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U.S. employers added a robust 678,000 jobs in February, another gain that underscored the economy’s solid health as the omicron wave fades and more Americans venture out to spend at restaurants, shops and hotels despite surging inflation.

The Labor Department’s report Friday also showed that the unemployment rate dropped from 4% to a low 3.8%, extending a sharp decline in joblessness as the economy has rebounded from the pandemic recession.

The latest jobs data follows recent reports that have shown an economy maintaining strength as new COVID infections have plummeted since late January. Consumer spending has risen, spurred by higher wages and savings. Restaurant traffic has regained pre-pandemic levels, hotel reservations are up and far more Americans are flying than at the height of omicron.

Friday’s hiring figures were collected before Russia’s invasion of Ukraine, which has sent oil prices surging and has escalated risks and uncertainties for economies in Europe and the rest of the world.

The report showed that average hourly pay in the United States barely rose last month but has increased 5.1% in the past year, a sign that companies feel compelled to raise wages to attract and keep workers. Many employers, in turn, have been raising prices to offset their higher labor costs, a process that has fueled inflation.

The strong hiring in February occurred across most of the economy, with restaurants, bars and hotels adding 79,000 jobs, construction 60,000 and transportation and warehousing 48,000. The economy still has 2.1 million fewer jobs than it did before the pandemic erupted two years ago this month, though the gap is closely fast.

After months of concerns about labor shortages holding back businesses, there were tentative signs last month that more people are taking jobs or looking for work. The number of people who said they avoided job hunting because they were concerned about COVID fell to 1.2 million in February, down 600,000 from January, when omicron was raging.

Yet consumer inflation has reached its highest level since 1982, squeezing America’s households and businesses, with price spikes especially high for such necessities as food, gasoline and rent. In response, the Federal Reserve is set to raise interest rates several times this year beginning later this month. Those increases will eventually mean higher borrowing rates for consumers and businesses, including for homes, autos and credit cards.

Chair Jerome Powell said this week that he plans to propose that the Fed raise its benchmark short-term rate by a quarter-point when it meets in about two weeks. Powell has acknowledged that high inflation has proved more persistent and has spread more broadly than he and many economists had expected.

The Fed chair cautioned that if inflation failed to ease later this year as he expects, he would consider carrying out half-point increases at future central bank meetings. Larger hikes would raise the risk of weakening the economy or even tipping it into recession.

Powell also warned that Russia’s invasion of Ukraine will lead to higher prices for gas as well as for such other commodities as aluminum, wheat and corn, thereby keeping inflation higher than it would otherwise have been. Oil prices, which have been soaring since war began more than a week ago, are critically important to the global economy.

For now, though, despite high inflation, the rapid fading of the omicron variant is likely to accelerate the U.S. economy and job growth. A survey by The Associated Press-NORC Center for Public Affairs Research found that Americans are now much less worried about COVID than they were in December and January. Mask mandates and other restrictions are ending. More companies are returning to pre-pandemic operations, including working in offices.

Data from the restaurant reservation software provider OpenTable showed that seated diners surpassed pre-pandemic levels late last month. And figures from the Transportation Security Administration reflected a sharp increase in the number of people willing to take airplane flights.

During the omicron wave, businesses barely wavered in their demand for workers. Job openings at the end of December reached near-record levels, with an average of 1.7 available positions for every unemployed person. Historically, there are usually more people out of work than there are jobs.

With many companies desperate for employees, layoffs have plunged. The number of people receiving unemployment aid fell two weeks ago to its lowest level since 1970.

Americans’ concerns about inflation have eroded their optimism about the economy. The Conference Board’s measure of consumer confidence slipped in February for a second straight month.

Still, other surveys show that Americans are increasingly satisfied with their own financial situations. And people clearly see that many jobs are available, the Conference Board’s survey shows.
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It’s unclear if Russian President Vladimir Putin expected the sanctions that followed his invasion of Ukraine. But their severity could have far-reaching economic consequences for Russia. Oksana Bedratenko has the story, narrated by Anna Rice.
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The ongoing conflict between Russia and Ukraine has left global oil and gas markets in the uncertain and unstable, causing supply issues and price spikes, with oil reaching levels of more than $110 a barrel Thursday. The uncertain duration of the conflict, though, makes it difficult to predict how much of the disruption will be permanent and how much is just temporary.

Washington-based Gulf analyst Theodore Karasik tells VOA there are many “wild cards” in the ongoing military confrontation that “could drive energy prices up even further.” He argues that “in any case, there are big changes occurring in the energy industry.”

“The energy situation and the pricing is contingent upon how long this [conflict] goes for and to what degree it ends. We’ve already seen extensive sanctions put on Russia because of its actions in Ukraine. Those sanctions against Russia in the energy field are going to affect how the Russian energy industry operates, and we just don’t have a clear picture of that yet,” Karasik said.

In the meantime, buying of Russian crude has stalled on the back of rising uncertainty over the possibility of direct western sanctions on energy exports, sending prices into freefall and prompting buyers to find alternatives.

The Russian export blend Urals — which trades as a differential to Atlantic Basin benchmark Dated Brent — touched record lows in recent sessions.

A source within the oil trading industry, who specializes in global markets told VOA that European buyers are now actively sourcing alternative crude supplies — Poland’s PKN Orlen is taking supplemental cargoes from term supplier Aramco — and much of that will come from local North Sea production as well as West Africa and the United States.

The source who chose to be unnamed said that the Chinese refiners, particularly those in Shandong province’s refining hub, are key buyers of Russian crude grades Urals and ESPO Blend.

“They have proven less concerned with sanctions, having purchased significant volumes of Iranian crude in the past year. But ongoing disruption to the global banking system as a result of SWIFT sanctions means that even willing buyers are struggling to pay for cargoes. Sanctions against Russian fleet Sovcomflot have only added to the logistical difficulties of buying Russian crude,” the analyst said.

Experts believe that Russian firms may eventually seek to set up accounts with Chinese banks to facilitate such transactions. And cargoes of Urals loading now in the Baltic Sea look likely to head to north China in bulk shipments, with or without earmarked buyers.

“But that entails losses — current market structure means long-haul arbitrage economics are marginal and storage economics are negative. Shipping a cargo to Shandong and floating for months is a losing proposition, even if that cargo has nowhere else to go,” sources in the energy industry told VOA.

