S/Africa Defence Spending, Egypt's Grain Hub + More | Business Incorporated

Añadido: 2026-05-25

[00:00:02][music] >> That's right. It's time to do business again on a rainy Friday. But, we have 25 minutes to give you updates from the world of business. And here's what we have prepared for you.

[00:00:15]From stability to jobs, the story of Nigeria we'll tell it today on the program.

[00:00:24]In South Africa, 70% of defense budget is on salaries. Should we be worried?

[00:00:34]And Egypt is planning a global grain hub, and they're getting their feed from Russia.

[00:00:43]Welcome to the program. I'm Ini John Mmekwa. This is Business Incorporated.

[00:00:47]We start from oil prices um where they resumed their rally today after declining for three straight sessions as investors are weighing mixed messaging on Iran peace deal negotiations. The US and Iran have signaled progress in talks to end the war, but the warring sides remain at loggerheads over Tehran's enriched uranium stockpile and tolls on the strategically vital Strait of Hormuz. International benchmark we see four this afternoon. Brent is up more than 2% $104.62 a barrel. WTI is also up 1 and 1/2% at $97.96.

[00:01:25]You come to natural gas that also uses that Strait of Hormuz and we see that's down 0.70% and it's now at $2.99.

[00:01:36]Um Iran's supreme leader had given a directive that near weapons-grade uranium in the country should not be sent abroad, and he's shared this with the media.

[00:01:50]Closely related to that, gold prices fell 1% as climbing oil prices heightened inflation worries, boosting bets for rate hikes, and lifting treasury yields and dollar, which has added more pressure on that. So, look at the numbers. Spot gold down 0.2%.

[00:02:06]It's $4,533.40.

[00:02:10]Spot silver is also down 0.37%. $76.45.

[00:02:15]Platinum is down almost 1%, 0.84%.

[00:02:18]$1,949.

[00:02:20]Palladium down. Copper is the only one.

[00:02:23]Sometimes copper we see tries to tell its own story.

[00:02:28]Gets different sentiments from most of the other metals. So, copper this afternoon is up 1.12% and the price just about $6.36.

[00:02:40]From the metals to what's going on with wheat. Egypt, the biggest buyer of Russian wheat, aims to create a global grain trading and storage hub. Supply Minister said this as he was speaking at a grains event in Russia and the Russian city of Sochi. Farouk, Mr. Farouk said that Egypt is pursuing an ambitious and comprehensive strategy to transform the country into a hub for the storage and processing of grain crops, as well as trading grain throughout the Middle East, Africa, and other regions. In this context, Egypt now wants to establish a global hub for grains, he says, and that the project will include modern elevators, transport systems, and processing storage facilities. He said that Egyptian and Russian commodity exchanges could join forces in the modernization of Egypt's grain trading infrastructure, developing pricing benchmarks, and ensuring supply chain's transparency.

[00:03:44]Still in the north of Africa, Morocco's annual inflation rate accelerated to 1.7% last month. That's up from 0.9% and that is recorded in March and that's because of rising transport and fuel costs caused by the conflict in the Middle East. Data released by the North African country's statistics agency shows that higher energy prices pushed up consumer costs across several sectors amid relatively moderate increase in food prices. The statistics agency also says that transport costs recorded the sharpest increase during the period while non-food prices increased by 2.5% within the same period. The latest inflation reading reflects growing pressure on households and businesses as global oil market volatility continues to affect domestic economies across North Africa and other emerging markets.

[00:04:40]In the south, although the African country that are South Africa defense budget allocates 65% of its funds to paying salaries when other expenses are taken into account, it is in fact closer to 70% leaving little for operations, equipment maintenance, and rejuvenation.

[00:04:58]This is the finding of a defense budget vote very webinar that's by a university security institute for governance and leadership in Africa, Zigler. Wilhelm Janse advisor to the parliament of South Africa's two defense committees and research fellow at the university points out that since 1994, South Africa's defense spending initially hovered around 2% of the GDP falling to 1.1% in 2011. Today, it stands at 7% by 2011 already, South African National Defense Force was 24% underfunded with many in money instead allocated to state-owned entity bailout, education, and social grants among others.

[00:05:49]Macroeconomic stability creates the opportunity structural transformation converts that opportunity into jobs, productivity, and long-term prosperity.

[00:05:58]Is Nigeria there?

[00:06:00]How stable are we? Can we transform that stability into jobs? Senior economist with NESG, Dr. Yoha joins us now to tell us this about more. Dr. Yoha, good afternoon. Welcome to the program.

[00:06:18]I think you should unmute, Dr. Yoha. I can see your lips moving, but I can't hear you.

[00:06:24]I will mute it.

[00:06:25]>> Yeah, great. Yeah, I can hear you now.

[00:06:27]>> Can you hear me now?

