Items filtered by date: Thursday, 20 June 2019
Nigeria’s daily oil production has exceeded the 2.3 million barrel per day benchmark for the 2019 budget.
 
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, disclosed this in Abuja on Tuesday during a discussion with the national officials of the Nigerian Union of Journalists (NUJ)
 
He maintained that Monday’s crude oil output figure was a significant improvement from the average daily production of 2.1 million barrels recorded last year.
 
The NNPC boss also said the country was able to attract $3.6 billion and $3 billion as Foreign Direct Investment into the oil and gas industry in 2017 and 2018 respectively.
 
He added that some officials of the corporation were close to sealing up another $7 billion FDI into the sector in London.
 
He highlighted internal and external transparency in the sector as a key factor in achieving this feat.
 
Baru said: “Since we came in July 2016, we had been focused on increasing production of oil and gas and condensates. At some point, our national combined production was about a million barrels; I am happy that as at the end of 2018, we have moved on, averaging last year, about 2.1 million barrels.
 
“As I am speaking, this morning, I look at our production figures, combined oil and condensates we are pushing 2.32 million barrels a day. This stability and ability to push production has come as a consequence of several factors, both internally, externally and also with the help of the media.
 
“Our drive for transparency has also produced a lot of fruits. We have been able to attract FDI into the oil and gas industry and in 2017 alone, we attracted about $3.6 billion.
 
In 2018, we shot it up by $3 billion; at the moment, some of our officers are in London, where they are negotiating sums in the region of $7 billion as FDI for the oil and gas sector.”
 
Speaking on the cost of production, the NNPC helmsmen revealed that the company had been able to minimise the cost of production to $22 from $27 per barrel in the firm’s Joint Venture (JV) operations.
 
“Oil exports are the largest single source of Nigeria’s revenue and anything that makes these more appealing to buyers would help revenues grow, including reducing the cost of production”.
 
He, however, noted that the corporation was on the lookout for means to bringing the cost to $20 per barrel.
 
While shedding more light on the state of Nigerian refineries, he said, “At the Port Harcourt refineries, the contractors are on site; they are carrying out every checks and lots of non-destructive testing. We believe that by the end of October, we would have detailed review and we would approach our financiers, clearly on financing basis; raise the funds because they are quite willing to fund the operations.
 
“NNPC would do that and pay the loans as appropriate, being that government does not have sufficient funds to finance the refineries rehabilitation. That is why it is taking time,” he said.
Published in Business
Nigerian Liquefied Natural Gas (NLNG) Limited Train Seven project is to gulp between $6 to $7 billion and create about 15000 jobs and enhance the enhance economy of Rivers State.
 
Rivers State Governor, Nyesom Wike said that Rivers people were happy that the Train 7 of the NLNG would soon come on stream, because it was key to the growth of the state and that the state government would support and partner with vision of the company.
 
He spoke at the Government House Port Harcourt on Wednesday during a Courtesy Visit by the Management of the NLNG.
 
He said: “The Train 7 is very key to the development of Rivers State. We are glad that it will soon take off. I am happy with the quantum of jobs that the train 7 will create in the State.
 
“However, these jobs should not be cleaners and unskilled workers. I want the NLNG to ensure that qualified Rivers people are employed when the Train 7 comes on stream”.
 
The Governor stated that the government and people of Rivers State would support the successful take off of the Train 7.
 
He commended the management of the NLNG for initiating the Community Health Insurance Scheme for Bonny Island, saying that the State Government will partner with the company to achieve the objectives of the programme.
 
On the project initiated by the NLNG to supply cooking gas directly to Rivers State, instead of passing through Lagos, Wike assured that the State Government would dredge the Iwofe waterway for that purpose.
 
“I will only support companies that mean well for the people of Rivers State. My business is to do good for our people, so that their lives can improve.
 
“Other companies should emulate what NLNG is doing in Rivers State. On behalf of the people of Rivers State, I commend the NLNG,” he said.
 
Wike also commended the NLNG for establishing their headquarters in Rivers State and also working to eradicate malaria.
 
Earlier, the Managing Director of NLNG, Tony Attah prayed that the second term of Wike would be more rewarding for the people of Rivers State.
 
He stated that the NLNG was set to kick off the Train 7 of the company, where the company is expected to spend between $6 billion and $7 billion USD by way of investment.
 
