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Mario Draghi Hints at Further ECB Stimulus Moves

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Mario Draghi

European Central Bank chief Mario Draghi has said the bank will “review and possibly reconsider” monetary policy at its next meeting in March.

He said eurozone rates would “stay at present or lower levels for an extended period” and there would be “no limits” to action to reflate the eurozone.

His comments followed the ECB’s regular meeting, where it kept the bank’s benchmark rate unchanged at 0.05%.

The overnight deposit rate was also left unchanged at -0.3%.

At the ECB meeting in December, this rate had been cut from -0.2% in an attempt to push banks to lend instead of parking money at the ECB.

In December, the ECB had also extended its €60bn-a-month stimulus programme by six months to March 2017.

Eurozone inflation is currently running at 0.2%, way below the ECB’s target of near 2%.

“We have the power, willingness and determination to act. There are no limits how far we are willing to deploy our policy instruments,” Mr Draghi said.

Howard Archer, chief UK and European economist at IHS Global Insight, said “the stimulus trigger looks cocked and ready to pull as soon as the March ECB meeting”.

‘Risks’

Mr Draghi told a news conference: “As we start the new year, downside risks have increased again amid heightened uncertainty about emerging market economies’ growth prospects, volatility in financial and commodity markets and geopolitical risks.”

He said that could make it necessary to review – and possibly reconsider – monetary policy at the next meeting in early March.

Mario Draghi most definitely doesn’t do panic. In fact, his demeanour in the news conference after the ECB’s governing council meeting didn’t even suggest mild anxiety. Still, his words made it plain that he and his policy-making colleagues have been watching the new year’s financial market gyrations very warily.

It’s not the ECB’s job to stabilise stock markets. The Bank’s job is to keep inflation in check, but it is currently too low: 0.2% compared with the ECB’s target of below, but close to, 2%.

The financial market turbulence, especially the fall in oil prices is one reason why, as Mr Draghi said, “inflation dynamics continue to be weaker than expected”. He told us the ECB will review policy at its next meeting in March. There is a strong chance of more action, probably extra quantitative easing, to stimulate inflation a bit more (yes really).

That meeting will have a new set of ECB macroeconomic projections to work with.

He said that the recent falls in the oil price meant that inflation was likely to be “significantly lower” compared with the outlook in early December.

Eurozone inflation was below zero – that is, prices were falling – as recently as September, mainly due to falls in international energy prices, particularly crude oil.

In December, Mr Draghi said that eurozone inflation was expected to reach 1% in 2016. However, the ECB’s forecasts were based on the assumption of oil prices averaging more than $50 a barrel this year, and oil is currently below $30.

Market reaction

Mr Draghi’s latest comments were seen as helping to calm stock markets, with shares in Europe rising as his news conference was under way.

His comments also weakened the euro, which briefly fell below $1.08 against the dollar before regaining ground.

“ECB president Draghi once again saw the equity markets confirm his ‘super’ status as they jumped almost as soon as he started his speech,” said Alastair McCaig, market analyst at IG.

“The emphasis shifted from ‘whatever it takes’ to ‘no limits’ where action is concerned, with the small caveat that nothing will happen until they have had their March meeting.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

eTax: Lagos Internal Revenue Optimises Payment for Taxpayers

The Lagos State Internal Revenue Service (LIRS) is currently optimizing its payment procedures for utmost efficiency and taxpayers’ convenience.

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Company Income Tax (CIT) - Investors King

The Lagos State Internal Revenue Service (LIRS) is currently optimizing its payment procedures for utmost efficiency and taxpayers’ convenience.

The Executive Chairman of the Lagos State Internal Revenue Service, Mr Ayodele Subair, in a statement issued on Sunday, said the Agency, as part of its digitalization process, is discontinuing all previously used bill references effective from August 1st, 2022.

Consequently, according to the Chairman, only the Enterprise Tax Solutions (eTax), generated bill references will be acceptable for tax payments.

The eTax platform, (https://etax.lirs.net) which went live in October 2019, was launched by LIRS to engender seamless tax operations and reduce compliance costs to taxpayers. Since its launch, eTax has improved the effectiveness of tax administration in Lagos State.

Mr Subair added that the eTax was built as a one-stop shop for all tax transactions, and it is in the same spirit that the generation of bill references, required for all tax payments is now exclusive to the eTax platform.

He reiterated that by the cutoff date of August 1st, 2022, eTax would become the only authorized channel to generate bill reference for tax payments and other tax-related transactions in Lagos State.

