Nigeria gambling market could be hit by drop in global crude oil price
Africa’s largest economy braces for the big hit as oil prices plummet. On the 12th of March 2020, the Nigerian dollar bonds sank to record lows stocks a four year low, as fears grow over the devaluation of the naira currency.
With oil prices plunging amid concerns over price war between Russia and Saudi Arabia, and the coronavirus outbreak obliterating stock markets, Africa’s largest economy is in a precarious position. Perhaps the local news agency reported that Nigerian stocks headed for their fifth straight day of losses to a new four year low. In which due to the fall of oil prices to just over $30 per barrel, rising external debt and a depreciating currency pose a threat to economic stability in the country of more than 190 million people.
The West African nation is Africa’s largest economy in terms of GDP (gross domestic product). The markedly lower oil prices will undoubtedly have a broad adverse consequence for the Nigerian economy and overall business model in the country as 60% of its budget is financed through crude oil.
How could it affect the gambling industry?
The economic situation of a country has a significant influence on gambling activities in a country, despite the 2014-15 oil price crash that took hold which plunged the country into recession in 2016 Nigeria has never fully recovered. The Naira is still a classic petrocurrency whose faith remains inartistically tied to global oil prices. However, as it stands now the Nigeria reserve stands at $38 billion a drop to $30 billion could see the devaluation of its currency. As a result of this would lead to increase in cost of living, in which. The hardship will continue to dwindle on the ordinary people.
Perhaps the importation cost for raw materials and other soft and hard commodities that will pay for using FX will affect raw inputs for manufacturers. Therefore it will become more expenses and the ultimate losers will be everyday consumers who will see further erosion in their purchasing power. However, if such a situation occurred, all sectors of business will be affected. Perhaps these will have a significant consequence on punters attitude towards gambling as we are going to see a lot of small players in terms of the amount that will punters staked on gambling. At the same time, it will result in a sharp dramatic decline in gambling revenue in the country.
Which estimated that over 25$ millions are spent on gambling every day in the country this will harm gambling operators, and we could begin to see downsize of workers in the industry. In contrast, some operators could close down their activities due to the shortage of revenue.
Article by Adeleye Awakan to know more about the African gambling industry, Consultant, please feel free to contact me on any of this channels: Email: [email protected] Linkedin: AdeleyeAwakan, Twitter: @AdeleyeAwakan, Instagram: adeleyeawakan