As a perma-bear for the Nigerian Naira, I have always maintained it is a bad currency. But the events in the International markets are not backed by fundamentals so I except the Naira to bounce back as soon as the World is done with Covid and Oil demand picks up.
While Saudi had boasted that they can keep oil prices low for a decade, the U.S can’t afford that as most U.S Oil coys will go bankrupt.
My prediction: U.S will put a leash on Saudi Arabia to protect their interests and Russia will capitulate their position.
Why did the Naira fall?
Quiet simply, Russia, U.S and Saudi Arabia are the Worlds largest Oil producers. Russia although not an OPEC member, has always coordinated with OPEC to fix prices.
Some weeks back, Opec decided to cut production by 1mn barrels/day due to lower demand in China. Russia sensing an opportunity to hurt U.S oil production refused and decided to flood the market.
Saudi Arabia (with worlds largest oil reserves), decided to punish Russia for going AWOL and flooded the market with cheap oil. Oil price tanked. Hard.
How will Covid-19 (Chinese Virus) affect me?
After ingesting sound research by the Isreali team that stopped Ebola spread in Africa, I can say that our Covid-19 fears should be greatly tempered. Here is why:
1. At a death rate of 0.5%, even if it infects 30mn Nigerians (unlikely), Covid-19 will kill less Nigerians this year than Malaria (300k deaths/yr) and HIV (215k deaths/yr).
3. Nigeria has an overwhelming youth population (over 71% of us are less than 30yrs, 42% are less than 14yrs). We will get to herd immunity faster than most countries of the World.
4. Social distancing can only “slow” the spread to avoid overburdening health systems but it’s only a vaccine or herd immunity that can truly stop ✋ it.
The World has seen greater pestilence than this.
Did the world come to an end? No.
Did Jesus come? No.
Did lots of people die? Yes.
Did the World recover quickly? Yes.
There is only one difference between the time of the Bubonic Plague (Black Death – 1347), Measles (1765), Spanish flu (1918), Ebola (1975), SARS (2003), MERS (2007), H1N1 (2009). And that is Social Media. Any and all panic can be spread with it.
This shall pass.