To generate a bill reference on e-Tax, taxpayers can use the 5 easy steps below:

1. Visit https://etax.lirs.net

2. Input your Payer ID and password to log in

3. Select revenue type, and upload schedule (For PAYE & Withholding Taxes)

4. Generate a bill reference

5. Make a payment on any of the multiple channels available, using the generated bill reference.

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Economy

Gas Flaring: Nigeria Flares Gas Worth $13.3 Billion in 10 Years

Despite efforts to commercialise Nigeria’s gas and plans to start supplying gas to Europe via Morocco, an estimated $13.3 billion or N4 trillion worth of gas was flared in the last 10 years,

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gas flaring

Despite efforts to commercialise Nigeria’s gas and plans to start supplying gas to Europe via Morocco, an estimated $13.3 billion or N4 trillion worth of gas was flared in the last 10 years, the Nigerian gas flare tracker of the National Oil Spill Detection and Response Agency (NOSDRA) report showed.

Between 2012 and 2021, Nigeria flared 3.8 billion standard cubic feet (scf) both onshore and offshore according to the report.

NOSDRA estimated that Nigeria flared gas valued at $13.3 billion in the last decade. This amount when converted to Naira, using exchange rates in the last 10 years, puts the cumulative value at N4 trillion.

In the last 10 years, Nigeria cut gas flaring by 31 percent, far below the nation’s estimated target. This was largely due to the inability of President Buhari’s administration to kickstart the gas flare commercialisation programme approved by the government in 2016.

Collins Obi, an energy specialist, explained that with Western nations imposing sanctions on Russian gas consumption following the Moscow invasion of Russia, gas security is now a priority in Europe.

“Thus, Nigeria needs to position itself for the economic growth opportunity this presents,” he said.

A corporate intelligence lead at GAS360, Oreoluwa Owolabi said the amount of gas flaring going on in Nigeria highlighted its riches in gas and other energy resources but poor energy management and supply techniques.

“We need to invest in infrastructure to distribute the gas to where it would be commercially viable. This could be for export or pipelines across the country for electricity generation,” he said. “It requires a government-led effort, and the government has already taken some steps towards stopping flaring by 2030.”

He, however, added that because international communities have started accepting gas as a necessary fuel.

“This can be used to accelerate Africa’s net-zero transition and there would be more funds available for gas projects, which can partially finance our infrastructure development,” Owolabi added.

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Economy

$2 Billion Lekki Deep Sea Port Berths First Cargo

The Nigeria Port Authority (NPA) on Friday announced that the $2 billion Lekki Deep Sea Port in Lagos has docked its first ship.

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Deep Sea port - Investors King

The Nigeria Port Authority (NPA) on Friday announced that the $2 billion Lekki Deep Sea Port in Lagos has docked its first ship.

Mohammed Bello-Koko, the Managing Director of NPA, who received the marine vessel “Zhen Hua 28”, explained that the Lekki Deep Sea Port would help decongest Apapa Ports and reduce ship waiting time by about 60%.

Estimated at $2 billion, Lekki Deep Seaport was constructed by China Habour Engineering firm to ease shipment pressure and improve the efficiency of Nigeria’s maritime economy.

According to Koko, the port has the capacity to evacuate and handle more cargoes because of a series of automation integrated into it during construction.

“The successful delivery today (yesterday) at the Lekki Deep Seaport of three Super Post Panamax state-of-the art Ship to Shore (STS) Cranes and 10 Rubber Tyred Gantries (RTG) is a testament to the unflinching commitment of NPA to providing the support necessary for placing Nigeria on the global list of countries with Deep Seaports.

Koko said: “The successful delivery of these very important equipment which are critical for the Lekki Deep Seaport to commence operations before the end of the year 2022 is a demonstration of our readiness to take trade facilitation a notch higher. This has been made possible by the tremendous backing of His Excellency, President Muhammadu Buhari and the Federal Ministry of Transportation who have over the time played a key role from the initial construction stage and also granted fast tracked approval for this historic exercise.

“For us at the NPA, the coming on stream of Lekki symbolises a lot of positives. Apart from being Nigeria’s first Deep Seaport, Lekki Port will also be the first fully automated port at take-off. This provides an insight into the path we are already toeing as a management team to govern the operationalisation of not just the forthcoming Badagry, Ibom and Bonny Deep Seaports, but also of the reconstruction of the aged Tin-Can Port, where work is set to commence once we secure the necessary approvals from the Federal Ministry of Transportation and FEC, respectively.”

He stated that “automation remains the most veritable tool for assuring port efficiency, and as most of us are aware, the NPA is working assiduously under the technical guidance of the International Maritime Organization to deploy the Port Community System (PCS), which will enable us respond squarely to the dictates of global trade facilitation and optimise the opportunities of the African Continental Free Trade Area (AfCFTA) Agreement to which Nigeria is signatory.”

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