The cryptocurrency trading market has boomed over recent years, quickly becoming one of the biggest drivers of new traders into the financial world. Whether it is Bitcoin, Ethereum, Litecoin, or others, the soaring growth trends and volatile trading patterns provide cryptocurrencies with a renowned reputation.
With cryptocurrency still relatively new to the financial scene, its growth is only predicted to increase in the coming years. Since the potential investment pay-offs are so high, this form of trading is becoming increasingly popular. However, it is imperative that one understands the market before entering it in order to avoid devastating losses.
What is Cryptocurrency Trading?
One way of understanding cryptocurrency trading is by comparing it to forex trading. Forex (or foreign exchange) trading involves trading currencies. For example, the U.S. dollar could be used to purchase an option in euros, which the investor will then sell, hopefully for a profit. Cryptocurrency trading works in a similar way—the investor can purchase a particular cryptocurrency with U.S. dollars, which can then be sold for U.S. dollars.
Cryptocurrencies are very volatile and it is still a relatively small and new market, lacking many of the regulations that are imposed on other financial sectors. This means that the value of a currency can be transformed overnight, bringing with it the potential for huge profits and losses. This is why it is recommended that traders who are new to the market start slowly and build up a portfolio over time, in a similar style to dollar-cost averaging in stock investing. Using a crypto VIP signal service is a perfect risk-reduction option for both novice traders and those lacking the time for constant monitoring, as it constantly watches the market, suggesting the best times to buy and sell.
Types of Cryptocurrency
With over 1,000 different forms of cryptocurrencies on the market, it can be hard to know where to get started.
For those just starting out, it is recommended that they avoid fledgling cryptocurrencies, as they usually have more limited traditional opportunities, making it hard to find a buyer when it comes time to sell. Focusing on one or two established cryptocurrencies will help to ensure a more active market. For example, Bitcoin represents 38% of the market and Ethereum takes up 18%, making either of these a safe option.
Some other forms that are commonly traded but slightly less widely available at the exchange are:
Dash
Ripple
Monero
Litecoin
Cryptocurrencies are generated by specialized computers with a method called mining. Since mining requires a lot of processing power in order to produce new coins, the value of these currencies, at least in part, is born in this process. In addition to this, some cryptocurrencies will only ever have a finite number of coins in existence. Bitcoin, for example, is limited to 21 million coins, 17 million of which are currently in circulation.
Cryptocurrency is one of the most exciting trading options on the market, and has been for a while now. With the potential for even the smallest cryptocurrencies to bloom overnight, it offers real potential pay-offs, and this is predicted only to grow and grow.
The Covid-19 pandemic has triggered the sharpest and deepest contraction of GDP (Gross Domestic Product) in the history of capitalism as globalisation has gone into reverse. International supply chains, which were once the exemplars of organised production and the backbone of trade, have collapsed; an emphasis on the national economy is back. Overseas travel and tourism have almost stopped entirely. Within the last few weeks, tens of millions of workers have become unemployed and millions of small businesses and their suppliers have closed down. In Europe, the banks, railways, airlines, airports, hotels, restaurants, and pubs are on the verge of bankruptcy. The global financial markets have been plunged into turmoil, share prices have collapsed, and foreign capital investment has halted. Oil prices have crashed on international markets as demand for crude evaporates. This fall has been exacerbated by an inopportune price war between Saudi Arabia and Russia.
Although some countries are now beginning to move slowly towards easing lockdown restrictions the effects of the pandemic have already destroyed the livelihoods of many and have damaged the prospects for future growth. Key components of globalisation have either ceased to function properly or have disappeared completely.
The world’s highest official coronavirus death tolls have been seen in two countries, namely the United States and the United Kingdom. This was unexpected because both of these countries had time to prepare after warnings from scientists and cautionary examples from China and Italy. Moreover both countries have a strong research base, access to vast resources, and millions of scientists, engineers, and medical professionals, yet were still unable to deal with the pandemic effectively.
Global Economic Crisis
The question is how bad will the downturn become? And how soon will the economic recovery begin? Will the recession be double dip, also known as W-shaped downturn, i.e., drop twice before it recovers to its previous growth rate, or more like an L-shaped scenario, otherwise known as a ‘depression’ i.e., a deep recession with no recovery for several years, just as Japan witnessed since the early 1990s (Siddiqui, 2015a). All indicators tell us so far that the crisis is going to deepen and will most likely resemble the L-shaped scenario. We should not expect a return to business as usual.
Last week the IMF (International Monetary Fund) warned that the world economy is facing its worst recession since the ‘Great Depression’ of the 1930s with output likely to fall sharply by as much as 6.5% in 2020. Gita Gopinath, the IMF’s chief economist, said the crisis could knock US$ 9 trillion (£7.2 trillion) off global output within the next two years. (See Figure 1 and Figure 3) For all of us who lived through the Asian Financial Crisis of 1997, these warnings will bring back stark memories of currency crashes, property prices tumbling and millions out of work and the wealth that was built up in decades disappearing in a matter of months. The covid-19 pandemic economic crisis will be even worse – our generation’s Great Depression.
The IMF says governments must help these households and firms survive because the impact of the coronavirus will be “severe, across the board and unprecedented”. The IMF also predicts that the annual growth of the emerging economies will fall sharply. (see Figure 3) The Fund said this scenario could trigger a downward spiral in heavily-indebted economies. It said investors might be unwilling to lend to some of these nations, which would push up borrowing costs. In fact, only a few countries in the world have that sort of financial power to deal with this. Many are grappling with huge populations, limited financial resources, and the very real possibility of political instability as their people get sick, hungry or both.
The US economy is expected to contract around 6% by the end of this year (Siddiqui, 2019a), which is its biggest decline since 1929 and an evaporation of 30% of aggregate demand over the next three months is anticipated. However, a quick return to work could lead to an increase of number of deaths in the US, with little or no reversal in these projected economic outcomes.
To understand the adverse impact of the corona pandemic on the economy, we need to analyse its effect on different industries. Consumption makes up 70% of the US GDP, but consumption has dropped as businesses close and as households postpone about major purchases as they worry about their finances and their employments. In the US, investment makes up 20% of GDP, but businesses are postponing future investment as they wait for full picture of the corona. Tourism music, sports, entertainment, and restaurants constitute 4.2% of GDP. With restaurants and film theatres are closed and the manufacturing sector constitute nearly 11% of the GDP, but most of this is now disrupted, because global supply chains industries and companies have shut down in anticipation of reduced demand.
According to the IMF forecast, the US economy will shrink by almost 6% this year, compared with a contraction of about 7% in the EU countries and 5% in Japan, while the other experts estimated an annualised second-quarter decline in the US could be as much as 40%. However, if the government were not spending several trillion US dollars to keep businesses afloat, wages to unemployed and benefits to poor sections of the society, the damage would be worse. Over six weeks has passed since national lockdown was declared in UK to limit the spread of Covid-19, during which time it has become clear that the country is also heading for its deepest recession since the ‘Great Depression’.
The US and UK governments have pumped trillions of dollars into their economies and have reduced interest rates to combat recession. For instance, the UK government has launched a job retention scheme to pay up to 80% of the workers’ wages. Nearly 400,000 companies have applied to pay nearly 3 million people through furlough payments, which have cost the UK government £2 billion until now. There is also a similar scheme to compensate five million self-employed workers. Unfortunately, many millions will not be covered under such plans. For businesses, the government has provided up to £300 billion of loans although few of these have so far been awarded by the banks responsible for processing them.
The Office of Budget Responsibility (OBR) has predicted that the pandemic crisis could cause a 35% fall in GDP. In fact the economic loss depends on the length of lockdown measures. If lockdown lasts for three months, then GDP will shrink by 13% for 2020. The OBR also predicted more than 2 million people could lose their jobs. David Blanchflower, a former Bank of England rate-setter, has predicted 6 million job losses (i.e. 21% of the workforce). The budget deficit will rise to an unprecedented level and could reach £273 billion by the end of 2020, which is nearly 14% GDP.
The impact of the virus and lockdown has been very different across industries and parts of the UK. Tourism, hotels, restaurants, entertainment, and transport are among the long list of sectors which have been hardest hit by this pandemic. Furloughing is also relatively higher in the North East of England and in London, and South-East England. These current economic variations highlight the need for recovery policy which takes account of local socio-economic needs. Corona pandemic has highlighted the importance of skills. Over decades, in the UK the neoliberal policies, including austerity and over-reliance on the market have proved to be ineffective. But currently millions are facing unemployment, the government need to find ways of help people to find jobs.
The South European countries namely Greece, Italy and Spain, could see their economies contract by as much to 9-10 percent by next spring, while unemployment rates could reach as high as to 19-20% (See Figure 2). The Chinese economy is expected to expand only 1.2% by the end of 2020, which is China’s slowest growth since it embarked economic reforms in 1978 (See Figure 3).
