Browse content similar to 10/06/2016. Check below for episodes and series from the same categories and more!
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with Aaron and World Business Report. | :00:00. | :00:18. | |
Africa's biggest economy faces its worst crisis in decades | :00:19. | :00:22. | |
as airlines pull out and foreign currency runs low. | :00:23. | :00:26. | |
Plus - you've heard of Carlsberg, but what about Hisense? | :00:27. | :00:30. | |
Or the state oil company of Azerbaijan? | :00:31. | :00:33. | |
They're just some of the companies sponsoring Euro 2016. | :00:34. | :00:35. | |
We'll be finding out what's in it for football's brand new friends. | :00:36. | :00:47. | |
It is Friday. We have that feeling. This is a bite-size snapshot of | :00:48. | :01:02. | |
everything in the world of business and money. We have lots going on. | :01:03. | :01:04. | |
We start in Nigeria, because Africa's biggest economy | :01:05. | :01:06. | |
is facing its worst crisis in decades. | :01:07. | :01:08. | |
The price of oil, which is how the country makes most | :01:09. | :01:11. | |
of its money, is less than half what it was two years ago. | :01:12. | :01:14. | |
That's brought growth to a standstill. | :01:15. | :01:16. | |
And there is a chronic shortage of foreign currency - | :01:17. | :01:19. | |
so much so that two major airlines, United and Iberia, | :01:20. | :01:22. | |
have said they will no longer fly to the country because of a lack | :01:23. | :01:25. | |
of demand and trouble collecting payments. | :01:26. | :01:30. | |
Nigeria's currency, the naira, is pegged to the US dollar | :01:31. | :01:37. | |
at this - an official exchange rate of 198. | :01:38. | :01:41. | |
The problem is it's worth nothing like that anymore. | :01:42. | :01:46. | |
In fact, on the black market on Thursday, | :01:47. | :01:47. | |
a US dollar would have cost you 368 naira. | :01:48. | :01:52. | |
Two weeks ago, the government promised to free up the exchange | :01:53. | :01:55. | |
rate so it reflects reality - but they have been stalling. | :01:56. | :02:00. | |
They know it's going to mean a hefty devaluation. | :02:01. | :02:04. | |
That means foreign firms are reluctant to invest in Nigeria. | :02:05. | :02:09. | |
They are fearful of getting their money out again, | :02:10. | :02:13. | |
There has been a plunge in capital coming into the country. | :02:14. | :02:24. | |
In the first three months of this year, it was down almost 75% on last | :02:25. | :02:28. | |
With good reason, perhaps - for instance airlines are now owed | :02:29. | :02:34. | |
$600 million from tickets sold in Nigeria that the government has | :02:35. | :02:37. | |
Still, some economists are hopeful that the promise of currency reform | :02:38. | :02:45. | |
will mean much needed foreign cash coming in soon. | :02:46. | :02:52. | |
It sends a signal even to investors out there because now everybody has | :02:53. | :02:55. | |
been waiting for an adjustment of the currency so now that | :02:56. | :02:58. | |
investors have seen that, yes, this is the line or the path | :02:59. | :03:01. | |
that the central bank is towing, they're likely to bring | :03:02. | :03:03. | |
It was mentioned also that one of the supply | :03:04. | :03:06. | |
sources is from foreign investors, so I expect that at least down | :03:07. | :03:09. | |
the line, now that this message has been passed across, | :03:10. | :03:12. | |
we should see some investment flows coming in. | :03:13. | :03:15. | |
Anna Rosenberg is director for Sub-Saharan Africa Research | :03:16. | :03:17. | |
Great to have you in. For the uninitiated who don't follow this | :03:18. | :03:32. | |
kind of story, we keep saying Nigeria is having a problem with | :03:33. | :03:35. | |
foreign currency. Can you break that down? What does that mean for an | :03:36. | :03:42. | |
economy if it is lacking in foreign currency? For an economy like | :03:43. | :03:44. | |
Nigeria, it means a lot. They depend on imports. It does not produce as | :03:45. | :03:50. | |
much locally. Oil is a major source of foreign currency earnings. It | :03:51. | :03:55. | |
sells it in dollars, so Nigeria gets the dollars and uses it to... Is | :03:56. | :04:04. | |
lack buy products. Does that mean they are importing less? Yes, to | :04:05. | :04:10. | |
some extent, because they can't get access to goods because they can't | :04:11. | :04:14. | |
pay for them. You have a massive problem with inflation because | :04:15. | :04:18. | |
prices are going up for pretty much everything, simple things like | :04:19. | :04:23. | |
tomatoes, 100% price increase. Is that why be Nigerian government | :04:24. | :04:32. | |
Israelite and to put its currency, flight it? If it devalues its | :04:33. | :04:42. | |
currency, then things go up, the prices of everything? Fear of hyper | :04:43. | :04:49. | |
inflation. There is a lot of political fear as well, because the | :04:50. | :04:53. | |
president, who had a brief stint of power in 80s, witnessed massive | :04:54. | :04:57. | |
