ThinkBusiness Today - July 17th

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Markets

• NGX ASI declined slightly by 0.29% on Friday, shedding 179.21 points to close at 62,569.73, a 1-week loss of 0.75%, a 4-week gain of 4.31%, and an overall year-to-date gain of 22.08%. key share price movement include Flour Mills Nigeria (- 10%), UAC of Nigeria (-10%), Wema Bank (-10%) and Champion Breweries (-10%).

• Oil prices fell more than a dollar a barrel on Friday. Brent crude futures settled at US $79.87 per barrel, down US $1.49, or 1.8%, while the U.S. West Texas Intermediate crude futures fell US $1.47, or 1.9%, to settle at US $75.42 a barrel.

• Naira lost ground again against the US $ in both the official and parallel markets. At the I&E window, the Naira demonstrated a notable depreciation of 7.93%, ultimately closing at a rate of N803.90. Similarly, on the streets, Naira depreciated by 3.63%, at N805.

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National Headlines

• Poverty alleviation does not work – There are two things that happened in the 8 years of President Buhari that appears unconnected, but they are. The first is that, as expected, given that one of President Buhari’s ambition is to see every Nigerian have N5,000, he came up with Trader Moni, and later metamorphosed into a full-blown social protection office – the federal ministry of humanitarian affairs, disaster management and social development in 2019. The second is that, given his touted background, he presided over the most corrupt and divisive government in Nigeria’s history. These two things are connected. The social protection under the former president is divisive and discriminatory to the extent that not all poor that qualified got support. It is corrupt to the extent it was never transparent, nor accountable. Very surprised that President Tinubu wants to use the same process for fuel subsidy removal palliatives. It does not work and has never worked.

• What does it mean to declare a state of emergency on food crisis? – The national emergency declaration on food security by President Bola Tinubu is one of those things I have been trying to understand since it was announced. First, food security is important, and has been an emergency and urgent issue in the last few years, but it’s about the process and not the slogan. How did we get here? Poor and misplaced agriculture funding, awful infrastructure from farmlands to towns and cities, poor yields because of poor application of inputs, and most recently in the last 10 years, the deterioration the security situation in farmlands etc. All these measures, and rightly so, the President will focus on in the national emergency plan. It will also be part of the national security purview. But we did not get here overnight and will not get out overnight. Extra ordinary measures can still be taking without extra ordinary words like state of emergency or what are we going to call a war situation?

• Fiscal incentives, crude oil theft and illegal mining – Crude oil theft is one of the major crises facing the government of President Tinubu. His focus in the last six weeks shows that he realizes it. The President should add illegal mining to the list of urgent national issues that he has to deal with. Indeed, just as the crisis in the Niger Delta helped to accentuate and deepen divestments and oil theft in the Niger Delta, the security situation in the North Central and North West is accentuating and deepening illegal mining in those regions. While security is important, the government may want to look at fiscal incentives and arrangement between the federal, state, local government, and businesses as enduring measures to resolving the mess.

Global Headlines

• UK signs deal to join the US $14 trillion Indo – Pacific Trade Bloc – The deal agreed in March was signed by the British business and trade secretary at the weekend Kemi Badenoch. The countries in the Comprehensive and Progressive Agreement for Trans – Pacific Partnership (CPTTP) are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Japan, Singapore, and Vietnam. It will mean that the UK can now trade with these countries on a near zero tariff basis, though it already has bilateral trade relationships with nine of them. The CPTTP evolved from the Trans – Pacific Partnership which was never ratified due to US withdrawal. The CPTTP account for about 14% of global trade and a population of 500 million people. The British parliament and all other countries legislators will now ratify the deal before the process is completed.

• The rich also cry and they also strike – You will be forgiven for thinking there is nothing like a trade union in Hollywood. But there is. There is the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA). It may also interest you to note that some of the world’s most popular actors are members, including Tom Cruise, Johnny Depp and Angelina Jolie. Both groups went on strike in the last week to protest low pay and the impact of Ai on their jobs, the first time in 60 years. Despite the power of individual contracts by the big stars in Hollywood, this protest, demonstration, and strike is a clear demonstration of the power of the studios, represented by Alliance of Motion Picture and Television Producers (AMPTP).

• Africa’s gaming market – It is still small, but it appears Africa’s gaming market is nearing a US $billion industries, according to reports by CNBC. The reports say the industry will generate in excess of a US $billion in 2024. The global games market is estimated at US $182 billion, so Africa accounts for about 0.5%. The upside for the gaming industry in Africa is the growth in the number of young people, expected income growth over the coming decade, and internet penetration on the continent.

Platform Capital - AFRICA WALK 2023

Platform Capital proudly presents Africa Walk 2023.

Join us in Dakar, Senegal (July 24-27) and Lagos, Nigeria (July 28-31), to explore the continent's investment landscape and witness the extraordinary talent within the African creative industry.

For participation and registration