Dear Subscriber,

Bigger Xmas Tree, Smaller Xmas Meal

Two distinct features of Christmas Day 2019 are that the rice you consumed was local and a 50kg bag of imported rice (N27,000) was 70% higher than in 2018. The unintended impact of the border closure has been a spike in the year-on-year inflation to 11.85% from a low of 11.02% in August. Whilst consumers are groaning, rice farmers are delighted and calling on the Government to extend the border closure indefinitely.

Investors are in pain with the 90-day T/Bills rate at 4%p.a. compared to inflation of 11.85% and a real rate of return in the minus column (-7.85%). The equity market in 2019 gave investors a negative return of -16.91%. The best performing stock of the year was C&I leasing Plc (+237.1%) whilst the worst was International Breweries Plc (-69.2%).

GDP in 2019 at 2.17% is higher than 1.91% in 2018 and the naira remained stable in both years at N363/$ in the parallel market. Nigerians are living longer (average of 56.3 years in 2019 compared to an average of 54.1 years in 2018) in spite of a drop in the income per capita to $1,917.

2020 is likely to be a better year than 2019 with real GDP expected to climb to 2.3%. Please remember that 2020 is the beginning of a new decade and economists are cautiously optimistic that the stock market will be positive and that interest rates will be higher than the rate of inflation.

In the slides, all of these indices and projections were discussed on the Channels Business Morning program on Christmas Day by Bismarck Rewane and the FDC Think Tank.

Do enjoy your read…