The oil price crash isn’t getting any easier for Nigeria.
Late on Monday, the nation released the prices for most of its crude oil grades for sale in May. The figures reflect an urgent need to offload cargoes in what is a highly competitive marketplace. Even so, traders cautioned that the prices -- $10 a barrel or less if the market doesn’t improve -- still may not tempt enough buyers because of the demand collapse triggered by the coronavirus.
Africa’s largest economy is particularly vulnerable to the oil-price rout that’s been brought about by the disease. The country, which has a fiscal breakeven well above $100 a barrel, mostly sells very light crudes that are low in sulfur -- a similar variety to those that the U.S. produces in abundance these days. Worse for Nigeria, it lacks the space to store unwanted supplies at a time the cost of hiring ships to take its supplies to importers has soared because many tankers are being used for floating storage.
Like a lot of oil producing countries, Nigeria sells its crudes at differentials to benchmarks. For the West African country, that marker is Dated Brent, published by S&P Global Platts. The measure stood at $14.68 a barrel on Tuesday.
Two of Nigeria’s banner grades -- Qua Iboe and Bonny Light -- will sell at discounts of $3.92 and $3.95 respectively to Dated Brent in May, according to a price list seen by Bloomberg. Both are more deeply discounted than they were in April, when prices were already staggeringly cheap by historical standards. The majority of the country’s grades will be sold for at least $3 a barrel below the benchmark next month.
Two traders said that the prices still won’t be cheap enough for Nigeria to sell its excess cargoes, a third said the discounts may be attractive enough to lift sales.
The release of the Nigerian official selling prices was about a week late, while loading plans for June have started to emerge several days later than normal. The nation’s exports of Qua Iboe crude oil for May have been revised lower to 153,000 barrels a day from the previously planned level of 215,000, while June’s shipments are set at 158,000 barrels a day, according to loading schedules compiled by Bloomberg. The loadings are the lowest for the grade since September 2016.
The dire state of the oil market has meant that, despite being so cheap -- $50or $60 a barrel would have been realistic just a few months ago -- Nigerian barrels have been selling slowly. Traders estimated that, as of late last week, about 30 out of 65 May-loading cargoes still hadn’t been sold. Normally just a handful would still be available so late in a month.
The coronavirus has halted swathes of the global transportation system, destroying demand for fuels in the process. Some estimates are that the reduction in demand could have been as big as 35 million barrels a day, or roughly 35% of global consumption. Nigeria is one of the countries taking part in a global pact to limit oil production by 9.7 million barrels a day.
Nigerian-American restaurateur and entrepreneur Jonathan Adewumi has died due to COVID-19, NY1 reports.
Adewumi was the co-owner of popular downtown Brooklyn restaurant Amarachi. The restaurant and event space is known as a gathering place for the area’s African community, and features a wide breadth of Afro-Carribean cuisine, from jollof rice and suya to sweet plantains and goat pepper soup.
Throughout his life, Adewumi was “a great ambassador for Africa in showing breadth and the wealth and the regalness of our culture and history to the American populous,” his brother Adebayo Adewumi tells NY1.
Aside from the restaurant, Adewumi was responsible for running the city’s Nigerian Film Festival, as well as a travel business called Homeland Travels and Tours that facilitated vacations to various regions in Africa. In the ’80s and ’90s, Adewumi also launched and ran a successful clothing business, Nigerian Fabrics and Fashions, with his two siblings, according to the report.
Adewumi’s family has set up a fundraiser on GoFundMe to provide burial support and help carry on Adewumi’s work, including funds for the Nigerian Film Festival.
“Jonathan had a lot of visions and plans especially when it came to Empowering Africa and he understood how important the African-Americans role in its development had to be,” the family wrote on Adewumi’s GoFundMe page.
Over the past month, NYC’s restaurant industry has been rocked by deaths due to COVID-19. Restaurateurs and longstanding industry figures including Floyd Cardoz, Andreas Koutsoudakis, Joseph Migliucci of Italian institution Mario’s, Jose Torres from Latin American restaurant Joe’s Place, Brooklyn bar owner Joe Joyce, and Italian butcher Moe Albanese have all died from the virus.
The International Monetary Fund(IMF) has approved Nigeria’s request for $3.4 billion loan to fight the devastating effect of the COVID-19.
The loan, which has a maximum repayment period of five years was approved by the Fund’s board Tuesday.