[00:06:28]>> Yes, yes, I can hear you. So, um we saw the numbers, macroeconomic numbers looking good. Applause to President Tinubu and his administration.

[00:06:37]Um but of course the Middle East has disrupted that. Well, we know that. I mean, when it comes to macroeconomics, the data said that the economy is stable, but translating this to jobs seems to be where we are stuck. Or are we not? It's the problem that it won't let me go now.

[00:06:53]>> [laughter] >> Dr. Yoha, can you hear me?

[00:07:02]But it looks like there's another disruption on the line, but I'll just speak on. So, macro stability macro stability um is a necessary condition, or however, it's not sufficient to deliver sustainable um prosperity. Um stability alone does not automatically translate to jobs, um does not create jobs, neither does it improve productivity, or transform um living standard. In realist um view, um economies grow sustainably when we can produce more, when we can process more, export more, and create higher productivity um that drives jobs across critical sectors. So, what we have seen in Nigeria in recent times is that Nigeria's growth remains structurally challenged. And the reason is because growth is concentrated in, um, sectors that are not, um, generating jobs. They are They are sectors that are low in employment. And particularly when we look at, um, extractive industries and parts of the service, um, sectors.

[00:08:08]While sectors um, with strong strong labor absorption such that such as agriculture and the manufacturing are are actually lagging behind. They are underperforming. When you look at the growth rate for these, um, sectors that are really job elastic, you see that their growth rate is below 5%. The economy is not expanding significantly in those areas that can create large-scale decent job. And when I say decent job, I mean high-level employment, um, vis-à-vis high level of poverty. So, we are We have jobs.

[00:08:44]However, that jobs have not led to prosperity, especially in the life and the standard of living of people. So, it is important to deepen, um, to deepen domestic value chain. Um, it's important to also stimulate, um, industrial activities.

[00:09:01]>> Yeah, so how do we do that? Um, do we need another set of reforms? Do we work with the reforms which this administration has started?

[00:09:12]Okay, thank you very much. Um, what we then need to do is, um, structural transformation. We have currently achieved stabilization, which is beautiful in terms of statistics.

[00:09:23]However, we need to transform our productive capacity. We need to move from being just a consumption-driven, um, economy into a a economy. Um, there a bit of there are three or five things that are really happening that we need to do in terms of structural transformation. First, we need um investment in infrastructure, particularly power, transport, logistics, and even digital connectivity. A high production and logistics cost remains um um um remains one of the challenge of businesses, especially when we talk about SMEs who are the backbone of the economy. And this high production cost and logistics reduce economic competitiveness. The next point around um how do we unlock productivity is about achieving regulatory and institutional reforms, streamlining approvals, reducing bureaucratic um bottlenecks, um driving rule of law and justice, reducing corruption, and strengthening the ease of doing business. They are critical for unlocking productivity and driving um structural transformation. Also, we need to also look at curbing insecurity.

[00:10:44]We need to um increase access to finance for specific sector, specific productive sectors that are high in job creation, especially agriculture and manufacturing, who needs um um affordable long-term finance and need expansion expansion and mechanization.

[00:11:05]Finally, Nigeria must prioritize human capital development. We must prioritize innovation and skill alignment to sector to support productivity productive sector in an increasingly technologically um driven environment.

[00:11:24]All right, uh Dr. Yoha, thank you so much for sharing those tips with us. I will certainly hope that this set of reforms will bring these expected productivity and jobs. Thank you for your time on the program.

[00:11:37]Thank you for having me.

[00:11:39]Uh let's switch a bit now and talk about AI. AI is the thing writing code and designing products. They are supposed to be done by those who are experienced.

[00:11:50]Well, saying that um especially in the emerging market, this is somewhat new.

[00:11:56]Where should individuals get that experience from?

[00:12:01]So, you want to employ a young person now and then you expect the person to be experienced, but where would the experience come from? I think uh let's try and find out if Damilola Ojo, a product designer, can tell us where we where they'll get this experience from uh for our next conversation. Damilola, good to have you on the program. You're welcome.

[00:12:22]Thank you, Eniola. It's good to be here.

[00:12:24]Yeah, so um we see that um AI are now generating entire code bases in seconds, designing logos, writing product company, and the list of course keeps growing. As a product designer, when you look at all of this, what's your honest reaction? Are you threatened?

[00:12:42]Yeah, so my honest reaction is that AI is changing how digital products are built, but not necessarily why they are built and whether they should exist in the first place. So, the human layer is still important and what we are seeing now is the automation of execution. So, AI is automating tasks, generating interfaces, and even prototypes in seconds. And it's incredibly powerful because it lowers the barrier to creation.

[00:13:12]It's never been easier to run a business or complete tasks like it is today and small startups that previously couldn't afford large design teams now have access to the kind of expertise that was once reserved for big organizations.

