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Will oil prices help or harm Nigeria’s economy in Q3?

Global Oil prices looked tired, exhausted and ready for an early summer break during the second quarter of 2019

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Will oil prices help or harm Nigeria’s economy in Q3?

Global Oil prices looked tired, exhausted and ready for an early summer break during the second quarter of 2019 as global growth fears overshadowed supply disruptions and ongoing OPEC supply cuts. At the time of writing, Oil prices remain shaky and vulnerable despite OPEC+ latest decision to extend production cuts until March 2020.

The crucial question is whether Oil prices will ever recover and trade back towards the $70+ levels. That depends less on geopolitical tensions in the Middle East and more on whether the US and China can reach a trade deal, settling disputes over tariffs and opening the door to continued global growth.

In this case, it’s likely that Oil prices will be injected with a renewed sense of confidence on the back of boosted global growth expectations and demand for Oil. But what if the current circumstances persist and the US-China trade disputes continue throughout the second half of 2019? 

Taking each scenario one-by-one, starting with the upside for Oil prices, Nigeria’s economy could benefit considerably if a US-China trade deal is reached and global growth expectations become brighter. The manufacturing sectors in the US and China are the Oil-gobbling engines which drive demand for international Oil suppliers.

China is the world’s top crude Oil consumer, importing more than 50 per cent of its consumption, part of which comes from Nigeria. In the fourth quarter of 2018, Nigeria exported ₦23.5 billion worth of crude Oil to China and remains a major trading partner to the Asian giant. It’s likely that if China’s economy roars back to life, Nigeria’s growth would see more long-term support, benefiting foreign exchange reserves and the naira.

Although unlikely, if a trade deal were to be announced early in the quarter, it’s possible the nation’s 2019 budget would also see ample support from increased Oil revenues from China. This argument doesn’t apply to the US which has considerably reduced its crude Oil imports from Nigeria as it heads towards energy independence, relying instead on domestic production to meet its own needs.  

If you take the negative outlook on Oil, it’s more likely the rise in Oil prices is a temporary result of supply shortage fears and the prevalent trend in Q3 will be downward pressure from concerns over a global recession. In this unfavorable scenario, the world’s two largest economies do not reach a trade deal in the third quarter and aggregate demand for Oil continues falling as it tracks economic weaknesses in China and the US.

As demand for Oil is whittled away, Nigeria’s foreign exchange reserves may be negatively impacted, along with the Naira, the 2019 budget, and most importantly GDP growth.

In terms of the national budget sheet, expenses like the petrol subsidy may take the limelight as they drag on revenues, overshadowing growth and threatening fiscal stability. 

There’s another factor we haven’t talked about so far but it’s significant in terms of Oil market economics. Oil sales are denominated in US Dollars. Recently, the currency has weakened against its rivals, meaning that Oil is more affordable and possibly giving traders an incentive to snap up contracts at current levels before they rise further.

If the Dollar bears have their way and the currency keeps declining, Oil price benchmarks could see further support in the third quarter. The impact of a weaker USD might not be as strong as a US-China trade deal, but it could feed positively into Nigeria’s Oil revenues and go some way to counter possible losses from ongoing global recession fears. 

To sum up, Nigeria’s foreign exchange reserves, currency, growth, and budget will face headwinds should trade disputes persist.

However, provided the USD keeps weakening, there’s scope for support from higher Oil prices based on bargain hunting. There’s always the possibility that the US and China could decide on a trade deal, if this happens sooner than later, Nigeria’s economy would benefit accordingly. 

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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Op-Ed

First 100 days in office, what’s in it? (Opinion)

We must not allow ourselves to be distracted or caught up in the noise around the first 100 days.

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The first 100 days

Recently, Nigerians have been pulling out scorecards and more to try and calculate the performances of their governors and the president after their first 100 days in office. Newspaper headlines had these elected officials and those who worked for them sharing achievements of their first 100 days. 

But why and when did the first 100 days become any kind of benchmark? Many of us don’t even know the history behind the concept of the first 100 days. So let’s take a quick trip down memory lane. 

How it started?

