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Economy

‘FG Can Achieve 2.19% GDP Growth This Year’

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US economy contracts by 32.9 percent
  • ‘FG Can Achieve 2.19% GDP Growth This Year’

With the country out of economic recession, having posted a growth rate of 0.55 per cent in Gross Domestic Product for the second quarter, finance and economic experts have said that the Federal Government’s projected growth rate of 2.19 per cent at the end of this year may be achieved.

They, however, said that there was a need for the government to redouble its efforts by focusing on sectors with the capacity to stimulate growth and job creation.

The Federal Government in its Economic Recovery and Growth Plan, which was launched by President Muhammadu Buhari early this year, had projected a growth rate of 2.19 per cent by the end of this year.

In the report, the government had projected a growth rate of 5.03 per cent for the agricultural sector, while industry and services sector are expected to grow by 7.74 per cent and -1.26 per cent.

Speaking on the country’s growth trajectory, the experts called on the Federal Government to put in place adequate measures to consolidate on the growth rate.

Those that spoke are a former Managing Director, Nigeria Deposit Insurance Corporation, Mr. Ganiyu Ogunleye; the Director-General, Abuja Chamber of Commerce and Industry, Mr. Chijioke Ekechukwu; and the Registrar, Institute of Finance and Control of Nigeria, Mr. Godwin Eohoi.

Ekechukwu while reacting to the GDP growth rate said that the economy had shown a lot of improvement in the second quarter to stimulate recovery.

He said the performance of some key economic variables had shown that the Nigerian economy was showing huge signs of recovery.

For instance, he said the increase in the Purchaser Manager’s Index which had risen for four consecutive months, showed that manufacturing activities were bouncing back.

This, he noted, was as a result of improved access to foreign exchange and stability of the naira at all segments of the foreign exchange market.

He said, “On the economy getting out of recession, there are various indicators of the economy that are doing well.

“First of all, the Purchasing Managers Index that we have today is about 50. When it’s 50 index and above, it shows that the manufacturing sector is growing so well.

“Today, we are growing everyday up to 55 and 56 as the case may be. And with this happening, we just know that the economy is doing well.

“Inflation is also beginning to drop by small margin and an economy that is in recession will not just begin to record decline in inflation rate.

“There is stability in the foreign exchange market that we are all experiencing right now and before now, it was obviously not stable as prices of goods and services were changing everyday as a result of increase in the exchange rate but today it has been stabilised and it’s stabilising more and more because of the Central Bank of Nigeria’s intervention in the foreign exchange market.”

He called on the government to sustain agricultural production particularly in the area of the entire value chains.

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.

Economy

Nigeria Earns Extra N318.4 Billion as Crude Oil Hits $67/Barrel

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Buhari

FG Generates Additional Income of N318.4 Billion as Crude Oil Hits $67/Barrel

The Federal Government earned an additional N318.36 billion in February following the surge in crude oil price above $60 per barrel.

Brent crude oil, against which Nigerian oil is priced, average $60 throughout the month of February.

In March, it rose to $67 per barrel.

According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, Nigeria’s crude oil price was retained at $40 per barrel for 2021.

However, she said the nation is presently producing below its 2.5 million barrel per day capacity at 1.7mbpd. This, she said includes 300,000bpd condensates.

“Although Nigeria’s total production capacity is 2.5mbpd, current crude production is about 1.7mbpd, including about 300,000bpd of condensates, which indicates compliance with OPEC quota,” the finance minister stated.

Going by the number, Nigeria is producing 1.4mbpd of crude oil without condensates, but with an additional $20 revenue when compared to the $40 per barrel benchmark for the year. It means the Federal Government realised an additional income of N318.360 billion or $20 X 1.4mbpd X 30days in the month of February.

Crude oil jumped to $68.54 per barrel on Friday following OPEC+’s decision to role-over production cuts.

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Economy

Nigeria, Morocco sign MOUs on Hydrocarbons, Others

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The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.

Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.

The statement said Nigeria would also produce ammonia and export to Morocco.

“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.

The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.

Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.

He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.

He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.

“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.

According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.

Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.

The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.

The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.

Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.

He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.

“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.

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Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

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Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

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