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Malabu: Italian Judge Jails Nigerian, One Other

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  • Malabu: Italian Judge Jails Nigerian, One Other

After several years of inquiry into the purchase of an offshore oilfield in Nigeria by Shell and Eni, an Italian judge on Thursday sentenced two defendants to jail in the first ruling on one of the oil industry’s biggest graft scandals.

The two oil majors are embroiled in a long-running corruption case revolving around the purchase in 2011 of one of Africa’s biggest oilfields – Oil Prospecting Licence 245 – for about $1.3bn.

Nigerian Emeka Obi and Italian Gianluca Di Nardo were found guilty of international corruption and each given four-year jail sentences, Reuters quoted three sources with knowledge of Thursday’s ruling as saying.

Lawyers for Obi and Di Nardo declined to comment, according to Reuters.

Milan prosecutors alleged that bribes totalling around $1.1bn were paid to win the licence to explore the oilfield which, because of disputes, has never entered into production.

The main trial, which besides Eni and Shell, also involves Eni Chief Executive Officer, Claudio Descalzi, and four ex-Shell managers, including a former Shell Foundation Chairman, Malcolm Brinded, is expected to drag on for months.

But Obi and Di Nardo, accused of being middlemen and taking illegal kickbacks, had asked for a separate fast-track trial which, under Italian law, allows sentences to be cut by a third.

Thursday’s ruling will not tie the court’s hand in the main trial.

The next hearing of the main trial involving Eni, Shell and 13 people is set for September 26.

Barnaby Pace, anti-corruption campaigner at Global Witness, was quoted as saying, “This judgment will send shivers down the corporate spines of the oil industry.”

In an emailed statement, a spokeswoman for Shell was quoted as saying that neither Obi nor Di Nardo worked on behalf of the company, adding that it was waiting to see the fast-track judge’s written decision.

“Based on our review of the Prosecutor of Milan’s file and all of the information and facts available to us, we do not believe that there is a basis to convict Shell or any of its former employees of alleged offences,” it said.

Also in emailed comments, Italian oil company Eni reiterated it had acted correctly in the purchase of OPL 245, saying it had worked directly with the Nigerian government.

OPL 245 is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion barrels.

Eni, the biggest foreign oil producer in Africa, has been doing business in Nigeria since 1962 and last year produced 109,000 barrels of oil equivalent per day.

Shell is the biggest foreign investor in the country, producing 266,000 barrels of oil equivalent per day in 2017.

The sources said the Milan judge had ordered the seizure of $98.4m from Obi and more than 21 million Swiss francs ($21.9m) from Di Nardo.

Prosecutors had alleged that Obi received a mandate from a former Nigerian Petroleum Minister, Dan Etete, to find a buyer for OPL 245, collecting $114m. Di Nardo, they said, took $24m of that amount for putting Obi in touch with Eni.

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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MPC Meeting on July 22-23 to Tackle Inflation as Rates Set to Rise Again

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The Monetary Policy Committee (MPC) is set to convene on July 22-23, 2024, amid soaring inflation and economic challenges in Nigeria.

Led by Olayemi Cardoso, the committee has already increased interest rates three times this year, raising them by 750 basis points to 26.25 percent.

Nigeria’s annual inflation rate climbed to 34.19 percent in June, driven by rising food prices. Despite these pressures, the Central Bank of Nigeria (CBN) projects that inflation will moderate to around 21.40 percent by year-end.

Market analysts expect a further rate hike as the committee seeks to rein in inflation. Nabila Mohammed from Chapel Hill Denham anticipates a 50–75 basis point increase.

Similarly, Coronation Research forecasts a potential rise of 50 to 100 basis points, given the recent uptick in inflation.

The food inflation rate reached 40.87 percent in June, exacerbated by security issues in key agricultural regions.

Essential commodities such as millet, garri, and yams have seen significant price hikes, impacting household budgets and savings.

As the MPC meets, the National Bureau of Statistics is set to release data on selected food prices for June, providing further insights into the inflationary trends affecting Nigerians.

The upcoming MPC meeting will be crucial in determining the trajectory of Nigeria’s monetary policy as the government grapples with economic instability.

The focus remains on balancing inflation control with economic growth to ensure stability in Africa’s largest economy.

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Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets

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IMF global - Investors King

The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs

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Food Inflation - Investors King

Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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