coming from low crude oil prices). This has made it adjust the exchange rate by about 15% as well as stopped the sale of FOREX to the BDCs. Banks have also started reducing the amount to be spent from naira denominated accounts for international transactions.

Relationship between Oil Price and Monthly Allocation

The expected theoretical relationship between the price of crude oil and monthly allocation has been such that “when the snail draws, its shell follows”. The reason for this is not far-fetched as crude oil constitute about 90% of Nigeria’s export earnings while it is about 65% of the country’s revenue. As such, it makes sense that monthly revenue will most times, follow the swings in the price of crude oil in the international market.

COVID-19: The Trouble that Lies Ahead for the Federal Accounts Allocation Committee (FAAC)
POSTED ON APRIL 3, 2020 BY ABDULAZEEZ KURANGA

Introduction

The Nigerian economy is one in which the three tiers of government (Federal Government, State Government and Local Government) come together each month to share income that comes to the country among themselves which will be used in the running of operations at the federal, state and local government level for each month. This income being shared is majorly composed on income generated from the sale of crude oil, VAT income, as well as Petroleum Profit Tax (PPT). Because crude oil accounts for more than 60% of government revenue, it is a major influencer of what the three tiers of government shares each month. Needless to say that one of the characteristics of the Nigerian economy is that since it is mono-culture (dependent on a single commodity-crude oil) in nature, it is influenced by the fluctuation in oil prices.

Related: More than 90% of the 774 LGs in Nigeria Exist Only to Pay Salary

Prior to the beginning of the year, nobody had it in mind to include the influence of COVID-19 on economies of the world when preparing outlooks. With the outbreak of the virus which was declared as a pandemic on 11th March by the World Health Organization, different economies of the world have been affected in terms of health and economy and this will have a major impact as well as shape how different things are being done going forward. As at April 2, cases of COVID-19 have been detected in 47 countries out of the 54 countries in Africa with Nigeria reporting 184 cases, 20 recoveries and 2 deaths (As at April 3). Lock down was also declared in Lagos, Ogun and Abuja starting from March 30.

In Nigeria, the pandemic has reduced Nigeria’s monthly revenue as a result of disruptions in global supply chain, low prices of crude oil, as well as low level of economic activities in the economy. The CBN also feels the heat as the dollars are not coming (foreign investors leaving emerging economies and low dollars coming from low crude oil prices). This has made it adjust the exchange rate by about 15% as well as stopped the sale of FOREX to the BDCs. Banks have also started reducing the amount to be spent from naira denominated accounts for international transactions.

Related: COVID-19: Why Nigeria is Likely to Record Increased Number of Cases in Coming Weeks

The next paragraphs therefore explain the trouble that lies ahead of FAAC going forward by first graphically explaining the relationship between oil prices and total monthly allocation, then examining the trend in monthly revenue sharing since 2017, compare with other months and years, as well as forecast what will happen going forward given the global pandemic as well as the price war which have led to share decline in the price of crude oil in the international market.

Relationship between Oil Price and Monthly Allocation

The expected theoretical relationship between the price of crude oil and monthly allocation has been such that “when the snail draws, its shell follows”. The reason for this is not far-fetched as crude oil constitute about 90% of Nigeria’s export earnings while it is about 65% of the country’s revenue. As such, it makes sense that monthly revenue will most times, follow the swings in the price of crude oil in the international market.

In January 2017 when Crude oil averaged $54.83/barrel, monthly allocation to the three tiers of government was N305.62 billion. When the price averaged $51.89/barrel in March 2017, monthly allocation was N330.48 billion. This increase in monthly allocation despite low crude oil price was as a result of the government stepping up with tax collection as a result of the recession which the country was during the period.

All through 2018, there was a positive relationship between the price of crude oil and monthly allocation to the three tiers of government. For example, when the price of crude oil averaged $66.24/barrel in February 2018, monthly allocation to the three tiers of government was N579.46 billion. When the average price of crude oil grew by 1.17% to $67.01/barrel in March 2018, monthly allocation in March grew by 2.56% to N594.30 billion.

The relationship between the monthly allocation and price of crude oil is not entirely a positive one based on the graph and this is because revenue from crude oil export being a 60% component of the overall monthly allocation will not make it have a full impact on the entire monthly income because of the remaining 40% coming from other sources such as VAT and exchange rate difference.

Trend in Nigeria’s FAAC Since 2017

In the last three years, a total amount of N19.63 trillion have been share among the three tiers of government based on the data obtained from the NBS. While they all share N5.18 trillion in 2017, N7.40 trillion was spent amongst them in 2018 and they all shared N7.04 trillion in 2019. All these are influenced by the fluctuation in international oil prices. This is reflected in 2017 when the Nigerian economy was out of recession in Q2 2017, low international oil prices was the major factor for the recession and it reflected in the low amount of revenue shared by the three tiers of government.

