Business

Oil Price Rises After Shocking OPEC+ Production Cut

Published

8 months ago

April 3, 2023

Editor

The oil price has surged to $86 per barrel after the world’s largest producers, the Organisation of the Petroleum Exporting Countries (OPEC) announced a surprise cut in production.

The development, is, however, likely to stimulate fresh tensions with the United States as Western governments try to get a grip on inflation.

According to the Guardian UK, the OPEC+ group of countries, which includes major producers Saudi Arabia, Iraq and Russia, said they would reduce production by around 1 million barrels a day, accounting for about 3.7% of global demand.

The move is atop of existing plans to continue cutting 2 million barrels a day – initially decided in November – until the end of 2023.

The decision instigated an immediate spike in Brent crude futures contracts for May, with the international benchmark for oil prices rising more than 7% to $86 a barrel on Monday morning.

Shares in the UK’s biggest oil producers jumped in response to higher oil prices. BP and Shell were up 4% on Monday morning, making them the top risers on the FTSE 100. The FTSE 250 companies Harbour Energy and Tullow Oil were up nearly 6% and 4%, respectively.

While OPEC+ representatives said the move was proposed to support market price stability, some analysts said members were angling for higher profits.

“Officially, the cartel wants price stability in oil markets,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. “But in reality, they simply want higher prices.”

The cut arises following a drop in oil prices in the first three months of the year, which resulted in its worst first-quarter performance since travel bans came into force at the start of the Covid pandemic in 2020.

But the western governments are concerned that the decision by OPEC+ to prop up prices could harm efforts to curb inflation that were originally exacerbated by geopolitical tensions following Russia’s invasion of Ukraine.

Michael Hewson, the chief market analyst at CMC Markets UK, said: “The reality is that inflation is unlikely to be receding any time soon short of an economic collapse, and with OPEC+ unexpectedly announcing at the weekend that they would be cutting output by 1.1 million barrels a day from next month, we could well see the economic boost offered by the recent fall in energy prices start to reverse if this morning’s surge in oil prices gains traction and starts to head towards $100 a barrel.”

The United States came out strongly against the OPEC+ output cut, which could prompt a further spike in fuel prices and consumer costs more broadly. “We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear,” a spokesperson for the US national security council said.

Business

Fuel Subsidy Removal Cripples 90% Of Nigerian Businesses – Report

Published

2 days ago

December 5, 2023

Editor

The fuel subsidy removal policy of President Bola Tinubu’s government, which took off in June 2023, negatively affected 90 per cent of businesses in Nigeria.

This is according to a recent report by Fate Foundation, titled “State of Entrepreneurship,” which surveyed over 10,000 businesses across the 36 states of the country and the FCT.

According to the report, smaller businesses were affected more than big businesses, and the policy resulted in high operating costs and lower profits due to weak demand and the loss of customers.

The report further stated: “Entrepreneurs in the South East were the most affected, while those in the South South were the least affected, relative to other regions. The impact of the policy was even for both male and female entrepreneurs.”

The report also revealed that around 89 per cent of businesses in the country were negatively affected by the naira scarcity experienced in the first quarter of 2023, with the agricultural sector being the most affected.

It further explained that the impact of the naira scarcity on farmers led to the contraction of the agricultural sector’s output by 0.9 per cent in the GDP report for Q1. The decline was the first in over three decades.

Regarding Nigerian entrepreneurs’ outlook towards business opportunities, around 86 per cent reported being optimistic about the future. However, the figure is less than the 93 per cent who affirmed their positive outlook in 2022.

According to the report, service sector businesses accounted for the country’s major share of businesses.

“While 35 per cent of businesses offer services, 22 per cent sell goods, and another 42 per cent trade in both goods and services. At the sectoral level, 18.8 per cent of total businesses operate in the wholesale and retail trade sector,” the report stated.

Business

Nigerian Correctional Service Begins Commercial Bread Production In Benin

Published

2 days ago

December 5, 2023

Editor

The Nigerian Correctional Service (NCoS) Zone G, has commenced the production of bread in Benin, the Edo capital, for both its inmates and members of the public.

Speaking at the official handover of the zonal bakery project to First Global Hakitekt Bread Bakery Limited for effective management, the Minister of Interior, Hon Olubunmi Tunji-Ojo, said the project was laudable.

Tunji-Ojo, represented by Mrs Comfort Kabirwa, Director of Special Duties in the ministry, commended the buy-in of the project by the different controllers in the zone comprising Edo, Delta, Anambra, Enugu and Ebonyi.

He stressed the importance of Public Private Partnerships (PPP), noting that a recent decongestion of correctional centres was not government funded but through corporate social responsibility.