The concept is believed to have its roots in France, where “Cent Jours” or hundred days, refers to the period of time in 1815 when Napoleon Bonaparte returned to Paris from exile and his final defeat at the Battle of Waterloo. 

It became a key benchmark in America during the presidency of Franklin D. Roosevelt. Roosevelt became president in 1932, taking leadership of an America that was extremely battered and was attempting to crawl out of the Great Depression, which followed the crash of the stock market in October 1929. 

Jide Sanwo-Olu also celebrates first 100 days in Office
A cut-out portrait of Nigeria’s Babajide Sanwo-Olu (L), and a portrait of his running mate, Obafemi Hamzat, are displayed along a road on March 6, 2019, in the Ikoyi district of the country’s largest city. (Photo by PIUS UTOMI EKPEI / AFP)

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He campaigned and won on the idea of a “new deal” for Americans that would see them through and past the hard times. Now, in order to tackle the issues facing the American economy at the time, he pushed through over a dozen pieces of major legislation during the first 3 months of his tenure. The first measures of the New Deal are referred to as the first 100 days. 

So therein lies the historical background of the first 100 days. But should it still apply in the 21st century? Can the first 100 days really show you the direction and possible outcome of any administration? Those are the questions we must answer individually as citizens. However, the way and manner the first 100 days is bandied about in Nigeria, simply makes you wonder what the big deal is. 

First 100 days records in Nigeria

Let’s start with President Muhammadu Buhari. According to his party, his second term’s first 100 days have gone well. The National Chairman of the APC said appointing ministers earlier than he did in 2015, having the 2020 budget prepared, and even engaging various professional groups have been the achievements of the first 100 days.

In Lagos, Governor Jide Sanwo-olu said the executive order declaring an emergency on traffic management and transportation and rehabilitation of atrial roads were achievements in his first 100 days.

In Oyo State, Governor Seyi Makinde, listed some of his achievements to be cancellation of all levies paid in Oyo public schools, going to Benin Republic for collaborations in the agribusiness sector and also having a 27 year-old commissioner. 

Buhari's First 100 days
Nigerian president Muhammadu Buhari (C) looks on during the African Union summit at the palais des Congres in Niamey, on July 7, 2019. (Photo by ISSOUF SANOGO / AFP)

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Each of these gentlemen claim more achievements in their first 100 days, but should we keep the first 100 days as a benchmark along the timeline of an administration?

The 100 days – is it enough?

As citizens of Nigeria and residents of various states, what do we think the first 100 days can tell us about any administration? 

Oftentimes, it appears there is a race to rack up “achievements” or grand gestures on the way to the first 100 days, but what happens after that? Using about 3 months to judge administrations that have 48 months to fulfill their mandate seems a bit pedestrian. 

We must not allow ourselves to be distracted or caught up in the noise around the first 100 days. Governance is a continuous journey, yes, with milestones along the way. But with the way we have elected officials holding programs, writing speeches, etc on their first 100 days, one would think it was more than that. 

The bar in Nigeria many would say has been set low, some would even argue that the bar is underground at this point. What we as citizens need to realize is that the bar is wherever we want it to. When we start to demand better, make those seeking our vote accountable to their campaign promises, and hand out consequences when they don’t meet our expectations, the bar will rise. 

And when the bar rises, we’ll find that the first 100 days loses some of the glamour around it.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

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Op-Ed

Wanna meet your match? 5 best makeup tips to keep you winning

Here are some recommendations that could come in handy when you go makeup shopping, unsupervised

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Wanna Meet Your match? Use These Unbeatable Tips | News Central TV
Photo credit: House of Tara International

One of the most difficult things for women when getting their makeup (when there are no makeup tips) done by themselves is getting their foundation shades right.

Most times, the shade appears correct but the texture is all wrong, leaving them with a ‘cakey’ finish or simply a dripping hot mess! Sometimes, it oxidizes during the day and leaves an ashy shade.

It’s almost like we never win! Well, we spoke to some makeup artists to get tips that would save you from this recurring facial misadventure.

