- Senate Backs AMCON on Debt Recovery
The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Ibrahim, has said that time will soon run out on recalcitrant obligors of the Asset Management Corporation of Nigeria.
He said this was because of the renewed commitment of the Senate to build strategic collaboration with AMCON to develop greater capacity for debt recovery and sustained development in the country.
Members of the Senate committee are in Uyo, the Akwa Ibom State capital, for a three-day retreat to deliberate on the best approaches to be adopted to help the Nigerian economy to recover from recession.
The theme of the retreat is: ‘Economic rebuilding through eligible assets recovery’, with the management of AMCON led by its Managing Director/Chief Executive Officer, Mr. Ahmed Kuru, among other stakeholders, in attendance.
Welcoming participants, Ibrahim stated that the Senate was committed to helping in stabilising the economy, but added that was no how this would be achieved without collaborating with key institutions of government like AMCON, which he argued carried a huge burden on behalf of the government.
Ibrahim said, “This retreat for the Senate Committee on Banking, Insurance and other Financial Institutions is in keeping with our commitment to build strategic collaborations in order to develop greater capacity for sustained development. It is my hope that we will fully achieve the objectives of this retreat, thereby strengthening the relationship between AMCON, this committee and indeed the entire hallowed upper legislative chamber.
“It is my expectation that at the end of the day, this committee will have identified new legislative support frameworks for AMCON, where necessary, as well as more efficient ways to consolidate on already existing support legislation and frameworks so that AMCON can be strategically positioned to optimally perform its uniquely important responsibility of asset recovery and management.”
“AMCON, since its founding, has been a key stabilising and revitalising force in the Nigerian financial system, and requires vital support from the legislature to achieve its statutory objectives.”
Earlier in his remarks, Kuru described AMCON as a child of necessity in the development of Nigeria’s financial system and needed the support of other critical stakeholders to cover significant ground in its debt recovery mandate.
Similarly, the Senate Committee on Privatisation has promised to assist electricity distribution companies and other relevant organisations in the sector to ensure that Nigerians enjoy regular power supply.
The Chairman of the committee, Senator Ben Murray-Bruce, who made the promise when he led other members of the committee on a fact-finding mission to the Port Harcourt Electricity Distribution Company on Thursday, said the committee was in the Rivers State capital to see how it could help in solving the problems of the PHED.
Murray-Bruce, who spoke after a closed-door meeting with the PHED management, explained that the committee would work with the Ministry of Power and the four states that the firm was covering to ensure that the problem of energy theft, ageing cables and low return on investments were resolved.
He stated, “The privatisation committee in the Senate is on a fact-finding mission across the country to look at industries that have been privatised in the last 10 years, particularly the power sector, to find out what problems they have and how we can assist in solving the problems.”
“The PHED has listed their problems, which include low tariff that is too low to get return on investment, energy theft, ageing cables, etc. But we understand the consumers’ plight because if you don’t have light, but you are expected to pay three times of what you used to pay before, of course it agitates. So, we are not here to blame anybody, but to find a peaceful way to resolve the problems.
“We are going to study the problems and find solutions to them. We are going to work with the Minister of Power and the four state governments in the region.”
Murray-Bruce called on the electricity distribution companies to be transparent in their dealings with the Federal Government, which still has 40 per cent stake in the firms.
He said, “On the issue of transparency, the Discos need to be transparent. If they are collecting N10 and say they are collecting N5, that’s a fraud. They have to be audited to ensure credibility.
“But if they commit fraud, they lose their status. The government will take out their business. Anyway, those are allegations, but I don’t think anybody will invest billions of naira and then turn around to do such.”
In his remark, the Managing Director of 4Power Consortium Limited, owners of the PHED, Mr. Matthew Edevbie, called on the Federal Government to address the problem of scarcity of foreign exchange.
He observed that while the cost of production was increasing for the Discos, they could not increase electricity tariff.
Edevbie said, “So, we are saying to the government that this issue of foreign exchange has to be stable for us because our income is not variable. You can imagine that a bottle of beer, which was previously N200, is now N350.
“As the prices of raw materials increase, the producers are also increasing their prices. But in my own case, our cost of production is increasing, but we cannot increase the tariff, because if we do, there is going to be a problem. So, who should take that loss? The government should please stabilise the foreign exchange rate.”
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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