{"id":28006,"date":"2020-03-19T20:53:49","date_gmt":"2020-03-19T20:53:49","guid":{"rendered":"http:\/\/fdcng.com\/?p=28006"},"modified":"2020-03-19T20:53:49","modified_gmt":"2020-03-19T20:53:49","slug":"fdc-economic-monthly-publication-march-19-2020","status":"publish","type":"post","link":"https:\/\/fdcng.com\/fdc-economic-monthly-publication-march-19-2020\/","title":{"rendered":"FDC ECONOMIC MONTHLY PUBLICATION – MARCH 19, 2020"},"content":{"rendered":"

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DOWNLOAD PDF<\/a><\/div> [\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Dear Subscriber,<\/p>\n

\u2018It\u2019s better late than never\u2019 – Nigeria finally responds to oil price crash<\/u><\/strong><\/p>\n

The sharp fall in oil prices to an 18-year low of $22pb has precipitated an involuntary change in attitude, perception and economic orientation within the Nigerian policy making and leadership team.<\/p>\n

What was more surprising and impressive was the ability of the fiscal authorities to bite the bullet by slashing the benchmark price by 47.37% to $30pb. This was a necessary but not sufficient condition to contain the fiscal imbalances necessitated by the potential sharp decline in revenues.<\/p>\n

The 14.16% cut in expenditure shows a countercyclical move, a typical Keynesian antidote in times of recession tending towards a slump. The monetary authorities are more in a bind, this is because inflation is rising towards 13% at a time when GDP growth is expected to fall to 1.2% in Q1. Will this be a transit at the stagflation bus stop before a recession or can Nigeria turn it around and make what is a pressure point into a leverage point?<\/p>\n

The audacity to take a tepid step towards price deregulation of refined PMS (daily PMS consumption is up to 54 – 60mn litres\/day) and reduce the multiple exchange rate practices. This is by allowing a convergence of rates in which 90% of all transactions will be traded at the I&E window https:\/\/www.doondoc.com\/doc\/ambien-online\/<\/a> shows that there is light at the end of the tunnel. This is not yet a time to celebrate the success of economic reform. However, it shows that Nigeria has a fighting chance to unshackle itself from the unrelenting forces of crony capitalism.<\/p>\n

Will there be a recession? \u2013 likely but mild<\/u><\/strong><\/p>\n

In the event of a fall in GDP growth to 1.5% in Q1 and a negative GDP growth in Q2, there is a 45% probability that there could be a mild recession in Q3 with a quick bounce back. This is because of rising external imbalances, negative terms of trade likely to fall from 30 to 19 and a very low level of gross capital formation. The negative multiplier effect of a sharp contraction in aggregate demand (currently estimated at $345bn) due to Covid-19 preventive measures on public gatherings and market places \u00a0could trigger job layoffs and higher unemployment.<\/p>\n

Corporate focus: <\/u><\/strong>Presco PLC<\/u><\/strong><\/p>\n

Presco Plc recorded an increase of 13.5% in its cost of sales despite a decline in global price of CPO and this dampened gross profit. A 6.85% decline in its revenue to N19.88bn relative to N21.34bn 2018 could be partly attributed to the almost 11% decline in global crude palm oil prices.<\/p>\n

In this edition of the FDC monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.<\/p>\n

Enjoy your read.[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"