“The employment side of the Train 7 is that it will create about 10 to 15 thousand jobs for the people of the state. It will build the skills and capacity of the people. The final investment decision will be taken in October “
 
Attah informed that the NLNG had worked out the modalities to ensure that cooking gas is delivered to Rivers State , instead of being routed through Lagos. He appealed to the Rivers State Governor to assist in realising the project by dredging the Iwofe waterway.
Published in Business
Thursday, 20 June 2019 12:19

Xi visits Kim ahead of Trump talks

Ahead of his trade talks with US leader Donald Trump,Chinese President Xi Jinping started a historic visit in Pyongyang on Thursday.
 
The two day symbolic visit is meant to reboot a troubled alliance. Xi is the first Chinese president to visit North Korea in 14 years, after relations between the Cold War era allies deteriorated over Pyongyang’s nuclear provocations and Beijing’s subsequent backing of UN sanctions.
 
Xi and Kim have been working to repair ties, with the young North Korean leader visiting his older ally four times in China in the past year and Beijing calling for sanctions to be relaxed.
 
But the Chinese leader waited to reciprocate the visit, biding his time to see how nuclear talks between Kim and Trump would play out before deciding to travel to Pyongyang, according to analysts.
 
After Beijing’s own trade negotiations with Washington hit a wall last month, some analysts believe Xi could come back from Pyongyang with leverage for his meeting with Trump at the G20 summit in Japan next week.
 
“When both China & North Korea are confronted by US, they have a lot to discuss with each other,” Lijian Zhao, the deputy chief of mission of China’s embassy in Pakistan, wrote on Twitter.
 
Xi arrived in North Korea late Thursday morning, China’s CCTV said.
 
He is visiting with his wife Peng Liyuan, Foreign Minister Wang Yi, and other officials, according to Chinese state media.
 
In Pyongyang, Chinese flags hung throughout the city and residents lined the streets to welcome Xi.
 
Authorities have imposed tight control on coverage of the visit. International journalists in Pyongyang were told they would not be able to cover it, while foreign media organisations that were initially invited to attend were unable to obtain visas.
 
Sources say the Chinese media delegation accompanying Xi was also reduced in size from initial plans.
 
The visit will be largely symbolic, with no formal joint communique expected –- as was the case with Kim’s April summit with Russian President Vladimir Putin in Vladivostok, Russia.
 
Published in World
A Federal High Court sitting in Lagos Nigeria, Southwest Nigeria has granted Wema Bank of Nigeria Plc the power either by itself or through its appointed Receiver Manager to take over and preserve the property of a limited liability company, CMB Maintenance & Investment Company used as security to obtain loan that has not been paid, pending the determination of the substantive suit.
 
Joined as co-defendant in this debt recovery suit was the Managing Director of CMB Maintenance & Investment Company, Kelechuckwu Mbagwu.
 
The order of the court was as result of an application file and argued before the court by a Lagos lawyer, Norrison Quakers, SAN.
 
In an affidavit sworn to by a Relationship Manager of Wema Bank, Mr Henry Alakhume, the deponent averred that by an application dated 24th of March 2014 and signed by Kelechukwu Mbagwu, the Managing Director of CBM Maintenance & investment Company applied to Wema Bank for a loan Project Finance Facility in the Real Estate sector, to finance the completion of 17 units of detached duplexes Pearl Garden Estates at Sangotedo, Lagos State and which was granted to CMB Maintenance & and Investment by Wema bank Plc.
 
He said the security for the facility was agreed to be legal mortgage 7 units detached duplexes 3 blocks located at Pearl Nuga Estate, along Cardinal Anthony Olubunmi Okojie Road, Sangotedo, Lekki Expressway, Lagos State valued at N347.2 million, being develop.
 
Alakhume explained that six other legal mortgages were also created in respect of the properties in the security specified.
 
He said the defendants drew down on the facility but had since failed to meet repayment obligations and that as at January 2017, the sum of N226,496.441.09 only was outstanding and unpaid by the defendants.
 
“The defendants have refused and neglected to pay their indebtedness despite restructuring it several times while interest has continued to accrue on the debt and the bank has therefore exercise its right to appoint a Receiver /Manager as provided under the respective Deeds of legal Mortgages and consequently appointed Mr. Gerard Onyiuke as Receiver /manager of the mortgaged properties.,” he said.
 
