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Sell Ajaokuta Steel company, MAN, Others Tell FG

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Ajaokuta Steel
  • Sell Ajaokuta Steel company, MAN, Others Tell FG

Manufacturers and experts have said privatisation of Ajaokuta Steel Company will yield better dividends than the facility being run by the government.

They spoke with our correspondent in separate interviews, maintaining that government-run business had never turned out to be a profitable venture but one that was prone to corruption and waste.

As such, they canvassed the sale of the national asset but urged the government to do such in a transparent manner.

A business and investment consultant, Dr Vincent Nwani, pointed out that the government was not supposed to run business.

He said, “Ajaokuta needs to be run as a business and not as a government agency or non-profit organisation. It needs to be transferred to the private sector for proper management.

“The steel mills in Japan and other places worldwide are not run by the government but by private companies and they are very successful.

“The pending court case on Ajaokuta should be resolved and the facility should be given to private investors in a transparent and competitive manner.”

Nwani emphasised that steel industry everywhere in the world was the bone of development.

“If our steel mill is well managed, it will service the local industry and save us huge foreign exchange spent on importation and there will be multiple benefits derived including job creation and economic development,” he said.

Another expert and a professor of economics at the University of Uyo, Leo Ukpong, agreed that a private entity would reactivate the steel company and run it successfully.

He said, “Government-run business has a history of corruption and lack of continuity in cases where another administration takes over and quickly abandons the agreement entered into by his predecessor.

“The demand for steel is very high both domestically and globally. This would serve as an incentive to any private investor who will see the prospect of profit and market in the investment.”

For the President, Manufacturers Association of Nigeria, Mansur Ahmed, it is important that the steel company is converted to a profitable entity and one sure way of doing this will be to involve private investors.

He stressed that the investors must be the right kind of private investors who could turn the facility into a profit-making one.

He said even if it was done with the involvement of the government on a public private partnership basis, the private investors must be given a free hand to operate, adding that such investors were usually many.

Ahmed said it was imperative this be done soon because there was a huge demand for steel in Nigeria.

Earlier, the former President, Nigerian Metallurgical Society, Prof Benjamin Adewuyi, urged President Muhammadu Buhari to ensure the completion of the steel complex during his second tenure.

Adewuyi who gave the advice in an interview with the News Agency of Nigeria said Buhari should ensure that the moribund steel company became operational in his second tenure to boost the economy.

He explained that the project when completed, arms, ammunition, and cars, among others, that were now being imported could be manufactured in the company.

He said, “Ajaokuta has the capacity to produce cars, arms for the military among others and can also provide massive employment for the youth.

“We are only deceiving ourselves that we are manufacturing cars locally. Without Ajaokuta steel functioning, we cannot manufacture our own cars.

“We have many brilliant youths among us that cannot carry out any innovation because we lack the materials they require, Mr President should revisit Ajaokuta Steel Company and kickstart the project.”

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.

Economy

COVID-19 Vaccine: Crude Oil Extends Gain to $48 Per Barrel on Wednesday

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Oil prices rose further on Wednesday as hope for an effective COVID-19 vaccine and the news that the United States of America’s President-elect, Joe Biden has begun transition to the White House bolstered crude oil demand.

Brent crude oil, a Nigerian type of oil, gained 1.63 percent or 78 cents to $48.64 per barrel at 11:50 am Nigerian time on Wednesday.

The United States West Texas Intermediate (WTI) crude oil rose by 1.36 percent or 61 cents to $45.52 per barrel.

OPEC Basket surged the most in terms of gain, adding 3.16 percent or $1.37 to $44.75 per barrel.

This was after AstraZeneca, Moderna and Pfizer-BioNTech announced the positive results of their trials.

Moderna and Pfizer had claimed over 90 percent effective rate in trials while AstraZeneca said its COVID-19 vaccine was 70 percent effective in trials but could hit 90 percent going forward.

The possibility of having a vaccine next year increases the odds that we’re going to see demand return in the new year,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Also, the decision of President-elect Joe Biden to bring Janet Yellen, the former Chair of Federal Reserve, back as a Treasury Secretary of the United States is fueling demand and strong confidence across global financial markets.

President-elect Biden’s cabinet choices, particularly Janet Yellen’s Treasury Secretary position, are adding to upside momentum across a broad space of asset classes,” said Jim Ritterbusch of Ritterbusch and Associates.

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Economy

Seyi Makinde Proposes N266.6 Billion Budget for Oyo State in 2021

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The Executive Governor of Oyo State, Seyi Makinde, has presented the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly on Monday.

The proposed budget titled “Budget of Continued Consolidation” was said to be prepared with input from stakeholders in all seven geopolitical zones of Oyo state.

Governor Makinde disclosed this via his official Twitter handle @seyiamakinde.

According to the governor, the proposed recurrent expenditure stood at N136,262,990,009.41 while the proposed capital expenditure was N130,381,283,295.63. Bringing the total proposed budget to N266,6444,273,305.04.

The administration aimed to implement at least 70 percent of the proposed budget if approved.

He said “The total budgeted sum is ₦266,644,273,305.04. The Recurrent Expenditure is ₦136,262,990,009.41 while the Capital Expenditure is ₦130,381,283,295.63. We are again, aiming for at least 70% implementation of the budget.”

He added that “It was my honour to present the Oyo State Budget Proposal for the 2021 Fiscal Year to the Oyo State House of Assembly, today. This Budget of Continued Consolidation was prepared with input from stakeholders in all seven geopolitical zones of our state.”

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Economy

World Bank Expects Nigeria’s Per Capita Income to Dip to 40 Years Low in 2020

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The World Bank has raised concern about Nigeria’s rising debt service cost, saying it could incapacitate the nation from necessary infrastructure development and growth.

The multilateral financial institution said the nation’s per capita income could plunge to 40 years low in 2020.

According to Mr. Shubham Chaudhuri, Country Director for World Bank in Nigeria, the decline in global oil prices had impacted government finances, remittances from the diaspora and the balance of payments.

Chaudhuri, who spoke during the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the Federal Government, said while the nation’s debt is between 20 to 30 percent, rising debt service remains the bane of its numerous financial issues and growth.

Nigeria’s problem is that the debt service takes a big part of the government revenue,” he said.

He said, “Crisis like this is often what it takes to bring a nation together to have that consensus within the political, business, government, military, civil society to say, ‘We have to do something that departs from business as usual.’

“And for Nigeria, this is a critical juncture. With the contraction in GDP that could happen this year, Nigeria’s per capita income could be around what it was in 1980 – four decades ago.”

Nigeria’s per capita income stood at $847.40 in 1980, according to data from the World Bank. It rose to $3,222.69 in 2014 before falling to $2,229.9 in 2019.

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