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World Bank Forecasts 1.8% GDP Growth for Nigeria in 2021

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GDP Nigeria growth

By Dipo Olowookere

The World Bank has said Nigeria, which prides itself as the largest economy in Africa, should record an economic expansion of 1.8 per cent in 2021.

In its latest report titled June 2021 Global Economic Prospects, the global lending organisation said the gross domestic product (GDP) growth projected for the country would be achieved only if prices of crude oil remain high at the international market.

It further said if this happens and the country carries out structural oil sector reforms, coupled with a market-based flexible exchange rate management, the economy should grow in 2022 by 2.1 per cent.

Business Post reports that in 2020, as a result of the COVID-19 pandemic, output in Sub-Saharan Africa shrank an estimated 2.4 per cent, but this year, the region has witnessed a resumption of activities, which the World Bank said reflects positive spillovers from strengthening global economic activity, including higher oil and metal prices, and some progress in containing COVID-19, especially in Western and Central Africa.

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The bank said in Nigeria, South Africa and Angola, which are the three largest economies in the region, there have been recoveries and the growth forecast is put at 2.8 per cent this year and 3.3 per cent next year on the back of “stronger external demand, mainly from China and the United States, higher commodity prices, and containment of COVID-19.”

But the World Bank warned that, “Conditions in the region’s fragile and conflict-affected countries are expected to be particularly challenging; their average output level in 2022 is forecast to be 5.3 per cent below its size in 2019.”

On the global scene, the lender economy is expected to expand by 5.6 per cent in 2021, the fastest post-recession pace in 80 years, largely on strong rebounds from a few major economies.

It said growth in the United States is projected to reach 6.8 per cent this year, reflecting large-scale fiscal support and the easing of pandemic restrictions.

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Also, growth in other advanced economies is also firming, but to a lesser extent and 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.

In addition, emerging market and developing economies as a group are forecast to expand 6 per cent this year, supported by higher demand and elevated commodity prices.

“While there are welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world,” the World Bank Group President, Mr David Malpass, stated.

He said further that, “Globally coordinated efforts are 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.”

On his part, the World Bank Group Vice President for Equitable Growth and Financial Institutions, Mr Indermit Gill, submitted that, “Linkages through trade and global value chains have been a vital engine of economic advancement for developing economies and lifted many people out of poverty. However, at current trends, global trade growth is set to slow down over the next decade.”

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“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,” he added.

As for the World Bank Prospects Group Director, Mr Ayhan Kose, “Higher global inflation may complicate the policy choices of emerging market and developing economies in coming months as some of these economies still rely on expansionary support measures to ensure a durable recovery.”

He noted that, “Unless risks from record-high debt are addressed, these economies remain vulnerable to financial market stress should investor risk sentiment deteriorate as a result of inflation pressures in advanced economies.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

NGX Lists 29.4 billion GT HoldCo Shares at N28.55 Each

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GT HoldCo Shares

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited has finally listed 29,431,179,224 ordinary shares of Guaranty Trust Holding Company (GT HoldCo) Plc on its trading platform.

The stocks were admitted on the exchange on Thursday, June 24, 2021, after the delisting of the entire GTBank equities on the same platform.

Business Post reports that the shares were listed today at a unit price of N28.55.

Last Friday, the stock exchange placed trading in the equities of GTBank on full suspension ahead of their delisting to allow the introduction of GT HoldCo shares.

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Today, the GTBank shares were removed from the exchange, a total of 29,431,179,224 and were replaced with 29,431,179,224 units of GT HoldCo.

Confirming this development, the NGX in a circular said, “We refer to our market bulletin with reference number NGX REG/LRD/MB16/21/06/18 dated June 18, 2021, wherein the market was notified that trading in the shares of Guaranty Trust Bank Plc (GTB) was placed on full suspension effective Friday, June 18, 2021, in preparation for the delisting of GTB and listing of the Holding Company, Guaranty Trust Holding Company Plc (GT HoldCo).

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“The market is hereby notified that the entire 29,431,179,224 issued shares of GTB were delisted from the daily official list of the NGX today, June 24, 2021, while GT Holdco’s entire issued share capital of 29,431,179,224 ordinary shares of 50 kobo each were also today, June 24, 2021, listed on the daily official list of NGX at N28.55 per share.

“The delisting of GTB and listing of GT HoldCo on NGX is pursuant to the Scheme of Arrangement between Guaranty Trust Bank Plc and the holders of its fully paid ordinary shares of 50 kobo each as approved by the Securities and Exchange Commission (SEC) and sanctioned by the court.”

