- Nigeria Must Prepare for Next Global Economic Crisis — Emefiele
Governor of Central Bank of Nigeria, Godwin Emefiele, on Wednesday, said Nigeria must prepare for the next global economic crisis.
Emefiele said this while delivering a lecture titled: ‘Beyond the Global Financial Crisis: Monetary Policy under Global Uncertainty,’ at the University of Benin, Benin, Edo State.
He said although the country had made progress in the year under review, more efforts must be made to reduce the country’s unemployment rate.
Emefiele stated, “From some of my concluding remarks, you may have observed, whether you like it or not, there is global uncertainty that will, unfortunately, most certainly lead to another crisis.
“The question could be, how are we as Nigerians, particularly our leaders, I am talking of monetary and fiscal policy authorities, how are we preparing our country for the next crisis?
“We have luckily exited recession; we have seen recession pending downward to about 18.72 per cent in 2017 to about 11. 37 per cent today.
“We have seen the reserve moving up but unfortunately we still have issues and those issues border on the unemployment rate and those issues border on how we prepare our country,” he said.
While enumerating effort being made by the apex bank to stabilise the nation’s economy, Emefiele said the introduction of the investors and exporters’ window had helped in shoring up the country’s external reserves.
He said the turnover in the I&E FX Window had reached over $48bn since the inception of the window and that the nation’s foreign exchange reserve had risen to $45bn in April 2019 from $23bn in October 2016.
The CBN governor added that Nigeria’s current stock of external reserves was able to finance nine months of current import commitments.
He said with the improved availability of foreign exchange, the exchange rate at I&E FX Window had remained stable over the past 24 months at an average of N360/$, and the parallel market exchange rate had appreciated from N525/$ in February 2017 to N360/$ today.
“After five consecutive quarters of negative growth beginning in the 1st quarter of 2016, a coordinated approach by the fiscal and monetary authorities supported a rebound in the nation’s economy during the second quarter of 2017.
“The recovery has been driven largely by improved non-oil activities especially the agriculture sector which expanded consistently by about 3.5 per cent to 4.3 per cent reflecting government’s efforts at diversifying the economy,” he added.
In the same vein, Emefiele was quoted in a statement from the CBN as seeking economic patriotism and urging stakeholders in the public and private sectors to look inwards in developing the Nigerian economy.
Emefiele charged Nigerians to think of what they could do to improve the fortunes of the economy, rather than what they could benefit from the economy.
The CBN governor noted that there was huge potential within the Nigerian economy to make it as developed as other countries, which were its peers at independence but had gone ahead to become more developed.
He added that the lecture was part of the bank’s efforts at promoting research and collaboration with universities, towards developing policies and programmes that would enhance the economic well-being of all Nigerians.
He highlighted how the crisis had helped to reshape monetary policy tools used by Central Banks to address dips in their economies.
He said, “The 60 per cent drop in crude oil prices between 2014 – 2016 along with normalisation of monetary policy by the United States Federal Reserve Bank in 2014, imposed severe constraints on the Nigerian economy, given our reliance on crude oil for over 90 per cent of our export earnings and 60 per cent of government revenue.”
Waltersmith’s 5,000bpd Modular Refinery in Imo State to Commence Operations
5,000bpd Modular Refinery Built in Imo State to Start Operations
The Department of Petroleum Resources (DPR) has said the 5,000 barrels per day Modular Refinery project built in Imo State is ready for operations.
Sarki Auwalu, the Director, DPR, disclosed this during a pre-commissioning visit to the project site in Ibigwe, Imo State.
In a statement released by Waltersmith, Auwalu was quoted as saying the purpose of his visit was to ensure that the refinery was ready to commence operations.
He said “We can confirm that the refinery is very much ready to commence operations. We have seen all the preparations.
“To us, the plant is alive. The commissioning is just symbolic. Everywhere is ready to start off. My overall assessment is excellent.
“We have been to other modular refineries but we have not seen anything like this – the space, the way it is arranged and the way it will work.”
The 5,000 barrels per day modular refinery is scheduled for inauguration this month. The refinery has crude oil storage capacity of 60,000 barrels and it is expected to deliver more than 271 million litres per year of refined petroleum products.
Auwalu said, “The role we play is to enable businesses and create opportunities. When DPR issues you a licence, it enables you to invest and as a result of that opportunity we create, that business is enabled.
“Waltersmith is one of our success stories. We consider the project as ours. We have been tracking their growth and we are happy to see that our child is growing. It is our plan that they expand and they have the potential.”
Speaking on the project, Abdulrasaq Isah, the Chairman, Waltersmith Refining and Petrochemical Company, said the project is the first phase of a series of refinery projects that will lead to the delivery of up to 50,000 barrels per day in refining products.
