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The Federal Government of Nigeria recently projected key assumptions in running the 2019 budget.

Director-General, Budget Office of the Federation, Mr. Ben Akabueze, rolled out the figures for the key assumptions during a public hearing on the Medium Term Expenditure Framework (MTEF)

The hearing was organised by the House of Representatives Joint Committee on Finance, Appropriation, Aids, Loans and Debt Management headed by Babangida Ibrahim, yesterday, in Abuja.

Akabueze said the 2019 budget is expected to run at nominal Gross Domestic Product, GDP, of 139.65 trillion and 3.01 percent of GDP growth.

He noted that other key assumptions of micro-framework of the budget are based on a projection of 2.3 mbpd oil production, oil price benchmark of $60pb, exchange rate of N305 to a dollar, 9.98 inflation rate and 119,28 trillion nominal consumption.

Similarly, Economic Recovery Growth Plan (ERGP) also projected oil production at 2.4mbpd, oil price benchmark of $50pb, exchange rate of N305 to a dollar, 13.39 inflation rate, 106, 03 trillion nominal consumption, 126, 36 trillion nominal GDP and 4.5 percent GDP growth rate.

“As at the end of 2018, Federal Government aggregate revenue was N3.96 trillion, which is 55 percent of the budget and which is higher than the 2017 revenue,” he said.

While explaining the parameters, he placed oil revenue at N2.32 trillion, 77 percent of budget and 64 percent higher than 2017; Company Income Tax, CIT, of N637, 25 billion, 80 percent of budget and 1.7 percent higher than 2017 and Customs Collection of N303, 91billion, 94 percent of budget and 16 percent higher than 2017.

He added that “Notwithstanding the softening in the international oil prices in late 2018, the opinion of most reputable oil industry analysts is that the downward trend is not necessarily reflective of the outlook for 2019.

‘’Currently, the average Brent oil price projection for 2019 by 32 different institutions with relevant expertise is still about $69/b,’’ he explained.

He mentioned that President Muhammadu Buhari had directed the Nigerian National Petroleum Corporation (NNPC) to take all possible measures to achieve the targeted oil production of 2.3 million barrels per day.

South Sudan on Friday opened an investment conference, the first dedicated to post-war funding as the country emerges from five years of brutal civil conflict.

The conference, dubbed “Doing Business in South Sudan,” aims to connect international corporations, individuals and private equity to South Sudan’s investment opportunities, said event organiser, Akol Nyok.

The day-long conference would enable government officials, local and international investors to take part in presentations, networking sessions and panel discussions.

“There is the need for transfer of information between people doing business in South Sudan and people externally,’’ Nyok said.

He added that the event could serve as a medium to provide people with practical information on doing business in the country.

“We believe that the private sector is the key to growth, and we think that as young people, we should play a role on how we can create jobs, how we can bring investment and how we can increase opportunities in this country,’’ he said.

According to the World Bank, South Sudan is the most oil-dependent nation in the world, with oil accounting for around 60 per cent of its gross domestic product (GDP).

However, after the young nation descended into civil war in late 2013, oil production fell from 350,000 barrels per day (bpd) in 2011 to less than 130,000 bpd in 2014 amid soaring inflation and economic crunch.

Outside the oil sector, the country has high potential in agriculture, which largely remains unexploited as only four per cent of South Sudan land is under cultivation, according to a report by KPMG in 2017.

South Sudan is also home to more than 30 million livestock such as cattle, goats and sheep.

Nyok said in spite obstacles hindering investment in South Sudan, the September 2018 peace agreement provides opportunities for business to pick up in the conflict-torn country if it can hold.

“Five years from now, I see a network of South Sudan entrepreneurs, international entrepreneurs spanning continents and I see a network that provides investment opportunities in South Sudan,’’ he said.

Zimbabwe’s inflation rose to a new 10-year high of 59.39 per cent year-on-year in February from 56.9 per cent in January, the statistics agency Zimstats said on Friday.
 
Zimstats said in Harare that the inflation was pushed by increases in the price of basic goods.
 
On a monthly basis, prices increased by 1.67 per cent in February, compared to 10.75 per cent in the previous month.
 
Zimbabwe’s Central Bank Governor, John Mangudya had said on Monday that annual inflation rate should fall to between 10 and 15 per cent by the end of the year.
 
