Nigeria’s Gross Domestic Product has contracted by 2.1 per cent in the second quarter of 2016, according to data from the National Bureau of Statistics. However, seven activities in the non-oil sector recorded positive growth.
The activities that drove growth in the non-oil sector included: agriculture; Information and Communication; water supply; arts, entertainment and recreation; professional, scientific, education and technical services..
Although growth in the sector declined by 0.38 in real terms in Q2 2016, the sector contributed 91.74 per cent to the nation’s GDP, higher from shares recorded in Q1 which was 89.71 per cent and Q2 2015 which was 90.20 per cent, according to the NBS data.
An earlier data compiled by the Bloomberg had put growth in the sector at -0.36 per cent in Q1 2016.
A 2.1 per cent GDP contraction beat analysts’ forecast by 0.5 per cent. The median of 17 economist estimates compiled by Bloomberg was for 1.6 per cent contraction.
Bloomberg quoted an analyst at the London-based Capital Economics Limited, John Ashbourne, as saying that there was poor performance across almost the entire economy, adding, “Every engine has blown out.”
But there have been a lot of efforts on the part of the government to diversify the economy by leveraging agriculture and other activities. In line with this vision, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has been carrying out sweeping reforms meant to enhance crop production across key food chains.
He stated during the launch of his most recent reform-the Agriculture Promotion Policy- that it was a “refreshed strategy” to tackle foreign exchange scarcity, end food importation and boost local food production.
According to him, the programme has placed priority on improving productivity of a number of crops and activities such as rice, wheat, maize, fish (aquaculture), dairy milk, soya beans, poultry, horticulture (fruits and vegetables), and sugar.
He said, “Nigeria believes that the gap can be closed by partnering private investors across farmer groups and companies to develop end-to-end value chain solutions. These chains will receive facilitated government support as they make deep commitments to engaging a new generation of farmers, improving supply of specialised fertilizers and protection chemicals, as well as wider scale use of high-yielding seeds.”
The agriculture programme is also receiving support at the state levels where states like Taraba, Lagos, Ebonyi and so many others have embarked on aggressive programmes targeted at enhancing productivity in crops and activities where each state has comparative advantage. While Taraba and Ebonyi have been consolidating on local rice production advantage, Lagos State has taken advantage of its natural environment to develop aquaculture and other key minerals found in abundance in the state.
The Federal Government is targeting tax revenue from activities in the non-oil sector to finance the 2016 budget amidst declining oil revenue.
Gold Hit 26.8% ROI YTD, the Highest Increase in Value Among Top Assets
Gold Delivers 26.8% Return on Investment Year-t-Date
As the world’s earliest form of currency, gold has long been considered a reliable store of value. Unlike banknotes, stock, or other assets, the precious metal managed to preserve the investors’ wealth throughout the years, especially in times of turmoil in the financial markets.
According to data presented by AksjeBloggen, gold hit a 26.8% YTD return on investment, the highest increase in value among top assets.
Gold Return Rate 8.5% Higher than in 2019
Investors tend to focus on gold in times of market volatility, considering it to be a ‘safe haven’ in crises like the coronavirus. In 2019, the value of gold increased by 18.3%, revealed the Blackrock data. The precious metal continued the impressive performance in 2020 with a 26.8% YTD return, 8.5% more than in 2019.
Statistics show that last year, the S&P 500 index increased in value by 31% but was outperformed by Nasdaq, which grew by 35.2%. The MSCI Europe index rose by 26.1% in 2019. China A-shares followed with a 22.3% ROI.
However, the COVID-19 crisis had a massive impact on popular assets, causing a sharp fall in their values during the first half of 2020. The Blackrock data revealed the Nasdaq YTD return hit 23.9%, 11.3% below the 2019 performance. China A stocks reached 10% ROI YTD, much under the 22.3% return in 2019.
Statistics show the S&P 500 index had an 8.4% value increase in the nine months of 2020, almost four times less than in 2019. MSCI Emerging Market Index reached a 4.9% value increase in the same period, compared to 13% in 2019.
The Blackrock data show that crude oil, FTSE 100, and MSCI Europe index witnessed the most significant drop in the nine months of 2020, with their values falling by 34.6%, 22.4%, and 11.5%, respectively.
Global Demand for Investment Gold Surged by 100% YoY
Although many investors value gold as an important portfolio asset, the economic downturn caused by the COVID-19 pandemic led to a surge in global demand for the precious metal.
The World Gold Council data showed the global demand for investment gold increased significantly since the beginning of the year.
In the fourth quarter of 2019, it amounted to 279.2 metric tons. By the end of March, this figure jumped by more than 93% to 539.6 metric tons. The increasing trend continued in the second quarter of the year, with global demand for investment gold hitting 582.9 metric tons, an almost 100% jump year-over-year.
Statistics indicate the global demand for gold for investment purposes hit a record-breaking 1,152 metric tons in the first half of 2020, the highest figure so far.
Oil Prices News: Oil Gains Following Drops in US Crude Inventories
Oil Prices Gain Following Drops in US Crude Inventories and OPEC High Compliance Level
Global oil prices extended their 2 percent gains on Thursday after data showed U.S crude oil inventories declined last week.
The price of Brent crude oil, against which Nigerian oil is measured, gained 0.2 percent or 7 cents to $43.39 a barrel as at 12:10 pm Nigerian time. While the U.S. West Texas Intermediate (WTI) crude appreciated by 8 cent or 0.2 percent to $41.12 barrels.
Oil prices extended their three days gain after the American Petroleum Institute said the U.S crude inventories declined by 5.4 million barrels in the week ended October 9.
The report released after the market closed on Wednesday revealed that distillate stockpiles, which include diesel and heating oil, declined by 3.9 million barrels. Those stated drawdowns almost double analysts’ projections for the week.
“Much of the fall is due to the effects of Hurricane Delta shuttering U.S. production in the Gulf of Mexico, and as such, will be a transitory effect,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.
“Therefore, I am not getting too excited that a turn of direction is upon markets, although both contracts are approaching important technical resistance regions.”
Also, the report that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, referred to as OPEC+ attained 102 percent compliance level with their oil production cuts agreements bolstered global oil outlook. Suggesting that demands for the commodity are likely not growing and could drag down prices in few weeks, especially when one factor in the reopening of Libya’s Sharara oil field, workers returning to operation in Norway and the Gulf of Mexico.
Oil Prices Gain on Tuesday Despite Expected Surge in Global Oil Supplies
Oil Prices Rise Despite Expected Surge in Global Oil Supplies
Oil prices gained on Tuesday despite Libya opening Sharara oil field for production, labour in Norway reaching an agreement with oil firms to return back to work and oil workers in the U.S returning to the Gulf of Mexico region after the Hurrican Delta.
Brent crude oil, against which Nigerian oil price is measured, gained 1.77 percent to $42.46 per barrel as at 11:15 am Nigerian time on Tuesday.
While the US West Texas Intermediate (WTI) crude oil gained 2 percent to close at $40.22 per barrel.
The improvement in prices was after oil prices plunged as much as 3 percent on Monday following a resolution reached by Libyan rebels and government to commence oil production at the nation’s largest oil field, Sharara Oil Field.
This coupled with labour agreement with oil firms in Norway was expected to boost global oil supplies and eventually weighed on prices and disrupt OPEC+ production cuts strategy.
However, prices surged after Nancy Pelosi said she would commence talks on $1.8 trillion stimulus package following President Trump’s return to the White House after he was rushed to hospital following a positive COVID-19 test.
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