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EFG Hermes concludes advisory on ASA International’s IPO

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EFG Hermes, a leading financial services corporation in frontier and emerging markets (FEM), has concluded advisory to international microfinance lender ASA International (ASAI) on its GBP 125 million initial public offering on the London Stock Exchange (LSE). With a 12-country footprint spanning Asia and Africa, ASAI is one of the world’s largest private-sector microfinance institutions…

Please visit https://www.businessdayonline.com/markets/article/efg-hermes-concludes-advisory-asa-internationals-ipo/ to access this member content.

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The ‘Recent future of energy series’ organised by BusinessDay Media Limited was an eye opener to those that are not properly in tune with what is happening in the power industry. It also shows an indication that the country still has a long way to go as far as her bid for having reliable, stable and efficient power supply is concerned.

Already, the sector has a shortfall of about N1 trillion that will be required to right and resolve the myriad of issue associated with it.

It is however cheering that the Nigerian Electricity Regulatory Commission (NERC) is stepping in and has unveiled a comprehensive plan to tackle liquidity gaps in the sector, which includes auditing the books of operators and providing credit advance system to perennial debtors.

The other thing the commission is also trying to do is to carry out a forensic audit of the Discos to determine their income as well as costs. The forensic audit of the Discos would be in terms of what they really collect, spend and save.

According to John Momoh, vice chairman of NERC, the commission carried out an open book review and discovered that it was imperative to actually carry out the forensic audit of the Discos.

Perhaps, this would finally put to rest the allegations and counter allegations between, especially management of Discos and the regulators over the level of revenue accruing to the Disco.

The Discos often say that they are not generating enough revenue because they are not allowed to charge reflective tariff. Through the planned steps by the NERC, it would be clear whether they are generating revenue or they are mismanaging the one they generate through spuriously paying board members huge sums.

The Discos settle as little of 15 percent of their market invoice. The audit will seek to determine what are the basic revenue baseline and the minimum they are allowed to remit, and develop appropriate basis for appropriation and disbursement of market funds.

These companies reported losses of over N196.23 billion to end the 2016 financial year. This compares with a loss of N104.69 billion they recorded the previous year.

The commission’s proposal to review the tariff methodology will be commendable. The current methodology has been in place since the last 15 years. The commission says it will revisit the methodology on which Multi Year Tariff Order (MYTO) is placed to determine if it is the best way to go in terms of tariff for the sector.

Other stakeholders in the power industry have also suggested solutions that can help move the industry forward.

According to Kola Adesina, chairman, Egbin Power plc, big economy needs big power, and that if the country truly wants to industrialise and also want investment in the power sector to create jobs, there must be enough certainty, and confidence.

Investors will come and invest in the power sector if they are given enough certainty and confidence, he said, saying if the fundamentals of the market were addressed the problems plaguing the industry would be solved.

Kolapo Joseph, general manager, corporate finance and corporate development, North South Power Limited, said the industry went into problems immediately the cost reflective tariff that was proposed by the NERC was frozen, stressing that cost reflective tariff must be immediately implemented.

In addition to this, he said the government must settle all sector debts, saying it was only after this that the sector could be revamped.

Joy Ogaji, executive secretary, Association of Power Generation Companies, said the state of the market should be thoroughly studied to know what was required, especially the demand side.

On what to do to find a lasting solution, she said in the short term the country should optimised what was available in the short run, while on the long run the generation capacity of the country should be  increased.

Jamil Isyaku Gwamna, managing director/CEO, Kano Electricity Distribution Company, said metering the

customers was the solution to the sector problems, saying in ideal situation meter was suppose to provide solution to the problems of revenue generation.

Metering is good for the Discos, but the challenge they are facing is the cost of procurement, he said, saying, “With capped expenditure, Discos will not be able to procure meters and yet expand it their network. So, metering as proposed for solution is just one half of the issues.”

Meter Asset Provider (MAP), he said, will take the burden of the Disco as far as meter is concerned. MAP would be successful depending on how it is structured.

