Nigeria’s Gross Domestic Product has contracted by 2.1 per cent in the second quarter of 2016, according to data from the National Bureau of Statistics. However, seven activities in the non-oil sector recorded positive growth.
The activities that drove growth in the non-oil sector included: agriculture; Information and Communication; water supply; arts, entertainment and recreation; professional, scientific, education and technical services..
Although growth in the sector declined by 0.38 in real terms in Q2 2016, the sector contributed 91.74 per cent to the nation’s GDP, higher from shares recorded in Q1 which was 89.71 per cent and Q2 2015 which was 90.20 per cent, according to the NBS data.
An earlier data compiled by the Bloomberg had put growth in the sector at -0.36 per cent in Q1 2016.
A 2.1 per cent GDP contraction beat analysts’ forecast by 0.5 per cent. The median of 17 economist estimates compiled by Bloomberg was for 1.6 per cent contraction.
Bloomberg quoted an analyst at the London-based Capital Economics Limited, John Ashbourne, as saying that there was poor performance across almost the entire economy, adding, “Every engine has blown out.”
But there have been a lot of efforts on the part of the government to diversify the economy by leveraging agriculture and other activities. In line with this vision, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has been carrying out sweeping reforms meant to enhance crop production across key food chains.
He stated during the launch of his most recent reform-the Agriculture Promotion Policy- that it was a “refreshed strategy” to tackle foreign exchange scarcity, end food importation and boost local food production.
According to him, the programme has placed priority on improving productivity of a number of crops and activities such as rice, wheat, maize, fish (aquaculture), dairy milk, soya beans, poultry, horticulture (fruits and vegetables), and sugar.
He said, “Nigeria believes that the gap can be closed by partnering private investors across farmer groups and companies to develop end-to-end value chain solutions. These chains will receive facilitated government support as they make deep commitments to engaging a new generation of farmers, improving supply of specialised fertilizers and protection chemicals, as well as wider scale use of high-yielding seeds.”
The agriculture programme is also receiving support at the state levels where states like Taraba, Lagos, Ebonyi and so many others have embarked on aggressive programmes targeted at enhancing productivity in crops and activities where each state has comparative advantage. While Taraba and Ebonyi have been consolidating on local rice production advantage, Lagos State has taken advantage of its natural environment to develop aquaculture and other key minerals found in abundance in the state.
The Federal Government is targeting tax revenue from activities in the non-oil sector to finance the 2016 budget amidst declining oil revenue.
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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