Connect with us

Economy

Buhari Constitutes Committee to Assess COVID-19 Effect on Economy

Published

on

Share

By Mathew Dadiya, Abuja

In a prompt effort to curtail the impact of the COVID-19 otherwise known as Coronavirus on the Nigerian economy with the plunge in the global oil prices from $53 last week to $35, President Muhammadu Buhari has constituted an economic committee to review the oil benchmark in the 2020 budget.

The committee which is chaired by the Minister of Finance, Budget and National Planning, Mrs Ahmed had the Minister of State, Petroleum Resources, Timipre Sylva, Minister of State, Budget and National Planning, Prince Clement Agba, Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele and the Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mela Kyari as members.

Speaking with State House correspondents on Monday, after meeting with President Buhari at the President Villa, Abuja, the Minister of Finance, Budget and National Planning disclosed that the committee would review the $57 crude oil price benchmark in the budget and might reduce the 2020 budget. 

She said: “Mr. President has formed us into a committee with the minister of State, Petroleum Resources, the Central Bank governor, GMD NNPC and myself as members.

“Our mandate is to make a very quick  assessment of the impact of this coronavirus on the economy especially as it effects the crude oil price.

“We will be writing a report and brief Mr. President tomorrow (Tuesday) or Wednesday morning. After that we will also have more substantial information for the press.

“It is very clear that we will have to revisit crude oil benchmark price that we have of $57 per barrel. We have to revisit it and lower the price. Where it will be lowered is the subject of this committee. What the impact will be on that is that there will be reduce revenue to the budget at it will cut the size of the budget. The quantum of the cut is what we are supposed to assess as a committee.”

Asked if Nigeria intends to dialogue with Russia and other OPEC+ members to cutdown oil output, the Minister of State Petroleum, Timipre Sylva, said, “we as a member of OPEC are not in a position to take that engagement on our own unilaterally. There was a disagreement between OPEC and OPEC+, it’s not just Russia, but the biggest producers within OPEC and OPEC+ which are Saudi Arabia and Russia.

“We believe that in the coming days when all of us would have begun to see effect of the reduction of prices, OPEC and OPEC+ might need to meet again and reconsider our positions.

Meanwhile, Sylva said that they expected also that a lot of discussions were going on at the level of Saudi Arabia and Russia, but as Nigeria, “we are not in a position to begin to engage members on this matter.”

Oil prices suffered their biggest fall since the day in 1991 when American forces launched air strikes on Iraqi troops following their invasion of Kuwait.

Monday’s crash spooked markets crash that were already freaking out about the impact of the coronavirus pandemic on the global economy and demand for oil. Brent crude futures, the global oil benchmark, were down 22%, last trading at $35.45 per barrel. US oil is trading at $33.15 per barrel, a decline of nearly 20%

Here are five things you need to know:

Why are oil prices crashing?

Saudi Arabia, the world’s top exporter, launched a price war over the weekend. The move followed the imposition of an alliance between the OPEC cartel, led by Saudi Arabia, and Russia.

The kingdom and Russia came together to form the so-called OPEC+ alliance in 2016 after oil prices plunged to $30 a barrel. Since then, the two leading exporters have orchestrated supply cuts of 2.1 million barrels per day. Saudi Arabia wanted to increase that number to 3.6 million barrels through 2020 to take account of weaker consumption.

But Russian President Vladimir Putin, worried about ceding too much ground to American oil producers, refused to go along with the plan and his energy minister, Alexander Novak on Friday signaled a fierce battle to come for market share when he said countries could produce as much as they please from April 1.

Why did Saudi launch a price war?

Simmering differences over how best to manage global oil markets spilled into the open at a meeting between OPEC and Russia in Vienna on Friday. 

CNN Business quoted sources as saying that after Russia said it was ditching the alliance, Saudi Arabia warned it would live to regret the decision.

Moscow had become tired of cutting production to stabilize prices and felt that the policy of supply restraint gave more room for US shale companies to grow. Mikhail Leontiev, a spokesperson for Russian state oil company Rosneft, described the OPEC+ deal as “masochism.”

“By yielding our own markets, we remove cheap Arab and Russian oil to clear a place for expensive US shale oil and ensure the effectiveness of its production,” he told Russian state media on Sunday.

America has become the number one oil producer in the world and is expected to pump about 13 million barrels a day in the first quarter of this year.

