Connect with us
iubh
Advertisement
Alpha
Advertisement
Hotflex
Advertisement
british airways
Advertisement
Advertisement
UBA
Advertisement
Patricia
Advertisement
app

Business News

Covid-19: World Bank discloses when Sub-Saharan Africa will fall into recession

The dreaded Coronavirus pandemic is expected to drive Sub-Saharan Africa into its first recession in 25 years.

Published

on

World Bank picks holes in CBN’s policies on lending, MSMEs loans,Covid-19: World discloses when sub-Saharan will fall into recession, World Bank predicts rebound of Sub-Saharan Africa’s economy next year, World Bank warns Nigeria, others in Africa not to relax.

The dreaded Covid-19 pandemic, which has significantly spread around the world and caused a lot of disruptions on the global economy, is expected to drive Sub-Saharan Africa into its first recession in 25 years.

This was disclosed in the World Bank’s latest Africa’s Pulse report, a twice-yearly economic update for the region, which was released on Thursday, April 9, 2020.

The report shows that the forecast for the Sub-Saharan Africa region is expected to decline from 2.4% in 2019 to between -2.1% to -5.1% in 2020.

The forecast came with a recommendation is made for African policymakers to focus on saving lives and protecting livelihoods by strengthening health systems and taking quick actions to minimize disruptions in food supply chains. According to Hafez Ghanem, Vice President for Africa, World Bank:

‘’The Covid-19 pandemic is testing the limits of societies and economies across the world and African countries are likely to be hit particularly’’.

‘’We are rallying all possible resources to help countries meet people’s immediate health and survival needs while also safeguarding livelihoods and jobs in the longer term – including calling for a standstill on official bilateral debt service payments which would free up funds for strengthening health systems to deal with Covid-19 and save lives, social safety nets to save livelihoods and help workers who lose jobs, support to small and medium enterprises, and food security”

(READ MORE: CBN pays $4.45 billion external debt to World Bank, others in 2-month)

An analysis from the report shows that the COVID-19 pandemic is going to cost the region between $37 billion and $79 billion in output losses this year. Sectors  that will be affected by this includes: trade and value chain disruptions, decline in foreign remittances, tourism, foreign direct investment, foreign aid among others.

Coronavirus Outbreak to Impact Tourism Across African Continent,Covid-19: World discloses when sub-Saharan will fall into recession

The GDP growth in the region, particularly in the 3 largest economies in Sub-Saharan Africa i.e. Nigeria, South Africa and Angola, is projected to decline sharply, due to persistent weak growth and investment.

british airways

The Coronavirus crisis can also potentially cause food security crisis in Africa, with agricultural production expected to contract between 2.6% in optimistic period and as much as 7% during trade blockages.

Food imports are expected to decline by as much as 25% or as little as 13% due to drop in local demand and high cost of transaction.

(READ MORE: World Bank deploys $150 billion to save the world from global meltdown)

Stanbic 728 x 90

The Bretton Wood institution has pledged about $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses and aid economic recovery.

Africa has 10,956 confirmed cases of the Coronavirus, with 562 deaths and 1,149 recoveries so far.

The International Monetary Fund (IMF) and the World Bank Group have already rallied for bailout funds and debt relief for the poor and emerging countries as part of measures to help mitigate the impact of lockdowns and restrictions as a result of the coronavirus outbreak.

Nigeria had also announced its intention to borrow $6.9 billion from the multilateral agencies to help cushion the effect of the Coronavirus pandemic on the country’s economy. A breakdown of that shows that  $3.4 billion will be from IMF, $2.5 billion from World bank and $1 billion from African Development Bank.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

2 Comments

2 Comments

    Leave a Reply

    Your email address will not be published.

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Business

    Cement prices surge in South East as scarcity, price hike hit North East

    Prices of cement have risen by 67% in many Southeastern states and by 40% as observed in northern states including Bauchi, Gombe, Borno, others.

    Published

    on

    The prices of cement have risen by 67% in the South-East states of Abia, Anambra, Ebonyi, Enugu and Imo.

