We believe in congratulating you on two things. The success of Toronto Raptors at the NBA Finals. Even if you’re not a fan of Basketball, it’s only appropriate we celebrate with Canada, Nigerians’ choice country of escape. (BTW, the Drake curse, alluded to have caused Anthony Joshua’s defeat, didn’t work on them). Secondly, the Nigerian Women’s Football team won their second match against South Korea after losing their opening match at the World Cup.
Let’s dive into what happened this week 😊
As you most likely know, the official date for democracy day was changed from May 29th to June 12th in honour of the late MKO Abiola, the widely acclaimed winner of the 1993 election. At the event, no past president of Nigeria was present at the inauguration. Although, presidents from some African countries were present. Finally, the president gave his long-awaited speech which had over 3,000 words.
What did President Buhari say?
He spoke a bit about his education and work experience.
About Nigeria being a great country— population stats and natural resources.
About how we’re a big brother to our neighbouring countries.
He also spoke about how since 2015, the administration has fought insecurity and poverty.
How in this new tenure this administration will remain committed to improving the lives of Nigerians.
Finally, he proposed the Abuja National Stadium be renamed to MOSHOOD ABIOLA NATIONAL STADIUM.
What are people saying?
Senators: Two PDP senators (Senators Istifanus Gyang, Plateau & Uche Ekwunife, Anambra) brought a motion to debate the speech of the president. We’re not even sure what they wanted to debate but it was rejected by other APC senators who form the majority of the Senate.
Nigerians: While some people celebrated that the speech was deep in thought and futuristic, some said it lacked strategy and weren’t impressed.
What we think: Actions speak louder than words.
The Federal Government of Nigeria has sued four oil companies before the Abuja Federal High court, accusing them of not being transparent in their production activities report over the years, and diverting almost $1 billion which should have been remitted to the federal government.
Let’s meet the four companies.
The Nigerian National Petroleum Corporation (NNPC): Accused of diverting about $148 million paid by Agip from 2006 to 2017; also $44 million by other operators.
Shell Petroleum Development Company (SPDC): Accused of incorrect entries of daily production volume, as well as the underpayment, non-remittance, and diversion of Petroleum Profit Tax and VAT between 2007, leading to the diversion of N375 billion, N1.1 billion and N8.25 billion.
Nigerian Petroleum Development Company (NPDC): N7.4 billion was not remitted to the Government coffers between 2011 and 2017 as recommended by law.
Nigerian Agip Oil Exploration Company: Misappropriated $750 million.
What it matters?
The federal government could use the extra $1 billion (N361 billion) to do a lot of good in the society, or at least, that’s what they say.
The National Bureau of Statistics recently released reports on Nigeria’s imports and exports for the first quarter of 2019.
What did they say?
Total Exports: N4.54trn. Total Imports: N3.70trn.
Major Export Trading Partners: India (16.43%), Spain (10.74%), Netherlands (8.94%), South Africa (7.18%), France (6.67%).
Major Import Trading Partners: China (26.4%), Swaziland (14.3%), United States (8.8%), India (6.6%), Netherlands (4.1%).
Top products by Exports: Petroleum (74.45%), Natural gas (11.52%), Vessels (6.88%), Refrigerated Vessels (1.53%) Sesamum seeds (0.87%).
Top products by Imports: Laboratory (13.96%), Motor spirit (5.15%), Used Vehicles (3.17%), Imported Motorcycle (2.57%), Gas Oil (1.68%).
What this means.
Nigeria is more reliant on Asian countries— India and China than on the US.
The trade balance— the difference between the monetary value of a nation’s exports and imports over a certain time period— was positive.
Nigeria is still very reliant on the Oil and Gas sector.
Riddle: I can travel from there to here, by disappearing. I can also travel from here to there, by reappearing. What am I?
*Answer at the end of the newsletter.
About a year ago, Egypt was seen as a global investment destination. But a year later, it’s economy is collapsing. A report by the United Nations said: “some 60% of Egypt’s population is either poor or vulnerable.”
The government currently allocates 38 per cent of its entire budget to pay off the interest on its outstanding debt. If you add loans and instalments, more than 58 per cent is eaten up. This means the lion’s share of Egypt’s public resources, goes to facilitating payments on debt rather than improving its economy. This means the country of 100 million people has little to spend on health, education, and infrastructure.
Why it matters.
Two things could happen— a failing economy could lead people to start taking matters into their hands, leading to a riot or they simply could start looking for somewhere else to call home – mass migration.
