Tag: Falling oil price

  • Impossible to run states with falling oil prices – Ambode

    Impossible to run states with falling oil prices – Ambode

    With the falling oil prices in the international market, Lagos State Governor, Akinwunmi Ambode said that it is currently impossible to run any state in Nigeria.

    He threw his weight behind granting of 18 months moratorium to states in order for them to have more money to meet their obligations in the face of the economic crisis.

    The governor spoke with State House correspondents after meeting with President Muhammadu Buhari at the Presidential Villa, Abuja.

    He said: “There is nothing wrong in asking for moratorium. Lagos State has just restructured its bond programme. It is about financial intelligence.

    “The states are not saying they are not going to pay back. We are saying that based on the present circumstances, we can hold down principal payments and just take interest.

    “Maybe for a while, let us also ask for moratorium to be able to pay principal at a future date. The issue is that you cannot operate a state in the manner in which the financial in flows are coming now. It is very difficult. We have to be realistic.

    “It is like any other organization. If the inflows are not up to what the fixed costs are like, you have to do something drastic and that is what we are all doing.

    “I am an accountant first before being a politician. You need to see the numbers. The numbers do not tally.

    “It has nothing to do with the status you are finding yourself now. It is about the past record, it is about the present status and it is about taking drastic decisions to be able to allow the state’s to stay afloat,” he stated.

    On the purpose of his visit to the President, he said that he came to thank him on behalf of Lagos State and the people of the state on the outcome of his visit to China.

    He said: “You will recall that Lagos State is a major beneficiary of that visit. The Lagos metro rail project of about $2.5bn is being signed up by Nigeria and the President.

    “The Lagos-Kano rail project and other projects are also there. There are many benefits coming to Lagos State. That is why it is important to come and thank him personally,” he said.

    He also noted that people will always oppose government policies and programmes just as they criticized the President’s visit to China.

    “What is important is about the majority of people who are going to benefit from it.

    “For Lagos, we cannot do any other thing than to say thank you,” he added

     

  • ‘Falling oil price no threat to Nigeria’

    ‘Falling oil price no threat to Nigeria’

    Moyosola Niran Oladunni is an expert in startups, business development and chain process management. He was the pioneer Chief Executive, Integrated Intelligence Imaging West Africa Ltd (I-CUBE) until 2012 when he stepped aside as the CEO. He is also the pioneer African Vice President, International Road Dynamics Africa, a subsidiary of IRD Corporation in Canada as well as the Executive Vice Chairman of Axis System and Solutions, which is a major player in infrastructure development in the aviation industry. The Ondo state-born Oladunni who has a passion for community development is desirous of serving his people at the highest level of government. He shares his plans and visions with Ibrahim Apekhade Yusuf. Excerpts:

    You mean different things to different people. Some see you as a businessman while others see you more as a politician and social activist. What is your antecedence in business and politics?

    When I left school, l worked in a bank until 2002 and later joined a startup company known as Cards Technology Limited (Master Card Service Provider). l rose from the position of Marketing Manager in 2003 to become the General Manager, Business Development in 2007. I later left the company in 2007 to set up my own company and l was pioneer CEO, Integrated Intelligence Imaging West Africa Ltd. The company is into intelligence surveillance and access control. We also won the concession for the airport access gate and that was the first business we got when we incorporated the company. I left I-CUBE as the CEO in 2012 to set up two other companies that have been very successful as well. I’m the pioneer African Vice President, International Road Dynamics Africa, which is a subsidiary of IRD Corporation in Canada. I’m also the Executive Vice Chairman of Axis System and Solutions, which is a major player in infrastructure development in the aviation industry. So for a very long time, l can say that l’m an expert in startups, business development and chain process management.

    To answer the second leg of your question, I see myself as a professional in politics. I started my career as a banker before l delved into private business. I was born into a politically conscious and active family. And l so much believe in community development. That has geared my interest towards participating in the upliftment of my people, which invariably some people will like to refer to as politics.  So it’s not out of place for people to call me different things depending on the side of me they might be used to.

    Why did you throw your hat into the ring in the first place?

    The fact remains that I didn’t decide that I want to be governor of my state overnight. No. My colleagues and contemporaries, friends and associates who identified some qualities and traits in me that I probably didn’t see early enough felt that it is time somebody of our own generation take up the responsibility of providing leadership for the state.

    And overtime, the pressure has been on me and l think because l’m also convinced that we’ve the mental capacity to deliver and provide a visionary leadership for the people.

    So l just decided to heed their call and give it a shot. So we’re prepared now to contest for the position of the governorship of Ondo state. We’re not a conventional politician as such, we’re not desperately aspiring for this position but we know we’ve got all what it takes to provide visionary leadership for the people. Leadership in my own understanding is that you want to run errand within a tenured period of time for the betterment of the people.

    So you’re optimistic that your modest achievements in business can serve you well in your foray into politics?

