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Ex-bankers’ N9.2b Suit Against CBN, Others for Hearing Dec. 13

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  • Ex-bankers’ N9.2b Suit Against CBN, Others for Hearing Dec. 13

The over 14,000 ex-staff of banks who filed a suit against the Central Bank of Nigeria following their retrenchment in 2006 as a result of the banking consolidation exercise would have the opportunity of taking their pleas at the Lagos Division of the National Industrial Court in December 13, 2017.

The ex-bankers lost their jobs in 2006 when the apex bank revoked the operational licences of 13 commercial banks for failing to attain the N25bn capitalisation threshold then introduced and enforced by the apex bank.

Specifically, the former bankers, amongst other things, wants all their entitlements and terminal benefits, which they put at N9,166,424,276, from four commercial banks, which acquired the eight banks for which they were working prior to the 2006 capitalisation.

The eight banks whose lincences were revoked in 2006 are All States Trust Bank, Hallmark Bank, Gulf Bank Plc, Liberty Bank, Metropolitan Bank,Trade Bank, Assurance Bank and Eagle Bank.

Included as defendants in their suit marked NIC/LA/603/2016 before Justice Benedict Kanyip are the Nigeria Deposit Insurance Corporation, the CBN, and the four commercial banks – Ecobank Nigeria Limited, United Bank for Africa Plc, Skye Bank Plc and Zenith Bank Plc – which acquired the eight banks for which the claimants were working prior to the 2006 capitalisation policy by the CBN.

The erstwhile bank workers are urging the court to declare that the NDIC and the CBN acted contrary to the law and prejudiced their interests while entering into agreements with Ecobank, UBA, Skye Bank and Zenith Bank, to sell the assets of their former employers.

The claimants are contending that it was unlawful and wrong for the NDIC and the CBN to sell the assets of the eight banks to Ecobank, UBA, Skye Bank and Zenith Bank, without also transferring the liability of paying the terminal benefits of the disengaged bank workers to Ecobank, UBA, Skye Bank and Zenith Bank.

The lawyer to the claimants, Dotun Onafowope, argued that both the NDIC and the CBN misunderstood their roles and misapplied the law in the 2006 consolidation exercise by categorising the eight non-consolidated banks as failed banks.

It would be recalled that the ex-bankers had earlier approached the court under the aegis of the Incorporated Trustees of the Association of Ex-Staff of Non-Consolidated Banks of Nigeria, but Justice Kanyip had questioned the possibility of the claimants coming before him as a group registered under the Corporate and Allied Matters Act as opposed to as individuals.

Taking the court’s hint, Onafowope, at the recent proceedings, brought an application dated June 30, 2017, seeking to substitute the group with names of 847 individual claimants.

However the matter could not proceed due mainly to the absence of the NDIC lawyer, who had written to the court that he was indisposed.

But before adjourning the matter till December 13, 2017, Justice Kanyip noted that the claimants’ lawyer, Onafowope, had to convince the court that there was even a competent suit before the court that could be substituted with another.

He asked whether the claims of the ex-bank workers were not statute barred against the NDIC and the CBN in view of the Public Officers’ Protection Act, which he said gave a window of only three months to file a suit against an action taken by a public officer.

Besides, he sought to know whether the claimants had not been caught by the six years’ limitation for the other defendants.

But Onafowope said though the consolidation took place in 2006, it was January 2011 that the claimants were supposed to be paid their terminal benefits, adding that the consolidation had been concluded as the assets of the acquired banks were still being advertised.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria Pumps 236.2 Million Barrels in First Half of 2024

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Nigeria pumped 236.2 million barrels of crude oil in the first half of 2024, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

This figure represents an increase from the 219.5 million barrels produced during the same period in 2023.

In January, Nigeria produced 44.2 million barrels of crude oil while February saw a slight dip to 38.3 million barrels, with March following closely at 38.1 million barrels.

April and May production stood at 38.4 million barrels and 38.8 million barrels, respectively. June’s output remained consistent at 38.3 million barrels, demonstrating a stable production trend.

Despite the overall increase compared to 2023, the 2024 production figures still fall short of the 302.42 million barrels produced in the same period in 2020.

This ongoing fluctuation underscores the challenges facing Nigeria’s oil sector, which has experienced varying production levels over recent years.

On a daily basis, Nigeria’s crude oil production showed some variability. In January, the average daily production peaked at 1.43 million barrels per day (mbpd), the highest within the six-month period.

February’s production dropped to 1.32 mbpd, with a further decrease to 1.23 mbpd in March. April saw a modest increase to 1.28 mbpd, which then fell again to 1.25 mbpd in May. June ended on a positive note with a slight rise to 1.28 mbpd.