OPEC Fund, West African Development Bank Agree to Improve Corporation in West Africa
OPEC Fund and West African Development Bank (BOAD) Agreed to Deepen Corporation in West Africa
The West African Development Bank (BOAD) and the OPEC Fund for International Development have signed an agreement to further deepen their development corporation in the member nations of the Western African Economic and Monetary Union (WAEMU).
The member nations include Benin, Burkina Faso, Côte-d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
According to the statement released by the two organisations, the agreement reached will increase engagement and knowledge-shareing between the two institutions and ensures improved cooporation in terms of co-financing public and private sector projects.
The OPEC Fund and West African Development Bank (BOAD) boost cooperation in Western Africa
The agreement focuses on increased engagement and knowledge-sharing between the two institutions and ensures enhanced cooperation in co-financing public and private sector projects.
It will also support international trade and regional trade integration to enhance economic productivity in the region. It will help mitigate the negative impact of COVID-19 on the region and strengthen the economy of the West African region.
Dr. Abdulhamid Alkhalifa, Director-General, OPEC Fund, who signed on behalf of the organisation said: “We are pleased to grow our partnership with BOAD to work together toward our common cause. West African countries have significant potential to increase trade flows and strengthen competitiveness which will drive growth, reduce poverty, and create new jobs in the region. The OPEC Fund’s global expertise, combined with BOAD’s strong regional presence, positions our two institutions well to help the region to weather the impacts of the pandemic and improve its competitiveness within the global economy.”
Serge Ekué, the President of BOAD, commended “the commitment and growing partnership between Africa and the OPEC Fund, which translated into support to BOAD for several decades now, thereby contributing to growth and sustainable development in the WAEMU member countries.” He added that the implementation of this framework agreement will help support the objectives of BOAD’s new strategic plan for 2021-2025, with the “aim of increasing the impact of its operations in terms of development outcomes by funding productive investments and creating jobs for youth and women, while focusing on micro-, small- and medium-sized enterprises (MSMEs), transport infrastructure and digitalization, agriculture and food security, energy, real estate, health and education.”
More Stimulus is Welcomed – But What’s Needed is Smarter Stimulus
Stock markets are cautiously upbeat that a stimulus package can be agreed in the U.S. before the November 3 election – but even if it does happen, it’s likely to be a “short-lived sticking plaster” that masks the major long-term issue: unemployment.
This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.
It comes as House Speaker Nancy Pelosi and Secretary Steven Mnuchin spoke again on Tuesday – the deadline imposed by the Speaker – as the two sides try and strike a deal over another significant fiscal stimulus package ahead of the election.
Earlier this month, Republican senators slammed a $1.8 trillion offer made by the Trump administration to the Democrats as too big, an offer Ms Pelosi dismissed as “insufficient.”
Discussions are due to continue on Wednesday upon the Secretary’s return to Washington.
Nigel Green warns: “No doubt, a breakthrough of the deadlock that would allow for more stimulus would provide a lifeline to millions and millions of Americans.
“U.S. and global markets are, generally, cautiously optimistic that a deal can be agreed by the two sides.
“There’s a sentiment that something will have to materialize – and this is fueling markets.
“However, the window of opportunity is closing and it is not yet a done deal.
“If talks collapse, the markets will inevitably be disappointed and there’s likely to be a short-lived sell-off.”
He continues: “Even if Pelosi and Mnuchin can get another massive stimulus package agreed, and U.S. and global markets rise, this is likely to serve only as a sticking plaster.
“A market rally is going to be difficult to be sustained due to the enormous uncertainty created by other factors including the presidential election, a possible looming constitutional crisis in the world’s largest economy, and the growing Covid-19 infections in America and other major economies.”
The deVere CEO goes on to add: “Getting over the political impasse would help boost the economy and deliver much-needed money to Americans, but the major, lasting issue triggered by the pandemic remains: mass unemployment, which will hit demand, growth and investment.
“As such, a swift rebound for the U.S. economy is doubtful as unemployment claims continue to rise.
“That V-shaped recovery talked about by so many? That will be impossible with so many millions facing long-term unemployment.”
Whilst it is certainly positive that unemployment has fallen from 15% in the U.S. to 11% in recent weeks, it should be remembered that this is still at the same rate of the 2008 crash.
In addition, a second wave of soaring unemployment could hit imminently as some support measures wind-down and business’ and households’ savings and resources have been already run-down.
Mr Green concludes: “Near-term support for sure, but a long-term strategy – a multi-year vision – for growth and investment is essential.
“What’s needed is not just more stimulus, but smarter stimulus.”
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