Of the three years under review, January 2017 was when the lowest amount of revenue (N305.62 billion) was shared among the tiers of government. N105.76 billion was allocated to the Federal Government while N115.26 billion and N84.60 billion were allocated to the state and local governments respectively. The highest amount share during the months and years under review was N672.61 billion in December 2018 when the price of crude oil was $67.46 as at the end of December. At this time, the Federal government received N280.91 billion, state government received N238.94 billion and the local government got a share of N152.75 billion.
Between January and April 2017 was the only time the 36 State Governments received more allocation than the federal government. Of the N5.18 trillion shared in 2017, 40.91% went to the Federal Government, 34.62% went to the 36 state government and the remaining 24.46% was shared among the 774 local government in the country.

In 2018, the federal government received more allocation (42.94% of total allocation) when compared with the N2.12 trillion it received in 2017. The 774 local government however, had reduction (in terms of proportion of total allocation) in the allocation received in 2018 when compared with 2017 as it received N1.66 trillion representing 22.39% of the 2018 total allocation.

Total allocation dropped by 4.8% in 2019 to N7.05 trillion as the Federal Government received the largest share of N2.93 trillion representing 41.63% of the total allocation while the 36 state government shared N2.47 trillion and the 774 local government shared N1.64 trillion which represents 23.28% of the total allocation. The lowest amount of N536.70 billion was shared among the three tiers in May 2019 while the highest total allocation in 2019 was recorded in July 2019 when the three tiers of government shared N643.39 billion.

The Trouble Ahead

In 2019, the FAAC adopted a recommendation that in any month where the distributable revenue available for sharing from the federation account falls below N680 billion, then the shortfall should be withdrawn from the Excess Crude Account (ECA). If the net distributable income is between N680 billion and N730 billion, then up to N50 billion should be transferred to the ECA to form savings. The committee further recommended that if the amount to be shared falls between N730 billion and N830 billion, then N100 billion should be transferred to the ECA as savings. As at February 2020, the sum of money left in the ECA was $71.81 million and this is where the trouble lies ahead.

In January 2020, the three tiers of government shared N622.93 billion of which N287.93 went to the Federal Government, N191.30 was shared by the 36 states and N143.69 was shared by the local government.

In February however, the first meeting ended at a deadlock because the amount to be shared was less than expected. In fact, it was the lowest amount shared since December 2017. When there was no agreement on sharing during the first meeting, the matter was transferred to the National Executive Council (NEC). In the end, the Federal government got N236.12 billion, while the 36 state governments shared N159.01 billion and the 774 local government shared N119.31 billion.

With the ECA in a very critical state in need for increased oil prices to be robust again, then it is expected that the amount to be shared by the three tiers of government in the coming month will be very low because they have no ECA fund to fall back to, in order to augment any shortfall since the ECA also needs help at this critical stage. The price of Crude oil is currently trading between $22 and $26 per barrel from $66 per barrel recorded at the beginning of the year. ECA is also almost in a state of non-existent and VAT income of N105 billion (in February 2020). All indices shows that the road ahead will be tough for the three tiers of government as revenue from all sources looks to be very low due to the pandemic as well as price war between Russia and Saudi Arabia which has sent oil prices southwards. Going further (with COVID-19 lasting beyond Q2 2020), income from VAT will also be affected as a result of disruptions in supply of goods and services. This will likely compound the revenue problem of the country and the country will see more borrowings in form of concessions, as well as issuing more domestic debts since it is not the best time to seek for international loan.

http://giftedanalysts.com/covid-19-the-trouble-that-lies-ahead-for-the-federal-accounts-allocation-committee-faac/

No thanks to the COVID-19 (declared as a pandemic by the WHO on March 11, 2020), the world is expected to experience recession worse than the great depression majorly due to how countries are flattening the covid-19 curve. The demand for crude oil is down by 29 million barrels per day according to the International Energy Association, global supply chain is also disrupted as well as tourism, hospitality, and aviation being the worst hit from the pandemic. All these have made global economy to slow and as such, the IMF expects the world to experience a contraction of -3.0% after which a partial recovery of 5.8% is expected in 2021.

This article gives a brief summary of how the IMF expects the world to grow in 2020, highlight the top 10 countries to grow in 2020 (with special focus on Guyana), highlight countries that will fall the most in 2020, as well as give a special case study of selected African countries.

23 (59%) of the 39 Countries Expected to grow in 2020 are in Africa

Of the 194 countries of the world, the only country without real GDP growth data is Syria. As such, the real GDP figure of the IMF covers 193 countries. Of this number, the IMF expects 39 countries to experience growth in 2020 while the remaining 154 will experience decline in economic activities in 2020. The countries that will experience a growth represent 20% of the countries of the world while the remaining 80% will experience decline, with Libya experiencing the worst decline of -58.66%.