currency depreciation that was supposed to fuel local | :04:58. | :05:01. | |
industrialisation but didn't, and caused massive price increases and a | :05:02. | :05:07. | |
major economic crisis. He is reluctant to contribute to a new | :05:08. | :05:10. | |
depreciation of the economy. But at this point it is a necessity. | :05:11. | :05:16. | |
Absolutely. Is it almost like a dog chasing its tail that foreign | :05:17. | :05:20. | |
investors are sitting back and looking at what is going on with | :05:21. | :05:24. | |
Nigeria and going, at the moment, I don't want to put money in to that | :05:25. | :05:28. | |
economy? Yes. To some extent is true. We work with Western | :05:29. | :05:33. | |
multinationals that do business across emerging markets. Some have | :05:34. | :05:38. | |
been investing in Nigeria for the past three years aggressively, and | :05:39. | :05:42. | |
they still believe in the long-term opportunity of country. They are | :05:43. | :05:46. | |
more cautious and are revising targets, but remain committed. Then | :05:47. | :05:51. | |
there are those who have been eyeing Nigeria for a while and looking for | :05:52. | :05:55. | |
excuses not to make more significant investments because there are so | :05:56. | :05:59. | |
many problems in the world they preferred to focus on the few big | :06:00. | :06:03. | |
growing economies like India or even Poland. They are more reluctant. | :06:04. | :06:06. | |
Short and sweet, but thank you. To football now - because you can't | :06:07. | :06:11. | |
fail to have noticed that the European Championship - | :06:12. | :06:14. | |
otherwise known as Euro 2016 - It is the most-watched sports event | :06:15. | :06:17. | |
in the world after the Olympics Companies have spent some $450 | :06:18. | :06:23. | |
million to be official sponsors - But are they getting good | :06:24. | :06:28. | |
value for money? We've put together a little | :06:29. | :06:32. | |
explainer for you. Jacques de Cock is from | :06:33. | :06:46. | |
London School of Marketing. Great to have you with us. Who are | :06:47. | :08:00. | |
the official sponsors for Euro 2016? The major one doing it every year is | :08:01. | :08:04. | |
Adidas, Donald, Carlsberg and Continental. You saw that clip and | :08:05. | :08:12. | |
that study with people who thought Carlsberg is the official beer, but | :08:13. | :08:17. | |
they thought it was something else. Does it really pay? Some of these | :08:18. | :08:20. | |
companies have paid millions and not getting recognition. Before the | :08:21. | :08:25. | |
event, they know the sponsors of their teams. If you ask an English | :08:26. | :08:35. | |
person who is sponsoring your 216 -- Euro 2016, they will say it Nike. | :08:36. | :08:41. | |
But then never see on television Adidas, McDonald's and all of those | :08:42. | :08:46. | |
people. They will see them. Football seems to have new friends. The state | :08:47. | :08:53. | |
oil company of Azerbaijan? And this Chinese tech company called Hisense? | :08:54. | :08:58. | |
As a vagina is really weird. They want to prove -- Azerbaijan is | :08:59. | :09:08. | |
really weird. What better opportunity than a billion people | :09:09. | :09:14. | |
seeing their brand in the next month. After a month people will no | :09:15. | :09:23. | |
what the state all coming is. Also interesting, this Chinese take them. | :09:24. | :09:27. | |
They are having a big push into football and sports, so it is | :09:28. | :09:35. | |
interesting we have a Chinese them on board. Hisense is a state firm | :09:36. | :09:42. | |
that is growing out of their setup. Televisions, mobile phones, and they | :09:43. | :09:45. | |
will make a push of their own brand in Europe. They will become the new | :09:46. | :09:51. | |
Samsung or whatever. That is right they sponsoring football because | :09:52. | :09:54. | |
they get maximum visibility. It is the biggest tournament by a long | :09:55. | :09:58. | |
while. We appreciate your time. Thank you for coming in. Have a | :09:59. | :10:03. | |
great weekend. Will I have time for this? Let me leave you with a couple | :10:04. | :10:08. | |
of stories making headlines around the world. | :10:09. | :10:10. | |
The downturn in the UK oil and gas sector could could have cost more | :10:11. | :10:13. | |
than 120,000 jobs by the end of this year, according to a report. | :10:14. | :10:17. | |
Oil Gas UK says 84,000 jobs linked to the industry went in 2015, | :10:18. | :10:20. | |
with 40,000 losses expected this year. | :10:21. | :10:22. | |
Many companies have been struggling under the weight of a sustained fall | :10:23. | :10:25. | |
It is not a pretty picture in Asia. All numbers in the red. Will be fed | :10:26. | :10:46. | |
raise the cost of borrowing in the world's the best economy? -- | :10:47. | :10:55. | |
biggest. You can find me on Twitter. I will be back to take a look at the | :10:56. | :10:58. | |
pictures. -- papers. | :10:59. | :11:03. |