Nigeria

Nigeria’s FX reserve fetish is bad for growth

30 April 2018

President Muhammadu Buhari is vaunting a rapid rise in foreign exchange reserves. A decent war chest is worth having in case the naira needs defending. But accumulating a vast pile of dollars will deprive the economy of the hard currency it needs to keep growing and create jobs.

Heineken’s number two status brings marginal costs

12 February 2018

The Dutch brewer is one of the few global groups still increasing beer volumes. However, acquisitions will weigh on operating margins in 2018. Heineken needs to invest in its new Brazilian brands to take on market leader AB Inbev. That limits the scope for boosting profitability.

The Exchange: Marcus Ruiz Evans

8 December 2017

The president of Yes California leads a campaign arguing that the Golden State should become an independent country – an idea increasingly referred to as Calexit. He explains why secession would be good for the state’s economy and how he’ll get the rest of the nation to buy in.

Iran’s upper hand in OPEC could be fleeting

28 September 2016

The Islamic Republic's resistance to an oil deal leaves its rival Saudi Arabia stuck with low prices. Yet that is pushing Riyadh to launch necessary economic reforms, which should make the kingdom more competitive. Iran, despite its current rapid growth, risks falling behind.

Emerging market fans get South Africa wake-up call

25 August 2016

The rand has slumped since Finance Minister Pravin Gordhan was ordered to report to a special police unit. Falling stocks and bonds are a timely reality check for money managers who have been lured back to emerging markets. An indiscriminate hunt for yield generally ends badly.

LafargeHolcim mega-merger gets to first base

5 August 2016

The world's largest cement group has reaffirmed EBITDA guidance for this year. LafargeHolcim's first year has been fraught, but synergies are coming through. Still, given the union's troubled markets, the real challenge is sustainable topline growth.

Nigeria’s problems defy central bank fixes

28 July 2016

A hefty rate hike was a fair response to a slump in the naira that’s fuelling inflation. Yet this is unlikely to lure much foreign money back to Africa’s biggest economy. Its political, trade, and fiscal misfortunes are too pernicious for even yield-starved investors to overlook.

UK’s own corruption safeguards less than fantastic

11 May 2016

The prime minister’s description of Nigeria and Afghanistan as “fantastically corrupt” has some basis in global graft indices. And Britain talks a good game on anti-corruption. But its recent adoption of US-style “deferred prosecution agreements” suggests no room for complacency.

Oil flirting with the $20s gives OPEC cause to cut

12 January 2016

That bleak outlook for oil is gaining traction among analysts. Such bearish predictions may prove correct unless bickering OPEC puts aside its differences and agrees to deep cuts. But for that to happen, Russia and other producers outside the cartel will have to play ball.

Nigeria’s democratic change is a real positive

1 April 2015

Africa’s biggest economy is set for its first peaceful transfer of power. Election winner Muhammadu Buhari, a 1980s junta leader, will find ruling harder now. Meaningful reform will take years. Still, better governance is good news for the populace and outside investors alike. 

Current account is key Africa factor in 2015

2 January 2015

Rapid African growth is likely to continue. But too much spending and borrowing has led many countries into trade deficits. As lenders become more discriminating, the state of the balance of payments, along with freedom from Ebola, will become keys to continued growth.

Fear is key to Ebola’s economic contagion

18 August 2014

The virus ravaging parts of Africa has yet to spread elsewhere. Yet Asia’s SARS crisis in 2003 showed how changes to behaviour can hurt growth and productivity more than an actual disease. Ebola seems harder to catch, but more deadly. That could make for a more pronounced effect.

Review: Hustling helps Africa’s partial success

17 April 2014

Dayo Olopade’s “The Bright Continent” describes “kanju,” the hustling, striving and rule-breaking that make modern Africa work. The canny invisible hand can outwit the dead hand of corrupt bureaucracy. Sadly kanju makes the continent a tough place to do fully organized business.

Damn statisticians with at least faint praise

8 April 2014

It’s easy to mock belated number nerd discoveries, for example that British savings and Nigerian GDP missed by almost a factor of two. Blushing and correcting beats persisting in error. Better still is to ignore the spurious precision of many calculations in the first place.

Nigeria’s oil scandal may yet help it emerge

20 February 2014

President Jonathan suspended the central bank chief after he pointed a finger at the state oil company. Local markets roiled, but Nigeria’s non-petroleum economy is actually growing smartly. With any luck, more attention on corruption will curb one of the country’s biggest drags.

Western debt magic is poison for Africa

24 December 2013

A poor continent with limited savings is hugely vulnerable to a credit crunch. Africa desperately needs capital, but only the sort that can’t easily leave. Speculative investors and yield-hunters will eventually do more harm than good. There’s a caution here for Bob Diamond.

Failed petrostates threatened by new oil bounty

20 September 2013

Oil majors are becoming less tolerant of the political risks and corruption they’ve coped with in the past. That’s bad news for the likes of Nigeria or violence-prone Libya. With safer crude on offer in the U.S. and elsewhere, troubled states risk an exodus of expertise.

Jonathan needs good luck to keep Nigeria moving

23 May 2013

The budget is under control, bad banks are being sold, the sovereign wealth fund opens soon and growth is over 6 pct. But a rebellion could hinder President Goodluck Jonathan’s progress. Combining careful anti-insurgent activity with solid economic management is a tall order.

Nigeria’s oil mess hides solid African growth bet

8 February 2013

The state oil company is fighting the government, and production has stagnated. But at long last Nigeria’s non-oil economy, led by telecoms and construction and perhaps worth $200 bln, is growing fast enough to compensate, and then some. It’s a frontier market worth a close look.

Nigerian billionaire’s LSE-quote plan is watershed

5 April 2012

A mooted London listing for Aliko Dangote’s $11 bln cement group is a milestone for Nigeria and for Africa. The resource-rich continent has seen false starts before, and Dangote’s venture isn’t without risks. But a FTSE 100-sized Nigerian company gives cause for celebration.