“We have to think out of the box to achieve our mandate. The bakery is a laudable project because it will help build the skills of the inmates and give them a source of livelihood and make them employable after leaving the correctional centre,” he said.

He added that charging the name from prisons to correctional was intentional not just for rebranding but to change the way prisoners were treated.

Earlier, Controller General of Corrections, Haliru Nababa, said the Bakery Initiative was a collaborative effort between the NCoS and the First Global Hakitekt Bread Bakery Limited under a PPP arrangement.

Nababa said the project was also supported by the Ministry of Interior, Ministry of Finance, and the Infrastructure Concession Regulatory Commission.

“It is a pilot initiative aimed at enhancing the performances of federal government projects. The First Global Hakitekt Bread Bakery Limited is expected to bring in expertise to allow for a win-win situation for both parties. “

Represented by the NCoS Zonal Controller, Zone G, Assistant Controller General, Friday Ovie, he said that initiative was in line with the mandate of the Service, which included inmates rehabilitation via skills acquisition.

Meanwhile, Managing Director, First Global Hakitekt Bread Bakery Limited, Mr Dare Eluyemi, said the project was not just to equip inmates with bakery skills but also to create jobs in the bakery value chain.

“The bakery project has the capacity to produce bread for more than 32,000 inmates on a daily basis.

“It will help to reduce government effort in meeting the food consumption of inmates in correctional centres and sold to thepublic for income generation.”

On her part, Controller, NCoS, Edo, Philomena Emehinola, said the Bakery initiative was a plus to the state as it would put the state in the limelight.

“We will make the project sustainable to feed our inmates as well as build their skills in bakery.”

She added that the inmates who would undergo skill acquisition in the bakery project would be paid an incentive under the earning scheme but would be given the money at the end of their jail term.

The News Agency of Nigeria reports that the pilot project will run for two years, after which it will be replicated in other zones of the NCOS.

The high point of the event was the inspection of the bakery by the representative of the Minister of Interior and other government officials present.

Business

El-Rufai Floats $100m Firm, Company Begins Operation January

Published

3 days ago

December 4, 2023

Editor

…says what young people need is mentoring

Former Kaduna State Governor, Nasir El-Rufai, on Monday, announced that his venture capital/private equity firm, Afri-Venture Capital Company Limited, will begin operations in 2024.

In a post on X, El-Rufai said through the firm, he hopes to finance, nurture, and mentor Nigerian innovators and entrepreneurs to become the next Dangote Group shortly.

The former governor said he would be working with private sector partners, including the co-founder of Excredite Consulting Limited, Eyo Ekpo, among others.

“I can confirm that our VC-PE firm, Afri-Venture Capital Company Ltd will by the Grace of God, begin operations initially in Abuja in January 2024 with Jimi Lawal, Hafiz Bayero, Eyo Ekpo and Kabir Yabo as founding directors and initial shareholders. I am privileged to be the part-time Chairman of the Board.

“Please, pray for our success and the Nigerian (and in the near future African) innovators and entrepreneurs we hope to finance, nurture, and mentor to be the Dangote Group of the future,” the former governor wrote on X.

The plan, he said, was to launch a $100 million venture capital fund for startups in Nigeria, particularly those in the Kaduna tech ecosystem, according to BusinessDay.

The PUNCH reports that El-Rufai had taken a break from the public scene after the Senate, in August, refused to confirm his nomination as a minister.

Other nominees rejected include a former Managing Director of Nexim Bank, Stella Okotete (Delta State); and Abubakar Danlandi, a nominee from Taraba State.

El-Rufai was replaced by Abbas Balarabe as a minister after his nomination was rejected by the Senate.

But speaking on the new firm and his plans, El-Rufai said Nigerian youths need mentoring and financing to achieve the needed breakthrough.

“What young people need is essentially mentoring and financing to get things going. They develop the idea and see whether it is viable. And we will open doors for them because they don’t have contact.

“They don’t know or have access to ministers, presidents, or regulatory agencies. We do. We know the minefields that they have to navigate. We know that they need to give them appointments and we can provide them with the startup funding and in return we take an equity position.

“We don’t want to take your business; we want to develop it. But if we take the risk on you, we will take a percentage of the business,” El-Rufai told BusinessDay in Marrakech, Morocco, in November during the Africa Investment Forum.

According to BusinessDay, El-Rufai is willing to stake $2 million of his money for the offtake of the ($100m) fund and plans to convince investors to provide the remaining funding.

“The investors will mostly be those who believe in us but don’t have the capacity or the time to do the analysis and evaluation. But they trust our judgment and they will come with us,” El-Rufai said.