- Africa’s Freight Demand up by 24.3%
International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose by 6.9 per cent in January 2017 compared to the year-earlier period.
While this was down from the 10 per cent annual growth recorded in December 2016, it still was well above the average annual growth rate of three per cent over the past five years.
African carriers’ saw freight demand increase by 24.3 per cent in January 2017 compared to the same month last year, helped by very strong growth on the trade lanes to and from Asia.
IATA stated that demand between the two continents jumped by 57 per cent in January on the back of rapid long-haul expansion and increased direct services, adding that the increase in demand has helped the region’s seasonally adjusted load factor to rise after falling by five percentage points in 2016 compared to the previous year.
Growth in freight capacity, measured in available freight tonne kilometers (AFTKs), slowed to 3.5 per cent in January 2017.The continued positive momentum in freight growth into 2017, according to the body coincides with a steady rise in new export orders, which reached their highest level in February (latest data available) since March 2011.
IATA also said there has also been an increase in the shipment of silicon materials typically used in high-value consumer electronics shipped by air. The timing of the Lunar New Year (in January 2017) also may have contributed to higher demand in January.IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said it has been a good start of the year for air cargo.
“Demand growth accelerated in January, bolstered by strengthening export orders. And that outpaced the capacity growth which should be positive for yields. And, longer-term, the entry into force of the Trade Facilitation Agreement (TFA) will cut red tape at the borders for faster, cheaper and easier trade.
“The onus is now on the industry to seize the opportunity to accelerate the modernization of processes to make air cargo an even more compelling option for shippers,” de Juniac said.
Manufacturers Association of Nigeria Raises Alarm as Unsold Goods Pile Up
The Manufacturers Association of Nigeria (MAN) has issued a stark warning about the escalating inventory of unsold goods, a crisis that threatens the very existence of companies within Nigeria’s production sector.
The association attributes this alarming trend to sustained pressure in the foreign exchange market coupled with the exorbitant cost of production.
As the value of the Nigerian naira continues to plummet in the foreign exchange market, MAN reports a 254% depreciation since the currency’s flotation by the Central Bank of Nigeria in June 2023.
This drastic decline has led to a surge in production costs, stoking inflation and eroding purchasing power, thereby dampening demand for manufactured goods.
MAN’s Director General, Segun Ajayi-Kadir, underscored the detrimental impact of the exchange rate crisis, inflation, and other macroeconomic challenges on the manufacturing sector.
Many warehouses and production plants across the country are now inundated with surplus inventory from the previous year, highlighting the severity of the situation.
Ajayi-Kadir warned that if left unaddressed, the mounting unsold goods could force manufacturers to halt production, inevitably leading to workforce downsizing and operational stagnation.
The dire economic conditions, exacerbated by the relentless depreciation of the naira, have rendered the current business environment unsustainable for many manufacturers.
In response to the crisis, manufacturers have adopted various strategies, including investing in backward integration to source raw materials locally and suspending operations altogether.
However, these measures may not suffice in alleviating the profound challenges facing the manufacturing sector.
The situation calls for urgent intervention from policymakers to address the root causes of the crisis and implement effective solutions to revitalize Nigeria’s manufacturing industry.
Failure to act decisively risks further exacerbating the economic downturn and exacerbating the plight of businesses across the country.
IBEDC Disconnects UCH Over N500m Debt, Critical Services Affected
The University College Hospital (UCH) in Ibadan, Oyo State, experienced a disruption in its power supply after the Ibadan Electricity Distribution Company (IBEDC) disconnected the hospital over a debt amounting to N500 million.
Dr. Jesse Otegbayo, the Chief Medical Director of UCH, confirmed the disconnection but refrained from elaborating on the exact cause.
IBEDC’s spokesperson, Busolami Tunwase, acknowledged the outstanding debt owed by UCH but denied that the disconnection was intentional.
Tunwase stated that while UCH owed the substantial amount, the power outage was due to a technical fault in the area, coinciding with the debt situation.
Despite repeated attempts to engage UCH in discussions to settle the debt, IBEDC had resorted to disconnection as a last resort.
The disconnection poses significant challenges to UCH’s critical services, affecting patient care and hospital operations.
While IBEDC emphasized its understanding of the hospital’s importance and commitment to resolving the issue amicably, the situation underscores the financial strains faced by healthcare institutions and the essential need for reliable power supply.
Efforts to negotiate and find a resolution between UCH and IBEDC are ongoing to restore normal operations and ensure uninterrupted healthcare services.
Oil and Gas Dealers Threaten Withdrawal as 70% of Downstream Businesses Collapse
The downstream oil sector in Nigeria faces a looming crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), issue a stern warning of potential service withdrawal.
In a recent resolution following their executive committee meeting in Abuja, NOGASA expressed grave concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating environment.
President of NOGASA, Benneth Korie, highlighted the dire situation, emphasizing the challenges faced by oil marketers in funding operations amidst soaring bank interest rates.
Korie underscored the overwhelming burden faced by operators who are compelled to acquire funds at exorbitant interest rates upwards of 30%, exacerbating financial strain and hindering business viability.
The primary demand voiced by NOGASA is the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically.
Failure to address these pressing issues, Korie warned, could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.
The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.
However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.
As Nigeria navigates through turbulent economic waters, stakeholders eagerly await decisive action from authorities to salvage the downstream oil sector from imminent collapse and avert potential disruptions in fuel supply chains.
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate February 1st, 2024
Education4 weeks ago
WAEC: Over 8,000 Candidates Register for First Series of Computer Based-WASSCE in Nigeria
Company News4 weeks ago
UAC Posts N12.7 Billion Profit Before Tax in 2023
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 2nd, 2024
Banking Sector3 weeks ago
CBN Accuses Banks of Hoarding $5 Billion in Foreign Currencies
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 30th, 2024
Naira3 weeks ago
Dollar to Naira Black Market Today, February 5th, 2024
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 31st, 2024