Paul Sullivan, a Washington-based Middle East analyst, argues there is no end to the number of wild cards that could change the energy situation. “The conflict increases risk and therefore costs of energy by adding risk premiums,” he says.

On the flip side, “sanctions [on Russia],” he adds, “could hammer the world economy and push energy prices down.” Meanwhile, “some oil and gas companies are leaving Russia or divesting from Russia … [and that] could disrupt supply chains.”

Sullivan goes on to say that potential “terror acts in Russia towards pipelines could push prices up,” while “Turkey closing off the straits to Russian war ships” could also “affect energy ships,” as well.

Experts note that the majority of Russian spot crude is sold through international trading firms like Trafigura, Vitol and Glencore — only a small share is marketed directly by Russian firms like Surgutneftegaz. If Russian crude oil comes under sanction, then the longstanding dynamics that underpin trade in Russian seaborne exports could change, mirroring recent developments in the country’s upstream sector which has seen an exodus as western oil majors exit projects.

Egyptian political sociologist Said Sadek tells VOA that countries in North Africa, like Egypt and Algeria, are being sought out to increase their gas exports to Europe to compensate for Russian gas, which makes up 40% of European imports.

“North African states that produce gas — Algeria, Egypt — Egypt have limited stock, but they have been increasing by 365% [quantities of] liquified gas, because 90% of Egyptian gas is used domestically, 10% is exported, and then we get gas from Israel and Cyprus and transfer it into liquified gas [to] export,” Sadek says.

The expert adds that Qatar also is being solicited to increase LNG exports to Europe, but the tiny Gulf emirate already sends much of its gas to Asia: “A lot of contracts — long term — have already been signed between Qatar, South Korea, Japan, China, which cannot be revoked.”

Sadek emphasizes the Middle Eastern state that could conceivably make up the difference for lost Russian gas exports to Europe is Iran, and he thinks some European countries are hoping to lift sanctions on Tehran to allow oil and gas exports to resume. He questions, however, if Iran — an ally of Russia — would be willing to “stab Russia in the back.”

Some Middle Eastern and north African states, Sadek points out, are facing a potential food crisis, as well, “because they import large quantities of wheat from both Russia and Ukraine. “Countries like Tunisia, Sudan and Lebanon cannot afford more expensive alternative sources of wheat,” and they could eventually face instability if a major staple like bread runs short.
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Fewer Americans applied for unemployment benefits last week reflecting a low number of layoffs across the economy.

Jobless claims fell by 18,000 to 215,000 for the week ending February 26, from 233,000 the previous week, the Labor Department reported Thursday.

The four-week average for claims, which compensates for weekly volatility, fell by 6,000 to 230,500.

In total, 1,476,000 Americans were collecting jobless aid the week that ended Feb. 12, a small uptick of 2,000 from the previous week’s revised number, which was its lowest level since March 14, 1970.

First-time applications for jobless aid generally track the pace of layoffs, which are back down to fairly healthy pre-pandemic levels.

The Labor Department releases its February jobs report on Friday. Analysts surveyed by the financial data firm FactSet forecast that the U.S. economy added 400,000 jobs last month.

In January, the U.S. economy added a whopping 467,000 jobs and revised December and November gains upward by a combined 709,000. The unemployment rate stands at 4%, a historically low figure.

The U.S. economy has rebounded strongly from 2020’s coronavirus-caused recession. Massive government spending and the vaccine rollout jumpstarted the economy as employers added a record 6.4 million jobs last year. The U.S. economy expanded 5.7% in 2021, growing last year at the fastest annual pace since a 7.2% surge in 1984, which also followed a recession.

Inflation is also at a 40-year high — 7.5% year-over-year — leading the Federal Reserve to ease its monetary support for the economy. The Fed has said it will begin a series of interest-rate hikes this month in an effort to tamp down surging prices.

Fewer Americans applied for unemployment benefits last week reflecting a low number of layoffs across the economy.

Jobless claims fell by 18,000 to 215,000 for the week ending February 26, from 233,000 the previous week, the Labor Department reported Thursday.

The four-week average for claims, which compensates for weekly volatility, fell by 6,000 to 230,500.

In total, 1,476,000 Americans were collecting jobless aid the week that ended Feb. 12, a small uptick of 2,000 from the previous week’s revised number, which was its lowest level since March 14, 1970.

First-time applications for jobless aid generally track the pace of layoffs, which are back down to fairly healthy pre-pandemic levels.

The Labor Department releases its February jobs report on Friday. Analysts surveyed by the financial data firm FactSet forecast that the U.S. economy added 400,000 jobs last month.

In January, the U.S. economy added a whopping 467,000 jobs and revised December and November gains upward by a combined 709,000. The unemployment rate stands at 4%, a historically low figure.

The U.S. economy has rebounded strongly from 2020’s coronavirus-caused recession. Massive government spending and the vaccine rollout jumpstarted the economy as employers added a record 6.4 million jobs last year. The U.S. economy expanded 5.7% in 2021, growing last year at the fastest annual pace since a 7.2% surge in 1984, which also followed a recession.

Inflation is also at a 40-year high — 7.5% year-over-year — leading the Federal Reserve to ease its monetary support for the economy. The Fed has said it will begin a series of interest-rate hikes this month in an effort to tamp down surging prices.
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European markets are rising Wednesday as Russia launched a more intense phase of its invasion of Ukraine. 

The FTSE index in London is up 0.9% at midday, with Paris’s CAC 40 one percent higher and the DAX index in Frankfurt up 0.7%.   

Stock markets in Asia and Australia were mixed earlier Wednesday.  Japan’s benchmark Nikkei index finished 1.6% lower, while Shanghai’s Composite index and the TSEC index in Taiwan both closed 0.1% lower.  Hong Kong’s Hang Seng index dropped 1.8%,, while Mumbai’s Sensex lost 1.3%. 

The KOSPI index in South Korea closed 0.1% higher.   

Australia’s benchmark S&P/ASX index finished up 0.2%.  

In commodities trading, gold was selling at $1,928.20 an ounce, down 0.8%. Oil markets are continuing to rise, with U.S. crude oil trading at $109.07 per barrel, an increase of 5.4%, while Brent crude oil, the international benchmark, is 5.7% higher, selling at $110.96 per barrel.    

