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FG to Release Implementation Roadmap for Economic Recovery Plan

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  • FG to Release Implementation Roadmap for Economic Recovery Plan

The Minister of Budget and National Planning, Senator Udoma Udo Udoma, has disclosed that the implementation roadmap for the National Economic Revovery and Growth Plan (NERG) is in the works and would soon be released.

Udoma said the implementation roadmap, which would provide more detailed strategies, timelines and derivables of the plan on a year-by-year basis, is being put together a team of experts who are working with officials of his ministry in collaboration with officials of other ministries, departments and agencies (MDAs).

Providing more insight on the NERG plan during an interactive session with journalists in Abuja yesterday, the minister said as soon as the roadmap was concluded, it would be uploaded on the website of the ministry of Budget and National Planning.

“The implementation road map is being drawn up by a team of experts who are working with officials of the Ministry of Budget and National Planning, together with officials of other MDAs.

“They will be working out a more detailed cost estimate and financing plan with detailed KPIs (key performance indicators) and so on.

“While the Ministry of Budget and Planning will be coordinating the plan, the president has approved that a Special Delivery Unit be created in the presidency to monitor its implementation and remove all bottlenecks to plan implementation.

“Implementation will be coordinated by the Ministry of Budget and National Planning. There are a number of initiatives being put in place to ensure effective implementation,” he said, noting that apart from the implementation roadmap, which is in the works, other initiatives had been enunciated.

According to him, these include a delivery unit being set up in the presidency, and the use of Implementation task-forces, among others.

“These task-forces are to focus on the key execution priorities. The execution priorities are (a) agriculture and food security, (b) energy which includes power and petroleum products sufficiency (c) transportation infrastructure and (d) industrialisation, focusing on small and medium enterprises.

“The task-forces will monitor execution of projects and programmes in the respective sectors and report back. Some of these task-forces may also have representation from the states and the private sector. Already, we have task forces working on rice, power and tomato paste,” the minister stated.

He stressed that active engagement with the private sector was part of the initiatives, adding: “We will be having regular and active engagements with the private sector on a sectoral basis. This will be led by the relevant ministers.

“In particular, the Minister of Investment, Trade and Industry will be meeting with manufacturers to try to replicate the success in the cement industry. The aim will be to seek self-sufficiency, wherever possible, in the basic products that we need and use.

“Our initial concentration will, of course, be in areas where we have the raw materials locally, such as petrochemicals. We will seek to establish what constraints the particular sector has and how government can help to remove the bottlenecks.

“As the NERG plan says, our role as government is to provide the enabling environment.”

On how to ensure the plan did not suffer the fate of previous initiatives by past administrations, Udoma said it was developed through an extensive consultation process, adding that President Muhammadu Buhari has the political will to ensure the success of the NERG plan.

The minister who also spoke about the expansionary budget and the debt implication, said the challenge was getting revenue up.

According to him, a short to medium plan to boost revenue was already on with a committee set to work on that.

He noted that additional revenue would help fast track the NERGP plan implementation as well as the economic recovery process.

The minister listed some of the measures to increase revenue to include targeting increased tax collection without necessarily increasing tax.

He lamented that the nation’s tax to GDP ratio is a paltry 6 per cent while the average is 15 per cent in Africa, noting that plans were on to increase this to about 15 per cent.

Udoma also pointed out that the government was going to insist that all agencies and departments should henceforth present their budgets to the Ministry of Finance for scrutiny as part of overall effort to ensure efficient spending.

The minister allayed fears that NERG plan implementation could be torpedoed by monetary policies, and stressed that the Central Bank of Nigeria (CBN) was actively involved in fashioning out the plan.

Udoma added that Monetary Policy Committee (MPC) of the apex bank would be involved to achieve the targets in the plan.

On the non passage of 2017 budget, the minister said his ministry was working with the National Assembly and encouraging it to pass the budget as soon as possible.

On the problems bedevilling the power sector, the minister stated that a power sector recovery plan was in place, adding that the target was to make all the components of the sector viable.

Udoma noted that a three to five year plan had been put in place to make the component units of the power sector viable.

According to him, about N700 billion was being provided to the Nigeria Bulk Electricity Trading (NBET) as an offtaker to ensure that power generated is paid for.

Contributing on the problems bogging the power sector, the Minister of State, Budget and National Planning, Mrs. Zainab Ahmed, said a major setback to the sector was huge government debt, pointing out that this must be sorted out to free the sector.

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.

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Crude Oil

Oil Rises as Threat of Immediate Iran Supply Recedes

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Oil prices rose on Tuesday, with Brent gaining for a fourth consecutive session, as the prospect of extra supply coming to the market soon from Iran faded with talks dragging on over the United States rejoining a nuclear agreement with Tehran.

Brent crude was up by 82 cents, or 1.13%, to $73.68 per barrel, having risen 0.2% on Monday. U.S. oil gained 91 cents, or 1.3%, to $71.79 a barrel, having slipped 3 cents in the previous session.