Due to the fall in the demand, the factories are stopping to produce and they do not carry out production. As a result, investments decline, there would be another round of reduction in incomes and consumption levels. So, if jobs and incomes collapse, so do consumptions and savings. But, some consumption has to continue, so people withdraw their savings and past deposits from the banks and financial institutions. A vast majority of the workers in the developing countries are working in the unorganised sector and the poor have low incomes and as their incomes stop, their consumption drastically falls. For example, in India at present, the workers who are now migrating from the big cities to their villages where they feel that their families will at least get food. This model of uneven development, which forces people to migrate to big cities to find employment, has to be re-examined after the pandemic.
In India, the world’s second largest population faces coronavirus with too little money and too few resources for the needs of its people and economy (Siddiqui, 2019b). A large number of people are facing hunger, unemployed, and complete loss of income (Siddiqui, 2019e). The government money offered to support businesses and workers is insufficient to the task and nearly half of the package of measures consists of things already included in an existing scheme. The Indian government does have 77 million tons of grain in buffer stocks, which means there is plenty available for distribution without risking inflation, but the government is reluctant to distribute food among the poor households.
Once lockdown is slowly lifted in India, the government must put more money into village-based employment programmes so that immigrant workers who have returned to their villages from mega-cities like Mumbai, Delhi, Bangalore and Chennai can find some means of livelihood. Subsidies should also be extended to SMEs, especially those supplying essential goods and services. There is a need to reorient India’s economic growth strategy on the basis of its strong internal market in agriculture, which provides jobs to nearly half the country’s workforce. Aagricultural growth has the potential to boost demand and thus employment in other sectors too (Siddiqui, 2018a; also see 2017). A great deal of attention paid to economic growth rates in India in recent years, while the on-going agrarian crisis is being ignored (Siddiqui, 2015b).
During the last two decades the agriculture sector in India has witnessed crisis in such as decline in rates of growth, rising numbers of farmers’ suicides, declining prices of several crops, and a widening gap between the agriculture and non-agriculture sectors. The agriculture sector is experiencing unprecedented crisis with stagnation or declining rural employment growth and as a result, food security and employment opportunities for the rural poor have been eroded. The agriculture sector plays an important role in the Indian economy and its better performance is crucial for inclusive growth. This sector at present contributes only 17% of the GDP, while it provides employment to 57% of the Indian work force (Siddiqui, 2019b).
For successful inclusive growth and development, agricultural growth is a pre-requisite. It is important to implement land reforms, improve institutional credits and increase investment in rural infrastructure, to assist small and marginal farmers and also to diversify the rural economy. Until a level playing field is created across the world, otherwise trade liberalisation in agriculture will simply prop-up developed countries farmers at the expense of farmers in the developing countries like India. The neglect of agriculture in India could and must be reversed through a policy of government remuneration procurement prices along with the use of tariffs to insulate domestic food grain prices from world price fluctuations. Furthermore, planting trees on unused lands could improve the quality of air and the overall environment whilst also providing additional employment opportunities in areas where they are now sorely needed.
At present in India, there is a large stock of foodgrains with the government and also bumper autumn crops are being harvested, which means there no danger of inflation. The levels of inequality are very high in India, and the wealth taxes are non-existence. There is the current low level of India’s tax-to-GDP ratio, then when the recovery begins taxes on the rich has to be raised to mobilise the resources to repay the debts. However, if debt-financed expenditures are not undertaken, then recession will intensify and turns into a depression. Therefore, a large fiscal stimulus is an absolute necessity in the current context and without such a stimulus, the humanitarian crisis would intensify.
In India, as elsewhere, the lockdown has reduced social interaction, leading directly to a fall in output and employment. This measure mitigates the physical impact of disease but exacerbates the economic crisis. Hence, the government must intervene to flatten the recession curve to mitigate the adverse impact of the pandemic.
The coronavirus was detected last December in China and the world had time to prepare for the pandemic in the manner China had shown to be effective in confronting it. Other East Asian governments, such as Singapore, Taiwan, South Korea and Vietnam, adopted highly successful policies to fight the spread of Covid-19 without causing massive economic disruption. However, the West refused to learn from these examples and failed to take any strong measures to prepare for and to act against the spread of the coronavirus. The two countries supposedly best prepared for a pandemic, the US and the UK, ranked first and second in the Global Health Security Index, performed poorly and proved incapable of handling a rapidly-developing emergency situation. Eventually, the clear evidence of success in East Asia and also in Germany forced even the most reluctant governments to impose lockdowns and to increase the number of people tested for coronavirus. Even so, testing and personal protective equipment (PPE) remained restricted owing to the lack of strategic stockpiles and national manufacturing capability and therefore health staff were left to cope with excessive workloads without the health and safety provisions they had a right to expect.
Economic Policy Failure?
The bankruptcy of neoliberalism is clearly exposed by vastly different responses to the covid-19 pandemic of the world’s two most economically powerful countries. The US was reluctant to take immediate measures to tackle the pandemic and has seemed confused about the way forward ever since, while China from the beginning gave state institutions full responsibility to contain the virus and took decisive measures that led to a successful outcome, at least in the interim.
This pandemic has proved once again that the neoliberal attitude toward public policy deprives societies of the resilience they need to withstand large-scale disruption. At present the private sector in the advanced and in the developing economies has become supportive, and even desperately enthusiastic, for government spending. The proponents of the free market and opponents of government intervention in economic policy are now pleading for unlimited public spending to support asset prices and to save businesses and the economy.
When capitalism faced crisis and a falling rate of profit in the 1980s, it opted for globalisation and the transfer of production from North America, Europe and Japan to take advantage of low wage economies, low regulation, and much higher rates of exploitation available in developing countries (Siddiqui, 2016; also see 2019c). During periods of falling interest rates capitalists compete for financial assets leading to an increase in asset values, which are then used to support further borrowing, more investment in financial assets, which further inflates their value, all without generating any productive economic activity. Consequently, since 2008, productivity across the advanced economies has stagnated and GDP growth has been lower than any decade since 1950 (Siddiqui, 2020a; also see 2020b). At the same time debts have grown enormously, particularly in the developing economies. For example, according to IMF, the total debts of the 30 largest developing economies has reached US$ 72.5 trillion, an increase of 168% in the last ten years.
Around the globe desperate measures are being taken by national governments and international agencies to support the financial system with little provision for ordinary citizens in the developed world and often no provision at all in the developing world. At an emergency submit for the G20 – G7 and emerging economies including China, India, Russia, Brazil, Turkey and Indonesia – on 26th March it was declared that “we are injecting over US$ 5 trillion into the global economy”. As the COVID-19 pandemic continues the rich countries now are planning to pump more money i.e. US$ 9 trillion to help businesses and people to get through the current economic crisis, which is US$ 1 trillion more than announced last month (see Figure 4).
The European Central Bank (ECB) will follow expansionary fiscal policy in the form of deficit spending. Economic expansion is to be backed by Eurobonds. This increased spending will keep business solvent and provide social security measures for workers. The IMF is considering emergency funds for developing countries which could amount to US$ 50 billon. However, these IMF loans are to help with “external financing gaps”, which means they are designed to bail out foreign creditors, not the people of the debtor countries. The harsh terms and conditions that invariably come with these loans will add to the crushing burden on the ordinary people of those countries unlucky enough to receive them.
In early 2020, the world economy was already slowing down, including even the best performing advanced economy, the US. The pandemic hit the economy after nearly four decades of excessive reliance on market forces to achieve greater efficiency. This neoliberalism fostered deindustrialisation and virtual collapse of the manufacturing base, while financial sectors grew to unsustainable proportions (Siddiqui, 2017; also see 2019d). Inevitably, this gross sectoral imbalance left the US and the UK unable to produce enough ventilators and personal safety equipment for their doctors, nurses and care workers.
The pandemic has revealed the pitfalls of capitalist globalization and has restored an understanding of the importance of sovereignty, national economy, and domestic markets. Even so, the potential for cross-border movements of finance has led to further pressure on countries in the developing world to restrict fiscal deficits even in the midst of global economic collapse. As a result the crisis will have a more adverse impact on the lives of the majority of people in Africa, South Asia and Latin America, who have no welfare benefits to protect them, and who rely on incomes drawn from unorganised sectors that have not enjoyed any government support. In addition the exodus of money from developing countries into US dollar dominated assets results in a depreciation of their currencies and thus increases the amount of their overseas debts, which are US-dollar denominated (Siddiqui, 2020a). At least 102 countries have approached the IMF for financial support to deal with the covid-19 pandemic.
Conclusion
Capitalism as an economic system is based on individualism, self-interest, greed and competition. It provides optimal conditions for the prosperity of elites on the assumption that the broader population will gain “trickle-down” benefits not otherwise available to them. In the midst of a pandemic in which governments have had to secure employment, incomes, supply chains, and the health system, whilst also supporting the financial system and the wider economy it has become painfully obvious that free trade and markets are incapable of supplying the resilience and core competencies that societies require and their populations demand.
