- Experts Advise FG to Focus on Economic Growth Drivers
Financial and economic experts have advised the Federal Government to focus more on key economic growth drivers in the current fiscal year in order to fast track economic recovery.
They spoke on Tuesday in Lagos at the Chartered Institute of Bankers of Nigeria Centre for Financial Studies’ annual programme tagged, ‘’Economic Outlook: Implications for Businesses in Nigeria in 2018.’’
Held in collaboration with a leading consulting firm, B. Adedipe Associates Limited, the forum examined economic performance last year and the outlook for the current year.
The Chief Executive Officer, Nigeria Economic Summit Group, Mr. Laoye Jaiyeola, said there was a need for the government to pay attention to economic indicators capable of moving the economy beyond the current fragile recovery.
Jaiyeola said, “Certain things are key drivers of growth whether in the developed or developing countries. The first is knowledge. The more advanced knowledge you see, the more growth you see. Technology is being used to provide various services like social services, and it has changed education in many nations. Nations that have done well have learnt to leverage technology to change quite a number of things. These are factors that drive sustainable inclusive growth. There must be equity, fairness and justice in order to drive inclusive growth.
“If the government pays attention to these drivers of sustainable inclusive growth in decision making, growth is bound to take place. But if less attention is paid to these factors, we will take one step forward and two steps backward. Whatever we do, we need to address these critically.”
Citing Ethiopia as example of a fast growing economy in Africa, the NESG CEO stressed a need for Nigeria to learn from what the East African country had done in the education and manufacturing sectors.
The President and Chairman of Council, CIBN, Prof. Segun Ajibola, described last year as a progressive one for the economy, having rebounded from its first recession in 25 years.
Ajibola said, “A triumph for the Small and Medium-scale Enterprises was recorded with the Movable Asset Bill 2017 and the Credit Reporting Bill 2017 passed into law by the National Assembly in May of 2017.”
The CIBN president noted that with the establishment of the Investors and Exporters FX window by the Central Bank of Nigeria last year, the banking and finance sector recorded major development.
He added, “Efforts need to be further intensified to ensure that the step being taken to improve electricity generation and distribution across the country yield the desired results. It would not be misplaced to categorically state that the state of emergency should be declared across the country on security between farmers and the Fulani herdsmen, in order not to scare away foreign investors from the prominent economic work of the nation.”
On the economic outlook for this year, the Chief Consultant, B. Adedipe Associates, Dr. Biodun Adedipe, said the developments in the stock market were good for the economy but stressed the need for caution.
He said, “I went back to the stock market data for 2000, and looked at how index and market had behaved. I looked at where we were yesterday (Monday) 43,000 index. I looked at the peak Nigeria ever attained-65,000 in February 2008. At that, we had strong external reserves but by April 2008, foreign investors began to troop out. As they left the stock market, they were paid from the external reserves.
“So, the outflows between April and November 2008 exceeded what we were earning from the sale of crude oil and other paltry exports by $4bn monthly. What we lost to the rest of the world was $28bn in a matter of a few months which of course led the Central Bank of Nigeria to devalue the naira.”
A former Deputy Governor of the CBN, Mr. Tunde Lemo, who was the chairman of the panel, hinted that the economic fundamentals of the country appeared good, or at least better than what we had in the past.
He, however, stressed the need for the government to focus on infrastructure, technology, leadership and multiple taxation.
Lemo said political activities this year would have implication for inflation.
Nigeria, Morocco sign MOUs on Hydrocarbons, Others
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.
Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021
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.
UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?
Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.
Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.
“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.
“He is raising taxes under the radar.
“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”
Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”
Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.
Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.
“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses. This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”
He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”
The deVere CEO concludes: “The Chancellor had to perform a tough juggling act. But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”
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