The world’s richest man, Bill Gates, and founder of social networking site, Facebook, Mark Zuckerberg, have collectively lost $3.4 billion to the decision of Britons to leave the European Union (EU).
In the fallout of the Brexit vote on global economy, both men were the worst hit billionaires in the United States, losing $1.8 billion and $1.6 billion respectively.
The amount lost by Gates alone is more than the entire wealth of Nigeria’s richest woman, Folorunsho Alakija. According to Forbes, Alakija is worth $1.73 billion.
Africa and Nigeria’s richest man, Aliko Dangote, ranked number 70 on the Forbes list with a net worth of $12.5 billion, also lost $505.3 million.
While the world’s billionaires have been suffering losses, oil prices rose to $48 a barrel yesterday as investors took advantage of a two-day slide in crude triggered by Brexit vote.
The vote’s impact on oil, despite sending global stocks and currencies spiralling, has so far been limited due to expectations of strong summer demand in Asia and the United States, and tightening supplies after a two-year rout.
According to Bloomberg Billionaires ranking, global markets erased another $69.2 billion from the combined net worth of the world’s 400 richest people on the first trading day of the week after the Brexit vote, bringing total loss to $196.2 billion in 48 hours.
Monday’s loss was felt most by Europe’s wealthiest, as collectively, 92 billionaires lost $29.4 billion, bringing their two-day decline to $81.7 billion.
One hundred and fifty billionaires from the US and Canada lost $26.7 billion on Monday, and recorded a two-day total of $62.5 billion.
Also, China’s 26 billionaires lost $1 billion on Monday, bringing their two-day total loss to $5 billion, with a 7.4 percent ($18.7 billion) decline in 2016.
Germany’s third-richest person, Georg Schaeffler, fared the worst on the index Monday with a loss of $1.9 billion from his net worth.
Europe’s richest person, a Spanish retailer, Amancio Ortega, also lost $1.5 billion.
While others lost, 69 billionaires on the list made some gains from the Brexit vote.
Founder of Osaka-based Keyence, a maker of electronic sensors, Takemitsu Takizaki, led the gainers with an increase of $579.3 million. Tadashi Yanai, Japanese retailer and chairman of Tokyo-based Fast Retailing Co., recorded the second highest addition to his fortune with a rise of $552 million. Nineteen billionaires on the index added more than $100 million on Monday.
Global markets erased another $69.2 billion from the combined net worth of the world’s 400 richest people on Monday, bringing the total since the UK shocked investors with a vote to leave the EU to $196.2 billion in the last two trading days.
The billionaires on the index control $3.8 trillion, a 1.8 per cent decline from the start of the year, according to the Bloomberg Billionaires Index.
Meanwhile, a looming strike at several Norwegian oil and gas fields which threatened to cut output in Western Europe’s biggest producer also helped support prices on Tuesday.
Brent crude futures were up 2.5 per cent, or $1.17, at $48.33 per barrel at 1116 GMT. US West Texas Intermediate (WTI) futures were 2.6 per cent higher, up $1.22 at $47.55 a barrel.
A report by industry monitor, Genscape, that showed a 1.3 million barrel fall in crude inventories at the benchmark’s pricing hub in Cushing, Oklahoma, added further support, brokerage PVM said.
Sterling and London’s FTSE 100 stock market index also rose on hopes of a coordinated central bank response to financial market losses.
“Oil is recovering on some bargain hunting after the drop below $47 a barrel proved unsustainable and news of a possible strike in Norwegian oil and gas industry,” said Commerzbank analyst Carsten Fritsch.
He said the turmoil in Europe was not expected to have a “meaningful impact on the physical global supply and demand balances.”
Over its two previous sessions, oil fell more than seven per cent to seven-week lows as the Brexit vote cooled investor appetite for volatile commodities such as oil.
A strike in Norway, which could start on Saturday, would add to a number of production outages in oil-producing countries including Nigeria.
Still, news that a successful ceasefire in Nigeria had allowed repairs to oil pipelines weighed on the market, ANZ Bank said.
Oil production in Nigeria has risen to about 1.9 million barrels per day from 1.6 million.
Prime Minister, David Cameron, said yesterday that he did not regret holding the referendum on Britain’s membership of the EU despite the surprise victory for the campaign to leave the bloc.
“Of course I regret the outcome but I don’t regret holding the referendum, it was the right thing to do,” Cameron told reporters in Brussels after an EU summit.
Brexit impact on Nigeria will be minimal – LCCI
The Lagos Chamber of Commerce and Industry (LCCI) has allayed fears of consequences of the Brexit vote on the Nigerian economy.
Reacting to the issue, the Director General of the chamber, Muda Yusuf, stated that on the whole, the impact of Brexit on the Nigerian economy was unlikely to be profound, adding that besides, negotiations will still take the next two years and that most of the current responses are driven by uncertainties and expectations which will fizzle out in the not too distant future.
Yusuf noted, however, that the unfolding scenario may have some adverse implications for remittances to Nigeria from the UK and that this will happen from the perspectives of tougher immigration regulations and enforcement as well as the likely slowdown of the British economy.
Giving further implications of the exit of Britain from the EU, he pointed out that there are likely going to be some immediate and remote implications for the Nigerian economy.
He pointed out that the outcome of the referendum had already triggered some measure of uncertainty and anxiety in the global economy.
The British economy is worth $3 trillion and is the fifth largest economy in the world and the second largest within the EU, which represented a major component of both the global economy and that of the EU, he said.
“Naturally, therefore, shocks to the British economy will have some transmission effects on the global economy and this perhaps informed the immediate responses of global and domestic financial markets.
“However, this dimension of the impact is unlikely to endure. They are responses driven by expectations and uncertainties” he stressed.
The DG further explained that there is a high probability that the British economy will suffer some setbacks arising from the resultant weakening of investors’ confidence within the economy, pointing out that the Brexit vote implies that investors within the British economy will no longer have free access to the EU market of over $16 trillion and a market size of over 500 million people which will certainly reflect in the strength of the currency as there is a relationship between the strength of the currency and the robustness of its economy.
A weak British currency, according to him, offers an advantage to importers from Britain. “Thirdly, there is a trade effect. Britain accounts for only 4.4 per cent of Nigerian global trade and the EU accounts for 38.8 per cent. It is therefore unlikely that the Brexit will have a material impact on our balance of trade situation. If anything, the trade between Nigeria and United Kingdom could be further improved on account of the likely depreciation of the British pounds and the affinity with Britain within the context of the Commonwealth,” he said.
Yusuf noted that Nigeria is yet to sign the European Partnership Agreement (EPA) which also reduces Nigeria’s exposure to the shocks of the EU economy, especially from a trade perspective.
Furthermore, the LCCI DG noted the diaspora dimension, saying the current sentiments in the United Kingdom are to adopt tougher stance on immigration issues.
“We have over one million Nigerians in the United Kingdom; Nigeria is also a major recipient of diaspora remittances in Africa. Therefore, the unfolding scenario may have some adverse implications for remittances to Nigerians from the UK. This will happen from the perspectives of tougher immigration regulations and enforcement as well as the likely slowdown of the British economy.”