Most Salary Earners Will Cry Soon

By Olukorede Yishau

I do not intend to scare you but by the time President Muhammadu Buhari speaks to us again to either end the lockdown or extend it, many of us will receive sad news: salaries will not be paid. It will not be because our employers are wicked; it is just that companies are closed and money is not made. Companies that have been operating have not done so at full blast and whatever revenue has been earned is bound to be infinitesimal and incapable of footing bills.

You may wonder why companies will not go into their reserves to cushion the effect of the financial dire strait caused by the pandemic and my response is – many companies in Nigeria are like the Federal Government, with severely depleted reserves, or no reserves at all! They are run based on what I see as ‘run-as-you-go’. If they do not earn money in a particular month, surviving the next month will be like a blind man trying to fix thread into a needle.

Our foreign exchange reserves fell to $34.58 billion on April 7. The reserves had $38.53 billion on January 2. No less than $3.95 billion has been taken away from it in the last three months. Oil price has tumbled to an all-time low and, being a mono-economy, we have no choice than to keep dipping our hands into the reserves. Soon, there may be nothing there again as it is the situation for many businesses in the country. Every government since we returned to democracy in 1999 has been mouthing diversifying the economy, but this has always ended up as mere campaign sloganeering. No concrete effort is discernible along this line.

The terrible shape of our Almighty black gold is captured in the words of Dr Sun Xiansheng, the Secretary-General of International Energy Forum: “The global spread of the Coronavirus is creating a demand shock that is impacting the already fragile world energy market balances. Markets are continuing to assess the yet unknown risks of COVID-19 to the global economy as the disease continues to suppress economic activity.

“Low oil prices combined with the inelastic nature of refined product supply and demand is usually a boon to refining margins. However, COVID-19 also impacts downstream profitability caused by erosion in demand. The combination of sustained shocks to supply and demand will cause product inventories to rise to new highs.”

The country this week joined other Organisation of Petroleum Exporting Countries (OPEC) counterparts to cut 9.7 million barrels of supply to raise price and save countries like Nigeria, which depends on oil cash, from starving.

Minister of State for Petroleum Resources Timipre Sylva said the cut in production would enable the rebalancing of the oil markets and the expected rebound of prices by $15 per barrel in the short term. Good as the expected effect of this decision sounds, its fruit will not be immediate and, even if it is, I do not see it translating into helping stop our tears.

There are fears that the country will soon slip into recession. The last time we went into recession, shortly after Buhari took over the reins of power in 2015, we saw hell. Many companies could not pay salaries for months, and when they eventually started meeting their obligations to their members of staff, it was because investors recapitalised. Recession at a time like this is like jumping from frying pan to fire. But it does not look like we can avert it.

From what I can see, it is not only transporters and others who earn daily money that are crying or will cry, salary earners will soon cry when at the end of the month, it is either they get half-pay or they are not paid at all. An employer told me during the week that his employees would be paid half salaries. Only the manager, he said, would get fully paid because she had carved a fresh niche for the business without being prompted.

Amid the Coronavirus madness, street gangs – whose sources of income have been cut off – terrorised residents of various parts of Lagos mainland during the week. They wanted money. They wanted food. The people had to take their destinies into their own hands by keeping vigil against them. I fear what will happen when, at the end of the month, workers do not receive bank alerts notifying them of payment of salaries. Bitterness will spread like wild fire and I pray blood do not flow.

In the First World, many employers have informed their employees that they will receive half of their pay for working from home. But there is a difference: governments have come in to make up the losses. In the United States, for example, every tax payer is getting paid some stimulus package. This covers non-citizens; once you are a legal resident and you pay tax, you get paid some dollars to ease the pain of the loss. If you have children, your kids also get about half of what you are paid. Landlords have also been mandated not to harass their tenants over no-payment or late payment of rents. These may not cover all your losses, but you are not left to bear the losses alone.

Nigeria seems handicapped to offer us real reliefs, except the tokenism that is embarrassingly being shared to those described as the vulnerable. But, in the end, it appears we are all vulnerable, especially salary earners who will in the next two weeks begin to receive the shock of their lives when the bank alerts refuse to come or they come with half or quarter of their pay.

In the next few days, we will further appreciate the fact that our world has changed and continues to change; we will realise that we do not know this world again; and with our cash flow dwindling, we will get to look at things from sombre perspectives.