After listening to the argument and submission of Quakers SAN., the presiding Judge Ayokunle Faji while restraining Kelechukwu Mbagwu, his company and their agents and privies from doing anything obstructing the Receiver/Manager in his lawful execution of his duties or function, granted Wema Bank Plc through itself and by its duly appointed Receiver/Manager to take over and preserve the properties of the company’s properties used as security for loan.
 
Thereafter, Justice Faji while adjourning till 21st of June, 2019 for further hearing also ordered the Inspector General of Police, through the officers and men of the Police Force to provide the bailiffs of the court and the Receiver /Manager with the necessary police protection while they carried out the orders of the court pending the determination of the motion on notice.
Published in Bank & Finance

Kenya’s Treasury Secretary has tabled a budget that is aimed at addressing five challenges. These are the creation of an enabling environment for businesses, the prudence and efficiency of government spending, the mobilisation of domestic resources, the reduction of the fiscal deficit and stabilisation of debt and the implementation of reforms to make the Kenyan economy more competitive.

The Conversation Africa’s Moina Spooner asked Tim Njagi for insights into whether it’s achieved this.

How well does the 2019/20 budget address these challenges? Please give details.

To some extent the Treasury Cabinet presented a budget that tried to address the challenges listed above. Kenya needs to be competitive to continue to attract investments.

Key proposals in the budget aimed at improving competitiveness included the 30% rebate to manufacturers on the cost of electricity, reduction of VAT withholding tax (from 6% to 2%), expediting VAT refunds and pending bills (and ensuring that suppliers to government are paid within 60 days), facilitating faster clearance of cargo at ports, and some protection measures for manufacturers – like increases in the railway development levy. The government also plans to prioritise locally manufactured products in its procurement.

But some areas of concern remain. These include the mobilisation of local resources, reduction of the fiscal deficit and stabilisation of the national debt.

As at December 2018, the Kenya Revenue Authority missed the revenue target by KSh61 billion (about US$598million). This deficit will likely double by the end of the financial year, later this month. The National Treasury has proposed a number of strategies to try to contain expenditures, including adopting zero-based budgets (a fresh budget with each cycle), a freeze on new projects, restructuring and realigning externally funded projects with the national agenda, and reducing the recurrent expenditures.

It is likely that the government will have to borrow more to address the increasing fiscal deficit, currently at 5.6% of the GDP.

The National Treasury has tried to suggest measures that will reduce recurrent expenditures – like reducing the increasing government wage bill, domestic and foreign travel expenditures. But this is unlikely to work. The wage bill has increased by an average of Ksh 46 billion (about US$450 million) over the last six years due to an increase in the number of employees and salaries.

The government must increase human resource planning and management and implement other recommendations proposed in the comprehensive public expenditure review report – like implementing a robust payroll system to prevent leakages and ensure better forecasting.

In addition to this, measures to improve fiscal responsibility should be cascaded to county governments where there’s a lack of fiscal discipline and wasteful expenditure is high.

How well does the 2019/20 budget speak to the country’s economic development agenda?

It speaks to it very well. The 2019/20 budget prioritised the “Big Four” – the economic agenda of President Uhuru Kenyatta’s administration – manufacturing, housing, health care and food security. About 15% of the total budget was allocated towards these.

On food security, the allocation to the agriculture, rural and urban development sector increased from 1.6% of the total budget in 2018/19 to 3%. A significant rise.

On universal health care, the allocation rose by 0.3% to 3.1%.

The government also made a significant allocation (about US$174 million) to housing for its employees and partnered with other stakeholders – like the World Bank – to make mortgages affordable for other citizens through the Kenya Mortgage Refinance Company.

As mentioned earlier, the budget has good proposals for improving the business environment and competitiveness. But, it’s important to verify whether the government is implementing measures to make spending more efficient. For instance, a low hanging fruit would be to further develop agro-based industries – which Kenya has already done quite well – a model which was successfully implemented in Ethiopia.

Of the various measures announced in the budget, what stood out for you? And why?

I have a keen interest in food security so was watching out for those.

There are a number of familiar proposals – like bailing out the sugar industry and monies for crop diversification. There are also a number of unclear programmes – like the National Value Chain Support Programme whose details are vague, and whose functions are now said to have been devolved to county governments.