Chiedu Ugbo, managing director, Niger Delta Power Holding Company, said eligible customers would resolve the

liquidity challenge in the industry.

If all these are worked towards, it is possible to have very reliable electricity industry in Nigeria.

 

 





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Ortom’s alleged exit from party a rumour, says Oshiomhole – Punch Newspapers

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The All Progressives Congress has described as “a rumour” the alleged exit of the governor of Benue State, Samuel Ortom, from the party.

Reacting to what the party called “speculation” on Monday in Abuja, Mr. Adams Oshiomhole, its National Chairman, said the party had a cordial relationship with Ortom.

He spoke to newsmen after a closed door meeting with members of the party’s National Working Committee.

“I know that Governor Ortom is a very senior member of the party and he has said so repeatedly in print and has said to me one-on-one that he will not leave the APC unless he was pushed out.

“Since I assumed the chairmanship of this party along with my colleagues in the NWC, I know of a fact, that we have not shut out any governor and certainly, not Governor Ortom.

SEE ALSO: Stunning facts about 2018 World Cup champions

“And in these days of social media, I will not be responding on the basis of rumour and unverified reports,” the APC chairman said.

On the party’s victory at the just concluded Ekiti governorship election, Oshiomhole said the APC was excited not because it won the election, but particularly with the process.

“We just want to make sure that the results of the election reflect the will of the people.

“You will also recall that there were issues about police deployment.

“I am very happy that all the commentators and observes including the Europain Union are happy that the election was free of violence and that the process was free and fair.

“We cannot ask for more, we celebrate not just the fact that we won, we celebrate that under President Muhammadu Buhari’s government, we now can see that election can be conducted without people being hospitalised,” he said.

He said party was very proud of its accomplishment at the election and had asked Dr Kayode Fayemi the governor-elect to reflect on all that should be reflected on so before he was sworn in.

He added that Ekiti people could not afford to wait any longer to see a renewed and refocused leadership that would ensure the quality of life of the people.

He further added that the party’s leadership had appealed to Fayemi to see the wisdom to carry along various shades of opinion and also to reach out to the opposition.

“Infact, democracy works well regardless of who wins. If the winner governs well for the benefit of all, indeed, the people can never lose in a democracy.

“And we trust that Fayemi will do all that, including addressing the huge liability,” the APC National Chairman stressed.

 

(NAN)

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How FG’s debt strategy boosts liquidity for real secto

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…Treasury Bills issuance reduced by half

…External borrowing boosts reserves by $6bn

…N830bn injected to local market

Going to the international capital market to borrow is a deliberate policy to help Nigeria boost its external reserves, reduce interest rate and shore up liquidity in the local economy, Director General of the Debt Management Office, Ms Patience Oniha, has said.

Speaking to Daily Trust team in her office on Friday, Oniha said for government to remain the dominant borrower in the local market for long did not augur well for the economy. 


She said the organised private sector has for long identified such scenario as one of the major reasons why interest rates were high and why some banks refused to lend money to them.

She said what government wants to achieve with external loans is to balance the borrowing ratio between the domestic and foreign sources at 60/40 respectively in the near future. “Now is in the range of 70/30 per cent.”

“From December to June this year, we have actually retired treasury bills worth about N830 billion. That is why the interest rate drops.” 

“We raised $3 billion to retire treasury bills. We have used $2.5 billion so far. There is another $500 million available. In December alone, we retired all the treasury bills that were due. At the moment the treasury bills have been reduced by 50 percent, so that market is stable.” 

The DG said some of the advantages of pulling out from the domestic market is that money would go back to the system, because we are the dominant borrowers. By the time we pull out, the real sector will get more money to borrow.” 

“That is why most times one of the major highlights of the MPC communiqué is that government is crowding out private sector in borrowing, and the world is watching. So with that strategy that takes us outside to meet all our needs, it means that whatever money is available here is for the real sector,” Ms Oniha stated.

But it still goes beyond that as part of the reason government also gives is, let’s borrow from outside to settle some of the local debts; that would bring down interest rate, because that is good for the real sector and is also good for us too. This is because we will always remain in the domestic market to borrow.”

