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FG Spent N750bn on Infrastructure in Five Months – Adeosun

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  • FG Spent N750bn on Infrastructure in Five Months

The Minister of Finance, Mrs. Kemi Adeosun, has said that the Federal Government is determined to invest massively in infrastructure, sort out issues around the ease of doing business and encourage patronage of made-in-Nigeria goods in a bid to reflate the economy.

She said these were part of broad measures being taken to create jobs, promote entrepreneurship and businesses, pull the country out of recession and grow the economy sustainably.

Adeosun stated these while speaking at the Wealth Creation Platform 2016, a programme organised by the Kingsway International Christian Centre in Lagos on Saturday.

Her lecture was entitled, ‘Where we are, why we are here and the future.’

The Finance minister said that the current administration had realised some mistakes made by past administrations and was working hard to ensure that they did not reoccur.

She noted that over the years, Nigeria had merely been spending about 90 per cent of her budget on recurrent expenditure, while infrastructure investment was near zero.

“It is unfortunate we are where we are today. But we had been heading in this direction for long. The high oil price had just been the anesthesia,” Adeosun said.

Adeosun said that the country needed about $25bn annually to meet her infrastructure deficit.

She said this explained why the President Muhammadu Buhari-led administration was prioritising infrastructure investment while also encouraging state governments to align with the government at the centre.

“Our economy is not growing because we are not spending on infrastructure. The average Nigerian does not have an enabling environment to thrive and succeed because infrastructure investment has not been our priority. And lack of infrastructure hampers growth, entrepreneurship and businesses,” Adeosun said.

She explained that this was why government was trying to reflate the economy through massive investment in capital projects, stressing that N750bn had so far been released for capital projects across the country in the last five months.

“Very soon, before the end of this year, government will release another tranche of funds for infrastructure development. The strategy is to inject funds into the economy, particularly into capital projects — roads, bridges and power. We believe it will create jobs in the short-term, but more importantly they will unlock the productivity of the Nigerian economy,” she said.

Adeosun stressed the need for Nigerians to begin to change their mindsets and patronise locally made products as much as possible.

She said that remained the only way to encourage the manufacturers to get better, conserve scarce foreign exchange and grow the economy.

“We must protect our own; everyone must join the campaign,” she added

She also disclosed that government was focused on investing massively in agriculture and the Micro, Small and Medium-scale Enterprises to create jobs for Nigerians, adding that the government had earmarked about $1.3bn to be pumped into the MSME sector in 2017 through the Nigerian Development Bank.

Adeosun lauded the Senior Pastor of the KICC, Matthew Ashimolowo, for initiating the Wealth Creation Platform programme, noting that when “you start talking about wealth at a difficult time like this, it shows that people have faith in the vision of a great Nigeria.”

Meanwhile, Africa’s richest woman and Executive Vice Chairman, Famfa Oil Limited, Mrs. Folorunsho Alakija, who also spoke at the programme, advised Nigerians not to allow the prevailing economic situation to kill their dreams.

She listed time-tested principles that could be adopted to make money to include seeking out simple but continuous streams of income, having the ability to turn challenges into opportunities and having resolute faith in one’s abilities.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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