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Ochicha: Buhari not Responsible for Our Economic Woes

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The Governorship candidate of the governing All Progressives Congress(APC), in the 2015 general elections in Cross River state, Mr. Odey Ochicha has called on Nigerians to stop blaming President Muhammadu Buhari for the nation’s economic recession.

In a statement he issued in Calabar on Tuesday, Ochicha said that Nigerians should learn how to separate lies from facts.

Ochicha said, if not for the intervention of Buhari’s administration, the country might have been in total shambles by now.

Ochicha, a retired Nigeria National Petroleum Corporation (NNPC) manager stated that there is no where in the world that economy grows in space, therefore instead of accusing the APC-led administration, the people should ask former leaders of the structures they set up for our economy to grow without oil.

He blamed the former administration of Goodluck Jonathan, describing it as “insensitive and the most corrupt in the history of the country which has led us to the present quagmire”.

According to the statement, “Nigerians should begin to channel their questions to the right people and stop believing this rhetorics and illusions that President Buhari and APC are responsible for the nation’s economic woes.

“There is nowhere in the world that the economy grows in space. What were the structures the past administrations built for our economy to grow without oil? “The economy grows by the standard of infrastructure and institutions created but unfortunately, the Buhari administration inherited almost a failed state from the PDP that had the rare privilege of managing the affairs of this country for a whole 16 years,”Ochicha said.

Blaming the Jonathan administration for mismanaging the nation’s resources, he said:”I can’t understand why people are pointing accusing fingers at this administration. The former administration earned more than sixty per cent of our total revenue from oil yet there’s nothing to show for it. See what is happening with the former first lady? What work was she doing to have such stupendous amount of money in her various accounts?

“Over $31.4 million in separate accounts. What was her source of income? I served this country for 29 years, 6 months and grew to the rank of Deputy Manager in the NNPC but I cannot boast of such huge amount of money because I didn’t steal. But a woman who has contributed nothing to the development of our country is today richer than the entire South South region.

“When people talk about Jonathan handing over the largest economy to Buhari, I begin to wonder whether they don’t understand that Jonathan met a viable economy with the growth rate of 7.9 percent and left it at about 2.9 percent. Six months to when he was leaving office and when the prices of crude oil had began to fall, his Finance Minister told us that they were borrowing money to pay salaries of federal workers.

“But under the President Buhari’s administration, despite the difficult economic situation, the government has been able to pay salaries without borrowing. The last two month’s federal allocation shared was the highest in the history of this country and was not gotten from oil. Why is nobody talking about this?”

He called on Nigerians to be patient with the President, adding that “nothing good comes easy as the challenges the country is facing is some of the sacrifices we need to make to be great and prosperous again and it’s going to be shortlived considering the dogged approaches being adopted by the present administration to revive the economy”.

Continuing, Ochicha said: “Only few countries like United Arab Emirates(UAE), Norway etc that utilised their oil wealth very well are currently not faced with recession. In fact, Norway is surviving now from about $800 billion foreign reserve it had accumulated but here, former President Jonathan’s Finance Minister has said it all that they lacked the will to save even when they had the will to squander what other administrations had saved.So I want to appeal to Nigerians to be patient with the President.”

What we are going through now is the price other nations had paid to get to where they are. President Buhari and you the good people of Nigeria will make our dear country great and prosperous again. Together, we can build a new Nigeria that is great, powerful, progressive, prosperous, industrialised and world class

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Oil Rises as Threat of Immediate Iran Supply Recedes

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Oil prices rose on Tuesday, with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks dragging on over the United States rejoining a nuclear agreement with Tehran.

Brent crude was up by 82 cents, or 1.13%, to $73.68 per barrel, having risen 0.2% on Monday. U.S. oil gained 91 cents, or 1.3%, to $71.79 a barrel, having slipped 3 cents in the previous session.

Indirect discussions between the United States and Iran, along with other parties to the 2015 deal on Tehran’s nuclear program, resumed on Saturday in Vienna and were described as “intense” by the European Union.

A U.S. return to the deal would pave the way for the lifting of sanctions on Iran that would allow the OPEC member to resume exports of crude.

