Barely six years after the global economic crisis, world stock markets have again been hit by the recent crash of the Chinese financial markets and a possible slowdown in the Chinese economy. Globally, investors are currently moving away from risky assets, such as stocks and government bonds, as they seek to re-evaluate exposure to risk.

About two weeks ago, in a surprise move, China, the world’s second largest economy, devalued its currency the Yuan against the dollar by 4.4 percent — the largest drop in decades. According to a statement by the People’s Bank of China, the move was designed to allow the currency to reflect the true market value.

In response to China’s devaluation, global prices for crude oil and some other African commodities fell further, on the suspicion that such a move means that growth in China is slower than previously thought. On Monday, China’s benchmark, the Shanghai Composite Index was down 40 percent since its peak in June of 2015 after falling another 8.5 percent. On Tuesday, the Shanghai Composite, which dropped by 22 percent over the past four days, fell by another 7.6 percent.

The downward pressure on the Chinese economy has also impacted the price of crude oil. Now hovering around $38.24, West Texas Intermediate crude has lost 5.5 percent of its value since its most recent high of $40.45 in October of 2014. This presents a problem for African oil exporting countries like Nigeria and Angola who earn majority of their government revenue and foreign exchange from crude oil sales.

China is currently Nigeria’s leading trade partner. Nigeria imported ₦336.5 billion worth of goods and services from Chinese companies in 2014.

China’s slowdown and the devaluation of its currency present an additional problem for Nigeria because a weaker Yuan means manufactured Chinese goods will become cheaper, possibly affecting Nigeria’s ability to spur local manufacturing.

Like many equities markets around the world, Nigeria’s Stock market has been affected by China’s stock market crash. At the end of Monday’s trading session, the Nigerian Stock Exchange recorded losses of about N228 billion. The average decline stood at 2.22 percent, as high losses by a majority of stocks overwhelmed modest gains.

Other equities markets across Africa have fared better. At the end of Monday’s trading session, the Nairobi Stock Exchange reported a 22.3 percent rise in pre-tax profit for the first half of the year, and said it was on track to launch new derivatives market this year.


http://venturesafrica.com/this-is-how-chinas-economic-slowdown-will-affect-nigeria/

Ok

If it was USA I will be more terrified..... As for China, I trust them to always come up with something better.


On the other hand, That's what you get for being over dependent on oil Revenue. So, our government should rekindle Agriculture.

benedictnsi:
If it was USA I will be more terrified..... As for China, I trust them to always come up with something better.


On the other hand, That's what you get for being over dependent on oil Revenue. So, our government should rekindle Agriculture.

Agriculture contributes more now to Nigeria's GDP than oil

ducii:


Agriculture contributes more now to Nigeria's GDP than oil

My brother, can you justify the veracity of this Your Aphorism or Apothegm with vivacity cos the last time I checked, the oil still remains the most relied source of our national income

I still want to confirm if some part of Nigerian foreign exchange are denominated in Yuan. A devaluation in Yuan means a redox in foreign reserve if am correct.

It was in the news that Dangote lost a good part of his investment due to the devaluation

This is a strategy to make sure that Africa esp West Africa keep buying from them.

hmmm a whole china. recently the richest man is Asia lost 13bill dollars. wonder how he will be behaving now.

benedictnsi:



My brother, can you justify the veracity of this Your Aphorism or Apothegm with vivacity cos the last time I checked, the oil still remains the most relied source of our national income

Check the data, Agriculture contributes more, but Nigeria does not export most of our Agricultural products we consume them locally. Oil affects Nigeria because that is what we export mostly.

I just attached a link of the NBC Q2 GDP valuations below. If you go through the report like i have done you will find that Oil contributes 9.80% to Nigeria's GDP, while Agriculture contributes 21.12% in real terms.

file:///C:/Users/coduche/Downloads/GDP_Q2_2015.pdf

ducii:


Check the data, Agriculture contributes more, but Nigeria does not export most of our Agricultural products we consume them locally. Oil affects Nigeria because that is what we export mostly.

I just attached a link of the NBC Q2 GDP valuations below. If you go through the report like i have done you will find that Oil contributes 9.80% to Nigeria's GDP, while Agriculture contributes 21.12% in real terms.

file:///C:/Users/coduche/Downloads/GDP_Q2_2015.pdf

There you are again..... When Agricultural production is not in commercial state, that is to say that it's generated revenue is in infinitesimal scale or its resources not fully utilised. I read a post here that the government are keen to import tomatoes that can be produced here.

Bros believe me, anything that will make the oil sector of Nigeria should Sneeze, the Agricultural sector will frozen.