    This is as some residents of the North-Eastern part of the country also complained of price hike of cement, which they attributed to the scarcity of the product and the activities of middlemen who try to capitalize on the situation.

    According to a report from the News Agency of Nigeria (NAN), a market survey conducted at various wholesale and retail shops in the eastern zone shows that the price of the product has almost doubled when compared to the price in 2020.

    What the cement traders in the eastern states are saying

    A cement dealer at Kenyetta Market in Enugu State, Mr Ifeanyi Amadi, said the increase in the price of the product which started last year was due to the Covid-19 pandemic and increase in dollar exchange.

    He pointed out that a trailer load of Dangote cement with 600 bags, which sold for N1.5 million in 2020, sold for N2.3 million in the first quarter of 2021.

    Another retailer, Samuel Uwakwe, noted that a bag of Dangote Cement now goes for N3,900, Unicem for N3,700; BUA Cement for N3,700 and Kogi Super Cement for N3,600.

    While begging the suppliers to reduce the price and make the product available, Uwakwe expressed his reservations at few individuals being given the opportunity to supply the product noting that the prices would likely crash during raining season.

    In Abia, a cross-section of residents of Umuahia, the state capital, also decried the high price of cement, which ranges from N4,000 to N4,100 per 50kg bag.

    Those who spoke to NAN said the price hike had further dashed the hope of many Nigerians, wishing to own their personal homes.

    A businessman, Mr Victor Ugwu, said he had to suspend his building project because of the current development as he could not afford to continue with the current price of the commodity.

    british airways

    He said,  “I think the hike can be attributed to the monopoly being enjoyed by the cement producers in the country. Unfortunately, there may not be any respite until that monopoly is broken.”

    However, a cement dealer, Mr James Ogbonna, said the price increase had nothing to do with the manufacturers of the commodity but rather put the blame on the activities of shylock distributors of cement.

    He said, “In the first and second week of March, we sold a bag for N3,200, but within the third week we started selling at N3,500. By the end of March, the price moved up to N4,000 and now, we sell between N4,000 and N4100, depending on the brand.”

    Stanbic 728 x 90

    A cement dealer in Awka, Mr Kenechukwu Okoye, said before the #EndSARS protest in 2020, a 50kg bag of cement was sold at N2,500 bur rose to N3,000 immediately after the protest and from there to the current price of N4,000 and N4,100.

    The survey also says that in Owerri, the Imo state capital, the price of cement is between N3,850 and N4300, depending on the brand.

    At the building materials Market in Naze, Owerri North Local Government Area, Dangote and BUA cement are sold at N4,000 per bag while BUA and UNICEM are sold for N3,900.

    Mr Okechukwu Okonya, a seller, said the cost could be attributed to the high cost of transportation as a result of fuel price increase adding that major dealers sometimes hoard the product in their warehouses to create artificial scarcity.

    The survey report says that in Abakaliki, Ebonyi, prices of almost all building materials have gone up, with Dangote and Bua which sold for N2,500 earlier in November and December 2020 now selling for between N4000 and N4500.

    Similarly, Unicem cement which also sold at N2,300 within the same period had also gone up to N4,000 and N4,300.

    Coronation ads

    Similar price increase in North East

    The survey report in Bauchi, Gombe, Borno, Yobe, Adamawa and Jigawa, shows an average of 40% increase in price.

    According to the respondents, this could be attributed to the outbreak of Covid-19 which affected production in factories, while demand kept rising.

    Others, however, blamed the hike on the high cost of transportation and other sundry activities associated with the business of procurement and sales of cement in the country.

    Malam Ibrahim Sanusi, a cement dealer at the Gombe main market described the hike as outrageous when compared with the price of the same commodity the previous year.

    app

    He said that a bag of Dangote brand which he bought for N2,400 and sold for N2, 500, is bought for N4,000 from their depot in Gombe and sold for N4,200.

    Continue Reading

    Energy

    Carbon Tax: A market-based alternative to carbon emissions in Nigeria

    A carbon tax is a way to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.

