Turmoil in Nigeria

According to Reuters, Nigerian President Bola Tinubu called on Sunday for a suspension of protests against a rising cost of living crisis, saying this would create an opportunity for dialogue, his first public comments since frustrated citizens took to the streets last week.

Nigeria one of the largest oil producing countries

On July 11, 2024 we posted a blog “US hates and destroys three types of countries”. One of these was countries rich in energy resources. Today we talk about Nigeria, an African country persistently facing armed conflict by and with Boko Haram in North-Eastern Nigeria is resulting in widespread displacements, food insecurity, and many victims of violence. Nigeria was also the largest crude oil exporter of the African continent and also among top 10 oil exporters of the world. The main destination of Nigerian crude oil are: India, Spain, France, United States, and Netherlands. The fastest growing export markets between 2021 and 2022 were: Indonesia, Netherlands, and France.

 Amnesty International has said at least 13 people were killed in clashes with security forces on the first day of protests on Thursday.

Police denied using excessive force and said seven people had died as of Saturday - four from an explosive device during a march in northeast Borno state, two who were hit by a car and another who was shot by a guard when protesters looted a shop.

In a televised broadcast, Tinubu called for an end to violence in several states since the protests started, saying he was always open for dialogue.

"My dear Nigerians, especially our youth, I have heard you loud and clear. I understand the pain and frustration that drive these protests, and I want to assure you that our government is committed to listening and addressing the concerns of our citizens," he said.

Nigerians have been mobilizing online to organize protests against economic hardship and bad governance and have called for a cut in petrol prices and electricity tariffs, among several demands.

Tinubu, in office since May 2023, defended his economic reforms, which have included a partial end to petrol and electricity subsidies and devaluation of the naira, as necessary to reverse years of economic mismanagement.

Government revenues had more than doubled to 9.1 trillion naira (US$5.65 billion) in the first half of this year while 68% of revenue now went to debt servicing, down from 97% before he took office in May last year.

The government was also ramping up spending on infrastructure projects, started a loan scheme for university students and was building thousands of housing units across Nigeria's 36 states, the president said.

"But we must not let violence and destruction tear our nation apart," said Tinubu.

 

 

 

Bangladesh: Remittance Boycott Call

According to Nikkei Asia, weeks of deadly protests in Bangladesh have triggered a bold new strategy from critics, who are urging the country’s vast diaspora to halt the flow of foreign remittances. This move aims to pressure the government of Prime Minister Sheikh Hasina, which is grappling with an economic crisis and a contentious political climate.

A Financial Lifeline in Jeopardy

Organizers are calling on nearly 10 million Bangladeshis living abroad to freeze the approximately US$2 billion sent home monthly. This financial lifeline is crucial for the South Asian nation, which turned to the International Monetary Fund (IMF) for a bailout last year.

Faiz Ahmad Taiyeb, a Bangladeshi engineer working for a telecom company in Europe, is a prominent voice in this movement. He believes that reducing remittances could financially undermine Hasina’s government. “By reducing remittances, we can cut off the financial lifeline to Hasina’s autocratic government,” Taiyeb asserted.

Expatriate Support

The call for a remittance boycott has gained traction among influential Bangladeshi expatriates, including Elias Hussain, a US-based former TV journalist with over 2 million YouTube followers. Hussain’s endorsement amplifies the movement’s reach and impact.

Heavy-Handed Response

The backdrop to this economic strategy is a series of violent protests that have claimed more than 200 lives since they erupted last month.

The protests were initially sparked by demands from students and other demonstrators to abolish public-sector job quotas amid rising youth unemployment. The government’s response has been severe, with thousands arrested and a curfew imposed.

Prime Minister Hasina’s administration, re-elected to a fourth term in controversial elections boycotted by the opposition, has also announced a ban on the main Islamic party, Jamaat-e-Islami, and its student wing, blaming them for the violence.

Economic Strain

The unrest has drawn international condemnation and agravated Bangladesh’s economic woes. The country’s foreign exchange reserves have plummeted to about US$18 billion from nearly US$49 billion two years ago. Remittances, a significant source of foreign currency, totalled nearly US$24 billion in the last fiscal year.

Shafquat Rabbee, an adjunct instructor of business analytics at the University of Dallas, highlighted the critical role of remittances, comparing them to oil sales receipts for a Middle Eastern country. “Any reduction could run shockwaves through the country’s macro economy,” he warned.