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GTBank restructured its business to allow it to offer more services and improve the earnings and value of the company. This led to the change to a financial HoldCo, with GTBank becoming a private company and will operate as a banking institution.

Other subsidiaries were created to offer services in financial technology (fintech), insurance, asset management and other sectors.

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Economy

June 2021 Allocation to FG, States, LGs Drops to N605.96bn

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June 2021 allocation

By Adedapo Adesanya

The federal government, the 36 states of the federation and the 774 local government areas shared the sum of N605.96 billion from the revenue generated in May 2021.

This was disclosed by the Federation Accounts Allocation Committee (FAAC) in a communique released on Thursday after its meeting held via virtual conferencing.

Business Post reports that the amount shared by the three tiers of government for the June 2021 allocation was lower than the N616.9 billion disbursed last month.

Giving a breakdown of the disbursement, the committee explained that from the inclusive cost of collection to Nigeria Customs Service (NCS), Department of Petroleum Resources (DPR) and Federal Inland Revenue Service (FIRS), the federal government received N242.1 billion, the states received N194.2 billion, while the local government councils got N143.7 billion.

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The nine oil-producing states of Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos all received N26.9 billion as a 13 per cent derivation of mineral revenue.

The communique issued by the FAAC at the end of the meeting indicated that the gross revenue available from the Value Added Tax (VAT) for May 2021 was N181.1 billion as against N176.7 billion achieved in the preceding month of April 2021. This resulted in an increase of N4.368 billion.

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The distribution is as follows; federal government got N25.3 billion, the states received N84.2 billion and local government councils received N58.9 billion.

The distributed statutory revenue of N428.198 billion received for the month was lower than the N497.385 billion received for the previous month by N69.197 billion, from which the federal government received N175.5 billion, states got N89.0 billion, while the LGs got N69.6 billion, and the 13 per cent mineral derivation handed to the nine oil states amounted to N24.666 billion.

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The communique also revealed that Companies Income Tax (CIT), and Oil and Gas Royalties, Import and Excise Duty decreased in the month, meaning only VAT increased in the month under review, although marginally.

The communique, however, disclosed that total revenue distributable for the current month inclusive of gross statutory revenue of N357.9 billion, VAT of N168.4 billion, solid mineral revenue of N7.9 billion, exchange gain of N1.7 billion and augmentation from oil and non-oil revenue of N50 billion and N20 billion respectively brought the total distributable revenue to N605.958 billion.

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Economy

National LPG Takes Sensitization to 12 States

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Domestic LPG

By Adedapo Adesanya

The National Liquefied Gas Petroleum (LGP) sensitization and awareness campaign to reduce gas flare has kickstarted in 12 states across the country.

Speaking at a two-day sensitization and awareness campaign held in Abuja, Mr Dayo Adeshina, the programme manager National LPG expansion implementation plan (NLEIP), said the exercise was the commitment of the climate change initiative to reduce emission by 20 per cent.

He said the National LPG pilot programme, which will start after the sensitization, is to begin in Enugu and Ebonyi States for South-East then to the South-South States of Delta and Bayelsa and in the South West – Lagos and Ogun.

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In the North West are Sokoto and Katsina States; the North East batch will be done in Bauchi and Gombe States while in the North Central, it will kick off in Niger and the Federal Capital Territory (FCT).

He said, “The sensitization awareness campaign is targeted at 12 pilot states, two in each geo-political zone. During the campaign, we will highlight the importance of the LGP to the government and the people.

“Every year almost nine hundred thousand people are affected by the effects of kerosine and charcoal which leads to malaria, the government plan is to display the energy mixture which currently stands at 65 per cent, kerosine 30 per cent, LPG 5 per cent.

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“LPG would ensure accessibility, acceptability and affordability.”

Mr Adeshina said to drive the exercise well, an inter-ministerial committee on LPG was constituted and is being headed by the Vice President, Mr Yemi Osinbajo, adding that the composition of the committee shows the commitment of the federal government to the expansion and implementation of LPG in Nigeria.

“So, to make it available, some of the policy directives were worked on and past in 2017, the government will remove necessary bottlenecks,” he said.

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LPG is a fossil fuel closely linked to oil. As a fuel, it is used for cooking, lighting, and central heating. It is a clean-burning, non-poisonous, dependable and high-performance fuel stored and transported in containers as a liquid, but is generally drawn out and used as gas.

LPG has a very wide variety of uses, mainly used across many different markets – agricultural, recreation, hospitality, calefaction, construction, sailing and fishing sectors – as an efficient fuel.

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