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286

Fitch Ratings, a global rating agency has revised downwards Nigeria's 2015 growth projections to 5.2 per cent from 6.4 per cent as a result of the dwindling price of crude oil in the international market.

The rating agency pointed out that Nigeria and some other oil producing countries in the region would face worsening current account and fiscal balances next year.

London-based Sovereign Analysts at Fitch, Carmen Altenkirch and Richard Fox disclosed this in a statement yesterday.

“Nigeria, along with Angola and Gabon, will also suffer from worsening current account and fiscal balances,” they said.

THISDAY had reported last month that the dwindling oil prices and other commodities could return Nigeria and other emerging market nations to “junk” credit ratings, laying bare many countries’ failure to reform in good times.

The price of Brent Light crude, the benchmark for Nigeria’s Bonny Light, fell below $59 a barrel yesterday, the first time since May 2009. After dropping below $60, Brent price then fell to $58.50 a barrel, before recovering slightly to $58.94.

Oil prices have now nearly halved since June as a result of waning demand and increased supply.

The Nigerian government had responded to the development by announcing a number of cost-cutting measures also aimed at shielding the economy from exogenous shocks.

In fact, the country's Medium Term Expenditure Framework (MTEF) was revised downward twice in the past three months from a budget benchmark of $78 per barrel to $73 per barrel and subsequently $65 per barrel.

Also disturbed by the development as well as the increasing pressure on the nation's currency, the Central Bank of Nigeria (CBN), had last month moved the mid-point of the official window from N155/$1 to N168/$1. In addition, it had widened the band around the mid-point by 200 basis points from +/-3 per cent to +/-5 per cent.

The CBN also increased the monetary policy rate (MPR) from 12 to 13 per cent, while the cash reserve ratio (CRR) on private sector deposits was also raised from 15 to 20 per cent. The naira has depreciated by about 12 per cent this year.

However, commenting further, Altenkirch and Fox said other countries in sub-Saharan Africa would benefit from the 44 per cent plunge in oil prices this year, boosting the region’s growth to five per cent in 2015 from 4.5 per cent this year.

“Most sub-Saharan African countries are significant oil importers,” they said. “Oil makes up around 20 percent of the import bill in Kenya, Cote d’Ivoire, Seychelles and Ethiopia.”

Speaking on the development in an exclusive interview with THISDAY, the Fixed Income, Currencies and Commodities (FICC) analysts for Africa at Standard Chartered Bank, Mr. Samir Gadio, said financial institutions and governments that plan to raise debts from the international market next year may have to do so at a higher cost.

Gadio pointed out that raising debt next year might be “very challenging”.

“I think in 2015, there will be an extra cost, either for the sovereign or banks, if they want to come to the international market. I think in 2015, there is still going to be room for banks to borrow, but it is going to be more challenging,” he added.

However, he pointed out that there is enough room for Nigeria to borrow because the country’s external debt is still low.

“The banking system will be a little bit more vulnerable in 2015,” he added.

http://www.thisdaylive.com/articles/fitch-revises-nigeria-s-2015-growth-projection-to-5-2-/196954/?

287
News & Happenings / Jonathan: Nigeria not surprised by falling oil prices
« on: December 17, 2014, 09:03:49 AM »

PRESIDENT Goodluck Jonathan said yesterday that Nigeria was not taken by surprise over falling oil prices.

Rather, he said the country in the past three years, had implemented agricultural transformation to tackle any possible implication of the falling oil prices.

Jonathan spoke at the official inauguration of the Youth Employment in Agriculture Programme (YEAP) and $100 million Fund for Agricultural Finance in Nigeria (FAFIN) at the Banquet Hall of the State House, Abuja.

He noted that the implementation of the agricultural transformation agenda had led to the production of 21 million metric tons of food in the past three years.

The president said the Federal Government had earlier targeted to add 20 million metric tons of food by this year, adding that a nation that could not feed itself, was doomed.

He said: “The agriculture sector is vital for the economy of Nigeria. The recent decline in the price of crude oil further underscores the necessity to rapidly diversify our economy away from dependency on crude oil.”

By producing adequate food in the country, he said Nigeria would save scarce foreign exchange, reduce dependence on food imports, while reviving rural areas and creating wealth for Nigerian farmers.

Jonathan added that within the same period, Nigeria has created three million farm jobs, expressing confidence that the nation would soon surpass a target of 3.5 million farm jobs.

He said: “Our food import bill declined from N1.1 trillion in 2009 to N624 billion by December of 2013, and continues to decline. Our electronic wallet system, which allows us to reach farmers with subsidised seeds and fertilisers via mobile phones, has become the backbone of a more modern agricultural sector. Over 14 million farmers have received their subsidised farm inputs through the e-wallet system.

http://thenationonlineng.net/new/jonathan-nigeria-not-surprised-falling-oil-prices/?

288

The House of Representatives has accused International Oil Companies (IOCs) operating in Nigeria of aiding crude oil theft, an accusation earlier levelled against the IOCs by the country’s Chief of Naval Staff, Vice Admiral Usman Jibrin.

Jibrin at a meeting with oil companies operating in the country threatened to expose some IOCs that are allegedly aiding and abetting oil theft in Nigeria’s coastal waters.

Adopting a motion sponsored by Hon. Hassan Saleh on the oil theft, the House called on the Chief of Naval Staff to name the oil companies aiding oil theft.

To this end, the House directed its Committees on Petroleum Resources (Downstream), (Upstream), and Justice to investigate the allegations.

http://leadership.ng/news/395685/international-oil-firms-aiding-oil-theft-nigeria-reps?

289
News & Happenings / DSS blames Total for fuel scarcity
« on: December 17, 2014, 09:00:22 AM »

The Directorate of State Services (DSS) has told Nigerians to hold Total Exporation and Production Nigeria Limited (TEPNG) responsible for the current fuel scarcity ravaging the entire country, insisting that the failure of the oil company to obey the gentleman agreement reached over rescinding the transfer of its unionist staff, Elo Victor Ogbonda, was responsible for the ongoing strike.

Speaking during a press briefing at their headquarters in Abuja on Tuesday, the Deputy Director, Public Relations of the of State Services, Marilyn Ogar,  lamented that the oil company had rebuffed all entreaties to rescind the decision on Ogbonda’s transfer.

According to her; “We want to put it on record that Total should be held responsible for the ongoing strike by NUPENG and PENGASSAN which is biting hard on all Nigerians. We want to state that in November, 2014, PENGASSAN had written to the Service to make a formal complaint about the transfer of Elo Victor Ogbonda to Lagos, from Port Harcourt by Total, after she was elected as a Zonal executive of the Union.”

