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COVID19: $30 oil price bench mark uncertain for 2020 budget- Uche warns

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COVID-19: $30 oil price benchmark uncertain for 2020 budget- Capital Market Professor, Uwaleke warns.

Prof Uche Uwaleke, Professor of Capital market, Nasarawa State University, Nigeria, said it will be uncertain to stick to $30 dollar per barrel, regarding a reduction in reference price in crude oil in the 2020 budget.

He added” looking into the unfavorable developments in the international crude oil market and against the backdrop of the forecast by the International Energy Agency of low oil demand in 2020 due to COVID 19”.

He also said, “Even when major oil consumer nations such as the US, China, and India eventually re-open their economies, the quantum of accumulated unsold inventory will not allow prices to recover appreciably.”

He explained, “In any case, I expect that a lot of traders, leveraging derivatives, must have locked-in low prices for future delivery of crude oil at least for the next few months in view of the uncertainties occasioned by COVID’19.”

Prof Uche Uwaleke pointed out, “By implication, in the event of an unlikely oil price spike, oil revenue may not be significantly impacted.
“I had also expected a further slash in oil production benchmark from 1.7 million barrels per day for the same reason I mentioned earlier. Given the current supply glut, only a deep cut in output by OPEC and OPEC+ will save the day.”

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Prof Uche Uwaleke further said, “The fact is that a Budget is supposed to be guided by the principle of conservatism, which means those saddled with the responsibility of its preparation are expected to err on the side of caution. If at the end of the day, oil price appreciates above the budget reference price, then it presents an opportunity to build buffer or earmark any excess for critical infrastructure.”

He added, “Having noted that, the implication of this development is grave not only for the Federal Government but also for State governments, whose budget assumptions are also predicated on that of the former.”

He gave advice, “It calls for cost cutting measures and prioritization of spending”.
“Borrowing to finance the deficit should only be made after a thorough cost and benefit analysis.
Because oil revenue drives the economy even though it constitutes just roughly 10% of GDP, the economic headwinds of 2020 occasioned by the twin shocks of oil price crash and the Coronavirus pandemic will combine to depress economic activities in Nigeria.
“So, projection of 3.4% negative GDP growth rate should not surprise anyone. Faced with this reality, the major concern of the government should be to reduce the recession cycle and minimize its knock-on effect on the ordinary citizen through the right spending targeting Health, Education, power and roads while the Central Bank of Nigeria, C BN, continues to focus on and possibly scale up its interventions in Agriculture, small and medium enterprises”.

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Business Africa

Namibia Bans Cattle Movement Following Food, Mouth Disease Outbreak

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Namibia bans cattle movement following food, mouth disease outbreak Read more at: https://www.vanguardngr.com/2020/10/namibia-bans-cattle-movement-following-food-mouth-disease-outbreak/

Namibia has placed a ban on the movement of all cloven-hoofed animals and their products in the country’s Kavango East region after an outbreak of Foot and Mouth Disease (FMD) was confirmed.

In a statement, the executive director of  Namibia’s Ministry of Agriculture Percy Misika said that Namibia had detected a Foot and Mouth Disease outbreak in the FMD protection zone.

The Executive Director added that all movement of animals across the Namibian or Angolan international borders has also been suspended.

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“All animal gatherings such as auctions and cultural shows are suspended including the slaughtering of cloven-hoofed animals except vaccinations,” Misika said.

Misika said surveillance teams have been sent to the region to establish the extent of the outbreak and So far, investigations by officials showed that 13 out of 657 cattle tested positive for FMD.

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President Buhari Warns ECOWAS Against Tenure Elongation

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President Buhari Warns ECOWAS Against Tenure Elongation

President Muhammadu Buhari has strongly warned that with the enormous socio-economic and security challenges confronting west Africa, the sub- region cannot afford another political crisis in the guise of tenure elongation.

Buhari said this while addressing the 57th Extraordinary Session of the Authority of ECOWAS Heads of State and Government in Niamey, the Republic of Niger.

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“It is important that as leaders of our individual member states of ECOWAS, we need to adhere to the constitutional provisions of our countries, particularly on term limits. This is one area that generates crisis and political tension in our sub-region.

“As it is, the challenges facing the sub-region are enormous; from socio-economic matters to security issues, the ECOWAS sub-region cannot therefore afford another political crisis, in the guise of tenure elongation,’’ he said.

He also expressed worry over the premature adoption of ECO as a single currency by French speaking West African Countries, stressing the need for them to return to the agreed roadmap.

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Nigerian Stocks Beat Global Slowdown With N154B Gain

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Nigerian Stocks Beat Global Slowdown With N154B Gain

Nigerian stocks continued to increase as investors took advantage of low share prices and continued to buy bargain stocks throughout the week, resulting in the stock price closing with an average return (increase) of 1.17% at the weekend, the second highest gain among global advanced and emerging markets. Kenya recorded an average return (increase) of 3.4%

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Trading reports at the Nigerian Stock Exchange (NSE) at the weekend showed the overall consensus across the market was for buying stocks across major sectors as investors continued to react positively to news of how much money is being made by companies in the first half of 2020. The benchmark index for Nigerian equities, the All Share Index (ASI), closed weekend with average increase of 1.17 per cent, equivalent to a net increase across all the shares in the index of N154 billion

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#COVID19NIGERIA Situation Report

The #COVID19Nigeria situation report for 21st July, 2020 has been published. Our daily reports provide a summary of the epidemiological situation & response activities in Nigeria

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@Africa CDC

The African Union and Africa CDC will virtually rollout the Partnership to Accelerate COVID-19 Testing (PACT) in Africa tomorrow 4 June, 2020 at 11.00 am Eastern Africa Time.

The African Union and Africa CDC will virtually rollout the Partnership to Accelerate COVID-19 Testing (PACT) in Africa tomorrow 4 June, 2020 at 11.00 am Eastern Africa Time.

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