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ECONOMY

Indonesia seeks to increase crude purchase from Nigeria

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With Nigeria losing out its US market, demand for the country’s crude from the Far East continues to rise.

Indonesia on Wednesday expressed desire to increase its crude oil purchase from Nigeria, in a bid to meet the country’s bourgeoning appetite for the commodity that has risen to 1.6 million per day.

Dwiyatna Widinugraha, the head of economic affairs of the Indonesian Embassy, has submitted the request when he led an Indonesian trade delegation to a meeting with the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Maikanti Baru in Abuja.

Widinugraha said Indonesia with a population of more than 250 million people needed about 1.6 million barrels of crude oil daily to meet its burgeoning energy needs as an emerging economy.

Indonesia, according to the envoy, would prefer to have a government-to-government crude lifting arrangement with Nigeria.

Regular supply of crude by the NNPC, he added, helped Indonesia to achieve energy sufficiency, adding that the country needed further assistance in the form of increased crude oil allocation.

The Indonesia delegation included top shots from the country’s state-owned oil company Pertamina. The company’s vice president , Anizar Burlian, said the delegation came to explore better arrangements of buying the country’s very high grade crude oil.

“Over the years, we have bought huge amount of crude oil from Nigeria. We are extremely happy to buy more Nigerian crude oil which is globally rated to be of very high grade and which is very suitable for our refineries,” Burlian said.

Mele Kyari, NNPC’s group general manager, crude oil marketing, however, said while the corporation was ready to assist Indonesia in the area of crude oil supply, the request for a government-to-government crude supply arrangement should be routed through President Muhammadu Buhari.

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ECONOMY

China blasts US for warning Nigeria, others over its loans

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Mr Zhao Linxiang, the Economic and Commercial Counsellor at the Chinese Embassy in Nigeria, on Friday in Abuja said the US position on Chinese loans to Nigeria and African countries “is ridiculous”.

The US Secretary of State, Rex Tillerson, had said on Thursday that African countries should be careful not to forfeit their sovereignty when they accept loans from China.

Tillerson, who is on his first diplomatic trip to the continent, also said Chinese investments “do not bring significant job creation locally”.

He further criticised how Beijing structured loans to African governments.

Reacting, Zhao, at a news briefing in Abuja, said the Chinese loans to Africa were aimed at implementing major China-Africa cooperation projects and promoting sustainable development in the continent.

He explained that African countries had begun accessing the loans and implementing planned projects.

“African people should know the role the Chinese loans play in your economy. That is the most important thing.

“Except the Chinese Government, which other government provides loans to African countries without critical conditions? No Western country does that.

“How can they say they suspect Chinese loans. It is ridiculous. Without funds, how can you develop a country?

“At the beginning of our opening up to the world, 30 or 40 years ago, we opened our doors to other countries and we borrowed from other countries,” Zhao said.

The envoy added that China-Africa relations allowed for win-win benefits for both parties.

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ECONOMY

CAC targeting two-hour company registration by December

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The Corporate Affairs Commission (CAC) says it hopes to reduce the time spent to register a company to two hours from 24 hours by December 2018.

Azuka Azinge, the acting registrar-general, CAC, made this known during a visit of the senate committee on trade and investment to the commission’s Lagos office in Ikeja on Thursday.

She said the commission has created an enabling environment to allow customers register their businesses within 24 hours to improve the ease of doing business in the country.

In 2017, the country moved up 24 places in the World Bank’s ease of doing business ranking.

“The post-registration is still manual. We are hoping that before the next few months, we should have that online, so that the issue of paying annual returns, which is still very cumbersome at the moment, can be easily achieved.

“We are still working and improving on the pre-registration infrastructure platform. We are hoping that as we continue to do that, the pre-registration process will also become faster, with fewer complaints from the customers.

“We want to reduce the 24 hours it takes to register a company to two hours. We are hoping to do that maybe by the end of the year or before that.”

In April 2017, Mahmud Bello, CAC’s registrar-general at that time, said business owners in Nigeria could conveniently register their businesses online within 48 hours.

He also said the commission had started operating 24 hours company registration process to make startup of business easier in Nigeria.

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ECONOMY

IMF to Nigeria: Increase monetary policy rate, excise tax

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The International Monetary Fund (IMF) has advised Nigeria to increase excise tax and monetary policy rate in a bid to strengthen the economy.

The global lender said Nigeria needed more ambitious tax policy measures, such as reforming the value-added tax, increasing excise, and rationalising tax incentives.

An excise tax is an indirect tax paid on goods; it is paid by the manufacturer who then passes it on to the customer by including it in the price of the item.

Nigeria’s economy, which slipped into its worst recession in 25 years, exited with a 0.83 GDP growth in 2017.

The monetary policy committee of the Central Bank of Nigeria (CBN) has kept MPR, which determines the interest rate, at 14 percent since 2016 to help the economy combat inflation.

The committee has been unable to meet in 2018 because of the senate’s refusal to confirm appointees for the committee, which cannot form a quorum at present.

“Directors commended the central bank’s tightening bias in 2017, which should continue until inflation is within the single digit target range,” IMF said in Article IV, an annual appraisal of a country’s economy, which was released in Washington on Wednesday.

“They recommended continued strengthening of the monetary policy framework and its transparency, with a number of directors urging consideration of a higher monetary policy rate, asymmetric application of reserve requirements, and no direct central bank financing of the economy.

“A few directors urged confirmation of the appointments of the central bank’s board of directors and members of the monetary policy committee.

“Directors commended the recent foreign exchange measures and recent efforts to strengthen external buffers to mitigate risks from capital flow reversals.

They welcomed the authorities’ commitment to unify the exchange rate and urged additional actions to remove remaining restrictions and multiple exchange rate practices.”

The Bretton Wood institution advised the CBN to carry out an asset quality review of the banking sector to determine if banks have made adequate provisions for non-performing loans (NPLs).

The level of NPLs in the banking sector is currently at 14 percent, higher than the five percent recommended by the CBN.

IMF commended the progress in implementing the economic recovery and growth plan, including the start of a convergence in foreign exchange windows, tight monetary policy, improvements in tax administration, and significant strides in improving the business environment.

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