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FG Exploring $300m Diaspora Bond to Make Nigerians Abroad Buy into ERGP

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  • FG Exploring $300m Diaspora Bond to Make Nigerians Abroad Buy into ERGP

The federal government is to float a $300 million Diaspora Bond as part of measures to galvanise the buy-in of foreign-based Nigerians into the Economic Recovery and Growth Plan (ERGP), the Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, has said.

The ERGP is a four-year (2017-2020) medium-term roadmap for Nigeria’s economic recovery, growth and sustainable development.

The Plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic changes with a more diversified and inclusive economy.

Overall, the ERGP is expected to deliver on five key broad outcomes comprising a stable macroeconomic environment, agricultural transformation and food security, sufficiency in energy (power and petroleum products), improved transportation infrastructure, and industrialisation focusing on small and medium scale enterprises.

Dipeolu, who spoke at a presidential economic communications workshop for finance/economy correspondents and editors in Abuja at the weekend, said the Diaspora Bond was being conceptualised to make Nigerians resident outside the country contribute to the country’s growth and recovery.

The National Assembly has already approved the Diaspora Bond.

The theme of the workshop, organised by the Office of the Vice-President in collaboration with the Bank of Industry (BoI) was “Economic Recovery and Growth”.

The presidential aide, who was responding to questions at the workshop, said the bond was being conceptualised and would be floated when all the necessary requirements have been put in place.

The Minister of Finance, Mrs. Kemi Adeosun had in January declared that Nigerians in the Diaspora, who were desirous of investing in the $300 million bond, would have the privilege of doing so in March, when it would be rolled out.

According to her, the Diaspora Bond would follow on the completion of the Eurobond, which was issued last month.

Dipeolu, who took time to explain what the ERGP is all about, said it was anchored on the 2016 Strategic Implementation Programme (SIP) and not designed to have a kind of command structure at the centre.

According to him, the plan was designed to be a guide and signalling tool on the direction the economy should go with all the stakeholders at all levels expected to buy in.

He noted that a major attribute of the ERGP was its inclusiveness, noting that every strata of the country would be impacted through its implementation, citing the School Feeding Programme and Conditional Cash Transfer, among others as pointers.

Dipeolu said the feeding programme would positively impact the lives of farmers, who produce food, transporters, cooks and others in the value chain.

The presidential adviser also noted that the N-Power programme had already drawn over 200,000 graduates as beneficiaries.

Dipeolu also stated that some sectors that would trigger economic expansion this year included road construction, railway and the Family Home Scheme.

Progress, he pointed out, was being made in road construction, citing the Lagos-Ibadan expressway as well as the rail sector, including the Idu (Abuja) and Kaduna rail link.

He expressed optimism that when the activities are galvanised in a holistic manner, the positive impact of the ERGP would be appreciated in no distant time.

But he advised that the country should get back to treating national development plans as a priority.

Dipeolu said while emphasis on timelines for ERGP programmes was good, these timelines were not an end in themselves.

According to him, the national development plans of the 60s and 70s had timelines, asking rhetorically: “But did they achieve their objectives?”

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 Prices Drop on Stronger U.S Dollar

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The strong U.S Dollar pressured global crude oil prices on Thursday despite the big drop in U.S crude oil inventories.

The Brent crude oil, against which Nigerian oil is priced, dropped by 74 cents or 1 percent to settle at $73.65 a barrel at 4.03 am Nigerian time on Thursday.

The U.S West Texas Intermediate crude oil depreciated by 69 cents or 1 percent to $71.46 a barrel after reaching its highest since October 2018 on Wednesday.

Energy markets became so fixated over a robust summer travel season and Iran nuclear deal talks that they somewhat got blindsided by the Fed’s hawkish surprise,” said Edward Moya, senior market analyst at OANDA.

The Fed was expected to be on hold and punt this meeting, but they sent a clear message they are ready to start talking about tapering and that means the dollar is ripe for a rebound which should be a headwind for all commodities.

The U.S. dollar boasted its strongest single day gain in 15 months after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.

A firmer greenback makes oil priced in dollars more expensive in other currencies, potentially weighing on demand.

Still, oil price losses were limited as data from the Energy Information Administration showed that U.S. crude oil stockpiles dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling continued improvement in demand.

Also boosting prices, refinery throughput in China, the world’s second largest oil consumer, rose 4.4% in May from the same month a year ago to a record high.

This pullback in oil prices should be temporary as the fundamentals on both the supply and demand side should easily be able to compensate for a rebounding dollar,” Moya said.

 

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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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