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Buhari’s Economic Recovery Plan Inadequate — MAN, LCCI

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General Economy In Nigeria's Capital
  • Buhari’s Economic Recovery Plan Inadequate

Stakeholders and economic experts, including the Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry, have said the President Muhammadu Buhari-led administration should expand its economic recovery plan as it is currently inadequate to lift the nation out of recession.

Buhari, in his New Year’s message to Nigerians, had said the economic recovery and growth plan in 2017 was anchored on optimising the use of local content and empowering local businesses.

He said the government would continue to appeal that the citizens bought ‘Made-in-Nigeria’ goods, describing farmers, small and medium-sized manufacturers, agro-allied businesses, dressmakers, entertainers and technology start-ups as the engine of economic recovery.

Commenting on the message, the Director-General, LCCI, Mr. Muda Yusuf, stressed the need for the government to stimulate investment across all sectors of the economy, including manufacturing, agriculture, exports and solid minerals.

“We need to ensure that all sectors are properly reactivated; so, we need to deal with issues that affect all the sectors together such as foreign exchange, interest rates, regulatory institutions and our trade policies,” he said.

According to him, while there has been remarkable progress made in rice production, agriculture is not only about rice.

He described access to funding and the issue of land being controlled by state governments as major challenges facing people in the agricultural sector.

Yusuf said, “We are also still lagging behind in mechanisation of agriculture. Ideally, we are on course but we should do a lot more not just in agriculture, but in all sectors because investment level is low across virtually in all sectors now.

“We also need to engage operators in each sector to be able to come up with sector-specific strategies that will bring the kind of turnaround that we expect.”

On the need to patronise made-in-Nigeria products, the LCCI DG noted that while it was necessary to appeal to the patriotism of Nigerians in that respect, the goods produced must also be affordable.

Yusuf stated, “We need to support them to bring down their costs because for many of them, the cost of production is too high as well as the cost of transporting the finished goods to the market.

“A lot of local producers have even closed down due to lack of foreign exchange. They cannot import some of their inputs, because they are included in the list of banned 41 items from accessing forex from the official market and yet you are talking about promoting goods made in Nigeria. Some of these things they say don’t add up.”

The Director, Economics and Statistics, MAN, Mr. Ambrose Oruche, said the government needed to outline how it intended to carry out the plans of growing the local manufacturing sector.

He said, “The government has stated what they are going to do to bring the economy out of recession in 2017, but the issue is that they have not given a breakdown of how they are going to do it.

“Are they going to deny people foreign exchange to encourage local sourcing of raw materials? Sourcing raw materials locally is not as easy as the President said, because there is a lot of process that the materials have to go through before they can become usable and it is a heavy investment, especially for the extractive industries.”

He added that the government should come up with incentives to attract investors.

Oruche said, “They said Nigeria has started making local rice, but where is the local rice? The government said the economy had taught us to stop buying branded clothes and patronise local tailors and garment manufacturers, how many people are doing that?”

The Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said, “If 85 per cent of what is in the budget is implemented, we will be on the road to recovery by the third quarter of the year. If we reduce our dependence on imports, we will conserve foreign exchange, which we don’t have enough of because demand exceeds the supply.”

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.

Markets

SEC To Ban Unregistered CMOs From Operating By Month End

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The Securities and Exchange Commission (SEC) says it will stop operations of Capital Market Operators (CMOs) that are yet to renew their registration on May 31, 2021.

This was contained in a circular signed by the management of SEC in Abuja on Monday.

On March 23, SEC had informed the general public and CMOs on the reintroduction of the periodic renewal of registration by operators.

The commission noted that the reintroduction of the registration renewal was due to the need to have a reliable data bank of all the CMOs registered and active in the country’s capital market.

“To provide updated information on operators in the Nigerian Capital Market for reference and other official purposes by local and foreign investors, other regulatory agencies and the general public, to increasingly reduce incidences of unethical practices by CMOs such as may affect investors’ confidence and impact negatively on the Nigerian Capital Market and to strengthen supervision and monitoring of CMOs by the Commission,” SEC explained.

According to the circular, the commission said CMOs yet to renew their registration at the expiration of late filing on May 31, would not be eligible to operate in the capital market.

It explained that CMOs were required to have completed the renewal process on or before April 30, however, the commission said late filing for renewal of registration would only be entertained from May 1 to May 31.

SEC also said that asides from barring the CMOs who failed to comply accordingly, their names would be published on its website and national dailies.

It added that names of eligible CMOs would be communicated to the relevant securities exchanges and trade associations.

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Crude Oil

A Threat to Revenue As Nigeria’s Largest Importer of Crude, India slash Imports By $39.5B

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Crude oil

Nigeria’s revenue earning capacity has come under threat following the reduction of importation of crude oil by India.

