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Tag: benchmark

  • $60 oil benchmark for N8.73tr Budget 2019

    The oil benchmark assumption for Budget 2019 has been pegged at $60 by the Federal Executive Council (FEC), which also yesterdat approved the 2019/2020 Medium Term Expenditure Framework (MTEF) Fiscal Strategy Paper (FSP).

    Other key assumptions being proposed for the budget are oil production of 2.3 million barrels per day, exchange rate of N305/$1 and GDP growth rate of 3.01 per cent.

    The projected N8.73 trillion 2019 budget is about N400 billion less than the N9.12 trillion 2018 budget.

    Read also: 26% UNESCO funding benchmark a myth — Okebukola

    The document will be transmitted to the National Assembly for consideration ahead of the presentation of the budget by President Muhammadu Buhari next month.

    Minister of Budget and National Planning Udoma Udo Udoma spoke to reporters after yesterday’s FEC meeting.

    Udoma said: “The MTEF/FSP that was approved today (yesterday) is designed to translate the strategic development objectives of the Economic Recovery and Growth Plan (ERGP) into a realistic and implementable budget framework for the medium term.

    “As you know relevant inputs from engagements with stakeholders, the last of such engagements was just last week, the inputs from stakeholders were part of the document that was submitted.

  • Shell gets 12-year $40-100/bbl operational benchmark

    Royal Dutch Shell has pegged its operational outlook at between $40 and $100 per barrel of oil from this year to 2030.  It however noted that prices could move above or below this range.

    In its 2017 Energy Transition Report, the oil giant said: “Given this range of outlook, we consider a range of between $40 and $100 per barrel of oil till 2030 to be likely. We have used our assumptions about the future cost of supply (the price at which it makes economic sense to produce resources) as the floor for our range.

    “Prices could move above or below this range. However, when oil prices fall, levels of industry investment tend to decline, which could lead to reduced production. Eventually, higher prices could be needed to support new investment in production to meet demand.

    “We, therefore, think it is unlikely that oil prices would remain at the lower end of our price range for several years. For comparison, the average Brent price for the last five years has been around $70 per barrel. The International Energy Agency (IEA’s) most rapid transition scenario – the Sustainable Development Scenario – indicates an average oil price of $68 per barrel in the period to 2030. The IEA’s Current Policies Scenario, that models current and announced energy policies, indicates an average price of $90 per barrel for the same period.”

    He continued:“Today, around 60 per cent of our Integrated Gas portfolio is linked to oil prices. Based on our view of possible future oil prices, we consider a range of between $6 and $12 per million British thermal units (MMBtu) to 2030 for liquefied natural gas (LNG) to be a plausible price for Asian markets, where we sell around 60 per cent of our LNG.”

    Considering sensitivity to oil prices, Shell said: “Assuming we meet the conditions in our operational plans, especially with regards to production and costs, we estimate that to 2027, a $10 per barrel change in oil prices would be expected to have a roughly $6 billion impact per year on our cash flow from operations. This is an indicative estimate and not a prediction.

    “Based on this assumption, if the oil price fell from around $65 per barrel today to $40 per barrel moneyof-the-day, our cash flow from operations would be expected to decrease by $15 billion per year.

    “Similarly, if the oil price rose to $100 per barrel money-of-the-day, our cash flow from operations would be expected to rise by $21 billion per year.

    “In addition to the resilience of our cash flow from operations, we are also managing the resilience of our organic free cash flow by actively managing the upper levels of our expected capital investment.

    “The capital investment levels included in our business plan offer sufficient flexibility to be reduced by $5 billion to 10 billion per year without materially impacting the long term sustainability of our business.

    “Our financial framework could sustain a potential reduction of up to $15 billion per year in organic free cash flow, according to our estimates. Some of the ways we could respond to this shortfall include reducing capital investment to below $25 billion, further reducing operational expenditure, increasing our levels of debt and accelerating divestments.

