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Business News

World Bank, IMF forecast sluggish growth for Nigeria in 2020

The World Bank has forecasted that Nigeria’s economy will further slowdown in 2020 with a growth of 2.1% amidst several policy uncertainties. On the other hand, the IMF disclosed that Nigeria’s economy will continue its sluggish trend. #IMF #WORLDBANK

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The World Bank and its sister organisation, International Monetary Fund (IMF) have forecasted sluggish growth for the Nigerian economy in 2020.

In its January 2020 Global Economic Prospects report, the World Bank forecasted that Nigeria’s economy will further slowdown in 2020 with a growth of 2.1% amidst several policy uncertainties.

On the other hand, the IMF disclosed that Nigeria’s economy will continue its sluggish trend with a 2.5% growth rate in 2020.

Growth in Sub-Saharan Africa and Risks in 2020

According to the IMF, in sub-Saharan Africa, growth is expected to strengthen to 3.5% in 2020–21 (from 3.3% in 2019). The IMF stated that the slow growth forecast for the region reflects downward revisions for South Africa (where structural constraints and deteriorating public finances are holding back business confidence and private investment) and for Ethiopia (where public sector consolidation, needed to contain debt vulnerabilities, is expected to weigh on growth).

[READ: Devaluation: Experts highlight trends clouding Nigerian economy]

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Meanwhile, the World Bank disclosed that the growth in the region is projected to stabilize as investors’ confidence in some of the large economies improve and oil production in major oil exporters picks, while activities among exporters of agricultural commodities remain solid.

On the downside, the World Bank stated that Per capita growth will remain below 1%. It added that several downside risks could materialize and these include slower-than-expected growth in major trading partners. Others are episodes of financial stress given rising debt vulnerabilities, disruptions to activity amid increased displacement of populations and growing climate risks.

Also, the global lender stated that Insecurity, conflicts, insurgencies and food security would weigh on economic activities of several economies like Burkina Faso, Chad, Ethiopia, Mali, Niger, and Nigeria.

Nigeria’s policy environment remains unconducive

According to the World Bank, activity in Nigeria is lackluster, as both macroeconomic policy and the business environment remain unconducive to strong domestic demand.

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The financial institution stated that the growth of Nigeria, Angola and South Africa (the three largest economies in the region) were subdued in 2019, below historical averages and contracting for a fifth consecutive year on a per capita basis.

In its report on Nigeria, it said, “Growth in Nigeria is expected to remain subdued. The macroeconomic framework – characterised by multiple exchange rates, foreign exchange restrictions, high persistent inflation, and a central bank targeting manifold objectives – does not provide a firm anchor for confidence.

[READ: Devaluation: Experts highlight trends clouding Nigerian economy]

“Growing uncertainty about the direction of government policies is expected to further dampen the outlook. Growth is projected to remain broadly unchanged, rising only to an average of 2.1% in 2020-22.”

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“This is weaker than previous projections, reflecting softer external demand, lower oil prices, and a slower-than-previously-expected improvement in oil production in view of the lack of the much-needed reforms.”

The world Bank had earlier warned that Nigeria may fall back into recession, highlighting conditions that may drag the nation’s economy into the downturn witnessed in 2016. The bank disclosed in its Economic Update for Nigeria that a decline in oil prices to the levels seen in 2016 would significantly reduce growth, potentially leading to another recession in Nigeria.

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Corporate deals

DEAL: Nigeria’s Cowrywise raises $3m pre-series A funding

Nigerian fintech startup, Cowrywise has raised $3m in pre-series A funding.

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Cowrywise to re-launch as Cowrywise Circles, , CowryWise raises $3m pre-series A funding

Nigerian fintech startup Cowrywise has raised $3m pre-series A funding.

This funding round was led by Washington DC-based Quona Capital, with participation from Sahil Lavingia, Tsadik Foundation, and a syndicate of local and diaspora based Nigerian angels.

Founded by Razaq Ahmed and Edward Popoola in 2017, Cowrywise gives Nigerian’s access to a range of goal-oriented savings and investment products.

The Quona led investment brings Cowrywise’s total funding amount to $3.3 million since its 2017 launch.

The company first introduced savings on its platform, followed by mutual funds and they currently have 19 different mutual funds and at least 20% of the total mutual funds in the country are listed on its platform.

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According to Ahmed, while Nigerian’s millennials may have high digital connection levels, they lack access to high-quality savings and investment products. Which is what Cowrywise is offering.

