KPMG has listed global pressure points and external shocks, fiscal unsustainability, exchange rate market, credit and reactive policy environment as factors that would determine the success of the Nigerian economy in 2020.
The multinational professional services firm disclosed this at the America Business Council’s second economic update on Wednesday in Lagos.
Speaking at the forum, the Associate Director, Strategy and Economics, Management Consulting, KPMG Nigeria, Olusegun Zaccheaus, explained that the the global developments in 2020 portends significant risks for the Sub-Saharan countries.
Others factors are investment for growth, productivity, technology and digital disruption, socio-economic pressure and consumer pressure points.
While providing an update on the Nigerian economy, it was stated that it currently stands on a slippery slope of recovery. According to KPMG, the Nigerian economy which recorded a growth rate of 6.21% in the first quarter of 2014, has continued to witness very slippery growth recovery since the 2016 recession.
Debt crisis amidst weak revenue
On Nigeria’s debt issue, KPMG stated that the nation’s revenue relative to GDP has been declining, with debt service ratio to revenue accelerating since 2016.
Following this, it was further disclosed that the 2020 budget revenues targets are ambitious, and this made the Federal Government push strongly for revenues across all fronts through the introduction of the 2019 Finance Bill.
Meanwhile, it was stated that the increase of VAT by 50% by the Federal Government might potentially affect sales negatively in major sectors of the Nigerian economy, as consumers are highly sensitive to price changes.
CBN’s Intervention fails to ease vulnerabilities
While addressing the Central Bank’s efforts to stabilise the Naira, it was disclosed that the currency has not depreciated, thanks to forex intervention by the CBN which amounted to $39 billion since August 2018.
Although KPMG noted that some progress had been recorded, and these include stabilizing the foreign exchange market, improved liquidity in the market and rise in portfolio investments.
However, key underlying issues still persist. Some key issues highlighted at the forum include foreign exchange supply gap, depletion in reserves used to defend naira, expensive OMO instruments in a bid to attract foreign portfolios and overvaluation of the Nigerian Naira which indicates that exports are becoming more expensive and less competitive.
It was emphasized that the huge gap between the foreign exchange supply and demand led to price distortions and increased demand in the parallel market which contributed to a wide gap between the official and parallel rates.
Nigeria’s multiple exchange rate systems
On the controversy surrounding multiple exchange rate system, KPMG disclosed that Nigeria may already be operating a multiple exchange rate system which more or less conforms with the criteria listed by IMF for determining a multiple exchange rate system.
According to KPMG, a review of the criteria for establishing multiple exchange rate practices by the IMF disclosed that Nigeria’s current exchange rate system has at least three characteristics that meet the definition of multiple exchange rate practices. The three criteria currently satisfied by Nigeria include multiple foreign exchange markets, different rate for different transactions and foreign exchange auctions.
While concluding on this, it was stated that Multiple exchange rates practice inhibits economic growth and the continued application of the multiple exchange rates practice may have unintended consequences in the long run.
Volatile Policy environment driving skilled talents to other climes
KMPG stated that the Volatile, Uncertain, Complex and Ambiguous (VUCA) policy environment has negative impact on the overall growth in the economy. Following this, social wheel pressure is spinning and this has resulted in a growing flux of skilled talent to other climes like Canada, U.K, Australia and the United States.
In conclusion, it was disclosed that the CBN policy focus areas are expected to shape 2020 monetary and market developments. However, KPMG warned that to successfully navigate the downturn and thrive in the subsequent upturn, organisations need to adopt a Proactive Strategic Posture.
According to the tax firm, an organisation that takes a proactive strategic posture has greater chances of surviving the turbulent time and take opportunity of the upside of recovery while minimising the risks in the downturn.
COVID-19 Update in Nigeria
On the 15th of July 2020, 643 new confirmed cases and 6 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increase as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 34,259 confirmed cases.
On the 15th of July 2020, 643 new confirmed cases and 6 deaths were recorded in Nigeria, having carried out a total daily test of 12,707 samples across the country.
To date, 34,259 cases have been confirmed, 13,999 cases have been discharged and 760 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 199,016 tests have been carried out as of July 15th, 2020 compared to 186,309 tests a day earlier.
