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Steel Industry Capable of Revamping Economy if Properly Harnessed

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  • Steel Industry Capable of Revamping Economy if Properly Harnessed

A member of the House of Representatives, Emmanuel Egwu (APC-Kogi), has called on the Federal Government to revamp Ajaokuta Steel Company Limited (ASCL) in Kogi state.

According to the lawmaker, revamping the company would help in the diversification of the nation’s economy and reduce the country’s over dependence on oil.

He explained that the steel plant in Ajaokuta was designed to be the driving force of Nigeria’s technological advancement.According to Egwu, the need to revamp the nation’s steel sector is now more compelling than ever before as the global oil price continues to drop.

“However, since its inauguration in 1983, the company has been embroiled in managerial ineptitude and controversies. Obsolete machines like outdated blast furnace model are also challenges plaguing the establishment,” he noted.

He further said that in spite of its initial completion, the plant had suffered years of neglect under successive administrations.“Kogi State is endowed with a lot of human resources, but unfortunately have not been able to metamorphose into infrastructural development, which is a serious concern to many. The state is faced with several abandoned federal projects which call for urgent attention.

“Most significant is that of the iron and steel Industry that would have been a hub for development in Africa. The iron ore industry that is supposed to be at Itakpe has not been maximally explored which is not of good Interest for Nigeria and even the international community,” he said.

He added that not much had been done about Iron and steel industry, therefore called on the federal government to intensify efforts at revamping the Iron and steel industry in the country.

He however expressed confidence that if the steel sector is given further attention, it would boost rapid infrastructural development in Nigeria, Africa and would also meet the international needs of the industrialised nations.

“We are talking about diversification to mineral resources. The first significant step should be Iron Ore. At the international level, there is no way you can go into development without iron.

“It is the need of every country, so I think it is another area that the country should have diverted to with significant attention that would boost the economy of the country,” he said.

On efforts made to address the issue on the floor of the House, Egwu said that motions on Iron and steel industry had been raised severally.

Egwu added that the state government’s delegation would be meeting with President Muhammadu Buhari soon on how to address the matter.“We are thinking of how to foster a consolidated forum that will meet with Mr President but of course, I think we would need the governor of the state who has to be a major stakeholder in that delegation.

“I think when that is resolved, we would move to the president to seek for his attention on this noble industry that has been abandoned for many years. When we meet with the President, one of our demands would be on the need for industrialisation of the Iron and steel, another is to see how we can boost the agricultural terrain in Kogi,” he said.

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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

Investment

Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies

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Barclays Bank

Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies

Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.

According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.

The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.

It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.

“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”

Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.

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Economy

Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension

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  • Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension

Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.

OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.

In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.

Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.

Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.

While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.

Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.

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Economy

Gold Dips by 2 Percent on Better Than Expected Job Report

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  • Gold Dips by 2 Percent on Better Than Expected Job Report

Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.

The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.

The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.

“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.

Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.

Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.

The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.

Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.

Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.

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