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FG ’s Budget Faces Crisis As OPEC Paints Gloomy Outlook For 2021

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Despite the stability of oil prices at $50 per barrel in recent times, the Organisation of Petroleum Exporting Countries (OPEC) has painted a mixed oil market outlook for 2021.
In his opening remarks at the 47th Meeting of the Joint Technical Committee (JTC), yesterday, via videoconference, OPEC Secretary General, Mohammad Barkindo, said, “Amid the hopeful signs, the outlook for the first half of 2021 is very mixed and there are still many downside risks to juggle. We are only beginning to emerge from a year of deep investment cuts, huge job losses and the worst crude oil demand destruction on record.
“Curbs on social and economic activity remain in place in a number of countries, and there is concern about the emergence of a pernicious new strain of the virus. Last night I saw on the news there are now about 30 countries that have reported this new strain.”
According to him, “Though the ongoing restrictions are necessary to combat the pandemic, they have chipped away at business sentiment and consumer confidence in some of the world’s biggest economies. It is too early to tell how quickly key sectors will bounce back to their pre-pandemic growth trajectories even if the vaccines defeat this terrible virus.
“Mr Chairman, sectorally, travel, tourism, leisure and hospitality continue to be affected. Our projections show that there will be rebound in the second half of 2021 with upside potential.
“However, it could be another a couple of years before these sectors bounce back to pre-Covid-19 levels, with corresponding lagging impact on oil demand.
“The Christmas Eve trade agreement between the United Kingdom (UK) and European Union (EU) is a promising development for the recovery process after months of very difficult and rancorous negotiations. Stimulus packages have clearly helped prevent deeper economic contractions and continue to lend crucial recovery support.
“The EU and US have now approved measures which, taken together, provide nearly $2trillion in additional support for those economies. It is worth noting that fiscal and monetary stimulus packages in the G20, including bank guarantees, have reached $25trillion, corresponding to more than 20 per cent of the global economy.”
Barkindo said, “Tomorrow, we begin a new chapter in the Declaration of Cooperation (DoC) with the start of monthly OPEC and non-OPEC Ministerial Meetings to evaluate the market. It was only one year ago that the DoC participating countries began to introduce adjustments of a then-astonishing 1.7million b/d, with additional voluntary contributions pushing that number to 2.1 million b/d.
“These adjustments, as agreed at the 7th OPEC and non-OPEC Ministerial Meeting in December 2019, were a pre-emptory response to support continued stability in 2020, actions that were welcomed widely as the market rang in a new and promising year. Looking back at the projections provided by the JTC, I don’t think anyone could have done a better job.
“In retrospect, those efforts taken at the end of 2019 pale in comparison to the scope and scale of the actions we have carried out since a series of ground-breaking Ministerial Meetings in April, June, and culminating in the visionary decisions taken at the last meeting one month ago today. The outcome of the December 3, Ministerial Meeting paved the way for a gradual return of 2million b/d to the market over the coming months, while the participating countries stand ready to adjust these levels depending on market conditions and developments.”
Barkindo said, “Collectively over the last nine months, we have delivered an unprecedented response to an unparalleled market shock and continue to lead the industry on the road to recovery. We are witnessing the very early stages of Covid-19 vaccinations and the progress so far has injected optimism into the economy. These promising developments, in parallel with the Declaration of Cooperation’s market leadership during the crisis, have contributed to a healthier oil market outlook for 2021.
“Following the last Ministerial Meetings, the price of Brent crude inched above $50 per barrel for the first time since early March, while Brent crude and US West Texas Intermediate experienced their longest stretch of advances since June. After the unprecedented shock experienced last year, the economic forecast calls for brighter days ahead.
“Our analysts expect the global economy to grow by 4.4 per cent in 2021 compared to a sharp contraction of around 4.2 per cent last year. The Covid-19 vaccinations provide upside potential for the economic outlook and may help usher in a strong rebound in the second half of 2021.
“Furthermore, we continue to see upward momentum in Asia, especially China, which remains on course for positive growth in 2020 – a singular achievement among the world’s biggest economies. China’s broad-based recovery forecast stands at about 6.9 per cent for 2021 and provides a beacon of hope for other economies, in the region and beyond. Our analysts in the Secretariat anticipate that crude oil demand will shift from reverse to forward gear and rise to 95.9million b/d this year, a gain of 5.9million b/d from 2020. The non-OECD will be in the driver’s seat with growth of around 3.3million b/d”, Barkindo added.

