- Christine Lagarde Resigns From IMF for ECB
The Managing Director of the International Monetary Fund, Christine Lagarde, has resigned her position effectively on Tuesday to become the next president of the European Central Bank (ECB).
Lagarde, who was nominated to succeed Mario Draghi at ECB, said: “I am honored to have been nominated for the Presidency of the European Central Bank.”
“In light of this, and in consultation with the Ethics Committee of the IMF Executive Board, I have decided to temporarily relinquish my responsibilities as Managing Director of the IMF during the nomination period,” Lagarde said in a statement released on Tuesday.
If Lagarde emerged the President of the European Central Bank, she would have to devise a solution for Europe’s economic slowdown.
President Draghi had said the apex bank would announce additional stimulus if the region’s economy continues to deteriorate. However, IHS Markit on Monday said the manufacturing sector of the Euro-area contracted for a fifth consecutive month in June.
The manufacturing Purchasing Managers Index contracted to 47.6 in June. Germany, the region largest economy, contracted the most at 45. Still, its 4-month high.
New job creation and export orders in the Euro-Area plunged during the month, while weak output and low new orders weighed on employment.
Again, while it is likely Christine Lagarde emerged as the ECB president given the level of support she has been receiving since she announced her resignation from IMF in pursuit of ECB, the European Parliament, as well as the Euro-Area finance ministers, will still have to vote.
“I know Christine Lagarde as the boss of the IMF, I know her as a tough lady, as somebody who knows what she wants, who is very clear on giving directions, when you come to her to get a loan, (she is) very tough on conditions, so I wouldn’t like to be the European country who needs to go to the ECB asking for favors,” Mark Rutte, Dutch Prime Minister told CNBC in Brussels.
Africa’s Economy to Contract by $236bn in Value in 2020 Says AfDB
African GDP to Contract by $236bn in Value Says AfDB
The African Development Bank (AfDB) has said the ravaging COVID-19 pandemic could cost the entire African continent about $236.7 billion in cumulative Gross Domestic Product.
The bank disclosed this in its latest report on African Economic Outlook (Supplement) released on Tuesday.
The bank predicted that the damage could be far greater if the impacts of the pandemic persist on the continent beyond the second quarter of the year. It said this could lead to a bigger contraction in Africa’s GDP in 2020.
According to the bank, the continent’s Real GDP could contract by as much as 1.7 percent this year if the virus has a shorter duration. This represents about a 5.6 percent decline from the January 2020 prediction.
However, under a long term scenario into the second half of the year, this could result in a deeper contraction in GDP.
This, the bank said could lead to 3.4 contraction, up from the 1.7 percent projected under the shorter duration and represents a decline of 7.3 percent from the previous projection before the outbreak.
It, therefore, said the combined loss due to the COVID-19 pandemic in Africa could range between $173.1 billion and $234.7 billion in 2020-2021.
Brent Crude Oil Maintains $43 Per Barrel Despite Surge in US Inventories
Brent Crude Oil Sustains Upsurge Despite Rising US Inventories
Brent crude oil, against which Nigerian oil is priced, sustained its upsurge at $43 per barrel on Wednesday during the London trading session despite a report showing a build-up in the U.S. crude inventories in the week ended July 3, 2020.
According to the U.S Energy Information Administration (EIA) report released on Tuesday, crude oil production in the U.S is expected to decline by just 70,000 barrels per day from the 670,000 bpd previously predicted to 600,000 bpd.
While this was below the projected decline, it also points to a build-up in U.S stockpiles and suggested that oil production from the world’s largest economy may not decline as previously projected in 2020.
“The EIA’s forecast of a lower decline in U.S. output was partially offset by its outlook for firm demand recovery, which limited losses in oil markets,” Hiroyuki Kikukawa, general manager of research at Nissan Securities said.
“Still, expectations that the Organization of the Petroleum Exporting Countries (OPEC) and allies would taper oil output cuts from August and softer U.S. equities added to pressure,” he said.
The EIA projected that global oil demand will recover through the end of 2021 as demand was predicted to hit 101.1 million barrels per day in the fourth quarter of the year.
Illegal Withdrawals: Rep To Investigate NNPC, NLNG Over $1.05bn
Rep To Investigate NNPC, NLNG Over Illegal Withdrawal of $1.05bn from NLNG Account
The Nigerian House of Representatives has concluded plans to investigate illegal withdrawal of $1.05 billion from the account of the Nigerian Liquefied Natural Gas Limited (NLNG) by the Nigerian National Petroleum Corporation (NNPC).
The decision followed the adoption of a motion titled ‘Need to Investigate the Illegal Withdrawals from the NLNG Dividends Account by the Management of NNPC’ moved by the Minority Leader, Ndudi Elumelu, on Tuesday.
The House adopted the motion and mandated its Committee on Public Accounts to “invite the management of the NNPC as well as that of the NLNG, to conduct a thorough investigation on activities that have taken place on the dividends account and report back to the House in four weeks.”
Elumelu said, “The House is aware that the dividends from the NLNG are supposed to be paid into the Consolidated Revenue Funds account of the Federal Government and to be shared amongst the three tiers of government.
“The House is worried that the NNPC, which represents the government of Nigeria on the board of the NLNG, had unilaterally, without the required consultations with states and the mandatory appropriation from the National Assembly, illegally tampered with the funds at the NLNG dividends account to the tune of $1.05bn, thereby violating the nation’s appropriation law.
“The House is disturbed that there was no transparency in this extra-budgetary spending, as only the Group Managing Director and the corporation’s Chief Financial Officer had the knowledge of how the $1.05bn was spent.
“The House is concerned that there are no records showing the audit and recovery of accrued funds from the NLNG by the Office of the Auditor-General of the Federation, hence the need for a thorough investigation of the activities on the NLNG dividends account.”
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