“The transfer was seen as a design by Total to frustrate her from performing her functions at the Union’s Secretariat in Port Harcourt. Consequently, this Service summoned the Managing Director of TEPNG, Elizabeth Proust, on November 5, 2014, to resolve the dispute. It was agreed that Ogbonda would be re-instated, posted back to Port Harcourt and granted leave of absence for the period she would serve as an executive of PENGASSAN.

“However, PENGASSAN was later to inform this Service that Total had reneged on its promise to recall Ogbonda and that she remains sacked. Consequently, this Service contacted Total and was informed that the company will not go back on its sack order. All entreaties to the company failed, thus culminating in the current strike and the attendant scarcity.

“We sympathize with Nigerians for the hardship they are facing and want to appeal to the Public that efforts are on to resolve the crisis. As we speak, the Service is currently meeting with the Management of Total with a view to addressing the contending issues.

“We are urging all well-meaning Nigerians who have good relationship with Total to ask the company not to allow this obviously inconsequential issue to bring hardship on the generality of the Nigerian populace. We will not stand aloof and see Nigerians suffer. We hope they see reason and address this issue urgently,” she noted.

http://sunnewsonline.com/new/?p=95774

290

Investors targeting Africa are looking east as an oil-market rout depresses economic growth prospects in Nigeria and other crude-producing nations.

Stocks have surged 22 percent in Tanzania, 18 percent in Uganda and 9.4 percent in Kenya since oil began falling from a peak of $115.71 a barrel on June 19. Lower fuel-import costs are helping to keep inflation and interest rates in check and bolster their economies. That contrasts with a 24 percent slump in the benchmark stock index in Nigeria, which relies on oil for 95 percent of foreign-exchange income and faces political instability ahead of elections in February.

“It’s mostly the east African countries that will benefit from the lower oil price,” Joseph Rohm, a fund manager who helps oversee Cape Town-based Investec Asset Management’s $2 billion Africa fund, said by phone on Dec. 2. “Lower inflation implies lower interest rates for longer, which is good for consumers. Low rates are also good for credit growth, which is good for the banks. Kenya (NSEASI) is one area where we have increased our exposure.”

Oil exporters such as Nigeria, Angola and Ghana, which are on Africa’s west coast, have been left exposed to financial market turmoil after a 42 percent plunge in the price of Brent crude in the past six months. Authorities were slow to build adequate savings and reduce the reliance on oil earnings to fund their budgets when crude prices soared, putting their economies now at risk.

‘Sharp Divide’

Nigeria’s naira has slumped 10 percent against the dollar since June 19, the most of 24 African currencies tracked by Bloomberg after Malawi’s kwacha, to trade at 181.30 as of 9:15 a.m. in Lagos. The Kenyan shilling has slid 3.5 percent, while Tanzania’s currency has dropped 3.2 percent and Uganda’s 6.2 percent.

“A sharp divide is opening up in financial markets between oil-exporting countries and importing ones,” Nicholas Spiro, managing director of Spiro Sovereign Strategy, said in an e-mailed response to questions, on Dec. 10. “It’s not all about oil. There’s a plethora of domestic and external factors that have a strong bearing on the creditworthiness and risk perceptions.”

Capital Economics, based in London, estimates that Nigeria’s current-account surplus of 3.5 percent of gross domestic product may reverse to a deficit of a similar magnitude next year, while Angola’s surplus of 4 percent could turn into a shortfall of 14 percent.

Oil Exploration

Despite a lack of oil wealth, economic expansion in East Africa has been resilient. The International Monetary Fund is forecasting GDP growth of 7 percent next year in Tanzania (DARSDSEI), 6.3 percent in Uganda and 6.2 percent in Kenya. Nigeria’s Finance Ministry on Dec. 10 cut its growth forecast by 1 percentage point to 5.3 percent, while Capital Economics estimates Angola’s economy will contract about 2 percent.

“There is a lot more positivity around non-commodity led growth in East African markets versus more commodity-led growth in the west,” Peter Attard Montalto, an emerging-markets economist at Nomura International Plc in London, said in an e-mailed response to questions. Still, the favortism toward East Africa may be “overdone” given the bigger market size in West Africa, he said.

While lower crude prices present a possible threat to Kenya and Uganda as they move toward becoming oil exporters, exploration projects have been onshore and thus will be cheaper to tap than offshore finds.

Political Instability

Tullow Oil Plc (TLW), based in London, will prioritize onshore exploration in Kenya over deep-water projects, Chief Executive Officer Aidan Heavey said on Nov. 5. The company, whose shares have plunged 56 percent in London since the beginning of June, has been able to reduce drilling costs in Kenya to $7 million per well from $50 million as exploration has progressed, he said.

Nigeria has lost its appeal with investors even though it has Africa’s largest economy and its population of 170 million is almost a third bigger than the combined population of Tanzania, Kenya and Uganda. Political instability is worsening amid an escalation of attacks by Boko Haram Islamist militants, who have killed more than 13,000 people in the past five years, according to the government.

“There is a lot of optimism around East Africa,” Thomas Hansen, an Africa analyst at Control Risks, said in a Dec. 5 interview in Cape Town. While Kenyan authorities are also struggling to contain attacks by Somalia’s al-Qaeda-linked militant group, al-Shabaab, “the violence doesn’t appear to be enough to drive away investment.”

http://www.bloomberg.com/news/2014-12-12/nigeria-s-loss-is-east-africa-s-gain-as-oil-prices-plummet-1-.html?

291
News & Happenings / ‘Foreign reserves lost $1.96b in November’
« on: December 11, 2014, 08:43:23 AM »
Data from the Central Bank of Nigeria (CBN) has shown that official reserves decreased by $1.96 billion last month to $36.8 billion. The decline, analysts at FBN Capital said, could be attributed to a fall in foreign exchange inflows following the sharp decline in the price of crude oil and the exit of some offshore portfolio investors at a time when demand was little changed.

Head, African Markets at FBN Capital, Olubunmi Ashaolu said the bi-weekly sales of foreign exchange at the CBN’s retail Dutch auction system (RDAS) declined by $700 million from the previous month to $2.29 billion

However, this merely reflects the CBN circular excluding specific import transactions (such as electronics, finished goods and generators) from the RDAS window. Authorised dealers were thereby driven to source these transactions for their customers on the interbank market.