    “If prices were to remain below the bottom of our range for more than three to five years, an outcome we think unlikely, we would consider making further strategic, portfolio and financial framework choices to remain financially resilient.

    “Conversely, in periods of high oil and gas prices we would use the excess organic free cash flow to strengthen our balance sheet and consider share buybacks.”

    According to the Report, Shell is stress testing its portfolio to assess its financial resilience in the short and medium term to 2030, adding that it looks the sensitivity of its cash flow to changes in oil prices, and to changes in the cost of carbon dioxide (CO2) emissions. “We expect that the risks associated with the energy transition will ultimately be reflected in the price of oil and gas, and therefore this is the basis for stress testing our portfolio.

    “Our scenarios show a range of possible outcomes for the energy system based on factors including growth in demand, the development of new technologies, world politics and government policy,” it added.

  • Govt urged to review budget benchmark

    Experts have sought a review of the 2018 budget benchmark, following the rise in crude oil price in the international market.

    Last week, the product  hit $69 per barrel. The Federal Government’s $22 benchmark has been increased to $47 per barrel by the Senate.

    An economist, Mr. Yinka Ogunjimi, argued that the going rate of the commodity would remain so for a greater part of the year, hence, the need for government to jerk up its benchmark in the budget. Doing so, he argued, would take off a huge burden of deficit from the financing of the budget, and give some breather to the economy to service its debts.

    “It will also allow more funding opportunities for major projects in the fiscal year. Although the Federal Government was very con-servative with its bench-mark, jerking the benchmark up to $53 per barrel, I believe, is still within reason range. This is because from all variables, crude oil is not likely to sell below $60 per barrel for  most part of the year,” Ogunjimi further argued.

    A Professor of Financial Economics, Leo Ukpong, also agreed that the $45 per barrel was conservative.

    Ukpong, who is Dean, Faculty of Business Admi-nistration, University of Uyo, Akwa Ibom State, said, was because the commodity is likely to sell at a higher price in  the year, considering the uncertainties in oil producing regions, which he noted include include the political quagmire in places, such as Venezuela and Qatar; economic sanctions on Iran; fightings in Iraq, Libya, and Turkey, which are likely to lead to a drop in global oil supply.

  • Expo sets new benchmark, empowers over 2000 women

    Expo sets new benchmark, empowers over 2000 women

    For 22 days, participants drawn from 17 African countries, Nigeria’s 18 states and hundreds of SMEs showcased quality arts and craft at this year’s 10th African Arts and Craft Expo in Abuja, which ended last Sunday. Assistant Editor (Arts) OZOLUA UHAKHEME reports. 

    Over two thousand women received training in e-marketing, bead-making, cloth weaving,  soap, air freshener, shoe making, hair-do, waste-to-wealth and make-up, among other skills at this year’s 10th African Arts and Craft Expo in Abuja.

    The 22-day expo, which ended last Sunday, also provided free medical tests for blood sugar and Body Mass Index for about 1,120 Nigerians, who could not afford such exercises. Also, 200 Nigerians were given free eye glasses while 620 got free dental test.

    Apart from the tremendous improvement in infrastructural development and content, the exercise was part of the innovations (investment round table, and states special days), which made this year’s AFAC Expo tagged: Nigerian Crafts: Untapped treasure, to surpass previous editions in its 10years of existence. Little wonder 17 countries, 18 states, 94 local government councils and over 200 NGOs participated in the expo, which attracted an unprecedented numbers of the diplomatic corps as well as other foreigners.

    Head of Service (HoS) of the Federation, Mrs Uyo Etta, who drew the curtain on the expo, said she was impressed with what she saw at the event, especially the security, excellent layout of pavilions and the skill acquisition programme for women. She urged the council not to rest on its oars, but take arts and culture to greater height, adding that stakeholders and the states should partner regions and countries for better promotion of the expo.