The emergency financial assistance was approved under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.
It will also assist Nigeria to meet the urgent balance of payment needs stemming from the COVID-19 pandemic.
The COVID-19 outbreak has magnified existing vulnerabilities, leading to a historic contraction in real GDP growth and to large external and fiscal financing needs, IMF said in a statement.
“Once the impact of the COVID-19 shock passes, the authorities’ commitment to medium-term macroeconomic stability remains crucial to support the recovery and ensure debt remains sustainable.
“The near-term economic impact of COVID-19 is expected to be severe, while already high downside risks have increased. Even before the COVID-19 outbreak, Nigeria’s economy was facing headwinds from rising external vulnerabilities and falling per capita GDP levels. The pandemic—along with the sharp fall in oil prices—has magnified the vulnerabilities, leading to a historic decline in growth and large financing needs.
“The IMF financial support will help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices.
“The IMF remains closely engaged with the Nigerian authorities and stands ready to provide policy advice and further support, as needed”.
Following the Executive Board’s discussion of Nigeria, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:
“The COVID-19 outbreak—magnified by the sharp fall in international oil prices and reduced global demand for oil products—is severely impacting economic activity in Nigeria. These shocks have created large external and financing needs for 2020. Additional declines in oil prices and more protracted containment measures would seriously affect the real and financial sectors and strain the country’s financing.
“The authorities’ immediate actions to respond to the crisis are welcome. The short-term focus on fiscal accommodation would allow for higher health spending and help alleviate the impact of the crisis on households and businesses. Steps taken toward a more unified and flexible exchange rate are also important and unification of the exchange rate should be expedited.
“Once the COVID-19 crisis passes, the focus should remain on medium-term macroeconomic stability, with revenue-based fiscal consolidation essential to keep Nigeria’s debt sustainable and create fiscal space for priority spending. Implementation of the reform priorities under the Economic Recovery and Growth Plan, particularly on power and governance, remains crucial to boost growth over the medium term.
“The emergency financing under the RFI will provide much needed liquidity support to respond to the urgent BOP needs. Additional assistance from development partners will be required to support the government’s efforts and close the large financing gap. The implementation of proper governance arrangements—including through the publication and independent audit of crisis-mitigating spending and procurement processes—is crucial to ensure emergency funds are used for their intended purposes.”
Most other teams have had to start with small clinical trials of a few hundred participants to demonstrate safety. But scientists at the university’s Jenner Institute had a head start on a vaccine, having proved in previous trials that similar inoculations — including one last year against an earlier coronavirus — were harmless to humans.
That has enabled them to leap ahead and schedule tests of their new coronavirus vaccine involving more than 6,000 people by the end of next month, hoping to show not only that it is safe, but also that it works.
The Oxford scientists now say that with an emergency approval from regulators, the first few million doses of their vaccine could be available by September — at least several months ahead of any of the other announced efforts — if it proves to be effective.
Now, they have received promising news suggesting that it might.
Scientists at the National Institutes of Health’s Rocky Mountain Laboratory in Montana last month inoculated six rhesus macaque monkeys with single doses of the Oxford vaccine. The animals were then exposed to heavy quantities of the virus that is causing the pandemic — exposure that had consistently sickened other monkeys in the lab. But more than 28 days later all six were healthy, said Vincent Munster, the researcher who conducted the test.
“The rhesus macaque is pretty much the closest thing we have to humans,” Dr. Munster said, noting that scientists were still analyzing the result. He said he expected to share it with other scientists next week and then submit it to a peer-reviewed journal.
Immunity in monkeys is no guarantee that a vaccine will provide the same degree of protection for humans. A Chinese company that recently started a clinical trial with 144 participants, SinoVac, has also said that its vaccine was effective in rhesus macaques. But with dozens of efforts now underway to find a vaccine, the monkey results are the latest indication that Oxford’s accelerated venture is emerging as a bellwether.
“It is a very, very fast clinical program,” said Emilio Emini, a director of the vaccine program at the Bill and Melinda Gates Foundation, which is providing financial support to many competing efforts.
Which potential vaccine will emerge from the scramble as the most successful is impossible to know until clinical trial data becomes available.
More than one vaccine would be needed in any case, Dr. Emini argued. Some may work more effectively than others in groups like children or older people, or at different costs and dosages. Having more than one variety of vaccine in production will also help avoid bottlenecks in manufacturing, he said.