[00:13:29]So, I think it's important that there is a there is a distinction between reducing outputs and designing human experiences that people can relate to.

[00:13:40]And I think that's where we need a human touch. That's where design comes in, making sure that your product is not just a collection of screens or tasks, but it's focused on building trust and supporting users and delivering a positive emotional experience. Mhm. So, you're not one of those who believe that AI will study and learn human behavior and eventually be able to take over what humans uh can do or are doing now.

[00:14:11]No, no, no.

[00:14:13]Uh I don't think so. I mean, ultimately, you still need human touch. AI can automate production, but meaningful user experience uh still requires human understanding. And besides, we still need to understand culture and local experiences. I mean, in many cases, AI was trained on Western data sets. So, that local experience, that gap is still there, and we need human intervention for that. Mhm. So, studies show that um AI-generated interfaces can reduce design production by up to 40%, and that's a huge uh a huge one there. But, user satisfaction scores on those same products often lag. Is this Is this the reality?

[00:14:58]Uh well, because efficiency is not the same as empathy. So, AI-generated products can reduce production time, which is valuable, but many AI products still feel generic because they are optimized for for efficiency, not emotional experience. So, you know, that human intervention and an understanding of users is not is not there. It's missing.

[00:15:23]And what often gets lost in AI design is personality. You know, that brand personality, that emotional reassurance.

[00:15:31]You know, for example, an AI banking app may technically function well, but still fail to reassure users in sensitive moments.

[00:15:40]A good example is failed transactions.

[00:15:43]You know, when money leaves your account, but confirmation is delayed.

[00:15:46]It's a common thing, you know, in Nigeria, in Africa. And a purely AI-driven interface may simply display processing, but a thoughtful design experience would actually anticipate user anxiety, provide status updates, recovery optionals, even give you access to customer support just for that emotional reassurance. So, human-centered design it is really focused on reducing anxiety and uncertainty, and that's what's actually improves user satisfaction.

[00:16:18]All right, Damilola Ojo, product designer. Thank you. We still need humans. Doesn't matter how smart AI is.

[00:16:23]Can't be smarter than human beings.

[00:16:25]Thank you for your time.

[00:16:28]Thank you so much.

[00:16:30]Let's go to the markets now and see what the numbers uh look like intraday. We see mostly positive for Africa and Nigeria leading the pack, recovered from that negative close of yesterday, but we're yet to recover for back to the 250,000 level. But, the news going on around the Nigerian market now obviously is driving a lot of investors uh for one, counting to down to September uh for the Dangote refinery uh IPO, uh and money's already rolling in, waiting just waiting at the doorstep.

[00:17:01]So, we can expect this market is going to be on fire very soon. Johannesburg is also positive, 0.07%, 140,138.10.

[00:17:10]Egypt is closed today, um um but it closed positive um and uh for Nairobi, it's closed negative yesterday. Moving over to the Middle East where only two of the markets are open on Friday, we see Dubai and Abu Dhabi both positive at intraday. And the other two markets uh, closed positive also, Tadawul and Qatar. In the United States uh, stock futures, it ticks higher with a bit of peace peace talks and hope. Uh, hopefully this weekend is not going to give us another surprise.

[00:17:43]Um, but Dow Jones, S&P, Nasdaq, they're all green at uh, in early trade. These are the futures. Going over to the Middle East to Asia now, uh, which is closed at this time. The Nikkei is positive, very positive, 2.68. Kospi, Hang Seng also positive. So, the other market, um, uh, on the Asian continent, Shanghai and Nifty are also positive.

[00:18:08]Let's see what's happening in Berlin and we have Chip Chiponda, Chin Belliu joining us to give us updates on that.

[00:18:14]Hi, Chip. Um, happy Friday to you. It's a rainy one here, but I hope your market is green.

[00:18:20]Happy Friday to you, Ini. And uh, it's also a good Friday at least on um, the markets here. The STOXX 600 is actually up around 0.7% and Germany's DAX is fearing even better today, more than 1% higher. European stocks are set for their biggest weekly gains since early April and that's as investors, of course, react to signs of progress in peace negotiations between the US and Iran. Today, Iran's foreign minister met Pakistan's interior minister to discuss proposals to end the Iran war according to uh, Iranian media. But Iran and Washington are still, of course, at odds over Iran's nuclear enrichment program and ending the blockade of the Strait of Hormuz. Of course, any resolution that ends the Iran war and results in the reopening of the Strait of Hormuz would be very beneficial for European stocks because um, the economies here are net energy importers. So, that's why of course any positive signs from Iran-US negotiations are beneficial for the markets here as we are seeing today.

[00:19:25]Yeah, well the after effects of that which is the oil shock oil price shock that triggered well not very good sentiments around the German economy. We see that the economy has gone into contraction for a second straight month.

