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Kachikwu Asks NNPC, DPR, PPPRA Bosses to Reply Falana

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Ibe Kachikwu
  • Kachikwu Asks NNPC, DPR, PPPRA Bosses to Reply Falana

The Minister of State for Petroleum Resources, Ibe Kachikwu, has ordered the Group Managing Director, Nigerian National Petroleum Corporation, Maikanti Baru; the Director, Department of Petroleum Resources, Modecai Ladan; and Executive Secretary, Petroleum Products Pricing Regulatory Agency, Saidu Abdulkadir, to provide the information being sought by a human rights lawyer, Femi Falana, SAN, on fuel importation and sundry matters.

In his April 17, 2018 letter to the minister, Falana raised several concerns about the oil industry and asked Kachikwu to respond, pursuant to the Freedom of Information Act, adding that “your reply should be received within seven days of the receipt of this letter.”

Kachikwu told Falana in a letter dated April 21, 2018, with reference number, HMS/MPR/085/VOL.1/389, which was made available to our correspondent in Abuja on Wednesday, that he had directed the chief executives of the NNPC, DPR and PPPRA to furnish the lawyer with the information he requested, subject to the limits of the firms’ contractual, legal and business confidentiality.

In the response, which was personally signed by Kachikwu, he stated that he never said the Federal Government was spending N1.4tn monthly as payment for under-recovery on Premium Motor Spirit, popularly known as petrol.

He, however, commended Falana for seeking proper information on the issue and stated that he had directed the heads of the selected agencies under the Federal Ministry of Petroleum Resources to furnish the lawyer with the requisite data.

Our correspondent observed that Kachikwu’s response to Falana was copied to the heads of the three agencies, as their names and designations were clearly outlined in the minister’s letter.

Kachikwu wrote, “I thank you for your continued interest in seeking the proper information on this issue. I have forwarded your letter to the GMD of the NNPC, the director of the DPR and the executive secretary of the PPPRA, the corporation and agencies who under their establishing laws are the managers of the Federal Government’s downstream commercial business and the ones in the best position to provide you with the correct data.

“I, therefore, have directed them, working through the GMD of the NNPC, to furnish you with such information as you have requested, subject to the limits of their contractual, legal and business confidentiality.”

The media reported on April 18 that Falana had told the minister that his (Kachikwu) daily petrol consumption claim was untenable.

The lawyer had said, “In December 2017, the management of the NNPC disclosed that the nation’s consumption rate of fuel was 28 million litres per day and that subsidy cost was N726m per day, i.e., N261.4bn per annum. But on March 5, 2018, the Group Managing Director of the NNPC, Dr. Maikanti Baru, claimed that the figure had metamorphosed to 50 million litres per day and that the NNPC had spent $5.8bn (N1.7tn) on fuel importation in January and February 2018.

“Furthermore, at a public forum held in Abuja two weeks ago, you (Kachikwu) stated that the consumption rate of fuel had skyrocketed to 60 million and that the cost of subsidy was N1.4tn! We are not unaware that the increasing consumption rate has been blamed on the smuggling of imported fuel from Nigeria to neighbouring countries by some economic saboteurs.

“Assuming without conceding that the story of smuggling is true, the total volume of fuel consumed by Benin, Togo, Cameroon, Niger, Chad and Ghana is said to be less than 250,000 litres per day. You will agree with me that this does not explain the difference of 32 million litres per day between the consumption rate of imported fuel in December 2017 and March 2018.”

But Kachikwu distanced himself from ever saying that under-recovery on PMS was N1.4tn monthly, adding that the ministry had also denied the statement.

The minister said, “Your request to me is predicated on a statement purportedly credited to me to the effect that the Federal Government is spending N1.4tn monthly on payment for under-recovery on PMS. Let me, for the umpteenth time, state that I made no such a statement and a previous rebuttal has clarified this. The information you quoted is both incorrect and alarmingly speculative.”

Other requests by the human rights lawyer, as contained in the letter he sent to Kachikwu, included Bill of Laden and the DPR certified Cargo Discharged Certificates of the imported subsidised petroleum products into the country from December 2017 to March 2018; and Offshore Processing Agreements pertaining to the sale of the 445,000 barrels of crude oil per day plus any additional crude barrels approved for domestic consumption from December 2017 to March 2018.

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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South Africa’s Inflation Rate Holds Steady in May

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South Africa's economy - Investors King

South Africa’s inflation rate remained unchanged in May, increasing the likelihood that the central bank will maintain current borrowing costs.

