- U.K. Economy Slows More Than Forecast as Consumers Cut Back
The U.K. economy posted its worst performance in a year as the dominant services industry felt the impact of an intensifying squeeze on living standards.
Growth slowed to 0.3 percent in the first quarter from 0.7 percent in the final three months of 2016, the Office for National Statistics said on Friday. The figure was weaker than the 0.4 percent forecast by economists in a Bloomberg survey. Services grew just 0.3 percent, the least since the start of 2015.
Having made Britain the strongest-growing Group of Seven economy bar Germany last year, consumers are now cutting back in response to rising prices brought on by the depreciation of the pound since the June Brexit vote and higher oil costs.
Households and businesses are also facing a period of heightened uncertainty as Britain prepares for a general election and the start of two years of negotiations to leave the European Union.
Prime Minister Theresa May is hoping to capitalize on her huge lead in polls to increase her Parliament majority in the election, though signs of weakness in the economy will give the opposition parties ammunition to attack her policies.
The downturn in services, which account for 79 percent of the economy, was driven by consumer-focused industries such as retailers, hotels and restaurants. Together, they fell 0.5 percent. Transport, storage and communication declined 0.2 percent. Services overall slowed from growth of 0.8 percent in the fourth quarter.
Industrial production rose 0.3 percent, with buoyant exports — the result of the weak pound — helping manufacturers increase output by 0.5 percent. Construction rose just 0.2 percent.
The data for March are based on estimates and early responses to survey questions. They show industrial production falling 0.7 percent that month — the third consecutive decline — and services output unchanged following a 0.2 percent increase in February. Construction is estimated to have increased 0.3 percent.
The U.K. is the first G-7 nation to report GDP for the first quarter. The U.S. follows later Friday, with economists predicting annualized growth of 1 percent, down from 2.1 percent in the previous three months. The equivalent first-quarter rate for the U.K. was 1.2 percent.
Further evidence of the squeeze on households emerged Friday, with separate surveys showing house prices fell for a second month in April and consumer confidence dipped to the lowest since July.
And the pressure is expected to intensify, economists say. Inflation is pulling ahead of earnings and a record-low saving ratio means people have little room to maintain their spending by setting aside less.
GDP rose 2.1 percent from the first quarter of 2016. Output per head grew just 0.1 percent from the fourth quarter.
The first-quarter GDP estimate is the first of three, based on only 44 percent of the information that will ultimately be available.
Africa Renewable Energy Fund II Secures €125 Million First Close With SEFA and CTF Investments
The Africa Renewable Energy Fund II has achieved its first close at €125 million, following a joint investment of €17.5 million from The Sustainable Energy Fund for Africa and the Climate Technology Fund through the African Development Bank.
AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a $300 million target capitalization. The Africa Renewable Energy Fund II, managed by Berkeley Energy, invests in early-stage renewable energy projects, thereby not only de-risking the most uncertain phase of power projects, but also promoting increased green baseload in Africa’s generation mix.
The Sustainable Energy Fund for Africa and the Climate Technology Fund will each contribute roughly €8.7 million to mobilize private-sector investment into Africa’s renewable energy sector. The Sustainable Energy Fund for Africa will also contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability.
Other investors include the U.K’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company (FMO) and SwedFund.
“We are proud to be associated with Berkeley Energy and other like-minded investors, and look forward to AREF’s continued success and leadership in promoting sustainable power development on the continent,” said Dr. Kevin Kariuki, the African Development Bank’s Vice President for Power, Energy, Climate and Green Growth.
In 2012, the African Development Bank selected Berkeley Energy, a seasoned fund manager of clean energy projects in global emerging markets to set up AREF. AREF II has a sharper strategic focus than its predecessor on “green baseload” projects that will deliver firm and dispatchable power to African power systems through hydro, solar, wind and battery storage technologies.
Luka Buljan, Berkeley Energy’s Managing Director, said: “We are very excited to have reached this milestone with strong support from our backers. The catalytic tranche from the Sustainable Energy Fund for Africa and the Climate Technology Fund will assist in mobilising private institutional investors up to full fund size of €300 million. We now look forward to concluding the fundraising and delivering projects that will provide clean, reliable and affordable energy across African markets.”
