The International Monetary Fund says Nigeria’s economy is expected to start recovering next year but it can only reach its pre-pandemic level in 2022.
This is the outcome of a virtual mission conduced by an IMF staff team led by Jesmin Rahman in the context of the 2020 Article IV Consultation with Nigeria.
The survey was done between October 30 and November 17, 2020, according to the IMF.
The fund, however, said the team concluded that under current policies, the outlook in Nigeria was, however, challenging.
The IMF said, “Real GDP (Gross Domestic Product) is projected to contract by 3¼ per cent in 2020. The recovery is projected to start in 2021, with subdued growth of 1½ per cent and output recovering to its pre-pandemic level only in 2022.
“Despite an expected easing of food prices, inflation is projected to remain in double-digits and above the Central Bank of Nigeria’s target range, absent monetary policy reforms.”
The IMF stated that fiscal deficits were projected to remain elevated in the medium term, following a significant decline in revenue collections from levels that were already among the lowest in the world.
It said there were significant downside risks to this near-term outlook arising from the uncertain course of the pandemic both globally and in Nigeria.
The IMF said the COVID-19 global pandemic was exacting a heavy toll on the Nigerian economy, which was already experiencing falling per capita income and double-digit inflation, with limited buffers and structural bottlenecks.
It said, “Low oil prices and sharp capital outflows have significantly increased balance of payments pressures and, together with the pandemic-related lockdown, have led to a large output contraction and increased unemployment.
“Supply shortages have pushed up headline inflation to a 30-month high.”
It said real GDP was contracting; inflation was increasing, and external vulnerabilities remained large.
The fund stressed that major policy adjustments embracing broad market reforms were needed.
Bloody clashes: Sanwo-Olu’s RTEAN ban timely, say auto journalists
The Nigeria Auto Journalists Association (NAJA), the umbrella association of automotive reporters in Nigeria, has commended the Lagos State Governor, Babajide Sanwo-Olu, for his swift action in suspending all activities of the Road Transport Employers Association of Nigeria (RTEAN) in the state following the recent restiveness between rival members of the group in Iyana-Iba, Ojo and Lagos Island areas of the state.
Mike Ochonma, Chairman of NAJA, made the commendation in a press statement he issued after the ban on the activities of RTEAN.
The chairman of NAJA stated that the ban by his the governor became imperative to prevent further breakdown of law and order in the state.
He called for more restraint and caution from RTEAN members to allow the state government to take necessary steps that would not only restore peace and decorum from the association, but more importantly, guarantee the security of lives of defenseless Lagos commuters going about their normal business.
The governor had also announced the constitution of a 35-man caretaker committee to take over activities of the union henceforth.
Heading the committee is Sulaiman Adeshina Raji with Bamgbose Oluseyi as deputy chairman.
During the clash last Wednesday, the transport union members were seen in a trending video clip engaging themselves in a free-for-all, hauling stones, bottles, cutlasses and other dangerous weapons at each other.
Two persons were reported killed during the clash.
Major marketers hail NNPCL’s acquisition of top downstream firm, OVH Energy
The Major Oil Marketers Association of Nigeria (MOMAN), an umbrella body of the largest downstream oil and gas companies in the country, has congratulated the Nigerian National Petroleum Company Limited (NNPCL) on the successful acquisition of OVH Energy Marketing (OVHEM) Limited, a major downstream operator.
MOMAN in a statement issued yesterday by its Chairman and Managing Director of Ardova Plc, Mr. Olumide Adeosun, welcomed and encouraged the ongoing market consolidation geared towards bringing stability, cost and logistics optimisation in the downstream sector.
OVH is the owner and operator of the Oando- branded retail service stations across the country, and the company and NNPCL are member companies of MOMAN.
The Group Chief Executive Officer (GCEO) of NNPCL, Mallam Mele Kyari and the Chief Executive Executive Officer of OVH Energy Marketing Limited, Mr. Huub Stokman, had announced the acquisition transaction last weekend at an event held in Abuja.
However, commenting on the development, Adeosun said, “We send hearty congratulations to NNPC Retail Limited and OVH Energy Marketing Limited on the successful acquisition of OVH Energy Marketing Limited by NNPC Limited.
“Both companies are active MOMAN members who are committed to our core values of health, safety, the protection of the environment, quality, customer service, innovation, technology and compliance with international corporate governance codes.
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“MOMAN welcomes and encourages the ongoing market consolidation which will bring stability, cost and logistics optimisation, enhanced competition and best practice sharing as we progress to a deregulated market.”
Kyari had said OVH Energy’s Oando- branded retail service stations would be rebranded into the NNPCL’s brand and merged with NNPC Retail Limited with full integration scheduled to take place by the end of 2023.
Both Kyari and Stokman were, however, silent on the financial implication of the deal and what would be the fate of OVH Energy Marketing’s employees when the formal takeover takes place by 2023.
The acquisition tagged by NNPCL as ‘Acquisition for Growth’, was expected to see the national oil company become the owner of entire assets of OVH Energy Marketing, licensee of the Oando retail brand and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.
OVH Energy boasts of distributing over one billion litres of refined petroleum products annually while ASPM Limited is focused on strengthening Nigeria’s downstream value chain through the Lagos jetty.
In the short term, the acquisition would see the NNPCL receive a jetty (ASPM) with 240,000 metric tonnes monthly capacity, eight Liquefied Petroleum Gas (LPG) plants, three lubes blending plants, three aviation depots and 12 warehouses.
The deal would also bring over 380 additional filling stations under NNPCL retail brand in Nigeria and Togo, on its journey to attaining 1,500 stations, making it the largest petroleum product retail network in Africa.
OVH’s expertise spans the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial and industrial purposes.
The NNPCL GCEO had explained that the strategic move was aimed to create the leading downstream energy company in Nigeria and West Africa, driven by operational efficiency, best-in-class management, and physical infrastructure while offering premium petroleum products and related services to customers, in line with global standards.
Through this acquisition, he said the NNPC Retail Limited would build on the existing success of OVH Energy and operate model service outlets leveraging OVH’s extensive asset base and commercial capabilities.
Kyari further stated that the NNPCL was bringing to the table, its 45 years of experience and strong capability to bear on the management of the facilities.He maintained that securing the country against energy poverty would mean access to petroleum products in addition to managing the energy transition, which he said has become a reality.
NMDPRA seals 16 gas plants, arrests five suspects in Edo
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has sealed 16 illegal gas facilities in Edo State.
Some filling stations were also sealed over an alleged breach of rules and regulations.
The agency arrested five suspects during the exercise.
The agency’s state comptroller, Ebi Ogionwo, said the clampdown was to curb the activities of illegal and unlicensed oil and gas operators in the state.
He alleged that some misguided operators were setting up oil and gas facilities in areas not suitable for the business and without necessary approval from the agency.
Ogionwo said, “It is an offence for anyone to site such facilities without due approval from the NMDPRA. The agency is out to bring sanity to the operations of midstream and downstream petroleum business in the state.”
He further warned investors against taking laws into their hands by setting up gas and petroleum facilities in areas not approved by the agency.
Ogionwo said five suspects arrested during the exercise would be charged to court.
“There are laws, guidelines and regulations that people must follow before setting up oil and gas facilities. So, the purpose of the operations is also to check the level of compliance by those who have set up these facilities in the state and take necessary actions that are required,” he said.
Ogionwo added that the illegal operations of oil and gas facilities compromised the safety of lives, property, environment as well as deprived both the state and Federal Governments of the revenue that should accrue to them through taxes and other sources.
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