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Analysts Bemoan Nigeria’s Slow Growth, Underdevelopment and Desertification in Sokoto State

Oct 03, 2022   •   by TheAnalyst, Proshare Research   •   Source: Proshare   •   eye-icon 211 views

Being an Analyst Note issued by Proshare Research on October 3rd , 2022

 

Analysts Bemoan Nigeria’s Slow Growth and Underdevelopment After 62 years of Independence 

As Nigeria marked its 62nd independence anniversary on October 1, 2022, Economists noted that the growth trajectory of the country has been checkered. Analysts associate this with the over-dependence of government revenue and capital expenditure on the volatile oil and gas export proceeds. In the last five years, the economy has recorded two recessions both associated with a crash in global crude oil prices. While a recent streak of GDP growth rates has been positive, analysts claim that the impact of the growth rates on unemployment and poverty levels has been minuscule.  With a population growth rate of 2.5%, and an average of 600,000 graduates per year Analysts put the country’s Unemployment rate at about 45%. This suggests that the economy’s growth is not sufficient to alleviate poverty and misery (see chart 1 below).

 

 Chart 1: Real GDP growth (%) (Q1 2020 -Q1 2022 

 

Desertification Threatens Sokoto State

Sokoto State is faced with a growing concern of desertification expanding in the state. Areas like Guda, a leading onion and garlic producing region in the state have been recording lower yield and farmers claim that even after applying organic fertilizer, windstorm sweeps it away while also destroying some plants in the process. While it is claimed that 70% of Sokoto state is at risk to desertification, environmentalists have claimed that it is possible to reduce or stop its expansion. Calls have been made for illegal logging of trees to be stopped as this has exposed the environment to all kind of dangers, claiming that the number of trees cut down daily is alarming. Part of the effects of this is that the uppermost layer of the soil could be lost leaving plants with less nutrients to foster growth.

 

The reduced yield could seriously force many from their homes to look for better opportunities as they seek to survive. Internal migration could be witnessed and this could put pressure on prices of certain food product in those areas migrated to as reduce supply would meet an increased demand for food and could intensify the pressure of food inflation.

 

Geregu Power Plant to be Listed On NGX 

On Wednesday, Geregu Power Plant will be admitted to the main board of NGX through Introduction (LBI) with the admittance of 2,500,000,000 ordinary shares of 50 kobo each at N100 per share as the first power plant listed on NGX. Mr. Femi Otedola joined the board of GPP as Chairman of the Board of Directors in November 2013. Prior to this, he was the Chairman of the Board of Directors of Forte Oil Plc (now Ardova Plc) from May 2007 to June 2019. The listing offers investors fresh stock options although analysts believe the current power generating problem in the country might weigh on investor’s decision. 

 

Methane, the Deadly Component of Natural Gas Hinders Charge against Global Warming

 

In more recent times, Methane leaks have emerged as a top threat to the global climate, and this is on the back of the intentional disruption of Europe’s energy infrastructure last week Monday, involving two Russian gas pipelines under the Baltic Sea. The disruption of these pipelines led to serious leakage of methane which scientists have recently discovered to be more deadly than the greenhouse gas carbon dioxide. After being disregarded for decades, it is now thought that the pollutant, which is 28 times worse than carbon dioxide, must be limited in order to keep global warming to 2 degrees Celsius or less, especially from agriculture and food waste. As a result, more than 100 countries have vowed to reduce methane emissions by 30% from 2020 levels by 2030. Analysts feel that urgent worldwide cooperation is the best option for reducing emissions of this incredibly dangerous gas, especially since the deadline for achieving net zero emissions by 2050 approaches and there is a serious energy crisis prevalent.                 

                                                      

Exodus of Telecom Experts Worry Operators

Telecom operators in Nigeria are disturbed over the mass migration of telecom experts from the country. According to them, this may lead to poor quality of services if not addressed as competent hands are resigning their positions in telecom companies to travel out of the country
 leading to many of the financial institutions having incessant technical problems.

 

The outcry from the telecom operators confirms that the exodus of professionals’ cuts across every sector of the economy.
 Analysts believe that a number of socio-economic factors are pushing young Nigerians out of the country which include insecurity, high cost of goods and services, and unemployment amongst others and the telecom sector should work on employee retention by providing more catchy incentives and salary increase.

 

Higher Interest Rate on October FGN Savings Bond should Attract Investors, Analysts Predict 

 

The Debt Management Office announced the Federal Government Savings bond for October with the interest rate slightly higher than the previous issuances. The 2-year bond with a maturity date of October 12, 2024 has 11.382% interest rate as against the 11.041% offered in September while the 3-year bond due on October 12, 2025 has 12.382% interest rate compared to 12.041% in the previous auction. The offer will commence from October 4 to October 12, 2022 with a minimum subscription of N5,000 and a maximum of N50,000,000. Analysts expect investors to be geared towards the offer as investors seek less-risker securities to combat current economic instability.  

 

Analysts Observed a Sell-bet Across Crypto-Coins

The cryptocurrency market was rife with sell-offs across several crypto coins, with the global crypto market valued at $924.41 billion, a -0.92% loss from the previous day. Bitcoin, the most capitalized coin, has failed to meet bulls’ expectations, as it struggled to attain the US$20,000 price mark. Over the past day, Bitcoin lost over -0.55% from its 24hr high of US19,312.48. Similarly, Ethereum and other Altcoins also followed suit, with many of them reverting from their previous performance. Data from Coinglass, revealed that over 36,500 traders have been liquidated, with a total liquidation of US91.56m during the last day. Analyst hinted that the fear and greed index has worsened further with market sentiment hitting an extreme value of 24, suggesting significant worry among investors (see chart 2 below).


Chart 2: Crypto Fear and Greed

 

 

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