However, economists said the figure could be higher due to price pressures from the exchange rate and a drought.
South Africa’s President Cyril Ramaphosa and Zimbabwe’s president Emmerson Mnangagwa arrive for bilateral talks in Harare, Zimbabwe, on Tuesday (March 12 2019). Picture: Philimon Bulawayo/Reuters
President Cyril Ramaphosa said on Tuesday South Africa was ready to help Zimbabwe revive its economy, but within its means, while the two neighbours consider options that could see Harare receiving some financial assistance.
 
A dearth of US dollars in Zimbabwe has fanned shortages of fuel, drugs and food, choking an economy yet to recover from the disastrous rule of Robert Mugabe, who was removed in a coup in 2017.
 
South Africa said in January that it had turned down a request in December from its southern African neighbour for a $1.2 billion (about R17 billion) loan.
 
But in a joint communique issued after a meeting between Rampahosa and Zimbabwe’s president Emmerson Mnangagwa and officials, the two countries said they were looking at increasing a standing credit facility between central banks of the two nations.
 
Under the facility, Zimbabwe can access R100 million from South Africa’s central bank.
 
“Other financing options beyond this are also being explored, for example a facility from South African private banks to the Zimbabwean private sector and guaranteed by the South African government with an appropriate counter-guarantee from the Zimbabwean government,” the communique read.
 
Ramaphosa had earlier told the meeting that Zimbabwe, which also faces a severe drought this year, deserved support from the rest of the world to help reboot its economy.
 
He repeated his previous call for sanctions against Zimbabwe to be lifted.
 
Zimbabwe says US sanctions, which were extended by another year by President Donald Trump last week, throttle its ability to access funding from lenders like the International Monetary Fund and World Bank and raise its political risk profile.
 
“South Africa, Mr President, stands ready to render support to Zimbabwe within our means in your quest for economic renewal,” Ramaphosa said, without giving details on whether this would entail financial help.
 
“We want to see meaningful support being given by international development partners to Zimbabwe because Zimbabwe does deserve the support that the world can give.”
 
South Africa is Zimbabwe’s largest trading partner and home to millions of Zimbabweans who flocked to the country amid an economic meltdown during Mugabe’s rule.
 
Mnangagwa pledged to protect South African businesses operating in Zimbabwe, which range from mining to manufacturing to construction.
 

South Africa’s central bank says rising fuel and electricity prices posed a domestic risk to the inflation outlook and impact on its 2019 growth.

The apex bank governor, Lesetja Kganyago, gave the remarks on Wednesday after the latest fourth-quarter data showed an annualised growth of 0.8 per cent.

Besides, Kganyago said the impact of the volatile Rand currency and tightening global financial conditions were also being monitored for possible inflationary impacts.

The governor, however, maintained that he expected the economy to grow by 1.7 per cent this year and two per cent in 2020.

The South African government is forecast to be hit by a tax revenue shortfall of almost R43 billion for the tax year ending next month, Finance Minister Tito Mboweni indicated in his budget speech on Wednesday.
 
There were pronounced risks to the local economic outlook with the main risk of concern being power utility Eskom and its financial woes, the 2019 budget review report indicated.
 
The report indicated that government tax revenue for the 2019 fiscal year would come in at R43 billion under the target set at the 2018 budget speech.
 
“There are pronounced risks to the economic outlook. The main risk of concern is Eskom. Failure to fully implement the reconfiguration of Eskom could lead to a negative market reaction that would prompt capital outlflows, with greater pressure on the rand. It would also perpetuate weak investor confidence and reduce economic growth,” the report said.
 
In the worst case scenario, National Treasury is forecasting negative 1% growth this year while its best-case scenario is just over 2% growth.
 
Mboweni cut the National Treasury’s forecast for economic growth for this year from 1.7% to 1.5% due to “fragile recovery in employment and investment, and a less supportive global trade environment”.
 
By 2021, the National Treasury’s best-case scenario is growth of 3% and its worst-case scenario is 1%.
 
“The economic and revenue outlook has deteriorated since the October 2018 medium-term budgetary policy statement and funding pressures from state-owned companies have increased,” the medium-term budgetary policy statement said.
 
“Several other state-owned companies are also in financial distress and have requested government support. As a result, the contingency reserve has been revised up by R6 billion in 2019/20 and any funding provided will be offset by the sale of non-core assets. Additional reforms to strengthen the governance, finances and operations of state-owned companies will be announced in the months ahead,” the 2019 budget review report said.
 
State companies that are looking for bailouts include the South African Broadcasting Corporation (SABC) and Denel.
 
“Several state-owned companies face negative cash flows and are financing operations from debt, which has become increasingly difficult to raise. This moves them perilously close to default unless they receive some form of recapitalisation.”
 