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Minister Blames Judiciary For Prisons’ Congestion

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The Minister of Interior, Ogbeni Rauf Aregbesola, has blamed the congestion in Nigeria’s correctional facilities on the country’s Judiciary, explaining that the Nigerian Correctional Service (NCOS) was not allowed by law to reject inmates sentenced to correctional centres or to release them.
Aregbesola, represented by Special Adviser on Nigerian Correctional Service, Suleiman Tala, stated this while delivering a paper at a policy advocacy conference entitled, “Decongestion of Correctional Centres: Status Quo”, organised as part of the 60th-anniversary celebration of the Order of The Knights of St Mulumba, Nigeria, Lagos Metropolitan Council, which was held in Lagos, adding that the primary responsibility of NCOS is to hold offenders pending the adjudication of their cases before a law court.
“It is important for the public to be aware that the NCOS and the Ministry of Interior are trying their best to tackle the issue from different angles as the length of time the inmates stay at the custodian centre is not determined by NCOS but by the justice system. I may not be able to reiterate exactly what the challenges are with the judiciary, however, as it affects the NCOS we are doing all we can not to compromise the traditional responsibility of the NCOS,” he stated.
Representing the Inspector General of Police, Baba Usman, Lagos State Commissioner of Police, Hakeem Odumosu, accepted that the police contribute to the congestion but gave his reasons.
“Inconsistence of the appearance of police officers to give evidence at trials has been identified as one of the alleged causes of prolonging trial but the IGP has mandated officers must attend court cases as at when due. The police are being hampered by a high level of distrust between the citizens and their police institution,” he stated.
Also at the conference, Lagos State Catholic Archbishop, Alfred Adewale Martins, who was represented by Rev. Paschal Uwaezeapu, stated that decongestion of the prisons would continue to be a matter as long as the government has refused to fix the country.
“The prison would continue to be congested if we don’t fix the society. As long as our society is a place where everybody takes for himself without considering the neighbour then our prison would continue to be congested. If we need to fix the prison we need to fix the family. These prisoners come from a family. We need to fix the education system also. We need to promote justice, without all these, the prison will soon overflow,” he stated.
Meanwhile, the Lagos Metropolitan Grand Knight, KSM William Adebisi, urged the government to declare a state of emergency on the congestion of prisons.
“The government needs to take the matter seriously as it affects the health of the inmates, economy of the company and behavioural change of the inmates,” he stated.

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FG Seeks $3bn With Eurobond Offer

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The Federal Government has announced plans for a Eurobond issuance in the International Capital Market (ICM) to raise $3billion.
The Debt Management Office (DMO) said, yesterday, that Virtual meetings with investors have been scheduled for today, and September 20, 2021.
It said, “In order to avail local investors the opportunity to invest in the Eurobonds, meetings will also be held with local investors.
“This is the first time local investors will be included in the Roadshows, and this is one of the reasons why a Nigerian Bookrunner (Chapel Hill Denham Advisory Services Ltd) was appointed as one of the Transaction Advisers.
“Through the Eurobond issuance, Nigeria is expected to raise up to $3billion but no more than $6.2billion.”
According to the DMO, the issuance for which all statutory approvals have been received, would be to implement the New External Borrowing in the 2021 Appropriation Act and that “Proceeds are for the financing of various projects in the Act.”
The agency gave further insight, saying, “In addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of Eurobonds by Nigeria benefits the country in many other strategic ways; amongst which are: 1. It is an inflow of foreign exchange, leading to an increase in External Reserves.
“External Reserves help support the Naira Exchange Rate, and Nigeria’s sovereign rating.
“When Nigeria raises funds externally, through Eurobonds, it frees up space in the domestic market for private sector and sub-national borrowers. In effect, it helps the sovereign not to crowd out other borrowers in the domestic market.
“The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector notably banks, to issue Eurobonds to raise capital in the ICM.
“By so doing, their capital base has been strengthened to provide banking services whilst also meeting regulatory requirements. Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.
“The local listing of Nigeria’s Eurobonds on the Nigerian Exchange Ltd. and the FMDQ Securities Exchange Ltd., have increased the range of products on these two (2) exchanges and their respective market capitalization.
“Overall, Eurobond issuances by Nigeria and the investor meetings that precede the pricing have provided a strong global platform for Nigeria to tell its own story and opportunities available in Nigeria for investors.”
The Transaction Advisers appointed by Nigeria for the issuance were: International Bookrunners – JP Morgan, Citigroup Global Markets Limited; Joint Lead Managers -Standard Chartered Bank and Goldman Sachs; Nigerian Bookrunner – Chapel Hill Denham Advisory Services Ltd; Financial Adviser – FSDH Merchant Bank Ltd; while White & Case LLP, was appointed International Legal Adviser; and Banwo&Ighodalo would serve as Nigerian Legal Adviser.
The last time Nigeria accessed the ICM was November 2018.

