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FG, States Using Tinubu’s Economic Policies, Says Adeosun

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  • FG, States Using Tinubu’s Economic Policies

The Federal Government said yesterday that its economic recovery template was adopted from a former governor of Lagos State and national leader of the All Progressives Congress (APC), Asiwaju Bola Tinubu.

The Minister of Finance, Kemi Adeosun, who spoke during the ninth annual Bola Tinubu Colloquium to mark his 65th birthday in Lagos, noted that the tax mobilisation formula and other policies the APC chieftain deployed as governor were what the Federal Government had adopted in its efforts to revamp the national economy.

This tribute by the Buhari government underscores the growing cordial relationship between the presidency and Tinubu. This contrasts with a notion of the existence of a no-love-lost relationship between President Muhammadu Buhari and Tinubu which was given expression recently when Tinubu’s protege Governor Akinwumi Ambode and his predecessor, now Minister of Power, Works and Housing, Babatunde Fashola, had a public spat over the development of Airport Road in Lagos.

At the event titled, “Make it in Nigeria – Use what we make, make what we use”, Adeosun further revealed that states were adopting the Tinubu economic model.

Her words: “We are following that template which you laid down. Oil has proved to us that it is a very unreliable source of revenue. As a matter of fact, it is a lazy way of economic revenue.

“The situation we found ourselves today demands that we should have multiple sources of revenue. We need to create jobs for our people by diversifying the economy but unfortunately, what we had before now was an unproductive economy which solely depended on oil.”

The minister stressed that the nation needed to drive the economy by creating jobs, adding: “We will change Nigeria by consuming what we make and make what we use. Using what we make and consuming what we make is the best way towards economic recovery.

“The tax mobilisation we copied from Tinubu is what we are using. And we thank you for leading the way in tax collection. As a matter of fact, when you embarked on aggressive tax collection, which eventually led to increased internally generated revenue (IGR) in Lagos, many people complained. But the truth is that we all can see the massive infrastructural development achieved from your aggressive tax collection.”

Adeosun vowed that very soon, she would employ an aggressive tax system towards wealthy Nigerians similar to that of Tinubu.

In the meantime, encomiums have begun pouring in for the former governor.

According to President Muhammadu Buhari, the celebrant is the most outstanding South West politician of his generation.

Represented by the Minister of Interior, Gen. Abdulrahman Dambazau (rtd), the president noted: “Tinubu is a great mobiliser, very good at planning and executing government plan. He played a great role in the transformation of Lagos State. Today, it is no exaggeration to conclude that Tinubu and his associates, Vice President Yemi Osinbajo, Minister of Power, Housing and Works, Mr. Babatunde Fashola and the incumbent governor of the state, Mr. Akinwunmi Ambode, are the architects of the new Lagos.”

Ambode said the astute politician was a great political mentor whose products traversed the country.

His Ogun State counterpart, Ibikunle Amosun, extolled Tuinubu’s selfless service to humanity and the nation at large. Amosun’s predecessor, Otunba Gbenga Daniel described, the famous businessman as a great mind.

The Lagos and Osun Houses of Assembly also paid tributes to the former governor.

However, the President and Chief Executive Officer (CEO) of Dangote Group, Aliko Dangote, noted that there were many unexplored business opportunities in Nigeria. According to him, many entrepreneurs fail in business due to poor electricity supply and inconsistent government policies. He commended Tinubu for laying the foundation that brought about the refinery he is building in the Lekki axis of the state.

Tinubu said the occasion “is about what a people united in purpose must do to improve their beloved country. Though our roles may be different some may work under the public glare and others labour without fanfare, we are all but servants to that goal.”

Guests included state governors, Atiku Bagudu (Kebbi ); Simon Lalong (Plateau); Rotimi Akeredolu (Ondo); Nasir El-Rufai (Kaduna); Abiola Ajimobi (Oyo); Aminu Bello Massari (Katsina) and Abdulahi Ganduje (Kano).

Others were former Vice President Namadi Sambo; erstwhile governors Olusegun Osoba and Otunba Gbenga Daniel of Ogun; Niyi Adebayo (Ekiti) and Godswill Akpabio (Akwa Ibom).