    Published

    on

    climate, Understanding Carbon Credits and Carbon Offset market

    Fossil Fuel is hurting us. It is an undeniable truth. I have heard in many conversations more often than not a very solid support for the fossil industry. Rather simple conversations on its perils and disadvantages always end with resignation by the other party that “fossil has come to stay.”

    While not doubting that premise, I rather believe a lot can be done to limit the harmful effect of what is here to stay with us. A lot can be said about how beneficial fossil fuel is to the economy and how it is initially cheaper and more available but, in truth, the harms still exists.

    Sadly, these harms are more than good. The clarion call to stop these emissions has been on for a very long time, but the reality remains the attention span of the larger consumer population is very very short when it comes to that discourse.

    I would say, the essence and need for us to look to further means to mitigate the harm from fossil fuel is not just for a cleaner environment but also for an environment to still exist. The constant clamour for a change in our perspective is not just for the growth of the alternative sector but also a struggle for survival, because we will all lose if we do not stop.

    Now, since we have declared to ourselves that we wouldn’t stop, it only makes sense if we can effectively checkmate how we continue with fossil, adopt Carbon Capture techniques and in an attempt to make sure no one goes overboard, impose fines on the amount on those that burn beyond their limit and on fossil that enters the country. This is a concept that, rather thankfully, already exists. Carbon Tax.

    A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). A carbon tax is a way — the only way, really — to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.

    It is a market-based alternative that helps the government reduce the carbon footprint and also allows them make money as a government when there is a breach of this solemn oath to stay in check. In Nigeria, The Carbon Tax Act came into force on 1 June 2019. The carbon tax was designed to apply to direct emissions in the following categories as specified in the National Greenhouse Gas Emission Reporting Regulations:

    • Fuel combustion, which relates to emissions released from fuel combustion activities;
    • Fugitive emissions from fuels, which relates to emissions mainly released from the extraction, production, processing, and distribution of fossil fuels; and
    • Industrial processes emissions, which relates to emissions released from the consumption of carbonates and the use of fuels as feedstock or as carbon reductants, and the emission of synthetic gases in particular cases.

    It is trite to say that this entire scheme is altogether ineffective and barely surviving. It is sad to note because there are numerous benefits to Carbon Tax. The advantages of doing this asides still having a healthy civilization in the next 100 years are numerous. First, it would be creating a very profitable system of revenue for the government. Here, the government will not need to spend much on the initial cost of having this revenue stream in place. Aside from the need to establish an agency to enforce the limits and payment of fines and the adequate system of calculating and verifying the amount consumed, the expenses on the government is almost Zero. This agency unlike many others in this country will be more active than idle, considering the existence of various fossil burning industries in Nigeria and being largely oil-dependent.

    Hotflex

    Secondly, this would help Nigeria join the global effort to reduce the carbon footprint and in turn put Nigeria on the good pages of the global community as a contributor to green energy. This will birth a host of benefits for the Nigerian Community and also assist the domestic green energy advocates.

    Furthermore, this system will help to promote the alternative energy industry. The renewable energy industry will from this initiative be able to sufficiently measure the actual impact of their activities on the environment and the economy as well as challenge the growth of new innovations to grow it. The campaigns will no longer be dependent on cancelling out the large emissions killing the environment since more revenue now streams for the government from them, but to the actual direct benefits of renewable energy.

    british airways

    This alternative will also assist the government in assessing the benefits of reducing emissions and growing the renewable energy industry. The implementation of this will serve as a step for the assessment and understanding of the dynamics, policies and funding needed for the full inevitable integration of Green Energy.

    The advantages are numerous and as such need Carbon Taxing to be revived in the country. In all sincerity to the dynamics of Nigerian politics and due respect to our exalted government, it is almost too easy for these things to be put in place seeing they will also have a fresh channel to loot from while saving our dear lives and making the air cleaner. A Win-Win for all the parties involved.

     

    Stanbic 728 x 90

    Written by Ude Fortune Chiziterem

    Continue Reading

      





    Nairametrics | Company Earnings

    Access our Live Feed portal for the latest company earnings as they drop.