It is “looking increasingly unlikely that we will see the U.S. rejoin the Iranian nuclear deal before the Iranian Presidential Elections later this week,” ING Economics said in a note.

Other members of the Organization of Petroleum Exporting Countries (OPEC) along with major producers including Russia — a group known as OPEC+ — have been withholding output to support prices amid the pandemic.

“Additional supply from OPEC+ will be needed over the second half of this year, with demand expected to continue its recovery,” ING said.

To meet rising demand, U.S. drillers are also increasing output.

U.S. crude production from seven major shale formations is forecast to rise by about 38,000 barrels per day (bpd) in July to around 7.8 million bpd, the highest since November, the U.S. Energy Information Administration said in its monthly outlook.

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Oil Prices Rise as Demand Improves, Supplies Tighten

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Oil prices rose on Monday, hitting their highest levels in more than two years supported by economic recovery and the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate.

Brent was up 53 cents, or 0.7%, at $73.22 a barrel by 1050 GMT, its highest since May 2019.

U.S. West Texas Intermediate gained 44 cents, or 0.6%, to $71.35 a barrel, its highest since October 2018.

“The two leading crude markers are trading at (almost) two-and-a-half-year highs amid a potent bullish cocktail of demand optimism and OPEC+ supply cuts,” said Stephen Brennock of oil broker PVM.

“This backdrop of strengthening oil fundamentals have helped underpin heightened levels of trading activity.”

Motor vehicle traffic is returning to pre-pandemic levels in North America and much of Europe, and more planes are in the air as anti-coronavirus lockdowns and other restrictions are being eased, driving three weeks of increases for the oil benchmarks.

The mood was also buoyed by the G7 summit where the world’s wealthiest Western countries sought to project an image of cooperation on key issues such as recovery from the COVID-19 pandemic and the donation of 1 billion vaccine doses to poor nations.

“If the inoculation of the global population accelerates further, that could mean an even faster return of the demand that is still missing to meet pre-Covid levels,” said Rystad Energy analyst Louise Dickson.

The International Energy Agency (IEA) said on Friday that it expected global demand to return to pre-pandemic levels at the end of 2022, more quickly than previously anticipated.

IEA urged the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, to increase output to meet the rising demand.

The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020, maintaining strong compliance with agreed targets in May.

On the supply side, heavy maintenance seasons in Canada and the North Sea also helped prices stay high, Dickson said.

U.S. oil rigs in operation rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co said in its weekly report.

It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.

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FG Spends N197.74 Billion on Subsidy in Q1 2021

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The Federal Government has spent a total sum of N197.74 billion on fuel subsidy in the first quarter (Q1) of 2021, according to the Federal Account Allocation Committee (FAAC) report for May.

The report noted that the value of shortfall, the amount the NNPC paid as subsidy, in the March receipts stood at N111.97 billion while N60.40 billion was paid in February.

In the three months ended March, the Federal Government spent N197.74 billion on subsidy.

The increase in subsidy was a result of rising oil prices, Brent crude oil, against which Nigerian oil is priced, rose to $73.13 per barrel on Monday.

The difference in landing price and selling price of a single litre is the subsidy paid by the government.

On May 19, the Nigerian Governors Forum suggested that the Federal Government removed the subsidy completely and pegged the pump price of PMS at N380 per litre.

The governors’ suggestion followed the non-remittance of the NNPC into the April FAAC payments, the money required by most states to meet their expenditure such as salaries and building of infrastructure.

However, experts have said Nigeria is not gaining from the present surge in global oil prices given the huge money spent on subsidy.

Kalu Aja, Abuja-based financial planner and economic expert, said “If Nigeria is importing Premium Motor Spirit and still paying subsidy, then there is no seismic shift.”

“Nigeria needs oil at $130 to meet the deficit. In the short term, however, more dollar cash flow is expected and with depreciated Naira, it will reduce short term deficit.”

Adedayo Bakare, a research analyst, said that the current prices do not really mean much for the country economically.

He said, “The ongoing transition away from fossil fuels and weak oil production from the output cuts by the Organisation of Petroleum Exporting Countries will not make the country benefit much from the rising oil prices.

“Oil production used to be over two million barrels but now around 1.5 million barrels. We need OPEC to relax the output cuts for the naira to gain.”

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