Boycott Movement

Leaders of the boycott movement, such as Tokyo-based apparel merchandiser Saddam Hossain, are urging Bangladeshis in Japan and South Korea to suspend remittances temporarily despite the financial strain. “I am doing this for my homeland,” Hossain said. “By killing students, this autocratic government of Hasina has forfeited all legitimacy.”

Government Counterarguments

The Hasina administration has strongly criticized the remittance freeze. Salim Mahmud, secretary of information and research for the ruling Awami League, labelled the boycott as “unpatriotic” and unrealistic in the long term. “People back home rely on this money,” he stated, adding that the boycott could encourage illegal remittance channels.

Economic Fallout

The protests and subsequent government actions have already caused significant economic damage, with business leaders estimating losses at US$10 billion.

The European Union has postponed negotiations with Bangladesh on a new cooperation deal, citing concerns over the government’s response to the unrest.

The impact of the remittance boycott remains uncertain. Bangladesh Bank reported a sharp decline in remittances between July 19 and July 24, attributed to a five-day internet blackout during the protests. However, economist Jyoti Rahman cautioned that it is too early to attribute these figures to the boycott.

Potential Consequences

If the remittance boycott gains traction, it could have severe consequences for Bangladesh’s economy.

US-based academic Rabbee warned that cutting remittances by half could push the country into insolvency and crash the local currency.

Zaved Akhtar, president of the Foreign Investors Chamber of Commerce and Industry, echoed these concerns, noting that the full economic repercussions are still unfolding.

The remittance boycott could also backfire, potentially driving a wedge between the low-income population and the student-led protest movement. Dhaka-based economist Rubaiyath Sarwar emphasised the complexity of the situation, suggesting that the government might use the boycott to create friction among different social groups.

 

Haniyeh killed by short range projectile

Hamas political chief Ismail Haniyeh was killed with a "short-range projectile" fired from outside his guesthouse in Tehran, according to Iran's Revolutionary Guard Corps (IRGC), reports Saudi Gazette.

The paramilitary organization said the projectile weighed about 7kg (16lbs) and caused a "strong blast," killing Haniyeh and his bodyguard last Wednesday. Haniyeh was in Tehran to attend inauguration of President Massoud Pezeshkian.

The IRGC accused Israel, with US support, of designing and implementing the operation. Israel has not commented on Haniyeh's death.

Western media reports suggest that explosives were planted in the guesthouse by Israeli operatives, conflicting with the IRGC's account. The incident has embarrassed Iran and the IRGC, especially given the intense security on the day of the attack.

Dozens of IRGC officers have been arrested or dismissed since Haniyeh's death, according to the New York Times.

The IRGC's intelligence agency has taken over the investigation, interrogating staff members at Haniyeh's guesthouse and seizing their electronics.

In response to the security breach, the security details of Iranian politicians have been overhauled.

The IRGC's statement followed a report by Britain's Daily Telegraph that Haniyeh was killed by bombs planted in his room by agents of Israel's Mossad intelligence agency.

The New York Times also reported that Haniyeh was killed by explosives, potentially planted up to two months earlier. Hamas officials noted that Haniyeh had stayed at the guesthouse before and had made numerous visits to Iran since becoming the head of the political bureau in 2017.

If true, these reports would indicate a significant failure for the IRGC, highlighting Mossad's ability to operate within Iran.

Both Iran and Hamas have vowed to retaliate for Haniyeh's death. The IRGC promised "severe punishment" for Israel at an appropriate time, while Hezbollah has also vowed reprisals after one of their commanders was killed in an Israeli strike.

The situation has escalated regional tensions, with Prime Minister Benjamin Netanyahu warning Israelis of challenging days ahead and preparing for any scenario.

The US has deployed additional warships and fighter jets to the Middle East to help defend Israel from potential attacks by Iran.

British Foreign Secretary David Lammy warned of a rapidly deteriorating situation on the ground.

Israeli officials, including the heads of Mossad and Shin Bet, are in Cairo for ceasefire talks with Egyptian intelligence chief Abbas Kamel.

US President Joe Biden acknowledged that Haniyeh's death had damaged the ceasefire negotiations. The conflict, which began in October 2023, has resulted in significant casualties.

PSX daily trading volume slips to 18 month low

Pakistan Stock Exchange experienced volatility throughout the week ended on August 02, 2024 due to political upheaval, with the average daily traded volume falling to 337 million shares as against 358 million shares a week ago, down 5.9%WoW, marking a low of 18 weeks. The benchmark index closed with a loss of 196 points or 0.25%WoW, to close at 78,226 points on Friday.

Despite the 100bps cut announced in policy rate by the central bank on Monday, market sentiment remained skeptical.