    It’s not actually a foray per se. Politics to me is not a profession that you want to stop something and go into. Politics for me is a pastime. It’s something that we’ve been doing along with all these accomplishments that we’ve recorded overtime. There has never been any time that I stopped playing politics and there’s never been any time that I haven’t been actively in political activities within my state. So that is why I say I’m a professional in politics and not a politician per se. It’s very unfortunate that a lot of people term politicians as people without any other job outside politics. So for me, it’s not a foray into politics. Politics is what we’ve been doing and will continue to do and it doesn’t stop us from doing our major professional calling.

    Why do you think you’re the best man for the job?

    Well, let me tell you something, my state is a very peculiar state. It’s a nation within a boundary called a state. I want to say it proudly that the entire Nigeria is encapsulated within the territory and boundary of Ondo state. It’s a very unique state. It’s a state that shares boundary with seven different states and it also shares boundary with three different geopolitical zones of the country. It’s a state that has almost all the natural resources in abundance. It’s a state that you can find every part of Nigeria historically represented. It’s a very unique state that we think the uniqueness has not been properly harnessed for the development of the state. And I also think that the uniqueness of the state has not been positively harnessed for the betterment of the people.

    Therefore, it’s high time we got people that could develop the potential, people that could tap into the resources of the state and create wealth for the people. We pride ourselves in this regard because we know that we’ve the mental capacity and we’ve got the character and the people can attest to the fact that handing over the affairs of the state into our hands is a decision that would never be regretted by the people.

    In one sentence, what’s your agenda in government?

    We have two basic policy thrusts and that is wealth creation and sustainable social and infrastructural development. By the grace of God our ability to put up a sound team of respectable personalities and professionals that would ensure that we succeed in the achievement of our goals.

    As a player in the aviation industry, how would you turn around the bad fortunes of the airport located in Ondo state if given the chance?

    To revamp the airport in my state is an agenda we will give priority and we’re going to take that up especially with the Federal Ministry of Aviation because just like we said, there are so many things that could happen within the airport community. And luckily for us in Ondo state, we have a very big land mass area that the airport sits so there are so many things we could do around the airport if the privatisation agenda of the present administration is properly handled. And as the governor of my state, I would be very happy to take up on behalf of the state the management of the state airport.

    The falling oil price is a challenge globally. So anyone coming in as a governor at this point will certainly face a tough job. What are those things you will use to galvanise your government?

    I can tell you authoritatively that there are so many prosperous countries in the world without oil. Even in Nigeria before oil was discovered, the western region had a very buoyant economy. The dwindling oil price in the international market is a challenge no doubt, but it cannot be a stumbling block to the development of Nigeria and for my state in particular. I want to tell you that human resources alone if well-harnessed can help to develop and generate wealth for the people. All you need is sincerity of purpose in whatever you do. We need to identify our primary goals, secondary and long-term goals. And this requires a lot of strategic planning. But in all, I can tell you, the dwindling oil price will not pose a serious threat to the development of the state because there are so many ways we can prosper the state aside from relying absolutely on oil. Ondo state is naturally endowed with basic natural resources. For instance, we have granite, limestone, bitumen. In fact, we have the largest concentration of bitumen in the world next to Canada. We’re also one of the largest producers of kolanuts, cocoa, even our agriculture endowment alone is enough for us to lift the economy of the state. Inasmuch as we know the dwindling oil price is a challenge on its own, it cannot stop the development of the state. Ondo state also has a lot of tourist attractions. In the riverine areas for instance, we can develop other tourist attractions to generate a lot of revenue for the state and we’re going to work closely with the private sector to harness this properly. So, it’s one area we can explore. The most important thing is for you to have formidable team of men of character that together can plan and deliver not just a billboard project or a politically-motivated conceptualised projects. What you find around this part of the world is that most of our leaders conceptualise project based on politics and not concrete development. We will ensure that we tap into every meaningful resources that could better the lot of the people.

    Who are your key role models?

    My father is one of my sources of inspiration. As an astute technocrat and politician of substance, he stood out in Ondo politics when Akoko was one. Currently, we have about four-five local government councils in Akoko. My father was the first person to be the chairman of Akoko LGA during the zero-party regime. My mum, as we speak is the chairperson and president of Association of Traditional Palace Chiefs in Ondo state. I hope to leverage on. So the character and integrity of my parents.