Ms Oniha urged the private sector operators to pay more attention to corporate bonds. “Issuing a corporate bonds is cheaper and easier,” she said.  

“When the real sector gets more capital to operate, it means that the economy will develop faster; it means that the government would earn more revenue; the budget deficit will be less, so I will borrow less.  By then the borrowing to revenue ratio will be better. It is good for all of us,” she also said.

She revealed that external borrowing contributed largely to the increase in the external reserves last year, with the fiscal side contributing $4.8 billion. 

“The CBN is the banker to the government. We gave them the dollars, they give us the naira. So when you saw a reserve going up, our borrowing was supporting that in such a large manner. It wasn’t from oil alone. So far this year we have done $2.5 billion,” said Oniha.

She stated that many Nigerians don’t support borrowing because many people are fixated that debt is bad. “But with the benefits I mentioned earlier, debt is good, just do it properly and know what you are doing.”

She challenged banks to do more in lending to the real sector as government has now done its part, by releasing money to the system. 

“The questions is, why hasn’t the money gotten to the real sector yet? Because that is the objective; the money is there, there is liquidity and the rates are low, so let it get to the private sector. For us that is what we are waiting to see there,” she added.





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NEM Insurance Plc 48th AGM and Associated Governance Issues By Nonso Okpala

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An integral component of the long-term strategy of any company is corporate governance, epitomized by transparency and accountability. By extension, it is also the single most important means of sustaining the vibrancy and relevance of any capital market in the world. Furthermore, it has been observed that regulated markets with that adhere to best corporate governance practices have attracted and retained the confidence of investors, local and foreign alike.

As the CEO of VFD Group Limited, a company implementing a long-term investment strategy in the financial services industry, I basically assess companies on three cardinal points. First, the presence of a visionary and selfless leader as espoused by Jim Collins in his book, “Good to Great”. I also look for companies that have strategically positioned themselves within the context of their operating economy. These are companies that have developed a niche, either by way of technology, regulations, efficiency, etc and established a moat around their business, as a barrier against competitors. The last cardinal point I consider is the company’s adherence to best practice in corporate governance, regardless of the local governance standards or regulatory requirements.

In the course of our operations, we have invested in a few listed companies – despite being mainly focused on private investments – and we intend to increase our capital allocation to this class of investments. One of our early investment picks was NEM Insurance Plc. The company had been a diamond in the rough for years with its market price then below N1.  However, our valuation of the company, on a futuristic earning basis, was conservatively about N4 per share. This valuation has subsequently been validated by market trends; as at 21st June 2018, the market price of the stock was N3.04. We invested in the company based on our confidence in the long-term prospects of the company and its high score on our three-assessment parameters (i.e. strong leadership, strategic positioning and best practice in corporate governance) particularly the first two parameters.

NEM Insurance has a visionary leader, Tope Smart. He stands out as an extraordinary leader and is remarkably humble at it. He took on a struggling company in 2007 and bootstrapped it into one of the top five insurance companies in the industry. The company has doubled shareholders’ funds in the last five years and consistently paid dividends over the stated period. He has also built a team of remarkable lieutenants who rank as the best in the industry on a cost basis consideration.

As a result of their strategic positioning within their operating economy, the company not only enjoys the insurance regulatory environment but has further enhanced its economic moat via efficient performance in a sector that is spectacularly known for inefficiency and poor regulatory compliance.

Unfortunately, it appears that the company is not nearly as strong on governance practices, relative to its stellar performance on the other two counts as stated above. I will elucidate with the organization of the company’s purported 2018 Annual General Meeting (AGM).

