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Petroleum Product Depot Owners Shut Down Operations

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Oil plant
  • Petroleum Product Depot Owners Shut Down Operations

The Depot and Petroleum Products Marketers Association of Nigeria on Sunday directed all its members to shut down operations at midnight of Sunday, December 9, 2018, until the Federal Government pays all the outstanding debt which it owed the marketers.

DAPPMAN’s declaration came less than 24 hours after the ankFedeal Government announced that it would pay N236bn to oil marketers this Friday as the first tranche of the outstanding subsidy claims that it owed members of the depot owners as well as those of the Major Oil Marketers Association of Nigeria.

Responding to an enquiry sent by our correspondent on whether the association would still proceed on strike despite the government’s latest promise, the Executive Secretary, DAPPMAN, Olufemi Adewole, replied, “Yes, we are proceeding, since we didn’t get the Federal Government’s assurances of receiving the funds which would help pay December salaries.”

He said the association took a bold step to stop the financial haemorrhage of its members by the painful disengagement of its loyal workforce after over three years of engaging the Federal Government in the efforts to secure the payment of all subsidy induced debts owed marketers.

The association’s spokesperson stated that till date, the efforts “have not yielded the desired results.”

Adewole said, “As you are aware, the association reviewed the suspension of the ultimatum given to the Federal Government on December 25, 2017, which was suspended due to the intervention of well meaning Nigerians and the Federal Government’s promise to immediately pay marketers the outstanding subsidy- induced debts.

“Unfortunately as at today, and almost 12 months to the date, all we got so far are invitations to meetings and dialogues which have so far not stopped the daily increasing interest on these debts which are owed banks and agencies, and which, also has not manifested as credit to marketers.”

Adewole said DAPPMA duly notified the Federal Government through the Federal Ministry of Finance and the Debt Management Office, and directly informed the presidency.

He said the association informed the government of its of financial constraints and the challenge of paying staff salaries beyond November 30, 2018, except its members received help via the payment of all outstanding debts which include subsidy, interest and foreign exchange differentials with summation calculated up to December 31, 2018.

He said, “Further talks to which we are usually invited, which now seem to be their response to our follow ups on these debts, never consented to our requests for full cash payment of these debts, hence the regrettable decision we have had to take to let go of our loyal staff who we have sustained through bank facilities at outrageous interest rates.

“Premised on our inability pay December 2018 salaries and to avoid owing staff for work done without any hope of paying them, it is hereby agreed that, since our staff have been disengaged, all DAPPMAN member depots are not in a position to operate, hence will shut down operations at midnight, Sunday, December 9, 2018 until the Federal Government pays our calculated claims: the remaining subsidy (to few members), forex differentials and interest incurred up to December 31, 2018.”

Adewole said this decision was binding on all members of the association and full compliance was expected from every member company of the association.

He said the association shall revert in the same vein with any other directives as might be deemed necessary.

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.

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Economy

Nigeria Allotted $3.35bn From IMF’s Special Drawing Rights(SDRs)

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Nigeria has secured about $3.35 billion as part of a historic general allocation of Special Drawing Rights (SDRs) of the International Monetary Fund (IMF).

This is part of the general allocation of about SDR456 billion – an equivalent of $650 billion – by the IMF Board of Governors.

This will help to boost liquidity in Nigeria that is currently battling declining revenue.

The allocation which was approved on Monday aims to boost global liquidity at a time when the world is grappling with the coronavirus (COVID-19) pandemic.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis,” said IMF Managing Director, Kristalina Georgieva.

Although it is not a currency, the SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

It is a potential claim on the freely usable currencies of IMF members and can provide a country with liquidity. The SDR is defined by the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

The amount allocated to Nigeria is as a result of the exchange rate of reference which is 0.702283 SDR to a dollar as of July 1, 2021, and Nigeria has 2.4545 billion SDRs.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy,” the IMF managing director added.

“It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

According to the IMF, the general allocation of SDRs will become effective on August 23 and the newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.

It stated that about $275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

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UN Chief Welcomes Historic’ IMF Liquidity Boost for Governments in Need

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As the COVID-19 crisis continues to exacerbate restrictions on government spending throughout the world, the UN chief on Tuesday welcomed the decision by the International Monetary Fund (IMF) to approve a $650 billion allocation of Special Drawing Rights to “boost liquidity”.

Secretary-General António Guterres issued a statement on the policy change towards Special Drawing Rights or SDRs, a type of foreign reserve asset that is IMF defined and maintained, as additional funding that could help to pay down debts.

He also underscored that economies not in need of access to cash should “consider channeling these resources to vulnerable low and middle-income countries that need a liquidity injection by replenishing the IMF’s Poverty Reduction and Growth Trust Fund”.

‘Historic decision’

Yesterday’s IMF’s allocation makes new borrowing available to the fund’s 190 member countries, roughly in proportion to their share of the global economy.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis”, said IMF Managing Director Kristalina Georgieva.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

Halting debt default

The Secretary-General stressed that it is also “critical to quickly establish the proposed Resilience and Sustainability Trust at the IMF…[for] a comprehensive response and recovery, including providing more support for vaccinations and debt management and to support the efforts of developing economies in restructuring for inclusive growth”.

Last month, he urged the world’s largest economies to spearhead a global COVID-19 vaccination plan and expand debt relief to developing countries battered by the pandemic.

Bulwark against default

He also advised supporting a new $50 billion IMF investment roadmap aimed at ending the pandemic and driving a fast recovery.

As many developing countries are “teetering on the verge of debt default”, the UN chief encouraged the G20 leading industrialized nations to channel unused SDRs to the Fund’s new resilience and sustainability plan, for these nations.

“Special Drawing Rights also need to be considered as additional funding, not deducted from Official Development Assistance”, he reminded.

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Economy

IMF Approves Largest SDR Allocation In History to Boost Global Liquidity

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The Board of Governors of the International Monetary Fund (IMF) has approved a general allocation of Special Drawing Rights (SDRs) equivalent to US$650 billion (about SDR 456 billion) on August 2, 2021, to boost global liquidity.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis. The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis,” IMF Managing Director Kristalina Georgieva said.

The general allocation of SDRs will become effective on August 23, 2021. The newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.

According to the IMF, about US$275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

“We will also continue to engage actively with our membership to identify viable options for voluntary channeling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth”, Ms. Georgieva said.

One key option is for members that have strong external positions to voluntarily channel part of their SDRs to scale up lending for low-income countries through the IMF’s Poverty Reduction and Growth Trust (PRGT). Concessional support through the PRGT is currently interest-free.

The IMF is also exploring other options to help poorer and more vulnerable countries in their recovery efforts. A new Resilience and Sustainability Trust could be considered to facilitate more resilient and sustainable growth in the medium term.

In April last year, Nigeria collected $3.4 billion—equivalent to 100 percent of its quota— under the IMF’s Rapid Financing Instrument, RFI, to tackle the funding gaps created by COVID-19, especially when the crude oil market stagnated.

The financial support, approved by the IMF Executive Board on April 28, 2020, provided critical support to shore up Nigeria’s healthcare sector and shielded jobs and businesses from the shock of the COVID-19 crisis while helping to limit the decline in the nation’s external reserves.

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