    Permanent Secretary Ministry of Information, Culture and Tourism Grace Isu Gekpe, who was excited by the quality of the organisation of the expo, said Otunba Runsewe brought lots of  innovations into the expo, noting that it was the best ever since the expo started. “I believe that next year will be better and bigger as he executed this year’s edition with little or nothing. On the part of the ministry, we will do all within our capacity to support the expo,” she added.

    Governor Yahaya Bello of Kogi State who was represented by Secretary to Kogi State Government, Mrs Folashade Arike pledged the state’s support for the promotion of culture.

    Director-General, National Council for Arts and Culture, Otunba Olusegun Runsewe, said given the height of creativity and ingenuity of African exhibitors as complemented by professional colleagues from other parts of the world, this year’s expo has set a new benchmark. He said the event has increased both domestic and international traffic in Abuja on the days the expo lasted. Otunba Runsewe, who pledged that the council would not rest on its oars until it realises the vision of making the expo the best in Africa and one of the best in the world, renamed it International Arts and Craft Expo.

    “The challenge before us now is how to attract critical stakeholders to join hands with the National Council for Art s and Culture to develop a vibrant expo that is second to none in the world. We need to leverage the potentials of this industry to help drive the economic diversification policy of this administration. I therefore call for the collaboration of government, corporate organisations, tour operators and art vendors,” he said.

    Otunba Runsewe, who described the expo as an opportunity for showcasing products and networking by exhibitors as against outright sales of arts and craft, disclosed that considering the challenges posed by the rain, next year’s expo would be held before the rainny season sets in.

    On what spurred him to repackage the expo, he said: “I needed to prove my competence as was done in tourism because many did not believe I could re-enact same feat in culture, especially in the face of the economic challenges facing the nation now. Above all, I want to use this sector to kick-start cultural diplomacy that can be used in resolving many national crises.

    “When you appeal to the people using their cultural elements, the job of reducing hate speeches is half done.”

    Otunba Runsewe cited reconstruction of venue, re-engineering of safety and security, using National Emergency Management Agency (NEMA) as arrow head, introduction of skill acquisition and redesigning of the pavilions as part of the strategies used to repackage the expo.

    Before now, the venue of the expo only had four toilet facilities for the guests and participants. But, this year 30 mobile toilets and one exceutive toilet were provided.

    Former National Broadcasting Commission (NBC) Director-General,  Mr. Tom Adaba, described Runsewe as cat with the proverbial nine lives, who goes and comes back better, articulate and ready to serve. He urged the DG to keep it up and take the expo to international standard, noting that arts and crafts are the products that distinguished Nigerians as a people.

    Senator Smart Adeyemi said apart from football culture is what ‘we can use to cement our diversity. As a state, Kogi is endowed culturally and capable of hosting a similar event.’

    United Kingdom (UK) trained entrepreneur Adaobi Jennifer Ifeadi, who deals on body and hair cream products, said she made good sales throughout the duration of the expo. “On a normal day, I sold products worth N20,000. I appreciate the opportunity the expo provided to show and sell my products and hope to be here next year,” she said.

    Executive member, Society of Nigerian Artists (Abuja Chapter), Mr. Onyeka Ilo Anya,  described this year’s expo as the best in the last 10years in terms of planning, publicity and packaging. “In fact, I scored the expo the best in all ramifications. This year’s expo is an edition to beat. There is guaranteed security in the pavilion 24/7, products are very safe even when you are sleeping at night and after closing nobody is allowed to stay back. Unlike past editions, exhibitors slept in the venue. Last year the society only sold one miniature whereas this year we made good sales. We pray next year will be better and bigger,” Anya said.

  • AfDB launches three-year $1b Global benchmark

    AfDB launches three-year $1b Global benchmark

    The African Development Bank (AfDB), rated Aaa/AAA/AAA, has launched $1 billion fixed rate dollar Global benchmark due 20 September 2019, the issuer’s fourth global benchmark issue this year.