Finally, it seems that Keynesian policies are back after four decades in the wilderness. Key services and utilities must be owned and managed by the government to ensure that basic needs are met and that essential services serve the people rather than profit. Public services must be expanded to create a society based on community, solidarity and respect for nature. Along with such policies, there is also need for progressive taxation so that the putative “wealth creators” who have benefitted from four decades of neoliberalism have the opportunity to contribute fully to the society that has supported them so generously.
Dr Kalim Siddiqui is an economist, specialising in International Political Economy, Development Economics, International Trade, and International Economics. His work, which combines elements of international political economy and development economics, economic policy, economic history and international trade, often challenges prevailing orthodoxy about which policies promote overall development in less developed countries. Kalim teaches international economics at the Department of Accounting, Finance and Economics, University of Huddersfield, U.K.. He has taught economics since 1989 at various universities in Norway and U.K.
References:
Siddiqui, K. 2020a. “The US Dollar and the World Economy: A critical review”, Athens Journal of Economics and Business. 6(1): 21-44. January, https:doi:10.30958/ajbe/v6i1.
Siddiqui, K. 2020b. “A Perspective on Productivity Growth and Challenges for the UK Economy”,Journal of Economic Policy Researches 7(1): 1-22.
Siddiqui, K. 2019a. “The US Economy, Global Imbalances under Capitalism: A Critical Review”, Istanbul Journal of Economics 69(2): 175-205, December. ISSN 2602-4151.
Siddiqui, K. 2019b. “The Economic Performance of Modi’s Government in India: The politics of Hindu right”, World Financial Review, July/August, pp. 12-26.
Siddiqui, K. 2019c. “Economic Transformation of China and India: A Comparative Political Economy Perspective”, Asian Profile, 47(3): 243-259.
Siddiqui, K. 2019d. “Government Debts and Fiscal Deficits in the UK: A Critical Review” World Review of Political Economy, 10(1): 40-68, Pluto Journals. DOI: 10.13169/worlrevipoliecon.10.1.0040.
Siddiqui, K. 2019e. “The Political Economy of Inequality and the issue of ‘Catching-up’” World Financial Review, July/August, pp. 83-94.
Siddiqui, K. 2018a. “Capitalism, Globalisation and Inequality”, World Financial Review, November/December, pp. 72-77. ISSN 1756-3763.
Siddiqui, K. 2018b. “U.S. – China Trade War: The Reasons Behind and its Impact on the Global Economy”, The World Financial Review, November/December, pp.62-68. ISSN 1756-3763. http://www.worldfinancialreview.com/?p=36411.
Siddiqui, K. 2017. “Financialization and Economic Policy: The Issues of Capital Control in the Developing Countries”, World Review of Political Economy 8 (4): 564-589, winter, Pluto Journals. DOI: 10.13169/worlrevipoliecon.8.4.0564.
Siddiqui, K. 2016. “Will the Growth of the BRICs Cause a Shift in the Global Balance of Economic Power in the 21st Century?” International Journal of Political Economy 45(4): 315-338, Routledge Taylor & Francis.
Siddiqui, K. “Political Economy of Japan’s Decades Long Economic Stagnation”, Equilibrium Quarterly Journal of Economics and Economic Policy 10(4): 9-39. DOI: http://dx.doi.org/10.12775/ EQUIL.2015.033.
Siddiqui, K. 2015b. “Agrarian Crisis and Transformation in India”, Journal of Economics and Political Economy 2 (1): 3-22. ISSN: 2148-8347.
Financial institutions always find ways to develop products that appeal to potential clients and drive greater profits. An example of this is when they offer flexible mortgage deals with refinancing schemes to help families own their dream homes without paying the entire sale amount upfront.
One of the most sought-after types of financing facilities that people take advantage of nowadays in funding property transactions is bridging loans.
What Are Bridging Loans?
As the name implies, bridging loans are used to bridge the finance gap between purchasing a new property and selling the one you have. They’re also called fast bridging loans because of their short-term deals, usually up to 12 months.
Unlike traditional mortgage financing, fast bridging loans are faster to arrange without basing on credit standing or salary. The loanable amount is secured against the equity of the property. Because these are more flexible than other loan types, they can be used to cover renovation projects. They’re also easy to avail of, making them a great financing option for auction property sales.
Bridging Loans In The Pandemic World
During the coronavirus pandemic, financial institutions made some changes in lending money to borrowers due to the uncertainties and economic impacts of the crisis. Now that incidence rates are declining, what’s the latest on bridging loans?
The bridging loan landscape has changed dramatically since the days before coronavirus.In April, during the initial weeks of the lockdown, a substantial percentage of lenders shut their doors and withdrew from the market.From small private lenders to major players such as Together Money, with 900 staff on furlough, the industry took a sharp intake of breath, as the shock of what was upon us became clear.With estate agents closed, viewings cancelled, surveyors unable to carry out valuations, the effects on the property industry were Armageddon like in their severity.
Through innovative changes to work practises, the willing use of technology, and a strong desire to find a way to do business, the property market and associated bridging loan industry is fighting to keep the doors and the deals flowing. The use of Automated Valuation Models (AVM), which is a mathematical and statistical modelling system to value residential properties has now been adopted by many lenders, instead of the traditional visit to the property by a surveyor. For quirkier properties, or some commercial properties, the valuers are resorting to virtual viewings and in some cases, highly sanitised viewings with all doors and windows open in the property.
How has this affected the bridging loan market:
Whilst the industry is trying to make the best of the fluid situation, there are some changes that lenders have had to make to their underwriting:
Reduced LTV’s across the board. Although some lenders are now back at 70%-75% for residential properties, the majority are still being cautious at 60-65%.
Less or no appetite for certain asset classes i.e retail, offices, land, speculative large scale developments, student accommodation.
Stricter underwriting criteria. Lenders are asking more questions, looking at experience and credit profile more closely, with less appetite for any difficult deals.
For refinances, the lending is based on the 180 day value rather than the full open market value. In happier times, for a normal residential property in a decent area, this would be the same figure. In the post Covid world, this can now be 10% less than the full OMV.
For purchases, the lending is now based on the 180 day value or purchase price, whichever is the lower.
Term: this is now being increased, with lenders now making typical loans of 12 months, to allow for any unexpected delays and/or a slow market.
Exit values; when building or renovating, then end values are now being seriously depressed by the valuers, which is having a knock on effect on deal viability or equity requirements of the developer.
Pricing: the rates have gone up across the board, with lenders now pricing for the increased risk, and indeed, the lower competition. For a 70% LTV good residential property, funding pre covid was often under 0.7% per month. This is now likely to be closer to 0.85% per month.
The bridging loan market is changing and evolving rapidly, with lenders changing their terms on a daily basis. In these uncertain times, now more ever, it is critical that a property investor engages the services of an experienced and specialist finance broker, such as Tiger Financial.
Matthew has been involved in property finance since 2004 and is regular contributor to specialist finance publications discussing the bridging loan and development finance sector.
About Tiger Financial
Tiger Financial is whole of market bridging loan and development finance broker with over a decade in the market. Their team works to provide short term property funding solutions across the whole of the UK, arranging market leadingbespoke and flexible lending terms.
In 2006, Tsotsi, a South African film written and directed by Gavin Hood, a South African filmmaker, won the Oscars1 for best foreign language film and was also nominated by the Golden Globe Awards2 in the same year for Best Motion Picture – Foreign Language. The African film industry in recent times has channelled out spectacular films that vividly depict the scenic landscape and authentic African culture on the continent. For many participants in the African film industry, it was not out of the blue when the New York Times mentioned Timbuktu3 in the list of 25 best films in the 21st century – Timbuktu, a film directed by Abderrahmane Sissako, a filmmaker from Mauritania and shot in South-East Mauritania, won prizes4 from Ecumenical Jury, François Chalais and received nominations from the Academy Awards (Oscars) for Best Foreign Language Film in 20155 and the British Academy of Film and Television Arts (BAFTA) for Best Film Not in English Language in 20166.
In spite of the many challenges in the region, African film industries have performed considerably well, producing some of the greatest films in the world. Even at the early stage of the post-independence era, a period considered to be the beginning of the film industry on the continent, classic films were produced at that time – BBC Culture’s 100 greatest foreign language-films, lists Touki Bouki7, as the greatest African film ever made. The 1973 Senegalese film which has been digitally restored by the Martin Scorsese’s World Cinema Project was also ranked 52nd in Empire magazines’ 100 Best Films8 of World Cinema in 2010. With a global reach, African film industries continue to increase in size and revenue – Nollywood, Nigeria’s film industry is ranked as the second largest film producer9 in the World. As revealed by PricewaterhouseCoopers (PwC), the film industry in Nigeria, Africa’s largest economy10 has been an integral component of the Arts, Entertainment and Recreation Sector with projected export revenue of $1billion in 2020.The film industry accounts for about $7.2 billion thus 1.42%11 of the country’s Gross Domestic Product (GDP) – overall the Arts, Entertainment and Recreation Sector contributes 2.3% of GDP12.
