- Walmart Will Worsen Nigeria’s Economic Crisis
The National Association of Nigerian Traders (NANT) has raised the alarm that the imminent entry of the World’s biggest retail chain, Walmart into Nigeria will spell doom for the country’s retail businesses.
The association was reacting to the retail giant’s announcement that it was planning to explore having economic footprints in Lagos State.
It also stated that the government would be paying lip-service to patronising locally made products if it allowed Walmart into the country.
President of association, Ken Ukaoha, speaking on behalf of its members, said while not working against expanding the economy, the country may not be fit enough to accommodate a market giant like Walmart, given Nigeria’s current economic crisis.
According to him, though there were high hopes that the global giant in retail would soon register its presence in the country, it would mean bringing to reality the worst nightmares of local producers and traders who were struggling to get the industrial sector on its feet.
Ukaoha noted that as much as the government was working to revive the economy, the proposed entry of Walmart which had generated mixed reactions from industry observers, would have been good if the investor was looking at marketing Nigeria’s local products.
“If you read the economy today, the only hope left for the country in terms of employment generation is the retail trade sector. This sector has accommodated an impressive number of people who may have remained unemployed. Bringing Walmart to the country will displace local businesses and employees. Besides, the government is campaigning for the promotion and patronage of our locally made goods yet they are planning to accommodate a store which deals in foreign items. Take ShopRite for instance, 97.8 per cent of what it displays on shelves are foreign items. Bringing Walmart will further increase Nigeria’s appetite for foreign goods.
“The government is unconsciously killing the industrial sector. Regardless of the worth of a foreign investment, government needs to be careful as it cannot eat its cake and have it. If care is not taken, a time is coming that Nigeria will be weeping like Ghana where it will be complaining that the economy has been ripped off by foreigners”, he warned.
The government needs to sit down and do a cost-benefit analysis of this arrangement. Walmart is a one-stop shop that will give consumers everything they want. But what they are offering is not made in Nigeria. What value are they then adding to the economy? I’m afraid that our local producers and retailers may not be able to survive if the market eventually settles down,” he argued.
It will be recalled that in July, a delegation from Walmart led by its top executive for Europe, the Middle East, Africa, and Canada, Shelley Broader, paid a visit to the Governor of Lagos State, Mr. Akinwunmi Ambode, intimating him of plans to bring the carrier of the ‘Save money, live better’ slogan to the state. The governor welcomed the move and promised to expedite actions to see that their plan comes to reality.
Crude Oil Drops on Wednesday as U.S. Oil Inventories Jump Unexpectedly
Global oil prices fell by 1 percent on Wednesday after data from the U.S. Energy Department showed that the United States oil inventories unexpectedly rose by 4.3 million barrels last week. More than the 1.9 million barrels predicted by experts.
The unexpected increase in United States inventories weighed on crude oil prices on Wednesday, erasing $1.31 or 1.5 percent from Brent crude oil after it rose to a seven-year high on Tuesday. While the U.S West Texas Intermediate (WTI) dipped by $1.09 or 1.3 percent to $83.56 a barrel.
Still, gasoline stocks declined by 2 million barrels across the United States, a situation likely to push pump prices even higher.
“The market continues to deplete Cushing crude oil inventories and that is impacting the Brent-WTI spread and ultimately we’re going to see crude oil diverted from the Permian up to Cushing rather than going to the Gulf Coast,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
However, the shaky COVID-19 recovery in most economies has led to doubts over the sustainability of rising oil prices.
“(Some) countries are falling into an autumn Covid-19 case spike,” said Louise Dickson, senior oil markets analyst at Rystad Energy, “which poses downside risk for oil demand growth in the very near-term and could provide a soft pressure on oil prices.”
Brent Crude Oil Extends Gain to $86.66 a Barrel Amid Tight Supply
Tight global oil supply pushed Brent crude oil, against which Nigeria oil is priced, to a multi-year high of $86.66 per barrel on Monday at 3:30 pm Nigerian time.
Oil price was lifted by rising fuel demand in the United States and tight global supply as economies recover from pandemic-induced slumps.
“The global energy supply crunch continues to show its teeth, as oil prices extend their upward march this week, a result of traders pricing in the ongoing rise in fuel demand – which amid limited supply response is depleting global stockpiles,” said Louise Dickson, senior oil markets analyst at Rystad Energy.
Goldman Sachs on the other hand is predicting a further increase in Brent crude oil to $90 a barrel, citing a strong rebound in global oil demand due to switching from gas to oil. This the bank estimated may contribute about 1 million barrels per day to global oil demand.
The investment bank said it expects oil demand to reach around 100 million barrels per day as consumption in Asia increases after the devastating effect of COVID-19.
“While not our base-case, such persistence would pose upside risk to our $90/bbl year-end Brent price forecast,” Goldman said in a research note dated Oct. 24.
Earlier this month, the Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+ agreed to continue increasing oil supply by 400,000 bpd a month until April 2022 despite calls for an increase in global oil supplies.
The decision bolstered the price of Brent crude oil above $84 per barrel and expected to push the price even further to $90 a barrel. Low global oil supply amid rising demand for crude oil will continue to support oil prices in the near term.
“Despite the recent power cuts and impacts to industrial activity in China, oil demand is likely instead supported by switching to diesel powered generators and diesel engines in LNG trucks, as well as by a ramp up in coal production,” Goldman Sachs stated.
U.S. and Ghana Inaugurate New $64.7 Million Energy Infrastructure Investment at Pokuase
U.S. Ambassador to Ghana Stephanie Sullivan joined the President of Ghana H.E. Nana Akufo-Addo and other Ghana government officials to formally inaugurate the Pokuase Bulk Supply Point (BSP) in Accra today. The U.S. Millennium Challenge Corporation (MCC) funded the $64.7 million (GH₵ 391.9 million) electrical infrastructure project under the Ghana Power Compact.
“The Pokuase Bulk Supply Point represents sustainable infrastructure investment by the United States with Ghana that will benefit hundreds of thousands of Ghanaians now and into the future,” remarked Ambassador Sullivan at the inaugural event. “It will help deliver more reliable power to the people, places, and businesses of Accra that drive increased economic activity benefitting families, businesses, and communities.”
This represents a flagship investment under the Millennium Challenge Corporation’s Ghana Power Compact. The Pokuase BSP will reduce outages in the power system, help stabilize voltages, and improve the quality and reliability of power supplied to the northern parts of the capital city of Accra. It will also reduce technical losses in the power transmission and distribution system, contributing to the financial viability of the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo) in the long term. The Pokuase BSP is now the largest-capacity BSP in Ghana at 580 megavolt amperes (MVA) and will directly benefit 350,000 utility customers.
The Government of Ghana implemented the project through the Millennium Development Authority (MiDA). MiDA formally handed over the new power substation to ECG and GRIDCo in today’s ceremony.
The Pokuase BSP is the first major construction project to be completed under the Ghana Power Compact. The $316 million compact is helping the Government of Ghana improve the power sector through investments that will provide more reliable and affordable electricity to Ghana’s businesses and households. The compact is also funding a BSP at Kasoa and two primary substations at Kanda and Legon, in addition to other power sector investments, energy efficiency programs, and women’s empowerment programs within the power sector. The compact program will officially close on June 6, 2022.
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