[00:19:40]Exactly uh figures from the latest purchasing managers index for the private sector which covers both manufacturing and services contracted for the second month in a row in May and that is what the latest monthly survey for the month from the financial services provider S&P Global shows. Now, S&P Global says that the German economy is on track for another contraction in the second quarter and in the first quarter of this year Germany's GDP actually only grew a meager 0.3%.

[00:20:11]The government also expects the economy to grow slower than was initially forecast because of the Iran war. The Strait of Hormuz blockade has of course led to higher prices supply chain issues and of course a lot of uncertainty and that is what is weighing on sentiment both for German businesses and households. And on top of that of course the Eurozone's business activity also contracted more this month because of the war. So, that doesn't mean that there is no respite anywhere for Germany's export dependent economy.

[00:20:41]Energy prices and supply chain disruptions have been of course pushing up pushing up production costs and demand has been falling because of lower business activity. So, it's it's really a doom a doom and gloom sort of image there.

[00:20:54]Oh, that's sad and I wonder how businesses German businesses are feeling this or reacting to this.

[00:21:03]Well, the reaction for some businesses has been to scale back production here in Germany and expand abroad instead and that is what is happening with some businesses in the chemical sector. Now, we speak a lot about car makers in years you know, but the chemical sector is a core pillar of the German economy. It is the country's biggest third biggest in the industry after the auto industry and mechanical engineering, but chemicals companies of course have also been feeling the pain of high energy costs, regulation, a weak economy and intense competition from abroad. The industry has of course faced some of the highest energy prices in the world since Russia's full-scale invasion of Ukraine in 2022 and the US Israel war against Iran has only exacerbated the challenges it was already facing by triggering especially a spike in energy prices and disrupting supply chains. So, that is this is this is why there is also at least there was last month a leading business survey which showed that business morale in Germany's chemicals industry fell to the lowest level in nearly 3 years. So, overall it's more bad news for the German economy despite of course the fact that markets are doing better today. Wow, that's sad.

[00:22:16]That's sad and we certainly hope that there'll be peace on all the fronts, you know, very soon so there can be a bit of relief. Well, thank you so much Chip and do have a great weekend.

[00:22:27]Have a wonderful weekend Ena. Thank you.

[00:22:30]As it was happening in the crypto space, South Korean lawmakers they've started reviewing growing opposition to the country's planned crypto tax policy after a public petition rapidly gained enough support to enter parliament.

[00:22:43]Well, the petition crossed the required 50,000 signatures yesterday, Thursday and that has forced the issue into a legislative committee for further examination. We'll see what that happens how that goes in a house with the lawmakers. Also, SEC is drawing hard as the US Securities and Exchange Commission is swiftly moving to temper expectations surrounding highly anticipated regulatory framework. We talked about that earlier in the year. Um what they agreed are going to they have a well, new legislation and all of that about tokenized. Well, SEC Commissioner and crypto task force chief uh is calling that hyperbole uh surrounding the SEC's potential exemption for the on-chain trading of tokenized stocks. And then also uh we have Coinbase Ethereum hitting monthly low. Institutional uh investors are selling off as pressure mounts. Who would blame them? There's a lot of uncertainty going on. So, that's will be a normal reaction. Can we have the numbers before we go to see the price?

[00:23:44]There you have it.

[00:23:46]Well, it's 77. 77,430 uh for crypt for Bitcoin. And a lot of green, but the numbers do not look impressive. I'm not impressed.

[00:23:57]We've seen better days. Ethereum is also about struggling with 2,000 and 2,000 uh dollar level. But, we have a lot of green. Perhaps that will comfort um some investors, even though of course we know where we're coming from and it might not be so comforting, but um it's the reality that we have at this time from the crypto space. It's not alone.

[00:24:19]That's what's happening in most markets except the Nigerian market. That's why you should be there. Well, that's it on the program today. Thank you so much for being a part of Business Incorporated.

[00:24:30]Uh today business, everyday business over the weekend. Do it on YouTube, our YouTube channel. And uh then we'll see you on Monday. But, I leave you in the hands of uh BOI Weekly. That's for DSTV viewers. Um there and uh all the platforms that there's an an aircraft acquisition summit. No, I beg your pardon. There's a BOI Weekly program that our DSTV viewers would be watching. And then of course on the top of the hour there's News Track on other platforms offer DSTV. We're going to have that BOI weekly program.

[00:25:08]The Bank of Industry, yes. They'll be telling you about some of the work that they do and some of their clients that benefited from them. That's on our DSTV viewer viewers and then on other platforms we'll have News Track keeping you updated on what's going on. But I'm signing out from here Business Incorporated. I'll see you tonight for the stock market report. Bye-bye.

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