As a background, the Directors of the company collectively own less than 23.73% of the company’s issued shares. 22.98% of the 23.73% of the shares attributed to all Directors are held by four Directors (the “ruling 4”) out of ten Directors (source: NEM 2017 Annual Report & Accounts). On closer examination, the situation gets even more interesting. The same audited financial statements reveal that only 16 shareholders, inclusive of the “ruling 4” Directors, have up to 50m shares each and this group of 16 shareholders collectively controls 52.11% of the company’s issued shares. The implication is that there are 12 shareholders who collectively control 29.13% of the company’s issued shares that are not included in the management of the company. VFD Group is one of the 12 shareholders, with a 2.11% stake. In recent times, we have made efforts to identify the other 11 shareholders and observed a trend of exclusion of these shareholders from the activities of the company. For instance, as a run up to the 2018 AGM of the company, most of these shareholders did not receive notice of the meeting, the proposed special resolutions, proxy forms and audited financial statements as required by CAMA. This is extremely suspicious, particularly if one considers the special resolutions proposed for consideration and approval at the purported AGM.

First, special resolutions are usually passed by 75% of the votes of shareholders present and voting in an AGM. In the case of NEM, none of these resolutions can be passed if the 12 excluded shareholders were present and voted against the resolutions. It will be mathematically impossible because if all shareholders are in attendance, the 12 shareholders would represent 29.13% of the possible votes. This will preclude the possibility of achieving the 75% approval that is required for the resolution. This is further compounded by the fact that 100% attendance of its shareholders in NEM’s AGM is impossible. Thus, the only way to assure the passing of such resolutions (if management is not sure of the position of the 12 shareholders) is to tactically exclude them so as to ensure victory if a poll is conducted.

I am certain the question running through your head is, why go through all of these, at the risk of regulatory sanctions? Why risk the company’s reputation and particularly jeopardize the otherwise stellar achievements and track record of the Group Managing Director? The answer is simple:  the company is run by a minority group of shareholders, “the ruling 4” Directors, who want to secure their hold on the company, at all costs.

The Directors, at the purported AGM, sought a resolution to issue 1.056bn shares of the company by way of private placement, at a price of N2.50. Looking closely at the proposal reveals why, in the words of former President Olusegun Obasanjo, “it is a do or die” affair for this ruling group of Directors. By maintaining the status quo and buying up shares on the floor of the stock exchange, it is currently impossible for anyone with a minority holding to gain majority shareholding, and neither is it possible through fair and equitable rights’ offers. Nevertheless, the proposed special/private placement makes it possible for “the ruling 4” Directors plus the “special interest” beneficiary of the special/private placement to achieve a supermajority.

Putting this in a clearer context, post the proposed private placement, the collective stake of the “ruling 4” Directors plus the special interest to whom the placement shares are issued will increase to 35.82% from 22.98%. Kindly note that the provisions of the special placement give “the ruling 4” Directors the right to pick who these shares can be allotted to. They can even allot the said shares to themselves or any one of them in the absence of any sensible checks and balances.

In truth, if the intention of the “ruling 4” Directors is to increase their interest or influence in the company, I have no fundamental objection to this goal. After all, we believe that the interest of shareholders is best served when management is significantly invested in the subject company.  But the offer should nevertheless be appropriately priced. If I were to negotiate on behalf of fellow shareholders, I would place a price tag of N4 per share as I initially stated in this article and every kobo of that valuation can be justified. However, do not take my valuation as it is, let’s look at the market for the appropriate valuation of the company’s shares. The special placement is priced at N2.50 while the market price is currently N3.34 as at 27/06/18, representing a discount of 25.15%. This is clearly unusual and indicative of management’s destruction of other shareholders’ value and is designed to grant inordinate gain to an unidentified “special interest”.  The question is: who will these shares be allotted to?

As an investor and specifically a shareholder of this company, VFD Group will like to participate in this offer. In fact, we will like to take up the entire offer. Why is such a compelling offer restricted to the exclusion of other shareholders who are willing and able to participate? How do you offer a significant stake of a company via a special/private placement priced at a significant discount to market?

My basic understanding of special/private placement posits the following considerations:

That the public company cannot raise capital via rights offer.

That the public company cannot raise capital via a public offer.

That the company is not doing well and as such, investors are reluctant to be exposed to such company and therefore placing the company under immense capitalization pressure.

That the company is subject to all three above considerations and it is in dire need of funds.