5 Best Makeup Tips

Here are some recommendations that could come in handy when you go makeup shopping, unsupervised.

1. Know your skin type

Wanna Meet Your match? Use These Unbeatable Tips | News Central TV
Photo credit: House of Tara

Sometimes, your skin can be oily, dry or a combination of both. Whilst knowing your skin type will not automatically help you pick your right shade, it would help you know the right foundation type for you.

To narrow down your options:

  • Choose cream or stick foundation if you have dry skin
  • Choose a matte finish or oil-free liquid or powder foundation if you have oily skin.
  • Choose a powder foundation if you have combination skin
  • Choose a foundation that offers full or medium coverage if you have an uneven complexion and want to cover most of your skin

2. Test under natural light

Find a door or window to see how the foundation holds up in daylight. Sometimes, what you see isn’t always what you get.

3. Test before buying

Wanna Meet Your match? Use These Unbeatable Tips | News Central TV
Photo credit: House of Tara

Choose the foundation shade that looks closest to your skin tone. Test by swathing on your jawline (it is the closest to your natural tone and would show you better how the foundation matches against your neck).

The idea here is to find one that blends in perfectly, not one that you can easily see.

The best foundation will disappear into your skin and provide an even canvas for your other makeup application.

4. If it’s broken (or wrong), fix it – of the very essential makeup tips

Some of us have multiple bottles of wrong shades of foundation- too light or too dark. Don’t throw them away because you now know the shade is wrong. Fix it and use it!

When it is too light, customize to get your right shade by mixing the foundation with a darker shade of concealer, foundation or powder.

When it is too dark, mix with a lighter shade.

5. Choose a Beauty Store that has artists or beauty experts

They would help you narrow down your options and even teach you some cool tricks.

Some other helpful makeup tips:

  • Change makeup sponges regularly if you use them to apply foundation because they can harbour germs and bacteria.
  • Always remove makeup and apply moisturizer before bed. Your skin will repair itself when you sleep.
Wanna Meet Your match? Use These Unbeatable Tips | News Central TV
Photo credit: House of Tara

There are over 21 shades of foundation and 15 shades of powder to choose between.

Hopefully, with our tips and tricks, you would find your match in this mix and maze of shades.

Now you never have to use your face as a permanent testing ground. Find your match and make your move.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

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Op-Ed

Nigeria’s economy: Preview of the week ahead

This week’s major risk event will be Thursday’s annual meeting at Wyoming where leaders from major central banks gather

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Nigeria's economy: Preview of the week ahead | News Central TV
(File photo)

Lingering concerns over a global recession will continue influencing market sentiment in the week ahead, with world equities, emerging markets and riskier currencies in the direct firing line.

Although treasury yields are recovering from record lows, the movements in bond markets are poised to be closely monitored by investors.

In Nigeria, there will be a strong focus on the second-quarter GDP report which should provide fresh insight into the health of the Nigerian economy.

A disappointing figure is seen fuelling expectations over the Central Bank of Nigeria cutting interest rates. Markets are predicting growth of 1.8% during the second quarter of 2019.

READ: Will oil prices help or harm Nigeria’s economy in Q3?

Across the Atlantic, Dollar traders will be closely looking at July’s FOMC minutes for clues on the future pace of rate cuts. Market expectations over a September rate should rise if the minutes are presented with a dovish touch.

However, some are still questioning whether the Fed will move forward with further rate cuts given how US retail sales grew 0.7% in July and the latest job report suggested moderate growth. 

This week’s major risk event will be Thursday’s annual meeting at Wyoming where leaders from major central banks gather. If major central banks express a readiness to cut interest rates further and implement new quantitative easing programs, the mood across markets has the potential to improve.

READ: Gold: Positioned to thrive in low-interest-rate environment

Appetite towards Gold will be influenced by trade developments, the Dollar’s valuation and global growth concerns. The precious metal could still hit $1550 once bulls can secure control above $1530.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

Copyright News Central

All rights reserved. This post and other digital content on this website may not be reproduced, published, broadcasted, rewritten or redistributed in whole or in part without prior express written permission from News Central.

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