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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.

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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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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