Economy

Nigerians are turning to expensive emergency loans to cover the cost of essentials, as the country’s economic woes push more people into poverty and fears grow of a consumer debt crisis.High inflation and a controversial austerity drive by the government have weighed down on Nigerians’ incomes at a time when payday loan providers have become ubiquitous.“You become enslaved,” said Samuel, the owner of a small dry cleaning company in Lagos who declined to give his surname because of the stigma attached to borrowing in Nigeria. At one point he owed money to four different fintechs at interest rates as high as 40 per cent and was paying back one loan with credit from another. The tripling of the cost of petrol since May, following President Bola Tinubu’s removal of $10bn-worth of fuel subsidies, had meant he had “no choice but to borrow”, he said.Recent inflation data highlighted the pressures facing ordinary Nigerians. Food prices are 31.5 per cent higher than they were last year. Bus fares in Nigerian cities have on average risen 117 per cent year on year, according to the most recent data from the statistics agency. The depreciation of the naira has also driven up costs in the import-dependent economy, contributing to an overall rise in consumer prices of 27.3 per cent in the year to October — the country’s highest inflation level for two decades.The World Bank said this year that “entrenched inflation” had driven an additional 4mn Nigerians into poverty. Some 63 per cent, or about 133mn people, were already “multidimensionally poor”, according to government statistics, creating fertile conditions for lenders to capitalise on. The country now has almost 200 licensed online lenders, according to Nigeria’s Federal Competition and Consumer Protection Commission, with more believed to be operating illegally.The apps of market leaders OKash and Palmcredit have more than 5mn downloads. Many lenders attempt to shame borrowers into repaying their loans by messaging people in their phone contacts saying they are in default. Users of OKash are required to grant the apps access to their contacts, location, SMS, calendar and camera when they sign up. The company says on their website that this is “a very important part of evaluation process”. Palmcredit says in its terms and conditions that it requires access to users’ phone history, device identification, contact list, call and text history, and other data. It also warns that it “has the right to alarm contacts to declare the loan if you are late with your payment”. OKash and Palmcredit did not respond to requests for comment.Online lenders typically provide loans without the collateral requirements of most established banks and often charge rates well in excess of Nigeria’s key interest rate of 18.75 per cent and the maximum lending rate of 27.24 per cent for high-street lenders. Central bank data last week showed lending from high street banks rose rapidly over the second quarter. Total consumer credit, of which almost three quarters were personal loans, increased 12.2 per cent over the three months to June.The official data does not capture emergency lending from payday providers. But financial literacy experts and analysts said they were seeing rising numbers of people resorting to emergency funding to bridge the gap between their costs and their incomes. A report by the Lagos-based SBM Intelligence consultancy showed that 27 per cent of Nigerians who had seen their pay decline had borrowed to augment their income.“The quality of life [of Nigerians] has reduced across all income categories,” said Seyi Awojulugbe, senior analyst at SBM Intelligence, who co-led the report.Oluwatosin Olaseinde, founder of the financial literacy service Money Africa, said economic difficulties had made many people “desperate” and vulnerable to “predatory lenders with high interest rates”.“When people can’t meet their immediate needs internally or through help from friends and family, they turn to outside loans,” she said, highlighting the proliferation of online lenders in Nigeria.Oluwakemi Afuye, a seamstress, said she had been inundated with texts to her phone advertising instant loans. While she has not borrowed from payday lenders after hearing horror stories of people being harassed when they default, the mother of one has resorted to salary advances from her employer to cope with the soaring cost of food and transport. “You have to cut your budget,” said Afuye, who has switched to buying groceries at traditional markets where they are cheaper than the supermarkets she used to frequent. “The situation is disheartening.”The rise in the cost of living has led to calls by the country’s labour unions to demand a minimum wage of at least N100,000 ($122) a month, up from the current level of N35,000. The unions have threatened to strike if their demands are not met.There is also increasing anger with the Tinubu government, which has been in place since May, which citizens criticise for extravagance at a time when they are struggling to make ends meet.Afolabi Adekaiyaoja, research analyst at the Abuja-based Centre for Democracy and Development think-tank, said there was a sense among Nigerians that the austerity they were being asked to stomach was not practised by the government.He pointed to the size of Tinubu’s government, the largest cabinet since Nigeria’s return to democracy in 1999, consisting of 48 ministers and more than 20 special advisers — something a senior member of the president’s All Progressives Congress party blamed on “political IOUs” to pay back favours dished out during a bruising election campaign.