    The transaction has a coupon of 1.125 per cent and was priced at a spread of mid-swaps plus 9 basis points, the tightest three-year benchmark pricing by the issuer since 2014, and equivalent to 26.2 basis points over the 0.875 per cent UST due September 2019. Joint lead managers are Barclays, BofA Merrill Lynch, J.P. Morgan and TD Securities.

    The mandate for a new $1 billion “no-grow” three-year benchmark was announced in London last Tuesday, with books open for indications of interest (IoIs) with initial pricing thoughts in the context of mid-swaps plus nine basis points (bps) area.

    Books were officially open at around 08.10 London time on Wednesday, September 14. IoIs stood in excess of $600 million at this time, with official guidance unchanged at mid-swaps plus nine basis points area.

    The order-book continued to grow, and by mid-morning orders stood in excess of $1 billion.

    The distribution by investor type was as follows: 67 per cent with central banks and official institutions, 17 per cent with fund managers, 11 per cent with banks, and five per cent with pension funds and corporates.

    In terms of geographical distribution, 46 per cent of the bonds were placed with accounts in the Americas, 38 per cent with Europe, 11 per cent with Asia and five per cent with the Middle East and Africa. The final orderbook stood in excess $1.3 billion, with 40 investors participating.

  • 2015 budget: Senate, Reps agree on $53 benchmark

    2015 budget: Senate, Reps agree on $53 benchmark

    • NASS cuts budget by N30b

    The National Assembly yesterday agreed on $53 per barrel as official oil benchmark for the 2015 budget.

    This follows the harmonisation of the positions of the two chambers.

    While the Senate had approved $52, the House adopted $54 per barrel leading to the raising of conference committees. Senator Ahmed Mohammed Makarfi, headed the Senate conference committee while the House was headed by Hon.  Abdulmumin Jibrin, Chairman House Committee on Finance.

    The Nation learnt that both chambers met and agreed on  $53 per barrel as official oil benchmark. N190 to $1 exchange rate in the 2015 budget was also agreed on by the committee.

    Another area of agreement was to trim the National Assembly budget of N150 billion by N30 billion, reducing the NASS budget to N120 billion.

    The issue of scrapping the Service Wide Vote was also agreed to by both chambers.

    Also they both resolved to cut the costs of oil production by N200 billion.

    Both the Senate and House are likely to  pass the 2015 budget today before going on break for the .2015 general elections.

  • 2015 budget: Reps reject $65 benchmark

    2015 budget: Reps reject $65 benchmark

    The House of Representatives has rejected the $65 oil benchmark proposed in the 2015 budget by the executive.

    It said the 2015 proposed budget was based on certain policy thrusts, instruments and assumptions that were flawed and needed to be “critically looked  at.”

    The House seems to be sticking to a benchmark of between $53 to $56 benchmark.

    The Green Chamber described the benchmark for 2015 budget as “unrealistic” and “ a problem”. “The budget cannot fly,” it said.

    It has also faulted another parameter in the budget, which is the 2.278 million barrels per day crude oil production estimate in the Medium Term Expenditure Framework (MTEF), saying it does not also reflect realities.

    A meeting held yesterday between the Executive and the House on the budget at the National Assembly was stalemated. The 25-member special committee headed by John Enoh, chairman, House Committee on Appropriation and Finance Minister Dr. Ngozi Okonjo-Iweala and Director General, Budget Office, could not resolve the issue.

    The bone of contention, a source told The Nation, was the parameters. The two parties could not agree on the benchmark. While the Federal Government wanted a benchmark of $50 per barrel, the House insisted on between $53 and $56 per barrel.

    According to the source, the over five hours closed door meeting also featured differences in exchange rates between the two parties.

    A member of the committee rejected N165 to a dollar proposed by Dr. Okonjo- Iweala’s team and insisted on $180 to a dollar.

    The Nation also learnt that capital expenditure dominated the discussion as the lawmakers insisted that the proposed 17 per cent of the budget allocated to capital project was meagre and that it should be upped to about 25 percent to give Nigerians some benefits.

