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Oil Price Slump Reduces Sector’s Output by N3.6tn

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The massive drop in global oil prices impacted negatively on the performance of the Nigerian oil and gas sector, which recorded a decline of N3.6tn in output in the 2015 fiscal period, according to punch report.

A report showing the performance of the sector, which was obtained by our correspondent from the National Bureau of Statistics, revealed that in monetary terms, the sector recorded a huge decline of 37.5 per cent from N9.61tn in 2014 to N5.99tn at the end of last year.

Further analysis of the report showed that since the second quarter of the 2014 fiscal year, the petroleum sector had been recording steady decline in output

Between the first and second quarters of 2014, the sector witnessed an increase in output from N2.61tn to N2.63tn.

However, due to the drop in oil prices, which began in June 2014, the sector’s contribution to the economy could not be sustained as it started declining steadily from the third quarter.

It dropped to N2.32tn in the third quarter of 2014 and further went down to N2.04tn in the fourth quarter.

In 2015, the sector witnessed its worst performance in recent times, contributing the sums of N1.39tn, N1.74tn, N1.53tn and N1.31tn to the economy in the four quarters of the year.

The report stated that the dismal performance of the oil and gas sector also impacted negatively on the contribution of the mining and quarrying sector to the economy.

There are four main activities that make up the mining and quarrying sector. They are crude petroleum and natural gas, coal mining, metal ore and other minerals.

The NBS report put the growth in the mining and quarrying sector at 5.18 per cent for the fourth quarter of 2015 as against 8.56 per cent recorded in the corresponding quarter of 2014.

It stated, “On a nominal basis, the sector slowed in the fourth quarter of 2015 by 35.12 per cent (year-on-year) during the quarter.

“This was substantially below the growth recorded in the corresponding quarter of 2014. This drop is attributable to the falling oil prices.”

Speaking on the low output of the sector, financial experts told our correspondent that the inability of the government to effectively diversify the economy away from oil was responsible for the drop in performance.

For instance, a former Managing Director, Unity Bank Plc, Mr. Rislanudeeen Mohammed, said the country should have built enough fiscal buffers when crude oil sold for as high as $140 per barrel.

He said, “Nigeria is a mono product economy basically. We export only crude because 70 per cent of our income is derived from oil; 94 per cent of our foreign earnings is derived from oil, and oil contributes only about 10 per cent of our Gross Domestic Product.

“When the price of oil was going up, when it was in the region of $140, Nigeria was making a lot of money for years. What Nigeria should have done is to build fiscal buffers. But this didn’t happen owing to constitutional challenges.”

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

Oxford Business Group signs MoU with Lagos Chamber of Commerce and Industry for 2023 Economic Analysis

Nigeria’s plans to put the private sector at the heart of the next phase of its economic development will be explored in a forthcoming report by the global research and advisory company Oxford Business Group (OBG).

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2023 Economic Analysis

Nigeria’s plans to put the private sector at the heart of the next phase of its economic development will be explored in a forthcoming report by the global research and advisory company Oxford Business Group (OBG).

The Report: Nigeria 2023 will look in detail at the key sectors of the country’s economy with high growth potential, which include agriculture, energy, ICT and industry.

It will also consider the important role earmarked for public-private partnerships in supporting Nigeria’s infrastructure development, with major projects such as the Lekki Free Zone and the Lekki-Epe road among those in the spotlight.

The openings that are expected to emerge from the African Continental Free Trade Area will be another focal point, with in-depth analysis provided of the potential that the initiative holds for boosting exports and fostering new trade partnerships.

Other topics set for coverage include a drive under way to encourage innovation and the introduction of tech solutions across the economic sectors, with the aim of galvanising growth in nascent segments, such as fintech.

OBG has signed a new memorandum of understanding (MoU) with the Lagos Chamber of Commerce and Industry (LCCI) as it begins work on The Report: Nigeria 2023. Under the agreement, the LCCI will team up with OBG to produce the Group’s first post-pandemic analysis of Nigeria’s investment opportunities and economic development, and other related content.

The MoU was signed by Wen Qian Chang, Country Director, OBG, and Chinyere Almona, Director General, LCCI.

Commenting after the signing, Almona said that OBG’s new report comes at a time when Nigeria is looking to the private sector to unlock the potential of key legislative reforms put in place in recent years and spearhead a new era of growth.

“These have been challenging times for Nigeria, with recession and high inflation weighing on the country’s economic performance. However, higher oil prices and a rise in post-Covid remittances, are combining to improve the outlook,” she said. “Oxford Business Group is known for producing highly regarded, detailed resources on emerging economies and has consistently provided accurate, in-depth analysis of Nigeria’s economic development over the years. I look forward to working closely with its representatives to highlight the latest openings across the economy as the country prepares for a new chapter in its growth story.”

Chang said she was delighted to have the LCCI on board for OBG’s 2023 report on Nigeria, with the country looking to build on its strengths, led by an abundant supply of natural resources, a sizeable workforce and a vibrant business scene, in the recovery phase.