With similar structures and challenges, the operational activities of the film and music industries in Africa are intertwined – music has been an essential integrant in films, creating rhythms in scenes that influence emotional responses to actions in the film. In some cases, the music associated with a film has been as iconic as the film. Similarly, the music industries in Africa have witnessed rapid growth in the last decade – in 2019, African Giant, Burna Boy’s album was nominated for Best World Music Album during the 62nd Annual Grammy Awards13. The Nigerian singer won the Best African Act at the MTV EMA Awards and the Best International Act at the BET Awards in the same year14. Other music artists from Africa continue to have successful careers within and outside Africa – Wizkid, collaborated with Drake on ‘‘One Dance’’ in 2016, the song became the most streamed song on Spotify15 with more than 822 million streams.
The Nigerian singer received the Billboard music awards16 for Top R&B collaboration, Top R&B song and Top streaming song (audio) in the same year. In 2019, The Lion King: The Gift17, Beyoncé’s album featured many African music artists and music producers – the list includes two South African singers, Moonchild Sanelly and Busiswa. South African music has made significant strides on the global stage, making an impact in Hollywood – wololo, a song created by South African music acts18, Babes Wodumo and Mampintsha, together with songs created by other South African singers were featured in the movie Black Panther19, one of the highest-grossing movies in the United States.
African music industries have witnessed tremendous growth in revenue in the last two decades – the projections of PricewaterhouseCoopers indicate that the Entertainment and Media sector of Kenya, South Africa and Nigeria will grow at a faster rate than the world’s average. In these three African countries, the music industry has been the fastest growing and the largest contributor to the growth of the Entertainment and Media sector.
Source: PricewaterhouseCoopers (PwC)
Nigeria, one of the fastest growing entertainment and music markets in the world, is estimated to experience a Compound Annual Growth Rate (CAGR) of 12.9%, in the music industry in 2020 – representing more than $86 million, almost twice the $47 million realised in 2015. In 2015, there was an overall growth of 15.7% in Nigeria’s entertainment and music sector thus reaching $3.8 billion in that year. According to the Entertainment and Media Outlook: 2016-202020, of PricewaterhouseCoopers (PwC), South Africa will record a growth rate (CAGR) of 4.4%, amounting to $178 million in music revenue in 2020.
Additionally, revenue generated from the music industry in Kenya is expected to soar to $29 million in 2020. The music industry’s sudden growth in revenue is attributed to three main factors: streaming, demographics and internet penetration. A study conducted by the GSMA21 shows that mobile internet penetration in Sub-Saharan Africa, continues to increase as countries in the region invest in digital technologies.
McKinsey Global Institute22 estimates that by 2025, Africa’s iGDP (internet’s contribution to overall GDP) will grow by at least 5% to 6%, contributing about 10% or 300 billion to Africa’s GDP. With more than 50% of urban consumers using devices supported by the internet, demographic trends such as a young population, urbanization and rising income levels in Africa is driving the growth in the music and film industries.
According to the United Nations Economic Commission for Africa23, the African continent has the youngest population in the world, with about 70% of the total population below 30 years – it is estimated that by 2050, 29% of the entire population of the youth in the world will reside in Africa. The large percentage of the youth in Africa’s population has influenced the growing interest in film and music. Kenya, South Africa, Nigeria and other African countries have made considerable investments in the music industry to meet the growing demand for music and film but challenges such as ineffective property laws, inadequate distribution networks and piracy issues have characterised both the music and film industries on the continent.
Source: PricewaterhouseCoopers (PwC)
In spite, of the several challenges associated with the film and music industries in Africa, Universal Music Group, Netflix, Sony Music Entertainment and other well established organizations in the music and film industry have entered the African creative industries. In 2018, Netflix acquired the rights to the Nollywood film, Lionheart24 – Netflix’s first original film from Nigeria. In February, 2020, Netflix, premiered its first original African series – Queen Sono25, a six-episode film, written and directed by South African stand-up comedian, Kagiso Lediga. In the music industry, the top three major record companies with the largest global market share have ventures in Africa – Universal Music Group26, has establishments in Nigeria, South Africa, Ivory Coast and Kenya with many signed African artists. Sony Music27 also has presence in West-Africa, specifically in Nigeria and South Africa.
Warner Music Group28 is the latest to enter the African market forging a partnership with Chocolate City, a leading record label in Nigeria.
Currently, the film and music industries in Africa look attractive and promising especially as internet penetration continues to improve – this feat has not been a fluke. Successive governments in Africa, in collaboration with international organizations and several countries have contributed immensely to this development. Notable among these countries is China – known to be one of the largest investors in Africa, between 2000 and 2013, China invested $1.7 billion in 38 African countries. According to Tracking Chinese Development Finance project29 (AidData), a chunk of this amount was invested in telecommunications infrastructure. Chinese telecom MNCs have extended telecommunication networks to rural communities30 in Africa by operating in the hinterlands, where motorable roads are few – these places have been consistently avoided by other Telecomm companies because of the poor road infrastructure that makes these localities difficult to access.
Also, Chinese telecom companies such as ZTE, Techno and Huawei among others, offer comparatively less expensive smartphones in Africa – Collectively, Chinese telecom companies control31 about 53% of the smartphone market share in Africa. Chinese smartphone companies support the music and film industries in diverse ways – Techno has chosen Nigeria’s sensational singer Wizkid32, as the company’s brand ambassador. The Chinese smartphone company has also partnered with the Africa International Film Festival33 (AFRIFF) to improve the quality of films in Africa via digital technology. In 2015, Techno launched Boomplay Music in Nigeria, a streaming service provider for African music – with more than 60 million users, Boomplay34, the biggest African music app now has contractual agreement with Universal Music Group, Warner Music Group and Sony Music Entertainment.
Through StarTimes35, a Chinese electronics and media company, China is gradually extending digital television to rural areas in Africa, making African film and music accessible to the population in both urban and rural areas – In 2015, China began a project to make satellite television accessible to 10,000 villages in Africa. Currently, StarTimes has digital coverage all over Africa. The company has launched the Pan-African Online Film Festival – a film awards organized for African film and music video producers.
In recent years, China has also invested in Africa’s film industry through academic research and dialogues – Africa and China have a long-standing relationship with the latter investing heavily36 on the African continent. This strong partnership between Africa and China has made the African market an ideal destination for China to export media consumptions. It has been reported on several occasions that Chinese TV series are becoming more and more popular among Africans37. As part of efforts to improve the relationship between Africa and China, the first ever research centre dedicated to African film and television was launched in Zhejiang Normal University in December, 201538.
Since then, the research institute has facilitated annual forums for not only academic research exchange but also dialogues relating to further industry collaboration. In addition to dialogues, the Centre for African Film and Television Research also makes documentary films that tell stories of African expatriates living in China39. In comparison to other established institutions for African media studies on the international front, the implementation model employed by the Chinese institute focuses distinctively on integrating industry trends with its activities. In other words, these research led activities are relatively more relevant to implementation and practices rather than driven by cultural theories or identity politics. Although the support and investments from China is essential to Africa’s development, it is imperative for a balance to be achieved – China plays a crucial role in Africa’s creative and cultural industries, so it is necessary for appropriate measures to be implemented to discourage the replication of exploits in the colonial era – a novel Chinese blockbuster Wolf Warrior 2 (2017) sparked debates regarding this particular question.
While the central intension of the film is to promote African-Chinese cooperation, sections of the African community feel uncomfortable watching how African culture has been represented in a clumsy manner40. The question still remains, in future collaborations, how can African culture be properly represented and promoted with the influx of new investment and involvement form Chinese companies? This is a challenge that requires a redress on all facets – all relevant stakeholders in Africa and China should be engaged in a problem-solving process to rectify this anomaly. In the future, there will certainly be many film co-productions between film producers on the African continent and China, as exemplified by the first film co-produced by South Africa and China41. Storytelling will be a key element to this exciting future as both Africa and China have a rich cultural heritage.
Evidently, China’s investment in Africa’s telecom industry has yielded tremendous outcome – it has built a network foundation for further development of the continent’s creative industries: enhancing content circulation and distribution in the music and film industry. This has enabled more and diverse content to be accessed across the continent especially in rural areas. It is expected that there will be more opportunities to explore in the area of creative and cultural content export as China’s investments in Africa, specifically telecom infrastructure continues to play an indispensable role in the growth of the creative economy of the continent. For this expectation to be realized, it is incumbent on all parties involved to work assiduously to ensure that the partnership between Africa and China brings to light the best from the film and music industries rather than recreating similar exploitations in the colonial era.
