The spread of novel Corona Virus Disease (COVID-19) in Nigeria continue to record significant increase as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 30,748 confirmed cases.

On the 9th of July 2020, 499 new confirmed cases and 5 deaths were recorded in Nigeria, having carried out a total daily test of 2,302 samples across the country.

To date, 30,748 cases have been confirmed, 12,546 cases have been discharged and 689 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 171,931 tests have been carried out as of July 9th, 2020 compared to 169,629 tests a day earlier.

COVID-19 Case Updates- 9th July 2020,

• Total Number of Cases – 30,748
• Total Number Discharged – 12,546
• Total Deaths – 689
• Total Tests Carried out – 171,931

According to the NCDC, the 499 new cases were reported from 24 states- Lagos (157); Edo (59); Ondo (56); Oyo (31); Akwa Ibom (22); Borno (21); Plateau (19); Kaduna (18); Katsina (18); Bayelsa (17); FCT (17); Delta (14); Kano (11); Rivers (10); Enugu (8); Ogun (6); Kwara (4); Imo (3); Nasarawa (2); Osun (2); Abia (1); Ekiti (1); Niger (1); Yobe (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 11,827, followed by Abuja (2,365), Oyo (1,604), Edo (1,562), Delta (1,337), Kano (1,302), Rivers (1,294), Ogun (1,063),  Kaduna (907), Katsina (646), Ondo (606), Borno (584), Gombe (524), Bauchi (519), Ebonyi (503), Plateau (497), Enugu (439), Abia (401),  Imo (359), Jigawa (318).

Kwara state has recorded 311 cases, Bayelsa (299), Nasarawa (236), Osun (212), Sokoto (153), Akwa Ibom (134), Niger (125), Benue (121), Adamawa (100), Anambra (93), Kebbi (86), Zamfara (76), Yobe (62), Ekiti (46), Taraba (27), while Kogi and Cross River state have recorded 5 cases each.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

It is often said that he who must find gold, must dig deeper because such is not found on the surface. With the current trends in interest rate, yield has become like gold, and those that must find it, should dig deeper than they have done before. It is no longer news that yield in traditional asset classes is approaching historically low levels. Indeed, yields are so low that yielder hunters are literally stuck. In one of my last pieces, I noted that the low yield had driven pension funds to the point of abandoning treasury bills as an asset class. The picture gets scarier and disheartening when viewed in real terms. With inflation holding steady, the low yields end up translating to negative returns when discounted for inflation.

Source: CBN

Now that Treasury bills seem to be out of the question due to sub-zero yields, what can investors turn to? Here are a few things that investors could think of doing;

Invest in Money Market Funds: Money market funds have been the darling asset class for most Nigerians, due to their conservative nature and the fact that money market funds seem to be much easier to understand. The present low yield in the World market is also affecting money market funds but they still remain much higher than what is obtainable from Treasury Bills.  Unfortunately, a great majority of fund managers do not have the yield of their money market funds on display when I visited their websites, below is a list of the prevailing money market yields in Nigeria for those that could be gleaned from the various website:

It may pay to shop around for yield as different funds present with different yields, as can be seen from the table above.

READ ALSO: SEC’s new rules on collective investment schemes: A step in the right direction

Fund Managers to the Rescue: One of the implications, if not the major implication of the ultra-low interest rate is that investors in yield driven asset classes, like money market funds, will either make minimal returns or no returns at all, especially when inflation is factored in. Unfortunately, most of these money market funds pay fees to the fund managers. To help the situation, it is time for fund managers to reduce or waive some of the fixed fees they charge investors like management fees. Investors should, therefore, ask fund managers for a renegotiation of the fee structure in such a way that the burden of low-interest rate is shared between the fund managers and the investors. Fund managers in places like the US are already doing this.

Loss Carryforward Provisions: Another way that investors can manage this situation is for them to ask fund managers to insert loss carry-forward provisions into the mutual fund agreement or prospectus. A loss carryforward provision is one which states that the fund manager does not get paid any incentive fee unless and until the fund attains its last known highest asset value. By having loss carryforward provisions, investors are afforded the time to recoup on losses before being charged further incentive fees.

Explore economic research data from Nairametrics on Nairalytics

Look for High Dividend Yield Stocks: Though stock investment remains riskier than money market funds and fixed income fund investments, in a low yield environment, it may pay to look for and invest in high dividend stocks that have a history of regular and consistent dividend payments.

Warning: Nothing in this article should be taken as investment advice and the author should not be held liable for using it as such.

Forex turnover fell by 88% on Wednesday at the I&E window weakening the exchange rate to N386.76/$1. The exchange rate at the black market however remained flat at N461/$1 for the third consecutive day this week.  

NAFEX: The naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday,  closing at N386.75 to a dollar, compared to the N386.50 that was reported on Tuesday, July 7, representing a 25 kobo drop. This is as traders continue to mull over CBN’s adjustment of the exchange rate at the SMIS window. The opening indicative rate was N387.32 to a dollar on Wednesday. This represents a 14 kobo drop when compared to the N387.18 to a dollar that was recorded on Tuesday.       

Parallel Market: At the black market where forex is traded unofficially, the naira remained stable as it closed at N461 to a dollar on Wednesday which was the same rate that it exchanged on Tuesday.   

READ MORE: Unify exchange rates to foster economic growth – NISER 

Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS and the NAFEX (I&E window). Nairametrics reported last week that the government has set plans in motion to unify the multiple exchange rates in line with requirements from the World Bank. Nigeria is seeking a world bank loan of up to $3 billion.     

Forex Turnover    

Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded a decline on Wednesday, July 8, 2020, as it dropped by 88.4% day on day, a huge decline from the figure that it achieved on Tuesday at the foreign exchange market. This is according to data from the FMDQOTC, an exchange where forex is traded by foreign investors and exporters.       

According to the data tracked by Nairametrics, forex turnover decreased from $103.37 million on Tuesday, July 7, 2020, to $11.96 million on Wednesday, July 8, 2020, representing an 88.4% drop on a day-to-day basis. This is a reversal from the decent turnover that was recorded the previous day and is a far cry from the $200 million mark that was achieved in January and last week.  

Rate Adjustment  

Nairametrics reported on Wednesday that the CBN official rate has been adjusted from N360 to a dollar to N381 to a dollar as reflected on the website of the FMDQ.  However, the official rate quoted on the website of the CBN remains at N360/$1.  

According to Reuters, “the naira eased 5.5% on the official market on Tuesday, after the central bank sold dollars to lenders at a lower rate, bowing to pressure from international lenders to unify its multiple exchange rates.” Reuters also reported “the naira eased to 380.50 in off-market trades, from 360.50 close on Monday” quoting sources from traders.  

Nairametrics cannot confirm if the latest adjustment is reflective of the SMIS rates or if the central bank has now taken a bold step towards unification and adjusted its official rate. Reuters claims it’s a move to “unify the exchange rate”.  

Explore economic research data from Nairametrics on Nairalytics

What this means: Unifying the Naira around the NAFEX rate is effectively another round of devaluation. If this is carried out and forex liquidity improves, then it could lead to an exchange rate strengthen in the parallel market just like it occurred in 2017.  

The parallel market rate is currently N461/$1 and could converge to the NAFEX rate meaning those who bought above the NAFEX rate could lose money if they sell.