• About Us
  • Contact Us
  • Privacy Policy
Wednesday, June 7, 2023
The Union Nigeria
No Result
View All Result
  • Home
  • News
    • National
    • International
    • Security
    • Judiciary
    • Special Reports
  • Politics
  • Investigations
  • Business
    • Economy
    • Agriculture
    • Aviation
    • Banking
    • Communication
    • Energy
    • Maritime
    • Oil & Gas
    • Technology
    • Tourism
  • Health
  • Education
  • Arts & Life
    • Art
    • Books
    • Fashion
    • Lifestyle
  • Sports
    • Football
    • Athletics
    • Tennis
    • Racing
    • Golf
  • Press Freedom
  • Opinion
    • Editorial
    • Interviews
    • Columns
  • Home
  • News
    • National
    • International
    • Security
    • Judiciary
    • Special Reports
  • Politics
  • Investigations
  • Business
    • Economy
    • Agriculture
    • Aviation
    • Banking
    • Communication
    • Energy
    • Maritime
    • Oil & Gas
    • Technology
    • Tourism
  • Health
  • Education
  • Arts & Life
    • Art
    • Books
    • Fashion
    • Lifestyle
  • Sports
    • Football
    • Athletics
    • Tennis
    • Racing
    • Golf
  • Press Freedom
  • Opinion
    • Editorial
    • Interviews
    • Columns
The Union Nigeria

How Us Presidential Election Winner Will Affect Nigeria

The Nigerian economy is connected to the US economy in 4 main ways which are The Dollar exchange rate, The price of crude oil, The US Federal Reserve Rate and China.

by The Union Nigeria
November 4, 2020
in International
How Us Presidential Election Winner Will Affect Nigeria

Joe and Trump

Share on FacebookShare on TwitterShare To WhatsAppSend To Mail

By Kalu Aja

With the US Presidential elections set to take place on November 3rd – America has a choice between two major parties with vastly different economic views. Expectedly, the policy positions of each of these presidents will have far-reaching effects globally, including Nigeria.

President Donald Trump’s signature phrase is “America First”. This is an economic policy that seeks to promote US based manufacturing, a weaker dollar to promote exports, energy independence via increased fossil fuel output, and targeted immigration policies to reduce illegal immigration and raise local US wages.

Internationally, Trump has favored bilateral trade policies over multilateral policies and has deployed trade tariffs under a policy of reciprocity. He has also pulled out of the Paris Climate Accord.

The Democratic policy

Former Vice President, Joe Biden, also has a “Buy America” economic plan funded by a hike in corporate and personal income taxes. His plan will expand the affordable Care Act (Obamacare). The Biden plan will restrict fossil fuel investment on federal land, rejoin the Paris Climate talks and expand renewable energy use in the US.

Biden is also planning a huge fiscal expansion (tax hikes) to invest in infrastructure and expansion of Obamacare to States. He also plans a new tax called the U.S. Global Intangible Low-Taxed Income (GILTI), which is a tax on patents, trademarks, and copyrights generated by an affiliated foreign corporation.

ALSO READ  (OPINION) 2023: Let us pray for Nigeria!

The facts

The stock market has performed better under Democrat Presidents than it has under Republican presidents, according to data going back to 1946.

From 1947 to 2006, the average annual return for stocks under a Democratic president was 10.5% versus 6.1% under a Republican president.

The average annual US GDP growth rate under a Democratic president was 3.6%, compared to 2.6% for a Republican president.

Why? The type of fiscal multiplies both parties use, Republicans use tax cuts while Democrats stimulate via consumption.

Tax cut introduced by Republicans boost economic growth by 0.3% to 0.4%, but expanding unemployment benefits and other policies often pushed by Democratic presidents has a fiscal multiplier of 1.2 to 1.7.

Effect of policies in the US

The Trump Presidency promises a new middle-class tax cut and further regulatory pullbacks on Energy and Financial Services, which are highly regulated. These sectors will see revenue boost; thus, banks, natural gas & pipelines, and local manufacturing will benefit under a Trump reelection.

The Biden presidency wants to focus on the Affordable Care Act, renewables, and infrastructure; thus, any sector in Wind and Solar power, and construction equipment will benefit. Health stock will also jump as Biden will boost Medicare expansion.

ALSO READ  ARMED FORCES: Democracy Has Come To Stay – CDS

What about Nigeria?

The Nigerian economy is connected to the US economy in 4 main ways which are The Dollar exchange rate, The price of crude oil, The US Federal Reserve Rate and China.

So which candidate’s policy will have a net positive effect on Nigeria and the Nigerian Stock exchange? To be clear, Nigeria benefit from a

Weak dollar. So, the cost of debt and imports is low.

Higher crude oil price. So, forex earnings are up.

Low Federal Reserve policy rate, to make emerging market securities attractive on a yield basis.

The certainty with China.

If Trump is reelected and continues his trade and energy policies, it will mean more Capital Investments in the US to avoid import taxes. America’s energy independence also means less import of foreign crude and more US exports of oil and gas.

This should boost the US dollar and drop the price of crude oil & gas which will be negative for Nigeria. The positive for Nigeria is fossil fuels will not come under heavy regulatory guidance; thus, boosting new investment. Under Trump, the dollar is stronger, crude prices fall, federal rates stay low.

ALSO READ  OPINION: How To Win Elections In Nigeria!

A Biden victory will see massive deficit spending, and a refocus on green policies and healthcare. This will affect investments in the Nigerian oil and gas industry. The positive is that the trade environment in the US will be more open to imports and outsourcing from Nigeria.

Under Biden, the dollar will be weaker, the crude oil price will stay up (dues to lower US Supply) and fed rates rise. Thus, emerging market security with higher yields is attractive.