Alexander Ayertey Odonkor is a chartered financial analyst and a chartered economist with a stellar expertise in the financial services industry in developing economies. He has completed the International Monetary Fund’s (IMF) program on Financial Programming and Policies – with a master’s degree in finance and a bachelor’s degree in economics and finance, Alexander also holds postgraduate certificates in entrepreneurship in emerging economies and electronic trading on financial markets from Harvard University and New York Institute of Finance, respectively.
Dr. Hiu Man Chan is an academic, consultant and entrepreneur with a specialty in the creative industries, focussing on the collaboration in the film sector between the European Union (EU), United Kingdom (UK) and China. She holds a PhD from Cardiff University, Master of Arts from University College London (UCL) and a Bachelor of Arts from Oxford Brookes University.
17 Abumere, I. P. (2019) ‘‘Beyoncé champions African music stars with Lion King soundtrack’’ British Broadcasting Corporation, 29 July [Online]. Available at: https://www.bbc.com/news/world-africa-49077673 (Accessed: 11 April, 2020).
25 British Broadcasting Corporation (2020) ‘‘Netflix’s first African series, Queen Sono, premieres’’ 28 February [Online]. Available at: https://www.bbc.com/news/world-africa-51675703 (Accessed: 15 April, 2020).
30 Cissé, D. (2012) ‘‘Chinese Telecom Companies Foray Into Africa’’ Centre for Chinese Studies, Stellenbosch University. Available at: https://aeaa.journals.ac.za/pub/article/view/94 (Accessed: 20 April, 2020).
39 Ndukong, K.H. (2017) “New documentary film tells stories of Africans in eastern China’s Yiwu” 26 October 2017 [Online]. Available at: https://www.focac.org/eng/zfgx_4/rwjl/t1504935.htm (Accessed 17 May, 2020).
Similar to other regions with abundant natural resources, the BP Statistical Review of World Energy report for 2018 indicates that Africa has 7.5% of global oil reserves.¹ Revenue generated from oil resources on the continent is a key driver of economic growth in energy-exporting African countries. Highlights from the African Economic Outlook report for 2020², shows the economy of Africa grew at 3.4% in 2019 with North Africa, contributing the largest as the region accounted for 44% of economic growth on the continent – the boost in economic growth in North Africa is partly attributed to oil revenue. Revenue from oil has been a major determinant of economic growth in North Africa – the region experienced economic growth decelerations when oil production was interrupted by the Arab Spring which commenced in the latter part of 2010 in Tunisia³. Conversely, higher levels of production and export of oil by Libya contributed immensely to the improved economic growth of the region after 2016⁴.
Although other sectors such as agriculture in Morocco played an instrumental role in propelling economic growth in North Africa, as high yield increased economic growth in the North African country from 1.2% in 2016 to 4.1% in 2017, revenue from oil has been the essential fount of growth in the area.
In Sub-Saharan Africa (SSA), where oil exporting countries account for almost 50% of the region’s Gross Domestic Product (GDP), oil contributes as high as 90% of the total fiscal revenue⁵ of oil exporting countries and serves as a major source of foreign reserve.
Source: International Monetary Fund (IMF) Country Report
Oil exporting countries in SSA rely heavily on revenue from oil, a condition that has tremendous impact on the development⁶ of the region – the decline in GDP growth in SSA from 5.1% to 1.4% in 2014 and 2016, respectively, was due to oil price shocks, when the price of crude oil fell by 56% within a seven-month period. Oil has a significant impact on the African economies. Between 2007 and 2017 oil producing countries on the African continent generated $3.3 trillion⁷ in revenue from oil – this amount is more than seven times the value of foreign aid the region received within the same period. Revenues from oil improves economic output in Africa but fluctuations in the price of oil has an enormous impact on countries in the area – between the middle of 2014 and January 2016, the price of oil declined by 70% as a result of global oversupply of the commodity. This outcome had adverse effect on both oil exporting and oil importing countries in Africa as GDP growth declined⁸.
Source: AfDB, OECD & UNDP
However, an increase in the price of oil is not always deleterious to all net oil-importing countries in Africa as is widely known in energy economics, that an increase in the price of oil will have a positive impact on net oil-exporting countries⁹ or an increase in oil prices will have a negative impact on net oil-importing countries. A study published in the volume 139 of Energy (Elsevier)¹⁰ in 2017, defies this analogy – the research work, which focussed distinctively on the impact of oil price shocks on small oil-importing economies suggests that an increase in the price of oil in Liberia (small oil-importing country) stimulates the country’s economy. This is mainly as a result of the intensive labour and capital employed in the process of reallocating resources from oil-intensive sectors when oil prices are high – the economic output of labour and capital when the price of oil increases, far exceeds the contribution of oil revenue in Liberia. Similarly, findings from another research¹¹ that was published by Heliyon (Elsevier) in 2019 reveals that net oil-importing developing countries: Cape Verde, Liberia, Sierra Leon and the Gambia respond positively to an increase in global oil prices as GDP per capita increases in the short term in these African countries.
The impact of oil price shocks does not only vary in different countries but it also varies across different sectors of the economy. In 2019, the International Monetary Fund (IMF) released a paper¹² that assessed the impact of declining oil prices on banks in oil-exporting countries in SSA – the findings of the research show that the nature of response for banks to a fall in oil price in SSA depends mainly on the ownership structure of the banks. The impact of declining oil prices on domestic banks is relatively severe as these local banks eventually become illiquid and the value of their financial assets depreciates – this is because indigenous banks in SSA constantly lend to a large number of customers during periods of declining oil prices, and fail to increase funding. The quality of assets deteriorates, leading to an increase in non-performing loans.
On the other hand, when oil price declines, foreign banks which are known in Africa to operate with a conservative business model reduce lending and increase the quality of their assets and funding thereby reducing credit growth. In the case of Pan-African Banks (PABs), even though they also increase lending when the price of oil falls, they concurrently reduce their holdings in Government securities – the impact of the decline in oil prices depends largely on the size of the Pan-African Bank. Whiles large PABs record a decline in the quality of assets, small-sized PABs experience an increase in the quality of assets.
Contemporary research has shown that whether a country is an oil exporter or an oil importer, a change in the price of oil has an impact on the expected cash flows of corporations as oil is a valuable commodity across all levels of the economy. According to the International Monetary Fund, oil price shocks have an undeniable influence¹³ on stock markets. Oil price shocks have an impact on inflation, exchange rate, monetary policy, fiscal policy, corporate income and the entire economic activity. In Nigeria¹⁴, Africa’s largest economy (with GDP of $337 billion) and also the largest oil producer and exporter, where oil accounts for 8.4% of GDP¹⁵ as the economy diversifies, the stock market depicts the golden rule thus, ‘‘oil up, stock down’’ – an increase in oil prices results in a decline of stock returns¹⁶.
In contrast, in South Africa, Africa’s second largest economy and the largest importer of oil on the continent, South African stock returns¹⁷ responds positively to an increase in the price of oil that is caused by a positive shock to demand and reacts negatively to supply shocks. Exhibiting, clearly the variation in the impact of oil price shocks in oil-importing and oil-exporting countries in Africa. Quite recently, the Journal of African Trade (Elsevier)¹⁸, published astudy which examines the co-movement between oil prices of the Organization of Petroleum Exporting Countries (OPEC) and Africa’s six largest Stock markets: South Africa (JSE), Egypt (EGX), Morocco (CSE), Nigeria (NSE), Kenya (NSE) and West African Economic and Monetary Union (BRVM10) indicates that apart from Egypt and South Africa, the co-movement of oil prices and the stock market is relatively low in Africa – whiles the Nigerian stock market and the other stock markets are not adequately developed and poorly integrated into the global oil market, the South African stock market which is by far the largest in Africa and the Egyptian stock market have a strong long-run co-movement with oil – a condition that exposes these two stock markets to global oil price fluctuations.
Several factors determine oil price fluctuations on the global commodity market: whiles OPEC + (OPEC Plus) controls 55% of the global oil supplies and about 90% of discovered oil reserves¹⁹ – the group which is made up of OPEC and top non-OPEC oil-producing countries has a considerable influence on global oil prices. However, the OPEC Bulletin Commentary for April 2015²⁰ cites market speculations as a significant contributor to oil price fluctuations.In a new-fangled development, the outbreak of covid-19 is the latest dominant factor in the form of a pandemic to have an immense impact on global oil prices – the negative supply shocks experienced on a global and regional level, emanates largely from a reduction in oil production as a result of a section of the oil workforce being infected and quarantined for treatment.