My final take: We have always needed one another; we will need one another more in the days to come. Whatever many have stored will dry up and there will be little or no cash to restock. With our kind of banking system – with a ‘sick’ credit system – there will be no money to get basic needs. A credit card would have made a difference like it is doing for folks in the developed world.

Brazil President Says No To Lockdown, Spites Lockdown Activators With Cough.

Brazilian President Jair Bolsonaro says he hopes this will be the last week of stay-at-home measures to try to slow the spread of the coronavirus, wishing for an end to a policy he has branded an ill-founded jobs killer.

Bolsonaro is one of the few global leaders who has openly railed against lockdown measures to combat the coronavirus.

He has asserted that the economic risks of shutting down Brazil's economy outweigh the dangers posed by a disease he calls a "little cold".

Despite Bolsonaro's protests, many of Brazil's governors have more or less shut down their states, leading to an angry response from the president.

Bolsonaro has also clashed with his own health officials, firing his popular health minister last week after they clashed over social distancing measures.

With Brazil's coronavirus outbreak appearing to be a few weeks behind those in Europe and the United States, it is unlikely Brazil's governors will end stay-at-home measures this week as the president wants.

Rio de Janeiro's state Health Secretary Edmar Santos said the peak of the outbreak will hit Rio in May, which would be a "very, very complicated" time.

On Sunday, Bolsonaro irked many in Brazil when he once again attended a public rally and attacked lockdown measures meant to fight the coronavirus, as supporters of the right-wing leader joined political motorcades around the country.

Brazil has more cases of the new coronavirus than any other country in Latin America.

On Monday, the number of confirmed cases rose to 40,581 and coronavirus deaths reached 2575, according to the Health Ministry.

Bolsonaro, who was not wearing a face mask, addressed a crowd of a few hundred in Brasilia.

During his brief address, which was punctuated by the president coughing, he called those in attendance "patriots" and said they were helping defend individual freedoms that he said are under threat by lockdowns.

Oil Price Apocalypse Amid COVID-19 Lockdown Nigeria on the Verge of bankruptcy, Africa’s Richest Nation

With oil prices falling below zero dollars per barrel, it's only a matter of time before Nigeria's debt-ridden government goes bankrupt.

Nigeria is slipping toward economic collapse that could include a devalued currency and soaring inflation as oil prices go negative. | Source: Yasuyoshi CHIBA / AFP

• Oil prices have fallen to all-time lows with some benchmark futures trading for less than zero.
• Nigeria’s Bonny light hasn’t fallen into negative territory yet. But the country is still generating massive losses on every barrel of oil it produces.
• After decades of mismanagement with government policies, Nigeria is on the road to a Venezuela-like collapse.

Nigeria may have one of the worst governments in the world. Even in good times, the country was in poor shape. But now, with oil prices falling to all-time lows, Nigeria is about to go the way of Venezuela and Zimbabwe with total economic collapse.

Now, with oil prices at unprecedented lows, the country is about to collapse in a Venezuela-like catastrophe.

Socialism gone wrong. Nigeria spends a staggering amount of money subsidizing fuel. Data by Bloomberg.

The country’s cost of producing oil is $15-17 per barrel, but with crude prices falling near or below zero, this won’t be enough to avert a sovereign debt crisis.

Nigeria’s benchmark Bonnie Light crude hasn’t hit zero yet. But with millions of barrels sitting unsold, Nigeria may start paying customers to take delivery due to its lack of onshore storage facilities. 

According to some sources, Nigeria is losing an average of $35 million a day in accruable revenue. And its currency, the Naira, maybe on the verge of a Zimbabwe-like devaluation because oil is the only source of the foreign exchange needed to prop it up.

The country’s cost of producing oil is $15-17 per barrel, but with crude prices falling near or below zero, this won’t be enough to avert a sovereign debt crisis.

Nigeria’s benchmark Bonnie Light crude hasn’t hit zero yet. But with millions of barrels sitting unsold, Nigeria may start paying customers to take delivery due to its lack of onshore storage facilities. 

According to some sources, Nigeria is losing an average of $35 million a day in accruable revenue. And its currency, the Naira, maybe on the verge of a Zimbabwe-like devaluation because oil is the only source of the foreign exchange needed to prop it up.

Drunk on cheap debt from China, domestic lenders, and high-interest rate Eurobonds, Nigeria is on the cusp of a massive sovereign debt crisis.

