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2021 budget under threats from 2nd round COVID-19 triggered Oil price slump says FG

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2021 budget under threats from 2nd round COVID-19 triggered Oil price slump says FG


Resurgence of COVID-19 in Europe, which has trigered the oil price to decline in the international market, is likely to affect the 2021 budget estimate, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has indicated.

The 2021 budget was predicated on $40 per barrel. But the current price of the crude oil in the market stands at between $37 and $38 per barrel 

The Finance minister said though the federal government “took the safer path” to benchmark the crude oil price in the 2021 budget but the second wave of COVID-19 in Europe threatened the estimate. 

Ahmed stated this on Thursday when she appeared before the Senate Committee on Finance to defend her ministry’s budget. 

The chairman of the panel, Senator Adeola  Olamilekan (APC, Lagos) had asked the minister about the contingency plans the federal government has put in place to insulate the budget from the shocks of falling oil price. 

Responding, the minister said: “The actual projection was $40 per barrel and that is the average price that we projected to be for the year . Some of the institutions that are responsible for tracking price of crude oil, actually have crude oil price going as far as $50, $52 per barrel. We took the safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two.”
The minister, however, dismissed insinuations that the federal government may increase Value Added Tax (VAT) again by 2.5% in 2021.

“As for the finance bill we have the draft. There will be no increase in VAT or any form of taxes because we see 2021 as a year of of recovery – not only got but businesses as well,” she said.

When they appeared to defend their budgets, almost all the heads of the agencies under the committee’s supervision lamented that their budgetary allocations were too meagre to meet their obligations. 

The Accountant General of the Federation, Ahmed Idris, said  his agency has 37 offices in dire need of rehabilitation. 

“We are grossly underfunded. We are being treated like any other MDA. We know the constraints but we can be better in terms of our ability to meet expectations and needs of Nigerian economy,” he said. 
But the finance minister said the budget office could not go beyond the available resources.”Every body is claiming scarce resources, but we can’t go beyond what is available,” she said. 
The Director General, Budget Office, Ben Akabueze, said until the federal government get more revenue, no agency of government would get enough allocation. 

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Economy

Apprehension as NBS announces Nigeria’s slip into worst, second recession under Buhari

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Apprehension as NBS announces Nigeria’s slip into worst, second recession under Buhari

Fear grips Nigerians as National Bureau of Statistics (NBS), the country’s official data agency announced that the economy has slipped into a second recession under President Muhammadu Buhari’s administration.
NBS said the economy started witnessing recession at the end of the third quarter (Q3) which ended in September.
In 2016 following a lull in economic activities as a result of the delay in the appointment of ministers and other key appointees upon take over of the reins of government in 2015 by President Buhari, Nigeria’s economy went into a recession.
The current recession the NBS said is the worst since 1987 as the Gross Domestic Product in real terms declined by -3.62% (year-on-year) in the third quarter of 2020 and is driven by the long closure of the Nigerian borders which restricted economic movements across the borders.
“Nigeria’s gross domestic product (GDP) recorded a growth rate of –3.62% (year-on-year) in real terms in the third quarter of 2020,” NBS said on Saturday.

“Cumulatively, the economy has contracted by -2.48%While this represents an improvement of 2.48% points over the –6.10% growth rate recorded in the preceding quarter (Q2 2020), it also indicates that two consecutive quarters of negative growth have been recorded in 2020.
“Furthermore, growth in Q3 2020 was slower by 5.90% points when compared to the third quarter of 2019 which recorded a real growth rate of 2.28% year on year.
“The performance of the economy in Q3 2020 reflected residual effects of the restrictions to movement and economic activity implemented across the country in early Q2 in response to the COVID-19 pandemic.
“As these restrictions were lifted, businesses re-opened and international travel and trading activities resumed, some economic activities have returned to positive growth. A total of 18 economic activities recorded positive growth in Q3 2020, compared to 13 activities in Q2 2020,” it explained further

The report also said during the quarter under review, aggregate GDP stood at N39,089,460.61 million in nominal terms, adding that the performance was 3.39% higher when compared to the third quarter of 2019 which recorded an aggregate of N37,806,924.41 million.
“This rate was, however, lower relative to growth recorded in the third quarter of 2019 by –9.91% points but higher than the proceeding quarter by 6.19% points.
“For clarity, the Nigerian economy has been broadly classified into the oil and non-oil sectors:The contract mark the beginning of a full-blown recession and second consecutive contraction from -6.10 per cent recorded in the previous quarter of this year.”
According to the numbers contained in the report, oil GDP contracted by -13.89 per cent from -6.63 per cent in the second quarter of this year and 6.49 per cent in Q3 2019.The country’s non-Oil GDP contracted -2.51 per cent from -6.05 per cent in Q2 2020 and 1.85 per cent in Q3 2019 Information & Communication under Services GDP grew 14.56 per cent compared to 16.52 per cent in Q2 2020 and 9.88 per cent in Q3 2019.

