ThinkBusiness Today - June 30th

E kaaro o, Ututu Oma, Barka de Safe - Good morning, and a warm welcome to ThinkBusiness Nigeria, your Monday – Friday dose of commentary, contexts, and insights on business and economic news that matter to you.

TGIF.

With this, we are closing out on the last publication for June and the end of the second month of this remarkable journey. Monday will be start of the third month. I will use the opportunity to share some exciting news about what we are doing and how you can continue to be part of the community of business thinkers.

Please have a great weekend.

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Markets

• Nigeria equities and debt markets closed for the Eid el Kabir celebrations. Data shows how the market opens today.

• Oil prices edged higher on Thursday, buoyed by a bigger-than-expected fall in U.S. inventories, but fears that rising interest rates could dent global economic growth limited further gains. Brent crude futures was up 46 cents, or 0.95%, to US $74.69 a barrel, US West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to US $70.04 a barrel.

• U.S. natural gas futures slid about 2% on Thursday on a big daily increase in output ahead of a federal report expected to show a near-normal storage build last week. The small price decline came despite forecasts for higher demand and hotter weather than previously expected through mid July and as the amount of gas flowing to liquefied natural gas (LNG) export plants increases after maintenance work.

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National Headlines

• Fuel pump price to rise further – Monday will be start of a new month, and the first working day of the second month of President Tinubu. It is clear from the ongoing reforms that they are still working through the price system. One of such is the fuel price at the pumps across the country. There are two major expectations. First is that the prices will rise, given recent changes to exchange rate. The second is that there will be a significant disparity between fuel prices in Lagos and surrounding cities, and the North, because of distance and logistics. The expectation is of N600 per litre in Lagos and as much as N700 in the North.

• Eko and Apongbon bridge to open July 9 – According to Guardian reports, the federal government will reopen the Eko / Apongbon bridge July 9^th . The bridge was shut from March 2022 when it was affected by fire underneath the bridge. It is a major bridge that links the Mainland to Island through Apongbon and Marina. The 4.1 kilometre road was constructed in 1975 as the second bridge linking the mainland and the Island. Carter bridge was the first, built in 1901. The third mainland, the most popular was built in 1990.

• Telecoms and Banks .. who blinks first? – The latest is that the dispute between banks and telcos regarding an outstanding debt of N120 billion has not been resolved. If this dispute remains, the risks of disruption to essential mobile money services remain. Most low-income mobile phone users without smart phone and emails rely almost exclusively on Unstructured Supplementary Service Data (USSD) that is used to send text messages. The problem started in 2019 and four years after, it appears there is no effective resolution yet. The telcos have threatened to disconnect banks that do not pay in due course.

Global Headlines

• Fed Rate rise now highly probable – It is now all but certain that the Fed will raise rates when it meets July 25 – 26. As I mentioned yesterday, Jeremy Powell, the Fed Chairman has said that there will be further monetary policy restrictions before the end of the year. He suggested there will likely be two additional hikes before the end of the year and added it could be consecutively. Now, there are four meetings left – July, September, Oct /Nov, and December. Since yesterday, a new revised growth rate for Q1 2023 is 2%, and not the previously published 1.3% and the number of those filing claims for unemployment benefits fell last week by the most in 20 months, signaling a still strong jobs market.

• Affirmative Action upended – The decades old affirmative action in the US, that allows race a factor in university admission, was upended by the US Supreme court yesterday. It has largely favoured blacks and has helped minorities gain admissions into top schools in the country, and not surprising, President joe Biden disagreed with the ruling. Donald Trump, former President and in the race for 2024 republican nomination, supported the ruling.

• Debt Relief for Zambia – Zambia has reached a deal with Paris Club of creditors and China on US $6.3 billion debt. It is a deal under the G20 common framework that brings together the Paris Club of creditors, China, and other bondholders. Zambia was the first country to default on sovereign debt during Covid – 19 pandemic. Africa’s foreign debt has become complex again since the debt crisis of the 1980s. A major part of that complexity is the scale of Eurobonds debt in this season. It constitutes 30% of the continent’s total debt. In Nigeria, 60% of external debt service goes towards servicing Eurobonds.

• Spain's inflation now under 2% - Spain’s inflation rose 1.9% y / y in June, slowest increase since March 2021. Spain is the first among the euro zone's large economies to have inflation fall below 2%, the European Central Bank's target. With a unified interest rate but diverse inflation dynamics, it poses a challenge for the European Central Bank when it meets July 27.

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What I read this week

The Greatest Minds and Ideas of All Time

Author: Will Durant, winner of the Pulitzer Prize and the Medal of Freedom / compiled and edited by John Little

What is your motivation for reading a book? Perhaps just like me, for a variety of reasons. But one thing is very clear, reading wide provides one of the bases for a wide perspective of life, business, and nations. Another thing close to that is travels and other forms of exposure.

So, the greatest minds and ideas of all time is not a business book per se, but it is largely an account of the civilization we see today, including that of business. It is Will Durant’s ranking of minds and ideas that have shaped civilizations. Of course, he does not expect everyone to agree with him, but he was very clear of his criteria. I particularly find interesting the chapters on “the ten greatest thinkers” and the “ten peaks of human progress”.

The criteria for the ten greatest thinkers are those who thoughts “have had an enduring influence upon mankind”. They are Confucius, Plato, Aristotle, Saint Thomas Aquinas, Copernicus, Sir Francis Bacon, Sir Isaac Newton, Voltaire, Immanuel Kant, and Charles Darwin.

The section on the ten peaks of progress makes one really think of how things have been taken for granted, because these things come ‘natural’ today. They are Speech, Fire, The Conquest of the Animals, Agriculture, Social Organization, Morality, Tools, Science, Education, and Writing and Print.

Let me add that the book is not even as fascinating as the man. Will Durant lived between 1885 and 1981 and wrote two major books. That is not so much fascinating, right? Yes, but he wrote an eleven-volume book for 50 years – The Story of Civilization. Now, that is someone I think you should read.