While the intention is not bad, these expenditures have a low return on investment.

For example, studies have shown that the government sugar mills would be better off if they were privatised.

The Coffee Cherry revolving fund – set to provide an advance payment to coffee farmers at a modest interest rate – is another expenditure that is unlikely to lead to the revival of the coffee industry. The coffee industry has performed poorly over the past 20 years, current production is the same as it was in the 1970s. Some farmers are now abandoning the crop for other profitable commodities.

I commend the zero-rating of agricultural chemicals, reducing the price of agro-chemicals, but more incentives are needed to enhance productivity within the agricultural sector. Allocations should be based on efficiency. For example, the country spent an average of 22% of the agriculture budget on input subsidies, but only 2% of the agricultural budget on extension (farmer knowledge and skills) between 2013 and 2017. Providing inputs at low prices has not translated into any significant improvement in yield performance.

As an alternative, more spending on extension services will mean that farmers have more knowledge and can better use the inputs (like fertilisers) that they have access to.

Government has adopted zero-based budgeting. What are the expected benefits of zero-budgeting for Kenya? And what are the risks?

Zero-based budgeting means making a fresh budget with each cycle. This implies that there are no incremental/carry over costs. Everything is assessed afresh and justification for resourcing made.

One of the immediate benefits is that budgets will be evaluated in line with proposed activities. This works very well with programme based budgets – which the government is trying to implement – as the budget has to be justified for each project. This improves efficiency since funds will only be requested for activities that ministry departments and agencies will implement. The traditional approach has sometimes led to lobbying for funds, even when the justification for the funding is weak.

It will also help to weed out ineffective programmes and activities and allow the government to channel funds to efficient areas.

But a zero-based budget needs careful and detailed planning. This means that the ministries and agencies must allocate human resources to devote time to planning and budgeting. Missed activities would imply missed budgets and gaps in service delivery and performance. Kenya has the human capacity to do this. But it needs to be committed to it.The Conversation

 

Timothy Njagi Njeru, Research Fellow, Tegemeo Institute, Egerton University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Economy
The top line out of the new United Nations report released Wednesday on the killing of Washington Post columnist Jamal Khashoggi is that there is “credible evidence” that Saudi Arabia’s crown prince and other high-level officials are personally liable for the grisly murder.
But the 101-page report also shows that while Khashoggi was certainly a wanted man, the kingdom may not have conspired to kill him as a first choice but rather did so as a Plan B, according to the findings by Special Rapporteur Agnes Callamard.
 
Instead, they hoped to take him back to the kingdom to face Mohammed bin Salman personally. When it seemed clear he would not cooperate, they killed him.
 
Saudi Arabia has 11 yet-unidentified people on trial for the murder and is seeking the death penalty for five of them.
 
But Callamard says the trial is a farce and fails to meet international standards.
 
She calls for it to be suspended and for an independent investigative team to look into the kingdom’s involvement instead. Khashoggi’s body has never been found.
 
“Nothing new,” Adel al-Jubeir, the minister of foreign affairs of Saudi Arabia tweeted in response to the report.
 
“The report of the rapporteur in the human rights council contains clear contradictions and baseless allegations which challenge its credibility.”
 
Published in World

Ghana and Ivory Coast announced that they had won concessions from stakeholders in the cocoa industry, including acceptance of a $2,600 floor price for a tonne of cocoa.

The two nations had threatened to stop selling their production to buyers unwilling to meet a minimum price.

Following a two-day meeting called by the two top cocoa producers who together account for over 60% of the world’s production, Joseph Boahen Aidoo, chief executive of the Ghana Cocoa Board, told a news conference that their demands had been accepted in principle by the participants.

“Ivory Coast and Ghana have suspended the sale of the 2020/2021 crop until further notice for preparation of the implementation of the floor price,” he said.

Calling the move “historic”, he said that “this is the first time when the producers have called consumers and the first time whereby suppliers have called buyers to come and engage on price,” he said.

“Over the years it has been the buyers who have determined the price for the suppliers.”

Aidoo added that there would be a follow-up meeting to work out how to implement the agreement.

The world’s chocolate market is worth around $100 billion, of which only $6 billion go to cocoa producers.

 

AFP

Published in Agriculture
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