At current levels, he said Nigeria’s external reserves are sufficient to provide cover for 8.2 months of merchandise imports. However, once services are included, the ratio drops to 5.6 months.

A cursory look at the sectoral utilisation of foreign exchange in second quarter of thus year showed that the oil and gas sector accounted for 32 per cent of the total.

This consisted largely of petroleum products, for which the import bill should have since declined sharply. As a rough guide, the spot price of Bonny Light averaged as much as $112/barrel in the quarter compared with about $70/barrel currently.

He said: “Looking further ahead, the bill would be reduced by deregulation of the fuel price and the resulting increase in domestic refining capacity.

“One area where notable progress has been made is the agric sector as significant investments have been made to expand domestic production of rice. In our view, the Federal Government should deepen its transformation agenda based on backward integration to reduce Nigeria’s hearty appetite for imports.”

The CBN said the decrease was driven largely by the increased funding of the foreign exchange market in the face of intense pressure on the naira and the need to maintain stability.

It added that the pressure on external reserves was deemed to be consistent with the seasonal annual payment of dividends to foreign investors.

http://thenationonlineng.net/new/foreign-reserves-lost-1-96b-november/?

292
News & Happenings / NLNG to build $1.8b ship repair facility in Lagos
« on: December 11, 2014, 08:41:47 AM »

The Nigeria Liquified Natural Gas (NLNG) in collaboration with other investors are set to invest $1.8billion in ship repair and dry docking business in the country to boost the economy and increase trade.

The facility, according to its promoters,  would be built in Badagry area of Lagos State because of its deep waters,  human resources and proximity to other West African countries.

Speaking at the investors’ road show organised by the Badagry Ship repair and Marine Engineering Limited, NLNG’s Managing Director Mr. Babs Omotowa said the robust investment will contribute immensely to the nation’s economy, give the country the much needed foreign exchange aside its potential to create jobs.

The need for the establishment of the dockyard, Omotowa said, follows the conclusion of feasibility studies by Royal Haskoning DVH, an independent international engineering and project management consultancy company which has its headquarters in the Netherlands.

The study, he said, is one of the benefits of NLNG’s $1.6billions ship building contracts given to Samsung Heavy Industries and Hyundai Heavy Industries to build six new ships for the company.

“This dry dock, when completed, holds huge potential for investors and for Nigeria; Our NLNG vessels and very large crude carriers of other companies in the oil and gas and marine industries, which are currently maintained overseas, resulting in millions of dollars in capital flight, will soon be maintained in our country with significant value-added for the Nigerian economy,” Omotowa said.

The feasibility studies for  citing the dock yard, he said, were done in seven locations which included Badagry, Lekki FTZ, Ladol Island,  Olokola FTZ, Onne and Bonny before the consultants picked Badagry as the suitable location for the project.

http://thenationonlineng.net/new/nlng-build-1-8b-ship-repair-facility-lagos/?

293
News & Happenings / Oil Workers May Begin Strike Tomorrow
« on: December 09, 2014, 01:40:29 PM »
Barring last minute intervention, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) will tomorrow begin a national strike over labour related issues.

PENGASSAN said its sister union, Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has also been mobilised for a nationwide industrial action that will disrupt operations in the oil and gas sector

The labour infringement listed by the oil workers include delay in passage of the Petroleum Industry Bill (PIB), unjust termination of appointment of the Port Harcourt Zonal Secretary of the association by Total Exploration and Production (Total E&P) Nigeria Limited, retardation of staff promotion in the Petroleum Technology Development Fund (PTDF), non-standardisation of nomenclature and collective bargaining agreement of the Nigerian Nuclear Regulatory Agency (NNRA) as obtains in other agencies in the oil and gas industry and refusal of the management of Addax/Petrostuff Nigeria Limited and Chevron/Sudelletra to recall sacked staff.

Other issues are the dangerous state of the nation's strategic and industrial roads and highways, non-beneficial deductions of National Housing Fund (NHF) for workers, lack of measures of addressing pipeline vandalism and crude oil theft and divestments by International Oil Companies (IOCs) without clear guidelines to check the resultant arbitrary job losses and heightening insecurity of members/families in the troubled parts of Northern Nigeria.

http://allafrica.com/stories/201412091134.html?viewall=1

294
CAMAC Energy has signed a contract with a subsidiary of Transocean for the provision of the semi-submersible drilling unit Sedco Express for drilling and completion activities offshore Nigeria.

The contract allows for the drilling or completion of up to three wells, and CAMAC intends to use the rig to accelerate timing of the tie-in of production from the Oyo-7 and Oyo-8 development wells. With the ability to drill a third well, and an option to extend the contract, the company is also considering using the rig to accelerate its 2015 exploration drilling program.

The Sedco Express is an ultra deepwater, semi-submersible drilling rig built in 2000, and is already within close proximity of the Oyo field in OML 120. The company’s other rig, the drillship Energy Searcher, will continue the plugging and abandonment operations on the Oyo-5 and Oyo-6 wells.

CAMAC Energy is an independent oil and gas exploration and production company focused on energy resources in sub-Saharan Africa. Its asset portfolio consists of nine licenses across four countries covering an area of 43,000 sq km, including current production and other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana, Kenya, and Gambia, and onshore Kenya.

http://www.worldoil.com/SEDCO-Express-to-drill-offshore-Nigeria-for-CAMAC-Energy.html

295
News & Happenings / 2015 Will be a Tough Year for Nigerian Workers - Esele
« on: December 09, 2014, 10:21:13 AM »

Former President General, Trade Union Congress of Nigeria, Mr. Peter Esele predicts that the year 2015 will be a challenging one for Nigerian workers in view of tumbling oil prices. In this interview with Linda Eroke, he emphasises the need for trade unions to be involved in the process of governance that would be beneficial to workers and the masses

What is your assessment of the year 2014 in relation to the current development in the country?

The year 2014 has been very challenging for the workers and the way it is ending, it is even going to be worse. Why I am using the word “worse” right now is that whether we like it or not, our minimum wage of N18, 000 was like $110, as at now is going to be less than that because the currency effectively has been devalued and prices of commodities are going to rise.

If N18, 000 was buying you 10 items before, because of the devaluation in the currency it is not going to buy you more than 8 items now. So the year is ending on a very tough note for the workers. If the price of crude continues to drop, then the money in our pockets will not be what it used to be.

You said “If the price of crude oil continues to drop then the money in the pocket of workers will not be enough”, what do you mean by that?