In another worrying sign, debt owed to municipalities is increasing. At the end of March, debt owed to municipalities is forecast to climb to almost R159 billion from almost R99 billion at the end of March 2015.
 
Of debts owed by municipalities that are more than 90 days in arrears, Eskom is the major creditor – it is owed R12.8 billion – followed by water boards with R6.4 billion.
 
“From July 2018 to June 2019 municipal financial year, 113 municipal councils adopted unfunded budgets, up from 83 the prior year.”
 
The government is expecting to issue $2 billion (about R28 billion) in debt by the end of the 2019 fiscal year.
 
Over the next three years, the government will raise an additional $8 billion (about R114 billion) in global capital markets.
 
“This year’s budget underlines the National Treasury’s continued commitment to these requirements in a difficult environment in which economic growth remains weak, public debt and debt-service costs have accelerated and governance and operational concerns are manifest across the public sector,” the review report said.
 
“Weak economic performance and residual problems in tax administration have resulted in large revenue shortfalls,” the report said.
 
“The deteriorating financial position of state-owned companies has put additional pressure on the public finances,” the report added.
 
“The government’s efforts to reform state-owned companies and the launch of the infrastructure fund are expected to increase growth and investment in the year ahead,” the 2019 budget review report said.
 
For the 2020 fiscal year, consolidated government expenditure is forecast to R1.83 trillion.
Nigeria’s inflation dropped by 0.07 percent in January 2019, the National Bureau of Statistics reports.
 
According to the NBS, the consumer price index, (CPI) which measured inflation increased by 11.37 percent (year-on-year) in January 2019.
 
“This is 0.07 percent points lower than the rate recorded in December 2018 (11.44) percent. Increases were recorded in all COICOP divisions that yielded the Headline index,” it said.
 
On month-on-month basis, the NBS said the Headline index increased by 0.74 percent in January 2019, same rate as was recorded in December 2018 (0.74) percent.
 
“The percentage change in the average composite CPI for the twelve months period ending January 2019 over the average of the CPI for the previous twelve months period was 11.80 percent, showing 0.3 percent point from 12.10 percent recorded in December 2018.
 
“The urban inflation rate increased by 11.66 percent (year-on-year) in January 2019 from 11.73 percent recorded in December 2018, while the rural inflation rate increased by 11.11 percent in January 2019 from 11.18 percent in December 2018,” it added.
President Muhammadu Buhari has boasted about the economic policies of his administration, saying they are meeting the desired target.
 
The president stated this in Lagos on Saturday in a meeting with the Lagos business community, adding that the impact of the policies can be seen in the gradual growth of the nation’s economy in the last three years
 
According to President Buhari, he had kept his promise to boost the economy, through blocking leakages in government finances, increasing capital expenditure and inflows, and implementing the Economic Recovery and Growth Plan (ERGP), among others.
 
‘‘I firmly believe that our economic policies are beginning to make the desired impact. Economic growth has resumed and is continuing to improve.
 
‘‘Growth was higher in 2017 than in 2016, data even from external sources shows that it will be higher in 2018 than in 2017. I am confident that as we stay the course, it will be better still at the end of 2019.
 
‘‘Inflation is coming down steadily, there is stability in the exchange rate and foreign exchange is readily available for genuine business. Foreign reserves are adequate and growing; capital inflows have increased and the trade balance is positive.
 
‘‘We are paying off debts that were not even publicly acknowledged before now, including those owed to States, the electricity sector, oil marketers, exporters, backlog of salaries of workers and pensioners, amongst others.
 
‘‘I am happy that the results of the priority we have placed on this sector are beginning to show.
 
‘‘Our commitment is reflected in the resources that we are providing for infrastructure. In 2016 and 2017, capital expenditure was up to N2.7 trillion while over N800m has been released under the current budget.
 
‘‘This has been complemented by the inception of the $650 million Presidential Infrastructure Development Fund which will focus initially on the Lagos-Ibadan expressway, the Second Niger Bridge, the Abuja-Kano expressway and the Mambilla hydropower plant,’’ he said.
 
The President also highlighted completed and ongoing projects in the transport and aviation sector, expressing delight that the rail projects are generating excitement across the country because it would help local businesses to grow.
 
‘‘The Abuja-Kaduna railway is up and running. The Itakpe-Warri line is being test-run before going commercial. The completed portion of the Abuja light rail project is facilitating movement to the airport.
 
‘‘The Lagos-Ibadan railway is nearing completion with people already taking test rides on the completed portions. We are determined to work at the same pace on the Coastal Railway Line and the line from Port Harcourt to Maiduguri.
 
