The United States’ Energy Information Administration (EIA) forecasts that Brent crude oil prices will average $71 per barrel in 2018 and $68 a barrel in 2019. Meanwhile, Nigeria’s Bonny Light crude oil has maintain an international price of $73.44 per barrel, higher than the Organisation of the Petroleum Exporting Countries (OPEC) basket price of $73.35 per barrel.
The price of Nigeria’s Bonny Light is higher than the Nigeria’s $51 per barrel benchmark for 2018 budget.EIA in its Monthly Oil Market report for May, expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.The updated 2019 forecast price is $2 a barrel is higher than in the May forecast, which sold for an average price of $77 a barrel, an increase of $5 per barrel from April and the highest monthly average price since November 2014.
 
Even though the 2019 oil price forecast is higher than it was in the May monthly report, EIA expects oil prices to decline in the coming months because global oil inventories are expected to rise slightly during the second half of 2018 and in 2019.According to EIA, expected inventory growth results from forecast oil supply growth outpacing forecast oil demand growth in 2019.
 
EIA currently forecasts global petroleum and other liquids inventories will increase by 210,000 barrels per day (b/d) next year, a factor that, all else being equal, typically puts downward pressure on oil prices.Most of the growth in global oil production in the coming months is expected to come from the United States.
 
EIA projects that U.S. crude oil production will average 10.8 million barrels per day for full-year 2018, up from 9.4 million barrels per day (bpd) in 2017, and will average 11.8 million bpd in 2019.
 
The agency noted that if the 2018 and 2019 forecast annual averages materialize, they would be the highest levels of production on record, surpassing the previous record set in 1970.EIA expects that OPEC crude oil production will average 32.0 million b/d in 2018, a decrease of about 0.4 million bpd from the 2017 level.
 
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, expressed optimism that the price of crude oil would rise to a level that is neither too high nor too low.The Minister said though crude oil appears to have fallen into bad times because of prevailing low price and the campaign against the use of fossil fuels for environmental reasons, the product would soon rise up to take its place as the prime global energy source.
 
Waxing poetic message on the current crude oil prices recently, Kachikwu stated: “My name is oil, those who are kind to me call me black gold. Those who hate me call me crude.“I worry for my future; everyone now talks down on me. Even farmers who trembled at the sight of my name are now strategizing against me.“And all my beneficiaries, me have they abandoned, all because producers have lost their tracks. But I will rise again, and when I do, I will take no prisoners.
 
“I will new technologies control; I will my supremacy confirm; I will my respect regain.“And my pricing, not too low, not too high; but I will not allow prices to humiliate me. All of you in OPEC, APPA, GCEF and all such bodies who have shown me no respect recently, soon, you’ll eat your words.”
 
Source: The Guardian
Lucky Amiwero, President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), and the Managing Director, Eyis Resources Limited
 
The Federal Government has been urged to immediately step up its reforms strategy on import and export processes to help reverse the current poor ranking by Trading Across Borders (TAB).
 
TAB, in its latest rankings, put Nigeria at 183rd position out of the 190 countries it rated on Ease of Doing Business (EODB).
 
In the ranking, Nigeria took the last position, while Mali, 85th position, was rated first among the 17 West African countries considered in the report.
 
President, National Council of Managing Directors of Customs Licensed Customs Agents (NCMDLCA), Lucky Amiwero, in a letter to the Presidency, dated June 10, 2018, said Nigeria’s poor ranking on ease of doing business has brought to the fore the need to urgently institute reforms to address the challenges on import, export and transit regulatory procedures.
 
Amiwero, who is also the Managing Director, Eyis Resources, said Nigeria’s import, export, regulatory and transit procedures are encumbered with lengthy, cumbersome procedures.
 
This, he said, is associated with unnecessary delays, high transaction cost and increase of cargo dwell time, which makes our port the most expensive in the globe based on verifiable information.
 
In the letter obtained by The Guardian, he said the reform should be targeted at implementing an integrated set policies and procedures that is globally accepted, which would ensure effective trade facilitation by the reduction of transaction cost, cargo dwell time and ensure safety and security of the processes.
 
“The poor rating of Nigeria can be seen from the identified challenges associated with the Import-Export, regulatory and transit procedures that is encumbered with lengthy and cumbersome procedure, which resulted to our present ranking of 183 from 190 countries.
 
“There is the urgent need to constitute a committee of trade procedure Experts, reform specialist and professional, as Task force to address the challenges urgently,” he stated.
 
Amiwero further recommended that the Federal Government should look into the issues of collapsed scanners, re-evaluate them to know the update and update the scanners for easy cargo examination.
 
He harped on the strict implementation and enforcement of the executive order in the seaport as stipulated in the Port Related offences, (Amendment) Act 61 of 1999.
 
