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Nigeria’s 2019 budget still under threat as oil price hovers at $52.72

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…NSE launches new chat to boost market participation***

The execution of Nigeria’s 2019 budget will likely encounter a serious threat as the price of Bonny Light, the nation’s premium oil grade, yesterday, hovered at $52.72 per barrel in the international market.

The price, which had dropped to as low as $48 last week, before hovering at the current level, showed $7.28 below the $60.00 per barrel benchmark price of the budget.

Specifically, while the price of Bonny Light stood at $52.72, others – Brent, West Texas Intermediate, WTI, OPEC Basket, Lousiana Light, Mexican Basket and Urals – stood at $53.21, $45.33, $53.92, $48.98, $45.18 and $49.80 per barrel respectively.

Commenting on the budget, Director-General, Lagos Chamber of Commerce and Industry, LCCI, Mr. Muda Yusuf, disclosed that: “Data from the Organisation of Petroleum Exporting Countries, OPEC, shows that oil prices are trending down at $54 p/bl on  December 22, 2018 from its peak of $88p/bl in the month of September and October 2018.

“This is already below 2019-2021 Medium-Term Expenditure Framework, MTEF, and 2019 budget benchmark of $60p/bl. The declining global oil price will likely distort FG’s economic projections for 2019 as well as impact adversely on its MTEF if the trend is not reversed.”

Exchange rate Yusuf stated that the development will impact of the nation’s exchange rate, adding: “Exchange rate was relatively stable in 2018 in different segments of the FX market. At the parallel market, the naira hovered within the band of N361/$ – N363/$; and at the I&E FX window, the naira traded within the tight band of N360.95/$-N363.32.

Higher oil prices and stable local production levels of crude oil are the two key critical factors that restored calm in the forex market. “Policy rate normalisation in the United States of America, which led to the US FED hike in policy rate triggered capital flow reversals.

The contagion effect spread across emerging economies including Nigeria, with foreign investment outflows leading to pressures in the forex market. Consequently, in a bid to support the value of Naira, the CBN sustained its intervention in the forex market.

“There are fears that the sharp fall in oil prices if sustained could lead to new pressures on the naira exchange rate. As capital flow reversals intensify, oil price weakens, and foreign reserves come under pressure, there are worries about the sustainability of current frequency of interventions by the Central Bank of Nigeria, CBN, to stabilise the market.

“Some measure of rate adjustment may become inevitable.  The improvement in liquidity and relative stability in forex market witnessed by businesses in 2018 may be threatened if oil price decline continues. This will have profound impact on the prices of imported goods and services leading to arise in the level of inflation. The fiscal operations of government would be adversely affected.  This may further escalate the deficit in the budget. 

In the meantime, the Nigerian Stock Exchange (NSE) has launched an artificial intelligence (AI)-powered chatbot that responds directly and automatically to enquiries through Facebook Messenger. The platform, known as X-Bot, is reputed as the first by any African securities exchange.

X-Bot is designed to provide market participants, especially retail investors, convenient, faster and real-time access to data and information from the Exchange.

NSE Chief Executive Officer (NSE) Mr. Oscar Onyema said the introduction of X-Bot was in line with the Exchange’s drive to improve market participation through greater access to market information.

“We aim for an Exchange that is easily accessible and actively matches investors’ increased thirst for information and detailed disclosure information to make sound investment decisions. With X-Bot, investors in our market can access on-demand market information, news and events on the activities of the Exchange and the various products and instruments that are listed and traded on it,” Onyema said.

According to him, the NSE has always been at the forefront of innovation, and the launch of the X-Bot marks yet another significant milestone in its continuous adoption of new technologies with a customer-centric focus to make financial services more inclusive and to provide a superior customer experience in the access and use of capital.

Head, Regulatory Technology (RegTech) NSE) Mr. John Adelana said customer experience is a key priority for NSE, noting that the Exchange is deeply committed to constantly improving customer experience.

According to him, with the launch of X-Bot, NSE becomes the first African securities exchange to launch a customer interactive machine learning chatbot, which contributes to facilitating and accelerating the process of providing information to market participants.

“We are particularly excited about the ability of X-Bot to learn through customers interactions and become better at providing our customers with more relevant and timelier solutions overtime,” Adelana said.