“The challenge with the government calling on citizens to bear economic sacrifices . . . is that it is at odds with its spending,” said Adekaiyaoja. “The honeymoon is over and the government cannot afford to aggravate an already sensitive situation for Nigerians.”The government’s supplementary budget, approved by parliament and signed into law by the president on November 8, was met with uproar. It included N1.5bn ($1.9mn) for cars for the office of the first lady, N2.9bn ($3.7mn) for the renovation of the president’s living quarters and another N28bn ($35.6mn) for other costs, including the president’s purchase of luxury vehicles. “It doesn’t make sense,” said electrician Kenny Ogunbela. “These things are too expensive and it shows they don’t care about the people.” More

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In the 1920s, the Canadian politician Raoul Dandurand described the country as a “fireproof house” — surrounded on three sides by the Pacific, Arctic and Atlantic oceans, and with a friendly neighbour in the US to the south. It is a comforting view of the world that has helped define Canada’s identity, even as it sent soldiers overseas to fight, from the second world war to Afghanistan. But that sense of detachment from the harsh realities of geopolitics is rapidly disappearing. Canada has found itself sucked into a series of perilous foreign policy dilemmas that have left it struggling to balance its values, interests and identity. In particular, Canada now finds itself at loggerheads with both India and China — the two most populous nations and the rising powers of this century.Over the past year alone, Canada has accused China of interfering in its domestic politics and criticised the Chinese military for flying dangerously close to its aircraft over the South China Sea. At loggerheads: Chinese leader Xi Jinping speaks with Justin Trudeau at the G20 summit in Bali last year More

ROME (Reuters) – Like many young people growing up in Sardinia, Davide Sanna loved Italian cuisine and wanted to have a successful career as a chef. But to do so, he had to move to New York.Sanna had worked in kitchens on the Mediterranean island and in northern Italy for four years, starting when he was only 19. But he was toiling 60 hours a week to take home just 1,800 euros ($1,963.26) a month, at best. In the busy summer season, he’d be at the stove every day for two months, without a break. Then a fellow chef put him in contact with a restauranteur looking for cooks in New York, Sanna said. He accepted without giving it a second thought.For the past year, the 25-year-old has cooked at Piccola Cucina, an Italian restaurant in Manhattan’s glitzy SoHo district, home to designer boutiques and high-end art galleries. In New York, he can pull down $7,000 a month, working a 50-hour week. “Here there are regular contracts, nothing in the ‘black’,” said Sanna, using the Italian slang for undeclared labour. “And, if you work a minute extra, you’re paid for it. It’s not like that in Italy.”Italy’s food is famous the world over but many talented young chefs, hoping to make a career in their country, find themselves frustrated by low pay, lack of labour protection and scant prospects. Since the launch of Europe’s single currency 25 years ago, Italy has been the euro zone’s most sluggish economy. Star chefs like Massimo Bottura, who runs the Osteria Francescana in Modena, are reinventing Italian cuisine. But, given its rich culinary tradition, Italy arguably finds itself under-represented by top-class restaurants. It has 13 with three Michelin (EPA:MICP) stars – the prestigious guide book’s highest ranking – the same number as Spain. Japan, meanwhile, has 21, and France boasts 29.The current outflow of Italian chefs due to difficult conditions at home is not a new phenomenon. Italians began taking pizza and pasta to the world during mass emigration in the late 19th century. The popularity of Italian cuisine in Europe and the United States grew as more immigrants arrived after World War Two.But the number of young Italian leaving to seek work in faster-growing economies has been steadily rising for decades – though the trend was briefly interrupted by the COVID-19 pandemic. Emigration, and a low birth rate, has contributed to a mounting