For the third year in a row, foreign direct investment (FDI) is down all over the world, but not in Africa. From 2017 to 2018, global FDI fell from $1.5 trillion to $1.3 trillion, according to an analysis by the United Nations Conference on Trade and Development (UNCTAD).
In 2018, roughly $46bn worth of FDI flowed into Africa, an 11 per cent increase compared to 2017.
What’s Foreign Direct Investment?
Foreign direct investment (FDI) is an investment made by a firm or individual in one country for business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company.
Zoom out: The United States remained the largest recipient of FDI, followed by China, Hong Kong (China) and Singapore.
What about Nigeria?
While FDI in sub-Saharan Africa rose by 13 per cent last year to $32bn, Nigeria’s own dropped by 43 per cent to $2bn.
Why this matters.
This is good for Africa because when a company or an individual makes an FDI, they are said to be establishing a long-term business interest in a foreign country. The expectation is that they will not only invest money, but also time, and soft assets (i.e. technology, expertise, and training).
It only keeps getting better, The African Continental Free Trade Agreement (AfCFTA) was signed into law in May, an agreement that allows 52 African countries to buy and sell goods without tariffs, this will make them less expensive, and therefore more appealing to African consumers.
Dig deeper: Read the World Investment Report for 2018.
It appears we’re closer to finding the successor of the former UK prime minister—Theresa May. The U.K.’s Conservative Party announced on Thursday the results of the first round of voting (by Conservative members of Parliament) to replace outgoing Prime Minister Theresa May as the party’s leader. The list of candidates has reduced from ten to seven.
Why it matters
Whoever emerges as the winner should be able to do a better job in attempting to reach a deal — or not — for the U.K. to leave the EU.
For the first time since the collapse of the Soviet Union, Kazakhstan has a new president. Meet Kassym-Jomart Tokayev (not sure we can help you in pronouncing this), the ‘hand-picked’ successor of Nursultan Nazarbayev (or this either), who ruled the central Asian country for nearly 30 years before surprisingly resigning in March.
Tell me about Tokayev.
Tokayev, who won the election by about 70% was a former prime minister, foreign minister, and the speaker of the Senate.
How’s everyone taking it?
Electoral commission: It could not guarantee an honest vote.
People: Certainly not pleased, as there have been protests in major cities which have led to the arrest of over 500 people.
Kazakhstan has for long tried to strike a balance between its two prominent neighbours—Russia and China, while also maintaining strong ties with the United States. Hopefully, Tokayev, a career diplomat who studied in Moscow during the Soviet Union, and is considered an expert on China, would be able to make things happen.
Salesforce, an American cloud-based software company made its largest acquisition ever by buying data analytics firm Tableau Software for $16 billion.
Salesforce is paying for this entirely in shares, meaning no cash is exchanging hands. Salesforce has been referred to as Godzilla, as the software firm has acquired more than 60 companies in the last 20 years.
Why it matters?
This acquisition should help salesforce keep pace with rivals offering more services as big tech companies over the years have been known to make up for competencies they are lacking by acquiring other companies. Last week, Google bought a data analytics startup for $3 billion. Microsoft bought LinkedIn in 2016 for $26 billion and Github last year for $7.5 million.
SAP also bought Qualtrics for $8 billion in 2018 right before Qualtrics went public. Qualtrics gave SAP a tool for measuring customer satisfaction making up for where SAP was lacking.
Chile’s a step closer to reaching its goal of having its public transit being electric-powered— 80% by 2022 and 100% by 2040.
A recent delivery of 200 electric buses was made by Chinese manufacturers BYD and Yutong, with more orders in the pipeline.
Why it matters.
According to Axios, “Chile is moving in this direction to help clean its air, reduce urban noise pollution, cut oil imports and add more renewables to its energy mix.
Also, Moving toward electric mobility is also a way for Chile to tighten its trade ties with China, the dominant player in the global electric bus market.”
Netflix is starting to explore the possibility of turning its movies and TV shows into videogames, and it’s starting with “Stranger Things”—one of Netflix’s most popular shows in the US and among young people.
“We’re looking for opportunities to extend the universe of these shows and films into other mediums,” Chris Lee, the director of interactive games at Netflix.
Why it matters?
Last year, Worldwide video games sales was $43.8 billion last year. That’s more than what streaming services made last year (~28.8billion). Venturing into video games provides an additional source of income for Netflix.
Also while this is still in the experimental stage, the prospect of this sounds exciting for the over 150 million subscribers of Netflix, imagine a black mirror game or *Insert the name of your favourite show* game.