Over the weekend, Saudi Arabia decided to fight for greater market share by slashing the prices its preferred customers pay by between $4-$7 a barrel. The kingdom is also reportedly planning to lift production to over 10 million barrels a day.

What does coronavirus have to do with all of this?

The coronavirus has undermined energy demand worldwide, but especially in China, which is now the number one importer of crude oil, guzzling roughly 10 million barrels a day.

Economy

We’ll Continue Borrowing Within Sustainable Limits- FG

Published

on

Share

 The Federal Government says it will continue to borrow within manageable and sustainable limits in accordance with the Debt Management Office (DMO) debt sustainability framework.

This is contained in a statement by the Director, Information and Public Relations in the Ministry of Finance, Mr Mohammed Manga, in Abuja on Wednesday.

President Bola Tinubu recently requested the approval of the 2024 – 2026 external borrowing rolling plan from the National Assembly.

Tinubu has requested the National Assembly’s approval to secure external loans of 21.5 million dollars and 15 billion Yuan, along with a grant of 65 million Euro, as part of the federal government’s proposed 2025–2026 external borrowing plan.

Manga said that the proposed borrowing plan was an essential component of the Medium-Term Expenditure Framework (MTEF) in accordance with both the Fiscal Responsibility Act 2007 and the DMO Act 2003.

“The plan outlines the external borrowing framework for both the federal and sub-national governments over a three-year period, accompanied by five detailed appendices on the projects, terms and conditions, implementation period, etc.

“By adopting a structured, forward-looking approach, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad-hoc or reactive borrowing practices.

“This strategic method enhances the country’s ability to implement effective fiscal policies and mobilise development resources,” he said.

According to the statement, the borrowing plan does not equate to actual borrowing for the period.

“The actual borrowing for each year is contained in the annual budget. In 2025, the external borrowing component is 1.23 billion dollars, and it has not yet been drawn.

“This is planned for H2 2025, the plan is for both federal and several state governments across numerous geopolitical zones including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.

“Importantly, it should be noted that the borrowing rolling plan does not equate to an automatic increase in the nation’s debt burden.

“The nature of the rolling plan means that borrowings are split over the period of the projects, for example, a large proportion of projects in the 2024–2026 rolling plan have multi-year drawdowns of between five to seven years which are project-tied loans,” Manga said.

He said that these projects cut across critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for security, rail and road infrastructure.

According to him, the majority of the proposed borrowing will be sourced from the country’s development partners, like the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank.

Manga said that these institutions offer concessional financing with favourable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.

He said that the government seeks to reiterate that the debt service to revenue ratio has started decreasing from its peak of over 90 per cent in 2023.

Manga said that the government has ended the distortionary and inflationary ways and means.

According to him, there is significant revenue expectations from the Nigerian National Petroleum Corporation Limited (NNPC Ltd), technology-enabled monitoring and collection of surpluses from government owned enterprises and revenue-generating ministries, departments, and agencies and legacy outstanding dues.

“Having achieved a fair degree of macroeconomic stabilisation, the overarching goal of the federal government is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth.

“Achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture.

“These investments will lay the groundwork for long-term economic diversification and encourage private sector participation.

“Our debt strategy is therefore guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing,” he said.(NAN)

 The Federal Government says it will continue to borrow within manageable and sustainable limits in accordance with the Debt Management Office (DMO) debt sustainability framework.

This is contained in a statement by the Director, Information and Public Relations in the Ministry of Finance, Mr Mohammed Manga, in Abuja on Wednesday.

President Bola Tinubu recently requested the approval of the 2024 – 2026 external borrowing rolling plan from the National Assembly.

Tinubu has requested the National Assembly’s approval to secure external loans of 21.5 million dollars and 15 billion Yuan, along with a grant of 65 million Euro, as part of the federal government’s proposed 2025–2026 external borrowing plan.

Manga said that the proposed borrowing plan was an essential component of the Medium-Term Expenditure Framework (MTEF) in accordance with both the Fiscal Responsibility Act 2007 and the DMO Act 2003.

“The plan outlines the external borrowing framework for both the federal and sub-national governments over a three-year period, accompanied by five detailed appendices on the projects, terms and conditions, implementation period, etc.

“By adopting a structured, forward-looking approach, the plan facilitates comprehensive financial planning and avoids the inefficiencies of ad-hoc or reactive borrowing practices.

“This strategic method enhances the country’s ability to implement effective fiscal policies and mobilise development resources,” he said.

According to the statement, the borrowing plan does not equate to actual borrowing for the period.

