Senior Research Analyst
at FXTM
2019 was a rough year for the Nigerian
economy thanks to volatile crude Oil prices and the headwinds not only coming
from global recession risks but also US-Chin a trade tensions.
Extra-smart
Nigerians are getting shares of the new Lagos by acquiring plots, acres and
hectares of land at Ibeju Lekki . What are you waiting for? Click: http://www.tectono-business.com/2019/07/have-share-of-new-lagos-by-investing-in.html
In addition, there were political
uncertainties amid elections which settled down following the re-election of
President Buhari. However, shortly after the investors’ attention turned back
to the economy as the Central Bank of Nigeria (CBN) unexpectedly cut interest
rates for the first time in three years, in March 2019. Thus, increasing the
specter of inflationary pressures.
Nigeria’s economy still managed to
average around two percent per quarter this year. The CBN may have taken a
precautionary measure to protect the economy from external risks. The move had
been enough to satisfy monetary policy makers because the CBN refused to join
the global easing train, in the second half of 2019, when over 40 central banks
cut interest rates. Instead, hoping to avoid inflationary pressures, the CBN
played a larger role in the overall economy by increasing the loan to deposit
ratio from 60% to 65%, with plans to increase the ratio to 70% by 2020.
These landed properties with C
of O @ Abraham Adesanya Roundabout, Lekki suit your taste. Your colleagues have
started buying. What are you waiting for? Click: http://www.tectono-business.com/2019/08/urban-prime-one-estate.html
External risks that influenced Nigeria in 2019
The US-China developments will remain a
primary factor influencing Nigeria’s economy in 2020. As Nigeria enjoys the
position of being the biggest destination for Chinese investors in Africa, any
slowdown in China’s economy is likely to affect Nigeria’s export and investment
markets.
Additionally, there were widespread
concerns over slowing global growth after major economic institutions like the
International Monetary Fund, World Bank, Organization for Economic Co-operation
and Development and World Trade Organization cut growth projections amid the
consequences of the US-China trade war.
Have
you thought about having a 5-Bedroom Apartment with Penthouse and Indoor
Swimming Pool near Pan Atlantic University?
For details, click: http://www.tectono-business.com/2019/08/have-you-thought-about-having-5-bedroom.html
Concerns over Nigeria’s growth were
further heightened by Brexit uncertainties, particularly with regards to trade relations. It must be kept in mind that
trade deals with the UK and African countries are negotiated through the EU
which plays a middle man. With the agreement becoming void when Britain departs
from the Europe, this presents significant disruptions and economic risk to
African nations who heavily trade with the UK. The UK was Nigeria’s
seventh-largest trading partner during the final third quarter of 2019 with
total trade amounting to roughly $1.3 billion. A question on investors’ minds
is whether Brexit could disrupt trade between Nigeria, the EU and the UK in the
near term.
The bright spot amongst the clouds of
uncertainty is the pick-up in crude Oil price benchmarks. WTI Crude and Brent
concluded 2019 with gains, appreciating roughly 23.5% and 27.0%, is good news
for Nigeria.
Business
executives and CEOs like you always bring their vehicles to GOF AUTOS
LTD for body works, painting with Sikkens paint and oven baking. For
details, click: http://www.tectono-business.com/2017/06/gof-autos-limited-best-automobile.html
What to expect in 2020
While crude Oil benchmarks were rising,
a troubling trend made its mark when crude Oil pipeline shut-ins and shut-downs
cost Nigeria N88.22bn in November 2019.
Although the commodity has appreciated
roughly 4% since the start of 2020 as geopolitical tensions in the Middle East
trigger fears over negative supply shocks in the markets, this may be not
enough to sustain oil prices in the medium to longer term. If Oil falls in
2020, it will hit revenues, which in turn may weaken the Naira and spur
inflation. This should discourage the CBN from cutting interest rates. Another
vulnerability in a falling Oil price scenario stems from state fuel subsidies,
which rise along with the cost of Oil, potentially impacting the bottom line
for Nigeria’s record 10.59 Naira budget for 2020.
Are you aware that many
Nigerian exporters have been defrauded in the process exporting their products?
To export successfully and get paid, click: http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
The year 2020 may be end of the Brexit
process and offers an opportunity for Nigeria to reach a trade agreement with
the UK, something that could support economic growth.
If the global trade outlook continues
improving and the US-China trade disputes reach a final deal, the impact would
be positive for the Nigerian economy. Especially, if China’s GDP growth
rebounds.
2020 may be another rough year if the
US-China trade disputes or Brexit issues take a turn for the worse, but there
is a potential for a good year in the event of reaching a satisfactory
conclusion for both. This would calm market concerns and supporting growth
along with crude Oil prices.
No comments:
Post a Comment