    Apart from my parents, there are several other people who are my role models in politics. Osun State governor, Ogbeni Rauf Aregbesola for instance, was the person that groomed me as a boy in politics. His political struggles are worthy of emulation. In politics too, I also give it to Asiwaju Bola Ahmed Tinubu.I have monitored his political career right from his days in the senate to the time he became the governor of Lagos state and also seen how he has played the leadership of his party. There are many of his contemporaries out there that are still contesting for elections as we speak. So I give it to him for his sagacity, his doggedness, and his values. In terms of administration, I give it to Mr. Babatunde Raji Fashola. I love his person, his integrity and humility. In terms of doggedness, I give it to Rotimi Amaechi. I love his fighting spirit. In terms of integrity, I give it to President Muhammadu Buhari. He is one man that we cannot see anything wrong with. So when people talk about integrity and performance, I want people to compare me with Buhari and Fashola. When you talk of political planning and strategy, I want to be likened to Tinubu and when you talk of doggedness and fighting spirit, I want to be seen as Amaechi.

     

  • Naira, falling oil price, top agenda as MPC meets

    The Monetary Policy Committee (MPC) meeting which begins today will focus on measures that would strengthen the naira, especially in the face of declining oil price, analysts have said.

    In the last six months, crude oil price has plumetted to about $45 per barrel from $100, with its backlash already taking a toll on the local currency as well as the 2015 budget.

    Managing Director, Financial Derivatives Company Limited, Bismarck Rewane said the Central Bank of Nigeria (CBN) is likely to consider further depreciation of the naira if the oil price slump persists.

    “The hawkish monetary policy stance of the MPC is therefore not expected to change at today’s meeting. However, the monetary authority will be careful since further tightening may be detrimental as the general election is less than three weeks from the scheduled January MPC meeting. Meanwhile, administrative tools will continue to be used to support the monetary policy,” he said.

    Continuing, Rewane said the status quo is likely to be maintained at the meeting. “However, threats from increased political spending, growth in money supply, liquidity overhang in the banking system, continued decline in global oil prices, external reserves depletion and a sustained pressure on the naira are underlining threats to consumer price,” he said.

    The committee had at the MPC meeting of November 25, moved the midpoint of the official window of the foreign exchange market from N155/dollar to N168/dollar.

    It also widened the band around the midpoint by 200 basis points from plus or minus three per cent to plus or minus five per cent.

    The committee also increased the Monetary Policy Rate (MPR), the base lending rate, by 100 basis points from 12 to 13 per cent while the Cash Reserve Ratio (CRR) on private sector deposits also rose by 500 basis points from 15 per cent to 20 per cent. It also retained public sector CRR at its current level of 75 per cent. The CRR is a portion of banks’ deposits kept with the CBN.

    Analysts said the fall in oil production has created pressure on the public finances, leading to the federal government’s submission of a budget amendment to the National Assembly. “Given this analysis and the modest decrease in official reserves to just below $34.6 billion, the committee is unlikely to trim either the policy rate or the CRR for fear of the impact on the naira exchange rate,” they said.

    They attributed the drop in reserves partly to the exit of some offshore portfolio investors after Bernanke’s remarks adding that the position warrants caution from the MPC. “The committee’s view is that the exchange rate has more impact on inflation than interest rates. We would be surprised, therefore, if it was to jeopardise its impressive record on single-digit inflation,” they said.

  • Senate warns over dwindling oil revenue

    2015 budget passes second reading

    The Senate on Wednesday warned that the Federal Government should tackle the emerging economic recession facing the country with all the seriousness it demands.

    The recession, the Senate said, is occasioned by the downward trend in oil revenue.

    The warning came as the upper chamber read the 2015 Appropriation Bill for the second time, referring the fiscal policy to its committees for further legislative actions.

    Senators took turns to debate the general principles of the budget with Senator Olubunmi Adetunbi stating categorically that the Senate is processing a deficit budget.

    The All Progressives Party (APC) Ekiti North lawmaker asked the Senate to demand from the Federal Government how it planned to fund the deficit in the budget.

    Deputy Senate President, Ike Ekweremadeu, who summed up debate on the general principles of the budget said, “Arising from the debate on the 2015 appropriation bill, I am happy that we have woken up to our responsibilities and this is also a wake up call to our nation as we face this challenging times of economic recession and the downward trend in our oil revenue.

    “I do believe that this is the time for us as a parliament to ensure that while considering the appropriation bill for 2015, all the revenue items are captured.
    “Our committee on finance will help us to do that. We need to ensure that all the revenue items are captured in the budget and determine a pool of resources to implement the budget when passed.

    “The federal government should also put up its thinking cap to develop new areas of revenue generation that would help us to drive our economy.

    “We have gone through this way before but eventually the oil price improved but unfortunately we did not learn any lesson while we enjoy the oil boom.

    “I hope that this period we will learn our lesson that will help us to be disciplined in our fiscal management. It is also time for us to also take seriously our fiscal federalism so that states can develop their initiatives in increasing their revenue that would help them to manage themselves.

    “We need to reflect as a nation on how to manage our economy and everybody will have to make sacrifices, going forward.

    “For us as politicians, we have to be mindful of our election expenses and we need to do things within the provisions of the electoral act.

    “If anybody thinks that he will spend money and would recover them after election, he would be disappointed because there would be no money to recover.”