    In an earlier interview, shortly before plenary, the Chairman, National Assembly Budget and Research Office (NABRO), Hon. Michael Opeyemi Bamidele, decried the parameters in the 2015 budget, especially the oil benchmark and the oil production estimates

    Of the oil benchmark, he said: “Definitely, this is a wrong assumption. Its a problem. It’s part of why the budget cannot fly and it’s not flying.

    “Going by what is happening in the international crude oil market, it’s wrong. It’s unrealistic for the Executive arm of government to have proposed a $65 per barrel benchmark.”

    The lawmaker said his committee did some comparative analysis on the issue and that it is evident that the executive is not forward looking.

    “Iraq pegged its benchmark at $60 per barrel; Saudi Arabia pegged its own at $60 and Venezuela $60. These are countries that don’t even have the kind of challenges that we have, and they are countries with better macro-economic fundamentals. But based on foresight, they chose $60 as their oil benchmark.”

    Bamidele said the budgets of these three countries had been passed in 2014 before the price of oil fell.

    “Here we are in Nigeria, we’re already in the middle of it and today, they (executive) are still talking about $65. Where is the foresight?”

    Bamidele also criticized the 2.278 million barrel per day estimate of the executive, saying it’s not a true reflection of current realities.

    House spokesman Zakari Mohammed expressed confidence that the 25-member committee headed by the chairman of the House Committee on Appropriation, John Enoh, which had been mandated to meet with the Minister of Finance on realistic parameters for the 2015 budget, will come out with a benchmark that reflects the true position of Nigeria’s oil earnings, as against the $65 proposed in the budget.

  • No going back on $65 benchmark, says Minister

    No going back on $65 benchmark, says Minister

    As the price of crude oil continues to slide, the Federal Government has remained adamant that it would not revise the budgetary benchmark downward in the new year.

    Minister of State for Finance, Ambassador Bashir Yuguda, said though the Federal Government recognises the fact that prices may slide further,it does not intend to revise the benchmark further down. The reason for government’s insistence on holding on to the $65 benchmark, Yuguda said is because government is “aware that price intelligence indicates that prices might average between $65 and $70per barrel (pb) in 2015. This is anchored on the fact that American shale oil which is largely driving this price shocks also runs the risk of becoming unsustainable as it is produced at a high cost of at least $65 per barrel.”

    Crude oil price yesterday slid further, below the 2015 budget benchmark of $65, a trend analysts said, if sustained for long, might affect government’s spending in the year.  However Yuguda emphasised  that the government’s scenario-based approach to the regime of oil price shocks is structured to proactively respond to such situations.

    The minister said the   Jonathan  administration  had taken policy decisions to correct the identified structural imbalances in the economy and the concentration of government’s external revenue on crude oil sales.

    Insisting that government has made progress in this regard, Yuguda said it was evident in the rebased gross domestic product (GDP), which showed “the strengthening of agriculture, services, construction, hospitality and other non-oil sectors.”

    He explained further that critical infrastructure projects will not be affected by the announced fiscal restructuring measures,  describing them as “key to economic growth and development as well as job creation.”

    The areas that would be affected by the fiscal adjustments, according to him, are those that would have the least negative impact on the generality of Nigerians, including widening the tax net, and pushing for higher levels of compliance, introduction of a new tax on luxury goods as well as reducing expenditure by cutting foreign travels by government officials to the barest minimum, especially with regard to overseas training programmes.

    He said the government will remain resolute “in its resolve to further diversify the economy, significantly boost non-oil revenues, plug loopholes and cut unnecessary expenditures but has restated its determination to maintain growth and stabilise the economy in 2015 despite the challenge of declining revenues among oil producing countries.”

    Yuguda however stressed the preparedness of government to introduce further measures “if prices fall outside this range.” He noted that the government initiated “the Capacity Enhancement Programme (CEP) of the Federal Inland Revenue Service (FIRS) to improve non-oil tax revenue”, adding that the agency is expected to meet its target of surpassing 2014 impressive performance by about N160 billion.

