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Nigeria may be headed for another recession as economy slows in Q2 2018

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The Nigerian economy has slowed for the second consecutive quarter this year, raising fears the nation may soon be heading for another economic recession.

According to the Gross Domestic Product (GDP) figures released by the National Bureau of Statistics (NBS) on Monday, the rate at which the nation’s economy grew in the second quarter of 2018 slowed to 1.50 percent from 1.95 percent recorded in previous quarter.

The GDP growth rate is the rate at which the value of all goods and services produced within a country’s border in a given period is rising.

Nigerian economy had officially slumped into recession in the second quarter of 2016 after recording negative GDP for two consecutive quarters, according to NBS.

Nigeria, which relies on crude oil for 70 percent for its revenue and over 90 percent for its export earnings, slumped into its worst economic woes since 1987 by recording five consecutive negative GDP growth rates from -0.67 percent in Q1 2016 to -0.91 percent in Q1 2017.

The nation’s annual growth rate turned positive in Q2 2017 with GDP growth rate of 0.72 percent and sustained the positive trajectory for five quarters till Q2 2018.

The economy would enter another recession when the GDP figures turn negative for two consecutive quarters.

Read Also: Nigerian stocks hit 10-month low on Dangote drop, election risk

The data indicated that the oil GDP contracted by -3.95 percent from 14.77 percent in Q1 2018, while non-oil GDP grew by 2.05 percent from 0.76 percent in Q1 2018.

Last week, the Statistician-General of NBS, Yemi Kale, had attributed the downturn to the clashes between farmers and herdsmen in some parts of the country.

The International Monetary Fund (IMF) had projected that the nation’s economy would grow from 0.8 percent in 2017 to 2.1 percent in 2018 and 2.3 percent in 2019 on the back of an improved outlook for oil prices.

According to the global monetary authority, the forecast “reflects improved prospects for Nigeria’s economy” and supported by the increase in commodity prices like crude oil.

With the GDP figures for the two quarters, the nation now has an average GDP of 1.73 percent for the first half of 2018.

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World Bank approves $500 million loan for Egypt to mitigate wheat shortage

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The World Bank Board of Executive Directors, has approved a USD 500 million loan to Egypt Bank to help finance its wheat purchases as prices skyrocket because of the Russian invasion of Ukraine.

Egypt’s international cooperation ministry made the announcement on Wednesday revealing that the funds will primarily support the country’s wheat purchases to help the government maintain a strategic reserve and utilize the investments made in raising the country’s grain storage capacity.

statement by the World Bank quoted the minister, Dr. Rania Al-Mashat, the project supports the government’s strong commitment to ensuring that the needs of citizens continue to be met even amid a very challenging global context caused by concomitant crises such as COVID-19 and the war in Ukraine.

“In addition to ensuring sustained food security, this project supports national climate efforts by increasing agricultural resilience.”

Wheat is fundamental to the Egyptian diet, with about 70 per cent of the population relying on subsidised bread to feed their families. The North African country is the world’s top importer of wheat, and has had its supply suffer since Russian invasion of Ukraine disrupted crucial supply from the two major exporting countries.

Russia is the world’s largest wheat exporter and Ukraine is among the top five. Global grain markets are facing turmoil following war between the two European countries with the two countries accounting for about 30 percent of the world’s wheat supply.

Egypt’s Prime Minister, Mostafa Madbouly, announced in March that the country will diversify its sources of wheat to avoid relying on what he described as “specific sources” for this product.

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AfDB to sponsor Rwanda’s African Pharmaceutical Technology Foundation

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The African Development Bank (AfDB) says it will be sponsoring Rwanda’s venture to host the new African Pharmaceutical Technology Foundation.

The venture is expected boost the continent’s access to technology in manufacturing medicines and vaccines.

AfDB President Dr Akinwumi Adesina said the project includes “revamping Africa’s pharmaceutical industry, building Africa’s vaccine manufacturing capacity, and building Africa’s quality healthcare infrastructure.

“Even with the decision of the Trips waiver at the World Trade Organization (WTO), millions are dying -and will most likely continue to die – from lack of vaccines and effective protection,” Dr Adesina said.

Meanwhile the venture has drawn commendation from players. The Director-General of the World Trade Organization, Dr Ngozi Okonjo-Iweala, remarked that the project “provides part of the infrastructure needed to assure an emergent pharmaceutical industry in Africa.”

Africa is short of pharmaceutical companies that fits its population size. The continent is currently home to about 375 pharmaceutical firms, which produce less than 25 percent of the needed products annually, forcing the countries to import vastly to meet demand.

This dependence on imports leaves citizens vulnerable to shortages of medication — a problem that triggered a continent-wide crisis during the pandemic.

During the COVID-19 pandemic, small pharmacies and large medical stores in Rwanda ran out of stock. In South Africa, it became nearly impossible to fill prescriptions for psychiatric drugs and oral contraceptives. In Kenya, oncologists complained about challenges treating their cancer patients. And in Nigeria, stocks of treatments to manage chronic illnesses, including HIV medicines, dipped critically low.

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