There are 54 countries in Africa, and based on the data obtained from the IMF, approximately 43% will experience growth in real terms in 2020 compared to 0% (all advanced economies will experience decline in 2020) and 29% in Asia. Of the 39 countries to experience growth in 2020, 23 are in Africa, 14 are in Asia and the remaining two are Kiribati (Oceania) and Guyana (South America).
Overall, the advanced economies are expected to contract by -6.1%, emerging markets and developing economies will contract by -1.0%, while Sub-Saharan Africa in isolation will contract by -1.6%.


How well do you know Guyana?

Often nicknamed the “Land of Many Waters” due to the abundance of fresh water in the country, Guyana is the only English speaking country in South America, bordering Venezuela, Brazil and Suriname. The country has a population of less than one million (39% of which uses the internet) as 90% of this population lives on the coast while the rest are scattered around the interior. Apart from being the only English speaking country in South America, Guyana has a diverse population, has a Caribbean vibe, great religious diversity, is a land of cricket as major game (unlike the rest of South America where football reigns), and has a lot of wild life including 6 wild cat species.


As at April 17 2020, Guyana has a total number of 63 confirmed cases of Coronavirus, with 6 deaths recorded so far.
The country is majorly covered by the tropical rain forest and it is rich in gold, sugarcane, bauxite, and timber. Guyana’s most important mineral resources are the extensive bauxite deposits between the Demerara and Berbice rivers that contribute to making the country one of the world’s largest producers of bauxite. Both sugarcane and rice are cultivated through a combination of mechanization and manual labour. The country also cultivates coffee, cacao (the source of cocoa beans), corn, vegetables, bananas and citrus fruits.

With the discovery and pumping of crude oil in the country, the IMF calculated that the oil sector will represent about 40% of the economy within five years. The government expects the initial $300M a year in revenue from profit-sharing and royalties to more than double after a second offshore well starts production around 2022.


With real GDP growth projection of 52.77%, Guyana will record the fastest economic growth in the world in 2020. In comparison, Guyana’s projected economic expansion would be 29 times that of what is expected from China- the second largest economy in the world. A major reason for the IMF projecting this expansion for Guyana is because the country started oil production in December 2019- a prospect which is believed will transform the economy of the country. According to the IMF, The commencement of oil production in Guyana in 2020 presents an opportunity to scale-up capital and current spending at a measured pace over the medium term to address infrastructure gaps and human development needs, while attenuating debt sustainability concerns at the same time. Furthermore, Guyana has the highest amount of crude oil for each person more than any other country in the world with its 3,900 barrels of offshore reserves per person (compared to 1,900 barrels for Saudi Arabia).

IMF however warns Guyana that the pace of scaling-up public spending needs to be gradual to reduce bottlenecks from absorptive capacity constraints, avoid waste, and minimize macroeconomic distortions related to ‘Dutch disease’ that has often inflicted economies experiencing sizable increases in resource-based income. Overall, while the economy will expand by 52.77% in 2020, economic growth in the country is expected to moderate to 6.25% in 2021 since even small changes to the projected oil output in 2020 would result in significant swings in the overall economic performance.

Libya Leads the Pack of 80% of the Countries in the World to Experience Decline in 2020

As noted earlier, 154 countries of the world will experience real GDP decline in 2020 based on the data obtained from the IMF. Libya will be the country to decline the most, thus being the fastest declining country of the world in 2020. Growth in Libya slows from a growth of 9.89% in 2019 to -58.66% in 2020 majorly due to the ongoing civil war in the country which disrupts the economy in addition to the devastating effects of covid-19.


Other countries in the top 10 to decline in 2020 are Macao (-29.62%), Venezuela (-15%), Aruba (-13.7%), San Marino (-12.17%), Lebanon (-12.02%), Belize (-11.99%), Palau (-11.95%), Seychelles (-10.84%) and Greece (-10.04%).


Among the selected countries above, only China will record a modest growth in 2020 even as it recorded decline of -6.8% in the first quarter of 2020. With the country ramping up production and coming back to live ahead of other countries of the world, it is expected to record a modest growth for full year 2020. Italy however is the hardest hit of the countries under review as the IMF expects the economy to contract by -9.13% in real terms in 2020. The Italian economy was already a fragile economy before the global pandemic as it recorded decline in Q4 2020 while the economy only grew by 0.3% in full year 2019. Furthermore, the measures put forward by the euro-zone finance ministers to combat COVID-19 fails to solve the excessive public debt profile in the most fragile countries. With no progress to on the mutualization of debt between member countries, significant political difficulties is expected to arise in Italy. As such, it is not surprising that seven of the 10 countries under review are European countries.