demographic crisis: Italy’s population of 59 million is shrinking.Much of the emigration has come from the Mediterranean islands of Sicily and Sardinia, as well as Italy’s economically underdeveloped south – the ‘mezzogiorno’. ‘FIVE YEARS’ TIME? NOT IN ITALY!’Roberto Gentile, a 25-year-old chef from Sicily, has worked for the last two years cooking French food at Le Suquet, a two-star-Michelin restaurant near Toulouse, after previous jobs in Britain and Spain.Despite his passion for Italian cuisine and the sentimental desire to go back to what Italians call the Bel Paese (the beautiful country), Gentile said the economic disincentives were too strong to consider returning.”After gaining experience abroad and reaching a high level, you would hope to go back to Italy and find a suitable role and salary, but that doesn’t happen,” he said. “Where do I see myself in five years’ time? Not in Italy!” Giorgia Di Marzo decided to take a chance and return to Italy in 2018, after working in Britain as a chef and restaurant manager for eight years. The 36-year-old said she wanted put down roots and be closer to her family.But an offer of just 1,200 euros ($1,284.84) a month to work 50 hours a week in a restaurant in Milan made no sense for her. Wages in Italy have declined over the past 30 years, adjusted for inflation – the only country in Europe where that has happened.Instead, Di Marzo opened her own eatery in her native Gaeta, a seaside town between Rome and Naples that has been a resort dating back to the Roman Empire. But soon, she ran into trouble.Last year, rising costs forced her to close for three months during the winter low season and she could not get a loan from her bank for a sector considered at risk after the COVID pandemic.”I stay afloat, but I can only offer seasonal contracts,” she said. “I can’t ensure work for my employees all year round.” Eating out is part of everyday life in Italy. It has 156,000 restaurants and takeaway food outlets, the second most in Europe after France, data from international industry research group IBISWorld shows.But the ratio of new restaurants opening to existing ones closing has been negative for each of the last six years in Italy, according to the sector’s business lobby FIPE, amid high taxes, endless red tape and the difficult economic backdrop.’ALWAYS IN THE BLACK’ For many restaurateurs, the answer is not to declare their workers at all and a large ‘shadow economy’ is rife in the restaurant business. Undeclared work accounts for around a fifth of the Italian private sector’s output, well above a European Union average of 15%, according European Labour Authority statistics.Such undeclared work is particularly rife in the hospitality sector, Italian economic data shows.Italians take their food very seriously, not just as nourishment and pleasure, but an important part of their regional and national identity.Typical dishes include tortellini in broth from the northern Emilia region, spaghetti alla carbonara from central regions around Rome, and pasta alla Norma in Sicily. Naples is the original home of pizza. A peep into the kitchens of even the most traditional Italian restaurants shows the local dishes are often prepared by low-paid immigrants.One such is Julio, a 31-year-old Peruvian who declined to give his surname because he has no work permit. He prepares pizza and pasta in a Rome restaurant, working 48 hours a week for a monthly salary of 1,400-1,600 euros “always in the black.” While similar situations are found in other developed nations, in Italy it is a relatively new phenomenon, with mass immigration only beginning around three decades ago.’COOKING IN OUR BLOOD’Fifty-year-old Francesco Mazzei trained as a chef in his home region of Calabria in Italy’s southern toe, and then in Rome, before leaving 27 years ago for London where he arrived “without even money for cigarettes.”He honed his art for two decades in Britain and around the world and in 2008 opened his own renowned restaurant, called L’Anima, in London’s financial district.That launched a career which has seen him open other eateries in London and Malta and establish himself as a restaurant entrepreneur and consultant.”I could never have done any of this in Italy,” he told Reuters. “In England you have a chance to do business, a cook does not cost you twice as much as you pay him,” he said, referring to high Italian social charges and taxes on labour. Partly for this reason, young chefs in Italy take home half the salary of their peers in Britain while working longer hours, Mazzei said.British people have become knowledgeable about Italian food, even learning about regional differences, he said, so he preferred to hire Italian chefs to satisfy an increasingly demanding clientele.”We Italians have cooking in our blood. We’re the only people in the world who ask ‘what shall we eat this evening’ while they are having lunch,” Mazzei said. MELONI’S MINISTRY FOR FOOD PRIDEItalian Prime