But as the first to reach such a relatively large scale, the Oxford trial, even if it fails, will provide lessons about the nature of the coronavirus and about the immune system’s responses that can inform governments, donors, drug companies and other scientists hunting for a vaccine.
“This big U.K. study,” Dr. Emini said, “is actually going to translate to learning a lot about some of the others as well.”
All of the others will face the same challenges, including obtaining millions of dollars in funding, persuading regulators to approve human tests, demonstrating a vaccine’s safety and — after all of that — proving its effectiveness in protecting people from the coronavirus.
Paradoxically, the growing success of efforts to contain the spread of Covid-19, the disease caused by the virus, may present yet another hurdle.
“We’re the only people in the country who want the number of new infections to stay up for another few weeks, so we can test our vaccine,” Prof. Adrian Hill, the Jenner Institute’s director and one of five researchers involved in the effort, said in an interview in a laboratory building emptied by Britain’s monthlong lockdown.
Ethics rules, as a general principle, forbid seeking to infect human test participants with a serious disease. That means the only way to prove that a vaccine works is to inoculate people in a place where the virus is spreading naturally around them.
If social distancing measures or other factors continue to slow the rate of new infections in Britain, he said, the trial might not be able to show that the vaccine makes a difference: Participants who received a placebo might not be infected any more frequently than those who have been given the vaccine. The scientists would have to try again elsewhere, a dilemma that every other vaccine effort will face as well.
The Jenner Institute’s coronavirus efforts grew out of Professor Hill’s so-far unsuccessful pursuit of a vaccine against a different scourge, malaria.
He developed a fascination with malaria and other tropical diseases as a medical student in Dublin in the early 1980s, when he visited an uncle who was a priest working in a hospital during the civil war in what is now Zimbabwe.
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“I came back wondering, ‘What do you see in these hospitals in England and Ireland?’” Professor Hill said. “They don’t have any of these diseases.”
The major drug companies typically see little profit in epidemics that afflict mainly developing countries or run their course before a vaccine can hit the market. So after training in tropical medicine and a doctorate in molecular genetics, Professor Hill, 61, helped build Oxford’s institute into one of the largest academic centers dedicated to nonprofit vaccine research, with its own pilot manufacturing facility capable of producing a batch of up to 1,000 doses.
The institute’s effort against the coronavirus uses a technology that centers on altering the genetic code of a familiar virus. A classic vaccine uses a weakened version of a virus to trigger an immune response. But in the technology that the institute is using, a different virus is modified first to neutralize its effects and then to make it mimic the one scientists seek to stop — in this case, the virus that causes Covid-19. Injected into the body, the harmless impostor can induce the immune system to fight and kill the targeted virus, providing protection.
Professor Hill has worked with that technology for decades to try to tweak a respiratory virus found in chimpanzees in order to elicit a human immune response against malaria and other diseases. Over the last 20 years, the institute has conducted more than 70 clinical trials of potential vaccines against the parasite that causes malaria. None have yet yielded a successful inoculation.
In 2014, however, a vaccine based on the chimp virus that Professor Hill had tested was manufactured in a large enough scale to provide a million doses. That created a template for mass production of the coronavirus vaccine, should it prove effective.
A longtime colleague, Prof. Sarah Gilbert, 58, modified the same chimpanzee virus to make a vaccine against an earlier coronavirus, MERS. After a clinical trial in Britain demonstrated its safety, another test began in December in Saudi Arabia, where outbreaks of the deadly disease are still common.
When she heard in January that Chinese scientists had identified the genetic code of a mysterious virus in Wuhan, she thought she might have a chance to prove the speed and versatility of their approach.
“We thought, ‘Well, should we have a go?’” she recalled. “‘It’ll be a little lab project and we’ll publish a paper.’”
It did not stay a “little lab project” for long.
As the pandemic exploded, grant money poured in. All other vaccines were soon put into the freezer so that the institute’s laboratory could focus full-time on Covid-19. Then the lockdown forced everyone not working on Covid-19 to stay home altogether.
“The whole world doesn’t usually stand up and say, ‘How can we help? Do you want some money?’” Professor Hill said.
“Vaccines are good for pandemics,” he added, “and pandemics are good for vaccines.”
