- From Blog Archive
Nigeria Economic Analysis and the Way Forward for Your Investment
1. Over supply of crude oil in the international market and a global glut.
2. The strength of the dollar against other international currencies is on the upswing. The US dollar is a major currency for crude oil trade internationally and has continued to appreciate over other world currency including the naira.
3. OPEC abandoning of output ceiling to crush Russia. OPEC members produce and sell as they like allowing for more volume supply in the international waters with several vessels lined-up to sell and very few buyers.
4. US excess reserve, increasing crude oil stockpiles, initiation of it export after 40 years and reaching its highest production levels after 80 years. Off course when you export your currency becomes stronger. Weather conditions are temporal issues.
5. Lifting of sanctions in Iran and the country has begun pumping crude again.
6. Devaluation of Chinese currency, its falling stock market and reduction in the country's purchasing power in crude consumption as a result of a deepened economy.
7. Stability in Iraq and Sudan other war prone oil producing nations.
8. International commodity prices have also come low creating a bitter experience for exporters.
In all these there is always a breakeven point for a slide down, even though many believe it may not come soon, but people need to remedy their own personal pocket even when there is no serious indication of a turnaround in the Nigerian economy and investment climate, at least not in the next few months.
The question is when will this situation change?
Nigeria economy is heavily dependent of crude oil price. It goes as far as affecting the prices of shares on the Nigeria stock exchange as well as the price dollar for importing raw materials for companies. The cost of goods on the shelf is already hiking with companies are already declaring losses and laying off staff in order to stay afloat. Individuals are tightening their belt to the bones and looking out for plan B in case anything goes red or at least try to sustain their expenditure in the face increasing local commodity prices.
Currently the exchange rate is N400 to $1. Bank interest rate is 33%. Minimum wage is N18k. Fuel price is N145. Kerosene sells at N220. Businesses are shutting down. Jobs are being lost in hundreds of thousands. Do you have to wait till get affected? Those win battles are those prepare well in advance for it before it comes knocking... Get an alternative source of income today.
Comparative timing and knowing the fundamentals can put you on the upswing for an increased revenue or create a backup that can cushion the effect of an economic slide down.