Services real GDP contracted by -5.49 per cent compared to -6.78 per cent in Q2 2020 and 1.87 per cent in Q3 2019.
Construction under Industry real GDP grew by -2.84 per cent compared to -31.77 per cent in Q2 2020 and 2.37 per cent in Q3 2019.
Industry real GDP contracted by -6.12 per cent compared to -12.05 per cent in Q2 2020 and 3.21 per cent in Q3 2019. Telecoms real GDP grew by 17.36 per cent compared to 18.1 per cent in Q2 2020 and 11.3 per cent in Q3 2019.
Agricultural sector grew by 1.39 per cent compared to 1.58 per cent in Q2 2020 & 2.28 per cent in Q3 2019.

























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Ajaokuta Steel critical to Nigeria’s rapid development says Adeyemo

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Ajaokuta Steel critical to Nigeria’s rapid development says Adeyemo

By Rex Danjuma

Deputy Secretary general of the African Iron and Steel Association (AISA), Solomon Femi Adeyemo has reechoed the fact that Nigeria’s development is anchored on the resuscitation of the Ajaokuta steel Company.
He spoke over the weekend when he recieved a certificate of credence conferred on him by Public Office Holders Association of Nigeria (POHAN) for excellence.
The steel complex which was said to have been 90% completed in 1984 by late Nigerian first executive President Alhaji Shehu Shagari had been abandoned by successive administrations and the gigantic project has been lying fallow almost in the shadow of its potentials.
A accord to revive the Ajaokuta project was reached recently during a meeting between Nigerian President Muhammadu Buhari and Russian President Vladimir Putin in Russia in October last year.
The partnership was meant to help get sections of the factory into production before the end of 2019, according to, the minister of Mines and Steel Development Olamilekan Adegbite.

Continuing the deputy secretary general said no nation can develop rapidly without steel.

“Firstly, Steel is the bedrock of every development in any country, go to China, go to Asian countries where we have Steel industries that are working they put them to use, even the per capita income of China at a time was measured by the Steel that they produce so you see there cannot be any meaningful development in any country without Steel it is not possible.”
We had a committee that was set up by world Steel Association and we called it sustainability study group, I was part of that sustainability study group and we found out that there is nobody who goes out that has no element of Steel on him.
“There is no way any person will dress up and there is no element of Steel on him.
“Check your Biro, your button, some of the designs on your cloths, so Steel is so important that we carry it along with us anytime, anyway and everywhere we are. Imagine that about 200m people in Nigeria are carrying one product of Steel in one form or the order.
“Think of the level of production, think of the products. To come to look at Ajaokuta Steel, you see there are other industries that are tied to this Steel complex.
“It is an integrated Steel complex, that means every other one comes to support it. Look at the downstream effect, is it those that are going to be building or those that are going to be using it for one thing or the other.
“Think of the thousands of products that would be coming out of it just like in the issue of the Petroleum product where Nigerians base their argument on just petrol, what of all other products that are associated with it?
“We are not talking about the black oil, petroleum jelly that we can get out of it, we are just talking about petrol, and that is what we are talking about in the Steel sector.
“In the Steel sector we have so many other things that are attached to it.
He expressed the confidence that Ajaokuta steel Company would be back on track as enunciated by President Muhammadu Buhari.

Adeyemo based his confidence on the believe that the issue is very close to the President’s heart and so he does not have any doubt as to the coming back on stream of the steel complex.
The deputy secretary general said from the pronouncement of the President of the Federal Republic of Nigeria, when he said he has set up committee of professionals who will look into the immediate take off of the Ajaokuta Steel, ‘all we need to do is to keep our fingers crossed and be praying for that committee that has been set up so that they hasten up.’
Adeyemo indicated that the minister at another forum was also quoted as saying that they are making sure that the Ajaokuta steel complex takes effect and seen to be working before the exit if the President Buhari administration. “We can just pray for them that this promises will come to pass.”
He said though non of the African Iron and steel Association members is a member of the committee however
very many of the committee members are engineers adding that they have the confidence they will deliver as promised.
He said on behalf African Iron and steel Association they had written to the Federal Government to congratulate them for taking that bold step and the committee thank them as they agreed to get back when their inputs are needed.
He expressed the hope that the committee is going to work objectively and call those who knows something about this thing to come and chip in their own knowledge.
The deputy secretary general said the proposed multiple railway projects to achieve Intermodal Transportation in the country as captured in the 2021 budget by the federal Government would easily be achieved if Ajaokuta resuscitated to produce that railtracks.
He recalled at a time when Government was about to build the Stadium in Abuja when the association went to the President then, chief obasanjo and told him, to allow the Nigeria steel industries to produce the Steel quantum of the Stadium and the answer was not favourable.
“We should be looking for way forward and that is those who knows the thing should be allowed to do it. We should use our local content to achieve our purpose.”