“The actual borrowing for each year is contained in the annual budget. In 2025, the external borrowing component is 1.23 billion dollars, and it has not yet been drawn.

“This is planned for H2 2025, the plan is for both federal and several state governments across numerous geopolitical zones including Abia, Bauchi, Borno, Gombe, Kaduna, Lagos, Niger, Oyo, Sokoto, and Yobe States.

“Importantly, it should be noted that the borrowing rolling plan does not equate to an automatic increase in the nation’s debt burden.

“The nature of the rolling plan means that borrowings are split over the period of the projects, for example, a large proportion of projects in the 2024–2026 rolling plan have multi-year drawdowns of between five to seven years which are project-tied loans,” Manga said.

He said that these projects cut across critical sectors of the economy, including power grids and transmission lines, irrigation for improving food security, fibre optics network across the country, fighter jets for security, rail and road infrastructure.

According to him, the majority of the proposed borrowing will be sourced from the country’s development partners, like the World Bank, African Development Bank, French Development Agency, European Investment Bank, JICA, China EximBank, and the Islamic Development Bank.

Manga said that these institutions offer concessional financing with favourable terms and long repayment periods, thereby supporting Nigeria’s development objectives sustainably.

He said that the government seeks to reiterate that the debt service to revenue ratio has started decreasing from its peak of over 90 per cent in 2023.

Manga said that the government has ended the distortionary and inflationary ways and means.

According to him, there is significant revenue expectations from the Nigerian National Petroleum Corporation Limited (NNPC Ltd), technology-enabled monitoring and collection of surpluses from government owned enterprises and revenue-generating ministries, departments, and agencies and legacy outstanding dues.

“Having achieved a fair degree of macroeconomic stabilisation, the overarching goal of the federal government is to pivot the economy onto a path of rapid, sustained, and inclusive economic growth.

“Achieving this vision requires substantial investment in critical sectors such as transportation, energy, infrastructure, and agriculture.

“These investments will lay the groundwork for long-term economic diversification and encourage private sector participation.

“Our debt strategy is therefore guided not solely by the size of our obligations, but by the utility, sustainability, and economic returns of the borrowing,” he said.(NAN)

Continue Reading

Economy

Organise Informal Sector, Tax Prosperity Not Poverty, Adedeji Tasks Officials

Published

on

Share

The Chairman, Joint Tax Board (JTB), Dr Zacch Adedeji, has urged officials of the board to organise traders and artisans into a formal body before capturing them in the tax net.

Adedeji said that this was in line with the agenda of President Bola Tinubu not to tax poverty but prosperity.

The chairman stated this at the 157th Joint Tax Board meeting held in Ibadan, on Monday.

The theme of the meeting “Taxation of the Informal Sector: Potentials and Challenges”.

Speaking on the theme of the event, Adedeji stressed the need to evolve a system that would make the informal sector formal before it could be taxed.

Adedeji, who also doubles as the Chairman, Federal Inland Revenue Service, (FIRS), said “What I would not expect from the JTB meeting is to define a system that would tax the informal sector.

“The only thing is to formalize the informal sector, not to design a system on how to collect tax from market men and women.

“As revenue administrator, our goal is to organise the informal sector so that it can fit into existing tax law.”

Citing a report of the National Bureau of Statistics (NBS) in the first quarter of 2023, the chairman said that the nation’s unemployment index was attributable to recognised informal work.

Adedeji stated that workers in that sector accounted for 92.6 per cent of the employed population in the country as at Q1 2023.

“JTB IS transiting to the Joint Revenue Board with expanded scope and functions.

“We are hopeful that by the time we hold the next meeting of the Board, the Joint Revenue Board (Establishment) Bill would have been signed into Law by the President.

“The meetings of the board provide the platform for members to engage and brainstorm on contemporary and emerging issues on tax, and taxation,” he said.

In his address, Gov. Seyi Makinde of Oyo State, said the theme of the meeting was apt and timely, stressing that it coincides with the agenda of the state to improve on its internally generated revenue.

According to him, the meeting should find the best way forward in addressing the issue of the informal sector and balance the identified challenges.

“Nigeria is rich in natural resources, but it is a poor country because economic prosperity does not base on natural resources,”

Makinde also said that knowledge, skill and intensive production were required for economic prosperity, not just the availability of natural resources.

He stressed the need to move from expecting Federal Allocations to generating income internally.

“We are actively ensuring that people are productive and moving the revenue base forward,” Makinde said.