Russia’s currency, the ruble, was trading at 108.75 to the U.S. dollar, down 3.5%. The Russian Stock Exchange is closed for the third consecutive day after sanctions imposed by a growing list of nations in response to Russia’s attack on Ukraine.  The British online newspaper The Independent said Russia’s central bank will allow a limited number of operations for the first time.   

In futures trading, all three major U.S. indices are trending slightly higher ahead of Wall Street’s opening bell. 

Some information for this report came from Reuters.  

 
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Cryptocurrency purchases in rubles are at a record high following Russia’s invasion of Ukraine, raising questions about whether the likes of bitcoin can help Moscow get around sanctions. 

Why is crypto attracting Russians? 

The United States and its Western allies have sought to cripple Russia’s banking sector and currency with a barrage of sanctions. 

They include cutting selected Russian banks from the SWIFT messaging system, rendering them isolated from the rest of the world. 

SWIFT’s system allows banks to communicate rapidly and securely about transactions. Cutting Russia off is aimed at preventing it from trading with most of the world. 

Western measures that prohibit transactions with Russia’s central bank have also helped plunge the country’s economy into turmoil. 

The ruble is down 27% against the dollar since the start of the year and is trading at more than 100 rubles per U.S. unit, its weakest level on record. 

Russians are consequently flocking to cryptocurrencies that operate on a decentralized network and therefore are not directly affected by sanctions.  

Crypto data-provider Kaiko has reported record purchasing volumes of bitcoin in rubles since last week’s invasion.  

Another type of digital currency to have benefitted hugely from Russia’s assault on its neighbor is tether, a “stablecoin” that is seen as less volatile than cryptocurrencies since it is pegged to the dollar. 

“What we saw … looking at tether (is) the average trade size has increased” in Russia, Clara Medalie, head of research at Kaiko, told AFP. 

“However, it’s still relatively low, which shows an interest split between institutional and retail buyers.” 

Is crypto a long-term solution against sanctions? 

Governments can, if they wish, order shopping platforms to place restrictions on purchases made using cryptocurrencies as a way of blocking attempts to get around sanctions. 

Ukraine’s deputy prime minister Mykhailo Fedorov, who is also minister of the country’s digital transformation, demanded via Twitter that crypto platforms block Russian accounts, a request reportedly being considered by U.S. authorities. 

Analysis group Chainalysis said in a statement that it was “optimistic that the cryptocurrency industry can counter attempts by Russian actors to evade sanctions.” 

It pointed out that blockchains, or the registers of transactions made by digital currencies, allow Western governments to identify violations.  

At the same time, North Korea and Iran have succeeded in getting around sanctions thanks to cryptocurrencies. 

North Korea has earned billions of dollars from cyberattacks, while Iran has used low-cost energy to mine bitcoin, according to Caroline Malcolm of Chainalysis. 

However, using crypto to sell key Russian export commodities, such as wheat, oil and gas, is unlikely because, one veteran broker said, trading volumes of bitcoin and its rivals remain insufficient to support large-scale trades. 

Crypto reactions to invasion? 

Bitcoin and other cryptocurrency prices have jumped since the invasion but not simply because of Russian investment. 

The Ukranian government since Saturday has received $17.1 million worth of crypto following a call for donations, according to analysts Elliptic.  

“We didn’t get to choose the time or manner of our little industry becoming geopolitically critical overnight, but it is upon us,” tweeted Nic Carter, partner at crypto fund Castle Island. 

But Medalie cautioned that the “ruble is not a large cryptomarket. There is not a lot of influence on the rest of the market,” she said. 

 
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From Afghanistan to Cuba, more than 20 countries around the world are under U.S. economic, financial and political sanctions that, according to some experts, are unprecedented in severity and scope. 

The latest penalties target Russia. 

As Russian troops crossed Ukrainian borders, U.S. President Joe Biden made it clear that he will not send U.S. forces to deter Russia’s invasion militarily. Instead, he authorized a series of economic and financial sanctions. 

“The scale of these sanctions are truly unprecedented,” Robert Person, a professor of international affairs at West Point, told VOA while speaking in a private capacity. 

This week Russia has been scrambling to prevent a financial meltdown after sanctions cut some banks out of a critical global financial system and froze the assets of Russia’s central banks that are held overseas. Western countries also set up a task force to seize assets of Russian companies and politically influential businessmen. 

“The cost to Russia will be immediate and profound — to its financial system, to its economy, to its technology base, and to its strategic position in the world,” Daleep Singh, deputy national security adviser for international economics at the White House, told reporters on February 24. 

“We are settling in for a long-term political-economic conflict with Russia, what some have called ‘containment 2.0.’ It’s worth remembering that it took 74 years for the economic flaws in the Soviet system to finally bring about its collapse,” said Person. “Patience in this long struggle will be necessary.” 

Presidential, congressional power 

Under the International Emergency Economic Powers Act of 1977 (IEEPA), the U.S. president can impose sanctions through executive orders. 

Sanctions do not require congressional approval, but Congress also can initiate sanctions through legislation. 

Sanctions are used when diplomacy fails and when war is not preferred as an option, experts say. 

“The exercise of powers granted to the president under IEEPA — the underlying legal authority for most sanctions programs — requires a declaration of national emergency with respect to a threat to the foreign policy, national security, or the economy of the United States that emanates largely from abroad,” Brian O’Toole and Samantha Sultoon wrote in a piece for the Atlantic Council.  

Most policies regarding sanctions are proposed by U.S. government agencies, such as the State Department, and discussed before being recommended to the president for approval. 

Various applications 

While many sanctions are economic in nature, some sanctions are also political and aim to address a range of issues such as nonproliferation of arms, human rights violations, terrorism concerns and trade disputes. 

As of February 2022, there are 23 countries under various U.S. sanctions. 

There are also sanctions related to counter-narcotics trafficking, counterterrorism, cyber operations, foreign interference in U.S. elections, and human rights violations, which can be applied against any country, individual or entity. 

Under IEEPA, there is no limit on the number of countries and foreign entities against which sanctions can be applied. 

“The limit is really policy-defined, in (terms of) how many sanctions regimes the U.S. government believes it needs (in order) to deal with whatever challenges it is facing,” Richard Nephew, a sanctions expert and Columbia University senior research scholar, told VOA. 

Execution 

Russia’s central bank has billions of dollars in foreign currencies held in Western countries which are now frozen. Earlier this year, the U.S. froze some $7 billion of Afghanistan’s assets at the New York Reserve.