The startup has more than 220,000 users currently. According to the Techcrunch, there are only half a million Nigerians actively investing in mutual funds. When compared to the total number of active bank accounts in the country of more than 40 million, it is obvious Cowrywise still has room to grow in the $3 billion markets.

This new funding will be used to increase its customer base and also expand its product offerings, support more fund managers in Nigeria, and build its investment management structure.

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What you should know

  • Cowrywise, an app that helps you easily plan, save, and invest online with the strongest interest rates and investment returns is the first Nigerian startup to be backed by Quona Capital.
  • In June 2018, Cowrywise closed an Angel round of $50,000 led by Microtraction. In August 2018, it raised a $120,000 seed round from Y Combinator and another seed round from Kairos by December of the same year.
  • It received undisclosed funding from K-50 Ventures in April 2019, before receiving an $80,000 grant from UK-DFID backed accelerator, Catalyst Fund. A first for a Nigerian startup.
  • In February 2020, Quona Capital led the $14 million series A round for Kenyan eCommerce Startup, Sokowatch.
  • The company has also significantly invested in South African startups like Lulalend, Yoco, ZOONA, and ALLLIFE.

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Tech News

Whatsapp to require biometric authentication for PC and web access

WhatsApp is adding a new biometric feature to confirm users’ identity when linking accounts to PC or the web.

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WhatsApp is adding a new biometric feature to confirm your identity when you want to link your WhatsApp account to a PC or the web.

The social media app is rolling out this new feature for its web and desktop apps, which will let people create an additional authentication layer using biometrics when they want to use WhatsApp on desktop or web.

Users will now have the option (not a requirement) to add in a biometric login, which uses either a fingerprint, face ID, or iris ID — depending on the device — on Android or iPhone, to add in the second layer of authentication.

When implemented, it will appear for users before a desktop or web version can be linked up with a mobile app account.

WhatsApp told TechCrunch that it is going to be adding in more features this year to bring the functionality of the two closer together. There are still big gaps: for example, you can’t make calls on the WhatsApp web version.

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To be clear, the biometric service, which is being turned on globally, will be opt-in: users will need to go to their settings to turn on the feature, in the same way, that today they need to go into their settings to turn on biometric authentication for their mobile apps.

WhatsApp has added that it will not be able to access the biometric information that you will store in your device and that it is using the same standard biometric authentication APIs that other secure apps, like banking apps, use.

This new feature will work alongside another, which sends your phone notifications whenever somebody logs into your account on the web or a computer.

What you should know

  • The company has been getting a lot of backlashes since it announced it will now share its users’ personal information, including phone numbers, IP addresses, contacts, and more with Facebook from February 8, 2021.
  • WhatsApp’s new privacy policy forced many users to quit the app and to seek alternatives in Signal and Telegram

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Economy & Politics

Nigeria, now 2nd most corrupt country in West Africa – Transparency International

Nigeria is now the second most corrupt country in W/Africa with Guinea-Bissau the only country more corrupt than Nigeria in the region.

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The Corruption Perception Index (CPI) 2020 report published by Transparency International indicates that Nigeria occupies the 149th position out of the 180 countries surveyed as well scored 25 out of 100 points.

With the current ranking, Nigeria is now the second most corrupt country in West Africa with Guinea-Bissau the only country more corrupt than Nigeria in the sub-region.

It can be recalled that in the 2019 report, Nigeria was ranked 146th out of the 180 countries surveyed, scoring 26 points out of 100 points.

What you should know 

  • The Corruption Perception Index (CPI) is an annual survey report published by Berlin-based Transparency International since 1995 which ranks countries by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys.
  • The CPI scales zero (0) to 100, zero means “Highly Corrupt,” while 100 stands for “Very Clean”.
  • Nigeria’s ranking on the corruption perception index has continued to drop in the last four years.
  • With the current ranking, Nigeria is two steps worse off than she was in 2018 when she scored 27 points to place 144th out of 180 countries.
  • Only 12 countries are perceived to be more corrupt than Nigeria in the whole of Africa. The countries are the Democratic Republic of Congo, Libya, Equatorial Guinea, Sudan, Somalia, Zimbabwe, Chad, Eritrea, Burundi, Congo, Guinea Bissau, and South Sudan.
  • Somalia and South Sudan remain the most corrupt nations on earth, according to the CPI 2020 ranking.
  • Denmark, New Zealand, Finland, Singapore, Germany, Sweden Switzerland, Norway, The Netherlands and Luxembourg are the least corrupt countries in the world.

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