“Long a regional powerhouse, Nigeria is now assessing the impact of measures adopted during the pandemic aimed at strengthening resilience and enabling the economy to withstand future shocks,” she said. “The private sector is recognised as the linchpin of Nigeria’s economic strength, with businesses ably supported by key organisations such as the Lagos Chamber of Commerce and Industry, which provides a broad range of services aimed at encouraging innovation and growth. I’m thrilled that our research into the many investment opportunities emerging in Lagos and beyond will benefit from the local knowledge and expertise of its members.”

The Report: Nigeria 2023 will mark the culmination of more than a year of field research by a team of analysts from Oxford Business Group. It will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments. OBG’s publication will also contain contributions from leading representatives across the public and private sectors.

The Report: Nigeria 2023 will be available online and in print. It will form part of a series of tailored studies that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including ESG and Future Readiness reports, country-specific Growth and Recovery Outlook articles and interviews.

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Economy

IPPIS Helps Uncover 70,000 Ghost Workers, TSA Saves Over N10 Trillion, Says FG

The Federal Government has said its recently enforced Integration Personnel and Payroll Information System (IPPIS) has helped uncovered 70,000 ghost workers in the civil service system.

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Treasury Single Account

The Federal Government has said its recently enforced Integration Personnel and Payroll Information System (IPPIS) has helped uncovered 70,000 ghost workers in the civil service system.

Dr. Dasuki Arabi, the Director-General, Bureau of Public Service Reforms, stated at the 43rd session of the ministerial briefing organised by the Presidential Communication Team at the Presidential Villa, Abuja on Thursday.

According to the Director-General, the Federal Government has saved at least N220 billion through IPPIS and about N10 trillion via the Treasury Single Account (TSA) since it was fully implemented by President Muhammadu Buhari.

Explaining the advantages of IPPIS, Arabi said the Federal Government can now give an account of the total Federal Civil Service personnel working in the country. He puts the total at 720,000 as of today.

Arabi said, “With the introduction of IPPIS, about 70,000 ghost workers have been eliminated from the payroll. We have a one-shot opportunity to look at IPPIS and say, as of today, we have 720,000 public servants working for Nigeria.

“We’ve been able to reduce more than N220bn wastage through wrong management of IPPIS on payroll by ministries, departments and agencies of government. We have reduced the budget deficits and changed the budget composition.

“We have succeeded in getting the Treasury Single Account deployed in all ministries, departments and agencies of government. Challenges have come in that implementation at the initial stage, but we are overcoming that and the government is able to save over N10tn over the years because whatever you’re generating now goes into a Treasury Single Account that is managed by somebody else, not you.

“And the government, especially at the top, is always able to see what has come into our Treasury Single Account today and what has gone out of that. So planning has been simplified. Budgeting has been simplified.”

The Integrated Financial Management Information System digitised government business and “reduced man-to-man contact and processing payments in ministries, departments and agencies.”

He said, “Transparency has been improved. A lot of things are done even outside the office. But the most important thing is the ability given to central agencies, the Office of the Accountant-General of the Federation, and the Ministry of Finance to see what is happening in all government MDAs because GIFMIS is not controlled by the agencies.

“It is controlled by the central agencies, but every activity you are doing under GIFMIS somebody is watching you and is monitoring that activity. This is a great achievement for us and for all of you and for all Nigerians.”

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Economy

Bread Producers to Commence Strike on July 13, 2022

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The persistent increase in the price of bakery materials and the Federal Government’s nonchalant attitude towards the situation has forced bread producers across the country to announce a nationwide strike starting on July 13, 2022.

The Association of Master Bakers and Caterers of Nigeria disclosed in a communiqué issued on Friday and obtained by Investors King.

According to the Association, prices of sugar, flour and other production inputs used in the bakery business had increased beyond the reach of many producers.

This is not surprising given Nigeria’s latest consumer price index report released by the National Bureau of Statistics (NBS). The report showed inflation grew at 17.71% in the month of May, the fastest rate of increase in 11 months.

In the report, the NBS attributed the increase in the headline inflation to jump in the prices of bread and cereals, food products, etc.

In the communiqué signed by Mansur Umar, National President and other executives, the association said its National Executive Council (NEC) reviewed the “neglect of the Federal Government in addressing the challenges facing our sector as captured in our letters acknowledged by the Federal Ministry of Industry, Trade and Investment, Federal Ministry of Finance, Central Bank of Nigeria and unproductive intervention of the Secretary to the Government of the Federation.

“Increase in prices of bakery materials especially flour and sugar having reached unprecedented levels, for example, flour is now between N25,000 and N27,500, so also other ingredients.

“The National Wheat Cultivation Committee already constituted is yet to be inaugurated after over one year. NAFDAC, SON, NESREA have turned the bakers into money making machine by charging our members outrageous levies even at this very challenging moment.

“Consequently, the NEC in session resolved that all zones, state, Local Governments and units of our association should commence full mobilisation of our members nationwide to embark on withdrawal of services starting from Wednesday July 13, 2022 for an initial period of two weeks.”

The association, however, urged its “members should await further directives.”

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