Athena Daily Brief – 10th October 2024
Petrol price may hit N1,100 per litre
Nigerian National Petroleum Company Limited (NNPCL) is set to increase petrol prices from N897 to around N1,047 to N1,100 per litre following its decision to stop being the sole off-taker of petrol from the Dangote Refinery. This shift will allow other marketers to negotiate prices directly, and enables higher market competition. Experts predict that without NNPCL’s subsidy, fuel prices could soar further, reaching N1,200 to N1,500 per litre in some cities, due to fluctuations in crude oil prices and exchange rates. The price hike is expected to worsen the ongoing cost-of-living crisis, with inflation already at 33.4%. Additionally, Dangote Industries, now Nigeria’s sole supplier of jet fuel, aims to stabilize fuel costs by using a naira-for-crude arrangement to shield against foreign exchange pressures.
Read more: https://leadership.ng/market-forces-petrol-price-may-hit-n1100-per-litre/
Athena Commentary:
NNPCL’s move to relinquish its monopoly in petrol off-take might facilitates competition, which could stabilize fuel supply chains in the long run. However, in the short term, the transition is poised to deepen the financial strain on Nigerians, who are already grappling with steep inflation and rising transport costs. While market forces could eventually bring efficiency, the immediate impact of price hikes could provoke further public outrage. Moreover, the shift away from subsidies comes at a precarious time, as many Nigerians are dependent on petrol for everyday electricity and mobility needs, and the national grid remains unreliable.
Only one Nigerian institution makes top 1,000 in 2025 World University Ranking
The Times Higher Education (THE) World University Rankings for 2025 reveal a decline in the presence of Nigerian universities among the top 1,000 institutions globally. Only Covenant University, a private institution that has consistently ranked in the top 1,000 since 2019, made it to this elite group. Other Nigerian universities like Ahmadu Bello University, Landmark University, University of Ibadan, and University of Lagos are ranked between 1001-1200. Globally, the University of Oxford retains its first-place position for the tenth consecutive year, with the Massachusetts Institute of Technology (MIT) moving up to second and Harvard University ranking third. The rankings are based on 18 performance indicators grouped into five areas: Teaching, Research Environment, Research Quality, International Outlook, and Industry Engagement.
Read more: https://www.premiumtimesng.com/news/top-news/743512-world-university-ranking-only-one-nigerian-institution-makes-top-1000-list.html
Athena Commentary:
The persistent decline of Nigerian universities in global rankings is a pressing concern that speaks about deeper systemic issues within Nigeria’s education sector. Factors such as inadequate funding, limited research output, infrastructural deficits, and brain drain contribute to this downward trend. To reverse this course, there is an urgent need for comprehensive reforms focused on enhancing the quality of education. This includes increasing investment in educational infrastructure, fostering a culture of research and innovation, and promoting international collaborations.
Foreign capital flows to Nigeria increase by 177% in first half of 2024
Nigeria’s significant increase in foreign capital inflows in 2024, a 177% rise compared to 2023, is highly commendable. The National Bureau of Statistics (NBS) reported that $5.98 billion in foreign investments entered the country, with most coming from the UK and the Netherlands and going into the banking sector. This surge was aided by the government’s easing of foreign exchange controls, which encouraged the return of portfolio investors.
Read more: https://www.ecofinagency.com/public-management/0910-45991-foreign-capital-flows-to-nigeria-surge-177-in-h1-2024/
Athena Commentary:
While the rise in foreign capital inflows is a positive sign, these reforms have come with significant challenges. The devaluation of the naira, while necessary to realign the exchange rate, has worsened inflation and increased the cost of living for many Nigerians. This approach, focusing heavily on attracting foreign investments through portfolio inflows and interest rate hikes, could expose Nigeria to volatile global financial markets, making the economy vulnerable to sudden shifts in investor sentiment. A more balanced strategy, which includes encouraging foreign direct investment (FDI) into more productive sectors like manufacturing or agriculture, could create a more sustainable foundation for long-term economic growth.
Nobel Prize in Physics awarded to AI Creators
Geoffrey Hinton and John Hopfield, pioneers in artificial intelligence (AI), have been awarded the 2024 Nobel Prize in Physics for their groundbreaking work on machine learning and neural networks. Their contributions have revolutionized industries, especially in technology and healthcare. Their Nobel Prize emphasizes the critical role AI will play in shaping the future, but it also highlights the need for more responsible development.
Read more: https://www.economist.com/science-and-technology/2024/10/08/ai-researchers-receive-the-nobel-prize-for-physics
Athena Commentary:
It is notable that neither Hinton nor Hopfield, nor any Nobel Prize winner other than Literature, hails from Nigeria or West Africa. This absence speaks to the pressing need for Africa to invest more in research and technology, particularly in AI. Nigeria, with its large population and dynamic youth, has the potential to be a leader in AI development, but it must prioritize technological education, funding, and innovation.
Does the expanding Middle East crisis affect Africa?
The ongoing Israel-Palestine conflict, alongside broader Midd le Eastern tensions involving Iran, Hezbollah, and US military involvement, has escalated into a crisis with global implications. The conflict, marked by high civilian casualties and mass displacement, threatens regional stability, impacting energy supplies and exacerbating global economic instability.
For Africa, particularly countries like Nigeria and others in West Africa, the crisis adds pressure to already fragile economies that depend heavily on oil imports. Rising energy prices due to Middle Eastern instability could increase inflation, strain national budgets, and aggravate poverty. Moreover, the humanitarian fallout, including displaced populations and refugee crises, could deepen security challenges, including extremism, as some African groups maintain ideological ties to factions involved in the conflict.
Read more:https://www.cnbcafrica.com/media/6349809126112/how-middle-east-crisis-is-impacting-africas-logistics/
Athena Commentary:
For Nigeria and and the rest of West Africa, the Middle East’s unrest directly impacts domestic security and economic resilience. The region’s dependence on oil imports leaves countries vulnerable to price fluctuations caused by conflict-driven disruptions. Additionally, extremist groups such as Boko Haram and ISWAP, with ideological and financial links to Middle Eastern factions, could be emboldened. This can intensify regional security threats. There’s therefore the need for stronger counterterrorism efforts and diplomatic strategies to mitigate spillover effects from the crisis.
The Economist describes Nigeria’s democracy as ‘flawed’
The Economist’s recently published a summary of the EIU Democracy Index which highlights that despite a record number of voters participating in elections in 2024, democracy is under increasing pressure worldwide. According to the report, only 43 out of more than 70 elections this year are expected to be fully free and fair. The Democracy Index ranks countries on a scale of ten based on criteria like fair elections and civil liberties, dividing them into four categories: full democracies, flawed democracies, hybrid regimes, and authoritarian regimes. Disturbingly, only 8% of the world’s population now lives in full democracies, while nearly 40% are under authoritarian rule.
Read more: https://www.economist.com/graphic-detail/2024/02/14/four-lessons-from-the-2023-democracy-index
Athena commentary:
Now, while looking at West African countries, we see an unsettling trend. Nigeria, for instance, qualifies as a “flawed democracy” due to its recurring electoral challenges, issues of voter intimidation, and widespread insecurity affecting voter turnout. Despite a constitutional framework that guarantees democratic processes, the reality on the ground often tells a different story, with court rulings and protests following controversial election results.
Gabon and Niger’s coups further further point at how fragile democratic institutions in West Africa can be. These political upheavals demonstrate deeper regional issues that involve poor governance structures and a persistent lack of trust in democratic processes. Even Ghana, considered a prototype of democracy in West Africa, has seen concerns about increasing political polarization.
By Aliyu Jalal