If any of the above stated is the situation with NEM Insurance Plc, then the offer as proposed will be in the best interest of the company and shareholders alike. Unfortunately, this is not the case. Shareholders are willing to participate in a public or rights offer because the company is doing very well. As mentioned earlier, the Management of the company have done remarkably well based on the operations of the company and this is indicative in the current market price, profitability and industry ranking of the company. The company is also not cash-strapped; in fact, the Board proposed and obtained approval for the payment of 10k/share dividend at the purported AGM and has consistently paid dividend in the prior years. It is also not under pressure by regulators to recapitalize, as it is one of the few insurance companies that has maintained a clean bill of health.  By the way, to date, no one has explained to shareholders what the funds to be raised will be utilized for.

So, what is the justification for the proposed special/private placement? What are the proceeds of the proposed offer for? If we must raise funds, why not do it via a rights issue or public offer? A private placement appropriates the value in the company for the benefit of a few and savvy shareholders will have none of this.

On a general note, I will like to address the role of institutions in the pursuance of best practices in corporate governance. Their roles are integral to its attainment or otherwise. I have reviewed the activities of our corporate regulators e.g. SEC, NSE, CAC, NAICOM, and others and I am extremely confident in their capacity and moral commitment to upholding global best practice standards in governance in our market. They have demonstrated this time and time again and we have no doubt that it will sustain through the foreseeable future.  It is important to ensure that this governance standards are not only upheld but are seen to be upheld by all relevant parties, including NEM Insurance Plc and all auxiliary and related parties or officers of the company, such as the directors and the company secretary, as well as the Company’s Registrar, APEL Capital & Trust Limited. These parties all owe a fiduciary responsibility to all shareholders and are expected to always act in the best interests of the shareholders.

Before I conclude this piece, I will like to state a few things about VFD Group as a background to this matter, and with specific reference to our investment in NEM Insurance Plc.

We are a Group of companies with interest/aspiration in all sectors of the financial services industry e.g. Asset Management, Bureau de Change, Banking, Microfinance, Insurance, International Remittance, Real Estate etc.




Our operations are funded by our equity and debt investors as well as retained profit and we have been in existence for nine years. We currently have about 48 shareholders from all walks of life, including leaders of public listed companies.
We are not particularly interested in running these companies or retaining Board positions, but we are firmly interested in the proper governance of our investee companies, a strong trend of profitability and consistent payment of dividends. Once that is in place, we are delighted to support the management of these companies.

We also stand against interference with the operations of the company because we do not consider ourselves experts in our investee companies’ areas of business. We believe once our set objectives are in place, we have no business interfering in their business operation.
This article is not written with malice and as much as possible, I have ensured that it is not personal but focused purely on the facts at hand. I also owe a fiduciary responsibility to our shareholders and it behooves on me to speak on their behalf and protect their interest. I also think it is in the interest of the Nigerian investing public to speak out and advocate better corporate governance. Our economy will be better off by this and similar efforts.
We think that our interests are aligned with those of NEM Insurance Plc and that there is absolutely no need for protective schemes with the negative implication on the company.

In conclusion, I call on the Board and Management of NEM Insurance Plc to set aside the purported 48th AGM of the Company and the resolutions passed thereat. This should not be done with the mindset of a victor or vanquished but should be done in the interest of all shareholders, majority or minority alike. I am certain that if we do the right thing by the company, all shareholders will be better for it in the long run instead of a slow and deliberate process of destruction of value that is inevitable if we continue down this path. In the meantime, VFD Group will take all necessary lawful steps to protect its investments in NEM while supporting the company to continue its growth trajectory.

Nonso Okpala

Email: [email protected]

Instagram Handle: @nonsomokpala

Twitter Handle: @nonsomokpala



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Fayemi carrying a stolen mandate , Ekiti  PDP alleges– The Sun News

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Ekiti

Ekiti update: Fayemi carrying a stolen mandate , Ekiti  PDP alleges



Wole Balogun,  Ado Ekiti

The Peoples Democratic Party (PDP), Ekiti chapter, on Monday alleged that Kayode Fayemi of the candidate of the All Progressives Congress(APC), is parading a stolen mandate of Kolapo Olusola, PDP’s flag bearer, having allegedly committed what the party alleged is ‘poll fraud” on July 14.

