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GDP Growth Per Capita to Contract by 7.4% in Nigeria, Other African Oil Nations

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Real GDP Growth Per Capita to Contract by 7.4% in Africa’s Oil Nations

The International Monetary Fund (IMF) on Tuesday said COVID-19 economic implications, both in terms of lockdowns and external shocks, will lead to Africa’s average real GDP growth per capita contracting by 4.9 percent and 7.4 percent for oil-dependent economies on the continent.

Speaking at the IEA Africa Ministerial Roundtable on COVID-19 impact on Africa’s Energy Sector, Abebe Aemro Selassie, Director of African Department, IMF, said while the average GDP growth rate was revised down from 3.8 percent to -2.8 percent for Africa in 2020, the growth rate in eight Africa’s oil-exporting nations will contract by 5.2 percent, down from 2.5 percent growth rate predicted in October 2019.

He said “The human toll will be steep especially in African oil exporters as measured by per capita growth. Indeed, we expect average real GDP growth per capita to reach -4.9 percent for the continent, and a staggering -7.4 percent in oil exporters.”

The economic crisis is expected to put government budget under tremendous pressuring this year and predicted to lead to a loss of $92 billion in fiscal revenue, a decline of a quarter when compared with the fund’s October prediction. For African oil exporters, loss in fiscal revenues of $34 billion was predicted when compared to the October projection.

The rise in financial burden amid falling revenue generation has pushed the continent debt burden to over 65 percent of GDP in 2020 on average.

He Selassie said “For African oil exporters the pandemic happened in an already difficult context. Since the oil price collapse of 2014, production and investment in the oil sector in most African oil exporters have been on a secular decline, for a combination of factors including structural issues, governance and security concerns in several countries (i.e., Nigeria and Libya).

“If this trend continues, limiting volumes, and if oil price persists in the $30-40 range, African oil exporters will have to face difficult fiscal challenges where most projected fiscal breakeven prices are greater than $50 and, in several cases, close to or greater than $100 (e.g., Algeria, Cameroon, Nigeria and Libya).”

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

Prepaid Meter is Free, Buhari Warns DisCos, Agents

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President Muhammadu Buhari once again warned Power Distributing Companies (DisCos) and their agents selling prepaid meters to electricity customers against the Federal Government directive that meter is free.

Ahmed Rufai Zakar, the Special Adviser to the President on Infrastructure, who represented Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders held in Ibadan, Oyo State on Wednesday, said President Buhari understood people’s concerns on issues surrounding electricity and was determined to curb and deal with unscrupulous individuals in the power sector.

He said, “We have made it very clear through the regulators direct order as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost.

“Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

“In cases where we find any disco or disco representative selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law.

“The President has mandated that these meters must be free. We have also said that they must come from local manufacturers.

“This would create jobs and revive our industry.”

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Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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