When sanctions are applied it becomes “illegal for U.S. persons — and foreign persons can face sanctions of their own — if they do business with sanctioned entities and individuals in ways the U.S. government considers material,” Nephew said. 

The U.S. cannot force other countries to comply with sanctions it imposes but seeks their cooperation to do so. 

Sanctions can deprive individuals and entities from a host of financial transactions such as credit loans, mortgage payments and funds transfers unless there are specific exemptions offered within a given jurisdiction. 

Under the latest sanctions on Russia, U.S. and European countries have also isolated selected Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), an international bank-to-bank transfer system. 

“This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,” the European Union said in a statement on February 26. 

Russian officials have shrugged off the sanctions as trivial and something that will not cause significant harms, but independent observers say it’s too early to say how deep and extensive the impact of the sanctions will be on the Russian economy. 

Effectiveness 

Sanctions can be modified, eased or removed at any time by the U.S. government. 

The Islamic Republic of Iran, the Republic of Cuba, and the Democratic People’s Republic of Korea (North Korea) have been under U.S. sanctions for several decades. 

The effectiveness of sanctions is passionately debated as both proponents and opponents point to specific cases. 

In a June 2019 Foreign Affairs article, a majority of experts quoted said sanctions were causing more harm than good. 

“Sanctions impose costs on both parties: the sender and the target,” said Person of West Point. “There’s also a long-term concern that aggressive sanctions like these will accelerate a global transition away from the American-led international financial architecture and use of the dollar as the dominant currency of exchange and reserve.” 

One thing that is clear is the palpable impact of sanctions — even if intended to target only the broader economic standing of a country — on ordinary people. 

Speaking on the effectiveness of the new sanctions imposed against Russia, White House official Singh said, “these impacts over time will translate into higher inflation, higher interest rates, lower purchasing power, lower investment, lower productive capacity, lower growth, and lower living standards in Russia.” 

“To be clear: This is not the outcome we wanted. It’s both a tragedy for the people of Ukraine and a very raw deal for the Russian people. But Putin’s war of choice has required that we do what we said and to ensure this (invasion) will be a strategic failure.” 
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The 31 members of the International Energy Agency said Tuesday they’d release 60 million barrels of oil from their strategic reserves to bolster the world’s oil markets in the wake of the Russian invasion of Ukraine.

The United States and large energy-consuming countries in Europe have not sanctioned Russian oil, but prices have spiked since the invasion. On Tuesday, the price of a barrel of oil was more than $100 for the first time since 2014.

Russia is the world’s third-largest producer of oil, accounting for roughly 12% of the oil market. Sixty percent of Russian oil goes to Europe, while about 20% goes to China. The U.S. also imports Russian oil.

The release is “to send a strong message to oil markets” that there will be “no shortfall in supplies” the group said Tuesday.

“The situation in energy markets is very serious and demands our full attention,” IEA Executive Director Fatih Birol said.

The U.S. will account for about half of the release announced by the IEA.

The IEA’s action is only the fourth time it has led a coordinated release of strategic oil reserves since reserves were created following the Arab oil embargo of 1974.

It is unclear if releases affect the price of oil.

Last November, amid spiking gas prices, U.S. President Joe Biden released 50 million barrels, a move followed by several other countries. The move had very little impact on the price of gasoline, which has continued to rise. The price of one gallon of gas in the U.S. is now 90 cents more than it was a year ago.

“The release of the reserves is notable, but as we saw back in November, it’s just not viewed as a kind of game changer in any way,” Craig Erlam, senior market analyst at commodity futures trading firm OANDA, told Reuters.

Some information in this report came from The Associated Press and Reuters.
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Global supply chains, already hit hard by the pandemic, are facing further disruption and cost inflation as airspace closures after Russia’s invasion of Ukraine affect the air freight industry.

Transport between Europe and north Asian destinations like Japan, South Korea and China has become particularly problematic due to reciprocal airspace bans that bar European carriers from flying over Siberia and Russia airlines from flying to Europe.

Airlines responsible for moving around 20% of the world’s air cargo are affected by those bans, Frederic Horst, managing director of Cargo Facts Consulting, told Reuters on Tuesday.

Germany’s Lufthansa LHAG.DE, Air France KLM AIRF.PA, Finnair FIA1S.HE and Virgin Atlantic have already canceled north Asian cargo flights over airspace issues, though major Asian carriers like Korean Air Lines 003490.KS and Japan’s ANA Holdings 9202.T are still using Russian airspace, as are Middle Eastern airlines.

Pure cargo carriers like Russia’s AirBridgeCargo Airlines and Luxembourg’s Cargolux are also subject to the airspace bans, in a move that could send air freight rates — already elevated due to a lack of passenger capacity during the pandemic — soaring further.

In December, air cargo rates were 150% above 2019 levels, according to the International Air Transport Association (IATA), adding to inflation affecting industries and economies around the world.

Sanctions imposed on Russia in the wake of its invasion of Ukraine are expected to further disrupt global supply chains.

Russia’s AirBridgeCargo alone moves just under 4% of global international air cargo, with most of that between Europe and Asia, Horst said.

“All up you could be looking at perhaps a quarter of air cargo between Asia and Europe needing to find alternate means of transportation,” Horst said.

“Yields are high enough that flying a longer route via Southeast Asia, South Asia or the Middle East is an option, but it will still pull capacity out of the market.”

Demand for air cargo last year was 6.9% above 2019’s pre-pandemic levels, according to IATA, as e-commerce surged during the pandemic and shipping container shortages and port bottlenecks led to more products being flown by air. In December, air cargo rates were 150% above 2019 levels, IATA said.

Asia-North America cargo routes are expected to be less affected than European routes, analysts say, because many carriers already use Anchorage, Alaska as a cargo hub and stopover point.

Japanese automakers Toyota Motor Corp 7203.T and Nissan Motor Co 7201.T said on Tuesday they were keeping an eye on any disruption to supply chains as a result of what Russia calls its “special operation” in Ukraine.

U.S.-based United Parcel Service Inc UPS.N and FedEx Corp FDX.X, two of the world’s largest logistics companies, have halted deliveries to Russia.
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Ordinary Russians faced the prospect of higher prices and crimped foreign travel as Western sanctions over the invasion of Ukraine sent the ruble plummeting, leading uneasy people to line up at banks and ATMs on Monday in a country that has seen more than one currency disaster in the post-Soviet era.