What I mean is that the currency effectively has been devalued Naira will lose its value. The official rate was N155 to a dollar now it is N178 to a dollar. If you are to get the dollar on the street it will be around N183. What that effectively means is that if anyone is importing anything into the country the person will now spend N178 which is the new official rate instead of N15, 500 which was the exchange rate some months ago.

It means the price of commodities will increase and when the price of goods increases the purchasing power of the workers automatically drops. The purchasing power of workers will drop by 10-20 per cent, so that is what I meant when I said the year is ending on a very tough note for the average Nigerian worker.

Looking at the current price of crude oil, ordinarily we know government is subsidising the price of petrol.

But with the current price oil at N73 do you think that government can continue to sustain the subsidy?

The most interesting aspect of the whole issue is the fact is that we do not learn .In crude oil practise we have what we call cyclical movement. It is a circle of bump and burst, how prepared are we as we are approaching the burst should be our concern. You could remember how they did the budget where there was a whole lot of problem between the legislature and the executive. Saudi Arabia with all its wealth benched their budget for the year at 65 dollars, even right now they can adjust with the current price of crude oil but for our own economy right now we are in trouble because the economy is going to get a hit.

When you are talking about subsidy or no subsidy what we should be asking ourselves is how much should be the price of petrol right now. For example, if you say you are subsidising by 700 billion for a year and in the last 3 months the price of crude have dropped by 34 per cent from June to date. It is when you are able to arrive by that you will know whether subsidy is there or not.
So for now everything is in the realm of speculation, it is time for government to come out and say the prices have dropped by this number and this is the current price now. Not until government explains this, you cannot say whether subsidy should be removed or not.

Looking at next year you said it is going to be tough for Nigerian workers, Federal Government is already contemplating removing subsidy from next year. So by the time they remove this subsidy, do you think it will be justified for labour to come out and say they are against subsidy giving the current economic situation?

First and foremost I am no longer president so I cannot say whether those who are driving it now will act, but the bottom line we need to ask ourselves some pertinent questions.

In other countries what you need to do first of all is to look at the wages. If you look at the budget for example, you will discover that the budget for next year is not giving an idea about the removal of subsidy. Next year budget proposal did not say whether subsidy will be removed completely. What I am saying is that the money they will use for next year subsidy will be low.

Also if you ask me based on this from my own work experience everything put together the price of petrol will be a little above N100. So we have to ask ourselves if the price going to remain like this. What you have to do as a government is to know all the allowances you are paying, because if you look at the budget, the expenditure takes over 71-72 per cent of the total budget. The current expenditure in Nigeria is over a trillion, If you reduce your current expenditure by 20 per cent you are looking at over N800 billion. So, there are areas I think government can also cut cost.

Next year is going to be very challenging; we have general elections and most of the time it is the masses that feels the pinch, It is not the elites they can live anywhere in the world. These are the things I am looking at it is not whether they remove subsidy or not. We should not be talking from the position of just wanting our voices to be heard, we should be able to have the empirical evidences, statistics to prove all of these.

Now we are talking about buying stove for women and I heard N9.6billion have been projected for it and they are going to give stove to about 750,000 women when we are importing kerosene.

We need to ask ourselves where lies our priority? Whether we remove subsidy or not, we should not be talking about it right now. Removing subsidy or not is treating what I call addressing the symptom but not the cause. What are we saving for the raining day, how much do we have in our foreign reserve. I will remind you about something that happened sometimes ago when the governors were at each other chambers sharing the money. Right now whether we like it or not if the prices of things does not change, if the price of crude oil does not improve we will all be in trouble, we will be getting ready for hard time and that is the plain truth.

The reason is that we have not diversified our economy since 1960, when we had the bump we did not do anything. We are a rent economy where the federal, state and local government gather to share money in Abuja every month. This is the only country where such happens. We import everything from chewing stick to toothpick to fruit juice. So a lot of challenges are going on, it is either this government addresses it, various government have not and so far in the life of government. They have done little about it. So, if you look at it I must be frank I do not really think the Central Bank of Nigeria (CBN)  or whatever can do much, it is you and I that need to start diversifying our economy so that we can free ourselves from this price of crude oil.

The membership of trade unions are reducing and the relevance is diminishing. So with these current challenges, how can trade unions regain their strengths?
We have to first of all define what the unions are looking for. Membership is one of them and that is why we say we need to organise and organising will add value to members. If you look at the union we talk about the secretariat, I’m a member of the union and not an employee of the union. The former president is not an employee so we all have to go back to our work. They can continue to collect my check-up dues, so what they have to do and I mean those who are leading right now is to give members value for their money. It is when we have value for our money that people now see the need to belong to the union.

One other means of attracting workers is simple; organise them and let them know why you need them and also find a way of meeting some of their problems. The TUC president now, Kaigama is working on a housing project. They are not going to give the house until it is completed, if you are not a member of TUC or a member of the affiliate there is no way you can subscribe to those houses. So, that is also an incentive for people who want to be part of it

Another incentive is to make sure that when they are facing challenges in their places of work, the union is there for them. I know the challenges they will be facing because people have this believe that the union is their voice, We are the voice of the oppressed we are not denying it. What now comes in is the method used in defending the interest of members. Sometimes they want us to behave as if we are opposition party unions will not behave like that; they have to look at their interest also.

If you look at the unions’ campaign you will find out that there are some governors who belong to different political parties. You will find out that some unions go and meet the governors because the union is also looking at their own interest. So, it is all about interest now. That is which governor or individual is best suited to meet the yearnings and aspirations of our members. It is not only to lock gate and shout; I always tell people that when unions begin to shout and match on the street, it is because everything has failed behind the scene. Unions naturally are pressure group but not “pull down the country” group. So, I think what they are doing now is just a matter of method and style. I will look at my primary constituency for example, PENGASSAN, if you check the roll call of the companies they had three years ago and the ones they have now, you will discover that the companies they have now is more than what they had three years ago. So they now have more companies which mean they have unionised more members. Also, when you look at the affiliates of Trade Union Congress, you will find out that the affiliates they have two or three years ago have also increased. If you watched those indices, that means they are making relevance in their primary areas. Their primary assignment to protect and defend the interest of members first and the others are secondary.

What is your opinion on the decision of the Senate to remove minimum wage from Exclusive legislative List to the Concurrent List of the 1999 Constitution?

I think it is ridiculous for anybody to say that and it is so unfortunate that majority of our governors would always want to quote something they thing is in their interest. We are a democratic nation and borrowed this from America. In America, the minimum wage is fixed by the Congress. It is the minimum standard that we expect an American worker to like by. In America, it is paid per hour while in Nigeria, it is paid monthly. What we are saying is that it minimum wage should be the benchmark and there are states in America that pay more than the minimum wage.

