Nigerians Vote and a South Pacific Remake
Daily SITREP for Friday, February 24, 2023
🇳🇬 Nigerians Vote
Nigerians will elect their new president and parliament this weekend with third-party candidate Peter Obi leading recent polls (ANAP Foundation). Obi has a strong following amongst younger Nigerians and a win would signal a break from some of the traditional political power structures in the country. However, there is still a significant margin for error in the polls and all three leading candidates have strong bases of support so a close election and run-off are still a significant possibility.
The four main candidates via Wikipedia. Currently, Obi, Tinubu and Abubakar are the leading three candidates.
Whoever wins the presidency will inherit a range of intractable economic and security issues and ‘quick wins’ will be in short supply. (See Bloomberg for more.) Traditional divisions between the north and south, and disappointment amongst supporters of the losing candidates, will further hobble the new president suggesting that there’s no easy path back to prosperity for Nigeria.
Sabre Rattling in the South Pacific
Original Musical Poster, © Majestic Theatre
While much of the world’s attention has been on Russia’s invasion of Ukraine, there are several developments in the Asia Pacific region worth keeping track of. Most relate to the struggle for influence between the US and China but North Korea still remains a significant potential source of instability.
🇹🇼 On Thursday, there were reports that Washington will increase the number of troops in Taiwain from around 100 to 200. While the number is very small, this will be seen as a provocation by Beijing, increasing the tension that has risen since the Chinese surveillance balloon was shot down after passing over the US two weeks ago. (More in Blomberg.)
🇵🇭 Separately, the Philippines has strengthened military ties with the US as Manila takes a tougher security stance to protect her maritime interests in the region.
🇰🇵 Meanwhile, North Korea tested nuclear-capable cruise missiles on Thursday to demonstrate the country’s ability to mount a counterattack in the event of any hostile action.
A strategic cruise missile is launched during a drill in this undated photo released on February 24, 2023 by North Korea's Korean Central News Agency (KCNA). KCNA via Reuters
🇰🇷 This test took place as the US and South Korea conducted tabletop exercises and joint military drills, preparing for an attack by North Korea. (Reuters.)
On to the numbers
Relative Values (90-Days)
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Potentially impacting: Fuel prices | Gound shipping costs. | Plastic prices | Changes to fuel subsidies (potentially leading to unrest) | Cost of living (especially transport and heating) | Changes to traffic volume/transportation choices | Demand for automotive products | Theft and smuggling.
Brent Crude is low for this 90-day interval. Prices ended relatively flat over the last 21 days after moderate fluctuation.
Iron and Steel
Potentially impacting: Cost of construction projects | Construction project timelines | Cost/availability of raw materials | Infrastructure project timelines/costs | Cost and availability of finished metal goods | Value of scrap | Value of 2nd hand equipment/vehicles.
Iron and Steel are very high for this 90-day interval. Prices ended relatively flat over the last 21 days after slight fluctuation.
Market Volatility (VIX-US)
Potentially impacting: Availability of capital for investment | Interest rates| Share prices | Consumer confidence | House prices/rent | Financial certainty/uncertainty | Financial models | Stock-based compensation values.
Market Volatility (VIX) is high for this 90-day interval. The index increased sharply over the last 21 days after moderate fluctuation.
Potentially impacting: Bread, pasta, couscous & noodle prices | Changes to food subsidies (potentially leading to unrest) | Cost of living | Movement from low-income to food insecure to undernourished | Increased theft or graft in loosely governed areas | Demand on charities.
Wheat is high for this 90-day interval. Prices ended relatively flat over the last 21 days with little fluctuation.
Ocean Freight (FBX)
Potentially impacting: Supply chain costs (direct and indirect) | Supply chain delays | Port capacity/throughput speed | Customs clearance | Availability of goods and materials | Consumer demand/hoarding.
Shipping (FBX) is very low for this 90-day interval. Prices ended relatively flat over the last 21 days after significant fluctuation.
February 25: Nigeria, President, House of Representatives and Senate
March 5: Estonia, Parliament
Maybe this email should have been a Tweet….