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IMF PREDICTS NIGERIA’S ECONOMY WILL CONTRAST BY 4.3%

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The International Monetary Fund (IMF) has revised its 2020 gross domestic growth projections for the Nigerian economy.

In its October World Economic Outlook report released in Washington on Tuesday, the IMF projected that Nigeria’s economy would contract by 4.3 per cent in 2020 in real terms.

This is a 1.1 per cent improvement from the 5.4 per cent that was projected in June and deeper than the 3.4 per cent projected in April.

The Washington-based institution projected that the economy would recover in 2021 by 1.7 per cent.

Gita Gopinath (pictured), IMF chief economist and director of the research department, said oil-exporting countries are battling the health and economic impact of the COVID-19 pandemic and the impact of low oil prices.

“They have been hit by the health crisis and they have been hit because they are oil exporters which had a collapse and more importantly, they just don’t have the resources that advanced economies have to deal with this crisis,” Gopinath said.

“Because we don’t have a financial crisis at this point, many emerging markets are able to borrow at record levels in foreign currency this year relative to previous years.”

The IMF chief economist said the foreign debts been acquired by emerging market economies will not be enough and advised that there is a need for continued international support.

This support, Gopinath explained, could be in terms of concessionary financing, aid and debt relief and restructuring.

“There are going to be developing and low-income economies that would need debt relief and, in some cases, restructuring of debt to make sure they have the space to do the spending that they need,” she said.

This contraction will be the worst recession in 37 years, and the second recession in five years, following closely after a negative economic growth of 1.58 per cent in 2016.

Business

Nigeria’s oil revenue not enough to cover petrol import costs – Finance minister

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Nigeria’s revenue being generated from its low oil production cannot cover the cost of imported petrol, Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

She stated this on Thursday in an interview with Reuters on the sideline of the World Economic Forum (WEF) in Davos.

She said the Federal Government hopes that oil production will average 1.6 million barrels per day (bpd) this year.

In the first quarter of 2022, Nigeria’s oil production averaged 1.5 million bpd.

The minister said, “We are not seeing the revenues that we had planned for. When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import.”

This year, the FG had budgeted 1.8 million bpd of production, but frequent crude theft and attacks on pipelines continue to affect the nation’s wealth.

In April, it asked the national assembly to drop the projected production volume to 1.60 million barrels per day.

Despite higher oil prices due to the Russia-Ukraine war, under-recovery costs, also known as petrol subsidy, continue to erode gains.

Nigeria has spent about N1 trillion on petrol import shortfall in the last four months and will spend up to N4 trillion this year. This has also dwindled the federation revenue — just as the Nigerian National Petroleum Company (NNPC) Limited has been unable to remit any amount to the government purse this year.

On the recent hike of the monetary policy rate by the Central Bank of Nigeria (CBN), the minister said the move was necessary due to policy adjustments by the US Federal Reserve and central banks in Europe.

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Aviation

No plane crashed in Lagos – FAAN, NEMA

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Two government agencies, the Federal Airports Authority of Nigeria and National Emergency Management Agency, have dismissed reports of a fresh plane crash in the Ikeja area of Lagos.

An internet user who saw a plane being towed away had sent the picture to the social media, concluding that it was the wreckage of a fresh plane crash in Lagos.

The aircraft, which had missing wings, was spotted on Ikeja-Agege road, causing gridlock along the route on Tuesday as the news went viral on the social media.

But FAAN in a terse statement posted on its social media handles, said Nigerians should disregard the news.

It stated, “The Federal Airports Authority of Nigeria would like to inform the general public to disregard the news making the rounds on social media about an alleged crash at Ikeja Airport.

“The aircraft was sold by the owner to a buyer, who was taking it to its final destination.”

Also, Ibrahim Farinloye, the zonal coordinator, South-West, NEMA, said after due consultations with all critical stakeholders and tracking of all incoming and outgoing flights in Lagos, there was no plane.

An aviation analyst, Daniel Dikio, had also tweeted his observation of the viral video.

“It is an Airbus A319, hasn’t flown domestically in years. I can see traces of a green logo; it likely belonged to First Nation Airways in its time.

“The wings are separated cleanly; this wouldn’t happen in a crash. The separation is a sign of dismantling.

“There is no damage to the fuselage, almost impossible given the purported circumstances”, Dikio noted.

 

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Business

FG targets 1.4mbpd domestic refining before 2027

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Minister of State for Petroleum Resources, Chief Timipre Sylva

The Federal Government has disclosed plans to actualise 1.4 million barrels per day, mbpd, domestic refining of crude oil in the next five years.

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