The Russian currency plunged about 30% against the U.S. dollar Monday after Western nations announced moves to block some Russian banks from the SWIFT international payment system and to restrict Russia’s use of its massive foreign currency reserves. The exchange rate later recovered ground after swift action by Russia’s central bank.  

People wary that sanctions would deal a crippling blow to the economy have been flocking to banks and ATMs for days, with reports in social media of long lines and machines running out.  

Moscow’s department of public transport warned city residents over the weekend that they might experience problems with using Apple Pay, Google Pay and Samsung Pay to pay fares because VTB, one of the Russian banks facing sanctions, handles card payments in Moscow’s metro, buses and trams.  

A sharp devaluation of the ruble would mean a drop in the standard of living for the average Russian, economists and analysts said. Russians are still reliant on a multitude of imported goods and the prices for those items are likely to skyrocket. Foreign travel would become more expensive as their rubles buy less currency abroad. And the deeper economic turmoil will come in the coming weeks if price shocks and supply-chain issues cause Russian factories to shut down due to lower demand.  

“It’s going to ripple through their economy really fast,” said David Feldman, a professor of economics at William & Mary in Virginia. “Anything that is imported is going to see the local cost in currency surge. The only way to stop it will be heavy subsidization.”

The Russian government will have to step in to support declining industries, banks and economic sectors, but without access to hard currencies like the U.S. dollar and euro, they may have to result to printing more rubles. It’s a move that could quickly spiral into hyperinflation.  

The ruble slide recalled previous crises. The currency lost much of its value in the early 1990s after the end of the Soviet Union, with inflation and loss of value leading the government to lop three zeros off ruble notes in 1997. Then came a further drop after a 1998 financial crisis in which many depositors lost savings and yet another plunge in 2014 due to falling oil prices and sanctions imposed after Russia seized Ukraine’s Crimea peninsula.

Russia’s central bank immediately stepped in to try to halt the slide of the ruble. It sharply raised its key interest rate Monday in a desperate attempt to shore up the currency and prevent a run on banks.  

The bank hiked the benchmark rate to 20% from 9.5%. That followed a Western decision Sunday to freeze Russia’s hard currency reserves, an unprecedented move that could have devastating consequences for the country’s financial stability.  

It was unclear exactly what share of Russia’s estimated $640 billion hard currency pile, some of which is held outside Russia, would be paralyzed by the decision. European officials said that at least half of it will be affected.

That dramatically raised pressure on the ruble by undermining financial authorities’ ability to support it by using reserves to purchase rubles.  

Kremlin spokesman Dmitry Peskov described the new sanctions that included a freeze on Russia’s hard currency reserves as “heavy,” but argued Monday that “Russia has the necessary potential to compensate the damage.”

The central bank ordered other measures to help banks cope with the crisis by infusing more cash into the financial system and easing restrictions for banking operations. At the same time, it temporarily barred non-residents from selling the government obligations to help ease the pressure on the ruble from panicky foreign investors trying to cash out of such investments.  

The steps taken to support the ruble are themselves painful since raising interest rates can hold back growth by making it more expensive for companies to get credit.

The ruble sank about 30% against the U.S. dollar early Monday but steadied after the central bank’s move. Earlier, it traded at a record low of 105.27 per dollar, down from about 84 per dollar late Friday, before recovering to 98.22.

Sanctions announced last week had taken the Russian currency to its lowest level against the dollar in history. 
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Russia’s invasion of Ukraine, and the sanctions that followed, has pushed the price of oil to over $100 per barrel, the highest level in eight years. But, it’s also opened an opportunity for African oil producers like Nigeria, Angola, Libya, and Algeria to cash in with more crude oil exports. But a lack of refineries in Africa means crude oil exporters will also have to pay more for imported fuels.

The Brent crude oil prices hit $105 per barrel last week, it’s highest mark since 2014 and up by 47% since December, amid fears that supplies from Russia may be impacted by crisis.

Russia accounts for a significant amount of the world’s total crude oil output between 25-30% making it the second highest producer globally.

But experts say the crisis and sanctions slammed on Russia by Europe and America could significantly impact demand for Russian products and tip the odds in Africa’s favor.

“For Africa it’s a gain, it’s an opportunity, it presents that window of opportunity for African countries to see how they can increase their production capacity and meet the need of global demands of crude oil,” says Isaac Botti, a public finance expert.

However, Africa’s production combined accounts for less than a tenth of total global output. Nigeria is Africa’s largest producer of oil followed by Libya. Other notable producers are Algeria and Angola.

Experts predict oil prices will rise further but worry Nigeria could be facing a backlash.

“At the end of the day it’s going to hit on our economy. We may think that we’ll gain but remember we don’t refine out crude oil,” said economic analyst Paul Enyim.

Nigerian refineries have been shut down for about one year. The country depends on imports to meet it’s energy needs. Experts say prices paid for imported will also increase.

Authorities are also grappling with huge subsidies to keep pump price of oil products within affordable limits.

Last week Nigeria’s minister of state for Petroleum said authorities were not comfortable with the surge in prices of crude oil.

But this week, Algerian state-owned oil and gas giant said it would supply Europe if Russian exports dwindled as a result of the crisis.

Botti says it’s a good example for other African nations.

“We need to develop our capacity to produce locally, we need to look at various trade agreements that are existing,” he said.

For years African oil producers including Nigeria have been struggling to meet required daily output levels.

Experts however worry African producers may struggle to fit into the big market with increasing global demands for crude oil.

For weeks, Nigeria has been battling to normalize fuel supply in the country after authorities recalled millions of liters of adulterated petrol from circulation causing a major shortage in West Africa’s most populous nation.

As the crises between Russia and Ukraine lingers, experts say the shifting focus on Africa could be both a blessing and a burden.
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BP said Sunday it is exiting its share in Rosneft, a state-controlled Russian oil and gas company, in reaction to Russia’s invasion of Ukraine.

BP has held a 19.75% stake in Rosneft since 2013. That stake is currently valued at $14 billion.

London-based BP also said its CEO, Bernard Looney, and former BP executive Bob Dudley will immediately resign from Rosneft’s board.

“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink BP’s position with Rosneft,” Looney said in a statement.

Rosneft said it was informed of BP’s decision Sunday. 

