Thursday, January 12, 2012

Nigeria Closes Down as Striking Unions Defy President About Fuel Subsidies

Good Analysis of Economic Impact of the Strike


Bloomberg
11 January 2012


Protesters march in the streets of Port Harcourt, the commercial hub of Niger Delta Rivers State in Nigeria.

Nigerian President Goodluck Jonathan and striking unions are deadlocked over their demands that the government reverse its decision to lift fuel subsidies that more than doubled the price of gasoline.

The strike, which entered its third day today, shut down banks, businesses and ports across the West African nation, limited the trade in stocks and the naira. While the action hasn’t slowed oil exports from Africa’s top crude producer, pumped by companies such as Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp. (XOM), it may have cost 320 billion naira ($2 billion) in economic output, said Bismarck Rewane, chief executive officer of Financial Derivatives Co.

“It’s mind boggling the cost” to the economy, he said by phone from Lagos today. “The foreign-exchange markets are down” and “the stock market is operating at about less than 5 or 10 percent of its optimal turnover and transactions.”

No comments:

Post a Comment