The fluctuations in daily production rates have prompted government and industry leaders to address underlying issues.

Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), has highlighted the detrimental effects of oil theft and vandalism on Nigeria’s production capabilities.

Kyari emphasized that addressing these security challenges is critical to boosting production and attracting investment.

Kyari also noted recent efforts to combat illegal activities, including the removal of over 5,800 illegal connections from pipelines and dismantling more than 6,000 illegal refineries.

He expressed confidence that these measures, combined with ongoing policy reforms, would support Nigeria’s goal of increasing daily production to two million barrels.

The Nigerian government remains focused on stabilizing and enhancing oil production. With recent efforts showing promising results, there is cautious optimism that Nigeria will achieve its production targets.

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Oil Prices Steady Amid Mixed Signals on Crude Demand

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Oil prices remained stable on Thursday as investors navigated conflicting signals regarding crude demand.

Brent crude oil, against which Nigerian oil is priced, settled at $85.11 a barrel, edging up by 3 cents, while U.S. West Texas Intermediate (WTI) crude dipped by 3 cents to $82.82 a barrel.

The stability comes as the U.S. economy shows signs of slowing, with unemployment benefit applications rising more than expected.

Initial claims increased by 20,000 to a seasonally adjusted 243,000 for the week ending July 1, prompting speculation that the Federal Reserve might cut interest rates sooner than anticipated. Lower rates could boost spending on oil, creating a bullish outlook for demand.

Fed officials suggested that improved inflation and a balanced labor market might lead to rate cuts, possibly by September.

“Healthy expectations of a Fed rate cut in the not-so-distant future will limit downside,” noted Tamas Varga of oil broker PVM.

However, rising jobless claims signal potential economic easing, which could dampen crude demand.

John Kilduff of Again Capital highlighted the impact of a slowing economy on oil consumption despite a significant drop in U.S. crude inventories last week.

Global factors also weighed on the market. China’s economic policies remain steady, though details are sparse, affecting investor sentiment in the world’s largest crude importer.

Meanwhile, the European Central Bank maintained interest rates, citing persistent inflation.

An upcoming OPEC+ meeting in August is expected to assess market conditions without altering output policy, according to sources. This meeting will serve as a “pulse check” for market health.

Overall, oil prices are caught between economic concerns and hopes of a rate cut, maintaining a delicate balance.

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Crude Oil

Oil Prices Slide on China Demand Concerns, Brent Falls to $83.73

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Oil prices declined on Tuesday for the third consecutive day on growing concerns over a slowing Chinese economy and its impact on global oil demand.

Brent crude oil, against which Nigerian oil is priced, dipped by $1.12, or 1.3% at $83.73 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.15, or 1.4%, to close at $80.76.

The dip in oil prices is largely attributed to disappointing economic data from China, the world’s second-largest economy.

Official figures revealed a 4.7% growth in China’s GDP for the April-June period, the slowest since the first quarter of 2023, and below the forecasted 5.1% growth expected in a Reuters poll.

This slowdown was compounded by a protracted property downturn and widespread job insecurity, which have dampened fuel demand and led many Chinese refineries to cut back on production.

“Weaker economic data continues to flow from China as continued government support programs have been disappointing,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial. “Many of China’s refineries are cutting back on weaker fuel demand.”

Despite the bearish sentiment from China, there is a growing consensus among market participants that the U.S. Federal Reserve could begin cutting its key interest rates as soon as September.

This speculation has helped stem the decline in oil prices, as lower interest rates reduce the cost of borrowing, potentially boosting economic activity and oil demand.

Federal Reserve Chair Jerome Powell noted on Monday that the three U.S. inflation readings over the second quarter “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target in a sustainable fashion.

This has led market participants to believe that a turn to interest rate cuts may be imminent.

Also, U.S. crude oil inventories provided a silver lining for the oil market. According to market sources citing American Petroleum Institute figures, U.S. crude oil inventories fell by 4.4 million barrels last week.

This was a much steeper drop than the 33,000 barrels decline that was anticipated, indicating strong domestic demand.

The International Monetary Fund (IMF) also weighed in, suggesting that while the global economy is set for modest growth over the next two years, risks remain.

The IMF noted cooling activity in the U.S., a bottoming-out in Europe, and stronger consumption and exports for China as key factors in the global economic landscape.

In summary, while oil prices are currently pressured by concerns over China’s economic slowdown, the potential for U.S. interest rate cuts and stronger domestic demand for crude are providing some support.

Market watchers will continue to monitor economic indicators and inventory levels closely as they gauge the future direction of oil prices.

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