Economy

Charts Showing Good and Bad News for Nigeria's Economy Last Week – BNN

Published

4 years ago

June 7, 2020

(Bloomberg) — Africa’s largest economy had a week of good and bad news as the oil price rebounded to the highest level in two months, while the negative impact of the coronavirus pandemic on consumers and business activity became clearer.

Crude prices have doubled since hitting a two-decade low in April, climbing past $40 a barrel after OPEC+ cuts started taking excess supplies from the market. With oil bringing in 90% of foreign exchange revenue for the continent’s largest producer, this will boost government income and dollar liquidity. Ironically, Nigeria is among the countries accused by the production group of not fully complying with the reductions that helped push up prices in the last month.

The following four charts show some of the bad and the good for Nigeria.

If oil prices stabilize close to the current levels until the end of the year, it would add modest upside risks to forecasts for economic growth, public finances and international reserves, said Mahmoud Harb, a director at Fitch Ratings. A 10% rise in the full year’s average crude price above the company’s current forecast of $35 per barrel would improve Nigeria’s current-account deficit by about 1.5% of gross domestic product, he said.

Yields on Nigerian bonds maturing in 2047 fell from an all-time high of 13.2% on March 19 to 8.6% on Friday, a sign that investor concern has eased. Although the West African nation has ruled out going to international bond markets this year, the cost of raising new debt will be relatively lower now if it chooses to.

Although the purchasing managers index of Stanbic IBTC Bank and IHS Markit’ rose last month, it remained below 50, suggesting the economy of Africa’s largest crude producer will shrink in the second quarter. The central bank said last week Nigeria may avert a recession and that the drop in GDP could be less than the 3.4% projected by the International Monetary Fund, but its own manufacturing PMI fell to 42.4 in May after staying above 50 for 36 consecutive months. The manufacturing PMI compiled by Lagos-based FBNQuest Capital fell to 43.3 in May from 45.8, with all sub-indices in contracting territory.

“The recession this year will be smaller than in advanced and many peer economies because of the limits to Nigeria’s integration within the global economy,” analysts at investment banking firm, FBNQuest wrote in a note on Friday. “For the same reason its U-shaped recovery in 2021 is likely to disappoint. Household demand remains squeezed.”

Nigeran consumers are feeling the impact of the disruption in economic activities, data released Friday by the statistics agency shows. At least 79% of respondents in a survey said their incomes have decreased since mid-March, when restrictions were imposed to curb the spread the pandemic. More than 42% who were working before the pandemic now say they no longer do and 51% of households were forced to buy less food due to higher costs.

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

1 day ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

6 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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