The contagious nature of the coronavirus has prompted the enforcement of lockdowns which has a negative impact on business activities, restricts transportation of goods and services in Africa and other regions of the world – the World Bank policy brief for April, 2020²¹ suggests that countries in North Africa and the entire MENA region will suffer a greater impact from a decline in aggregate consumption and investment as the coronavirus continues to spread to Europe and other parts of the world. The shocks from covid-19 is intertwined with the collapse of global oil prices attributed to the failed negotiation between OPEC and its allies – in early march, 2020, OPEC proposed a reduction of 1.5 million barrel per day(mb/d) for the second quarter of 2020. Thus, 0.5 mb/d and 1 mb/d reduction for non-OPEC and OPEC, respectively. Notably, Russia rejected the proposal, an action which instigated Saudi Arabia, the world’s largest exporter of oil to increase oil production to its full capacity (12.3 mb/d) and also offer close to 20% discounts in key markets – The price of oil declined more than 30% and continued to fall after that episode.
Global oil price shocks is mostly pinned on tension between OPEC and its allies as the cartel has not been able to operate as a unified force despite the fact that many different countries joined the organization for a common goal (Ahmad, 2016)²². The diminution in global oil prices will have catastrophic effects on oil-exporting African countries, especially those that rely heavily on oil revenue.
However the oil price-exchange rate nexus for the two largest economies on the continent: Nigeria and South Africa seems to be the identical. Although Nigeria is the largest oil exporting country and South Africa is also the largest oil importing country in Africa, empirical studies for the two countries shows that an increase in oil prices leads to a depreciation of both the South African rand²³ and the Nigerian Naira²⁴ vis‐à‐vis the United States dollar. This prevailing oil price-exchange rate nexus for Nigeria and South Africa is not the same in all dimensions of the two economies and even other parts of the continent– whiles agricultural commodity prices are neutral²⁵ to global oil prices in South Africa, the situation is quite different in Nigeria.
Even though there is no long-run relationship between oil price and any agricultural commodity in Nigeria, in the short-term, oil price has a positive and a significant impact on local food items such as maize and soya bean – oil price also has a negative effect on the price of commodities such as rice and wheat but the impact is negligible²⁶. In other parts of Africa, such as East Africa²⁷, the dynamics for oil prices and local food prices is quite disparate – analysing data on the price of petrol and maize suggests that global oil price affects the price of local foods (maize) via transportation cost rather than biofuel or production cost.
As a non-renewable energy, oil is a volatile commodity that derives its price mainly from the supply and demand dynamics of the international markets – the current downward trend of global oil prices which began with the spread of covid-19 has led to a decline in oil price from $56.10 per barrel in December 2019 to less than $30 by the middle of February 2020. For many developing countries, where the oil sector is the primary driver of growth, this unexpected fall in oil prices will slowdown economic growth, a challenge Collier (2007)²⁸ identified as one of the traps many resource rich countries in Africa and Middle East frequently experience.
Dr. Paiman Ahmad is an academic with research interest in oil price politics, energy governance, rentier economies and sustainable development in developing economies. She holds a master’s degree in International Affairs and Public Policy Making (Bilkent University-Ankara) and a PhD in public administration from National University of Public Service. Her research works have been published by reputable journals such as Public Money & Management, Journal of Public Affairs and top-tier academic publishers: Palgrave, Springer and many others.
Her Academic Affiliations are: University of Raparin, Lecturer in Law and Administration Departments. Emails: [email protected]. [email protected]. Rania-Sulaimania-Kurdistan Region-Iraq. Visiting lecturer at Tishk International University: International Relations & Diplomacy Department, Faculty of Administrative Sciences & Economics, Kirkuk Road, Erbil- Kurdistan Region -Iraq. Email: [email protected].
Alexander Ayertey Odonkor is a chartered financial analyst and a chartered economist with a stellar expertise in the financial services industry in developing economies. Alexander has completed the International Monetary Fund’s (IMF) program on Financial Programming and Policies – with a master’s degree in finance and a bachelor’s degree in economics and finance, he also holds a postgraduate certificate in mining from Curtin University. His research works have been published by the Global Business Review, International Journal of Economic Development etc.
3 World Bank (2012)‘‘Middle East and North Africa Economic Developments and Prospects, October 2012: Looking Ahead After a Year in Transition’’. Middle East and North Africa Economic Developments and Prospects. Washington, DC. United States. Available at: https://openknowledge.worldbank.org/handle/10986/11979
6 Coulibaly, B. S. & Madden, P. (2020) ‘‘Strategies for coping with the health and economic effects of the COVID-19 pandemic in Africa’’ Brookings Institution, 18 March [Online]. Available at: https://www.brookings.edu/blog/africa-in-focus/2020/03/18/strategies-for-coping-with-the-health-and-economic-effects-of-the-covid-19-pandemic-in-africa/ (Accessed: 19, 2020).
10Gbatu, A.P., Wang, Z., Wesseh Jr. P.K.&Tutdel, I.Y.R.(2017) ‘‘The impacts of oil price shocks on small oil-importing economies: Time series evidence for Liberia.’’ Energy, 139, 975–990. https://doi.org/10.1016/j.energy.2017.08.047
11Gershon, O., Ezenwa, N. E., &Osabohien, R. (2019) ‘‘Implications of oil price shocks on net oil-importing African Countries.’’ Heliyon, 5(8), e02208. Available at: doi:10.1016/j.heliyon.2019.e02208.
16Asaolu,T.O&Ilo, B.M (2012) ‘‘The Nigerian stock market and oil price: A co-integration analysis’’Kuwait Chapter of Arabian Journal of Business and Management Review, 1 (5) (2012), pp. 28-36
17Chisadza, C., Dlamini, J., Gupta, R. &Modise, M. P.(2016) ‘‘The impact of oil shocks on the South African economy’’,Energy Sources, Part B: Economics, Planning, and Policy,11:8,739-745,DOI: 10.1080/15567249.2013.781248
18Gourène, G.A.Z.&Mendy, P. (2018) ‘‘Oil prices and African stock markets co-movement: A time and frequency analysis’’Journal of African Trade, 5 (1–2) (2018), pp. 55-67, https://doi.org/10.1016/j.joat.2018.03.002
20Organization of the Petroleum Exporting Countries ‘‘Gambling on oil: The price the market pays’’ OPEC Bulletin Commentary April 2015. Available at:https://www.opec.org/opec_web/en/press_room/3007.htm (Accessed: 24 May, 2020).
22 Ahmad, P. (2016). ‘‘Political tension in OPEC’’, PRO PUBLICO BONO – Magyar Közigazgatás, 2016/2, 118–137. https://folyoiratok.uni-nke.hu/document/nkeszolgaltato-uni-nke-hu/political-tension-in-opec.original.pdf
23Fowowe, B. (2014) ‘‘Modelling the oil price–exchange rate nexus for South Africa’’, International Economics, Volume 140, Pages 36-48, ISSN 2110-7017,https://doi.org/10.1016/j.inteco.2014.06.002.
24 Muhammad, Z., Suleiman H. &Kouhy, R. (2012) ‘‘Exploring oil price—exchange rate nexus for Nigeria’’ OPEC Energy Review,36, 383–395. doi:10.1111/j.1753-0237.2012.00219.
25Fowowe, B. (2016) ‘‘Do oil prices drive agricultural commodity prices? Evidence from South Africa’’, Energy, Volume 104, Pages 149-157, ISSN 0360-5442, https://doi.org/10.1016/j.energy.2016.03.101.
27 Dillon, B.M & Barrett C.B (2016) ‘‘Global Oil Prices and Local Food Prices: Evidence from East Africa’’, American Journal of Agricultural Economics, Volume 98, Issue 1, January 2016, Pages 154–171, https://doi.org/10.1093/ajae/aav040.
28 Collier, P. (2007). ‘‘The Bottom Billion: Why the poorest countries are failing and what can be done about it’’, ISBN-10: 0195374630, ISBN-13: 978-0195374636, Oxford University Press. https://www.oxfordmartin.ox.ac.uk/publications/the-bottom-billion-why-the-poorest-countries-are-failing-and-what-can-be-done-about-it/
The bitcoin price has started trading flat for this year and this is due to the financial and economic damage caused by the coronavirus pandemic. For the month of March this year, bitcoin price has dropped to $4,000. Luckily, it is climbing once again to $7,000 starting last April. People own cryptocurrencies for several reasons. Some individuals opt to store these cryptocurrencies as value because of the limited supply of Bitcoin. Others choose to store it as they wait for its value to become higher than the U.S. dollar so they could earn more profit. There are also those who buy Bitcoins just because they use it in their daily transactions as they travel around the world or shop for groceries. Lightning Wallets such as Lastbit even make it possible to pay in stores that don’t accept bitcoin.
