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Nigeria May Lose N400bn to Closure of Abuja Airport

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  • Nigeria May Lose N400bn to Closure of Abuja Airport

Nigerian may lose as much as $1 billion (about N400 billion) owing to the temporary closure of the Nnamdi Azikiwe Airport, Abuja.

A former Minister of Aviation, Babatunde Omotoba, who made the projection said that the economy would lose about N400 billion with the shutdown of the airport as many businesses have also shut down while some foreign airlines have cancelled their flights to Abuja during the period.

Sources at the airport also corroborated Omotoba’s statement, pointing out that many businesses are expected to wound down or render skeletal services, while services that depend on daily transit of air passengers to the Federal Capital would close shop.

Omotoba said: “This movement is costing us so much. Some foreign airlines have cancelled their flights to Abuja during the period. Many businesses have also shut down. I have come down to Lagos and I want to stay here for two weeks, at least. When I am going I will go by road. A lot of people have put off their trips this period and that will have huge impacts on the economy”

Omotoba said: “An economist will look at what Abuja contributes to the GDP in a year and look at what one and half months will contribute; because many economic activities will be paralysed during this time. Nigerian airlines are going to count their losses. The number of travellers will reduce. This will have negative impact on our economy. Many who are in Abuja will be there for the six weeks; so the number of travellers will reduce. This will cost the economy hundreds of billions because a section of the economy will be shut down during this period.”

About three years ago it was projected that Nigeria’s Gross Domestic Product (GDP) was $543 billion and it was also projected that 60 percent of this funds come from Lagos while the other cities generate 40 percent and Abuja and Port Harcourt generate high percentage of the remaining funds.

Omotoba added: “Let us assume that a lot of businesses will not operate fully because of the loss of production, so Abuja will lose about $1 billion during the period, which is about N400 billion. In six weeks, our economy will suffer because you should also know that some of the businesses done in Lagos are also connected to Abuja, so there will be effect of this in Lagos, in Ibadan and other places. So the closure will slow down everything. This will also shut down the routing of most flights from Abuja to other destinations.”

He also noted that there would be additional costs “because people are also worried about kidnapping. It is because of kidnapping that many entrepreneurs said they would shut down their businesses. So it will have major, major impact on our economy.”

The airport was shut down in the midnight of Wednesday, March 8, 2017 for the rehabilitation of its runway, which will take about for six weeks. The Kaduna airport was designated as alternative to the Abuja airport.

Many international airlines declined to operate from Kaduna airport citing security concerns. They have closed their Abuja offices, cancelling the flights of hundreds of passengers.

Travel expert, Ikechi Uko said that the economy would definitely experience contraction due to the closure of the Abuja airport, pointing out that many hotels would lose customers and businesses that deal with air travel while passenger movement would be drastically affected, while it would be a boom for road transporters.

Also, some companies in Abuja would provide skeletal service as their top officials had left the city on holidays and those who have offices in Lagos have moved to the nation’s commercial city pending when the airport would resume operations. All the domestic carriers have moved their operations to Kaduna as alternative airport to Abuja.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Global Markets Near Record Peaks and Will Get Stronger: deVere CEO

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As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.

Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.

“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.

“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.

“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.

“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”

However, the CEO’s bullish comments also come with a warning.

“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.

“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”

Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”

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Refinitiv Expands Economic Data Coverage Across Africa

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Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.

Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.

Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.

Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades.  As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”

Refinitiv Africa economic data coverage:

  • Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
  • Content is sourced from national statistical offices, central banks and other key national institutions
  • The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
  • International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent

Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.

 Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.

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Oil Rises on Drawdown in U.S. Oil Stocks, OPEC Demand Outlook

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Oil prices rose in early trade on Wednesday, adding to overnight gains, after industry data showed U.S. oil inventories declined more than expected and OPEC raised its outlook for oil demand.

Brent crude futures rose 28 cents, or 0.4%, to $63.95 a barrel at 0057 GMT, after climbing 39 cents on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures similarly climbed 28 cents, or 0.5%, to $60.46 a barrel, adding to Tuesday’s rise of 48 cents.

Oil price gains over the past week have been underpinned by signs of a strong economic recovery in China and the United States, but have been capped by concerns over stalled vaccine rollouts worldwide and soaring COVID-19 infections in India and Brazil.

Nevertheless, the Organization of the Petroleum Exporting Countries (OPEC) tweaked up its forecast on Tuesday for world oil demand growth this year, now expecting demand to rise by 5.95 million barrels per day (bpd) in 2021, up by 70,000 bpd from its forecast last month. It is banking on the pandemic to subside and travel curbs to be eased.

“It was a welcome prognosis by the market, which had been fretting about the impact the ongoing pandemic was having on demand,” ANZ Research analysts said in a note.

Further supporting the market on Wednesday, sources said data from the American Petroleum Institute showed crude stocks fell by 3.6 million barrels in the week ended April 9, compared with estimates for a decline of about 2.9 million barrels from analysts polled by Reuters.

Traders are waiting to see if official inventory data from the U.S. Energy Information Administration (EIA) on Wednesday matches that view.

Market gains are being capped on concerns about increased oil production in the United States and rising supply from Iran at a time when OPEC and its allies, together called OPEC+, are set to bring on more supply from May.

“They may have to contend with rising U.S. supply,” ANZ analysts said.

EIA said this week oil output from seven major shale formations is expected to rise by 13,000 bpd in May to 7.61 million bpd.

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