COVID-19 Case Updates- 15th July 2020,
- Total Number of Cases – 34,259
- Total Number Discharged – 13,999
- Total Deaths – 760
- Total Tests Carried out – 199,016
According to the NCDC, the 643 new cases were reported from 19 states- Lagos (230), Oyo (69), FCT (51), Edo (43), Osun (35), Rivers (30), Ebonyi (30), Kaduna (28), Ogun (27), Ondo (23), Plateau (20), Benue (17), Enugu (16), Imo (10), Delta (6), Kano (4), Nasarawa (2), Kebbi (1), Ekiti (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 12,941, followed by Abuja (2,738), Oyo (1,951), Edo (1,850), Rivers (1,427), Delta (1,398), Kano (1,318), Ogun (1,132), Kaduna (1,067), Ondo (770), Katsina (669), Ebonyi (646), Borno (593), Plateau (591), Gombe (533), Enugu (531), Bauchi (521), Kwara (422), Abia (413), Imo (409).
Jigawa state has recorded 321 cases, Bayelsa (318), Osun (311), Nasarawa (254), Sokoto (153), Akwa Ibom and Niger (145), Benue (143), Adamawa (110), Anambra (101), Kebbi (88), Zamfara (76), Ekiti (67), Yobe (62), Taraba (30), Cross River (10) while Kogi state has recorded 5 cases only.
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.
|Date||Confirmed case||New cases||Total deaths||New deaths||Total recovery||Active cases||Critical cases|
|July 15, 2020||34259||643||760||6||13999||19500||7|
|July 14, 2020||33616||463||754||10||13792||19070||7|
|July 13, 2020||33153||595||744||4||13671||18738||7|
|July 12, 2020||32558||571||740||16||13447||18371||7|
|July 11, 2020||31987||664||724||15||13103||18160||7|
|July 10, 2020||31323||575||709||20||12795||17819||7|
|July 9, 2020||30748||499||689||5||12546||17513||7|
|July 8, 2020||30249||460||684||15||12373||17192||7|
|July 7, 2020||29789||503||669||15||12108||17012||7|
|July 6, 2020||29286||575||654||9||11828||16804||7|
|July 5, 2020||28711||544||645||11||11665||16401||7|
|July 4, 2020||28167||603||634||6||11462||16071||7|
|July 3, 2020||27564||454||628||12||11069||15867||7|
|July 2, 2020||27110||626||616||13||10801||15693||7|
|July 1, 2020||26484||790||603||13||10152||15729||7|
|June 30, 2020||25694||561||590||17||9746||15358||7|
|June 29, 2020||25133||566||573||8||9402||15158||7|
|June 28, 2020||24867||490||565||7||9007||14995||7|
|June 27, 2020||24077||779||558||4||8625||14894||7|
|June 26, 2020||23298||684||554||5||8253||14491||7|
|June 25, 2020||22614||594||549||7||7822||14243||7|
|June 24, 2020||22020||649||542||9||7613||13865||7|
|June 23, 2020||21371||452||533||8||7338||13500||7|
|June 22, 2020||20919||675||525||7||7109||13285||7|
|June 21, 2020||20242||436||518||12||6879||12847||7|
|June 20, 2020||19808||661||506||19||6718||12584||7|
|June 19, 2020||19147||667||487||12||6581||12079||7|
|June 18, 2020||18480||745||475||6||6307||11698||7|
|June 17, 2020||17735||587||469||14||5967||11299||7|
|June 16, 2020||17148||490||455||31||5623||11070||7|
|June 15, 2020||16658||573||424||4||5349||10885||7|
|June 14, 2020||16085||403||420||13||5220||10445||7|
|June 13, 2020||15682||501||407||8||5101||10174||7|
|June 12, 2020||15181||627||399||12||4891||9891||7|
|June 11, 2020||14554||681||387||5||4494||9673||7|
|June 10, 2020||13873||409||382||17||4351||9140||7|
|June 9, 2020||13464||663||365||4||4206||8893||7|
|June 8, 2020||12801||315||361||7||4040||8400||7|
|June 7, 2020||12486||260||354||12||3959||8173||7|
|June 6, 2020||12233||389||342||9||3826||8065||7|
|June 5, 2020||11844||328||333||10||3696||7815||7|
|June 4, 2020||11516||350||323||8||3535||7646||7|
|June 3, 2020||11166||348||315||1||3329||7522||7|
|June 2, 2020||10819||241||314||15||3239||7266||7|
|June 1, 2020||10578||416||299||12||3122||7157||9|
|May 31, 2020||10162||307||287||14||3007||6868||7|
|May 30, 2020||9855||553||273||12||2856||6726||7|
|May 29, 2020||9302||387||261||2||2697||6344||7|
|May 28, 2020||8915||182||259||5||2592||6064||7|
|May 27, 2020||8733||389||254||5||2501||5978||7|
|May 26, 2020||8344||276||249||16||2385||5710||7|