The country’s total debt stands at an estimated $84 billion, with up to 80% of its bilateral debt owed to China. According to Forbes, debt servicing eats up a full 2/3rds of all government revenue. And China is reluctant to forgive these debts — especially as it attempts to revive its own struggling economy.

Nigeria owes a huge amount of money to China. But China isn’t willing to write off these loans. Data by Bloomberg

Paradoxically, Nigeria’s President Muhammadu Buhari has decided to pile on even more debt recently, approving an additional $23 billion loan request from international lenders.

It is also important to note that Nigerian senators will still enjoy their $37,500 monthly salaries under the new budget cuts.

WHO WELCOMES GLOBAL EFFORTS ON COVID-19 VACCINE

GENEVA

The World Health Organization (WHO) officials on Monday welcomed efforts to develop a vaccine to counter COVID-19 in different parts of the world while urging equitable distribution once they are approved.

WHO Director General Tedros Adhanom Ghebreyesus said the organization was working to accelerate the development of a vaccine to beat the novel coronavirus.

"And, second is access and equitable distribution," he stressed at a video news conference in which more than 300 journalists from around the world participated.

"We're already discussing with many partners, relevant partners, and look forward to announcing the initiative as soon as possible in the next few days."

The WHO was asked about vaccines being developed in countries in different parts of the world, including the U.S., the U.K., Italy and Switzerland.

Swiss scientists said Monday they hoped to have a vaccine in use in Switzerland by October.

Dr. Martin Bachmann, an immunologist at the University of Bern and Oxford University, said he is working with the Swiss company Saiba to develop a vaccine within months.

The UN and U.S. experts have said that it generally takes 18 months to develop, try and test a new vaccine, but some scientists are aiming to shorten that time frame significantly due to the deadly pandemic that has so far claimed nearly 170,000 lives worldwide.

"We welcome all work on the development of the vaccine and as rapidly and safely as possible," said Dr. Maria Van Kerkhove, a U.S. epidemiologist on the WHO's emergency health program.

She said that there are more than 10,000 full "genome sequences" that have been made publicly available from all over the world.

"And there are a large number of scientists and biologists who are looking in detail at each full genome sequence that is available," said Kerkhove.

Dr. Mike Ryan, executive director of the WHO’s Health Emergencies Program, stressed: "What's also important is scaling up and ramping up production of those vaccines so that they can be allocated fairly across the world and do the best possible good.

"If this is to work, it will require one of the greatest scientific, political, financial, and greatest public health operations that we've seen in a generation. And it must be done with proper leadership and stewardship."

Pres. Buhari May Lift Lockdown On Monday As He Weighs The Tough dDecision

The Director General of the National Center for Disease Control (NCDC) Dr Chikwe Ihekweazu has announced President Muhammadu Buhari will make some difficult decisions on COVID-19 containment next week.

He said: ”President Buhari will on Wednesday have a tele conference with the Governors and there will be some difficult decisions to be made on how to restart the economy, especially on what to start and what not to start.”

However, enlightenment about manufacturing and safe usage have already begun by the task force and various departments in the government have already intensified efforts in manufacturing their face masks. The face mask will be used together with personal hygiene to get best result. 

The NCDC boss also spoke while on a courtesy call on Katsina Governor Aminu Masari in his office at Government House Katsina.

He spoke as the Governor demanded establishment of a testing centre in Katsina to ensure speedy confirmation of samples of suspected cases in the state.

Masari noted the State Government had to travel for about 12 hours after collecting samples of suspected patients for test in the laboratory at Abuja.

He said: ”Availability of a testing centre here will actually help in reducing the duration and the stress we are presently going through.

“Samples from Katsina had to reach Abuja in 24 hours otherwise it would not be tested.”

Coronavirus: Lockdown Might End Soon In Lagos... Lagos Governor: Wearing Of Face Mask Will Be Compulsory

The Governor of Lagos state, Babajide Sanwo-Olu, has announced a new directive in the fight against COVID-19 in the state.

Sanwoolu in a statewide broadcast on COVID-19 efforts in the state ordered the compulsory wearing of protective face masks in the state.

Lagos state government has said that the enforcement on compulsory wearing of face masks would start next week

- Governor Babajide Sanwo-Olu made this known on Monday, April 20, during a media briefing on COVID-19.

