- Afrinvest CEO Urges FG to Embark on ‘Bold’ Reforms to Jumpstart Growth
The Chief Executive Officer of Afrinvest West Africa Limited, Mr. Ike Chioke has stressed the need for the federal government to be bold and assertive in pushing for critical reforms in the country. This, according to him was needed to stimulate economic growth.
Chioke, who said this during a media briefing on the launch of Afrinvest’s 2017 Nigerian Economic Outlook titled: “Reform or be Relegated,” in Lagos, said with the current state of the economy, if policy makers don’t push for critical reforms, ” we would be talking of a bigger problem than what we have now in the future.”
“Nigerians are very patient people. If they have a problem, instead of solving it, they go for palliative. I think the leadership needs to try to focus on how to solve problems in a holistic manner, otherwise we would be continuously relegated. People are talking about the ‘Giant of Africa,’ we are giant of nothing!” he said.
According to him, investors in Africa are now increasingly showing more interest going to countries like Ghana, Kenya and Egypt.
“While we have refused to reform, because of either political, religious or ethnic tensions, other countries similar to Nigeria that have similar commodity driven environment, such as Russia, Brazil and South Africa, because they reformed very rapidly, they have been able to attract enough foreign direct investments (FDIs) and foreign portfolio investments (FPIs) flows.
“Last year, Nigeria only recorded $2.1 billion of FDI, compared to $5.6 billion in 2015. When you compare that to Brazil, in 2015, they recorded $261 billion of FDI flows. In 2016, because they reformed quickly, they went up to nearly $340 billion. So, in an environment where we are going down, Brazil is going up. Same thing happened in Russia, in 2015, they had $31 billion of FDI flows, while in 2016, they recorded over $40 billion of FDIs.
“So, because these were markets that quickly reformed their currency, restructured their oil and gas sector, in other to attract long term capital, that immediately supported their economies and they have left the problems of 2014, far behind. But here we are in 2017, still suffering from the symptoms of 2014, when oil prices started going down and we started seeing the impact of shale production,” the Afrinvest boss added.
These, according to Chioke, are problems nations face when they refuse to reform major areas of the economy, but just skirt around the edges.
“See what is happening in the oil and gas sector, the Petroleum Industry Bill (PIB) has been floating around. Look at the Niger Delta militancy, it has been there for almost a decade. The combination of these issues means that we are looking at certain sectors for reforms. We need to carry out a major reform in the oil and gas sector. We think that we need to do whatever is necessary to ensure the passage of the PIB. That, with some targeted sale of some assets, the government can go from being 51 per cent owner of the Joint Venture to be a significant minority. Imagine an NNPC running as efficient as NLNG, you will get really attractive dividends and get value.
“The power sector is another area that massive reform is needed. One of the challenges of the sector is the national grid arrangement, which means that if I generate power in Lagos, before I can sell it to the people in Lagos; I need to send it to the national grid. It means therefore that it is extremely difficult for power to get to Nigeria. In other countries around the world, they don’t have a national grid. But we introduced it because of political reasons,” he added.
While calling on the federal government to take the mining sector out of the exclusive list, improve the ‘Ease of Doing Business,’ in the country, Chioke also advocated for favorable market-friendly policies, especially with regards to the foreign exchange market.
COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020
Nigeria’s oil revenue declined by 41.44 percent in the first nine months of 2020 to $2.033 billion, according to the latest data from the Nigerian National Petroleum Corporation, NNPC.
This represents a decline of 41.44 percent from $3.47 billion filed in the same period of 2019 when there was no COVID-19.
In the September 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), revenue from oil and gas rose by 16 percent to $120.49 million in the month of September, a 66 percent or $234.81 million drop from $355.3 million posted in the same month of 2019.
The global lockdowns caused by the COVID-19 pandemic plunged Nigeria’s crude oil sales and global demand for the commodity. This was further compounded by Nigeria’s high cost of production compared to Saudi Arabia, Russia and others that were offering discounts to boost sales during one of the most challenging periods in human history.
Experts like Prof. Yinka Omorogbe, President of Nigeria Association of Energy Economics, NAEE, were not surprised with the drop in earnings given the effect of COVID-19 on the world’s economy.
She, however, called for the revamp of the nation’s petroleum sector laws and diversification of the economy away from oil revenue dependence. She said “Covid-19 made 2020 a very hot year and it battered the oil industry internationally and we are not an exception; so we could not have been unaffected”.
She also said the effect of the fall “is definitely a wake-up call; we have to diversify, strengthen our other resources and capabilities”.
Omorogbe, a former NNPC Board Secretary, urged the government and the operators in the sector to look inward and think strategically, stating: “think medium term, think of where they want to be and the government, above all, must think of how best we can utilize our resources, so that we can achieve our objectives once we know and define them.
“It is a clear wake-up call, if not we will just sit here and find that we have become one of the poorest nations in the world”, she noted.
Crude Oil, Other Commodities Closing Price for Monday
Brent crude oil, Nigeria’s crude oil benchmark, gained 47 cents to $55.88 per barrel on Monday, while the US crude oil expanded by 50 cents to $52.77 per barrel.
Gold for February delivery fell $1 to $1,855.20 an ounce. Silver for March delivery fell 7 cents to $25.48 an ounce and March copper was little changed at $3.63 a pound.
The dollar fell to 103.80 Japanese yen from 103.83 yen. The euro fell to $1.2139 from $1.2167.
Wholesale gasoline for February delivery rose 1 cent to $1.56 a gallon. February heating oil rose 2 cents to $1.59 a gallon. February natural gas rose 16 cents to $2.60 per 1,000 cubic feet.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
Abdulaziz Yari, Former Governor of Zamfara State, to Forfeit N270 Million in Zenith, Polaris
45th President of the United States, Donald Trump, Launches ‘office Of The Former President’ In Florida
Julius Berger Plc Pre-tax Profit Decline by 30.7 Percent in Q4, 2020
News4 weeks ago
Heartbroken American Mistress Displays Dangote’s Buttocks in a Viral Video
News4 weeks ago
FCMB Group MD Links to Death of Tunde Thomas, Husband of Married Staff He Fathered Her Kids
Investment2 weeks ago
London Real Estate Company for African Investors Announces its Launch
Technology4 weeks ago
Chinese Government Goes After Jack Ma and Empire
Finance4 weeks ago
President Buhari Increases Npower Budget by N365 Billion
News4 weeks ago
Tunde Thomas: FCMB Commences Review Into Allegations of Unethical Behavior Against MD Nuru
Brands4 weeks ago
Prada’s Profits Drop by $219 Million, Sales in China Up by 60%
Banking Sector3 weeks ago
FCMB Appoints Yemisi Edun as Acting Managing Director While Adam Nuru Proceeds on Leave