The minimum wage is benchmark in which no employer is expected to pay below. It is the responsibility of the government to set this benchmark. Recently, Obama has been campaigning for an increase in the minimum wage and once this is effected, other states will begin to implement it and no employer will go below this minimum standard. However, there are states in America that pay more than the federal government. Again, lets tell ourselves the truth. Is the N18, 000 enough to feed their dogs? There is no part of the country today that N18, 000 will take you anywhere. If you are telling me that states like Lagos should pay N35,000 and Port Harcourt should pay more, I will understand but  not for the governors to say that they cannot pay. How much is N18, 000 with the current exchange rate now. As at the time we took the protest for the review of minimum wage, N18,000 was $130 then, right now it is $100. The minimum wage of three years ago is no longer what we have now. So, I find it absurd when I hear governors talking about removing minimum wage from Exclusive List. I think what we should be talking about is how to make like easier for the workers and Nigerians.

But the argument is that some states do not have the financial capacity to pay this minimum wage?

When you say ability to pay, tell me any state that does not have security vote, tell me anywhere in the world where you have security vote that is not accounted for. Security vote of the federal government is almost a trillion naira. Likewise security votes of state is about N300 million per annum and then check their wage bill to know who is consuming more.

They are some states that are complaining that they cannot pay but they have 1000 special advisers and personal assistants. You find out that it is the political appointees that are undermining the process. In Europe and America where we borrowed our democracy from, every one Naira of public fund is accounted for. So let our leaders come and tell us how they are spending this fund. They are travelling out of the country and attending conferences. There are so many wastages which the workers are not responsible for. They governors have the ability to pay if only they can cut down their expenses.

Given the current situation, what then is the hope of Nigerian workers in this country?

Nigerian workers must not give up hope on themselves and they also need to be involved in the process of governance. If you are not involved in the political process and do not come out to say this is where we stand, then the situation will continue to get worse. The workers in the UK did not just wake up and formed their own party, in 1906, when the government were doing things the workers don not like, they set up their own party which is the Labour Party in the UK in the 19th century. But years later, they wanted only three sits but today that same party is now a major party in the UK and the workers are directly involved in the political life of the British economy.

If you decide to sit on the fence and look, anything you see, you take but not until you are involved in the process. Some day you will get the power and when this happens, you will make changes that will be beneficial to your own interest and the interest of Nigerians in general. When I was the TUC President that was what I was talking about-the need for Nigerian workers not only to protest but to get political power, for them to organise themselves and decide how to go about it. That to me is the only way they can save themselves.

http://www.thisdaylive.com/articles/esele-2015-will-be-a-tough-year-for-nigerian-workers/196179/?

296
News & Happenings / Conoil crude oil production drops to 9,000bpd
« on: December 09, 2014, 09:44:57 AM »
The  exigency of production hiccups  has made  Nigerian independent, Conoil Producing limited output to  drop  to 9,000 barrels of oil daily  from 11,000barrels daily attained  in the  middle of 2014,investigation by Daily Independent has revealed .

The firm  was one of the leaders of the independents  is struggling with optimum output in two different production hubs: 1,000 barrels  on the western flank of the Niger Delta and 8,000barrels  in its Otuo South field, at the mouth of the continent’s most prolific basin.

But Sources who told Daily Independent on  conditions of anonymity  over the weekend  noted that the company in the last two years,   has been more aggressive, working on the  potentials of  OPL 290, OML 2007 and OML 59,and has  made deeper  discoveries in OML 59 and propped up new oil in OML 2007 and OPL 290, which has the potentials to  push production to 60,000barrels by 2018.

Further investigation revealed that  Conoil was the first real Nigerian operator of a Nigerian hydrocarbon acreage, winning its first license as one of the several local firms granted discretionary awards in 1991.

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Executive Director, Jagal Group, owners of  Nigerdock, Nigeria Limited, Mr. Mansur  Jarmakani spoke with Anayo Korie, Acting Energy Editor  on  the issues concerning  the  developments in the Nigerian oil and gas sector  after performing the handover ceremony of     the fabrication of a Gas Gathering Compression Platform and Non-Associated Wellhead Platform for Chevron’s  gas project.  He concludes that the enactment and the implementation of Nigeria’s content laws has empowered the nation to attain  global standards in the fabrication of inputs used in the harnessing of hydrocarbon resources.

What is the  impact of  Gas Gathering Compression Platform (GGCP), Non-Associated Wellhead Platform you fabricated for Chevron Nigeria?

Let me try to summarize it in a way that will reflect on why this project is a milestone. First of all, Nigeria, many years ago, realised that gas is a major component of driving energy. Today, with the Gas Master Plan in effect,  it is very important that Nigeria builds the infrastructure to utilize this aim , not just to flare it or produce it, but to actually make sure that it channels back its way into Nigeria to  produce sustainable power. What we built today is part of a project that Chevron has awarded to Hyundai Heavy Industries (HHI) of Korea, with NNPC and other stakeholders as partners, to deliver the facilities that are part of this major gas programme. So, what we executed today was with over 2.5 million man-hours without lost time incident. That means we delivered the project safely; the project is on schedule and is within its budget. These are significant achievements in the industry because Nigeria is just catching up with the trend of major projects. The Nigerian Content Act was passed in 2010 but Nigerdock had been planning this before it was a law. We believe that this is the right thing to do. If you look at this project in a holistic way, it is decks, platforms and jackets with the piles, which basically is the infrastructure that is put on the field to produce gas.

What is the impact of  non-passage of the Petroleum Industry Bill (PIB)  on the  inflow of new projects?

PIB delay has affected this industry dramatically. I believe that when the PIB concept first came up, it was to drive investment; it was to drive projects but I think there was, may be, not right . I think the PIB, whether in its current form or different form, is a legislation that will happen in this country, a legislation to promote investment and the right return for Nigeria. But the delay  has created a bit of slow-down in projects because there is uncertainty on the tax regime. We are just a contractor; we will follow what our industry gives us. The PIB is between the government, the NNPC and the other stakeholders, which are not just the international oil companies (IOCs) – the National Oil Companies (NOCs) have a major role to play because we also rely on them to give Nigerian companies work. So, it is something that is important for the country, but I think the PIB will get through in probably, a different format. That is my personal take on it.

Do you see the drop in crude oil price  effecting  the execution of new projects in  oil and gas industry?