- Sanwo-Olu also said that patients who lie about their travel history would be prosecuted

The Lagos state government has said that it would begin enforcement of wearing face masks in public faces starting form next week.

The Nation reports that this was disclosed on Monday, April 20, by the state governor, Babajide Sanwo-Olu, at the 7th briefing on COVID-19 at the State House, Marina, Lagos.

It was gathered that the governor said one million of locally made face mask have been contracted to tailors and would be distributed during the week.

In the same vein, Governor Sanwo-Olu also said that patients who lie about their travel history would be prosecuted. 

As a result of the continuous decline in oil price and economy in shut mode, lockdown poses more danger. The US oil also plunged to negative as sellers had to beat the contract deadline. Since no buyers to offload the barrels, no space to store the undemanded oil, sellers had to pay buyers just to settle meet deadline. Brent and Opec basket also moving in this direction. 

Nigeria depends more on proceeds of crude oil and will be hard-beat if economy is not restarted soon. 

Nigeria Can Be Empowered By Bitcoin Says Foundation CEO

Lady Victoria Walker, CEO of the United Digital Currency Reserve Foundation, has recently stressed that the understanding and deployment of bitcoin can kickstart the financial growth in Nigeria and Africa as a whole, reports Niger247News

In a recent presentation Lady Walker, who is also a blockchain and cryptocurrency speaker, as well as Principal Consultant at Cryptoria Investment Research, maintains that for Nigerian banks to deal with blockchain technologies, it first needs to understand cryptocurrencies:

“Many banks and regulators are confused and do not fully understand how Bitcoin and blockchain technology work, but I think once the Central Bank of Nigeria and other key figures get to understand the true nature of blockchain technology and what it can bring economically, I believe they may embrace the technology with open arms.”

The UK based fintech entrepreneur feels that new technologies such as blockchain and cryptocurrency are essential factors in empowering African leaders to inject growth and financial inclusivity into their economies, she argues:

“Britain imposes a ‘super tax’ on remittances sent to African countries, causing a loss of £1.8bn a year from money sent home by workers. Think about it, £1.8bn is taken away from the people sending money to support their families in Nigeria.  Imagine what £1.8bn a year could do in the pockets of families depending on money sent to them from abroad? This is where blockchain technology comes in. It solves a problem like this by making it easier and cheaper to transfer and remit payments internationally.”

Nigeria has had a difficult cryptocurrency history. Early last year it was reported that the Central Bank of Nigeria was considering implementing its own cryptocurrency, but later the same year, it was advising banks to distance themselves from virtual currency, warning them, “not to use, hold or transact in any way with the technology.”

The remarks came at a time when Nigeria’s interest in cryptocurrencies was flourishing. According to data from Coindance, weekly trading volume on Localbitcoins in Nigeria surged 500 percent in 2017.  Nigeria then, was among top countries using Google to search for ‘bitcoin’, alongside South Africa, Slovenia, Holland, and Austria. Although, it was reported at this time that a Ponzi scheme may have been partly responsible for the clicking figures. The scheme reportedly cost investors UD$50 million in early March of that year.

In a press release issued in March of this year, the CBN is now reiterating its warnings of last year, suggesting that due to crypto investments being unprotected, investors will be at risk. Lady Walker maintains that it is lack of knowledge which holds back the tide of progress in the African crypto space, which in turn creates institutional and public skepticism such as the CBN’s.

“People are skeptical because that is human nature. We are natural cynics and skeptics and rarely trust what we don’t understand. This is why I urge people to truly understand the nature of the industry, asset and also yourself”

Lady Walker believes that there will come a time when all Nigerian banks will have to adopt cryptocurrencies of their own, but due to the current volatility of the crypto market, it remains a future goal of those who see cryptocurrency as the financial future. She maintains:

“Bitcoin is a reality. We have all major world governments scrambling to make sense of it and world leaders sharing their views on the currency. For the past 700 years, our world has relied on the European legacy banking system for means of payments and transactions. Bitcoin is definitely challenging the traditional way when it comes to transfer of value. Just like the internet changed how we shop, bank, date and find information.”

About 40% of Nigeria’s population is unbanked, which blocks nearly half of the population from the financial economy. To this, the fintech CEO argues “All you require is a smartphone and internet to start sending and receiving payments. No I.D required, filling out paperwork, etc… Do you know how much this could change things for the people of Nigeria?”