Also present were Oba of Lagos, Rilwanu Akiolu; Senator Gbenga Ashafa; Alhaji Lateef Jakande; Chief of Air Staff, Air Marshal Sadique Abubakar; Senator Femi Ojudu among others.

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.

Gold

Gold Advances to Three-Month High on Virus Woes, Inflation

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Gold rose to the highest in more than three months as concerns over the pace of a global recovery crept back in following a flareup in coronavirus cases in parts of Asia.

The pandemic is wiping out “entire families” in villages in India, where more people are saying the scale of the crisis is much bigger than official numbers reveal. The World Economic Forum is canceling the annual meeting it was planning to hold this August in Singapore, while cases in Thailand have surged.

Investors will turn to the minutes from the Federal Reserve’s April meeting due Wednesday for potential clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation. Fed Vice Chair Richard Clarida said Monday that the weaker-than-expected U.S. jobs report for April showed the economy had not yet reached the threshold to warrant scaling back the central bank’s massive bond purchases. Meanwhile, Fed Bank of Dallas President Robert Kaplan said supply and demand imbalances and base effects will contribute to elevated inflation this year, but he expects price pressures to ease in 2022.

Gold’s rebound puts it close to erasing this year’s declines, with recent inflows into bullion-backed exchange-traded funds signaling a boost to investor sentiment. Expectations for further increases in consumer prices could start to bolster demand for gold as a hedge.

“It seems inflation fears are finally translating into higher precious metals prices,” said John Feeney, business development manager at Sydney-based bullion dealer Guardian Gold Australia. “ETF investors are starting to swing into net-buyers again, after the recent consolidation, and it makes sense for the metals to play catch up to the recent moves higher in other commodities. We also have a lot of uncertainty with Covid-19 strains and mutations in the Asia-Pacific region that would be leading to safe haven buying.”

Spot gold rose as much as 0.4% to $1,873.82 an ounce, the highest since Jan. 29, and was at $1,868.01 by 12:16 p.m. in Singapore. Silver and palladium gained, while platinum steadied. The Bloomberg Dollar Spot Index fell 0.1%.

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Energy

Hamburg’s German African Energy Forum to jumpstart Africa’s Economic Transformation

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The African energy sector continues to solidify partnerships with German investors and technology with the aim of leading energy businesses from Germany, Europe and across the African continent. From upstream to downstream, Africa’s energy sector must accelerate its transition to net-zero, continue to adopt new technologies and start to embrace digitization and decentralization over the next decade.

The 14th German African Energy Forum in Hamburg hosted by Afrika Verein continues this dialogue and pushes for investment with a clear focus on highlighting the entire African energy mix, together with economic cooperation between Germany and Africa.

As stated by Afrika-Verein, “the economic impacts of the COVID-19 pandemic, climate change and the ongoing digital transformation of economies need a green, smart and quick response from the energy sector. Power generation is still one of the main enablers for inclusive economic growth in Africa.” With this said, the African Energy Chamber strongly endorses and supports the 14th German African Energy Forum in Hamburg in its efforts to do so.

In the same manner, there is a strong need for German and African businesses and policymakers to support policies that create an enabling environment for investment in a fair and evolving industry. Germany’s march to net-zero transition can’t be met if Africa is behind. The African energy sector’s ability to support the rapidly increasing demands for electricity, the deployment of smart infrastructure to manage energy more effectively, gas monetization, combating energy poverty and the approach we take to financing Africa’s clean energy transitions in a post Covid era makes this forum more important than ever.

The 14th German African Energy Forum is set to provide key market insights, trends and opportunities over the next decade as the energy sector prepares to support a global green economy.

“Year after year, Afrika Verein has been consistent in keeping Africa at the center of German foreign policy and energy policy. Their ability to bring together key stakeholders from Africa and Germany to work on energy matters including Germany and Africa is inspiring” stated NJ Ayuk, Executive Chairman of the African Energy Chamber.

“We are going to need a real net-zero transition that takes into consideration policy, regulation, innovation, technology and investment in Africa. A disorderly transition creates a stronger impulse for job losses, geographic inequity and a deterioration in inequality. In return, economic disenfranchisement can reduce public support for environmental policies over time Germans and Africans need to work together to avoid it.” Concluded Ayuk.