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African Iron and steel confident Buhari will resuscitate Ajaokuta steel complex before end of tenure

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African Iron and steel confident Buhari will resuscitate Ajaokuta steel complex before end of tenure

**says no meaningful development without steel in any country

Deputy Secretary general of the African Iron and steel Association (AISA), Solomon Femi Adeyemo has expressed the confidence that Ajaokuta steel Company would be back on track as enunciated by President Muhammadu Buhari.
He spoke over the weekend when he recieved a certificate of credence given to him by Public Office Holders Association of Nigeria (POHAN) for excellence.
Adeyemo based his confidence on the believe that the issue is very close to the President’s heart and so he does not have any doubt as to the coming back on stream of the steel complex.

The steel complex which was said to have been 90% completed in 1984 by late 0Nigerian first executive President Alhaji Shehu Shagari had been abandoned by successive administrations and the gigantic project has been lying fallow almost in the shadow of its potentials.
Shehu Shagari and Leonid Brezhnev led Nigeria and Russia when the two countries first started to build the Ajaokuta steel rolling mill in 1979.

Forty years after Nigeria returned to Russia for a bilateral agreement to resuscitate the now derelict steel factory complex.
The accord to revive the Ajaokuta project was reached during a meeting between Nigerian President Muhammadu Buhari and Russian President Vladimir Putin in Russia in October last year.
The partnership was meant to help get sections of the factory into production before the end of 2019, according to, the minister of Mines and Steel Development Olamilekan Adegbite.
We are now almost at the close of 2020 the project is yet to be completed.
The deputy secretary general said from the pronouncement of the President of the Federal Republic of Nigeria, when he said he has set up committee of professionals who will look into the immediate take off of the Ajaokuta Steel, ‘all we need to do is to keep our fingers crossed and be praying for that committee that has been set up so that they hasten up.’

Adeyemo indicated that the minister at another forum was also quoted as saying that they are making sure that the Ajaokuta steel complex takes effect and seen to be working before the exit if the President Buhari administration. “We can just pray for them that this promises will come to pass.”
On what it means for Nigeria if Ajaokuta is made to be working he said,
“Firstly, Steel is the bedrock of every development in any country, go to China, go to Asian countries where we have Steel industries that are working they put them to use, even the per capita income of China at a time was measured by the Steel that they produce so you see there cannot be any meaningful development in any country without Steel it is not possible.”

We had a committee that was set up by world Steel Association and we called it sustainability study group, I was part of that sustainability study group and we found out that there is nobody who goes out that has no element of Steel on him.
“There is no way any person will dress up and there is no element of Steel on him.
“Check your Biro, your button, some of the designs on your cloths, so Steel is so important that we carry it along with us anytime, anyway and everywhere we are. Imagine that about 200m people in Nigeria are carrying one product of Steel in one form or the order.
“Think of the level of production, think of the products. To come to look at Ajaokuta Steel, you see there are other industries that are tied to this Steel complex.
“It is an integrated Steel complex, that means every other one comes to support it. Look at the downstream effect, is it those that are going to be building or those that are going to be using it for one thing or the other.
“Think of the thousands of products that would be coming out of it just like in the issue of the Petroleum product where Nigerians base their argument on just petrol, what of all other products that are associated with it?
“We are not talking about the black oil, petroleum jelly that we can get out of it, we are just talking about petrol, and that is what we are talking about in the Steel sector.
“In the Steel sector we have so many other things that are attached to it.

He said though non of the African Iron and steel Association members is a member of the committee however
very many of the committee members are engineers adding that they have the confidence they will deliver as promised.

He said on behalf African they have written to the Federal Government to congratulate them for taking that bold step and the committee thank them as they agreed to get back when their inputs are needed.
He expressed the hope that the committee is going to work objectively and call those who knows something about this thing to come and chip in their own knowledge.
The deputy secretary general said the proposed multiple railway projects to achieve Intermodal Transportation in the country as captured in the 2021 budget by the federal Government would easily be achieved as Ajaokuta will be handy in producing that railtracks.

He recalled at a time when Government was about to build the Stadium in Abuja when the association went to the President then, chief obasanjo and told him, the Nigeria steel industries to produce the Steel quantum of the Stadium and the answer was not favourable.
“We should be looking for way forward and that is those who knows the thing should be allowed to do it. We should use our local content to achieve our purpose.”

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