Although Bitcoin is still not recognized as a legal tender across Australia, it is not deemed illegal to use it for financial transactions. Proof of this is the fact that the Australian Taxation Office announced in 2018 that it will be imposing taxes on Bitcoins, as a property that will be under the rules of the CGT or Capital Gains Tax. Thus, more and more Australians are also investing on Bitcoins these days. Today, many people are using Swyftx to trade BTC in Australia. However, the best time to buy Bitcoin still remains in the dark for some Bitcoin traders, especially for those who are still new in this industry. According to studies conducted by bitcoin experts, the best time for purchasing bitcoins couldn’t be etched on rock since the cryptocurrency industry is highly volatile. However, some findings from studies and observations made by cryptocurrency analysts reveal the following:
The Price of Bitcoin Tends to Decrease on Mondays
During weekends, the demand for Bitcoin will tend to slow down. In turn, its price is also more likely to go down when Monday comes. However, Bitcoin price will also soar high again during Fridays and Saturdays.
Some People Prefer to Buy on a Weekend
Some findings from studies made also reveal that many people decide to buy Bitcoin during the weekends and make transactions from the start of the week. In turn, volumes increase on the first day of the week, but people should be more cautious in their behavior by the rest of the week.
Avoid Buying During Pay Days
Those who have been in the Bitcoin trading industry know that they should avoid purchasing bitcoins during the time when employees earning salaries are being paid. This usually occurs in the middle or by the end of the month. The reason for this is obvious. When people have more money to buy Bitcoins, the demand for this cryptocurrency increases along with its price.
Use a TDM Analysis Software to Figure Out the Best Time
If you’re looking to buy Bitcoin but are not certain when is the best day of the week to do it, it is best to use a software or get advice from a bitcoin broker who helps you make sound analysis. With this software, it will become easier for you to find out whether it is best to purchase Bitcoins at the start of the week, when there is an uptrend or if it is best to sell towards the end of the week when a downturn occurs so you are more likely to get the best price.
One of the best things about the cryptocurrency world is its promise for a more transparent way of banking, which is something that people could not expect from the current mainstream banking. Cryptocurrency promises immutability and decentralization which helps ensure that everyone involved in the network has a clear idea of what is currently happening within the system.
A genuine essay writing service comes in handy for almost all students due to the massive amount of coursework they have to handle during a semester. Dealing with exams and coursework requires a lot of effort and time management. In this case, it is a good idea to redirect some tasks to an essay writing service which can help you get part of the load off your shoulders.
When deciding to outsource your essays, identifying a reliable provider can be challenging. Are they equal in service quality? How can you distinguish an honest essay writing service from a fraudulent one? Keep reading to find out how professional companies provide their services.
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Customer service is crucial for essay writing services, primarily when the work is delivered. You might have some questions, or you may face some problems. Customer satisfaction is the main aim of any company. So, they never ignore customer’s negative complaints. Uninterrupted customer support allows you to solve any issues in the shortest possible time.
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Proofreading is an essential part of any writing project because even the best writers occasionally make mistakes. Ideally, writing services assign a qualified proofreader to review the writer’s work for grammatical errors, typos, and clarity. Check their proofreading procedures before placing an order and talk to customer support if you have any questions.
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We all need academic help every once in a while. The most important thing is to choose the right service provider that ensures your educational success. Remember that not all essay writers are equal. They differ in quality of the service, so take your time to sift through their sites and carefully read their reviews before making a decision.
In this competitive business environment, most companies strive to expand their market share to generate more profit. Several companies operate beyond borders and have gone global. The import and export of goods and raw materials are critical for a company’s success. Besides, corporations often need to send their products from one city to another in the same country. Many companies do not possess in house resources for transporting goods from place A to place B. They get freight quotes and hire the best freight services that do the job for them while ensuring the safe transportation of the products.
To make things easy for the business owner, freight forwarding companies help transport goods from the manufacturer to the customer or the retailer. Considering an international transport service like TSL Australia is a good way to dip your toes in the industry. They operate as an agent of the company and offer an economical yet safe transfer of products. Some freight forwarding companies provide International transportation, while some work on a national level. They work as a travel agent, but not for people, instead of merchandise.
Freight forwarding companies work with suppliers, carriers, logistic providers, and other clients. They have means of deporting huge consignments, and they plan and arrange the whole process of transportation. A general misconception is that they pick up stock, and then deliver it to the final destination. Freight forwarders’ job is not as simple, as the process requires extensive paperwork, which also involves trading regulations. Moreover, freight forwarders can give you a piece of better advice regarding what mode of shipment would suit your corporation.
Freight forwarders provide their services through different modes. Their expertise is generally reliable, and business owners feel relief after assigning the task of transportation to them.
Following are the different types of freight forwarding:
Air Forwarding
Air forwarding involves planning and arranging the transport of freight from one place to another through airplanes.Furthermore, air forwarding does not take much time, and contrary to popular belief, it is not expensive either.
Land Forwarding
Land freight forwarders are ideal for massive projects that require back and forth transportation of bulky items. Large-scale construction projects usually hire land forwarders for the safe transfer of tools, raw material, and other stuff. If you are from Illinois you can safely rent shipping containers in Chicago since they are considered among the best in the world.
Ocean Forwarding
Companies prefer ocean forwarding over air and land freight forwarders when they need to send large items in high quantity. Ocean freight forwarders have the expertise and are aware of laws regarding transferring cargo. Besides, ocean forwarding is cost-effective as compared to air forwarding, especially if it involves transporting goods internationally. Since most companies do not own airplanes, ships, or trucks, they take advantage of freight forwarders.
The advantages of hiring freight forwarders are numerous, and below we are listing a few of them:
1. Timely Pickup and Delivery
Companies often lose clients because they are unable to cater to customers’ needs on time. When a package is lost overseas, clients find themselves at a loss as there is not much they can do. Freight forwarding has emerged as a profession, and these companies offer timely delivery of your cargo. A legit freight forwarding company has proficient workers who show professionalism from planning the transportation process, till the delivery. A successful and credible logistics services company can make a world of difference to your businesses’ efficiency and productivity.
2. Efficient Track Systems
It may take a reasonable amount of time for your consignment to finally reach its destination. Companies fret about losing their merchandise on the way. Moreover, when they have a tracking system of their cargo, they feel at ease. Although there are options for delivering goods through other services, authentic freight forward companies keep track of your cargo. They have an easy-to-implement tracking system in place, owing to advancements in technology. Due to tracking enabled freight forwarding, clients know when their shipment will reach them or the desired destination.
3. Security
The most significant benefit of hiring freight forwarders is that they offer the utmost security. You can be at peace that your stuff is in reliable hands despite sending your valuable cargo to faraway lands. Freight forwarders have proper tools, equipment, and compartments to keep all kinds of stuff. They ensure to keep fragile pieces with maximum care. Full proof packaging keeps the small and delicate items intact. Freight forwarders work with proper digital and manual documentation, which is why they offer a guarantee that your stuff will be safe.
4. Cost-Effective
The bigger your package is, the more expensive it would be. However, freight forwarders offer comparatively reasonable shipments. Since you will not be the only one sending packets through them, they can provide you with a better price. Moreover, many freight forwarders offer discounted rates to regular clients and to those who send large shipments. They have means of transporting items in bulk quantities and staff to ensure that process goes smoothly, which is why they offer the first-class service at economical rates.
5. Accurate Documentation
It is no secret that companies who have experience in a particular field operate professionally. For business owners, full or partial truckload shipping across international borders can become the worst nightmare if a carrier shows a disparity in legal documentation. The two countries which are involved in the business transaction don’t necessarily follow the same set of laws and regulations. Incomplete and inaccurate documentation can lead to lengthy delays, and banks can put the transaction of your money on hold. Freight forwarders ensure that all paperwork is immaculate, take care of your documentation, and deliver cargo following legal procedures.
6. Inventory Management
Freight forwarders have a vast network spreading across miles. Hiring a freight forwarder will save you from hiring different people for different tasks. Freight forwarding companies have resources that aid in managing inventory efficiently. Freight forwarder offers hassle-free, fast services that help you in expanding your business.
7. Warehousing
Businesses hire freight forwarders to ship goods in bulk quantity. Although freight forwarder ensures that your shipment will reach its target, they also keep an option of warehousing if, for some reason, they are unable to deliver your goods. Approved freight forwarders offer storage in case your shipment land at a foreign land. They have a warehouse where they keep the client’s staff and make sure that inventory remains secure.
Conclusion
Freight forwarders have proper knowledge of logistics and work through appropriate channels. International shipment usually involves more than one mode of transport, and different ways have different rules. Freight forwarders have the know-how of the regulations, and they provide transparent lawful service.A wise approach is to hire a licensed freight forwarder, which allows you to track your cargo. When a company has ambitions to expand its reach, it needs to transport goods to distant locations. Dealing with numerous service providers could be a headache, and hiring freight forwarder is an easy and effective solution.