The Africa Energy Chamber believes Hamburg will be a great place for energy investors, project developers, policy makers and innovators to share insights and expertise on key transition trends and opportunities in Africa.

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Crude Oil

NNPC Closes Direct Sale and Direct Purchase Deals With 26 Firms

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The Nigerian National Petroleum Corporation (NNPC) has picked 26 foreign and local companies as well as 12 countries to lift the country’s crude oil for the next two years.

The crude term contracts, expected to run from 2021 through 2023, would see the firms and the selected nations, which would operate on a Government-to-Government (G2G) basis to purchase the commodity from the national oil company.

The deal is coming less than a week after the corporation chose 16 oil and gas consortia for its new crude-for-fuel swap contracts for one year starting in August.

The contracts, known as Direct Sale, Direct Purchase (DSDP) are high-stakes agreements used to supply nearly all of Nigeria’s petrol needs as well as cover some of its diesel and jet fuel consumption.

However, in the fresh crude oil term agreements, it was observed that the names of majority of the companies involved in the DSDP deal also appeared in the list of those picked by the national oil company for the crude term contracts.

The list sighted by the media showed that the preferred companies included Sahara Energy Resources Limited, Oando, Duke oil (an NNPC subsidiary), Petrogas, AA Rano, MRS, Mercuria and Vitol.

Other oil and gas concerns which scaled the NNPC selection hurdle were Oceanbed Trading Limited, Levene Energy, Bono Energy , Mocoh Energy, BP Oil, West Africa Gas Limited, Litasco SA, Emadeb, Hyde, Matrix and Brittania-U.

Other names listed by the NNPC as having qualified for the contracts included Masters, AMG, Casiva, Barbedos, Trafigura, Hindustan and Patermina.

NNPC has its own equity share of crude oil from its Joint Ventures (JVs), usually shared on a 60 to 40 basis and thereafter appoints companies and issues licences to lift its share of the oil on a Free on Board (FOB) basis.

The companies and countries nominate ships that transport the crude which is sold in the international market. Sometimes, the NNPC also awards contracts to governments to carry out the business.

In the document approving the qualified countries, China, Niger, Cote D’voire, Ghana, India, Togo, South Africa came tops, while Sierra Leone, Liberia, Turkey, Senegal, and Fujaira also made the cut.

Typically, entities qualified to take part in the contract bid are divided into four categories, namely a bonafide end user who owns a refinery and or retail outlets that can process Nigerian crude oil grades.

For the government to government contracts, or what is termed “bilateral relationships”, with what the corporation terms “high energy consuming nations”, bidding nations must provide proof that the entity is wholly owned by the relevant country or provide evidence of a bilateral agreement with the designated nation.

The third category is the internationally established and globally recognised large volume crude oil traders, while the fourth classification are indigenous companies engaged in Nigeria oil and gas downstream business activities.

In addition, qualifying foreign companies must demonstrate a minimum annual turnover of $500 million or the naira equivalent and a net worth of not less than $250 million or the naira equivalent for the previous financial year.

For indigenous firms, they are required to have a minimum turnover of $200 million or the naira equivalent and a net worth of $100 million for the preceding financial year ending.

Bidders are also to show their ability to handle supplies of crude and must list facilities and products processed or sold over the last three years, in addition to disclosing links to NNPC or the Bureau of Public Procurement (BPE) and confirming that directors have not been convicted of fraud or financial impropriety.

As with all Nigerian tenders, NNPC also highlights that the local content law must be strictly adhered to in terms of, among others, the use of Nigerian shipping companies, insurance and banks where possible.

In the past, Civil Society Organisations (CSOs) in the country’s oil and gas space had argued that G2G contracts with smaller, non-refining countries have high governance risks and low policy benefits for Nigeria.

For instance the Nigeria Natural Resource Charter (NNRC) has asked that term contracts should be carried out through a transparent and competitive tender process that includes robust pre-qualification standards and an end of sales to smaller non-refining countries unless NNPC can publicly explain the deals’ policy benefits.

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