I am not an oil economist but I can tell you something. The price of crude oil has a direct relationship with investment worldwide. From Saudi Arabia to Nigeria to the United States, there is more than just oil price that will affect projects. So, you cannot look at something singularly; you have to look at it from broader perspective .

What are the strategies on the ground to ensure healthy relationship with your partner,  Hyundai Heavy Industries of Korea?

Let me try and describe what a professional relationship is supposed to look like. A professional relationship is based on a common vision, a focus and an ultimate  goal. If we are desirous more than  any Nigerian company  of delivering a project or engineering man-hours  in industry, they must take the initiative to invest in their own capability and prove that they are up to the task. Worldwide, it is always more cost effective to do something locally than to just import a finished good. So, you ask me what are we doing? As a company, we are acting professionally; we invite any company, international or local because we have passed that barrier. It is a mind-set change; whether you are an international company or a local company or a highbred, the world today needs to develop its resources. Nigeria, today, has a vision. His Excellency, Mr. President has put several agenda items that are a must for the economy and we are delivering on them. The only way you can deliver is to bring two companies together, that have common vision, professional attitude and are willing to take that painful journey and deliver the work because we have a lot to learn as an industry and we have a massive challenge in front of us.

Still on workflow, your chairman had expressed  fears on the possibility of your projects drying up this quarter or the first quarter of 2015. What is the situation now?

The situation is yet to take a turn; you know the projects today are coming under a lot of pressure to either be fast-tracked or to push through, but I believe and I have the confidence that between the oil companies, the authorities and  the Nigerian Content Development and Monitoring Board (NCDMB), I think there is now a better alignment that needs to happen to sustain the workflow. There are projects now that are starting to come through the pipeline into a commercial stage and we have submitted commercial offers for these projects and we hope that in the next quarter or two, they will be awarded. We have presented tender for many projects.

You once made a remark that you started local content several years before the enactment of the Nigerian Content Act. How has it impacted on your operation?

It has absolutely impacted on our projects. I think this Act is a natural economic policy that is in every country. In Nigeria, our industry base needs to grow and what this Act has really achieved, for us yes, we are part and parcel of this Act; we have been delivering Nigerian content before it was a law, but where it has really impacted us is that it has improved the supply chain available to us in-country to interact with other Nigerian companies that have credible delivery of goods and services. That is the real Nigerian impact, it has created a bigger supply chain; it has created a bigger workforce; it has created more talented engineers and fabricators and welders and fitters , buyers and bankers. . We don’t have to go half-way around the world to do it; we can do it at home.

What is the fate   of  hundreds  of Nigerians  so far trained by Nigerdock when this job is completed? 

They will go to other projects, hopefully. Today, Nigeria, like every other country, is not immune to economic strife. The world today, is a global village . You can see the impact on the oil price. There are other tax regimes; as countries around the world struggle economically, they increase their tax but the real issue in this is what happens next. Your question is what are we going to do with this highly skilled trained workforce. There are several opportunities. We, as a company are bidding work for  every day; it is up for the NNPC, the international oil companies and the government to keep the framework at a balance that will give Nigeria the right return on its assets and also create an investment climate that suits further investment into this oil and gas industry. So, for us to take these workers on to the next job, it is our duty; we will continuously bid for  work. I can tell you that we are confident that we will win jobs based  on  capacity to deliver jobs without delay.

We understand that this is the first time this kind of project is being fabricated in Nigeria. What gave you the courage to embark on such ambitious project?

Every country around the world today is struggling economically and financially. Nigeria has had the vision for many years; there are yards around the country, all the way from Port Harcourt to Warri and Lagos that have been fabricating different components for decades. But what gives us the courage wasn’t just the Nigerian Content Act; it is the ability of our workers to produce this; it is the training the workers passed through , it is the management that we have got in place and it is the ability to transfer a paper engineering document into a final structure that can stand the test of time and reliably produce these by-products of energy.

 What is the strategy behind new infrastructure, projects  and investment  domiciled at Nigerdock

Most of the time, people are just interested in a dollar or Naira number. Most of the time, people are looking for how much was  spent; what people don’t appreciate is with the hundreds of millions of dollars and if we want to be conservative you have to be , we have spent over $500million in upgrading this facility alone. Capital expenditure (Capex) investment over the past 12 months is in excess of $100 million. This is part of the plan and we are ready to invest much more. But the real testament is not just the money; it is the man-hours. It is the training; it is the constant reinforcement of a vision because the struggle we have is not just the investment in the equipment in the facilities and infrastructure. We have to contend with   a continuous work flow because it makes more economic sense  for us as a company in terms of competitiveness, but it actually saves Nigeria money. For us, consistent workflow is what gave us the courage; it is what gave us the appetite to invest and we look at this as part of our minimum duty.  If you give us work, we deliver it  within time and budget limit. . You have to earn it; you have to bid it; you have to go out and you have to be competitive. It is no one’s birthright to go and get project; it is your duty to promote Nigeria and say, yes we can; yes we will; yes we are, and in fact today, we just did it.

What is your current staff strength and how do you manage to retain your skilled workers?

It is always the most single painful thing we have to do  to let go of our staff because we invest heavily in them . It is outright phenomenal what this company has in Africa but what is even more impressive is the talented workforce . We have close to 5,000 strong workforce. That has taken us years of development; years of investment and today is a testimony to that achievement. What do we do when we don’t have projects? The first thing we do as a company is to try to retrain.  Our overhead is heavy and it is very painful. But at a certain point, they are either pouched by competitors because we have a basket of qualified individuals and in fact, we have even gotten international companies pouching our people because of their level of competence and we try to make sure that there is a back-to-back sequence of projects. So, we move them from project to project but the one other thing that we do is that we move them from division to division. We have  ship yard and   logistics and marine services; we also have fabrication yards, training school and  infrastructure programme. So, we try to move them around the work chain.

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News & Happenings / OPEC and Alison-Madueke’s Development Agenda
« on: December 08, 2014, 09:10:38 AM »

The news of the election of Minister of Petroleum Resources, Mrs Diezani Alison-Madueke as President of the global oil cartel, the Organisation of Petroleum Exporting Countries (OPEC), came unexpectedly, but forcefully, from Vienna, Austria, on Thursday, November 27, this year, amid the increasing tension occasioned in some parts of Northern Nigeria by Boko Haram’s bombing activities.