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Insecurity: Put Nigeria First, FG Tells Media

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The Federal Government has tasked the media to put Nigeria first in the reportage of the country’s activities, particularly the fight against insecurity.
The Minister of Information and Culture, Alhaji Lai Mohammed, made the call in Abuja during the ceremony of the renaming of the News Agency of Nigeria (NAN) Headquarters Building after the former Managing Director and Board Chairman of NAN, late Wada Maida.
Mohammed said it may seem obvious and trite, but for any professional, including a journalist in Nigeria to be able to carry out his or her responsibility at all, the nation must first exist, in peace.
“In other words, if the country goes down, all professionals and everybody go down. It is that stark, and this is why I want to use this platform to appeal to our media to put Nigeria first”, Mohammed said.
Speaking further, the minister said if one picked up most newspapers, watched most television stations or listened to most radio stations in the country, one will be right to think Nigeria is a country at war.
While acknowledging that there were challenges in the country, especially in the area of security, Mohammed, however, said the Buhari administration had not only acknowledged the challenges, it is earnestly tackling the challenges.
“A good example is the decisive manner in which our gallant troops are tackling the banditry in the North-West or the way they are combating the terrorists in the North-East. Our security agencies have also successfully tackled the separatists in the South-East and South-West and the militants in the South-South. Unfortunately, these efforts have only been perfunctorily reflected in the reportage of the security challenges that we face. This is not only unfair, especially to those who are sacrificing their lives to keep us safe, it is unpatriotic.
“To illustrate the damage this non-acknowledgement of the efforts of the security agencies pose to the country, let me tell you what transpired when I recently hosted some members of the Nigerians in Diaspora Organisation (NIDO) UK Chapter, who visited me in my office here in Abuja. They said some of their colleagues who would have come to Nigeria for their programme tagged,‘A Week in and For Nigeria’ during the month of July, did not come out of fear of the security situation in Nigeria. However, those who made the trip said they travelled to their hometowns across the country and returned to Abuja safely. If Nigerians in the diaspora can be afraid to come to their country, imagine how foreigners, including investors and tourists, will feel about coming to the country.
“Whatever image problem Nigeria is suffering from today is mostly due to the unflattering portrayal of the country by the country’s media.
“Even when some media organisations report fake news, they never have the decency to retract such stories and apologise. They simply move on as if nothing has happened.
“We are not saying the media should not report on the security challenges we face. All we are saying is: Be fair and report accurately the efforts being made by the state and federal governments to tackle the challenges. Even if you don’t want to encourage the men and women in uniform fighting to keep us safe, please don’t discourage them with negative reporting. The security challenges we face today will be successfully tackled and Nigeria will not cease to exist, despite the antics of naysayers”, Mohammed added.
Mohammed congratulated the family, friends and associates of the late Maida for the great and much-deserved honour done to him.
He commended the management and staff of the NAN for coming up with the idea to immortalise the late Maida.
“The Federal Government’s decision to approve the proposal was not difficult, upon realising the role played by Alhaji Wada in making NAN the respectable agency that it is today. A man who was everything from Zonal Editor to Foreign Correspondent to Editor-in-Chief to Managing Director to Board Chairman, a man who built this glistening NAN headquarters edifice deserves to be immortalised by the organisation he served so well in his lifetime”, Mohammed stated.
Mohammed prayed that God will continue to comfort and strengthen the family of Maida, even as he prayed that the soul of the departed continues to rest in peace.

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