“BP has come under unprecedented pressure from both the regulator and its shareholders. BP’s decision was preceded by a Western media campaign full of false reports and conclusions,” Rosneft said in a statement on its website that was translated by The Associated Press. “The decision of the largest minority shareholder of Rosneft destroys the successful, 30-year-long cooperation of the two companies.”

BP Chairman Helge Lund praised the “brilliant Russian colleagues” BP has worked with for decades, but said Russia’s military action “represents a fundamental change.”

“The Rosneft holding is no longer aligned with BP’s business and strategy and it is now the board’s decision to exit BP’s shareholding in Rosneft,” Lund said in a statement.

BP’s action was an abrupt turnaround from earlier this month. During a conference call with investors on Feb. 8, Looney downplayed concerns and said there were no changes to the company’s business in Russia.

“Let’s not worry about things until they happen. And who knows what’s going to happen?” Looney said.

Kwasi Kwarteng, the U.K.’s secretary of state for business and energy, said he welcomed BP’s decision.

“Russia’s unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in Putin’s Russia,” Kwarteng said in a tweet.

BP said it will take two non-cash charges in the first quarter to reflect the change, including an $11 billion charge for foreign exchange losses that have accumulated since 2013.

It is not clear exactly how BP will unwind its holdings, or who might step up to buy them. 

Rosneft’s partnerships with Western oil and gas companies have been stymied before.

In 2011, Exxon Mobil, led at the time by future U.S. Secretary of State Rex Tillerson, signed a deal with Rosneft to potentially drill in the oil-rich Russian Arctic. But Exxon ended that partnership in 2017, citing U.S. and European sanctions against Russia.
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Commission President Ursula von der Leyen says the European Union will close its airspace to Russian airlines and private jets due to Russia’s invasion of Ukraine.

The ban was decided on Sunday by the bloc’s foreign ministers. The decision is among several actions announced by the foreign ministers after their meeting in Brussels.

“We are shutting down the EU airspace for Russians. We are proposing a prohibition on all Russian-owned, Russian registered, or Russian-controlled aircraft. These aircraft will no more be able to land in, take off, or overfly the territory of the EU,” von der Leyen told a news conference.

Many European countries had already announced they would close their airspace to Russian planes.

Finland and Belgium were among the most recent to take the step, saying earlier they would join other European countries in ramping up sanctions against Moscow, officials said.

Finland, which shares a 1,300-kilometer border with Russia, “is preparing to close its airspace to Russian air traffic,” Transport Minister Timo Harakka said on Twitter on February 26.

He did not state when the measure would take effect.

Belgian Prime Minster Alexander De Croo said on February 27 that the country “has decided to close its airspace to all Russian airlines.”

De Croo said on Twitter that “our European skies are open skies. They’re open for those who connect people, not for those who seek to brutally aggress.”

Several other countries, including Germany, France, Bulgaria, the Czech Republic, Britain, Romania, and Poland, had already closed their airspace to Russian flights, forcing westbound Russian planes to make enormous diversions.

“France is shutting its airspace to all Russian aircraft and airlines from this evening on,” French Transport Minister Jean-Baptiste Djebbari said on Twitter.

Air France-KLM said it is suspending flights to and from Russia as well as the overflight of Russian airspace until further notice as of February 27.

Canada also said on February 27 it had shut its airspace to Russian aircraft effective immediately, Minister of Transport Omar Alghabra said on Twitter.

Germany’s Transport Ministry said it would close its airspace to Russian planes and airlines for three months from February 27, with the exception of humanitarian aid flights.

Baltic countries Lithuania, Latvia, and Estonia are also closing their airspace to Russian airliners.

Moscow, for its part, has also banned planes from those countries from flying over its territory.

With reporting by AFP and Reuters.
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The U.S. is revisiting cutting Russia from the global bank-to-bank payment system known as SWIFT, as the next step in a series of escalating sanctions punishing Moscow for the unprovoked invasion of Ukraine.

U.S. President Joe Biden initially held back on this crucial step that would isolate Russia on the world stage and have a serious impact on its economy, due to the concerns of European allies. But those concerns appeared to be eroding Saturday as Russian forces moved to encircle the Ukrainian capital of Kyiv.

Ukraine has lobbied for a SWIFT ban on Russia, urging Europe to act more forcefully in imposing sanctions against Moscow. However, some European nations, including Germany, are hesitant to take that step.

British Prime Minister Boris Johnson called Friday for nations to cut off Russia from the SWIFT international bank transfer system “to inflict maximum pain.”

Luxembourg Foreign Minister Jean Asselborn said “the debate about SWIFT is not off the table, it will continue.”

Putin, Lavrov sanctioned

The United States announced Friday that it would freeze the assets of Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, following similar steps taken by the European Union and Britain, as nations around the world sought to tighten sanctions against Russia’s government over its invasion of Ukraine.

The U.S. Treasury Department announced the action Friday after EU foreign ministers meeting in Brussels unanimously agreed to freeze the property and bank accounts of the top Russian officials.

Britain’s government took the same action Friday, with Foreign Secretary Liz Truss writing on Twitter, “We will not stop inflicting economic pain on the Kremlin until Ukrainian sovereignty is restored.”

White House press secretary Jen Psaki said the move by the U.S., the European Union and Britain sends “a clear message about the strength of the opposition to the actions” by Putin.

Juan González, the National Security Council Senior Director for Western Hemisphere Affairs, told VOA, the sanctions were designed to apply global pressure on Russia.

“If you see the sanctions on 13 financial institutions, among the largest in Russia, that will have an impact with any government or business that has agreements with these institutions. But also, a lot of this money laundering and governments that operate outside the financial system international will feel the squeeze,” Gonzalez said.

Russian foreign ministry spokeswoman Maria Zakharova said the sanctions against Putin and Lavrov reflect the West’s “absolute impotence” when it comes to foreign policy, according to the RIA news agency.

World leaders are rarely the target of direct sanctions. The only other leaders currently under EU sanctions are Belarus President Alexander Lukashenko and Syrian President Bashar al-Assad, according to Agence France-Presse.

Austrian Foreign Minister Alexander Schallenberg said the move is “a unique step in history” toward a country that has a permanent seat on the U.N. Security Council but said it shows how united EU countries are in countering Russia’s actions.

The EU sanctions against Putin and Lavrov are part of a broader sanctions package that targets Russian banks, oil refineries and Russia’s defense industry.

EU leaders agreed, however, it was premature to impose a travel ban on Putin and Lavrov because negotiating channels need to be kept open.