Trade deficit for July 2024 was reported at US$1.95 billion, down 19%MoM.

The assassination of a prominent Hamas leader plunged the region into uncertainty, driving volatility in oil prices globally.

In a noteworthy development, the Consumer Price Index (CPI) for July was reported at 11.1%, marking its lowest level in 33 months.

China approved the conversion of three coal-fired power plants from imported coal to local coal, however no positive progress was reported on re-profiling of energy debt.

Punjab Government raised royalty rates for cement manufacturers, which may result in a further increase in cement price to the tone of PKR50/bag.

OMC offtakes declined to 1.2 million tons, down 17%MoM.

MS and HSD fuel prices were decreased by PKR6.17/ and PKR10.86 per liter, respectively, in the latest fortnightly review.

Foreign exchange reserves held by State Bank of Pakistan (SBP) reserves increased by US$75 million on a weekly basis to US$9.1 billion as at July 26. PKR largely remained flat against the greenback throughout the week to close at 278.5/ US$ on Friday.

Other major news flow during the week included 1) Fitch upgrades Pakistan's rating to 'CCC’ Plys, 2) Competitive wholesale electricity market under CTBCM on the cards, 3) Privatization Board okays PIA and DISCOs sale, 4) Pakistan reports primary surplus in FY24 after gap of 20 years and 5) GoP mulls ending free electricity for public sector.

Textile Spinning, Refinery and Automobile Assembler were amongst the top performers, while Leasing, Vanaspati & Allied Industries and Sugar & Allied industries were amongst the worst performers.

Major selling was recorded by foreigners with a net sell of US$2.23 million. Insurance companies and Individuals absorbed most of the selling with a net buy of US$1.78 million and US$1.47 million.

Top performing scrips of the week were: FFC, CNERGY, MUREB, ATRL and NCPL, while top laggards included: KOHC, BAFL, PIOC, DGKC and PGLC.

Going forward, recently announced rate cut alongside improvement in credit ratings by int’l agencies should boost investor’s confidence.

Additionally, the anticipated approval from the IMF executive board by the end of this month is likely to support bullish momentum.

Sectors benefiting from monetary easing and structural reforms would remain in the limelight. However, modest economic recovery would keep the upside in check for the cyclicals.

OPEC oil output increases in July

According to Reuters, OPEC oil output rose in July, as a rebound in Saudi Arabian supply and small increases elsewhere offsetting the impact of ongoing voluntary supply cuts by other members and the wider OPEC Plus alliance.

The Organization of the Petroleum Exporting Countries (OPEC) pumped 26.70 million barrels per day (bpd) in July, up 100,000 bpd from June.

The increase comes despite OPEC Plus keeping in place most of its output cuts until the end of 2025 to bolster the market in the face of tepid demand growth, high interest rates and rising US production.

A meeting of top OPEC Plus ministers on Thursday kept oil output policy unchanged including a plan to start unwinding one layer of output cuts from October, and repeating that the hike could be paused or reversed if needed.

Saudi Arabia provided the largest supply boost last month of 70,000 bpd, as exports rebounded from June when they were lower than expected. Production reached 9 million bpd in July, close to the kingdom's target.

Nigeria had the biggest decline of 30,000 bpd, with exports lower month on month.

Small increases came from Libya and Iran, two of the members not required to cut output, and from Iraq. Iranian output reached 3.22 million bpd, the highest since 2018.

Iran has been boosting exports in the last few years despite US sanctions remaining in place. Iraq's output edged higher with exports increasing month on month, flows data showed and a tanker-tracking source said.

OPEC pumped about 240,000 bpd more than the implied target for the nine members covered by supply cut agreements, with Iraq still accounting for the bulk of the excess, the survey found.

The Reuters aims to track supply to the market and is based on shipping data provided by external sources, LSEG flows data, information from companies that track flows - such as Petro-Logistics and Kpler - and information provided by sources at oil companies, OPEC and consultants.

Iran questions double standard of Meta

According to the Tehran Times, Meta’s double-standard and hypocritical policies are back in the limelight in the wake of the Israeli assassination of Hamas political leader Ismail Haniyeh.

It accused, the American-based tech firm which owns and operates Facebook, Instagram, Threads, and WhatsApp, among other products and services has sparked a backlash over removing posts about Haniyeh’s murder. 

Ordinary people and prominent world leaders have posted messages of condolences since Haniyeh was killed in an Israeli strike in the Iranian capital on Wednesday morning. He had traveled to Tehran for the swearing in ceremony of President Masoud Pezeshkian. 