Economy

Fuel Scarcity Will Soon Disappear, NMDPRA Tells Unbelieving Nigerians; Depot Managers Disagree 

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…Insist there is still serious supply gap***

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has assured Nigerians that the prevailing fuel crisis ravaging various parts of the country would soon disappear. His audience largely disbelieved him.

NMDPRA Coordinator in Delta, Mr Victor Ohwodiasa, gave the assurance when he led a team of the regulatory authority on an unscheduled inspection visit to some petroleum depots at Ifiekporo, on Thursday evening and Friday in Delta.

The Ifiekporo Community is in Warri South Local Government area of Delta.

Ohwodiasa said that a lot of vessels laden with Premium Motor Spirit (PMS) known as Petrol were already coming into the state.

He said the regulatory authority would ensure that the vessels discharge products as quickly as possible.

“We will ensure that the depots receiving these products lift them out to the end users.

“By the time we have all the depots wet with PMS and they are lifting regularly, the looming scarcity we are experiencing will disappear,” Ohwodiasa said.

Nigeria, 99 others Back Agreement Against Illegal, Unregulated Fishing
President-Muhammadu-Buhari

The agency’s coordinator said the essence of the visit was to ensure that depots with the products dispensed to licenced retail outlets, eliminate middlemen and also avoid diversion.

“Once we get our daily manifest, we send our men out to make sure that those trucks get to their actual locations.

“There might be one or two infractions; we have apprehended about two persons for product diversion and they were made to face the full wrath of the law.

“As a regulatory authority, saddled with the responsibility of regulating the Midstream and Downstream of the Oil and Gas sector in Nigeria, we will continue to do what we need to do.

“This is to ensure that the products are available and adequately and fairly distributed within Delta and neighbouring states,” he said.

Ohwodiasa said the NMDPRA would carry out intense routine surveillance, adding that it would sustain the tempo to ensure that the right things were done in the Midstream and Downstream sectors of the oil and gas industry.

He, however, urged people to stop panic buying, assuring that the Federal Government was doing everything possible to ensure the availability of petroleum products in the country, particularly during the Yuletide season and beyond.

Ohwodiasa added that NMDPRA would ensure that the products get to the consumers at the right price, quality and quantity.

Among the depots visited were: Matrix Energy Group, Pinnacle Oil and Gas Ltd. and AYM Shafa Ltd.

Speaking on behalf of Matrix Energy, Mr Francis Ibe, the Terminal Manager, Matrix Energy, said that the PMS stock level at the Warri Depot was 14 million litres on Thursday.

Ibe said as of the evening of Thursday, it had trucked out over four million litres.

“With what I am pushing out, I know it will not be enough. Before now on weekly basis, we were receiving 40 million litres of PMS, but at the moment, we barely received 40 million in two weeks. So you can see the difference.

“Forty million litres in one week as against receiving one vessel in two weeks cannot solve the problem. There is a serious supply gap,” Ibe said.

Also, Mr Luke Nnajieze, the Depot Manager, Pinnacle Oil and Gas, Warri Depot, said that the current stock level of the company in Warri as of Thursday morning was 3.1 million litres of Premium Motor Spirit (PMS).

Nnajieze added that the Automated Gasoline Oil (AGO) was 2.9 million litres. At the moment, we are out of stock of Dual Purpose Kerosene (DPK).

“On daily basis, we trucked 2.5 million litres to 3 million litres of PMS,” he said.

Nnajieze identified heavy vehicular gridlock as a major challenge confronting their business in the area, calling on the government to assist in expanding or fixing the bad access road.

He also called for the dredging of the Escravos Bar to allow bigger vessels to navigate and bring in petroleum products.

A respondent who spoke on condition of anonymity however said: “What I hate is telling innocent people deliberate lies. We all know supply is grossly inadequate; and yet, we keep hyping lame duck assurances!”, he said, adding that it was like the government, knowing that it was now on its last lap, has seemingly relaxed…!

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Economy

Oyo Govt efforts in agribusiness already yielding positive results- OYSADA DG

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Oyo Govt efforts in agribusiness already yielding positive results- OYSADA DG

…Fails to indicate how OYSADA positively tinkers with availability of agricultural products*** 

 The Director-General, Oyo State Agribusiness Development Agency (OYSADA), Dr. Debo Akande, on Friday stated that the state government efforts in agribusiness were already yielding positive results.