German Foreign Minister Annalena Baerbock said Friday the package of banking sanctions the EU has passed would hit Putin’s government harder than excluding Russia from the SWIFT payments system.

“The sword that looks hardest isn’t always the cleverest one,” she said, adding, “the sharper sword at the moment is listing [the] banks.”

In response to the sanctions, Russia has taken its own measures, including banning British flights over its territory, after Britain imposed a similar ban on Aeroflot flights.  

The United States and several allies had imposed a first tranche of sanctions Tuesday, after Putin declared the disputed eastern Ukraine regions of Luhansk and Donetsk as independent states, much as he appropriated Ukraine’s Crimean Peninsula in 2014.

President Biden added another round of sanctions on Russia Thursday, hours after Russia began its invasion of Ukraine, declaring at the White House after meeting virtually with leaders of the G-7 nations and NATO that “Putin chose this war, and now he and his country will bear the consequences.”

Biden said the new U.S. sanctions, which target Russian banks, oligarchs and high-tech sectors and include export controls, will “squeeze Russia’s access to finance and technology for strategic sectors of its economy and degrade its industrial capacity for years to come.”

NATO allies, including Britain and the European Union, also imposed more sanctions Thursday, and the effects were felt almost immediately when global security prices plunged and commodity prices surged. Biden acknowledged that Americans would see higher gasoline prices.

Also Friday, an International Criminal Court prosecutor warned that the court may investigate whether Russia has committed any possible war crimes, following its invasion of Ukraine.

“I remind all sides conducting hostilities on the territory of Ukraine that my office may exercise its jurisdiction and investigate any act of genocide, crime against humanity or war crime committed within Ukraine,” ICC prosecutor Karim Khan said Friday in a statement.

Some information in this report came from The Associated Press, Agence France-Presse and Reuters.
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An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.

The figure reported Friday by the Commerce Department was the largest year-over-year rise since 1982. Excluding volatile food and energy prices, core inflation increased 5.2% in January from a year earlier.

Robust consumer spending has combined with widespread product and worker shortages to create the highest inflation in four decades — a heavy burden for U.S. households, especially lower-income families faced with elevated costs for food, fuel and rent.

At the same time, consumers as a whole largely shrugged off the higher prices last month and boosted their spending 2.1% from December to January, Friday’s report said, an encouraging sign for the economy and the job market. That was a sharp improvement from December, when spending fell. Americans across the income scale have been receiving pay raises and have amassed more savings than they had before the pandemic struck two years ago. That expanded pool of savings provides fuel for future spending.

Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia’s invasion likely disrupting oil and gas exports. The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, have also increased.

President Joe Biden said Thursday that he would do “everything I can” to keep gas prices in check. Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation’s strategic reserves. He also warned that oil and gas companies “should not exploit this moment” by raising prices at the pump.

A separate report Friday showed that orders for long-lasting factory goods rose sharply in January, led by a rise in demand for airplanes. The figures indicate that many companies are willing to invest more in industrial equipment and other goods, a sign of confidence in the economy.

“Overall, the real economy appears to be in stronger health than we feared,” said Paul Ashworth, chief U.S. economist at Capital Economics, a forecasting firm.

Russia’s invasion and the likely resulting rise in inflation have increased pressure on the Federal Reserve, which is expected to raise interest rates by a quarter-point as many as five or six times this year beginning in March. The Fed’s delicate task — to raise rates enough to restrain inflation, without going so far as to tip the economy into recession — has now become more difficult.

Fed officials are acknowledging that the invasion of Ukraine has complicated the economic outlook, but say that so far they are sticking with their plans for rate hikes.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said Thursday that she supported a series of rate hikes beginning in March. But she said the Fed should remain flexible: Faster rate hikes might be needed, she said, if inflation hasn’t begun to fade by mid-year, or more gradual increases if inflation is slowing.

“The implications of the unfolding situation in Ukraine for the medium-run economic outlook in the U.S. will also be a consideration,” she said. Other Fed officials have offered similar remarks this week.

Late Thursday, however, Fed governor Christopher Waller said he would support a half-point rate hike in March if inflation remains high.

Fed officials want inflation to fall back to its 2% target, as measured by the Commerce Department’s gauge, released Friday. A separate measure, the consumer price index, released two weeks ago, showed that inflation reached 7.5% in January from a year earlier, also a four-decade high.

In December, Fed officials projected that inflation would decline to just 2.7%, according to their preferred measure, by the end of this year, which most economists see as increasingly unlikely. The Fed will release updated projections at its March meeting.

January’s data show inflation was already picking up before the invasion. From December to January, prices rose 0.6%, up from 0.5% in the previous month.

There are early indications that consumer spending has stayed healthy, boosted by the rapid fading of the omicron wave of the coronavirus. JPMorgan Chase said that spending on its credit cards for airline tickets, hotel rooms, and restaurant meals rose in the first half of this month.

The JPMorgan Chase Institute also recently released data showing that cash balances remain elevated among their customers, including those with lower incomes. Bank account balances for Americans with less than $26,000 in income were 65% higher at the end of last year than they were two years before.

Americans’ paychecks are rising steadily. Average hourly earnings rose 5.7% in January compared with a year ago. Unless companies can offset their higher labor costs with greater efficiencies, most of them will likely charge their customers more. This would send inflation higher.

The combination of higher pay and enhanced savings suggests that Americans may be able to keep spending at a solid pace in the coming months, thereby sustaining the economy’s inflationary pressures.
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Thailand’s economy has seen growth in its recovery amid the global pandemic, but rising COVID-19 cases concern health experts.

Heavily reliant on international tourism to boost its economy, Thailand dropped its quarantine requirement for fully vaccinated visitors in November, with thousands of arrivals flocking to the country since.

But along with the renewal of tourism in Thailand, new COVID-19 infections have also begun to accelerate throughout the country.

Dr. Anan Jongkaewwattana, a virologist and researcher at the National Centre for Genetic Engineering and Biotechnology in Thailand, has said the country is at a “crossroads” over what to do next.

“We are experiencing rising in omicron cases — a very rapid one.  The question should be how long we can expect it to slow down … it can be days or weeks or even months,” he told VOA.

“In my opinion, we are at the crossroads at the moment.  The number of cases are rising but, to many doctors, the majority of them are still considered mild when compared to the delta wave,” he added.

