Diversification of Nigeria’s economy is believed to be the only viable way to survive the current environment of global economic uncertainty with the volatility of oil prices.
It certainly presents an opportunity for the most competitive and strategic option for Nigeria in light of her current developmental challenges. It can only diversify the economy through digital economy, manufacturing and agriculture. Manufacturing actually creates a lot of jobs, creates middle class and also transforms the society. These are areas we need to really focus on.
Nigeria has a readily available market because of its huge population but there is need for government to remove factors that have continued to constrain the manufacturing sector.
In addition, the drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per litre. The outbreak of the deadly coronavirus and its spread across the world has forced the international oil market to a near standstill, leaving crude oil price to crash from around $60 per barrel to about $29.
The drastic fall in the price reduced the expected pump price of petrol to N64.32.
Despite the development, the ex-depot price stood at N125.63 per litre, while government’s approved retail price hovers between N135.00 and N145.00 under a subsidy scheme. The PPPRA disclosed that the country currently has about 2,217,972,763 litres of PMS in stock, expected to last for 39 days in the face of the growing concern as businesses close down across the world over the coronavirus pandemic, there are indications that the Federal Government could save the N450 billion that was budgeted for subsidy in 2020.
Following the fall in the world demand for crude oil and crude oil prices, the OPEC+ meeting and negotiations to cut oil production fell through and spurred a race for market share between Russia and Saudi Arabia.
The refusal of Russia to cut oil production spurred Saudi Arabia to boost production to about 12.3 million barrels per day starting from April 1. Russia, in retaliation, increased its output by 500,000 barrels per day. This disagreement pushed oil prices down by the most, since 1991.
The tit for tat jostle caused a fall in Brent crude by more than 20% on March 9 and led to the biggest one-day calamity of the US Stock Market.
For China, the incidence of coronavirus slashed their oil demand by more than 20% last month, leading to excess crude oil in the global market begging for prospective buyers, and then, a crash in the oil price.
Nigeria could see its economy collapse, while all offshore production would be loss-making if oil prices remain suppressed into the teens over the long term. The nation’s foreign exchange reserves declined from $45 billion recorded in June 2019 to $36.2 billion in March 2020. As oil price continues to decline, so does the nation’s reserves. Nigeria’s main source of funds is crude oil.
High importation, capital flight, and weak capital importation are some of the challenges hurting Nigeria’s liquidity.
Inflation rate rose to 12.13% in January, eroding consumer spending, retail sales and household income despite a high unemployment rate of 23.1% or 20.9 million unemployed people.
With the foreign reserves fast declining, credit agencies downgrading the nation’s credit rating and global growth projected to slow down in 2020, the nation would struggle to sell its Eurobond scheduled for September as it did in 2018 when it sold $2.86 billion at a period when crude oil was averaging $70 per barrel.
Godwin Obaseki wins Edo State governorship election
Incumbent governor, Godwin Obaseki emerged winner in the Edo State gubernatorial election.
INEC has declared Godwin Obaseki the winner of the Edo State gubernatorial election. Mr. Obaseki will return as Governor for a second term.
The results were declared by INEC on Sunday afternoon after the results were counted from all LGA’s on Saturday.
Obaseki had 307,955 votes, which was enough to be declared a clear winner over Ize-Iyamu’s 223,619 votes.
Obaseki took to his Twitter handle to thank the people of Edo State for their votes. He stated, “Words fail me in saluting our teeming supporters who displayed immense courage in the face of threats, intimidation and brutalization. The collective will of Edo people made it possible for us to triumph over godfatherism. Congratulations to all Edo people. This is our victory!”
Words fail me in saluting our teeming supporters who displayed immense courage in the face of threats, intimidation and brutalization. The collective will of Edo people made it possible for us to triumph over godfatherism. Congratulations to all Edo people. This is our victory! pic.twitter.com/4X4Lfk3wMb
— Godwin Obaseki (GGO) (@GovernorObaseki) September 20, 2020
TikTok’s owner seeks $60 billion valuation in US deal as Oracle, Walmart take stakes
Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global.
TikTok’s parent company, ByteDance is seeking a valuation of $60 billion for its video-sharing app, as Oracle Corp and Walmart Inc take stakes in the technology firm’s US operations to address the security concerns of the Trump administration.
According to a report from Bloomberg, Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global under an agreement that has gotten the approval of President Donald Trump.
The duo US firms would be paying a combined amount of $12 billion for their stakes if they reach an agreement with TikTok for the asking price of $60 billion.
The final valuation had not been set as the parties worked out the equity and measures for data security.
It was also stated that China is yet to approve the deal, although regulators are said to have expressed support for any transaction in which BtyeDance still maintains control of its valuable recommendation algorithms and other proprietary technology.
It would be recalled that President Donald Trump, had threatened to ban the ByteDance owned TikTok, over national security concerns, but which some analysts see as part of the row between US and China. This pressured ByteDance into the deal as they looked to avoid the ban by the US government.
The US officials had expressed concern that the personal data of as many as 100 million Americans that use the app were being passed on to the Chinese government.
ByteDance turned down the proposal of a full buyout from Microsoft Corp but rather agreed to Oracle’s offer in which the Chinese parent company will still maintain a majority stake in the technology firm.
Trump told reporters on Saturday, ‘’I approve the deal in concept. If they get it done, that’s great. If they don’t, that’s ok too.’’
Trump’s new stance appears to conflict with his earlier executive order for China’s ByteDance to divest from the video-sharing app’s operations in the United States.
ByteDance is in a race to avoid a ban on TikTok after the US Commerce Department said on Friday that it would block new downloads and updates to the app from Sunday.
According to market researcher, CB Insights, ByteDance is the most valued private start-up in the world at $140 billion. Under the proposed deal, ByteDance may end up owning as much as 80% of TikTok Global, which include the app’s operations in the US and the rest of the world excluding China. Venture firms like Sequoia Capital and General Atlantic may also acquire equity in the new business.
Lagos to shut Ojota’s axis of main carriage way of Ikorodu road for 3 months
The Commissioner advised all motorists to utilize alternative routes suggested during the stipulated time.
The Lagos State Government has announced the shutdown of the entire length of the main carriageway of Ikorodu Road from Ojota interchange to Ojota Second Pedestrian Bridge from Monday, September 21, 2020, for a duration of 3 months.
This is development is part of the next phase ongoing rehabilitation work on Ikorodu Road which is set to commence from the Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos.
While making the disclosure, the Lagos State Commissioner for Transportation, Dr Frederick Oladeinde, advised all motorists to utilize alternative routes suggested during the stipulated time for the repairs following the closure of the entire length of the main carriageway for reconstruction work.
Oladeinde in his statement said, “Vehicles coming from Maryland will be diverted at Odoyalaro into the Service lane and the BRT Corridor to link back the main carriageway at Ketu bus stop and Demurin junction respectively.’’
The commissioner gave an assurance that the Lagos State Traffic Management Authority (LASTMA) and other law enforcement agencies will be available to direct traffic for free vehicular movement during the entire period of construction work.
While soliciting for the cooperation and support of residents and motorists that ply the axis, the Commissioner stated that the project is aimed at finding a lasting solution to the ever-busy road as well as to achieve the present administration’s traffic management and transportation policy objectives.
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The Lagos State Government is set to commence the next phase of repairs from Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos, from Monday 21st of September, 2020 for a duration of three months.@jidesanwoolu @dr_oladeinde#ForAGreaterLagos pic.twitter.com/8mzYGauqpi
— The Lagos State Govt (@followlasg) September 18, 2020