Minister Giorgia Meloni’s right-wing government has set up a ministry for food sovereignty as part of a drive to boost national pride. The minister, Francesco Lollobrigida, suggested in March establishing a task force of tasters to monitor quality standards in Italian restaurants around the world, to avoid chefs getting recipes wrong or using ingredients that aren’t Italian.But the government has also facilitated the temporary and informal work arrangements that blight the restaurant sector in Italy, and it opposes calls for a minimum wage.Antonio Bassu, a 28-year-old Sardinian chef who works in a high-end restaurant in Barcelona, said Spanish salaries were lower than in northern Europe but working conditions were still far better than back home.A chef in Spain can expect a regular open-ended contract based on 40 hours per week with two days off, he said, unlike in Italy where they are likely to be hired on a temporary contract, if there is a contract at all.”Here you don’t have to beg for what you get,” Bassu said. ($1 = 0.9168 euros) (This story has been updated to fix a typo in paragraph 1) (additional reporting by Gavin Jones, editing by Gavin Jones and Daniel Flynn) More

In September, Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, said it anticipated U.S. retail sales, excluding automotive, to grow 3.7% during the holiday season, running from Nov. 1 through Dec. 24.Black Friday refers to the day after the U.S. Thanksgiving holiday, when retail sales are traditionally strong.E-commerce sales on Friday increased by 8.5% year-over-year as consumers shopped for deals online, while in-store sales increased by 1.1%, MasterCard Spendingpulse said.U.S. shoppers spent $9.8 billion online during Black Friday this year, according to data from Adobe (NASDAQ:ADBE) Analytics, which was in line with expectations of the data and insights arm of software firm Adobe. More

The revenue surge to PLN 475.4 billion represents nearly two-fifths of Poland’s annual target, showcasing the country’s economic resilience amid global challenges. This uptick was primarily driven by increases in Value-Added Tax (VAT) and Personal Income Tax (PIT), despite a slight decline in corporate tax income.On the expenditure side, totaling PLN 511.8 billion, there was a noticeable rise due to the centralization of the “500+” family support program from local governments and increased defense spending, particularly on armaments purchases. Additionally, local government subsidies experienced growth following legislative changes that included enhanced educational funding.One area of concern is the escalating domestic debt servicing costs, which have contributed to higher State Treasury debt expenditures. Conversely, EU-related expenditures decreased after budget adjustments related to contributions based on VAT and Gross National Income (GNI) from prior years.The Polish government has been proactive in managing its finances, as evidenced by the lower-than-planned subsidies required for the Social Insurance Fund due to the strong labor market. This financial prudence comes at a time when Poland, like many other nations, faces economic pressures from various external factors.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Nagel’s remarks followed a period of fiscal scrutiny where Finance Minister Lindner accounted for €42 billion in new debt, a move necessitated by a constitutional court challenge over special off-budget accounts. This debt was taken on to mitigate the financial strain caused by soaring energy expenses.In his speech, Nagel proposed that Germany could utilize the flexibility within its debt brake rules to expedite the reduction of its national debt ratio to 60% of GDP. However, he emphasized that such fiscal measures would require a consensus among political leaders.On the topic of monetary policy, Nagel noted that while interest rate increases by the European Central Bank (ECB) have somewhat eased inflationary pressures, inflation has not yet returned to target levels. Despite this challenge, he reassured that the Bundesbank is equipped to handle any potential losses from its quantitative easing program without resorting to government capital injections.The Bundesbank President’s statements underscore an ongoing effort to balance economic growth and stability in Germany amid uncertain financial times. The focus remains on achieving political alignment to implement necessary fiscal strategies and ensuring that monetary policies continue to address inflation effectively.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

In the document, Signa REM Germany informed its employees about the company opening insolvency proceedings. Der Spiegel first reported the court filing at the Berlin Charlottenburg district court on Friday.Signa declined to comment when contacted by Reuters.A provisional insolvency administrator will “probably be appointed by the local court at very short notice,” the letter stated. More