Connect with us

Business & Economy

World Bank projects 5.6% growth for global economy

Published

on

Share

The global economy is expected to grow at 5.6 per cent in 2021, although many emerging market and developing economies continue to struggle with the COVID-19 pandemic and its aftermath.

The World Bank said this in its June Global Economic Prospects released on Tuesday in Washington D.C., adding that the expected growth was based largely on strong rebounds from a few major economies.

The 5.6 per cent expected growth, the fastest post-recession pace in 80 years, is an upward review from the 4.1 per cent forecast in January.

According to the bank, in spite of the recovery, global output will be about two per cent below pre-pandemic projections by the end of the year.

Also, per capita income losses would not be unwound by 2022 for about two-thirds of emerging market and developing economies.

It said that among low-income economies, where vaccination had lagged, the effects of the pandemic had reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.

Among major economies, the United States of America’s growth is projected to reach 6.8 per cent, reflecting large-scale fiscal support and the easing of pandemic restrictions, while growth in other advanced economies is also firming, but to a lesser extent.

“Among emerging markets and developing economies, China is anticipated to rebound to 8.5 per cent this year, reflecting the release of pent-up demand.

“Emerging market and developing economies as a group are forecast to expand by six per cent this year, supported by higher demand and elevated commodity prices.”

It however, said that the recovery in many countries was being held back by a resurgence of COVID-19 cases and lagging vaccination progress, as well as the withdrawal of policy support in some instances.

It said that excluding China, the rebound in this group of countries was anticipated to be a more modest 4.4 per cent, while the recovery among emerging market and developing economies was forecast to moderate to 4.7 per cent in 2022.

Even so, gains in this group of economies are not sufficient to recoup losses experienced during the 2020 recession, and output in 2022 was expected to be 4.1 per cent below pre-pandemic projections,” it said.

It added that per capita income in many emerging market and developing economies was also expected to remain below pre-pandemic levels and losses were anticipated to worsen deprivations associated with health, education and living standards.

Major drivers of growth had been expected to lose momentum even before the COVID-19 crisis, and the trend is likely to be amplified by the scarring effects of the pandemic.

“Growth in low-income economies this year is anticipated to be the slowest in the past 20 years other than 2020, partly reflecting the very slow pace of vaccination.

“Low-income economies are forecast to expand by 2.9 per cent in 2021 before picking up to 4.7 per cent in 2022.

“The group’s output level in 2022 is projected to be 4.9 per cent lower than pre-pandemic projections.”

For Sub-Saharan Africa, regional activity is expected to expand a modest 2.8 per cent in 2021 and 3.3 per cent in 2022.

According to the report, positive spillovers from strengthening global activity, better international control of COVID-19 and strong domestic activity in agricultural commodity exporters are expected to gradually help lift growth.

“Nonetheless, the recovery is envisioned to remain fragile, given the legacies of the pandemic and the slow pace of vaccinations in the region.

“In a region where tens of millions more people are estimated to have slipped into extreme poverty because of COVID-19.

“Per capita income growth is set to remain feeble, averaging 0.4 per cent a year in 2021-22, reversing only a small part of last year’s loss.

“Risks to the outlook are tilted to the downside, and include lingering procurement and logistical impediments to vaccinations, further increases in food prices that could worsen food insecurity, rising internal tensions and conflicts, and deeper-than expected long-term damage from the pandemic.”

In Nigeria, however, growth is projected to resume at a modest rate of 1.8 per cent in 2021 and edge up to 2.1 per cent in 2022, assuming higher oil prices, a gradual implementation of structural reforms in the oil sector and a market-based flexible exchange rate management.

“The expected pickup is also predicated on continued vaccinations in the second half of 2021 and a gradual relaxation of COVID-related restrictions that will allow activity to improve.

“Nonetheless, output in Nigeria is not expected to return to its 2019 level until end-2022.”

David Malpass, the World Bank Group President, said that while there were welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world.

He said that globally coordinated efforts were essential to accelerate vaccine distribution and debt relief, particularly for low-income countries.

“As the health crisis eases, policymakers will need to address the pandemic’s lasting effects and take steps to spur green, resilient, and inclusive growth while safeguarding macroeconomic stability.”

The report said that lowering trade costs such as cumbersome logistics and border procedures could help bolster the recovery among emerging market and developing economies by facilitating trade.

Indermit Gill, World Bank Group Vice President for Equitable Growth and Financial Institutions, said that linkages through trade and global value chains had been a vital engine of economic advancement for developing economies and lifted many people out of poverty.

He said that however, at current trends, global trade growth was set to slow down over the next decade.

“As developing economies recover from the COVID-19 pandemic, cutting trade costs can create an environment conducive to re-engaging in global supply chains and reigniting trade growth.”

It also said that rising food prices and accelerating aggregate inflation may also compound challenges associated with food insecurity in low-income countries.

However, policymakers in these countries should ensure that rising inflation rates do not lead to a de-anchoring of inflation expectations and resist subsidies or price controls to avoid putting upward pressure on global food prices.

Instead, policies focusing on scaling up social safety net programs, improving logistics and climate resilience of local food supply would be more helpful, it added. (NAN)

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business & Economy

Senate To Probe CBN’s Anchor Borrowers, Ways And Means

Published

on

Nigerian Senate
Nigerian Senate
Share

The Senate on Tuesday, resolved to further investigate N10trn Anchor Borrowers’ Programme by the Central Bank of Nigeria (CBN), as well as accountability in the Ways and Means loans by the Apex Bank.