China is Nigeria’s biggest opportunity – both candidates seek to crack down on Chinese imports, which presents an opportunity for Chinese and American companies to offshore to Nigeria and avoid Chinese import tariffs.

Worthy to note is that in each party, there exists polices net positive or neutral for Nigeria

Which stock will benefit from a Trump win? Seplat, what about a Biden win? Nigerian Eurobonds will do well.

Remember, the risks to this forecast are significant, Covid 19 is not defeated, it can kill global demand. (nairametrics)

Subscribe To Receive Newsletters

Check your inbox or spam folder to confirm your subscription.

ShareTweetSendSend
Previous Post

US Election 2020 Update: See Who is Leading

Next Post

US Election 2020 live updates: As Trump holds Florida, Biden says ‘It Ain’t Over’

MORE STORIES

BREAKING: US President Donald Trump Impeached, To Face Trial (All You Need To Know)

American Writer Accuse Former US President, Donald Trump Of Rape

April 27, 2023
DSS Steps Up Investigation Of CBN Governor, Emefiele

Terror Attack In Congo Church Kills Ten, Injures Dozens

January 16, 2023
Islamic Insurance Corp Signs Agreement To Support Export Devt

Islamic Insurance Corp Signs Agreement To Support Export Devt

January 12, 2023
Republican McCarthy Elected US Speaker

Republican McCarthy Elected US Speaker

January 7, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

TRENDING STORIES

  • OKOWA: Why I Refused To Accept Ibori’s Candidate As My Successor

    OKOWA: Why I Refused To Accept Ibori’s Candidate As My Successor

    0 shares
    Share 0 Tweet 0
  • BREAKING: Tinubu Appoints Chief Of Staff, Others

    0 shares
    Share 0 Tweet 0
  • 10th NASS Leadership: APC, Tinubu Allegedly Back Out Of Akpabio’s Endorsement

    0 shares
    Share 0 Tweet 0
  • EFCC Arraigns Jonathan-Omo for N105m Amnesty Fraud

    0 shares
    Share 0 Tweet 0
  • Meet Man With Over 2600 Court Cases, See What He Did To Guinness For Publishing His Record

    0 shares
    Share 0 Tweet 0
  • SPECIAL REPORT: 49 Kidnapping Hotspots On South-West Roads Identified

    0 shares
    Share 0 Tweet 0
  • SPECIAL REPORT: Despite Lack Of Funds Nigeria Gifts ₦806 Million To Guinea Bissau (See Implications)

    0 shares
    Share 0 Tweet 0
  • 2023: Is Yekini Amoda Ogunlere The Real Name Of Bola Ahmed Tinubu?

    0 shares
    Share 0 Tweet 0
  • Wike No Longer In PDP – Says NEC Member

    0 shares
    Share 0 Tweet 0
  • DOLLAR RAIN: Senate President Aspirants Luring Colleagues With ‘$200,000 Per Senator’ — Ndume Alleges

    0 shares
    Share 0 Tweet 0
ADVERTISEMENT

RECENT STORIES

NLC Shelves Planned Strike After Aso Rock Meeting

NLC Shelves Planned Strike After Aso Rock Meeting

June 6, 2023
Amidst Subsidy Removal, Jet Fuel, Cooking Gas Prices Crash

Amidst Subsidy Removal, Jet Fuel, Cooking Gas Prices Crash

June 6, 2023
How PDP Chairman, Ayu Rejected Kogi Governor, Bello's Condition To Work For Party —Sources

Court Upholds Ayu’s Removal As PDP National Chairman

June 3, 2023
“Judging by the irregularities plaguing the details and payment for the contracts, it can only be inferred that the procurement process was...

CSO Asks ICPC To Investigate NPDC MD, Muhammed Zahra For Paying Electricians, Mechanics In Dollars

June 3, 2023
EFCC Arraigns Jonathan-Omo for N105m Amnesty Fraud

EFCC Arraigns Jonathan-Omo for N105m Amnesty Fraud

June 2, 2023

THE UNION NIGERIA

TheUnionNigeria.com is an independent, nonprofit news website that seeks to promote transparency and accountability through robust and objective reporting. We aim to critically engage you with news reports, Opinions, Editorials, Politics, Business Sports, Entertainment news, Lifestyle, Education, Videos, Photos, Documents and investigative reports.

  • Facebook
  • Twitter
  • YouTube

GET NEW POST ALERT

Check your inbox or spam folder to confirm your subscription.

NEWS SOURCES

  • Africa.com
  • Businessday
  • Channels Television
  • Daily Independent
  • Daily Times
  • Daily Trust
  • Leadership Newspaper
  • National Daily
  • NewsDiary Online
  • Nigerian Tribune
  • Economic Confidential
  • Peoples Gazette
  • PM News
  • Pointblanknews
  • Premium Times
  • Punch
  • The Guardian
  • The Nation
  • The Sun
  • Thisday
  • TV360 Nigeria
  • Vanguard

©The Union Nigeria | Published By Flying Dutchman Limited.

No Result
View All Result
  • Home
  • News
    • National
    • International
    • Judiciary
    • Security
    • Crime
    • Special Reports
  • Politics
  • Investigations
  • Business
    • Economy
    • Agriculture
    • Aviation
    • Banking
    • Communication
    • Energy
    • Maritime
    • Oil & Gas
    • Technology
    • Tourism
  • Health
  • Education
  • Arts & Life
    • Art
    • Books
    • Fashion
    • Lifestyle
  • Entertainment
    • Movies
    • Music
  • Sports
    • Football
    • Athletics
    • Tennis
    • Golf
    • Racing
  • Opinion
    • Editorial
    • Interviews
  • Press Freedom
  • Columns
  • TUN TV
  • ABOUT US
  • CONTACT US

©The Union Nigeria | Published By Flying Dutchman Limited.