Other scientists involved in the project are working with a half dozen drug manufacturing companies across Europe and Asia to prepare to churn out billions of doses as quickly as possible if the vaccine is approved. None have been granted exclusive marketing rights, and one is the giant Serum Institute of India, the world’s largest supplier of vaccines.
Donors are currently spending tens of millions of dollars to start the manufacturing process at facilities in Britain and the Netherlands even before the vaccine is proven to work, said Sandy Douglas, 37, a doctor at Oxford overseeing vaccine production.
“There is no alternative,” he said.
But the team has not yet reached an agreement with a North American manufacturer, in part because the major pharmaceutical companies there typically demand exclusive worldwide rights before investing in a potential medicine.
“I personally don’t believe that in a time of pandemic there should be exclusive licenses,” Professor Hill said. “So we are asking a lot of them. Nobody is going to make a lot of money off this.”
The Jenner Institute’s vaccine effort is not the only one showing promise. Two American companies, Moderna and Inovio, have started small clinical trials with technologies involving modified or otherwise manipulated genetic material. They are seeking both to demonstrate their safety and to learn more about dosing and other variables. Neither technology has ever produced a licensed drug or been manufactured at scale.
A Chinese company, CanSino, has also started clinical trials in China using a technology similar to the Oxford institute’s, using a strain of the same respiratory virus that is found in humans, not chimps. But demonstrating the effectiveness of a vaccine in China may be difficult because Covid-19 infections there have plummeted.
Armed with safety data from their human trials of similar vaccines for Ebola, MERS and malaria, though, the scientists at Oxford’s institute persuaded British regulators to allow unusually accelerated trials while the epidemic is still hot around them.
The institute last week began a Phase I clinical trial involving 1,100 people. Crucially, next month it will begin a combined Phase II and Phase III trial involving another 5,000. Unlike any other vaccine project now underway, that trial is designed to prove effectiveness as well as safety.
The scientists would declare victory if as many as a dozen participants who are given a placebo become sick with Covid-19 compared with only one or two who receive the inoculation. “Then we have a party and tell the world,” Professor Hill said. Everyone who had received only the placebo would also be vaccinated immediately.
If too few participants are infected in Britain, the institute is planning other trials where the coronavirus may still be spreading, possibly in Africa or India.
“We’ll have to chase the epidemic,” Professor Hill said. “If it is still raging in certain states, it is not inconceivable we end up testing in the United States in November.”
Oil prices have fallen to all-time lows with some benchmark futures trading for less than zero.
Nigeria’s Bonny light hasn’t fallen into negative territory yet. But the country is still generating massive losses on every barrel of oil it produces.
After decades of mismanagement with government policies, Nigeria is on the road to a Venezuela-like collapse.
Nigeria may have one of the worst governments in the world. Even in good times, the country was in poor shape. But now, with oil prices falling to all-time lows, Nigeria is about to go the way of Venezuela and Zimbabwe with total economic collapse.
The Nigerian government depends on oil for 60% of its revenue and 90% of its foreign exchange. But with prices for several oil benchmarks falling below zero, Nigeria is generating massive losses for every barrel it produces. Add this to a rising debt load, bad economic policies, and political instability, and you have a recipe for disaster.
Where Did Nigeria’s Oil Money Go?
There are many proposed explanations for Nigeria’s situation. Some blame corruption, while others blame colonialism. But the real problem has been disastrous government policy. Like Venezuela, Nigeria allowed its central government to exert outsized control over its economy, which led to inefficiency and stagnation.
Until recently, Nigeria’s Federal government was responsible for practically all oil refining through its state-owned Nigerian National Petroleum Corporation (NNPC). But because its poorly-managed refineries fell into disrepair, the government relied on imports to meet its populations’ demand for fuel.
Put simply, Nigeria produces crude oil which it sells to the United States, China, and the European Union, only to re-import gasoline at a higher price, subsidize that gasoline, and sell it to consumers at a massive loss.
Nigeria’s benchmark Bonnie Light crude hasn’t hit zero yet. But with millions of barrels sitting unsold, Nigeria may start paying customers to take delivery due to its lack of onshore storage facilities. According to some sources, Nigeria is losing an average of $35 million a day in accruable revenue. And its currency, the Naira, maybe on the verge of a Zimbabwe-like devaluation because oil is the only source of the foreign exchange needed to prop it up.