Meanwhile, the Managing Director, Nigerian Ports Authority (NPA) Hadiza Bala Usman had recently threatened to seek the intervention of the Vice President Prof. Yemi Osinbajo on the non-compliance by some government agencies to the presidential order on Ease of Doing Business at the nation’s seaports.
 
Usman’s reaction is coming in the wake of complaints by some stakeholders that the level of compliance to the presidential order by some government agencies, one year after the order was issued has left much to be desired.
 
She said the way some government agents float the order has limited its positive impact and the Federal Government.
 
While assuring that the Authority would continue to fulfil its own part of the order she lamented that the organisation has the limitation of compelling other agencies to do what they are supposed to do under the presidential directives.
 
Source: The Guardian
The Central Bank of Nigeria (CBN) has authorized the use of Renminbi (RMB) instead of dollar by Nigerians to import some specific goods from China to achieve maximum benefit in the recent $2.5 billion currency swap pact signed by both countries.
 
This was disclosed at a press briefing organised by the apex bank at the end of the Bankers Committee meeting held in Lagos yesterday.
 
According the committee, importers of Chinese equipment, machineries and goods are expected to obtain invoices in RMB instead of dollar for settlement which would ultimately cut down transaction cost and make importation cheaper for Nigerians playing in that market segment.
 
The committee said the arrangement would go a long way to strengthen the nation’s external reserve which is currently put at $48 billion.
 
Specifically, a member of the Bankers’ Committee and the Chief Executive, Stanbic IBTC Bank, Demola Sogunle, said: “CBN and the Bankers Committee are to start encouraging importers to receive invoices in Renminbi instead of dollars.
 
One of the incentives will be that a percentage spread will be given to any importer that is bringing a Renminbi invoice for settlement instead of bringing a dollar invoice.
 
If you bring Renminbi invoice, the benefit is that it is going to be cheaper for the importer in coming to CBN to get foreign currency which, in this case, will be Renminbi.
 
“The importer will actually bring lesser amount of naira.
 
If he goes ahead to buy with the same supplier based in China and collect invoice in dollars, it will cost the importer slightly more in terms of the naira amount he will use to get the foreign currency.
 
“We have got almost $48 billion in external reserve, because we trade a lot with China.
 
If we are able to continue to bring in machinery and equipment, without depleting our dollar reserve, the external reserve will not be under threat.
 
So with the Renminbi in place instead of dollar, based on this swap deal, we are in a very good position. So importers are encouraged to bring in invoices in Renimbi instead of dollars. “
 
Source: The Guardian
The Chairman of International Chamber of Commerce Nigeria (ICCN) and Regional Coordinator, Sub-Saharan Africa, Babatunde Savage, has reiterated the urgent need for restructuring of government’s spending in favour of capital expenditure in view of the huge infrastructure deficit confronting the nation.
 
Savage, who spoke at the 19th yearly general meeting of the chamber in Lagos, noted that the relatively low performance in capital budget, which hovered around 60 per cent as at December 2017, when compared with the almost 100 per cent implementation of recurrent expenditure is not development friendly.
 
He said the trend of unspent capital allocations, which are usually returned to the treasury, is a product of delayed budget approval processes, hence the need to revisit this issue for the good of the economy.
 
According to him, it is a widely held view that the private sector is the engine of growth and poverty reduction, as well as one of the most powerful catalysts for the transformation of the economic structure of countries.
 
“Businesses thrive when supported with well-conceived regulatory policies and good corporate governance practices in line with global best practices.
 
Corporate governance, to me, is all about how an organisation is managed- its corporate and other structures, its culture, its policies, and the ways in which it deals with its various stakeholders.
 
“It is concerned with structures and processes for decision making and with the control and behavior that support effective accountability for performance outcomes/results”, he added.
 
On the future outlook, Savage said the global economic growth prospects have improved modestly due to stronger United States’ growth expectations, exit of some large economies from recession and rising commodity prices.
 
According to him, with the sustained recovery in oil prices, strengthening commodity prices, rising aggregate demand, rebound in investment as a result of improvements in investor’s confidence and accommodative monetary policy, which confronted the global economy in 2017, there were signs of moderate growth and improvement.
 
“We would expect increased diffusion effects of oil sector growth in 2018, through budgets and government spending; oil sector procurement, wage and CSR growth and oil sector support for the external sector.
 
“With the gradual recovery from recession, stability in exchange rates, inflation under control, we certainly have reasons to be optimistic.
 
Oil prices have surged to $60-70pb beyond 2017 expectations, offering Nigeria some respite and suggesting a better economic outlook in 2018. Adopting the highest standards of corporate governance to achieve long-term value for all is now imperative”, he added.
 