|May 25, 2020||8068||229||233||7||2311||5524||7|
|May 24, 2020||7839||313||226||5||2263||5360||7|
|May 23, 2020||7526||265||221||0||2174||5131||7|
|May 22, 2020||7261||245||221||10||2007||5033||7|
|May 21, 2020||7016||339||211||11||1907||4898||7|
|May 20, 2020||6677||284||200||8||1840||4637||7|
|May 19, 2020||6401||226||192||1||1734||4475||7|
|May 18, 2020||6175||216||191||9||1644||4340||7|
|May 17, 2020||5959||388||182||6||1594||4183||7|
|May 16, 2020||5621||176||176||5||1472||3973||7|
|May 15, 2020||5445||288||171||3||1320||3954||4|
|May 14, 2020||5162||193||168||3||1180||3815||4|
|May 13, 2020||4971||184||164||6||1070||3737||4|
|May 12, 2020||4787||146||158||6||959||3670||4|
|May 11, 2020||4641||242||152||10||902||3589||4|
|May 10, 2020||4399||248||142||17||778||3479||4|
|May 9, 2020||4151||239||127||11||745||3278||4|
|May 8, 2020||3912||386||118||10||679||3115||4|
|May 7, 2020||3526||381||108||4||601||2818||4|
|May 6, 2020||3145||195||104||5||534||2507||1|
|May 5, 2020||2950||148||99||5||481||2370||4|
|May 4, 2020||2802||245||94||6||417||2291||2|
|May 3, 2020||2558||170||88||2||400||2070||2|
|May 2, 2020||2388||220||86||17||351||1952||2|
|May 1, 2020||2170||238||69||10||351||1751||2|
|April 30, 2020||1932||204||59||7||317||1556||2|
|April 29, 2020||1728||196||52||7||307||1369||2|
|April 28, 2020||1532||195||45||4||255||1232||2|
|April 27, 2020||1337||64||41||0||255||994||2|
|April 26, 2020||1273||91||41||5||239||994||2|
|April 25, 2020||1182||87||36||3||222||925||2|
|April 24, 2020||1095||114||33||1||208||855||2|
|April 23, 2020||981||108||32||3||197||753||2|
|April 22, 2020||873||91||29||3||197||648||2|
|April 21, 2020||782||117||26||3||197||560||2|
|April 20, 2020||665||38||23||1||188||466||2|
|April 19, 2020||627||86||22||2||170||436||2|
|April 18, 2020||541||48||20||2||166||356||2|
|April 17, 2020||493||51||18||4||159||317||2|
|April 16, 2020||442||35||13||1||152||277||2|
|April 15, 2020||407||34||12||1||128||267||2|
|April 14, 2020||373||30||11||1||99||263||2|
|April 13, 2020||343||20||10||0||91||242||2|
|April 12, 2020||323||5||10||0||85||228||2|
|April 11, 2020||318||13||10||3||70||238||2|
|April 10, 2020||305||17||7||0||58||240||2|
|April 9, 2020||288||14||7||1||51||230||2|
|April 8, 2020||274||22||6||0||44||226||2|
|April 7, 2020||254||16||6||1||44||204||2|
|April 6, 2020||238||6||5||0||35||198||2|
|April 5, 2020||232||18||5||1||33||194||2|
|April 4, 2020||214||5||4||0||25||185||0|
|April 3, 2020||209||25||4||2||25||180||0|
|April 2, 2020||184||10||2||0||20||162||0|
|April 1, 2020||174||35||2||0||9||163||0|
|March 31, 2020||139||8||2||0||9||128||0|
|March 30, 2020||131||20||2||1||8||121||0|
|March 29, 2020||111||22||1||0||3||107||0|
|March 28, 2020||89||19||1||0||3||85||0|
|March 27, 2020||70||5||1||0||3||66||0|
|March 26, 2020||65||14||1||0||2||62||0|
|March 25, 2020||51||7||1||0||2||48||0|
|March 24, 2020||44||4||1||0||2||41||0|
|March 23, 2020||40||10||1||1||2||37||0|
|March 22, 2020||30||8||0||0||2||28||0|
|March 21, 2020||22||10||0||0||1||21||0|
|March 20, 2020||12||4||0||0||1||11||0|
|March 19, 2020||8||0||0||0||1||7||0|
|March 18, 2020||8||5||0||0||1||7||0|
|March 17, 2020||3||1||0||0||0||3||0|
|March 16, 2020||2||0||0||0||0||2||0|
|March 15, 2020||2||0||0||0||0||2||0|
|March 14, 2020||2||0||0||0||0||2||0|
|March 13, 2020||2||0||0||0||0||2||0|
|March 12, 2020||2||0||0||0||0||2||0|
|March 11, 2020||2||0||0||0||0||2||0|
|March 10, 2020||2||0||0||0||0||2||0|
|March 9, 2020||2||1||0||0||0||2||0|
|March 8, 2020||1||0||0||0||0||1||0|
|March 7, 2020||1||0||0||0||0||1||0|
|March 6, 2020||1||0||0||0||0||1||0|
|March 5, 2020||1||0||0||0||0||1||0|
|March 4, 2020||1||0||0||0||0||1||0|
|March 3, 2020||1||0||0||0||0||1||0|
|March 2, 2020||1||0||0||0||0||1||0|
|March 1, 2020||1||0||0||0||0||1||0|
|February 29, 2020||1||0||0||0||0||1||0|
|February 28, 2020||1||1||0||0||0||1||0|
Nigerian Real Estate and COVID in 19 Slides
