- Global Air Transport to Suffer $252bn in Damages
The International Air Transport Association (IATA) has said the expected damage to the global air transport due to the coronavirus pandemic has risen to $252 billion or 44 percent below the 2019’s revenue.
The association had previously estimated $113 billion revenue loss on March 5th, however, the association revised up its estimation to $252 billion citing more air restrictions, cancellation of flights and an increase in ticket refund.
“Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet $252bn or 44 percent below 2019’s figure. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year,” the association said.
Alexander de Junaic, the Director-General, IATA, said, “The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates. But without immediate government relief measures, there will not be an industry left standing.
“Airlines need $200bn in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit.”
The association added that under the stated scenario, it assumed that several travel restrictions would be lifted after three months. Meaning, it could get worse without a credible solution warranting such a decision.
IATA said, “The recovery in travel demand later this year is weakened by the impact of global recession on jobs and confidence. Full-year passenger demand declines by 38 percent compared to 2019.
“Industry capacity (available seat kilometre or ASKs) in domestic and international markets declines 65 per cent during the second quarter ended 30 June compared to a year-ago period, but in this scenario recovers to a 10 per cent decline in the fourth quarter.”
Warren Buffet to Give Out Another $2.9bn, Total Donations Now $37bn
Warren Buffet Gives Away $2.9bn, Total Donations Now $37bn
Oracle of Omaha, Warren Buffet, has announced his yearly charitable donations to the five philanthropies he picked to donate most of his fortune to.
The billionaire plans to give out 15.9 million class B shares of Berkshire Hathaway worth $2.9 billion to the five philanthropies. This will bring his total philanthropic donations to $37 billion since 2006.
Buffet, who has promised to give away about 99 percent of his fortune, still hold 248,734 Class A shares of Berkshire valued at around $67.5 billion.
However, before he began given out his shares, Oracle of Omaha held 474,998 Class A shares of Berkshire, which would have worth about $129 billion as of today.
UBA Appoints Ayoku Liadi, Oliver Alawuba as Deputy Managing Directors
UBA Appoints New Deputy Managing Directors for its Growing Business
United Bank for Africa Plc (UBA) announced the appointments of Ayoku Liadi and Oliver Alawuba as the Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively.
In a statement issued by the bank and released on the Exchange’s website, the bank said the creation of the new positions represents further strategic recognition of the bank’s pan-African business growth.
The lender explained that its pan-African business now accounts for over 40 percent of its Group revenue, while Nigeria remains the bank’s largest market.
According to the bank, the new Deputy Managing Directors will report directly to the Group Chief Executive Officer (CEO), Kennedy Uzoka.
Speaking on the new appointments, Tony O. Elumelu, Group Chairman, said “In 2005, we set out our pan-African vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent.
“In Africa, we lead in innovation and service, whilst our International Business, operating from New York, Paris and London, provides global and African clients access to treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimise our management structure to best serve our clients and drive our business success.”
West African Consumer Sentiment Reflects Global Uncertainty
Ghanaian Consumer Confidence Declines by 15 Points
Lagos, 7 July 2020 – Against the backdrop of the unprecedented COVID-19 pandemic, West African consumer sentiment has experienced a sharp drop in the Nielsen Consumer Confidence Index (CCI) for Quarter 2, 2020. Ghana’s figures show a substantial decrease of 15 points to 104, while Nigeria’s CCI has decreased by 14 points to 108.
Looking at Ghana’s performance, Yannick Nkembe, Market Lead for Nielsen West Africa Expanded Market, comments; “The latest consumer sentiments reflect the market reality. With the global pandemic affecting the economy and causing general uncertainty all around, consumers have readjusted their confidence levels and are also more cautious with their spend.”
Ghanaians have significantly dropped their outlook around their job prospects, with less than half (45%) saying they will be good or excellent in the next 12 months – a 16 point decrease from the previous quarter. In terms of the state of their personal finances over the next 12 months, 60% say they are excellent or good, again a substantial 16 point drop from the previous quarter.
Ghanaians propensity to purchase has also seen a considerable decrease quarter on quarter, with the number of those who think now is a good or excellent time to purchase what they want or need drop from 52% to 33% in the second quarter.
Only 43% of Ghanaians say they have spare cash, down 13 points from the previous quarter. Once they meet their essential living expenses, the highest number of consumers (74%) put their spare cash into savings, followed by 73% on home improvements/decorating and 56% who would invest in stocks and mutual funds. One of the most significant drops in discretionary spending is on holidays down from 58% to 27% – a clear indicator of consumers’ mindset shift away from non-essential services and their desire to avoid unnecessary travel.
When asked whether they had changed their spending to save on household expenses compared to this time last year, 75% said yes, up seven points from the previous quarter. To reduce expenses, 53% said they spent less on new clothes, 52% on out of home entertainment, with the same figure deferring on the replacement of major household items.
When looking at the real-life factors that are affecting their outlook, the top consumer concerns over the next twelve months were increasing food prices (29%), followed by work/life balance (23%) and their children’s education (22%). Nkembe comments; “Ghana has previously experienced strong business prospects and with the relatively earlier easing of restrictions to stimulate its economy, recovery in Ghana is likely to rebound sooner. We expect consumers to revert to previous consumption behaviours, although some of their attitudes will have fundamentally or permanently changed post the pandemic.”
Subdued sentiment in Nigeria
In tandem with the rest of the world, Nigeria’s CCI figure dropped by 14 points. Commenting on the reasons for this, Nielsen Nigeria MD Ged Nooy says; “As Africa’s largest economy and the largest exporter of oil, Nigeria’s economy was already under immense pressure before the COVID-19 lockdown due to the collapse in international oil prices. Based on the additional economic pressure as a result of the COVID-19 pandemic, Nigeria, therefore, instituted a fairly early easing of its 5-week lockdown in early May due to the adverse financial effects on its economy and population.”
Looking at the consumer picture during this time (Quarter 2, 2020) Nigerian job prospects declined with less than half viewing them as excellent or good, a 14 point drop from the previous quarter. Nigerians’ sentiment around the state of their personal finances also showed a decline with 59% who think they will be excellent or good over the next year, having decreased 19 points from the previous quarter. Immediate-spending intentions also declined, with only a third of the respondents saying “now is a good or excellent time to purchase” what they want or need, a 14 point drop from the previous quarter.
In terms of whether Nigerians have spare cash to spend, 32% said yes, versus 50% in the previous quarter. When we look at Nigerians spending priorities, once they have met their essential living expenses, 81% said they would put their spare cash into savings, 73% said home improvements and decorating and 66% would invest in shares/mutual funds.
Seventy-six per cent of Nigerians said they had changed their spending to save on household expenses compared to this time last year. To reduce expenses, 67% said they had delayed the replacement of major household items (a 10 point increase on the previous quarter). Sixty-four per cent said they would spend less on new clothes and 56% said less out of home entertainment – both of which are understandable given ongoing restricted living patterns.
In the next 12 months, Nigerians said their top concern would be attaining a work/life balance (31%), which has seen the biggest increase of eight points compared to the previous quarter. This is followed by increasing food prices (23%) and concerns over the economy (19%).
Elaborating on these results, Nooy says; “Economic recovery has been sluggish and will remain severely constricted due to the oil price crash amidst and beyond the pandemic. For Nigeria’s manufacturing and retail sectors to rebound will require a sharp focus, as trade opportunities and execution remains severely constrained, having further deteriorated during the partially restricted living period.”
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