The Red Chamber said the move was to plug loopholes in future development finance activities of the CBN.

The Senate resolved to set up an ad hoc committee to investigate the details of the Ways and Means, including the various intervention programmes such as the Anchor Borrowers’ Programme, monies given to state governments, manufacturers, aviation, banks, excess funding in the power sector, amongst others which raised the current debt profile of the country.

This was part of resolutions of the Senate after a debate over the report of the National Assembly Joint Committees on Banking, Insurance and other Financial Institutions (BIOFI), Finance, National Planning, Agriculture and Appropriation on the state of the economy.

On the compliance and transparency of economic actions, the Senate equally resolved that the CBN ensured compliance with the provisions of the Act in respect of Ways and Means and accountability through timely submission of its budget, financial statements and report of its activities to the President and National Assembly as stipulated in the Act.

In an extensive debate, Senator Adamu Aliero argued that some state governors, including some retired ones in the Senate, were beneficiaries of N18bn as shock absorbers under the Ways and Means since 2015.

Some lawmakers suggested that a special committee be set up to scrutinize the N30trn intervention disbursements (some of which were grants) and ways to mop them up.

Deputy Senate President Barau Jibrin also explained that the intervention monies were expended outside appropriation without the knowledge of the parliament and noted that lawmakers have a right to interrogate the expenditure.

Senator Victor Umeh, however, deferred, as he enquired to know how the money was spent before approval by the Senate. The issue of whether or not to investigate the matter raised another furore in the Red Chamber.

Senate President Godswill Akpabio thereafter maintained that owing to the current economic situation, it has become expedient to thoroughly examine the Ways and Means funds.

Continue Reading

Business & Economy

Oil marketers get approval to sell Dangote fuel

Published

on

Aliko Dangote
Share

 

 

The seven major oil marketers in Nigeria have registered with the Dangote Petroleum Refinery for the lifting and distribution of refined petroleum products produced by the $20bn plant.

Dealers under the aegis of the Major Oil Marketers Association of Nigeria confirmed on Sunday that with the registration, they would commence the distribution of fuel produced from the facility once the commercial terms are sorted.

This came as the Independent Petroleum Marketers Association of Nigeria also revealed that they would meet with the management of the Dangote refinery this week to discuss terms of product loading.

Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria stated that PETROAN had been engaging the management of the multi-billion dollar refinery for the supply of products from the facility.

As IPMAN and PETROAN engage the refinery, major marketers who are members of MOMAN have already registered with the plant and are set to start buying products.

The seven major marketers include 11 Plc, Conoil Plc, Ardova Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited, Total Nigeria Plc and NNPC Retail.

Last Friday, the Dangote Petroleum Refinery announced the commencement of production of Automotive Gas Oil, also known as diesel, and JetA1 or aviation fuel.

The President of the Dangote Group, Aliko Dangote, had in a statement issued by the firm, thanked President Bola Tinubu for his support, encouragement, and thoughtful advice towards the actualisation of the project.

He also thanked the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, and Nigerians for their support and belief in the historic project.

“We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals. This is a big day for Nigeria. We are delighted to have reached this significant milestone.

“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects. This is a game changer for our country, and I am very fulfilled with the actualisation of this project,” Dangote stated.

The refinery, located in Lagos, has so far received six million barrels of crude oil at its two SPMs located 25km from the shore. The first crude delivery was done on December 12, 2023, and the 6th cargo was delivered on January 8, 2024.

The refinery can load 2,900 trucks a day at its truck-loading gantries. The products from the refinery will conform to Euro V specifications, according to the firm.

“The refinery design complies with the World Bank, US EPA, European emission norms, and Department of Petroleum Resources emission/effluent norms, employing state-of-the-art technology,” the company stated.

The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria.

The Dangote Petroleum Refinery is an industrial plant that transforms crude oil into various usable petroleum products such as diesel, gasoline, jet fuel, and kerosene.

Dangote Petroleum Refinery with a capacity to refine 650,000 barrels of crude oil per day covers an area of approximately 2,635 hectares in the Lekki Free Trade Zone in Lagos.

When contacted and asked whether major oil marketers would be involved in the lifting of refined products from the Dangote refinery, or whether the facility would distribute the fuel itself, the Executive Secretary/Chief Executive Officer, MOMAN, Clement Isong, replied, “I confirm that we (major marketers) have met with him (Dangote).

According to Isong, all MOMAN members have registered with Dangote Petroleum Refinery to become marketers of its products

Punch

Continue Reading

Business & Economy

Senate Gives Kyari, NUPRC Boss 24 Hours To Appear For Budget Defense

Published

on

Mele Kyari
Share

 

The Chairman of the Senate Appropriation Committee, Senator Adeola Olamilekan, on Wednesday, directed the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, to appear before the committee in 24 hours.

Olamilekan, who asked Kyari to appear in company of the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), warned that failure to appear undermines the legislature and sabotages the process.

They are required to present the list of all individual companies operating with OML licenses in Nigeria as well as total production output approved on a daily basis.

The lawmaker expressed concerns that some of the revenues required to drive the 2024 budget was attributed to the NNPCL, which according to him, was owned by the Federal Government and responsible to it, and by extension the three arms of government.

The NNPCL, had earlier shunned for a second time, summons by the Senate to appear before its committee probing over N11trn expenditure on turn around maintenance of refineries in the country between 2010 and 2023.

The absence of Kyari, whose entity is at the centre of the investigation, stalled efforts by the Senate panel to make progress on the matter.

Continue Reading