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Reps Tell Kachikwu, Baru to Halt Refineries’ $1.8bn TAM

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  • Reps Tell Kachikwu, Baru to Halt Refineries’ $1.8bn TAM

The House of Representatives on Thursday asked the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Maikanti Baru, to halt the Federal Government’s bid to spend $1.8bn on another Turn Around Maintenance on the country’s four refineries.

The refineries, two located in Port Harcourt and one each in Kaduna and Warri, have largely been unable to refine crude for domestic consumption and possible exportation of finished products.

The NNPC takes 445,000 barrels of crude daily for the purpose of refining for domestic consumption, but the country now depends almost 100 per cent on importation for its fuel energy needs.

A House resolution in November 2017 had directed the NNPC to stop the fresh TAM, pending the outcome of an investigation by the House into the many maintenance efforts carried out on the facilities in the past.

The Chairman of the ad hoc committee set up by the House to conduct the probe, Mr. Garba Datti-Muhammad, stated in Abuja on Thursday that the panel had commenced the investigation.

However, he stated that the committee had received hints that the NNPC was actually proceeding with the project in disobedience to the House resolution.

He restated the House’s resolution and asked Kachikwu and Baru to halt the TAM until the probe had been concluded.

Datti-Muhammad said, “The committee has commenced action on the matter and its attention has been drawn to the NNPC’s intention to spend $1.8bn on the TAM of the said four refineries.

“The committee has communicated to the minister and the GMD, requesting them to stay action pending the outcome of the committee’s investigation into the matter.”

Datti-Muhammad, who pleaded with Nigerians to be patient with the House to conduct the probe, stated that it would help to unravel the reason the refineries never worked despite the huge funds sunk into TAM in the past.

In its November 2017 resolution, the House had noted that the same refineries had already gulped more than $20bn on TAM but without appreciable improvement in performance to justify the expenditure.

The House said that Nigeria’s refineries had the worst performance record in Africa of 11 per cent, compared to the 81 per cent scored by Egypt and 85 per cent recorded by South Africa.

A motion moved by a member from Ogun State, Mr. Ibrahim Isiaka, described the performance of the refineries as abysmal.

“The House is cognisant that whopping sums of $308m; $57m; $200m; and lately, more than N264bn were spent, yet it was reported that the NNPC is seeking $1.8bn to carry out another TAM to make the refineries attractive to investors,” Isiaka stated.

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

More Stimulus is Welcomed – But What’s Needed is Smarter Stimulus

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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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Business

The Highest Corporation Taxes Around the World and the Main Drivers Behind them

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Taxes Pay by Corporation Around the World and the Main Drivers Behind them

While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.

The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.

On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?

OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.

South America has most countries in highest corporation tax top 10

According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.

It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.

Africa: the continent with the highest average corporation tax

Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?

South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?

Country Continent Tax (%)
Puerto Rico North America 37.5
Zambia Africa 35
Brazil South America 34
Venezuela South America 34
France Europe 33.3
Columbia South America 33
Morocco Africa 31
Japan Asia Pacific 30.62
Mexico North America 30
Argentina South America 30
Germany Europe 30
Australia Asia Pacific 30
Philippines Asia Pacific 30
Kenya Africa 30
Nigeria Africa 30
Congo Africa 30
Belgium Europe 29
Pakistan Asia Pacific 29
Sri Lanka Asia Pacific 28
New Zealand Asia Pacific 28
South Africa Africa 28
Luxembourg Europe 27.08
Chile South America 27
Canada North America 26.5
Algeria Africa 26
India Asia Pacific 25.17
Jamaica North America 25
Chile South America 25
Ecuador South America 25
Netherlands Europe 25
Spain Europe 25
Austria Europe 25
South Korea Asia Pacific 25
Bangladesh Asia Pacific 25
China Asia Pacific 25
Indonesia Asia Pacific 25
Zimbabwe Africa 25
Tunisia Africa 25
Greece Europe 24
Italy Europe 24
Malaysia Asia Pacific 24
Israel Middle East 23
Egypt Africa 22.5
Norway Europe 22
Denmark Europe 22
Turkey Europe 22
Sweden Europe 21.4
United States North America 21
Portugal Europe 21
Russia Europe 20
Finland Europe 20
Iceland Europe 20
Afghanistan Asia Pacific 20
Azerbaijan Asia Pacific 20
Kazakhstan Asia Pacific 20
Thailand Asia Pacific 20
Vietnam Asia Pacific 20
Cambodia Asia Pacific 20
Taiwan Asia Pacific 20
Saudi Arabia Middle East 20
Jordan Middle East 20
Yemen Middle East 20
Madagascar Africa 20
Libya Africa 20
Slovenia Europe 19
Czech Republic Europe 19
Poland Europe 19
United Kingdom Europe 19
Belarus Europe 18
Croatia Europe 18
Switzerland Europe 18
Ukraine Europe 18
Singapore Asia Pacific 17
Hong Kong Asia Pacific 16.5
Lithuania Europe 15
Georgia Asia Pacific 15
Maldives Asia Pacific 15
Kuwait Middle East 15
Iraq Middle East 15
Ireland Europe 12.5
Cyprus Europe 12.5
Bulgaria Europe 10
Qatar Middle East 10
Hungary Europe 9
Barbados North America 5.5

 

Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.

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Economy

Nigeria’s Crude Oil Production Declined to 1.31mbpd in September

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Nigeria’s Crude Oil Output Declined from 1.37mbpd in August to 1.31mbpd in September

The Organisation of the Petroleum Exporting Countries (OPEC) reported that Nigeria’s crude oil production declined by 58,000 barrels per day in the Month of September when compared to the nation’s oil production of August.

In its latest oil market report, the cartel said Nigeria produced 1.37 million barrels per day in the month of August but that number declined by 58,000 to 1.31 million barrels per day in September. Bringing the total decline for the 30 days of september to 1.74 million barrels.

On oil price movement in September, the organisation said prices settled lower in the month under review after four consecutive months of gains.

OPEC Reference Basket declined by 8.1 percent or $3.65 in September to $41.54 per barrel, while it moderated to $40.62 per barrel from the year-to-date.

Commenting on the recent changed in Nigeria’s monetary policy rate, the oil cartel said “the recent cut is a part of the policy to continue supporting the economy that plunged 6.1 per cent in the second quarter hit by the global pandemic.

“Nevertheless, Nigeria’s annual inflation rate surged to the highest rate since March 2018 in August 2020, as it rose to 13.22 per cent year-on-year from 12.82 per in in July.

Oil prices sustained bullish trend on Thursday after data showed U.S oil inventories declined last week.

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