- MAN Seeks Manufacturing Development Bank
The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to set up a bank that will address the financial needs of the manufacturing sector.
Its President Dr. Udemba Jacobs, said the establishment of a Manufacturing Development Bank (MDB) would cater for the credit needs of the manufacturing sector, lamenting that conventional banks have failed to support the manufacturing sector.
In a communiqué signed by Jacobs at the weekend, he also sought the sustenance of priority foreign exchange (forex) allocation for raw materials, spare parts and machinery to the industrial sector in order to improve production.
Jacobs said the empowerment of the Development Bank of Nigeria (DBN) to fully commence operations and the re-capitalisation of the Bank of Industry (BoI) to enable it meet up with the huge credit demand of the industrial sector was also important.
He said the Federal Government should intensify efforts at further diversifying the economy away from oil and expedite the resumption and implementation of the Export Expansion Grant (EEG) to catalyse non-oil export forex earnings.
He regretted the difficulty in accessing various development funds created by the Central Bank of Nigeria (CBN) such as the N220 billion Micro Small and Medium Enterprises Development Fund (MSMEDF) and the N300 billion Real Sector Support Facility (RSSF). He asked the government to relax the stringent conditions that denies manufacturers access to the funding windows. According to him there are other fundamentals that government needed to look into to stimulate the sector.
He said: “We are expecting the National Assembly to pass the Moveable Collateral Registry and the Credit Reporting Acts into law. The four existing refineries should be made functional either by outright rehabilitation or through privatisation. The association is expecting the design and implementation of policies that will encourage private sector investment in petroleum products refinery and the revisiting and full implementation of the Power Sector Reform and the power sector roadmap to improve the efficiency of the generation, transmission and distribution companies.”
The MAN chief called for the re-classification of the manufacturing sector into strategic gas users from the current commercial classification and ensuring proper settlement of acquired properties such as land for electricity equipment installation to avoid anger that may lead to destruction of the infrastructure.
He also called for stricter punitive measures for vandals of critical national infrastructure and the resuscitation of the nation’s petro-chemical sector, noting that modern industrialisation is chemical based with most of the industrial chemicals as bye-products of crude oil.
On access to raw materials he stressed the need to improve the local sourcing of raw-materials through effective development of agriculture, solid minerals and the petro-chemical sectors.This is in addition to aggressively developing key selected mineral resources through the creation of incentives for backward integration especially for those with high inter-industry linkage such as iron ore, zinc-led, bitumen, lime stone and coal.
Jacobs stressed the need to encourage strong private sector participation in backward integration through the provision of affordable credit, extension services and other incentives such as a stronger public-private partnership (PPP) in road and rail construction, including other infrastructure development in the country.
Others are exhaustive consultation among stakeholders in policy design, consistency, signing into law the Petroleum Industry Bill (PIB) to encourage the development of the petroleum sector and create the much needed petrochemical base raw-materials for the use of the manufacturing sector and fast tracking the work of the committee on the harmonisation of taxes and levies.
He called the attention of government to the macroeconomic terrain in 2016, especially in the first half, which he declared as highly volatile for general economic activities and especially for the manufacturing sector to make meaningful headways.
He disclosed that the sector only had some breather and momentum when government responded to various calls with a 6 per cent preferential FX allocation to manufacturers for importation of raw-materials and machinery that are not locally available.
“However, notwithstanding the leeway gained in the second half of the year, it is very important for the government to continue to address the multifarious economic challenges facing the economy especially the manufacturing sector by taking cognizance of the need to implement policies that will grow the real sector”, he added.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting
Oil Prices Rise to $64.32 Amid Expected Output Extension
Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.
Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.
“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.
Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.
“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.
Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.
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