- IMF Sees Improve Growth in Nigeria in 2019
The International Monetary Fund on Tuesday lowered the world’s growth projection by 0.1 percent, saying trade tensions and increased tariffs between the US and China has impacted its previous projection.
In the same quarterly outlook, World Economic Outlook, the fund raised Nigeria’s growth projection by 0.3 percent to 2.3 percent for 2019.
In January, the fund had revised down Nigeria’s estimated growth from 2.3 percent to 2 percent in 2019 and from 2.5 percent to 2.2 percent in 2020, saying high debt servicing cost and weak business confidence will hurt Nigeria’s growth.
However, the fund has now revised its position in the new world economic outlook as Nigeria is expected to gain from rate cuts in developed economies and stimulate growth within with the new Central Bank of Nigeria’s policy aimed at compelling Deposit Money Banks to increase lending to the private sector.
Still, the expected growth rate is below Nigeria’s population growth rate of 2.6 percent, meaning until the nation’s economic growth rate is higher than the population growth rate, Nigeria is merely sustaining economic recovery.
Global growth is projected to expand at 3.2 percent in 2019 and 3.5 percent in 2020, 0.1 percent lower than the previous projections.
“We are revising downward our projection for global growth to 3.2 per cent in 2019 and 3.5 per cent in 2020. While this is a modest revision of 0.1 percentage points for both years relative to our projections in April, it comes on top of previous significant downward revisions,” the IMF stated.
“The revision for 2019 reflects negative surprises for growth in emerging market and developing economies that offset positive surprises in some advanced economies.”
Meanwhile, the Central Bank of Nigeria led Monetary Policy Committee left interest rates unchanged on Tuesday in spite of recent moderation in consumer prices.
The committee said given new CBN policy at stimulating growth, current rates level is necessary to curb a possible increase in prices due to the projected surge in money supply.
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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