No. 265 – Nigeria’s Debt Situation Doesn’t Feel Good

Bond Investors Are Rushing to Nigeria – I wrote a bit about Federal Reserve chair Jerome Powell’s 60 Minutes interview earlier this week. Another thing he mentioned in that conversation was that at some point, the US was going to have to deal with the rate at which its debt is growing relative to its growth. You can look at the chart above and see that it’s not sustainable. 

Policymakers in Nigeria have been trying to have that conversation for years now, but it’s like the country is in a vicious cycle of finding itself in situations where it needs to seek out more debt to finance its deficit. One hopefully long-term positive that has come out of this pandemic is that the government ended its practice of paying an oil subsidy in order to keep gas affordable. Those subsidies have been so expensive for the government. Imagine in 2011, the government spent $8B. The government’s budget for that year was over $11B. The country has a $27B budget this year, and the subsidy elimination saves the country at least $2B. The problem is that the government anticipates running nearly a $14B deficit.

As the country hopefully emerges from this COVID-19 situation sooner than later, how do the country’s leaders position it to foster really strong growth in order to chip away at the debt the country has taken on?

The Amazon-Berkshire-JPMorgan Health Venture Fails to Disrupt – A month or so ago, I was wondering what happened to the joint venture between JP Morgan, Berkshire Hathaway, and Amazon during this COVID-19 situation. The venture was supposed to change the game for what employer healthcare programs looked like. Well, apparently things weren’t going well. The CEO Atul Gawande resigned his post to focus on the pandemic. While he was at the helm, the company took more incremental steps towards figuring out how to develop a truly innovative employer healthcare program. That’s unfortunate, especially considering the number of people losing their jobs. A reimagined healthcare offering would have been real nice.


‘This Isn’t a Fad’: Three of Africa’s Biggest Stars on Making the Industry Come to Them – This is a great interview with Tiwa Savage, Mr. Eazi, and Davido, Nigerian artists have played important roles in elevating the profile of the music African artists put out. Real nice interview.

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