Data show that the omicron variant is highly transmissible, has an incubation period of about five days and causes less severe symptoms than earlier variants.

Thailand saw a new daily record high on Friday, with 24,932 cases.

Last year saw strict curfews and social restrictions enforced throughout the country for months. However, after a speedy vaccination rollout – sometimes reaching one million doses administered per day – measures were eventually relaxed toward the end of the year. 

Officials said on Monday that the economy rebounded in the fourth quarter of 2021, with rising exports and the return of tourists. Year on year, Thailand saw a 1.9% increase in its economy, aided by the late wave of tourism. Nearly 500,000 people have visited since November.

With rapidly rising infection in the country, though, foreign tourists may think twice about entering, according to Stuart McDonald, founder of travel guide Travelfish.org.

“Should that be concerning for tourists? I would say yes. It is a rapidly changing situation and the Thai administration has a history of chopping and changing rules in an ad hoc, short notice, manner, and not always in a manner clearly informed by concerns for public health,” McDonald told VOA.

Thai authorities have changed entry requirements for tourists several times in recent months, including pausing its Test & Go plan in December following a rise in omicron cases.

The Thai government made further changes Wednesday to the plan, allowing fully vaccinated visitors to skip the quarantine period that is required by unvaccinated air arrivals.

As of March 1, fully vaccinated arrivals are now only required to take one PCR test instead of two when entering the country. Travelers must then wait for their results for up to 24 hours in a health-approved hotel before being allowed to travel elsewhere. Visitors must also take a self-administered rapid antigen test on the fifth day.

Tourism is crucial to the Thai economy. In 2019, tourism accounted for approximately 11% of Thailand’s gross domestic product, and around 20% of Thais  were employed in tourism, according to the Bank of Thailand.

Tourism businesses had previously asked the government to relax entry restrictions.

Authorities have recently ruled out any imminent new restrictions, including lockdown, despite recently raising the country’s COVID-19 alert to Level 4, the second-highest level. Masks are still required in public, while people are encouraged to work from home, cancel nonessential travel and avoid large gatherings.

Thailand now must focus on a plan to live with the virus, according to Pravit Rojanaphruk of Thai news site Khaosad English.

“The government can ill afford to impose another semi-lockdown as it has spent a lot of money over the past two years to remedy and contain COVID-19. It is hesitant because further restrictions would adversely affect the latest Test & Go scheme for arrivals from abroad and further harm the tourism and related industries.

“Increasing vaccination is the way ahead as the government has enough vaccines now for a booster shot. Children will be a particular target group in the weeks ahead but some parents are still reluctant. It’s time to focus on normalising coexistence with COVID-19,” he told VOA.

Last month health officials began vaccinating 5- to 11-year-olds. According to Thailand’s Ministry of Public Health, this age group includes 5 million children in Thailand.

But Jongkaewwattana raised his concerns still, “I’m quite worried in the increasing number of children who are infected and getting sick.  Those kids are not vaccinated and they are more likely afflicted by the Omicron infection compared to the fully vaccinated adults.”

The head of Bangkok’s Chulalongkorn University’s Centre of Excellence in Clinical Virology, Dr Yong Poovorawan, warned that Thailand could soon see 100,000 people test positive per day.

Jongkaewwattana believes more can be done to mitigate the risks of infection.

“I believe in the use of technology to help the vaccine to slow down the spread of the virus.  I suggest the government provide test kits to people so that they can monitor their risk. The use of masks in public must be emphasized and the activities that promote virus spreading should be prohibited.”

An increase in the daily death rate could force the government into further action, he said. Thursday and Friday also saw 38 and 41 COVID-19 deaths respectively.

“The death case is now slowly rising and if the number reaches 50 or more the government may start something to bring the number down. If the number of COVID patients in the hospitals nationwide are at a certain limit, they will implement some restrictions. But I don’t see a complete lock down or curfews coming very soon.”

Thailand’s health authorities have administered approximately 122 million doses, including first, second and booster doses. The country has recorded nearly 2.8 million COVID-19 cases with nearly 23,000 deaths since the pandemic began. 
…

Nigeria’s real estate market has been expanding rapidly, but so has the number of people in need of housing in Africa’s most populous country. Nigeria’s Central Bank says the country has a growing deficit of at least 22 million homes.

Fashion designer Precious Nwajiaku moved to Abuja in late January in search of better opportunities. Without much money, she settled for a one-room apartment in a sandy village on the outskirts of Abuja.

She said she paid $300 for one year’s rent.

For that budget, Nwajiaku said, the house does not even have basic comforts such as water and electricity.

“You pay for water, there’s no water inside,” she said. “As you can see there’s no light, there’s nothing, there’s no good road.”

Nigeria’s real estate market grew by 3.85% in the second quarter of last year, its highest rate in six years.

Experts say cities such as Lagos and Abuja have the kind of buildings and architecture that are in high demand.

As demand for higher-priced real estate increases, though, access to affordable housing is more difficult for millions of citizens.

Nigeria’s housing disparity reflects the country’s huge economic divide.

The World Bank says 22 million people in Nigeria do not have the housing they need, the highest number in the world.

For years Nigerian authorities have been pledging to address the issue but without much result. In 2019, government officials pledged to supply 1 million affordable houses each year to help meet the demand.

Housing development advocate, Festus Adebayo said the housing programs are not keeping up with Nigeria’s population growth each year, though.

“If Nigeria is producing to the rate of 5 million every year, how many units of houses has the government or private sector produced in a year?” he said.

Adebayo runs an advocacy campaign for affordable houses and hosts an annual gathering and housing show in Abuja. The show aims to bring government and industry together to address the lack of affordable housing.

He said through the show, hundreds of citizens have been given suitable homes at affordable prices.

He warned that housing gaps will worsen by the time Nigeria’s population doubles to 400 million, as it is estimated to do by experts in 2050.

Property developer Banji Adeyemo cites several factors for the high cost of building homes.

“This is an era where foreign exchange has taken a new toll entirely and most of the construction materials have foreign input,” he said. “Governments needs to bring down the cost of land and it will reflect on the cost of production by developers for houses. Because other materials you don’t have control over them.”

Nigerian lawmakers this month began considering a bill that calls for rent to be paid monthly instead of once a year to ease the financial burden on tenants.

Experts say unless more houses are built, the gap will only widen, and millions will lack affordable shelter.
…