The party boasted that they would deploy every constitutional means to retrieve what it called a ‘ stolen mandate’ from the former governor, Adding that the party would challenge the election in court.

Addressing journalists in Ado Ekiti on Monday on the outcome of the election, the party’s Chairman in Ekiti, Barr. Gboyega Oguntuase, accused the Independent National Electoral Commission(INEC) and security of conspiring to subvert the will of the electorate.

Oguntuase alleged the two federal government bodies of allocating  votes to Fayemi, just to disgrace Governor Ayodele Fayose, who has consistently been posing as the major opposition to President Muhammadu Buhari.

Oguntuase said over 20 members of the party, including the Chief of Staff to the Governor, Chief Dipo Anisulowo and four of his aides

among others were arrested by combined forces of military and paramilitary security outfits and clamped in detention on the day of

election.

He described the governorship poll as an embarrassment to democrats across the globe, saying APC governors spending humongous amount that could have been used to develop their states to buy votes signposted that the party has no interest of the masses at heart.

He said: “What  did they need 30,000 police officers for in Ekiti when criminals were killing Nigerians in other states? Ekiti people knew

they were in our state for a task and not to protect their votes and that was why there was no jubilation or ceremony anywhere in the state after the election.

“This election was far from being free, fair and credible. In Ilejemeje, Ilawe, Ikole, Ise/Orun ,  Oye , Ado  and other major towns in Ekiti , many of our people were beaten by APC thugs being aided by the security men.

“As we speak, the results declared by INEC to give victory to Fayemi was more than the number of accredited voters. So, where did they get the additional votes they added?

“We are going to use every constitutional means to retrieve this stolen mandate, it is just a matter of time.

“APC mobilized over N11 billion to buy votes in Ekiti. They came here to perpetrate electoral perfidy and such will not stand”, he stated.

Oguntuase stated that the federal government deliberately delayed June allocation to Ekiti to create impression that Fayose was owing

salaries and to sway votes for APC.

On those arrested and detained members , Oguntuase told the police to release them to the party, saying : “We are not going to tolerate excuses that they had escaped from detention when they cannot be found anywhere from police.

“They must not just  be released immediately to us, they must also be hale and hearty”, he added


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Amsterdam port to fuel ships with plastic

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The Port of Amsterdam will soon get a new factory that will be able to convert unrecyclable plastic into fuel for ships.

The processing of plastic waste is expected to cut CO₂ emissions by 57,000 tons per year, compared to today’s manner of waste management.

Bin2Barrel, a Dutch company focusing on the development of plastic to projects, and the Port of Amsterdam expect the plant to be operational by the end of this year.

The construction of the new IGES Amsterdam factory began on June 15, 2018. The project is supported by the Dutch government, which recently added chemical recycling to its national waste management plan.

As explained, the idea is that synthetic materials that could not be reused otherwise will now become reusable in a useful application, while at the same time offering a more sustainable alternative for traditional transport fuels. The ultimate goal is the application of the produced substances in the production of new synthetic materials, in other words, chemical recycling.

The first plant of Bin2Barrel, accomplished with an investment of approx. EUR 28m, will produce more than 30m liters of fuel per year out of 35,000 tons of non-recyclable plastic. In combustion of the produced fuel, the return on energy is nearly three times higher (80%) than in direct burning of plastic in waste incinerators (33%).

Despite the fact that the fuel could also be suitable for other sectors, Bin2Barrel focuses first on selling it to the marine industry.

“The use of plastic and the lack of a proper processing of plastic cause massive pollution worldwide. Bin2Barrel introduces innovative and badly needed technology that will enable us to make use of a currently non-recyclable flow of waste in a manner that makes perfect sense,” Roon van Maanen, Head of Circular & Renewable Industry at Port of Amsterdam, said.

