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FRC, Private Sector Fine-tune Corporate Governance Code

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  • FRC, Private Sector Fine-tune Corporate Governance Code

The nation’s Organised Private Sector, OPS, has pledged to collaborate with the Financial Reporting Council of Nigeria, FRC, in fine-tuning the recently released, National Code of Corporate Governance, NCCG, to ensure it becomes the guiding rules for businesses in the country.

Corporate governance involves balancing the interests of a company’s many stakeholders, including shareholders, management, customers, suppliers, financiers, government and the community.

It also provides the framework for attaining a company’s objectives, from action plans and internal controls to performance measurement and corporate disclosure.

The collapse of organisations in either the public or private sectors in Nigeria, has often been attributed to weak corporate governance with regard to undue interferences, lack of disclosures, padding of books and general corruption in the system.

As such, the FRC Code among others seeks to promote the highest standards of corporate governance, encouraging sound systems of internal control to safeguard investments, while also promoting sound financial reporting and accountability in both the public and private sectors of the economy.

But the release of the Code on October 17th generated a lot of controversies among stakeholders, particularly capital market investors, who felt the Code was at variance with the Companies and Allied Matter Act, CAMA, so much that it was suspended until it was fine-tuned.

Accordingly, the OPS, comprising the Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and Manufacturers Association of Nigeria (MAN), weekend, sought further clarifications on certain aspects of the code, while pledging to support the FRC on it.

Speaking during a courtesy visit to the Council’s headquarters in Lagos, the Director General, NECA, Olusegun Oshinowo, who led the delegation, said the body was in support of the NCCG, which is to ensure transparency, accountability and fairness to all stakeholders in the business sector of the economy.

According to a statement from the FRC, he also commended the Council for the way and manner it allowed for robust social dialogue on the NCCG through the series of public hearings and seminars it organised to get inputs from stakeholders before the code was eventually released.

Oshinowo, however, noted that to ensure a wider acceptability, there was the need for continuous social dialogue and improvements on the Code to reflect current realities in Nigeria.

He highlighted some of the grey areas in the Code, for which they sought clarifications to include transitional time for the enforcement of the code; the number of non-executive directors to be appointed into companies’ board; constitution of Joint Audit by entities with at least N10billion capital and appointment of consultants.

He urged the FRC to look into these with a view to addressing them in such a way that the inputs of the stakeholders would reflect in the code.

Responding, the Chief Executive Officer of the FRC, Mr. Jim Obazee, was quoted to have said that the Council was working tirelessly with stakeholders to ensure the code yields the desired result of entrenching transparency and accountability in the transaction of businesses.

He also emphasised the need for more disclosures in financial statements in order to build investors’ confidence in the nation’s business environment.

He noted that some of the giant strides the FRC made in the past which were hitherto criticised in the beginning were later commended for achieving the desired results.

Among them were “the adoption of International Financial Reporting Standard, IFRS, as benchmark for stating financial statements in the country; and the issuance of FRC registration numbers to those who sign entities’ accounts to give credence to the accounts.”

This, he said, is to ensure that in the event of any mis-statements, such individuals are “held responsible through suspension of their numbers instead of the entire organisations they represent,” the statement read.

Obazee was said to have assured the delegates that the areas they have raised issues about would be looked into, as the code goes through further restructuring.

Noting that since the code was not a law, he said: “it would not require rigorous process of amendment if there are genuine reasons for it to be re-jigged for the general good of the nation’s business environment.”

The Chairman, Steering Committee of the NCCG, Victor Odiase, was also quoted to have said that corporate governance codes world over-determine the critical destination of investments, and decried the high level of business ownership concentration in the country.

He said: “if we must attract the desired local and foreign investments to move the country’s economy out of recession and make the economy a vibrant one, there is need for deliberate efforts to de-concentrate entities’ ownership, which the corporate governance code focuses on addressing as one of the key areas to attract investors.”

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

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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Crude Oil

OPEC Says Uncertainties Remain High in 2021

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OPEC Says Uncertainties Remain High in 2021

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.

In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.

However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.

Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.

But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.

The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.

Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”

“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.

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Crude Oil

Brent Crude Oil Rose to $56.25 Per Barrel

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Brent Crude Oil Rose to $56.25 Per Barrel

Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.

Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.

Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.

Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.

Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.

China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.

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