“AREF is intertwined with the Sustainable Energy Fund for Africa’s history and success, and we have worked closely over the last decade to create precedents in difficult markets and challenging technologies. We look forward to continued collaboration to accelerate the energy transition in Africa,” said Joao Duarte Cunha, Manager for Renewable Energy Initiatives at the African Development Bank and Coordinator of the Sustainable Energy Fund for Africa.
FG Earned $34.22B From Crude Oil and Gas in 2019 – NEITI
The Nigeria Extractive Industries Transparency Initiative (NEITI) on Thursday released its 2019 oil and gas industry audit report, which shows that Nigeria earned N34.22 billion from the oil and gas industry in 2019.
The audit, conducted by Adeshile Adedeji & Co. (Chartered Accountants), an indigenous accounting and auditing firm, reconciled payments from 98 entities. They include 88 oil and gas companies, nine government agencies and the Nigerian Liquefied Natural Gas (NLNG).
The 2019 figure is an increase of 4.88 percent over the $32.63billion revenue realised from the sector in 2018. A breakdown of the earnings showed that payments by companies accounted for $18.90billion, while flows from federation sales of crude oil and gas accounted for $15.32billion.
The report further showed that 10 years (2010-2019) aggregate financial flows from the oil and gas sector to government amounted to $418.544billion, with the highest revenue flow of $68.442 recorded in 2011, while the lowest revenue flow of $17.055 was recorded in 2016.
According to NEITI, the total crude oil production in 2019 was 735.244mmbbls, representing an increase of 4.87 percent over the 701.101mmbbls recorded in 2018. Production sharing contracts (PSCs) contributed the highest volumes of 312.042mmbbls followed by Joint Venture (JV) and Sole Risk (SR) which recorded 310,284mmbbls and 89.824mmbbls respectively. Others are Marginal Fields (MFs) and Service Contracts (SCs) which accounted for 21,762mmbbls and 1,330mmbbls respectively.
The report also showed that total crude oil lifted in 2019 was 735.661mmbbls, indicating a 4.93 percent increase to the 701.090 mmbbls recorded in 2018, with companies lifting 469.010mmbbls, while 266.650mmbbls was lifted by the Nigeria National Petroleum Corporation (NNPC) on behalf of the federation.
Analysis of crude oil lifted by NNPC showed that 159.411mmbbls was for export, while 107.239mmbbls was for domestic refining. 97 percent of the volumes for domestic refining (104.475mmbbls) was utilised for the Direct Sale Direct Purchase (DSDP) programme while the remaining 3 percent (2.764mmbbls) was delivered to the refineries.
NEITI reported that the value of the 2019 domestic crude oil earnings was N2.722 trillion. Of this figure, N518.074billion was deducted for Petroleum Motor Spirit (PMS) under-recovery by the NNPC.
This figure was N213.074billon above the approved sum of N305billion for under-recovery in 2019. Similarly, the sum of N126.664billion was incurred by the Corporation as costs for pipeline repairs and maintenances which showed a difference of N96.378billion from the approved sum of N30.287billion for that purpose.
The report also pointed out that N31.844billion was also deducted for crude and product losses due to theft.
Oil Prices Drop on Stronger U.S Dollar
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.
Business4 weeks ago
End Of The Road For Internet Explorer As Microsoft Pulls The Plug
Cryptocurrency3 weeks ago
Can cryptocurrency survive regulators? Here’s what Ripple CEO says about XRP’s future
News4 weeks ago
Akeredolu Replies Malami, Open Grazing Ban in South Is Irreversible
Ethereum4 weeks ago
Ethereum Closes In on Long-Sought Fix to Cut Energy Use Over 99%
Telecommunications4 weeks ago
Nigerians To Submit Phone IDs In Three Months says NCC
Cryptocurrency3 weeks ago
BankDhofar Launches Mobile Banking Payments from Oman to India with RippleNet
Social Media4 weeks ago
Facebook Africa Launches ‘Made by Africa, Loved by the World’ Ahead of Africa Day
Education2 weeks ago
Senate Passes Bill To End HND/BSc Discrimination