Validate investment cases and focus energies on property sectors that are more resistant to shocks.
Nigeria is rapidly approaching an economic crisis as the COVID-19 global pandemic has put the world on lockdown and sent Brent crude oil prices to a 20-year low. Spurred by lower global demand and reliance on oil exports for 90% of its foreign exchange income, Nigeria’s economy and her fragile currency are being pushed to their breaking point.
In this report, we will focus on the impact this pandemic will have on the real estate market in Nigeria. So far, key themes include mass concessions, re-negotiation and restructuring activity, slowed decision making, stretched out project deliveries due to the lockdown and more. After outlining the potential property sector losers, hospitality and retail most especially, alongside potential winners (industrial and healthcare), we discuss the impact of the COVID-19 pandemic on individual property sectors and the direction of rentals, capital markets and more.
Within this uncertain environment, we recommend that market participants including asset owners, real estate service providers and others stress test their businesses at varying levels of reduced income, use the downtime for market research to validate investment cases and focus energies on property sectors that are more resistant to shocks.
Download the report through the link in the header.
IMF appoints Ceda Ogada as new director and secretary of the fund
Before joining the IMF, Ogada worked at the United Nations Conference on Trade and Development.
The International Monetary fund (IMF) has announced the appointment of Mr. Ceda Ogada as the Secretary of the Fund and Director of the Secretary’s Department with effect from September 1, 2020, following the retirement of the former Secretary, Mr Jianhai Lin.
This was disclosed in a press statement by IMF on Wednesday, July 15, 2020.
While making the announcement, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said, “Ceda has outstanding institutional knowledge, strategic and intellectual heft, and people leadership. His unparalleled ability to bring people together, combined with his profound appreciation of the Fund’s institutional history and legal principles, as well as a strong service orientation, will help the Fund to even more effectively serve our member countries in a very challenging economic environment.”
Mr. Ogada joined the IMF’s Legal Department in 1999 and rose through the ranks to become Deputy General Counsel in 2014. During this time, he has worked on virtually all aspects of the Fund’s work, including advising on the governance of the Fund, on country operations, helping to develop Fund policies and implementation guidance, and providing technical assistance to member countries.
According to the statement, ‘’Some of the key projects that he has worked on include the Fund’s enhanced policy to address governance and corruption issues, ensuring the adequacy of the Fund’s lending resources, reforms in lending policy such as the establishment of the Flexible Credit Line (FCL) and the Catastrophe Containment and Relief Trust (CCRT), reviews on surveillance policy and capacity development strategy and transparency, archives and communications policies.’’
The new Secretary of the fund was heavily involved in the work on euro area crisis countries during the global financial crisis. Recently, he has led the Legal Department in promoting good governance and transparency in several countries, together with the use of emergency financing for the COVID-19 crisis.
Before he joined IMF, Mr. Ogada worked at the United Nations Conference on Trade and Development as a legal expert and also before that he was in private legal practice in the United States. He holds a Juris Doctor from Harvard Law School and a B.A. in history from Dartmouth College. Mr. Ogada is a citizen of Kenya.