It is not surprising to say that kitchen appliances are one of the necessary purchases of life. Just like a car or furniture, they help increase the home’s value. With so many options available out, it becomes overwhelming for a buyer where it is fruitful to invest money. Be the need is for the oven, fridge, juicer, or any other appliance, making a smart move is necessary. Although the purchase of kitchen appliances depends upon your lifestyle still we are describing you here the kitchen appliances on you can save money and make life easier to live.
Kitchen appliance prices increase with the increasing needs of a homeowner. If you want to save money on kitchen appliances, then prefer kitchen appliances that carry features that matter you the most. Keep yourself in budget and focus on the lifestyle you live. Avoid purchasing kitchen appliances that have similar features but are expensive in terms of price. They are never a good deal for you and your family.
Kitchen Appliances: Where You Need To Invest or Where Not?
Blender over Food Processor
A blender is a must appliance of every kitchen space. Not only mesh the food items perfectly but it also costs less than your food processor. Plus, they are more durable and can last many years to come. When it comes to using, one can easily access it without much knowledge. It is worth investing in this if you do not need all the functions that are available in the food processor. If protein shakes are part of your regular, then go for this option as it meets every budget.
Cheap Juicers over Expensive One
A market is full of countless cold press masticating juicers to serve your daily needs. All those who are fond of citrus juice can consider shopping for the cheap juicers. No doubts! An expensive juicer carries advanced features but if those features are not important for you, then you can go with a cheaper one. It will save lots of your money in the long-term and you can spend it on other new home appliances.
One-door Refrigerator over Built-in refrigerator
A purchase of a one-door refrigerator helps you be in your budget and save a lot of money. You can compromise with the size if you have a small family. Whereas built-in refrigerators are generally taller than freestanding models. Just focus on the features that save your loads of money i.e. energy efficiency. Don’t make a mistake of investing in the refrigerator that isn’t energy-efficient and you are only buying due to its latest features.
Ovens over Microwave
Another way to save money on the purchase of kitchen appliances is to shop for oven over the microwave. The reason is that oven can be used for multiple purposes like baking, grilling, roasting, and reheat food. Whereas, a microwave is designed only to cook or reheat food. So, it better goes with oven rather than investing in both separately.
Go with the purchase of conventional over as they make use of just waves to heat food rather than entire space. All this means, they are energy efficient as compared to the traditional ones. Plus, always make choice for a reliable brand rather than expensive one. Paying in a reliable brand means you are away from the use of unnecessary features. Your importance is on the durability as it ensures that the kitchen appliance you are buying is going to last for many years to come.
The same can be said for grills and smokers. If you have an outdoor kitchen, these are worthy appliances to invest in as well. It can be tricky to find the best models though, so we recommend that you check out this page for reviews and tips.
Coffee Maker over Coffee Machine
If you are a kind of person who is addicted to coffee, then it is good to buy a coffee maker rather than investing in an expensive coffee machine. Due to its simple functionality and limited features, a coffee maker can be considered as a cheaper option. Plus, it is an energy-efficient option as it doesn’t consume much electricity for the preparation of coffee.
Where to Shop for Kitchen Appliances?
Choose the platforms that sell kitchen appliances with free delivery at your doorstep. This will save the extra cash that you pay on the delivery of the product. And the delivery charges you save can use for paying other bills. Prefer to do shopping during off or special seasons. Have patience and wait for the best deals on your home appliance. You can surely get decent discounts you never even wondered or imagined. Also, follow the platform that sells high-quality appliances on great discounts. Kamado bbq is a good place to start for this.
So, these are a few appliances on which you can spend money without thinking much. All are multi-purpose. Don’t worry about their cleanliness as they are easy to maintain without frequent repair or replacement. Be healthier than before by bringing the best kitchen appliances at your home today!
At the time of writing (June 2020) the world is tentatively emerging from the coronavirus lockdown that we have all been living through for the past three months. The cost to human life and health has been unprecedented and beyond that, the global economy is set for a period of turbulence and uncertainty as we look to rebuild and refocus on normal life.
Banking and the wider Financial Services (FS) sector is undoubtedly vulnerable and facing a period of change. During the lockdown itself, banks have faced many challenges: the logistics of most of the workforce suddenly working from home; customers unable to speak face-to-face with advisors; the pressure applied by the overall economic uncertainty and a wave of increased cyber-attacks.
FS cyber security is challenging enough at the best of times. Clearswift research in 2019 revealed that 70% of financial companies had suffered a cyber security incident in the last 12 months. Less than a quarter of the respondents felt they had an adequate level of budget allocated to cyber security within their firm.
What fresh cyber security threats has coronavirus brought along in its wake and how can banks use this pandemic as an opportunity to improve its overall cyber security strategy?
The cyber threat facing banks
The multiple threats that FS firms face can be categorised into two distinct camps – to steal or to disrupt. Stealing personal data that maybe used to compromise customers through their identities being stolen, which in turn can lead to their accounts being ransacked.
Disruption, due to political reasons can disrupt the trading of an FS firm and could result in a loss of revenue. Both types of attacks carry similar consequences: reduced business and reduced customer confidence and the risks of heavy fines if personal data is comprised.
Cyber criminals have not been slow to utilise these threats during the coronavirus crisis and with banks operating in a state of greatly heightened anxiety, are more vulnerable than they might be usually. With people concerned about the current situation, banks are receiving more queries from customers about short-term loans and for general business advice and attacks could come from such a route.
There has also been a spike in coronavirus-based phishing campaigns. These are well-crafted, look authentic to the untrained eye and are designed to trick people into opening them. These campaigns prey on people’s concerns about the current crisis and who are more likely to click on a malicious link now than they usually might be.
Homeworking even when not in the grip of such a crisis has security issues, but with many FS employees working from home during the lockdown, there have been further security concerns. Staff may be tempted to access corporate systems via unauthorised home systems, while other family members might use the employee’s laptop or device at home – kids printing out their homework, checking personal email – and this can be an easy route in for a hacker using phishing or social engineering lures based on coronavirus.
It’s also true that homeworkers lack the usual office-based security measures – no web gateway security, intrusion detection/prevention systems.
Addressing the threat
Part of the problem for banks in mitigating the threat is that the threat landscape is so wide, varied and evolving. Malware, ransomware and phishing are all still widely deployed tactics, while social engineering techniques, weaponised documents and weaponised websites change all the time. Keeping up with what is going on is a major challenge for any FS firm and especially so during the coronavirus, with internal security teams stretched in a number of different directions.
Ideally FS firms will have already prepared for being breached and will review this process regularly. Assuming they’ve not created a breach response playbook there are several things they will need to do. Identify how the attack happened and work to contain the situation so that it doesn’t continue. This may involve taking systems offline to perform a thorough investigation. Once they know how it happened and what was impacted and the risk assessed, the entity can start to work through the process of communicating to customers with a clear message about what has happened and how it’s being dealt with.
If a data breach concerns personal data, then the entity should contact the Information Commissioners Office (ICO) and Financial Conduct Authority (FCA) within 72 hours of becoming aware of the breach. Once the systems have been restored, then it’s a question of reviewing not only how to secure the entity better through technology and process, but also to evaluate any lessons learnt throughout the breach. When a new plan has been finalised then it should be tested through simulation so that staff can learn how to deal with the next one.
What the banking industry can learn from the pandemic
Although the lockdown has been tough for banks, and the uncertain economic future could be even tougher, it can also act as a period of learning and reflection for executives, especially around how they approach cyber security. There is a clear need to take cyber security even more seriously and up the pace of innovation and deployment of effective data protection and threat mitigation strategies. This includes working with the right technology providers and ensuring that staff are using all of the features and measures available to them.
Addressing cyber security effectively should always cover the combination of people, processes and technology, and the current pandemic allows FS organisations to look at where they are with all three. With so many employees working from home, there have had to be quick training exercises taking place to demonstrate best practice in this area and what processes to follow should any employee think they have been the victim of a cyber-attack.
When the lockdown is over it is not unreasonable to think that many more people will now work from home more regularly. All the measures that were put in place to facilitate pandemic home working should remain, but it’s also an opportunity to put in place new measures.
Such times can act as a trigger for a bank to reinforce its cyber security processes and to remind employees of the need for extra vigilance. This should certainly extend to providing advice and technical help to make sure employees are as well-protected working from home as they are from the office. The impact of coronavirus will be with us for a long time and no FS organisation wants the additional headache of a serious security breach.
Alyn Hockeyis VP of Product Management at Clearswift. Alyn has had an extensive career in cybersecurity, co-developing the MIMEsweeper range of products and working across departments within Clearswift, managing technical support, research and currently product management.
A techie at heart, Alyn spends much of his time talking to customers about the latest technologies and presenting on product lines, gathering information on how to improve those product lines to meet customer demands and the ever-evolving cyber threat.
By Terence Tse
CFOs are evolving into AI-driven transformation orchestrators, balancing finance, technology, and strategy while upskilling teams, managing risks, and driving measurable business value.
A key insight from this year’s AI for CFOs event, organized...
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