On-line publications and on-line versions of the print media celebrated it on Thursday night.  The electronic media made a feast of it before the newspapers ran with the story on Friday, November 28, which coincidentally was the day the Central Mosque in Kano was bombed and scores of Muslim faithful were killed while many of them sustained varied degrees of injuries.
Indeed, the bombing cast a pall on the general security outlook of the nation and imposed restraints on men of conscience who should have celebrated the refreshing development that rubbed off positively on Nigeria at the 166th meeting of the OPEC meeting in Vienna.  Truth is, Mrs Alison-Madueke’s election deserved pomp, especially for being the first female oil minister of a member nation of OPEC to step in the saddle as its president.

Regardless of the situation back home, she will assume office in January 2015 to succeed former Libya’s Vice Prime Minister for Corporations, Abdourhman Atahar Al-Ahirish.  Before stepping in the saddle as President, Alison-Madueke started out earlier in year as the alternate president of OPEC.  Her election is very significant , coming at a time that her principal and President Goodluck Jonathan is heading for the polls on February 14, next year, to seek the renewal of his mandate by the Nigerian people.  The prominent and pre-eminent position into which Alison-Madueke has launched the Federal Government and Nigeria will count a lot in the critical assessment and performance rating of the Jonathan administration.

This, perhaps, explains why the Peoples Democratic Party (PDP) did not fail to seize the moment by quickly appropriating the feat recorded by the Petroleum Minister, describing it as a confirmation of the increasing global confidence in the Federal Government under the leadership of President Goodluck Jonathan.   The Party, in a statement by its National Publicity Secretary, Olisa Metuh, expressed confidence that “with Mrs Allison-Madueke’s election, Nigeria is now, more than ever before, advantageously positioned to contribute to and influence major decisions in the global oil market.”

Just like the PDP, many watchers of the global oil market and Alison-Madueke’s trajectory are not, at all, surprised at the decision by the OPEC member nations to hand the task of presiding over their affairs to a prominent cabinet member in the Nigerian government, who has defined her commitment as a champion of progressive reforms in the all important oil and gas sector, which is the critical hub around which our national economy revolves.

Back home, Alison-Madueke’s stewardship in the petroleum ministry has produced landmark achievements in the oil and gas sector.  The consensus in the industry is that she has demonstrated capacity and exemplary leadership at the domestic front even as she has the capabilities to provide the OPEC with sharply-focused leadership.

Her impressive development agenda in the critical oil and gas sector of the national economy has put the sector on the path of irreversible progress.  Consider some of the achievements: the Petroleum  industry under her watch, as of March, this year, ensured annual average crude oil production of approximately 2.3 mbopd crude oil and increased gas production from 6.3 to 8.1 bcf/d by year-end 2013, despite incessant pipeline vandalism and crude oil theft.

The administration commissioned the Usan Floating Production, Storage and Offloading (FPSO) vessel with a processing capacity of 180,000bbls/day operated by Mobil. The Usan field, as of March this year, was producing 103,000 barrels a day.  It is on record that the participation of indigenous oil and gas companies in the industry has increased, leading to the commissioning of several critical infrastructure projects by Nigerian companies including: the establishment of Ebok terminal by an indigenous company, with current daily crude oil production of 7,000 bpd and a plateau production of 50,000 bpd at full capacity; commissioning of Africa’s largest vessel, christened Akpevweoghene, an Offshore Pipe-laying/Derrick Barge, in May 2013; and commencement of the landmark Egina FPSO vessel platform integration in Nigeria

In line with the transformation programme, in terms of Gas-to-Power, Allison-Madueke’s leadership has continued frontier exploration in the Chad Basin and signed agreements for the aero-magnetic survey of other hinterland basins.  It is pursuing the implementation of the Gas Master Plan even as it has completed over 450 km of critical gas backbone pipeline infrastructure, including: Itoki – Olorunshogo,  Escravos – Warri – Oben, Imo River – Alaoji, and Oben – Geregegu.  According to reports, the Ministry has kicked off 1,860 km of ongoing gas pipeline infrastructure comprising: Oben – Lagos, Obiafo – Obrikom – Oben (Ob3), and Calabar – Ajaokuta – Kano.

The administration has reportedly commenced Front-End Engineering Design (FEED) of the 850mcf/d Gas processing facility, to support Domestic supply of gas to power and the Ogidigben Industrial Park.  In line with this, the Ministry of Petroleum had, with the assistance of the Ministry of Finance, raised US$450 million dollars in Eurobonds in support of pipeline extensions for the Calabar – Ajaokuta – Kano Pipelines Project.

Indeed, President Jonathan called on and reiterated some of the achievements in his 2015 presidential election declaration speech at the Eagle Square on November 11, this year, wherein he said that “in our determination to encourage much greater participation of Nigerians in the oil and gas industry, one of the first action I took, was the enactment of the Nigerian Oil and Gas Industry Content Development Act.  As a result of this law, indigenous Nigerian participation levels in upstream and downstream activities of the oil and gas industry have increased by over 45 percent, thereby increasing employment opportunities for our youth.”

Jonathan said that the Federal Government also succeeded in eliminating the long queues that previously characterized fuel stations in the country through regular and sustained product supply, which ties with the report by the Ministry of Petroleum that it has been able to maintain unprecedented stability in the supply and distribution of petroleum products across the country.

It is also significant to note that under the watch of Alison-Madueke, the Petroleum Ministry, through the NNPC has been able to aggressively pursue the plan to emplace gas infrastructure to ensure adequate gas-to-power and gas-to-industry, with over 450km of gas pipelines already installed over the last three years and another 2000km being planned for installation over the next four years.

In her first task of bringing knowledge to bear on the developments in the sector, Alison-Madueke said in Vienna, Austria, shortly after her election, against the backdrop of the current fall in global oil price, that Nigeria was now left with no choice other than to embark on an aggressive development and domestic utilization of its gas.  President Jonathan also spoke about this at the Eagle Square declaration: “in terms of gas supply, we have grown from less than 500 million cubic feet per day, four years ago, to about 1.5 billion cubic feet per day currently.  Our goal is to attain 4 billion cubic feet per day over the next four years.”

These are enviable records of performance.  Having now been given the onerous responsibilities to preside over the affairs of the oil cartel and define its development agenda, she is expected to, in her characteristic manner, break the glass ceiling.  And speaking with journalist at the end of the Federal Excutive Council (FEC) meeting in Abuja, Alison-Madueke said as OPEC President, she would ensure that before anything else, necessary steps are taken to stabilize global oil prices.