India, Nigeria’s largest crude oil importer, reduced crude oil imports by $39.5bn in April, compared to the same time the previous year, data from India’s Petroleum Planning & Analysis Cell showed.

According to the Indian High Commission in Nigeria, India’s crude oil imports from Nigeria in 2020 amounted to $10.03bn.

This represented 17 percent of Nigeria’s total crude exports for the year according to the Nigerian National Petroleum Corporation, as quoted by OilPrice.com.

As Nigeria’s largest importer of crude oil, lockdowns in India’s major cities from the COVID-19 surge in April had ripple effects on Nigeria’s oil sales.

The NNPC was prompted to drop the official standard price of its main export streams, Bonny Light, Brass River, Erha, and Qua Iboe, by 61-62 cents per barrel below its April 2021 prices. They traded at $0.9, $0.8, $0.65, $0.97 per barrel respectively, below dated Brent, the international benchmark, as Oilprice.com showed.

India had been buying the not-too-light and not-too-heavy Nigerian crudes that suited its refiners.

Reuters reported that the Indian Oil Corporation’s owned refineries were operating at 95 percent capacity in April, down from 100 percent at the same time the previous month.

An official at the IOC was quoted as saying, “If cases continue to rise and curbs are intensified, we may see cuts in refinery runs and lower demand after a month.” Hundreds of seafarers risked being stuck at sea beyond the expiry of their contracts, a large independent crude ship owner reportedly told Bloomberg.

India reportedly bought more American and Canadian oil at the expense of Africa and the Middle East, reducing purchases from members of the Organisation of the Petroleum Exporting Countries to around 2.86 million barrels per day.

This squeezed the group’s share of imports to 72 percent from around 80 percent previously, as India’s refiners were diversifying purchases to boost margins, according to Reuters.

India also plans to increase local crude oil production and reduce import expenses as its population swells, according to Bloomberg.

A deregulation plan by the Narendra Modi-led government to boost national production to 40 million tonnes of crude oil by 2023/2024, an increase of almost eight million tonnes, had already been initiated.

According to Business Today, an Indian paper, the country currently imports 82 percent of its oil needs, which amounted to $87bn in 2019.

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Energy

Invest Africa and DLA Piper Partner to Support ESG Best Practice in African Renewable Energy Projects

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Invest Africa - Investors King

The global law firm, DLA Piper, has partnered with Invest Africa, the leading trade and investment platform for African markets, to support the development of ESG best practice in African renewable energy projects.

Clear Environmental, Social and Governance (ESG) targets and measurements have become an increasingly important part of fundraising as investors seek to align their portfolios with sustainable growth. For a continent boasting ample natural resources, this presents a significant opportunity for Africa’s green energy sector. However, renewable does not always equal sustainable and developing and articulating ESG metrics can pose a significant challenge to projects as they prepare investment rounds.

The project will assemble experts from the worlds of impact investment, development finance and law. Across a series of online meetings, participants will discuss strategies to improve ESG practices in African renewable projects from both a fundraising and operational perspective.

Amongst those speaking in the inaugural session on Thursday 13th May are Cathy Oxby, Chief Commercial Officer, Africa GreencoDr. Valeria Biurrun-Zaumm, Senior Investment Manager, DEGOrli Arav, Managing Director – Facility For Energy Inclusion (FEI) – Lion’s Head Global PartnersBeatrice Nyabira, Partner, DLA Piper Africa, Kenya (IKM Advocates) and Natasha Luther-Jones, Partner, Global Co-Chair of Energy and Natural Resources, International Co-Head, Sustainability and ESG, DLA Piper.

Veronica Bolton-Smith, COO of Invest Africa said, “Africa is particularly vulnerable to the impact of climate change despite contributing very little to global emissions. As the price of renewables fall, they will form an ever more important part of Africa’s electrification. In this context, it is essential that projects be given the tools to apply best practice in ESG not only from an environmental perspective but also in terms of good governance, fair working conditions and contribution to social inclusion. I look forward to working closely with DLA Piper on this important topic.”

Natasha Luther-Jones, Global Co-Chair Energy and Natural Resources and International Co-Head Sustainability and ESG at DLA Piper also commented, “Climate change is one of the biggest challenges companies, and people, face today and when we look at its reduction – whether that be in how we power our devices, what we eat or how we dress, where we live or how we work – all roads come back to the need to increase the amount of accessible, and affordable, clean energy. However, renewable energy companies are not automatically sustainable as sustainability is a focus on all ESG factors, not just environmental. We know the need for renewable energy is only going to continue to rise, and therefore so will the number and size of renewable energy companies. The additional challenge is to make sure they are truly sustainable organisations and that’s what we’re excited about discussing during the webinar.”

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