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Nigerians Not Feeling Impact of Development Banks – Dogara

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SPEAKER of the House of Representatives, Yakubu Dogara
  • Nigerians Not Feeling Impact of Development Banks

The Speaker of the House of Representatives, Mr. Yakubu Dogara, said on Tuesday that Nigerians were not feeling the impact of Development Finance Institutions established by the Federal Government to serve as a catalyst for development.

He noted that despite the huge financial resources at the disposal of the institutions, they had made little impact over the years to grow Micro, Small and Medium Enterprises, among others.

Some the country’s DFIs include the Bank of Industry, Bank of Agriculture, Federal Mortgage Bank of Nigeria, Nigerian Export-Import Bank, The Infrastructure Bank and National Economic Reconstruction Fund.

Last week Wednesday, President Muhammadu Buhari announced his administration’s plan to recapitalise the BoI and the BoA next year by making a provision of N15bn in the budget for the two institutions.

Dogara on Tuesday spoke at the opening of a hearing by an ad hoc committee of the House on the dwindling efficiency of the DFIs.

He stated that the House would support the government’s efforts to strengthen the institutions to be able to deliver on their core mandates.

Dogara cited the example of SMEs, which he said had not been able to access loans for development despite the presence of the DFIs established primarily to serve this purpose.

The Speaker added, “The DFIs are established to serve as catalysts for the development of Micro, Small and Medium Enterprises and agro-based businesses. In most developing countries, the DFIs have been the springboard on which such countries became economy giants.

“The financial conditions of many development banks have deteriorated over the years owing to a number of factors such as the prevalence of macroeconomic instability, low repayment rates by clients, and significant shortage of investible funds.”

The committee is chaired by a member from Anambra State, Mr. Emeka Anohu.

But, the BoI, argued that the loans it offered to small-scale enterprises recorded 95 per cent performance over the years.

The bank’s acting Managing Director, Mr. Waheed Olagunju, said the BoI’s performance was above the threshold set by the Central Bank of Nigeria, one of its key financiers.

“We got a six-year intervention fund of N535bn from the CBN, running from 2010. And the performance of our loan is 95 per cent, which is over and above the CBN’s threshold of five per cent, and the industry average of 11 per cent,” Olagunju explained.

He called for stronger private sector involvement in the economy to drive industrialisation as against leaving it in the hands of the government alone.

The BoI boss, however, advised that the country must address all the social challenges associated with industrialisation.

Olagunju added, “When investors come in, how they are treated at our embassies in their countries when seeking for visas matters a lot. How the airport security treats them, how the taxi driver and hotel receptionists receive them in Nigeria, and lastly, how bureaucrats handle their files while pushing for investment opportunities, all determine whether they will bring in the money or not.

“So, the government has very little to do with regards to the attitude of individuals, because no profession preaches corruption.”

He disclosed that the bank faced initial challenges, like the failure of the administration of former President Olusegun Obasanjo to release the N50bn take off grant it promised the BoI.

“We didn’t get up to the N50bn promised by the government. So, we decided to become a self-funding institution by sourcing our funds and loan them out to small and medium-scale industrialists,” he said.

The committee later summoned all the DFIs to appear before it on January 17 with full disclosures of the funds they had received from the government since their creation.

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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Oil 1

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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Nigeria's economic Productivity

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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