According to a statement released by Statistics South Africa on Wednesday, consumer prices rose by 5.2% year-on-year, the same rate as in April.

The consistent inflation rate is expected to influence the decision of the six-member monetary policy committee (MPC), which is set to meet in mid-July. The current benchmark rate stands at 8.25%, a 15-year high, and has been held steady for six consecutive meetings.

Central Bank Governor Lesetja Kganyago has repeatedly emphasized the need for inflation to fall firmly within the 3% to 6% target range before considering any reduction in borrowing costs.

“We will continue to deliver on our mandate, irrespective of how our post-election politics plays out,” Kganyago stated earlier this month in Soweto. “The only impact is what kind of policies any coalition will propose. If the policies are not sustainable, we might not have investment.”

While money markets are assigning a slim chance of a 25-basis point rate cut in July, they are fully pricing in a reduction by November.

Bloomberg Africa economist Yvonne Mhango anticipates the rate-cutting cycle to begin in the fourth quarter, supported by a sharp drop in gasoline prices in June and a rally in the rand.

The rand has appreciated more than 3% since Friday, following the ANC’s agreement to a power-sharing deal with business-friendly opposition parties and the re-election of President Cyril Ramaphosa.

In May, the annual inflation rates for four of the twelve product groups remained stable, including food and non-alcoholic beverages.

However, transport, alcoholic beverages and tobacco, and recreation and culture saw higher rates. Food prices increased by 4.3% in May, slightly down from 4.4% in April, while transport costs rose by 6.3%, up from 5.7% and marking the highest rate for this category since October 2023.

The central bank’s cautious stance on monetary policy reflects its ongoing concerns about inflation.

Governor Kganyago has consistently voiced worries that the inflation rate is not decreasing as quickly as desired. The MPC’s upcoming decision will hinge on sustained inflationary pressures and the need to balance economic stability with fostering growth.

As South Africa navigates its economic challenges, the steady inflation rate in May provides a measure of predictability for policymakers and investors alike.

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Ghana Reports Strong 4.7% GDP Growth in First Quarter of 2024

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Ghana one cedi - Investors King

Ghana’s economy showed impressive growth in the first quarter of 2024 with the Gross Domestic Product (GDP) expanding by 4.7% compared to the same period last year, according to Government Statistician Samuel Kobina Annim.

This represents an increase from the 3.8% growth recorded in the previous quarter and should provide a much-needed boost to the ruling New Patriotic Party (NPP) as the nation approaches the presidential elections scheduled for December 7.

The positive economic data comes amidst a challenging backdrop of fiscal consolidation efforts under a $3 billion International Monetary Fund (IMF) rescue program.

The government has been working to control debt through reduced spending and restructuring nearly all of its $44 billion debt.

This includes ongoing negotiations with private creditors to reorganize $13 billion worth of bonds.

The latest GDP figures are seen as a vindication of the NPP’s economic policies, which have been under fire from the main opposition party, the National Democratic Congress (NDC).

The opposition has criticized the government’s handling of the economy, particularly its fiscal policies and the terms of the IMF program, arguing that they have imposed undue hardship on ordinary Ghanaians.

However, the 4.7% growth rate suggests that the measures taken to stabilize the economy are beginning to yield positive results.

Analysts believe that the stronger-than-expected economic performance will bolster the NPP’s position as the country gears up for the presidential elections.

“The growth we are seeing is a testament to the resilience of the Ghanaian economy and the effectiveness of the government’s policies,” Annim stated at a press briefing in Accra. “Despite the constraints imposed by the debt restructuring and IMF program, we are seeing significant progress.”

The IMF program, which is designed to restore macroeconomic stability, has necessitated tough fiscal adjustments.

These include cutting government expenditure and implementing structural reforms aimed at boosting economic efficiency and growth.

The government’s commitment to these reforms has been crucial in securing the confidence of international lenders and investors.

In addition to the IMF support, the government has also been focused on diversifying the economy, reducing its reliance on commodities, and fostering sectors such as manufacturing, services, and technology.

These efforts have contributed to the robust growth figures reported for the first quarter.

Economic growth in Ghana has been uneven in recent years, with periods of rapid expansion often followed by slowdowns.

The current administration has emphasized sustainable and inclusive growth, seeking to ensure that the benefits of economic progress are widely shared across all segments of the population.

The next few months will be critical as the government continues its efforts to stabilize the economy while preparing for the upcoming elections.

The positive GDP growth figures provide a strong foundation, but challenges remain, including managing inflation, creating jobs, and ensuring the stability of the financial sector.

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World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

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world bank - Investors King

The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

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