- South Africa CPI Unchanged at 4.5%
Prices of goods and services remained unchanged in South Africa in the month of June, according to Statistics South Africa.
The Consumer Price Index (CPI), which measures inflation, rose by 4.5 percent year-on-year, same as in May but 0.1 percent higher than economists’ projection.
On a monthly basis, prices rose by 0.4 percent in June, Statistics South Africa stated on Wednesday.
The inflation rate has remained below 4.5 percent since December 2018, forcing the South African Reserve Bank to lower its inflation projection from 4.5 percent to 4.4 percent during last week Monetary Policy Committee meeting.
Also, the apex bank cut the benchmark rate by 25 basis points to 6.5 percent in an effort to stimulate growth and support job creation amid a slowing economy.
Still, price pressures remain subdued with core inflation around 4.1 percent and 4.3 percent.
Meanwhile, the South African economy contracted by 3.2 percent in the first quarter, forcing global credit ratings to lower the country’s 2019 growth forecast. Moody’s lowered South Africa’s growth projection for 2019 to 1 percent, down from the 1.3 percent previously predicted.
“The quarterly decline, the largest in 10 years, is credit negative for the Government of South Africa’s (Baa3 stable) revenue and policy options,” Lucie Villa, Moody’s lead sovereign analyst for South Africa, wrote in a research report.
NNPC Spends N101.65bn on Petrol Subsidy in Q1 2020
FG Spends Petrol N101.65bn on Petrol Subsidy in the First Quarter
The Nigerian National Petroleum Corporation (NNPC) said it spent N101.65 billion on petrol subsidy in the first three months of the year.
In its latest Monthly Financial and Operations report released in the month of March, the corporation described the spending as under-recovery.
A break down shows N43.31 billion was spent in January while N20.68 billion and N37.66 billion were spent in February and March respectively.
The amount was spent before the Federal Government halted subsidy following the decline in global oil prices due to the COVID-19 pandemic.
Speaking on subsidy, the former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said “There is no need for subsidy again because they are using it to make unnecessary demands and this is the corruption that we are talking about. They are also using it to finance corruption too.
“The money that they would have used for other sectors or even send to FAAC is being used for subsidy and we cannot actually quantify its impact on the masses; rather, it is used to enrich a very few.”
Nzekwe urged the PPPRA to ensure subsidy does not return and encouraged the government to liberalise the downstream oil sector in order to allow other marketers to participate in fuel importation.
He said, “The NNPC should not be the only one importing petrol. The downstream sector must not continue like this. Other players should be allowed to play in the space too. The sector should be fully liberalised.
“And it is because the NNPC is the only one importing and almost running everything that makes it simple for it to say whatever it wanted as expenses on subsidy or under-recovery. This should not continue.”
Oil Prices Decline on Rising COVID-19 Cases
Global Oil Prices Dipped on Friday as New COVID-19 Cases Jump Globally
Global oil prices decline on Friday as the number of confirmed COVID-19 cases surged across the world.
Brent crude oil, against which Nigerian oil is priced, declined from $43.47 per barrel it traded on Thursday during the Asian trading session to $41.60 per barrel on Friday at around 11:39 am Nigerian time.
Oil traders and investors are worried that the rising number of COVID-19 new cases would disrupt demand for the commodity and force refineries to shut down once again.
“I do not suspect many oil traders will be looking to place significant bids in the market today, suggesting prices may continue to wallow into the weekend,” said Stephen Innes, chief global markets strategist at AxiCorp.
Despite efforts by both OPEC plus and other top oil producers to halt falling oil prices and reduce global oil glut, the lack of a cure for COVID-19 remained global concerns.
As previously stated on this platform, until a cure is found the world would have to find a way to either work through COVID-19 or shut down activities completely.
This is coming a day after the Federal Government of Nigeria announced that it was putting school resumption plan on hold following the latest COVID-19 report that shows Nigeria’s confirmed cases crossed 30,000 on Wednesday.
In the United States, more than 60,000 new COVID-19 cases were reported on Thursday, forcing lawmakers to start contemplating the second phase of COVID-19 lockdown.
We Are Losing N13.9bn Monthly Because FG Caps Tariff – Discos
Discos Says it is Losing N14bn Monthly Because of NERC Capped Tariff
The Nigerian power Distribution Companies (Discos) have said they a losing N13.9 billion in revenue every month because the Nigerian Electricity Regulatory Commission, limited how much they can charge for consumption.
Ernest Mupwaya, the Managing Director, Abuja Electricity Distribution Company, made the statement during a presentation on behalf of the Discos to the House of Representatives Committee on Power.
The statement was after the Discos demanded realistic indices before the implementation of the proposed service reflective tariff, which was supposed to be implemented on July 1.
Mupwaya said there were some outstanding requirements before the service reflective tariff could be implemented.
“One of them is the removal of estimated billing caps. The financial impact of the Capping Order is an average loss of N13.9bn monthly, thereby, undermining or jeopardising the minimum remittance requirement,” Mupwaya stated.
The July 1 service tariff implementation was halted by members of the National Assembly, who prevailed on the Discos to shelve the date to the first quarter of 2021 due to the current economic challenges in Nigeria.
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