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We’ll Resist Sale of NNPC Stake – Oil Workers

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  • We’ll Resist Sale of NNPC Stake

Oil workers on Sunday declared that they would resist any attempt by the Federal Government to sell some of its stake in the Nigerian National Petroleum Corporation.

The Federal Ministry of Petroleum Resources released a draft policy document on the reform of the oil sector late on Thursday in which it proposed the sale of some of its stake in the national oil firm. Reuters reported on Friday that the country had been mulling the sale of oil assets to raise foreign exchange as a slump in vital oil revenues was eroding the budget.

The proposal stated that a newly formed corporation could sell the stake “so long as the government shareholder retains effective control and ownership.”

Reacting to the draft proposal on Sunday, the Public Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, Mr. Emmanuel Ojugbana, told one of our correspondents that the union would not support the sale of NNPC’s assets.

He said, “Actually, the government is trying to revisit the Petroleum Industry Bill and that may have to do with the draft document being reported. But we have not engaged with them in order to know the implication of what is in the draft or the bill. However, we have already made our position clear and I’m restating it that we are not in support of any attempt to sell our national assets.

“But if there are other policies of government that will enhance the oil and gas industry, we are in support of that. So, we need to understand what the draft proposal is all about and then we will make our contributions. But as per the sale of assets, PENGASSAN is completely against it and should be counted out.

“We are not in support of the sale of our national assets; we will only give support to policies that aim to create adequate governance structures, as this will provide more business opportunities, which is good for the Nigerian people. In times like this, the government should not consider the sale of assets belonging to the NNPC, for we will oppose it seriously.”

Also speaking on the issue, the Secretary-General, PENGASSAN, Mr. Lumumba Okugbawa, said the union did not know which subsidiary of the NNPC might be put up for sale, but stressed that oil sector workers would resist the move.

He said, “Our position still remains the same that they cannot sell our national assets. It is not to be allowed. We don’t have the details of which company they want to sell in the NNPC. Is it the Kaduna, Warri or Port Harcourt refinery? Is it a different subsidiary of the NNPC, or is it the entire NNPC? These are things we need to find out.

“But no matter what it may be, our position stays and it is that the government should not be allowed to sell our collective national assets. There should be better ways to handle things, not by selling our national assets. So, we look forward to having better dialogue with the government.”

A branch Chairman of the National Union of Petroleum and Natural Gas Workers, who spoke on condition of anonymity, stated that it would be necessary for the government to explain what the draft proposal entailed before implementing it to forestall a backlash.

Ojugbana, however, said that PENGASSAN would support any proposal by the government that would benefit the workers as well as the country.

He said, “Sometime ago, when the government came up with the idea of the sale of national assets, we said that we didn’t support it. We are aware that there are a lot of things the government is doing to revamp the economy and put things in order, but we are not in support of the sale of any national asset.

“If there are other moves that will bring about efficiency in the operations of the NNPC that will be beneficial to both the workers and the nation, we can look at it and examine the grey areas and the implications; and if it is not beneficial to us, we can also come up with our position on it.

“They promised to engage with us so that we can understand the details of the proposal; when we get the full information on what it entails, we will have our own internal discussion on it.”

As part of the draft proposal to restructure the NNPC, the Ministry of Petroleum Resources said the corporation would be listed on the Nigerian Stock Exchange for optimal management of the country’s energy resources.

The government also aims to reduce the country’s reliance on oil exports and shift to a gas-based industrial economy.

“Unless there are additions to reserves and those reserves are brought into production, Nigeria can expect to see absolute declines in production from around 2020,” the plan stated.

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.

Economy

NNPC To Resume Oil Exploration In Sokoto Basin

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The Nigerian National Petroleum Corporation on Thursday announced plans to resume active oil exploration in Sokoto Basin.

A statement issued in Abuja on Thursday by NNPC spokesperson, Kennie Obateru, said the corporation’s Group Managing Director, Mele Kyari, said exploration for crude would resume in the Sokoto Basin.

The statement read in part, “Kyari also hinted of plans for the corporation to resume active exploration activities in the Sokoto Basin.”

The NNPC boss disclosed this while receiving the Governor of Kebbi State, Atiku Bagudu, who paid Kyari a courtesy visit in his office on Thursday.

In October 2019, the President, Major General Muhammadu Buhari (retd.), had during the spud-in ceremony of Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the North-East, said the government would explore for oil and gas in the frontier basins across the country.

He outlined the basins to include the Benue Trough, Chad Basin, Sokoto and Bida Basins.

Buhari had also stated that attention would be given to the Dahomey and Anambra Basins which had already witnessed oil and gas discoveries.

Kyari restated NNPC’s commitment to the partnership with Kebbi State for the production of biofuels, describing the project as viable and in tandem with the global transition to renewable energy.

He said the rice production programme in the state was a definite boost to the biofuels project.

Kyari said the linkage of the agricultural sector with the energy sector would facilitate economic growth and bring prosperity to the citizens.

He was quoted as saying, “We will go ahead and renew the Memorandum of Understanding and bring in any necessary amendment that is required to make this business run faster.”