Going by her disposition, Nigerians should also rest assured that their country would not bear the brunt of the fall in oil prices.   Nigeria, according to her, has to be much more competitive at this time and going into the future, pointing out that “we cannot continue to do business as usual; we must ensure that we have the right enabling parameters and indices in this country to attract the right end-user markets, to attract the right end-user demand for our products because there are so many other countries that would be competing for those end-user markers and to get that end-user demand.  So we will have to sit down and reformulate our entire approach over the next month or so, in fact, immediately to ensure that we are at the cutting edge of competitiveness; we have to make ourselves competitive in the market and we have to ensure we are able to garner and take those end-user markets.”

Therefore, if the poser by those who are still in doubt about her capacity is: how will Alison-Madueke fare in her new office?  The answer, even though embedded in the womb of time, is certainly positive: she will excel once more.

http://www.thisdaylive.com/articles/opec-and-alison-madueke-s-development-agenda/195890/?

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News & Happenings / Crude oil price decline permanent, says Emefiele
« on: December 08, 2014, 08:59:55 AM »

The Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele has said the continued decline in oil price is ‘seemingly permanent’, and may not be transitory.

The CBN chief who spoke at the weekend during the 48th annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, said technological advances have made shale oil production profitable to the extent that the United States which used to be Nigeria’s major oil consumer now meet a lot of its demands from domestic shale oil production and in fact exports over 200 barrels of oil per day.

He described import substitution as the solution to naira’s economic challenges, insisting that for years, Nigeria has been wasting too much foreign exchange in importing things that can be produced in the country, hence weakening the naira.

Emefiele said N1.3 trillion has been spent importing rice, sugar, wheat and fish since 2011, and this has put too much pressure on the naira and foreign exchange reserves. He called on importers to replace costly imports with local goods by embracing import substitution.

“Also, most market watchers and economists now believe that the current situation in the oil market may not be transitory, but seemingly permanent,” he said.

The CBN governor added, “As we all know, the main source of our forex supply is the sale of crude oil, however, during the year, we have seen oil prices fall by nearly 40 per cent from a peak of $116 per barrel in January 2014, to as low as $70 per barrel in November. The direct implication of this is a significant reduction in supply of dollar to the market.”

Emefiele said the naira versus dollar has come under pressure in the last couple of months. That, he said, prompted the apex bank to decide that it would be sub-optimal to continue to heavily deplete the country’s reserves in defending the naira.

He said the CBN adjusted the naira exchange rate bank because neither the federal government nor the apex bank was in control of the major factors causing the depreciation of the nation’s currency.

“In fact, the Russian central bank has abandoned its defense of the currency and allowed the depreciation of the currency, but only after it was said to have spent over $90 billion in defending the currency over a couple of months,” he said.

He also called on banks, Development Finance Institutions to rally round CBN’s effort at supporting local production of goods. “The CBN has spent a substantial amount of its reserves in shoring up the naira and in contrast, inflow of forex into the banks or the country has been less than anticipated in view of dwindling oil prices. We must remember that in an import-dependent country like ours, the exchange rate operates like every other price in the market. The forces of demand and supply basically determine movement of the naira. When oil price falls, price moves up, when supply fall, price also rises as well,” he said.

http://thenationonlineng.net/new/crude-oil-price-decline-permanent-says-emefiele/?

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News & Happenings / Austerity - Realities, Fallacies Behind the Alarm
« on: December 08, 2014, 08:55:43 AM »
Nigeria's Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Sunday November 16, while unveiling measures designed to mitigate the negative impact of the falling global oil prices on the nation's economy, gave a succinct picture of what lies ahead.

Without mincing words, she said, "The drop in oil prices is a serious challenge which we must confront as a country," adding that Nigerians must be prepared to "make sacrifices where necessary".

Trully, the oil price dropped to $69 per barrel from $77 as at Wednesday, with the possibility of dropping even as low as $60 per barrel before the end of the year.

With the benchmark for the 2013 budget put at $78 per barrel, the handwriting was clear on the wall that hard times are ahead if the steep fall of the oil price persists. This trend has already seen the Federal Government consider an 11per cent downward review of the 2015 Budget benchmark to $65 per barrel, from the earlier $73 per barrel.

For Nigeria, whose economy is largely driven from oil proceeds, this prediction poses a major threat, hence the need to cut down on expenditure.

Economic analysts have been far from satisfied by the way the government has been run, saying they have not been prudent enough at all levels, hence have been unable to save for the rainy days. The obvious consequence, they say, is the inability of the government to prevent the external reserves from being depleted, and its inability to cushion the effects of the drop in oil price.

Okonjo-Iweala, however, expects the government to take the lead in making such sacrifices by tightening its belt and reducing government expenditure to avert austerity, being the consequence of the dwindling oil price. Among the austerity measures listed by the minister is the restriction on international travels in the public service.

According to her, foreign trips by public officials will be permitted only when they become compellingly, while local travel will also be curtailed drastically.

Not done, she said that the government has started compiling the list of luxury goods with the aim of increasing revenue from non-oil sectors.

But, she was quick to douse fears, assuring that the austerity measures will not affect salaries of public sector workers as well as key initiatives in education, health and other critical areas vital to the development of the country.

However, one of the significant measures taken by the government is the devaluation of the naira by the Central Bank of Nigeria (CBN) by 8.4 per cent from N155 to N168, raised the benchmark interest rate (Monetary Policy Rate) from 12 per cent to 13 per cent, and increased the Cash Reserve Ratio of private sector deposits in banks from 15 per cent to 20 per cent

This move, announced by the Monetary Policy Committee (MPC), the CBN says is aimed at strengthening the nation's economy in the wake of the dip in oil prices.

Notwithstanding, the business community across the country, especially in Lagos, is apprehensive of the effects the austerity measures and the devaluation of the naira would have on them.

Already, there are complaints from financial institutions suggesting that the oil price crash is hitting the economy as much, just as the devaluation is taking a huge toll on the real sector.

Experts are also worried that the current devaluation of the naira could impact more on the masses and small and medium scale enterprises than the financial industry as the full ripple effects of the current devaluation eventually unfolds in the economy.

While some financial experts believe the situation is critical and could spell doom for the nation's economy, others are of the view that the period is not a lost course, but one that affords the nation an opportunity to retrace its step and put its economy back on track.

For the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) the adoption of austerity measures by the federal government to cushion the effect of sliding global oil price is unnecessary.

President of the union, Achese Igwe, is of the opinion that the FG should have been prepared long before now for any shock to the nation's economy, submitting that the measures are a ploy to further pauperise the downtrodden masses of this country.

http://allafrica.com/stories/201412080099.html?viewall=1

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