‘‘We completed the repairs to the runway in Abuja in record time, and just a few weeks ago, I commissioned the Baro Inland Port. All these achievements will help Nigerian businesses to grow,’’ he said.
 
“On future plans to sustain the positive economic outlook, the President said the Federal Government would raise more revenue to boost the economic fundamentals and increase the level and quality of government services in support of the private sector.
 
‘‘I recently inaugurated a Technical Advisory Committee to identify new sources of revenue in this regard. This is also to ensure that Government at all levels have the resources to pay the new national wage, which we are indeed committed to paying.
 
‘‘Our economic fundamentals are strong and, in the next four years by the grace of God, we are determined to stay the course in terms of partnerships with the private sector; support to the real sector; helping small businesses, providing infrastructure and an enabling business environment,’’ he said.
 
President Buhari further informed the gathering that his administration has also stimulated growth in the economy by adopting and implementing new strategies to deal with the security situation in the country and tackling rampant corruption.
 
 
Source: The Ripples
President Muhammadu Buhari has announced that the Nigerian National Petroleum Corporation (NNPC) will soon commence drilling for a deeper search for oil and gas in the Benue Trough.
 
This, he said, is the next step following the commencement of drilling in the Kolmani River area, located within Bauchi and Gombe States.
 
President Buhari, who made the announcement on Wednesday while addressing traditional rulers at the Banquet Hall, Government House, Makurdi, Benue State, recalled that as Minister of Petroleum in the 70s, he had seen “very interesting seismic surveys” that promised oil and gas from the Chad Basin through the Benue Trough down to the Delta region.
 
He said for mostly commercial reasons, investment was directed to the Niger Delta given the promise of quicker results.
He narrated past efforts by him as Military Head of State to diversify the country’s sources of oil to strengthen its unity, promising that his administration will intensify efforts in this direction.
 
President Buhari welcomed the observation by the Tor Tiv, His Royal Majesty, Professor James Ayatse, that peace had been restored to Benue State following the spike, sometimes back in farmers and herders’ clashes as well as the fact that the President had so far conducted a decent and peaceful campaign.
 
The President promised to look at requests for more roads, bridges and tertiary institutions made by the royal father.
 
Earlier, the Tor Tiv had expressed appreciation to President Buhari, “for the way and manner you have conducted peaceful campaign, no riots, no violence, setting good example. We had a challenging time in 2016. Thanks for your intervention, for accepting our appeal to step up security. Operation Whirl Strike has succeeded in chasing away violent herders.”
 
The Governor of Benue State, Samuel Ortom in his remarks, called for free and fair elections, urging all contestants to abide by the outcome.
 
 
Source: The Ripples
China's economy grew at its slowest rate since 1990, stoking fears about the impact on the global economy.
 
China expanded at 6.6% in 2018, official figures out Monday showed.
 
In the three months to December, the economy grew 6.4% from a year earlier, down from 6.5% in the previous quarter.
 
The data was in line with forecasts but underlines recent concern about weakening growth in the world's second-biggest economy.
 
China's rate of expansion has raised worries about the potential knock-on effect on the global economy. The trade war with the US has added to the gloomy outlook.
 
The official figures out Monday showed the weakest quarterly growth rate since the global financial crisis.
 
China's economic slowdown is not news in itself. Beijing has broadcast this for several years, that it's going to focus on the quality not quantity of growth.
 
But still, we should be worried.
 
Slower growth in China means slower growth for the rest of the world.
 
It accounts for one-third of global growth. Jobs, exports, commodity producing nations - we all depend on China to buy stuff from us.
 
Slower growth in China also means it is harder for China to address its mountain of debt, even with the Communist Party's undoubted ability to be able to support the economy.
 
Growth has been easing for years, but concern over the pace of the slowdown in China has risen in recent months as companies sound the alarm over the crucial market.
 
Earlier this month Apple warned weakness in China would hit its sales.
 
Carmakers and other firms have spoken out on the impact of the trade war with the US.
 
Policymakers in China have stepped up efforts in recent months to support the economy.
 
Those measures to boost demand include speeding-up construction projects, cutting some taxes, and reducing the level of reserves banks need to hold.
 
Capital Economics China economist Julian Evans-Pritchard said the Chinese economy remained weak at the end of 2018 "but held up better than many feared".
 
"Still, with the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify... China's economy is likely to weaken further before growth stabilises in the second half of the year."
 
 
Source: Business Insider.
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