    Additionally, the government is working on a system of tax incentives for Micro-Finance Banks in order to promote financial inclusion for the poor.

  • Jega: Anambra’ll be benchmark for elections

    The Chairman of the Independent National Electoral Commission (INEC), Prof. Attahiru Jega, has reiterated the importance of a credible voters register in conducting free and fair elections.

    He said the November 16 governorship election in Anambra State would be the benchmark for subsequent elections.

    The commision would review the voters register from August 19 to August 25.

    Jega, who spoke yesterday at a meeting with stakeholders on the preparations for the election, said with the revalidation of the code of conduct by parties and the planned revalidation of voters register, the electoral body was sure of success.

    The INEC Chairman, however, solicited the support of all stakeholders, saying without their cooperation, every plan would amount to nothing.

    He said: “As we are all aware, the credibility of the voters register goes a long way to assure the credibility of the elections. In this regard, we have left no stone unturned in order to clean up and have a very credible register for Anambra State before November 16.

    “Our preparations include continuous voters registration from August 19-25 to update the register as required by law, before the election.

    “The exercise provides an opportunity for all those who have turned 18 since the last registration in 2011 to register. Also for all those who have registered and we have their records on the manual register or whose details are incomplete, to have their registration status updated.

    “It is in this context that we have made a review of the register of voters for Anambra State a key item on the agenda for today’s meeting.

    “A few days ago in Minna, all the parties revalidated the Code of Conduct for political parties. By so doing, they have reaffirmed their commitment to deepening democracy through a considerably reformed electoral process in our country.

    “Hence, the Anambra State governorship elections would be the first test case of the practical affirmation of the code of conduct. All the key aspects of the document must be demonstrably put into practice: respectable and responsible conduct by all parties, candidates and their supporters.

    “All the stakeholders must engage in the electoral process in strict compliance with the rules of the game, with decorum, civility, tolerance and mutual respect for one another.

    “Our key objective is to make the Anambra governorship election the best so far. But, no matter how hard we try, we cannot succeed without the cooperation and partnership of all stakeholders, especially parties, their candidates and the people.”

  • National Assembly pegs Budget oil benchmark at $79

    The National Assembly (NASS) yesterday dumped the $75 oil benchmark proposed for the 2013 budget by President Goodluck Jonathan. The Senate and the House of Representatives have adopted $79 for the price of crude at 2.526 million barrels per day.

    The lawmakers have also adopted a Corporate Tax rate of 30 per cent and five per cent Value Added Tax (VAT) rates for 2013 to 2015.

    The lawmakers want the Comprehensive Import Supervision Scheme (CISS) Account transferred to the Nigerian Customs Service in addition to an increasing revenue target for the Customs in 2013.

    These emerged at the plenary yesterday during the consideration of the Conference Committee report on Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) 2013-2015 that the Senate and the House could not agree on the most feasible benchmark for the 2013 budget until the early hours of yesterday.

    According to the Chairman, House Committee on Appropriation, John Enoh, the consensus took so long as a result of the resolve on both sides to maintain their stance on $80 and $78.

    “Though the official meeting of the conference Committee on November 17, we met several time after that. As a matter of fact, the insistence on the House position on the benchmark led to several meetings as other issues were dealt with much earlier.

    “However, because of exigency of time, taking into consideration that the House might adjourn for the festive period, a decision had to be made fast. It was not until the early hours of this morning (Tuesday) that we arrived at $79,” Enoh said.

    The lawmakers noted that the document presented for consideration by Enoh was not signed by three members of the House, who were in the conference Committee as well as Enoh himself.

    Enoh explained that the original document was signed by all the members of the committee.

    Chairman, House Committee on Petroleum Resources (Down stream), Dakuku Peterside noted that observations on the report ought to have taken place during the second reading of the report.