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The International Monetary Fund (IMF) yesterday cautioned Nigeria against expansionary fiscal policies, given the uncertainty that still pervades the global economic scene just as the Nuhu Ribadu Task Force set up by the Federal Government to review the oil industry has found that the use of crude oil traders was contrary to the global best practice and trend wherein national oil companies develop their own trading arms.
IMF’s Senior Resident Representative in Nigeria, Mr. Scott Rogers, who presented the World Economic Outlook, told journalists in Abuja that Nigeria must take advantage of the current growth to strengthen her fiscal position by saving for the future, as there is no assurance of early global economic recovery.
He said: “The global economic outlook remains uncertain. The global context has continued to witness slowing growth mostly marked in the advanced economies.
The US housing prices remain depressed and that nation’s weak economy is impacting negatively on many other countries of the world because the US is an export destination of many countries of the world. The US economy is recovering but the recovery is still weak.
“If the world economy remains weak, it will continue to affect countries of the world especially those with strong ties with the US and the Euro area which could actually go into recession. Export growth in Sub-Sahara Africa has remained weak due to the weakening economies of the advanced countries”.
Mr. Rogers said the situation could be worse if by January, American President Barak Obama fails to reach a deal with the Congress to raise the deficit ceiling, as according to him, “that will mean raise in tax rates and cut in government expenditure across board which could further weaken the growth or even throw the economy into recession”.
The Resident Rep urged the Federal Government to come up with policies to save as much funds as possible and avoid undue increase in government spending to avoid a burst if oil prices crash.
Nigeria’s 2013 budget will be based on a world oil price of $75 per barrel and projected national output of 2.53 million barrels per day, Finance Minister, Ngozi Okonjo-Iweala said Wednesday.
Nigeria, Africa’s largest oil producer, derives more than 90 percent of its foreign exchange earnings from oil.
“We are working on the basis of projection of crude oil production of 2.53 million barrels a day. This is compared to 2.48 million barrels a day in 2012… and a benchmark price of $75 a barrel,” Okonjo-Iweala said.
“This compares to $72 a barrel last year,” she told journalists after a weekly cabinet meeting chaired by President Goodluck Jonathan.
Nigerian oil production hit its highest level ever last week, 2.7 million barrels per day, the state oil firm said on Friday, though hurdles remain to a sustained boost in production.
The West African nation has seen crude production rebound since a 2009 amnesty deal for militants in the Niger Delta region, which led to a sharp decline in unrest there.
It has been producing between 2.0 million and 2.4 million barrels per day in recent months, according to International Energy Agency figures.
But sabotage and oil theft continues to feed a lucrative black market.
Anglo-Dutch oil giant Shell, historically Nigeria’s largest producer, said in April that there were estimates of 150,000 barrels per day of oil and condensate being stolen in the country.
“The projected revenue for 2013 is 3.891 trillion naira ($24.3 billion, 19.7 billion euros) and the projected expenditure is 4.929 trillion naira ($30.7 billion, 25 billion euros),” the minister said.
The 2013 budget predicts a fiscal deficit of 2.17 percent of gross domestic product, down from 2.85 percent in 2012, Okonjo-Iweala said.
The budget proposal will be presented to Parliament by September.
The National Urban Transport Improvement Project (NUTRIP), which was approved by the World Bank today, will help to expand the capacity of Uhuru highway, which bisects Nairobi’s central business district, and to initiate rapid bus transit and commuter rail systems.
The World Bank will invest $300 million in the project in addition to $113 million from the Kenyan Government.
“By helping to ease traffic congestion and develop a modern commuter system, this project will enable Nairobi to remain a great city in which to live and to do business,” said Johannes Zutt, World Bank Country Director for Kenya.
“Developing countries like Colombia, Mexico and Nigeria have embraced mass public transit systems as they transitioned to middle-income status, and it is now time for Kenya to follow their example.”
A National Metropolitan Transport Authority will be established to coordinate and regulate public transport.
The major components of the project include the expansion and upgrading of highway, service and access roads from Jomo Kenyatta International Airport through Nairobi to Rironi on the Northern Corridor transport system. It will also finance the construction of by-passes in Kisumu in Western Kenya and Meru in the East.
