DAY 2: NATIONWIDE STRIKE IN NIGERIA

The nationwide strike action declared by organised labour from yesterday, entered day 2 today and the costs and impact on the economy are beginning to emerge.

Tin Can Island port in Apapa Lagos state, which is the main gateway for imported goods into Nigeria, has been closed.

Hitherto, there was congestion in the port and the strike has made it worse. Containers are mounting and with that millions in demurrage.

Under normal operations,there were charges for the first 3 days of uncleared container. After then , the charges begin to rise every 4 days culminating in about N8000 per day after about 15 days.

With the strike, it is not of question of slow clearing and delivery, anymore, the demurrage just accumulates and will continue while the strike lasts 

It happened like that earlier this year when port workers went on strike making worse importers aches over 200% increase in transportation costs because of very bad access road.

We understand that to avoid being picketed by organised labour, the Nigerian stock exchange, like banks has closed its front doors to visitors. Trading is still ongoing though and stockbrokers and staff can access 

Manufacturing concerns and mercantile outfits are beginning to have problems with accumulating cash for goods bought in cash.

A good thing, though for many companies cash transaction represents only about 15% of business done and payments are still received through fund transfer.

For some factories, salaries are now being met from cash so generated whereas under normal times, such would have been paid into banks first to ease accounting for cash flow and in some instances, as part condition for loan repayment.

Most reports say public hospitals are closed but we understand that but for tool downing by some laboratory staff, Lagos University Teaching Hospital is, like our contact put it: "working full swing"

As in day 1, transporters in Lagos, Abuja under the umbrella of different central transport workers and owners associations remain on the roads offering their services, so fare is normal, and fuel supply normal.

However, obviously the longer the strike goes on, some scarcities will begin to surface especially for fuel since oil and gas workers are very much on strike.

Public schools remain closed and the children are on forced holiday after resuming school only a week ago.

Meanwhile, ATMs remain crowded and banks already with installed electronic cash pay in platforms are still able to receive deposits from cash generating customers.

But no doubt, about it, each day the strike  continues, available resources will run out, demand will slow down more and more, and the warning of the Monetary Policy Committee of Central Bank last Monday  that Nigeria may be heading again to recession, could be true faster than any one could anticipate.

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more