Being an Analyst Note issued by Proshare Research on September 26th , 2022

Nigeria Loses US$2bn from the Global Shea Nut Market

The President of the National Shea Product of Nigeria said that Nigeria, particularly Niger State, loses over US$2bn of shea resources annually due to unchecked illegal export and lack of technical know-how in the shea business. Nigeria is the world's highest producer of shea nuts but is not the largest product exporter, with neighbouring Ghana having a larger market share than the country. 

Data shows that Nigeria underproduces per hectare, producing less than one tonne per hectare. Illegal exports have caused severe problems for this commodity. Ghanaian traders are said to come into the country to purchase these shea nuts and then take them to their country to export without remitting any revenue. Analysts highlight that if these illegal exports continue, Nigeria could continue to experience reduced income from the commodity as countries with the machinery to boost their processing would continue to mop up some of Nigeria's production for their country's export (see chart 1 below)

Economists Push for Innovative Financing in Africa's Healthcare Sector using Renewable Energy

A new understanding is emerging, led by the World Bank and the UN's Sustainable Energy for All program. The understanding calls for Africa's public healthcare facilities to adopt private sector-driven business models to supply reliable electricity to hospitals in urban areas. In addition to increasing renewable energy as a source of electricity, this attempts to address the energy problem affecting the African health sector. According to the World Bank, it will cost around USD1bn annually until 2030 to use renewable energy to power health clinics in Sub-Saharan Africa. 

Most experts agree that financing is not the main problem because, over the past ten years, international humanitarian organizations have invested tens of millions of dollars in solar energy for Africa's health facilities. However, these installations are not properly maintained, which leads to their failure and abandonment. Several private operators, such as GreenMax Capital, aim to provide solar generation projects across various healthcare facilities with their pilot operations in Nigeria. This is a significant development as it allows the entire continent to effectively transition to renewables and provides a sustainable increase in the standard of living.

Youths Turn to Digital Banks for Better Service Delivery

Many of Nigeria's youths use digital banks over the traditional system for higher interest rates. According to customers of these digital banks, the institutions offer both convenience and address most of their financial pain points. In a report by NIBSS, the volume of mobile transactions rose by 128.4 percent to 153 million in the first four months (January-April) of 2022 from 67 million in the same period last year. 

India; May become the Next Global Chip Powerhouse 

Due to the various issues faced by the semiconductor industry in recent times, the steps taken by India to go into the sector are steps in the right direction. India could have a significant role in the semiconductor industry and other countries like the United States of America (USA). India has been looking to make strategic alliances around semiconductors and made moves to bring manufacturing companies into the country. Analysts expect this move to help bring about innovation and expansion in the semiconductor industry. 

Analysts Fear Sterling Falling Below Parity as Tax Cuts Bite Into Revenue 

The pound sterling dipped by 4.85% to a record low on Monday at US$1.03 as investors reacted to the new government's fiscal policy. The UK Minister of Finance, Kwasi Kwarteng, has unleashed a historic tax cut requiring 72 billion pounds of government borrowing in the next six months. Investors are worried about the country's financial burden and are pivoting to the strong dollar as a haven. The rapid decline has led to speculation that the Bank of England might intervene to support the currency. With the recent fall in the sterling, analysts fear that the currency might eventually fall below parity. Still, a hawkish policy rate may support the currency slightly (see chart 2 below).   

Chart 2: Pound sterling to the dollar September 1 –26, 2022

Apple imposes a commission on in-app NFTS trades

Apple reported that it would allow the onboarding of NFT applications and games on its App Store for a 30% transaction fee for firms with annual revenue greater than $1 million and a 15% transaction charge for organizations with annual revenue less than $1 million. With the usual marketplaces requiring a 5% commission on every transaction, NFTS app developers grumbled at the outrageous fee. Magic Eden withdrew its services from the App Store after learning about the policy. Analysts noted that while the in-app policy is limiting the functionality of NFT firms, Apple has refrained itself from the market by making transactions in US dollars

The cryptocurrency market continued to retest, with coins trading below their 24-hour highs. Over the past day, the market cap fell -0.44% to US$934.65 billion. Bitcoin resumed its symmetric triangle pattern, settling at US$19,117.6. The convergence of the US$19,000 level has intensified the ongoing bearish trend and plunged the price of Bitcoin to the US$18,000 level. Contrary to the price action, the relative strength index slope indicates a short underlying bullishness, with the divergence at 61.11% encouraging a bullish reversal from the triangle pattern (see chart 3 below).

Chart 3: Bitcoin Price Indicators