Dear Subscriber,

A Change is as Good as a Rest

They say a change is as good as a rest. That is why we at Financial Derivatives Company, think that it is time to change the look and feel of our publications. We do not compromise our principles of equity, justice and fearless objectivity. We are not ideologues but believe strongly in the view that injustice anywhere is injustice everywhere. In this edition of the new bimonthly publication, we acknowledge and seek to interrogate the immediate and long-lasting impact of the invasion of Ukraine by Russia, especially on commodity prices, inflation and exchange rate instability.

Surging Food Prices and Embattled Households in Poor Economies

Emerging economies continue to struggle with rising food prices which are now reaching a distress level. The prices of most commodities have increased steeply, leaving households struggling. Prior to the pandemic and the Russian- Ukraine war, prices had spiked as a result of unfavorable weather and production interruptions. An estimate by the Centre for Global Development forecasted that up to 40 million people would further fall into extreme poverty as a result of the war. This all-time increase in commodity prices is coming at a time when total debt is mounting and debt service costs is excruciating. This has further handicapped governments from supporting citizens through food subsidy or palliatives. Some of these countries (such as Sri Lanka and Egypt, etc.), have now began to approach multilateral agencies such as IMF and the AFDB for support as the impact of the war intensifies.

Nigeria’s climate goals; transitioning to clean-cooking fuel

At COP26 conference, Nigeria committed to end the use of fossil https://drcatalona.com/online-pharmacy/ fuel by 2060. Recently, the federal government signed the climate bill into law further highlighting the country’s commitment to addressing climate change. This has made it imperative to explore practical ways to improve the availability and affordability of clean cooking fuels. The price of a 12.5kg cooking gas cylinder has risen to N7,500, 97.37% higher than N3,800 in December 2020. This has raised concerns about a possible shift back to kerosene and coal which will defeat the efforts of achieving the climate change goals. For a country where multidimensional poverty is at 75% of the population, there is a need to encourage increased adoption of affordable clean cooking fuels such as mix of methanol and LPG and solar cooking.

Mergers & Acquisitions and Other Corporate combinations in Nigeria: A Bright Future 

Mergers and Acquisitions (M&A) activities reached a record of $5tn in deal volume globally in 2021. In Nigeria, M&A deals reached a whopping one billion dollars (0.25% of GDP) in mid-2021, a 267% rise from the value recorded in 2020. M&A offers the opportunity to foster more structured growth through economies of scale and bulking up. Nigeria has a young population with an abundance of fresh talent, especially in the area of coding. M&A serves as an avenue by which firms may be able to acquire the cream of the crop of this fresh talent.

In this edition of the FDC Bi-monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.

Enjoy your read!