Indirect discussions between the United States and Iran, along with other parties to the 2015 deal on Tehran’s nuclear program, resumed on Saturday in Vienna and were described as “intense” by the European Union.

A U.S. return to the deal would pave the way for the lifting of sanctions on Iran that would allow the OPEC member to resume exports of crude.

It is “looking increasingly unlikely that we will see the U.S. rejoin the Iranian nuclear deal before the Iranian Presidential Elections later this week,” ING Economics said in a note.

Other members of the Organization of Petroleum Exporting Countries (OPEC) along with major producers including Russia — a group known as OPEC+ — have been withholding output to support prices amid the pandemic.

“Additional supply from OPEC+ will be needed over the second half of this year, with demand expected to continue its recovery,” ING said.

To meet rising demand, U.S. drillers are also increasing output.

U.S. crude production from seven major shale formations is forecast to rise by about 38,000 barrels per day (bpd) in July to around 7.8 million bpd, the highest since November, the U.S. Energy Information Administration said in its monthly outlook.

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Oil Prices Rise as Demand Improves, Supplies Tighten

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Oil prices rose on Monday, hitting their highest levels in more than two years supported by economic recovery and the prospect of fuel demand growth as vaccination campaigns in developed countries accelerate.

Brent was up 53 cents, or 0.7%, at $73.22 a barrel by 1050 GMT, its highest since May 2019.

U.S. West Texas Intermediate gained 44 cents, or 0.6%, to $71.35 a barrel, its highest since October 2018.

“The two leading crude markers are trading at (almost) two-and-a-half-year highs amid a potent bullish cocktail of demand optimism and OPEC+ supply cuts,” said Stephen Brennock of oil broker PVM.

“This backdrop of strengthening oil fundamentals have helped underpin heightened levels of trading activity.”

Motor vehicle traffic is returning to pre-pandemic levels in North America and much of Europe, and more planes are in the air as anti-coronavirus lockdowns and other restrictions are being eased, driving three weeks of increases for the oil benchmarks.

The mood was also buoyed by the G7 summit where the world’s wealthiest Western countries sought to project an image of cooperation on key issues such as recovery from the COVID-19 pandemic and the donation of 1 billion vaccine doses to poor nations.

“If the inoculation of the global population accelerates further, that could mean an even faster return of the demand that is still missing to meet pre-Covid levels,” said Rystad Energy analyst Louise Dickson.

The International Energy Agency (IEA) said on Friday that it expected global demand to return to pre-pandemic levels at the end of 2022, more quickly than previously anticipated.

IEA urged the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, to increase output to meet the rising demand.

The OPEC+ group has been restraining production to support prices after the pandemic wiped out demand in 2020, maintaining strong compliance with agreed targets in May.

On the supply side, heavy maintenance seasons in Canada and the North Sea also helped prices stay high, Dickson said.

U.S. oil rigs in operation rose by six to 365, the highest since April 2020, energy services company Baker Hughes Co said in its weekly report.

It was the biggest weekly increase of oil rigs in a month, as drilling companies sought to benefit from rising demand.

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Crude Oil

FG Spends N197.74 Billion on Subsidy in Q1 2021

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The Federal Government has spent a total sum of N197.74 billion on fuel subsidy in the first quarter (Q1) of 2021, according to the Federal Account Allocation Committee (FAAC) report for May.

The report noted that the value of shortfall, the amount the NNPC paid as subsidy, in the March receipts stood at N111.97 billion while N60.40 billion was paid in February.

In the three months ended March, the Federal Government spent N197.74 billion on subsidy.

The increase in subsidy was a result of rising oil prices, Brent crude oil, against which Nigerian oil is priced, rose to $73.13 per barrel on Monday.

The difference in landing price and selling price of a single litre is the subsidy paid by the government.

On May 19, the Nigerian Governors Forum suggested that the Federal Government removed the subsidy completely and pegged the pump price of PMS at N380 per litre.

The governors’ suggestion followed the non-remittance of the NNPC into the April FAAC payments, the money required by most states to meet their expenditure such as salaries and building of infrastructure.

However, experts have said Nigeria is not gaining from the present surge in global oil prices given the huge money spent on subsidy.

Kalu Aja, Abuja-based financial planner and economic expert, said “If Nigeria is importing Premium Motor Spirit and still paying subsidy, then there is no seismic shift.”

“Nigeria needs oil at $130 to meet the deficit. In the short term, however, more dollar cash flow is expected and with depreciated Naira, it will reduce short term deficit.”

Adedayo Bakare, a research analyst, said that the current prices do not really mean much for the country economically.

He said, “The ongoing transition away from fossil fuels and weak oil production from the output cuts by the Organisation of Petroleum Exporting Countries will not make the country benefit much from the rising oil prices.

“Oil production used to be over two million barrels but now around 1.5 million barrels. We need OPEC to relax the output cuts for the naira to gain.”

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