Dear Subscriber,
Easter (April 4): Vacation for vaccination – Where???
Easter is April 4, 2021 and we do not expect any surge in domestic and international travels. Most travellers are going for vacation for vaccination, mainly to Dubai, Mumbai, Shanghai or Bye Bye
Q4’20 GDP – Point of inflection
Just like most of us, you must have been taken by surprise with the news of positive GDP growth in Q4’20. Your shock was probably based on the fears that the pandemic lockdown and the #Endsars protests (Oct’20) must have disrupted business activities and supply chains substantially. Therefore, is this growth for real or is it a propaganda stunt?
NBS numbers are solid!
We can confirm that we have absolute confidence in the NBS and its data integrity. Therefore, you can rest assured that the economic recovery is REAL. Now the question that must be running through your mind is whether this trend is sustainable and when we are likely to reach pre-pandemic levels of business activities like we had in 2019.
You are wondering, if it is time to ramp up your operations on the assumption of a V-shaped recovery that starts in Q1’21. Our recommendation is that Q1 growth could surprisingly move to the downside with a marginal negative growth of -0.15%. The safe assumption, therefore, is for a solid recovery in Q2’21. If there is any growth in Q1’21 it is likely to be fragile and weak.
Floating exchange rate – Will the World Bank be happy with a crawling peg?
In January 2021, the average exchange rate at the I & E window was N394.03/$ but it has since depreciated to N408/$ in February and is trading at N411/$ since the month of March. However, in the parallel market, the rate has oscillated between N470/$-N485/$. This happened with a noticeable increase in the CBN’s participation in the forex market. The average daily turnover at the I & E window is up 15.97% to $66.46mn from $57.31mn in January. There are also early signs of interest rates climbing in the interbank market.
This brings us back to the theme of this month, which is that: “Is this a point of inflection for Nigeria and how sustainable is this performance?”
In the download, Bismarck Rewane and the FDC Think Tank try to decipher the data and nuanced comments of policy makers on your business strategy and budget for 2021.
Enjoy your read!