The governor said that tax drive should be done by simplifying tax processes, incentives for compliance like access to empowerment schemes and loans.

He urged JTB to deepen partnership and innovation in using data on tax to track and administer it.

Earlier, the Executive Chairman, Oyo State Board of Internal Revenue, Mr Olufemi Awakan, said the meeting was to address tax-related matters, evolve a workable, effective and
efficient tax system across the states and at the Federal level.

He urged participants to find amicable solutions to challenges of tax jurisdiction, among others.

Tax administrators from all the 36 states of the federation, who are members of JTB, were in attendance. (NAN) 

Continue Reading

Economy

Customs Zone D Seizes Contraband Worth N110m

Published

on

Share

The Nigeria Customs Service (NCS), Federal Operation Unit (FOU), Zone D, has seized smuggled goods worth over N110 million between April 20 till date.

The Comptroller of Customs, Abubakar Umar, said this at a news conference on Tuesday in Bauchi.

He listed the seized items to include 11,200 litres of petrol; 192 bales of second hand clothing, 140 cartons of pasta, 125 pairs of jungle boots, 47 bags of foreign parboiled rice and 9.

40 kilogramme of pangolin scales.

Umar said the items were seized through increased patrols, intelligence-led operations, and strengthened inter-agency collaboration.

The comptroller said the pangolin scales would be handed over to the National Environmental Standards and Regulations Enforcement Agency (NESREA) for appropriate action, while the seized petrol would be auctioned, and the proceeds remitted to the federation account.

He attributed the decrease in smuggling activities of wildlife, narcotics, and fuel to the dedication and professionalism displayed by the personnel in line with Sections 226 and 245 of the NCS Act 2023.

The comptroller enjoined traders to remain law abiding, adding the service would scale up sensitisation activities to combat smuggling.

“We remain resolute in securing the borders and contributing to Nigeria’s economic development,” he said.

The FOU Zone D comprises Adamawa; Taraba, Bauchi, Gombe, Borno, Yobe, Plateau, Benue and Nasarawa. (NAN)

Continue Reading

Read Our ePaper

Top Stories

Foreign News13 hours ago

Israel Vows to Build Jewish Settlements, Rejects Macron’s Call for Palestinian State

Share “Do not threaten Israel with sanctions” as it will continue to build a “Jewish state” on the ground,” Israeli...

NEWS13 hours ago

Stock Market Sheds N48bn Amid Sell-offs

Share The stock market on Friday closed the week on a bearish note, as key performance indicators dipped by 0.07...

JUDICIARY13 hours ago

Judiciary Workers Threaten Strike from June 2

Share The Judiciary Staff Union of Nigeria (JUSUN) has directed its members in all federal courts nationwide and other judicial...

NEWS13 hours ago

Customs Intercepts 39,425 Litres of Smuggled Petrol

ShareThe Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, said Operation Whirlwind intercepted 39,425 litres of petrol worth ₦39.4 million...

NEWS13 hours ago

Enugu Govt. Says Suspected Ritualist, Obieze, will Face Wrath of Law

Share The Enugu State Government says the arrested suspected ritualist and kidnap kingpin, Obi-Levi Obieze, will face the full weight...

NEWS13 hours ago

Zamfara Gov., Residents Celebrate Return of Peace

ShareGov. Dauda Lawal has expressed joy over the return of peace and security in Zamfara, saying that the State Government...

NEWS13 hours ago

WHO Seeks Urgent Action to Ban Flavoured Tobacco, Nicotine Products

ShareThe World Health Organisation (WHO) on Friday launched a new publication and called on governments to urgently ban all flavours...

NEWS13 hours ago

Anniversary Celebration: C’River Govt. Showcases Otu’s Landmark Projects

Share The Cross River Government, on Friday, conducted newsmen round some of the completed and ongoing landmark projects undertaken by...

NEWS13 hours ago

Police Crack Down on Armed Robbery, Vehicle Theft in Kaduna

ShareThe Police Command in Kaduna State, said it has has made significant strides in combating crime, arresting suspects and recovering...

NEWS14 hours ago

New NSCC D-G Assumes Office, Promises Inclusion of Nigeria’s Senior Citizens

ShareThe newly appointed Director-General, National Senior Citizens Centre (NSCC) Mrs Omobolanle Akinyemi-Obe, has pledged to lead a renaissance in the...

Copyright © 2021 Daily Asset Limited | Powered by ObajeSoft Inc