“With this project, the process of reforming the urban transport has just begun, and its ultimate success will require widespread community support,” said Josphat Sasia, the project’s Task Team Leader. “Developing public transport systems that move large numbers of commuters will relieve the worsening traffic congestion, and improve the local business climate.”
The new project, NUTRIP, will further deepen major investment in the transport sector in line with the government’s Vision 2030 and the Bank’s Country Partnership Strategy for Kenya. The Bank has invested another $960 million in the country’s Northern Corridor Transport Improvement Project, and another $300 million in the Kenya Transport Sector Support Project.
Nigeria’s unions have suspended their strike after the president agreed to cut the cost of petrol following a week of protests.
The strike was called after prices doubled when President Goodluck Jonathan removed fuel subsidies on 1 January 2012.
Earlier on Monday, he announced that he would restore part of this subsidy.
Nigeria is Africa’s biggest oil producer but it imports almost all of its refined fuel.
Correspondents say many Nigerians see cheap fuel as the only benefit they get from their country’s oil wealth, much of which is pocketed by corrupt officials.
The unions had said that all street protests should be cancelled because of the security situation. However, police in the commercial capital, Lagos, on Monday fired live bullets into the air and tear gas to disperse hundreds of protesters.
Army checkpoints have been seen in parts of the city for the first time since the protests began a week ago.
Giving the union response to the president’s announcement, Nigeria Labour Congress chief Abdulwahed Omar told a news conference in the capital, Abuja that “Labour and its allies formally announce the suspension of the strike, mass rallies and protests across the country.”
A Nigerian construction mogul has topped a list of Africa’s richest people.
Aliko Dangote, with a stake in Dangote Cement and interests in flour milling and sugar refining, has a fortune of $10.1bn (£6.4bn).
Forbes magazine’s inaugural list of the 40 richest people in Africa put South Africa’s Nicky Oppenheimer at number two with $6.5bn.
The total wealth of the list is $64.9bn.
By comparison, the wealthiest 40 people in Taiwan are worth $92.7bn.
The average age of those on the African list – which contains no women – is 61.
Mr. Dangote and Mr. Oppenheimer of diamond miners De Beers are two of 16 billionaires on the list.
De Beers recently agreed a $5.1bn deal to sell the Oppenheimer family’s 40 percent stake to Anglo American.
Egypt had the most billionaires, with seven coming from two families, the Sawiris and Mansours, according to Forbes.
Forbes said it had reached the values using stock prices for publicly-traded companies and estimates of revenues or profits for the many privately-held businesses.
The magazine ignored dispersed family fortunes such as the Chandaria family of Kenya.
Whether someone is an Apple customer or an Apple stockholder cannot help but be saddened by the resignation of the legendary founder of the company.
The question that comes to everyone’s mind, however, is whether the company can continue to thrive without Steve Jobs’ leadership whether Apple can continue to churn revolutionary products that make a difference in the lives of the consumers and in the company’s bottom line.
While only time and markets can provide a definite answer to this question, arguments can go in both directions. On the one side, it will be difficult for Apple to thrive without Steve Jobs, as he was a leader with a strong vision, a man who knew the technology, the market and the art and he could marry altogether in blockbuster products; and he had the charisma to develop and spread the message to Apple followers, creating efficient and effective WOM and buzz campaigns.
On the other side, Apple can thrive without Steve jobs, as it isn’t a conventional company.
It is a form of collective entrepreneurship, an association of thousands of entrepreneurships that share the risks and the rewards from the discovery and exploitation of new products—which makes it more likely that a new leader will emerge to lead the company.
World Bank Managing Director, Ngozi Okonjo-Iweala, resigned her post on Friday in order to become Nigeria’s new finance minister, spurring hopes of reform in sub-Saharan Africa’s second biggest economy.
Okonjo-Iweala will take up an expanded position as Co-coordinating Minister for the Economy and Minister of Finance in Nigerian President Goodluck Jonathan’s new cabinet, World Bank President, Robert Zoellick said in a statement.
“Her desire to serve her country is truly a big loss for the World Bank but a major gain for Nigeria as it works to craft its economic way forward,” he said.
