15 Jul

Daily Watch – Nigeria to be Africa’s next motor hub, New airport terminals ready by year end

  • A new report by PwC Nigeria suggests that the country is set to become Africa’s next automotive hub. The report, which painted three possible growth scenarios, projects average GDP growth of 6.6 percent through 2020, 5.1 percent to 2030 and 5.4 percent to 2050. Growth in new car sales was assumed to run at twice GDP expansion on the basis of other large emerging markets such as Indonesia. The report predicts production of 4.16 million locally manufactured vehicles in 2050, 463,000 new vehicle imports and no second-hand imports. It also predicted a park of 40.4 million cars in 2050 including 18.3 million Nigerian used. As context, PwC’s estimates for 2015 have a park of 14.5 million vehicles, second-hand imports of 335,000, new vehicle imports of 91,000 including the grey cross-border market and just 30,000 locally manufactured cars.
  • The naira took a dive on Thursday at both the parallel and interbank markets, becoming the worst performing currency in Africa this year. The naira, which began trading at around 283 to the dollar at the interbank market on Thursday, depreciated to 284/$1 to become the third worst performing currency in the world. The naira, according to Bloomberg data, came ahead of only two global currencies – the Venezuelan bolivar and the Suriname dollar. At the parallel market, the naira fell to its lowest level since the start of the new foreign exchange regime, trading at 363/$1 and 485 to the pound in Abuja and Port Harcourt. The Euro traded above ₦390 in Lagos and under 380 in the nation’s capital, Abuja. The naira has lost 29.61 percent of its value on the official market, following the CBN decision to allow a floating foreign exchange regime.
  • FAAN says new terminals being constructed at Nigeria’s international airports – Lagos, Port Harcourt, Kano and Abuja – are at advanced stages of completion. The agency’s spokesperson, Yakubu Dati says it will take delivery of the terminals by the end of the year, citing assurances received from contractors handling the various projects. Dati added that members of the National Assembly had visited the various terminals, which would improve the nation’s airport capacity from 15 million passengers per annum to about 24 million passengers.
  • After hitting a two-year low last month due to renewed militant attacks on oil facilities in the Niger Delta, Nigeria’s crude oil production has managed to increase from the 1.426 million barrels per day recorded in May to 1.523 million barrels per day in June, according to OPEC. In its July oil and gas report released on Tuesday, the cartel noted that the country’s production had increased by 98,000 bpd. Nigeria lost its top Africa producer title earlier this year to Angola, whose production is approaching two million bpd. According to the OPEC report, Angola, which was second to Nigeria in crude production, soared to 1.773 million bpd in June. Saudi Arabia remains OPEC’s largest producer with 10.308 million bpd. Oil has traded between about $44 and $52 a barrel since early June after almost doubling from a 12-year low in February amid a spate of supply disruptions and falling U.S. output, with London Brent closing at $47.37 on Thursday.