The Next Sovereign Debt Crisis
Drunk on cheap debt from China, domestic lenders, and high-interest rate Eurobonds, Nigeria is on the cusp of a massive sovereign debt crisis.
Paradoxically, Nigeria’s President Muhammadu Buhari has decided to pile on even more debt recently, approving an additional $23 billion loan request from international lenders.
To address these challenges, Nigeria has discontinued its insane fuel subsidy and is considering reducing its 2020 budget by around $4.9 billion. According to the country’s finance minister Zainab Ahmed, the new budget assumes crude oil production of 2.1 million a day at an average price of $30 a barrel. But with oil prices falling below zero, this new budget won’t stop Nigeria’s slide towards insolvency.
It is also important to note that Nigerian senators will still enjoy their $37,500 monthly salaries under the new budget cuts.
The Coronavirus death toll in France has surpassed 10,000 mark, with 541 new death recorded in the last 24 hours.
According to France’s health officials, the dreaded pandemic has killed 10,869 people in the troubled country.
The large number of death has forced French President, Emmanuel Macron to hint at an extension of lockdown till April 15 to effectively checkmate the spread of the disease.
According to Jérôme Salomon, Head of the Public Health Authority, the nation now had 7,148 people in intensive care at hospitals across France, a net increase of 17 from the day earlier, the lowest increase recorded in recent weeks.
Salomon said he was unable to give a tally for the country’s nursing homes, which account for more than 30% of total fatalities, due to “technical problems”.
The death toll from hospitals was slightly lower than the comparable number from the day earlier, which was 597, according to France 24.
The Federal Government has once again emphasised the seriousness of the outbreak of the Novel Coronavirus (COVID-19) pandemic.
The Secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on (COVID-19), Mr. Boss Mustapha, who emphasised the seriousness on Wednesday, spoke on the perspective in some quarters, where COVID-19 is believed to be a hoax.
The PTF also defrayed the claim being spread through the social media that members of the task force were being paid N500,000 daily sitting allowance, saying no member of the body had received any payment for their time and efforts since it was constituted
Mustapha responded to a question from one of the journalists at the event, talking about some parts of the country where there is the belief that the COVID-19 was an idea and not a real disease with capacity to infect or cause death.
According to him, the outbreak is not a joke, scam or hoax, but a real disease, which had killed thousands of people across the world, refering to a story of a Nigerian medical practitioner, who recently lost the battle against the disease in the United Kingdom.
“The Coronavirus is not a joke. Please, take it very seriously and listen to the government. Please stay safe and protect your loved ones, nothing is more important.
“Listening to this, I think we’ve gone past the stage, however ignorant a person is, wherever you live in Nigeria, for you to begin to assume that this is a scam, a hoax or a joke and I think those of you in the media have the responsibility for driving this point.
“This is not a joking matter, we’ve gotten to the stage where we are beginning to see some of the things that are happening in other climes.
“So, we ought to take it with every element of seriousness and for those that think it’s a hoax or a scam, I wish them well, but for those of us who believe that we ought to do everything humanly possible to contain this spread or limit the infection or mortality, we will continue to work day and night and that is why I solicit your support and cooperation in this particular endeavour”, Mustapha said.
The Minister of Information and Culture, Alhaji Lai Mohammed, described reports that members of the task force had been receiving half a million naira daily as sitting allowance as fake news, which should be disregarded.
According to him, no member of the task force had received anything as payment for their efforts. Rather, they had been the ones who had been expending their resources to carry out a national task.
“The issue I want to take on is that of the sitting allowance of half a million naira, paid to each of the members of the task force. You will remember that each time I come here, since I tested negative for Coronavirus, my other major problem has been fake news.
“As soon as I got that information, I consulted with my colleagues here whether I’m not a member of the task force and I asked them whether they’d received their own and they said no.
“What bothers me is that since about 2 O’clock this afternoon I’ve been receiving text messages to send money to people; that they were broke, they had no money and I began to wonder, why today? Apparently, they are acting on this fake news that we receive half a million naira everyday.
“The truth of the matter is that no member of the committee has received one penny, either for sitting or sleeping allowance, not even when we went to Lagos yesterday.
“So, you see this fake news is targeted at one thing alone: to distract the government from the more serious problem and task of containing and combating fake news.
“I want to say loud and clear; no member of the committee receives a penny as sitting allowance. Everybody sacrificed his time, energy and even sometimes his resources”, Mohammed said.