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.

No. 233 – Tuesday Reads

Address To The Nation By President Akufo-Addo On Updates To Ghana’s Enhanced Response To The Coronavirus Pandemic – “The cynics question our capacity for the maintenance of discipline in this period, and in its aftermath; however, I am confident that we will prove them wrong.”

Masayoshi Son Talks WeWork, Vision Fund And SoftBank Under Siege – “Look at a shadow. Even within 24 hours, the length of your shadow differs dramatically, even though your height in 24 hours is unchanged. People get scared or overconfident looking at the length of the shadow.”

The Truth About Isaac Newton’s Productive Plague – “Doing the work was what mattered, and Newton did it as a student in Cambridge before the plague, he persisted at Woolsthorpe, and he kept going upon his return to college.”

Jamie Dimon Letter to Shareholders – “We know that too many people are being left behind – particularly in the black community. The Civil War ended more than 150 years ago, and we still have not come even close to parity. We need to do more as a nation, and we have more to do as a firm.”

New data methods are helping the Government of Ghana fight COVID-19 – “Understanding changes in mobility patterns is important for the government in order to establish whether the current restrictions are likely to contain the spread of the disease, and whether more, or different, interventions should be put in place in the coming days or weeks. This work shows the power of data and is a good example of how it can benefit everyone.”

No. 117: 3 Tuesday AM Reads – Davidson Grad Gets a Promotion |JP Morgan Has Plans for Africa | Gabon’s Energy Sector at 30,000ft

  1. I nearly clicked my heels when I saw the news of Amrote Abdella being named Regional Director of Microsoft’s 4Afrika Initiative, an effort for Microsoft to support economic development on the continent while finding new business opportunities. I’m a big fan of Amrote’s. Seeing Davidson alumnae killing it will never get old.

  2. What is getting old is American business news anchors not believing that there is opportunity to do business in African countries. See Stephanie Ruhle’s face during her interview with JP Morgan’s Jamie Dimon at the 25:40 mark. At least Stephanie listened. Check out this interview Trish Regan did with McKinsey Director, Acha Leke, last year.


  3. Interesting analysis of market headwinds Africa’s oil and gas industries face and how consistent regulatory policy could help mitigate the impact of dropping energy prices. Speaking of consistent regulatory policy, NJ Ayuk and his Centurion law firm, put out a guide to Gabon’s energy sector, including an explanation of its new hydrocarbons law.

No. 83: Growing Exports to Nigeria Can Be Atlanta’s Secret Sauce

Atlanta is a top-10 exporter amongst US cities to Nigeria. I hope the city puts more energy behind its connection to the country. The city recently completed its Metropolitan Export Plan with support from JP Morgan and the Brookings Institution. Currently, the only African countries an exporter in Atlanta can get information about exporting to are Morocco and South Africa. Yet, the growth of Atlanta’s exports to African markets outstrips exports to other parts of the world.

While the city has seen record export growth, its ranking among US metro areas remained at No. 18. There is a lot more than $178M in sales opportunities in Nigeria. For example, the Dangote Group is in the process of investing $16B in the development of an oil refinery and two fertilizer plants. Machinery and chemicals are two of Atlanta’s top export products.  And that is just talking about one company. I believe that if Atlanta puts energy behind building its export pipelines to African markets, particularly Nigeria, the city will see it’s ranking rise.

No. 74: Corruption: FIFA or Wall Street

A couple of weeks ago, several banks agreed to pay criminal fines close to $9 billion for currency rigging, a felony crime. Around the same time, the corruption deal with FIFA started heating up. 

I get that billions of people love the beautiful game and the corruption in the sport has been ongoing for decades. It was definitely time for something to correct that. A total of nearly $9 billion in fines is enormous. Rate fixing is a serious crime, yet the banks involved got exemptions from criminal charges. 

I often hear Wall Street saying that the markets will take care of themselves, as if we’re talking about some all powerful, all knowing being. Really? Since the beginning of time, people have tried to cheat people when it comes to getting something valuable. 

We just went through several painful years during the Great Recession. Some of the same banks involved there faced fines in this case – J.P. Morgan. Citigroup. Corruption in FIFA will negatively impact people’s lives, but hubris on Wall Street could negatively impact a lot more people.