“By creating a new product from an otherwise problematic waste product, Bin2Barrel fits perfectly within the mission of Port of Amsterdam to facilitate energy transition as well as transition to a circular economy,” van Maanen added.



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IMF warns trade tensions could disrupt global growth – Punch Newspapers

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The global economy is still expected to grow at a solid pace this year, but worsening trade confrontations pose serious risks to the outlook, the International Monetary Fund said Monday.

The IMF’s updated World Economic Outlook (WEO) forecast global growth of 3.9 percent this year and next, despite sharp downgrades to estimates for Germany, France and Japan.

The US economy is still seen growing by 2.9 percent this year, and the estimate for China remains 6.6 percent, with little impact expected near term from the tariffs on tens of billions of dollars in exports the countries have imposed on each other so far.

READ ALSOBritish PM hit by more resignations as rival Johnson pushes ‘global Britain’

“But the risk that current trade tensions escalate further — with adverse effects on confidence, asset prices, and investment — is the greatest near-term threat to global growth,” IMF Chief Economist Maurice Obstfeld said.

The fund warns growth could be cut by a half point by 2020 if tariff threats are carried out.

Although the global recovery is in its second year, growth has “plateaued” and become less balanced, and “the risk of worse outcomes has increased,” Obstfeld said in a statement.

– Addressing ‘disenchantment’ –
The report comes as US President Donald Trump has imposed steep tariffs duties on $34 billion in imports from China, with another $200 billion coming as soon as September, on top of duties on steel and aluminum from around the world including key allies.

China has matched US tariffs dollar for dollar and threatened to take other steps to retaliate, while US exports face retaliatory taxes from Canada, Mexico and the European Union.

“An escalation of trade tensions could undermine business and financial market sentiment, denting investment and trade,” the IMF report said.

In addition, “higher trade barriers would make tradable goods less affordable, disrupt global supply chains, and slow the spread of new technologies, thus lowering productivity.”

The IMF said growth prospects are below average in many countries and urged governments to take steps to ensure economic growth will continue.

The fund said global cooperation and a “rule-based trade system has a vital role to play in preserving the global expansion.”

However, without steps to “ensure the benefits are shared by all, disenchantment with existing economic arrangements could well fuel further support for growth-detracting inward-looking policies.”

– Europe, Japan slowing –
The sweeping US tax cuts approved in December will help the economy “strengthen temporarily,” but growth is expected to moderate to 2.7 percent for 2019.

And while the fiscal stimulus will boost US demand, is also will increase inflationary pressures, the WEO warned.

China’s growth also is seen slowing in 2019 to 6.4 percent.

After upgrading growth projections for the euro area in the April WEO, the IMF revised them down by two-tenths in 2018 to 2.2 percent, due to “negative surprises to activity in early 2018,” and another tenth in 2019 to 1.9 percent.

The estimates for Germany, France and Italy were cut by 0.3 points each, with Germany seen expanding by 2.2 percent this year and 2.1 percent in 2019. France’s GDP is expected to grow 1.8 percent and 1.7 percent.

Meanwhile, Britain is now forecast to grow 1.4 percent this year, 0.2 points less than the April estimate, and 1.5 percent in 2019.

Japan’s GDP is seen slowing to 1.0 percent this year, two-tenths less than previously forecast, “following a contraction in the first quarter, owing to weak private consumption and investment.” It should grow 0.9 percent the following year.

India remains a key drivers of global growth, but the GDP outlook was cut one-tenth for this year and three-tenths for next year to 7.3 percent and 7.5 percent, respectively.

Brazil saw an even sharper 0.5-point downward revisions from the April forecast, to 1.8 percent this year.

(AFP)

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Buhari meets Dutch PM, Mark Rutte – Punch Newspapers

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President Muhammadu Buhari on Monday met the Dutch Prime Minister, Mark Rutte at his office in The Hague, during his visit to the Netherlands.

A video shared on the Twitter handle of Bashir Ahmad, the President’s Personal Assistant, showed the Dutch PM waiting for the arrival of President Buhari.

President Buhari is in The Hague to deliver a Keynote address at the 20th anniversary of the adoption of the ICC Rome Statute.

