- Analysts Proffer Measures to Enhance Economic Growth
Following a World Bank report that revealed economic growth in Nigeria has not been impressive since 1995, some economic analysts have advised the federal government to enhance investment in infrastructure and also develop policies that would encourage foreign direct investments (FDIs).
The World Bank had in the latest edition of its Africa’s Pulse stated that Nigeria’s economic growth has remained below population growth in the fourth consecutive year, adding that although regional growth was expected to rebound to 2.8 per cent in 2019, it has remained below three per cent since 2015.
However, reacting to the position of the multilateral institution, an analyst at Ecobank, Mr. Kunle Ezun, stressed the need for increased government spending.
He said: “This report wouldn’t come to me as a surprise looking at the economy in the last few years. We had slipped into recession and by 2017, we recovered slightly to grow at 0.8 per cent Gross Domestic Product (GDP) and by 2018, we grew by 1.93 per cent.
“So if you put that side by side with the size of the economy, and the population growth, you can completely say growth is slow and may not be adequate to support the economy.
“The economy on its own has a population growth of two per cent annually and if you have a growth of less than two per cent, then you would begin to see the gap and the threats to the economy.
“So if the World Bank has said is a slow-growing economy, it is accurate because the data are in line with that argument. This would continue to widen the gap between the rich and the poor and this gap might be the fertile ground for social unrest and for insecurity.”
Speaking on measures to boost economic growth, he said: “There is need for government to rejig the economy. This can start from the 2019 budget. I think the amount in the 2019 budget is low for our economy.
“The government needs to see how much of funds you can push into the system to stimulate the output and growth.”
Ezun added: “The federal government is a big spender in a growing economy like ours. So the government could spend like 60 per cent while the private sector would do about 30 per cent or more.
“So if they can fast track the approval of the minimum wage and all other reforms that would improve liquidity in the system and empower the citizenry to spend more, then we would be on the right path.
“That is because the citizenry is empowered to spend more, it stimulates local production and creates demand and when those two work together, you begin to see an improvement in the economy.”
On his part, an economist and Senior Lecturer at the Lagos Business School, Dr Bongo Adi, called for a different approach to monetary policy in the country.
He said: “We have to look at the implications of tight monetary policy which includes the tightening of liquidity, which reduces credit to the private sector.
“So if you back 10 years from 2008, aggregate monetary policy has been tight and when you look at our growth, you see that Nigeria has underperformed compared with sub-Saharan and middle-income countries in Africa and our growth rate has declined significantly.
“The slow growth is simply because of the way monetary policies have been managed.”
Speaking on measures the government should adopt to enhance growth, Adi said: “The truth is that we need to use monetary policy instruments to grow the economy and for that to happen, we should be approaching single-digit rates to enhance growth.”
To the Managing Director, Afrinvest Securities Limited, Mr Ayodeji Ebo, a major catalyst for growth is creating policies to secure foreign investments.
He explained: “What needs to be done is that there needs to be a more political will to implement a lot of the policies that are already available on investments. For this economy to grow, we need more partnership with private investments.
“Why people are not investing is because of the way by which the government can easily resign a transaction where investors would have put in a lot of money. so if we can rejig our policies to attract and ensure that once a contract is signed, no new government can come to override that first contract, then we can begin to attract more investments into critical areas that would jumpstart the economy.
“I think the federal government should come up with deliberate policies that would attract foreign direct investment, reduce the burden on the government and if we are able to that, I feel that this economy can grow at the rate of six to seven per cent if those policies are put in place.”
Goldman Sachs Revised Down Brent Oil Forecast for Q3 2021
Goldman Sachs Group, an American multinational investment bank and financial services company, has revised down its Brent oil price projection for the third quarter (Q3) of 2021 by $5 from $80 per barrel previously predicted to $75 a barrel following the surge in Delta variant COVID-19.
The investment bank predicted that the surge in Delta variant COVID-19 cases will weigh on Brent oil price in Q3 2021 even with the expected increase in demand.
However, the bank projected a stronger second half of 2021, saying OPEC+ adopted slower production ramp-up will offset 1 million barrel per day demand hit from Delta.
Goldman said, “Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up.”
The leading investment banks now projected a deficit of 1.5 million barrels per day in the third quarter, down from 1.9 million barrels per day previously predicted.
Therefore, Brent crude oil is expected to average $80 per barrel in the fourth quarter, a $5 increase from the $75 initially predicted and the bank sees 1.7 million barrels per day in the fourth quarter.
“The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.
Goldman added that even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices.
“Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.
Oil Extends Gains on Thursday on Expectations of Tighter Supplies
Oil prices rose about $1.50 a barrel on Thursday, extending gains made in the previous three sessions on expectations of tighter supplies through 2021 as economies recover from the coronavirus crisis.
Brent crude settled at $73.79 a barrel, up $1.56, or 2.2%, while U.S. West Texas Intermediate (WTI) settled at $71.91 a barrel, rising $1.61, or 2.3%.
“The death of demand was greatly exaggerated,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Demand is not going away, so we’re back looking at a very tight market.”
Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed this week on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.
But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021.
“In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive,” it said.
Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.
Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed.
Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week.
“Supplies fell further by 1.3 million barrels to the lowest level since early last year, theoretically offering support to the WTI curve,” said Jim Ritterbusch of Ritterbusch and Associates.
Gasoline and diesel demand, according to EIA figures, also jumped last week.
Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.
RES4Africa, Enel Green Power and the European Investment Bank Encourage African Youth to Find Green Energy Solutions to Community Challenges
The second Micro-Grid Academy Young Talent of the Year Award today acknowledged energy innovation from across Africa that can accelerate the green transition and improve economic opportunities.
Backed by the RES4Africa Foundation, Enel Green Power and the European Investment Bank the yearly competition encourages young energy entrepreneurs from across the continent to develop projects that expand enegy access, enable greater use of renewable eneryg and accelerate sustainability.
Young finalists from across West, East and Southern Africa presented their innovative ideas to expert judges from the RES4Africa Foundation, Enel Green Power and the European Investment Bank.
The 2021 edition of the Micro-Grid Academy Young Talent of the Year Award has arrived to its final steps. Today, the eight young African innovators selected as finalists out of nearly 50 applicants presented to the international public their disruptive projects for the first time. The presentation took place during the event Public Competition for the MGA Young Talent of the Year 2021 finalists, and represents a preparatory step for the announcement of the three winners, that will be held the 28th of September in the framework of the Precop26.
The three entities strongly believe that renewables and innovation will be the response to the climate changes and energy deficit that Africa faces. In this deeply needed path towards its just energy transition, the continent can and must rely on one of its most precious resources : its youth. With this joint initiative, RES4Africa, Enel Green Power and the European Investment Bank put together their efforts to support those young people from all Africa countries who are committed and motivate to create a real change in their communities.
These are the finalists identified by the selection committee, who publicly presented their project ideas and among which there are the three future winners:
• Adekoyejo Ifeoluwapo Kuye, 26 years old from Nigeria, introduced a project focused on a sustainable cold chain for food;
• Alex Makalliwa, 31 from Kenya, presented his initiative of electrical tricycles for heavy loads in Nairobi;
• Benson Kibiti, 34 also from Kenya, performed an overview on an PV-powered trolley for heating up food and providing power;
• Lucas Filipe Tamele Junior, 24 from Mozambique, focused on waste management, biofertilizers and biogas;
• Matjaka Ketsi from Lesotho is 28, and presented an initiative aiming at building solar-powered Learning Centres for rural communities;
• Shedrack Charles Mkwepu is instead 26 and comes from Tanzania: he designed a system that allows farmers to control irrigation and other soil parametres from a mobile phone;
• Carol Ofafa, 32 from Kenya, proposed the installation of a PV system for health facilities;
• Kumbuso Joshua Nyoni, 34 from Zambia, envision an integrated Water-Food-Energy model for PV power and a water pumping system.
The webinar benefitted from the presence of Salvatore Bernabei, President of RES4Africa and Head of Enel Global Power Generation, as well as of Maria Shaw Barragan, Director of Lending in Africa, Caribbean, Pacific, Asia and Latin America, European Investment Bank. They introduced the objectives of the MGA Young Talent of the Year Award, while reflecting upon youth’s impact on the just energy transition.
Moreover, after the finalists’ presentation, a final feedback was provided, with closing remarks, by Roberto Vigotti, Secretary General at RES4Africa Foundation, Carmelo Cocuzza, Head of Corporates Unit, European Investment Bank, and Silvia Piana, Head of Regulatory Affairs Africa, Asia and Australia Area at Enel Green Power.
“The ability to generate innovation will be a fundamental driver to pave the way for a transformation that goes well beyond the dynamic of the Energy sector” commented Salvatore Bernabei “We are here give voice and visibility to young talents, innovators, entrepreneurs promoting the best innovative ideas to stimulate socio-economic progress from within and free the creativity of the younger generations in designing the Africa of tomorrow”.
“Increasing energy access and enabling more sustainable energy use is crucial to unlock opportunities for communities across Africa. The finalists in this year’s Micro-Grid Academy Young Talent Awards all demonstrate inspirational and innovative thinking that combined world-class energy expertise with unparalleled understanding of local energy needs and all deserve to win. The European Investment Bank is pleased to join RES4Africa and Enel Green Power to support talented young innovators and encourage them to become green energy leaders of the future.” said Maria Shaw-Barragan, European Investment Bank Director for Global Partners.
RES4Africa Foundation (Renewable Energy Solutions for Africa) envisions the sustainable transformation of Africa’s electricity systems to ensure reliable and affordable electricity access for all, enabling the continent to achieve its full, resilient, inclusive and sustainable development. The Foundation’s mission is to create favourable conditions for scaling up investments in clean energy technologies to accelerate the continent’s just energy transition and transformation.
Technology3 weeks ago
Opera Becomes the World’s First Alternative Browser Optimized for Chromebooks
Government4 weeks ago
Justice Binta Nyako Grants FG Request, Remands Kanu in DSS Custody
Economy3 weeks ago
130 Countries Signs Commitment to Global Tax Rate, Nigeria Abstains
Naira3 weeks ago
Naira Exchange Rates Today, Monday, July 5, 2021
Business2 weeks ago
How to Redeem Gift Cards, Gift Card Rates in Nigeria
Dogecoin4 weeks ago
Dogecoin Released New Fee Structure Proposal
Business3 weeks ago
Jeff Bezos Steps Down as Amazon CEO- How Much Power Will He Give Up?
Finance2 weeks ago
African Development Fund Extends $83.6 Million in Grants to Boost Ethiopia-Djibouti Electricity Trade