Source: The Guardian
Foreign exchange, forex, sales by the Central Bank of Nigeria (CBN) was dominated in 2017 by Forwards contracts which accounted for $11.2 billion or 70 percent of total sales. Unlike spots transactions which involves immediate delivery, forwards are transactions which involves delivery of forex at a future agreed date but at current exchange rate. 
 
A breakdown of the annual report of the Financial Market Department of the apex bank for 2017 revealed that forex sales for forward contracts rose by 44 percent to $11.2 billion in 2017 from $5.8 billion in 2016. This exceeded the 30 percent increase in total foreign exchange sales by the CBN which rose to $15.8 billion in 2017 from $12.2 billion in 2016. CBN Headquarters Managing Director/Chief Executive, Financial Derivatives Company Limited, Mr. Bismarck Rewane, however, noted that this trend will not persist in 2018, as the conditions that necessitated the dominance of forwards contract no longer exist. Speaking to Vanguard, he said: “When you buy into a forward contract, you are buying at the official rate but they will deliver to you in 90 days and in some cases 120 days. “When the CBN had shortage of foreign exchange they managed it by doing forwards contract but now that the reserves are strong, they are doing spot transactions. 
 
The benefit of the forwards is that it helps to manage the cash flow and secondly, the implied rate is different from the effective rate. That is, if they sell to you at N330 per dollar, and take your money 90 days ahead, by the time you add the treasury bills rate to it, you will find out that effectively you have paid N340 per dollar. So it is another way of devaluing the currency. “But the constraints that led to that last year are no longer there. We have gone beyond that now. That time the reserves were doing $23 billion to $24 billion, but now we don’t need to panic.” The report had stated: “In 2017, the CBN maintained its direct intervention in the inter-bank foreign exchange market to cushion the demand pressure and ensure exchange rate stability. 
 
Consequently, a total of $15.82 billion was sold at the inter-bank segment. “This comprised $1.53 billion at the inter-bank spot, $1.39 billion for invisibles, $1.07  billion for SMEs,  $622 million at the I & E, while forwards sales were $11.19  billion. On the other hand, the Bank purchased $6.09 billion at the inter-bank market. Thus, net sales by the Bank amounted to $9.73 billion. 
 
The sum of $10.73 billion matured at the forwards segment, while $1.92 billion remained outstanding at end-December 2017. “In the preceding year, $12.16 billion was sold at the inter-bank market, comprising $6.30 billion spot and $5.85 billion at the forwards. In the same vein, the Bank purchased $130.98 million, resulting in a net sale of $12.24 billion. The sum of $4.29 billion matured at the forwards, while $1.56 billion remained outstanding at end-December 2016.”
 
 
Source: VanguardNG
An economist, Dr Chijioke Ekechukwu, says Nigerian businesses find it difficult to become conglomerates due to both external and internal factors.
 
Ekechukwu, a former Director-General, Abuja Chamber of Commerce and Industry, expressed the view in an interview in Abuja.
 
*Traders doing business in front of the completed project that is under lock and key
 
He said many Nigerian businesses lacked human, material and financial capacity to grow bigger than what their family members can offer.
 
According to him, many Nigerian businesses engage in little or no research and development and their key officials lack the requisite education for growth and development.
 
According to him, many businesses also do not grow to become conglomerates due to lack of proper budgeting, accounting and costing.
 
“Many of them do not know what their financial positions are; as far as there is turnover, they don’t bother with knowing their profit or loss.
 
“There are no qualified professionals engaged in their firms; in other words, they are satisfied with cheap and unskilled labour.
 
“These and many more are responsible for the limited growth of the Nigerian indigenous businesses, why they have not become conglomerates.
 
“If these factors are properly addressed, many Nigerian businesses will grow and become conglomerates,’’ Ekechukwu said.
 
According to him, the external factors are lack of basic infrastructure in the country, inefficient rail system, lack of power, lack of good roads and insecurity.
 
Others, he said, are lack of access to huge and long term loans, high cost of funds and unfavourable government policies.
 
NAN reports that a conglomerate is a combination of two or more corporations that are engaged in entirely different businesses under one corporate group. 
 
Credit: (NAN)

The federal government has said that telecommunication companies operating in Nigeria must quickly conclude plans to get listed on the Nigerian Stock Exchange (NSE) or face regulatory penalties from their compliance failures.

Mr. Adebayo Shittu, minister of Communications, stated this in Abuja when mobile telecommunication firm, MTN and distributed renewable energy (DRE) firm, Lumos, launched the national rollout plan of their portable, affordable, easy to install solar power home systems (SHS). He said the telecommunication outfits must allow their shares to be open for public subscription at the NSE.

Though Shittu did not disclose any deadline for this to happen, he however explained that the government would eventually take punitive actions against firms that fail on this.

He added that the firms must be willing to give Nigerian investors the opportunity to be part of their businesses and the eventual outcomes from them in terms of profits and losses.

 

- Nigeria CommunicationsWeek

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