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Financial Experts Seek Early Budget Passage …To Sustain Capital Importation

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Financial experts have recommended early budget passage, improved business environment and liquidity in the Foreign Exchange Market (Forex) to sustain the flow of capital importation to the economy.
The experts told The Tide source last Friday in Lagos that increase in capital importation to the economy supported the view that foreign investors’ confidence was bolstered on the back of rate convergence and liquidity in the foreign exchange market.
The nation’s Capital Importation report released by National Bureau of Statistics (NBS) on March 2, revealed a 12.2 billion dollars capital inflow in 2017.
The inflow represents an increase of 7,104.4 million dollars or 138.7 per cent, compared with the 5.12 billion dollars figure recorded in 2016.
The report revealed that the capital inflow was divided into three main investment types namely: Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI) and Other Investments.
According to the report, foreign portfolio Investment accounted for 60 per cent capital imports, the single largest share compared to Foreign Direct Investment and Other Investments.
Mr Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI), told reporters that increased portfolio investment was driven by improved investors’ confidence, performance and growth in the Nigerian Stock Exchange (NSE) in 2017.
According to him, S&P Dow Jones Indices ranked NSE as one of the best five capital markets in the world for 2017.
“The NSE closed the year on the positive note as the NSE All-Share Index returned 42.30 per cent year-on-year.
“Market capitalisation grew positively to close at N13.61 trillion compared to N9.25 trillion recorded at the end of 2016,’’ he said.
Yusuf noted that participation of foreign investors in the nation’s equities market gained momentum following the introduction of Investors’ and Exporters’ Foreign Exchange window by the Central Bank of Nigeria (CBN) in April 2017.
“The foreign exchange window and the various forex interventions by CBN helped to ease scarcity and challenge in the foreign exchange market.
“Government needs to intensify efforts to pass the 2018 Budget and expedite its quick implementation toward bridging the nation’s infrastructure deficit which stands as a disincentive to foreign direct investments,’’ he said.
The LCCI boss urged the Federal Government to evolve policies that would attract more foreign capital into the economy to further boost NSE performance and strengthen economic rebound.
Yusuf recommended that more companies should be attracted to get listed on the NSE to further deepen the market, increase trading activities and improve liquidity.
Ms Peace John, a researcher at Centre for the Study of the Economies of Africa (CSEA), told The Tide source that maintaining economic growth as portrayed in the recent GDP report would sustain flow of capital import.
“The investors are coming in already and if we keep having positive data on our economic indicators, that means that recovery process would be consolidated.
“The external factors that have to do with oil price, foreign exchange are stable for now and if the government should do its part with the passage and implementation of budget and effective implementation of Economic Recovery and Growth Plan (ERGP), capital inflow would be sustained,’’ she said.
John noted that further improvements in the ease of doing business, favorable lending rate policy, capital release for projects and tax incentives would attract more investors to different sectors of the economy.

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Oil Slumps To $88/Barrel, OPEC Considers 1mbpd Cut

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The global benchmark for crude, Brent, appreciated in price on Monday, a situation the Organisation of Petroleum Exporting Countries (OPEC) and its allies consider an oil output cut of more than a million barrels per day when they meet today (October 5, 2022).
Industry figures seen on Monday showed that the cost of Brent moved up by 3.7 per cent or $3.15 to close at $88.3/barrel as at 6.03pm Nigerian time.
Another oil grade, the WTI, also increased in price on Monday, gaining $3.36 or 4.23 per cent to close at $82.83/barrel around the same time.
However, oil grades in the OPEC Basket dipped in price, shedding $0.42 or 0.45 per cent to trade at $92.34/barrel around 6.06pm on Monday.
OPEC sources told Reuters that the oil cartel and its allies were considering an output cut of over one million barrels per day at their meeting coming up today (Wednesday).
The latest figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1mbpd.
The meeting to consider a reduction in global oil supply is happening at a time when governments around the world are struggling to control runaway inflation.
A cut in supply leads to a rise in petroleum prices for consumers.
Today’s face-to-face meeting of the 13 OPEC members led by Saudi Arabia and its 10 allied members headed by Russia will be the first in the Austrian capital since the spring of 2020.
“It is a meeting that is taking place at a very interesting global time,” one of the sources told Reuters.
Saudi Arabia, OPEC’s de facto leader, first flagged the possibility of cuts to correct the market in August.
The cartel had agreed to huge cuts in output in 2020 when the pandemic sent oil prices crashing but began to increase production last year as the market improved.
Now, the output cuts are being considered on the back of a slide in oil prices from multi-year highs reached in March and market volatility.
Oil prices soared to almost $140/barrel in March after the start of Russia’s war in Ukraine, but have since fallen to around $80/barrel amid recession fears.

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‘Blue Economy Can Contribute $1.5trn To Economy’

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Secretary-General, International Seabed Authority, Michael Lodge, has said the sustainable development of deep seabed resources located in Africa’s continental shelves, and in the international seabed area can be a key driver for the development of Africa’s Blue Economy.
He stated this, Monday, in Abuja, during a pre-event press briefing on the imperative of supporting Africa’s Blue Economy.
The event is jointly organised by the International Seabed Authority in collaboration with National Boundary Commission, Federal Ministry of Transportation, Nigerian Maritime Administration and Safety Agency, and other relevant Ministries, Departments and Agencies, and aimed to support the  strategy of Africa’s Blue economy.
Quoting the United Nations statisics, Lodge said Blue economy could also contribute up to $1.5tn to the global economy if effectively and sustainably managed.
“The sustainable development of deep seabed resources located in Africa’s continental shelves and in the international seabed area could be a key driver for the development of Africa’s Blue Economy.
“According to the United Nations, Blue Economy could contribute up to $1.5tn to the global economy if effectively and sustainably managed.
“This is a huge opportunity for Africa and each African state. The oceans and seas surrounding the African continent include a wealth of natural living and non-living marine resources. This inspired a growing interest in the sustainable development of the African Blue Economy”, he said.

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FG, States, LGs Share N2.429trn In Three Months

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The three tiers of government comprising Federal, State, and Local, have shared N2.429 trillion from the Federation Account from June to August, 2022.
The amount is made up of statutory distributions, Value Added Tax (VAT), and others that goes to collecting agencies such as the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS).
Data available to The Tide’s source stated that the Federal, State and Local governments got N673.137 billion in August, N954.085 billion in July and N802.407 billion in June.
Under statutory disbursements, which is derived after VAT and cost of collection are deducted from the total distributable revenue that accrues to the Federation Account at the end of every month, N1.823,369 trillion was shared among the Federal, State and Local Government councils.
In the three months, the Federal Government received N437.871 billion; State governments received N776.918 billion, while Local governments got N608.580 billion, thus bringing the total statutory disbursements between June and August to N1.823,369 trillion.
Under the proceeds from VAT, a total allocation of N586.26 billion was made to the benefiting governments in the three months reviewed. In August, the three governments got N215.266 billion, in July, N177.167 billion, and in June, N193.827 billion.
From June to August, the FIRS, Customs and other revenue-generating agencies that are entitled to the cost of collection received and shared N35.487 billion in August, N47.254 billion in July and N44.606 billion in June, 2022, bringing the total for the three months to N127.347billion.
After making all the deductions, the remainder known as the ‘total distributable’ was shared as follows: Federal Government in August received, N259.641 billion, in July N406.610 billion and in June, N321.859 billion. So, in the three months, the Federal Government got N988.11 billion.
Within the same months, the state governments received N222.949 billion in August; N281.342 billion in July and N245.418 billion in June – all amounting to N749.709 billion.

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