Connect with us

Business

Nigeria : Corona outbreak pulls down oil prices below budget benchmark

Published

on

Nigeria’s budget estimate appears threatened as oil price drops $5 below the 2020 benchmark on global fears over the impact of the Coronavirus epidemic.

Brent crude which is the international benchmark for crude oil, traded at $51.95 per barrel. This figure is $5 lower than Nigeria’s $57 crude oil price benchmark in the 2020 budget.

The United States West Texas Intermediate, WTI, traded at $47.31 per barrel, down 2.91percent.

According to the International Energy Agency (IEA), global oil demand will witness its first contraction in a decade because the Coronavirus outbreak has resulted in a partial shutdown of the Chinese economy.

For Nigeria, this does not tell a good story as the country depends on crude oil for an estimated 90 percent of export earnings and more than 50 percent of government revenue.

The outbreak has also affected businesses and governments across the world as the supply of some raw materials have been delayed and conferences cancelled.

Commenting on the impact of reduced oil prices on Nigeria’s economy and the risk of a recession, Lukman Otunuga, FXTM research analyst, said recession will continue to hang over the Nigerian economy for as long as crude oil remains the primary source of revenue.

“falling oil presents negative consequences for the economy, especially when considering how roughly 90 percent of export earnings and over 50 percent of government revenues are from crude exports,” he said.

“What is even more alarming is Nigeria’s 2020 budget which has set the benchmark for oil at $57. With Brent and Crude both depreciating over 15 percent since the start of 2020, it raises tough questions whether Nigeria will meet its oil revenue goal of N2.64 trillion.

“The woes do not end here. Foreign exchange reserves are poised to decline on lower oil which not only complicates the Central Bank of Nigeria’s (CBN) efforts to defend the Naira but raises the risk of inflation running rampant.

The toxic combination of lower government revenues, rising consumer prices and weakening local currency is more than enough to threaten Nigeria’s fragile economic recovery.

Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Nigerian stock market opens with N119 billion loss

Published

on

Nigerian equities market resumed trading on Monday with a loss of 0.91 per cent as a result of profit taking in some blue chips.

Speficially, the All-Share Index which opened the week at 25,182.67 lost 228.35 points or 0.91 per cent to close at 24,954.32.

Accordingly, Month-to-Date and Year-to-Date losses increased to -1.2 per cent and -7.0 per cent, respectively.

Also, the market capitalisation shed N119 billion or 0.91 per cent to close at N13.017 trillion against N13.136 trillion posted on Thursday.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; MTN Nigeria Communications (MTNN), BUA Cement, Zenith Bank, Ecobank Transnational Incorporated and Guaranty Trust Bank.

Analysts at United Capital Plc said: “Looking ahead, we expect the market to remain volatile, as investors lock funds in cheap and fundamentally sound stocks, while taking profit on some stocks that gained last week.”

Consequently, market breadth closed negative with 16 stocks compared with 25 decliners.

Prestige Assurance led the losers’ chart in percentage terms, dropping by 10 per cent, to close at 63k, per share.

Neimeth International Pharmaceuticals followed with 9.73 per cent to close at N2.32, while AIICO Insurance shed 9.32 per cent to close at N1.07, per share.

ETI dropped 7.34 per cent to close at N5.05, while UACN Property Development dipped 6.73 per cent to close at 97k, per share.

Conversely, Fidson Healthcare and Red Star Express led the gainers’ chart in percentage terms, appreciating by 10 per cent each to close at N3.30 and N3.63 per share, respectively.

Cornerstone Insurance followed with a gain 9.80 per cent to close at 56k, per share.

Honeywell Flour Mills rose by 9.78 per cent to close at N1.01, while Unity Bank appreciated by 8.77 per cent to close at 62k, per share.

In the same vein, the total volume traded declined by 29.51 per cent with an exchange of 237.65 million shares, worth N1.61 billion, and traded in 4,808 deals.

This was in contrast with a total of 337.13 million shares valued at N3.41 billion achieved in 3,880 deals on Thursday.

Transactions in the shares of FBN Holdings topped the activity chart with 24.35 million shares worth N128.76 million.

Zenith Bank followed with 24.14 million shares valued at N392.36 million, while FCMB Group accounted for 19.47 million shares valued at N33.48 million.

Caverton Offshore traded 17.37 million shares worth N39.02 million, while United Bank for Africa transacted 14.64 million shares valued at N95.74 million.

Today.ng

Continue Reading

Maritime

NIMASA tasked on discrimination against Nigerian seafarers’ certificate

Published

on

A Marine Engineer, Daniel Ikueyemi, on Saturday urged the Nigerian Maritime Administration and Safety Agency (NIMASA) to address the issue of discrimination against the Nigerian Seafarers’ Certificate of Competence (COC).

He made the appeal on an Instagram live programme organised by Mrs Ezinne Azunnah of the MaritimeTvNews, entitled, ”Seafarers’ Certificate of Competence: Quality and Opportunities”.

The Certificate of Competency (COC) is a form of licence every mariner is granted to work on ships.

The certificate ensures that the concerned person has the sufficient knowledge and skills to sail on ocean-going vessels.

According to him, our COC is not strong enough and the issue of discrimination of the COC is a common thing for us.

He added that to ensure that the discrimination stopped, there was the need for NIMASA as the regulator to strengthen the security of the COC to standardise it and prevent it from being forged.

“Other ways to tackle the issue is to have a Memorandum of Understanding (MoU) with some African countries to ensure seafarers utilise their COC.

“There is a notion that 60 per cent of what is taught does not correlate.

“There is need to check this notion and also look into the curriculum that are being used in the country’s maritime academies,’’ he said.

Ikueyemi also pointed out that the feedback mechanism that existed did not capture seafarers’ experience at sea.

He urged NIMASA to have a plan from point of training to point at which seafarers were employed so that their trade would be harnessed.

Also Capt. Ola Alufa, a Marine Captain and Consultant said that the restriction of the country’s COC had not given seafarers the opportunity to be utilised globally.

According to him, Nigerian seafarers are faced with limitations as regards categorisation and that should be expunged.

Alufa suggested that Nigerian seafarers should be well-employed everywhere and be able to work in vessels.

“The limitation is the categorisation. We do not have trading vessels and we need them now.

“NIMASA has tried as regards the curriculum, experience and examination which is very tough. It is of international standard, we need to encourage our own certificate,” he said

He recommended that the Ministry of Transportation must work hand in hand with NIMASA to write to the International Maritime Organisation (IMO) to expunge the clause affecting seafarers.

“A lot of seafarers have not yet gone on board a ship before. They just got the certificate from schools but there is no opportunity and this still bounces back to government on the need for training vessels.

“The vessels will give seafarers the experience and certificate to be recognised worldwide,” he said. (NAN)

Continue Reading

News