The Kebbi State governor expressed appreciation to the NNPC for its cooperation on the biofuel project.

Bagudu said the cassava programme was well on course but the same could not be said of the sugarcane programme as the targeted milestone was yet to be attained.

Kebbi state is one of the states that the NNPC is in partnership with for the development of renewable energy.

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Economy

Nigeria To Benefit As G-20 Approves Extension Of Debt Relief Till December

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Finance ministers of G-20 countries have approved an extension of debt relief for the world’s poorest nations till December 2021.

David Malpass, World Bank president, made the announcement at the virtual spring meeting, on Wednesday.

TheCable had earlier reported that the G-20 countries will meet this week to consider an extension of the debt freeze.

The G-20, is a group of finance ministers and central bank governors from 19 of the world’s largest economies, including those of many developing nations, along with the European Union.

G-20 countries had established a debt service suspension initiative (DSSI) which took effect in May 2020.

Nigeria had benefited from the initiative which delivered about $5 billion in relief to more than 40 eligible countries.

The suspension period which was originally set to end on December 31, 2020 was extended to June 2021.

Malpass said the extension to December 2021 will boost economic recovery and promote job creation in low income countries.

He urged countries to be transparent in their approach to the debt service payment extension.

“On debt, we welcome a decision by the G20 to extend the DSSI through 2021. The World Bank is also working closely with the IMF to support the implementation of the G20 Common Framework,” he said.

“In both these debt efforts, greater transparency is an important element: I urge all G20 countries to disclose the terms of their financing contracts, including rescheduling, and to support the World Bank’s efforts to reconcile borrower’s debt data more fully with that of creditors.

“Participation by commercial creditors and fuller participation by official bilateral creditors will be vital. I urge all G20 countries to instruct and create incentives for all their public bilateral creditors to participate in debt relief efforts, including national policy banks. I also urge G20 countries to act decisively to incentivize the private creditors under their jurisdiction to participate fully in sovereign debt relief efforts for low-income countries.

“Debt relief efforts are providing some welcome fiscal space, but IDA countries need major new resources too, including grants and highly concessional resources. From April to December 2020, the first DSSI period, our net transfers to IDA and LDC countries were close to $17 billion, of which $5.8 billion were on grant terms.

“Our new commitments were almost $30 billion, making IDA19 the single largest source of concessional resources for the poorest countries and the key multilateral platform for support. To recover from COVID, much more is needed, and we welcome the G20’s support for advancing IDA20 by one year.”

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Economy

IMF / Fiscal Monitor Report April 2021 Forecast

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Unprecedented fiscal support by governments during the pandemic has prevented more severe economic contractions and larger job losses, but risks remain of long-term scarring the International Monetary Fund says in its Fiscal Monitor report released on Wednesday (April 7) in Washington, DC.

Meanwhile, such support, along with drops in revenues, has raised government deficits and debt to unprecedented levels across all country income groups, said Vitor Gaspar, Director of the Fiscal Affairs Department at the IMF.

The first lesson one year into COVID-19 is that fiscal policy can act timely and decisively. The fiscal policy response was unprecedented in speed and size looking across countries. We also learned that countries with easier access to finance or stronger buffers were able to give more fiscal support. They’re also projected to recover faster,” said Gaspar.

Average overall deficits as a share of GDP in 2020 reached 11.7 percent for advanced economies, 9.8 percent for emerging market economies, and 5.5 percent for low-income developing countries. Countries’ ability to scale up spending has diverged.

“So, what have we learned? We’ve learned that fiscal policy is powerful and that sound public finances are crucial in order to enable that power to be used to the fullest,” stressed Gaspar.

Gaspar urged policy makers to balance the risks from large and growing public and private debt with the risks from premature withdrawal of fiscal support, which could slow the recovery.

“In the spring 2021, we emphasize differentiation across countries. Moreover, COVID-19 is fast evolving, as are the consequences from COVID-19. The fiscal policy must stay agile and flexible to respond to this fast-evolving situation.” Said Gaspar.

He also warned that the targeting of measures must be improved and tailored to countries’ administrative capacity so that fiscal support can be maintained for the duration of the crisis—considering an uncertain and uneven recovery

“Moreover, countries are very different in their structures, in their institutions, in their financial capacity and much else. Therefore, policies and policy advice have to be tailored to fit.” Said Gaspar

Gaspar concluded his remarks by emphasizing that global vaccination is urgently needed, and that global inoculation would pay for itself with stronger employment and economic activity, leading to increased tax revenues and sizable savings in fiscal support.

“A fair shot, a vaccination for everybody in the world may well be the highest return global investment ever. But the Fiscal Monitor also emphasizes the importance of giving a fair shot at life success for everyone. It documents that preexisting inequalities made COVID-19 worse and that COVID-19 in turn made inequalities worse. There is here a vicious cycle that threatens trust and social cohesion. Therefore, we recommend stronger redistributive policies and universal access to basic public services like health, education, and social security,” said Gaspar.

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