Okonjo-Iweala laid out her vision for the Nigerian economy during her screening by the Senate last week, pledging to create jobs and ensure the country “lives within its means” if approved as a cabinet minister.
From Business Desk
Goldman Sachs International, U.S Investment banking and securities firm, has predicted about three per cent rise in Nigeria’s current Gross Domestic Product (GDP) growth of 7.85 per cent.
Nigeria’s GDP growth rate increased from 7.36 per cent in the first quarter of 2010 to 7.85 per cent in the third quarter of 2010.
China Onyemelukwe, Managing Director, Investment Banking Division UK, told the Europe correspondent of the News Agency of Nigeria (NAN) in London that this could however only be achieved if the current power problem is fixed.
“Solving the power problem will add two to three per cent increase to the current GDP growth of Nigeria.”
He said government must demonstrate the will to take the bold steps to turn around the power sector for good.
“The power problem in Nigeria can be solved, it is do-able and people know what to do but it will take a lot of strong will and bold steps to effect the necessary change,” Onyemelukwe said.
He also said that Nigeria’s economy, being one of the emerging markets, had great potentials. “There are a lot of interests from around the world because there are huge investment opportunities not just in oil and gas but in infrastructure, power, human capital development and trade in goods and services,” he said.
He explained that the challenges facing the country’s economy include good governance, transparency, rule of law, and democracy.
Mr. Onyemelukwe, who commended the Economic and Financial Crimes Commission (EFCC) for its “aggressive” approach at tackling corruption, said corruption was not unique to Nigeria.
He said Nigeria has been one of the countries in the fore front of anti-corruption crusade in the last 10 years, adding that the anti-corruption institutions have been given the platform to perform.
The Central Bank of Nigeria may no longer need to liquidate rescued Deposit Money Banks as a result of the progress currently being made in their recapitalization process.
Following the dismissal of some court cases filed by shareholders of the banks, it was gathered that some of them had started finalizing plans to beat the CBN’s September 30 recapitalization deadline.
The Head, Corporate Affairs, CBN, Muhammed Abdullahi, who spoke with Punch correspondent in a telephone interview, said the various court rulings in favour of the CBN would allow the banks to finalize their recapitalization process before the stipulated time.
“It is the hope of the CBN that with the vacation of the court cases, the recapitalization process of the banks will be smooth and will be concluded before the September deadline,” he said.
The CBN had given eight rescued banks four months to fully recapitalize or risk being liquidated.
This followed the collapse of merger talks between the managements of some of the rescued banks and potential investors, as well as the delay in their recapitalization process.
Analysts and industry watchers however believe that the banks will scale the recapitalization hurdle following the dismissal of the suits by some shareholders and former Chief Executive Officers (CEOs).
Guaranty Trust Bank, one of the largest banks in Nigeria and Africa, last week lost its Managing Director/Chief Executive Officer (CEO), Tayo Aderinokun.
Mr.Tayo, who had been on a sick leave for sometime now, died in a hospital in London. He was 57 years.
Although information was sketchy as to the cause of death, it was learnt that he may have suffered from brain tumor.
Acknowledged as one of the brightest minds in the Nigerian banking industry, Mr. Tayo was credited with the stabilization of GT Bank, which has a subsidiary in Ghana, an institution he managed as CEO for 10 years.
He presided over the bank’s recapitalization process, an era which witnessed the collapse of many banks in the country.
He was recognized as a confrontational businessman and made no apologies for his desire to see GT Bank become one of the biggest in Africa.
The late Aderinokun co-founded Guaranty Trust Bank Plc in 1990 and served as Deputy Managing Director for 12 years from 1990 to 2002, after which he became the Managing Director, a position he held until his death.
During his reign as Managing Director, GT Bank was said to have witnessed tremendous progress and growth and emerged as one of the industry leaders.
The bank is currently recognized as one of the most profitable and professionally managed corporate institutions in Nigeria and has been the recipient of several awards for exemplary corporate governance practices and excellent customer service.
His deputy, Segun Agbaje, who was appointed Deputy Managing Director in 2002, will serve as MD.