It should also be known that Europe is the epicenter of the Coronavirus with Italy recording 175,925 cases as at April 18, while Spain recorded 191,726 number of cases, France with 151,793 cases, Germany with 142,872 cases and the United Kingdom recording 114,217 number of cases as at April 18, 2020.

The Big Economies in Africa Drag the Continent’s Growth

Nigeria, South Africa and Algeria are the first, second and fourth biggest economies in Africa as they control approximately 41% of the entire GDP of Africa ($2.34 trillion in 2018). The three countries will record a fall in their real GDP in 2020. While South Africa will have its real GDP contract by -5.80%, the real GDP of Algeria will contract by -5.16% while that of Nigeria will fall by -3.41% in 2020.


Of the ten selected countries, Benin republic will record the largest real growth in 2020 as it is projected to grow at 4.52% which is 188bps less than 6.40% growth recorded in 2019. Furthermore, the IMF expects real GDP of Benin republic to improve to 5.97% in 2021. Egypt is also among those expected to experience growth in 2020 even though the growth will be moderate.

Conclusion

With Sub-Saharan Africa expected to contract by -1.6% while 23 countries in Africa will experience growth, it shows how strong the smaller and developing economies are but big countries dragging down their growth. It also explains the much opportunities available in the developing economies as they are relatively immune to downturns. Furthermore, the developing economies theoretically have the tendency to grow more than the developed economies because they still have excess capacity and with increased capital investment, they tend to grow rapidly, other things being equal.

However, due to how the big and developed countries are being dependent on by the smaller countries, slower growth in those developed countries tend to have an impact on the smaller countries. As such, growth in the big economies is a mirror image of growth in the entire world.

http://giftedanalysts.com/imf-weo-how-the-world-will-grow-in-the-great-lock-down-of-2020/

The CPI (Consumer Price Index) calculates the average over time increase in prices of products and services purchased by people on a regular basis. The monthly Statistics released by the NBS stands at 12.26%.

March 2020 reports a 12.26% steady increase Year on Year from 12.20% in February 2020. Data obtained from the National Bureau of Statistics (NBS) shows an upward trend in inflation rate with 0.06 percent point increase from the preceding month. This is the seventh consecutive month of increase since August 2019(11.02%) and the highest level since April 2018 (12.48%).


In the same vein, the composite food index rose by 14.98% in March 2020 compared to 14.90% in February 2020 (Year on Year). The food sub-index increased by 14.98% in March 2020 from 14.90% in February 2020 (Y-o-Y). This rise in the food index is reported to be caused by increases in prices of Bread and Cereals, Fish, Potatoes, Yam and other tubers, Oils and fats, Vegetables, and Fruits.

Similarly, core inflation increased to 9.73% in March 2020 from 9.43% in February 2020 (Y-o-Y). The highest increases were recorded in prices of Passenger transport by air, Tobacco, Household textiles, Major household appliances, Domestic services and household services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Water supply and Catering services.

Moving forward, a steady increase in inflation rate is expected due to the lock-down measures at combating COVID-19 in the country. Major increases are to be experienced in essential goods and services. Thus, we expect inflation rate to continue its rise in the nearest future following the trend as the country moves towards lean period of agricultural output, as well as disruption in supply chain caused by corona virus lock down order.

http://giftedanalysts.com/cpi-report-for-march-2020-a-steady-rise-in-inflation-to-12-26/

A breakdown of Nigeria's inflation rate in March 2020 and the major commodities that experienced uptick in prices is explained in the article in my signature.

Also, an insight into what we should expect in the coming months based on the current economic dynamics is given in the article.

WTI forward price for May 2020 expired yesterday April 21 and it tumbled well below $0 per barrel to close the day (April 20) at -$37 per barrel which means you get paid $37 for every barrel of WTI crude oil you buy.

The article in my signature therefore explains why you shouldn't think there is only one variant of crude oil as different countries have different variants.

It also explains how a forward market works (particularly in the oil industry) and why suppliers are willing to pay buyers to buy their oil. Lastly, it briefly gave an insight of how Nigeria is affected and if the current situation will persist.


Click on my Signature to read about it and also ask questions that bother you about it.

febo15:
KIV means Keep in view. Thank me later.

Thank you

lilllly:


I think they have replied today. I got a regret mail.

Yes they have

kontrolbuoy:
you were probably placed on KIV, not every one will accept the offer hence the move. Like you said earlier, it’s best you move on and if they later get back to you,very much fine unlike you waiting and at the end of the day having your hopes dashed.

Please What is KIV and what is the offer about that it's not everybody that will be willing to accept it?

lilllly:
Am I the only one who didn’t get a success nor regret mail? I have checked my spam and even called the phone number on the mail. I was told to hold on and I would be contacted. (Though I have move on)
Please is there anyone else like me?

You Are not the only one. We are together