Akande made this known at Fasola Farm in Oyo while welcoming Mr. Ben Langat, the Managing Director, Friesland Campina WAMCO Nigeria PLC, who led other members of the company on a facility tour of the farm.

The Maritime First learned that Ben Langat’s visit may be connected to his company’s readiness to set up a milk collection centre through dairy livestock farming within the facility.

Akande, who is also the Executive Adviser to Gov. Seyi Makinde on Agribusiness, said that the state agribusiness venture had been thriving evidently through increment of internally generated revenue and jobs creation opportunities.

Addressing journalists shortly after the facility tour, Akande said: “We have ensured that our agricultural hubs are going to be completely private sector driven.

“One of the things that created problems for all of those farm settlements we had in the past was that they are public sector driven.

“And in so doing, we are attracting the investors that can run the hub.

“Fasola Farm was known for livestock farming for many years and the work we’ve been doing in terms of livestock has created impacts across the state.

“What we are doing now is to bring back the glory of the past, but in a different way, because our milk collection partner investors are known for our dairy and livestock.

“So, we will see a manifestation of a modern approach in livestock and dairy production within this particular facility that we have and to me, I think that is quite significant.”

Oyo State Logo

According to him, the state government is already generating revenue, because this farm is not given free to our milk investor company.

“They are paying leases on the land they are using; they have already paid and they will be paying annually for the next 20 years,” he said.

Akande said this was not limited only to the milk collection partner, but also to other investors in the hub.

“All of them are here on a lease, the government is going to generate a chunk of their lease at the first year.

“And also be generating lease payment for the next 20 years from all these private companies, that is part one of the revenue, ” he said.

The Director-General said the hub would generate taxes and employ people within the state, especially youths.

During the tour, beneficiaries of the Oyo State Youth Entrepreneurship In Agribusiness Project (YEAP), which had already cultivated up to 45 percent of the hundred hectares of land allocated to them, were also on ground.

Offering an insight, the Managing Director of Friesland Campina WAMCO Nigeria PLC, Ben Langat

said the company is in partnership with the Oyo State Government in developing an Agribusiness hub, which is very important to all the parties concerned.

“We are a dairy company that is ready to ensure that we produce quality dairy for Nigerians to consume every day.

“We are developing 300 hectares of land now, that was part of the land allocated to us.

“We have developed pasture, which is part of the process before we bring cows in; we built sheds where they will feed, also bunkers and boreholes as well as other things,” Langat said.

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Economy

IMPRUDENCE: Oyetola Left N76bn Salary, Pension Debts- Official

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IMPRUDENCE: Oyetola Left N76bn Salary, Pension Debts- Official

…Salary: N29,875,191,128.64; Pension Arrears: N45,375,237,693.40; Life Assurance Scheme: N554,644,028.97***

 Mrs. Bimpe Ogunlumade, Permanent Secretary, Ministry of Finance in Osun, says the state government has discovered salary and pension-related debts, amounting to over N76 billion, left by the immediate past Gov. Adegboyega Oyetola’s administration.

A statement by Malam Olawale Rasheed, the Spokesperson of Gov. Ademola Adeleke of Osun, calling attention to the former Governor’s imprudence on Thursday in Osogbo, highlighted that Ogunlumade made the revelations while briefing officials of the new administration on the state’s financial status.

According to Rasheed, the Osun Government has uncovered a monumental debt in salaries, pensions and insurance commitments incurred by the administration of Mr. Gboyega Oyetola, amounting to N76 billion.

“This revelation was made by the Permanent Secretary, Ministry of Finance, Mrs. Bimpe Ogunlumade, while briefing officials of the new administration on the financial status of the state on Thursday.

“The disclosure was contrary to the claim by the former governor that he left N14 billion in cash for the new government, among other bogus claims that have now been found to be an outright falsehood.

“The breakdown of the salaries and pension-related liabilities as disclosed by the Permanent Secretary are as follows:

“Salary: N29,875,191,128.64; Pension Arrears: N45,375,237,693.40; Group Life Assurance Scheme: N554,644,028.97, Total: N75,805,072,851.01.

“The public is hereby advised that this is not the total debt left by the past administration as briefings on other sources of liabilities continue tomorrow,” he said.

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