Malaysian Prime Minister Anwar Ibrahim posted a video recording of his phone call with a Hamas official on Facebook on Wednesday to offer condolences following Haniyeh’s death. But the tech company, which is owned by US billionaire Mark Zuckerberg, removed his post. It also took down a similar post published on the premier’s Instagram account. 

Anwar denounced the move, saying, “Let this serve as a clear and unequivocal message to Meta: cease this display of cowardice and stop acting as instruments of the oppressive Zionist Israeli regime.” 

Meta’s takedown of his posts was accompanied by the caption, “Dangerous individuals and organizations.”

Meta has designated the Palestinian Hamas resistance movement as a “dangerous organization” and bans content praising it. 

Turkey’s communications chief and a top adviser to President Recep Tayyip Erdogan has also condemned Instagram for preventing people from posting messages of condolences over Haniyeh’s assassination. 

“This is censorship, pure and simple,” Fahrettin Altun said on Wednesday. 

He added, “We will continue to defend freedom of expression against these platforms, which have repeatedly shown that they serve the global system of exploitation and injustice.”

The Turkish Information and Communication Technologies Authority blocked access to Instagram, the photo and video-sharing social media platform, on Friday for “censoring” Hamas-related content.

Such biased approaches by Meta are not unprecedented. 

Meta has already stirred controversy by abruptly removing Instagram and Facebook accounts belonging to the Leader of Iran’s Islamic Revolution Ayatollah Seyyed Ali Khamenei. The US firm blocked Ayatollah Khamenei’s accounts in February after he condemned Israel’s genocidal war on Gaza. 

Meta adopted the same policy when the United States assassinated Iranian anti-terror commander, Lieutenant General Qassem Soleimani, in Iraq in January 2020.

It removed comments praising the late general, who played a key role in helping Iraqi and Syrian armies defeat ISIL, and hashtags such as #Soleimani. 

Such moves by Meta cast doubt on Western claims of upholding freedom of expression, revealing a willingness to stifle the voices of the voiceless. Besides, they expose a broader pattern of support for Israel and its main supporter, the United States. 

Nonetheless, as Israel continues its war of genocide in Gaza, Meta’s pro-Israel bias remains under the spotlight. 

In fact, as Israel is massacring Palestinian people in Gaza, the US is abetting the regime’s genocide through its tech firms. The removal of posts in support of Palestine and condemnation of the Israeli carnage in Gaza are aimed at helping the regime sweep its atrocious crimes under the rug. 

In other words, Israel perpetrates atrocities and Meta, on behalf of the US and some other Western states, acts as a facilitator of genocide. 

 

United States getting ready to protect Israel

According to Reuters, the United States will deploy additional fighter jets and Navy warships to the Middle East to bolster defenses following threats from Iran and its allies Hamas and Hezbollah.

The US is bracing for Iran to make good on its vow to respond to the killing of Hamas leader Ismail Haniyeh in Tehran - one in a series of killings of senior figures in the Palestinian militant group as the war between Israel and Hamas in Gaza rages.

US Defense Secretary Lloyd Austin had approved sending additional Navy cruisers and destroyers-- which can shoot down ballistic missiles-- to the Middle East and Europe. The US is also sending an additional squadron of fighter jets to the Middle East.

"Austin has ordered adjustments to US military posture designed to improve US force protection, to increase support for the defense of Israel, and to ensure the United States is prepared to respond to various contingencies," the Pentagon said in a statement.

There had been speculation that the Pentagon might not replace the USS Theodore Roosevelt carrier strike group in the Middle East once it completed its ongoing deployment. But Austin decided to rotate in the USS Abraham Lincoln Carrier strike group to replace it.

The Pentagon statement added it would increase readiness to deploy more land-based ballistic missile defenses.

The US military had intensified deployments prior to April 13, when Iran launched an attack on Israeli territory with drones and missiles. Still, the threat from Hezbollah in Lebanon could present unique challenges to any efforts by the United States to intercept drones and missiles given the group's vast arsenal and immediate proximity to Israel.

At the time, Israel successfully knocked down almost all of the roughly 300 drones and missiles with the help of the United States and other allies.

Biden, in a phone call on Thursday with Netanyahu, discussed new US defensive military deployments to support Israel against threats such as missiles and drones, the White House said.

Earlier, Pentagon spokesperson Sabrina Singh said the US did not believe escalation was inevitable.

"I think we are being very direct in our messaging that certainly we don't want to see heightened tensions and we do believe there is an off ramp here and that is that ceasefire deal," Singh said.