See the video below:

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Tongues wag over FG’s plan to share $322m Abacha loot to 300,000 households –

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Wabba insisted that Organised Labour would only measure the sincerity of the government after seeing the empirical data and the criteria that will be used to determine those being considered the poorest of the poor in the country.

Another Nigerian, Kaycee, reacting to one of our publications on the Abacha loot queried the proposed sharing formula.

He stated: “I want you to ask the proponents of sharing Abacha’s loot to the poor, to tell Nigerians how to determine who is poor, the criteria for being poor and how to extend this loot to the said poor people.

“Truly, Nigerian leadership has gone mad. It is in delusion and grossly dead in ideas. For heaven’s sake, this administration is an agglomeration of dead woods bereft of any iota of focus and intelligence.

“For this group of labour officials who are supporting this proposal, we would need their brains examined by psychiatrists. This is a totalitarian failed society, I must confess with unequivocation.”

Also reacting, Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, said the recovered loot is part of the revenue expected to fund the budget, especially the social intervention fund, which includes the N5,000 being shared to the people in selected states, micro credit scheme and others.

“The social intervention fund is meant for the poor. I believe the money is going to come as social intervention programmes of the government and these are targeted at the poor on the lower level of the economy,” he said.

The LCCI boss, who pointed out that the money, through the budget, could be used to address a lot of social infrastructure challenges, said that would be more ideal rather than distributing physical cash to the people.

Meanwhile, the House of Representatives on its resumption a fortnight ago resumed debate a bill seeking to use the $322 million (or N116 billion) Abacha loot to fund the Ajaokuta Steel Company and Railways.

This was barely six days after the House passed a resolution urging President Muhammadu Buhari to halt ongoing plans to distribute the $322 million to 302,000 poor households in 19 states without database.

The details of the bill for an “Act to allocate the returned looted Nigerian government fund of $322 million from Switzerland for funding of Ajaokuta Steel Company and Railway line(s) projects in Nigeria and for other related matters,” was promoted by Rep Ossai Nicholas Ossai, PDP, Delta and five other lawmakers.

They include Mohammed Umar Bago, Rita Orji, Darlington Nwokocha, Alagbaso Jerry and Nwabuwa Henry projects.

The explanatory memorandum of the bill further stipulates that the “bill seeks to ensure that returned looted Nigerian government funds are used for major infrastructural projects that will enhance economic growth and development in Nigeria.”

This came as some professional bodies in the housing sector and civil society organisations had called on the Buhari administration to halt the plans to share the $322 million to the poor but rather roll out modalities to channel the fund into more productive sector with potential to add value to the nation’s economy.

The lawmakers had penultimate Wednesday passed a resolution to set up an ad-hoc committee that will investigate repatriated Abacha loot from 1998 till date, and mandated that the ad-hoc committee should report back within six weeks for further legislative action.

Why we prefer cash handouts …Buhari

President Muhammadu Buhari on Wednesday gave reasons why he preferred giving cash handouts to the poor. Reacting to criticisms against conditional cash transfer, the president said the Federal Government signed the Memorandum of Understanding (MoU) with the World Bank and Switzerland to lift people out of poverty using the recovered loot.

Speaking at the inception of a meeting of the Mantra project on asset recovery and development in Nigeria by Africa Network for Environment and Economic Justice (ANEEJ), in collaboration with World Bank and Switzerland government, the President, who was represented at the occasion by his Special Adviser on Justice Sector Reforms, Juliet Ibekaku-Nwagwu, said the choice of investing the recovered loot in the social investment programme as captured in the MoU was taken to address the problem of extreme poverty and create social equality among Nigerians.

The president said the administration is committed in partnering with both local and international partners to ensure transparency and accountability in the management of the recovered loots.

‘The use of the funds to be applied to social investments, particularly to targeted cash transfer, is to lift people out of poverty. We know people who are today in this country that wake up in the morning and don’t even know where to get their meal from. I’m sure you’ve experienced such people within your communities, so this whole project is to address that problem to create social equality, to provide opportunity.





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