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Oil price rises to $82 a barrel amid fears of global recession

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Oil prices rose on Friday to $82 a barrel amid fears of a global recession.

Brent crude, the global oil benchmark, climbed 1.29 percent to $82.64 a barrel at 19:30 GMT+1, while US West Texas Intermediate (WTI) crude rose 1.16 percent to $76.60 a barrel.

In January, World Bank had warned that given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions — could push the global economy into recession.

So far, the price of the commodity has remained below $100 a barrel in the year.

Bolade Agboola, oil and gas sector analyst at Meristem Securities Limited, told TheCable that the price of the commodity is expected to remain at its current level.

“We are not expecting any drastic upsurge in the near term and even if there would be, neither do we expect crude oil price to cross 100/bbl at any time this year,” she said.

“This is hinged on the expectation of a tight gap between global demand and supply.

“In addition, fears of recession in the global economy are expected to exert pressure on oil demand growth which might keep the price in check.”

The recent oil price is 9 percent above the benchmark in Nigeria’s 2023 budget.

Agboola said the current price presents an opportunity for Nigeria to finance the 2023 budget “as it is above the assumed price of $75/bbl in the 2023 FGN budget”.

However, she said the risk to this opportunity is not being able to attain or surpass the set production volumes for the country.

“In summary, oil prices hovering around $80/bbl would be beneficial if it is supported by higher production volumes,” Agboola said.

So far, Nigeria’s oil production figure has increased steadily from January 2023 to February 2023 (from 1.25 million barrels of oil per day to 1.30 million bpd).

But despite the rise in oil output, the country failed to meet its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8 million bpd.

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Crisis hits Eko Disco as chairman and directors disagree on Dr. Tinuade Sanda’s sacking

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Members of the board of the Eko Electricity Distribution Company are at loggerheads over the sack of the company’s Managing Director/Chief Executive Officer, Dr Tinuade Sanda.

We reported that the firm replaced Sanda with Mrs Rekhiat Momoh, who was said to have taken over on Tuesday.

It was gathered that Sanda’s sack was communicated through a letter signed by the EKEDC Chairman, Dere Otubu, on March 25.

According to Otubu, the decision to relieve Sanda of her duties followed a directive from the Nigeria Electricity Regulatory Commission.

“We have received a directive from NERC stating that all staff working for the utility must be employed directly by the utility, bound by applicable service conditions that are applicable to the employees of the utility, and paid through the utility’s payroll.

“The Disco is obligated to comply with these directives due to the powers of NERC as stipulated in the Electricity Act 2023. In compliance with the aforementioned directive, all seconded staff from WPG Ltd are being released by Eko Electricity Distribution Plc and returned to WPG Ltd.

“Accordingly, you are hereby relieved of your role, office, and position at Eko Electricity Distribution Plc effectively immediately, and returned to your employer, WPG Ltd,” Otubu had said.

We reported earlier that some senior staff members of the Eko DisCo were recently accused of ghost worker recruitment, fraud and negligence; a claim the firm said was unfounded.

Reacting to the allegation, NERC ordered thorough investigations, while directing that all existing WPG secondees be returned to their original employer.

While announcing the change of leadership, the DisCo said, “We wish to inform the general public that Mrs Rekhiat Momoh has on 26th March 2024 assumed the role of Acting CEO of Eko Disco.

“This follows the redeployment of our erstwhile MD/CEO Mrs Tinuade Sanda back to WPG Ltd, the core investor who seconded her to Eko Disco.

“We have great confidence in her ability to perform this role effectively and take the company to greater heights,” the EKEDC said.

However, in a rebuttal on Wednesday, a Director and Chairman of the Legal & Regulatory Committee, Mr Babor Egeregor, disagreed with the chairman over the sack of Sanda.

He said the NERC did not order the removal of any staff either seconded to or hired by EKEDC, except those connected to the alleged fraud and negligence.

“It has come to my notice that by a letter dated 26th of March 2024, the Chairman of EKEDC, Mr Dere Otubu, purportedly terminated the Contract of Employment of Dr Tinuade Sanda, the MD/CEO of EKEDC, allegedly in compliance with orders/directives issued by the NERC.

“The said order of the NERC, herein displayed, are unambiguous, incapable of, and unyielding to plural interpretations. There was nowhere in the order where NERC requested the removal of any staff either seconded to or hired by EKEDC, except those connected to the alleged fraud and negligence i.e., Wola Joseph Condotti, Sheri Adegbenro, and Aik Alenkhe,” he said.

According to Egregor, NERC’s directives were issued to compel the board of EKEDC, following picketing by the union and unrelenting staff protests, “to act appropriately in the face of the determined position of a majority of the board members to cover up the alleged use of ghost workers together with the alleged fraud and protect Wola Joseph Condotti, especially”.

“Mr Dere Otubu’s letter, therefore, was done in bad faith and in vengeful revenge against the MD/CEO for escalating the alleged fraud and issuing queries against one of his protégés, whom he has desperately sworn to protect by all means.

“Rather than comply with the orders of NERC, a recourse to subterfuge was hatched with the purported termination. There are no doubts about a deliberate agenda and unconcealed mischief to misread the orders of the NERC to malign Dr Sanda’s reputation for daring to escalate and issue queries to Wola Joseph Condotti for alleged fraud through the use of ghost workers for three years, and continuous payment of salaries to exited staff despite personally receiving their resignation letters,” Egregor stated.

He added that similar queries were issued to the Chief Audit and Compliance Officer, Sheri Adegbenro, and the Chief Human Resources Officers, Aik Alenkhe, “for their failure and gross negligence to audit and detect fraudulent payments on payroll for over three years”.

On the appointment of Momoh as the Acting MD/CEO, Egregor said, “The board of EKEDC, on which I sit, has neither met nor decided on the purported appointment of Mrs Rekiah Momoh as Acting MD/CEO, except Mr Otubu and his close circle of colleagues have transformed themselves into ‘the board’.

“I and all well-meaning members of the EKEDC board, I believe, should vehemently distance themselves from this contrivance.

“The board is not a one-man show, and matters are to be collectively deliberated on and approved by Board members. Mrs Momoh is the Chief Commercial Officer of EKEDC and remains so.”

Amid the allegations of fraud, the director took pride in saying that the EKEDC was known for due process and legality, adding that anything that would erode the commitment to due process and corporate governance would be resisted.

“Therefore, let it be known that Dr Tinuade Sanda remains the MD/CEO of Eko Electricity Distribution Company and has since her assumption of office as the MD/CEO, turned EKEDC around for good, with very great milestones and achievements which every sector player recognises.

“She made EKEDC the number one distribution company in Nigeria. The investors, board, and management of EKEDC believe firmly in her leadership and look forward to many more record-setting and breaking moments,” he submitted.

Contacted, the EKEDC spokesperson, Babatunde Lasaki, told our correspondent that Sanda was not sacked but only asked to step aside “until the realignment of the structural management process is completed”.

According to Lasaki, Momoh was appointed to avoid a vacuum.

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Business

FG directs banks to deduct 0.375% stamp duty charges on all loans

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The Federal Government has directed commercial banks in the country to henceforth deduct and remit 0.375% on all loans disbursed by them.

The deduction is to be made on the principal loan amount, according to a message sent to customers by banks.

This comes as the government expands the net on transactions covered by the stamp duty charges from regular bank transfers to foreign transactions and now loans.

Recall that banks were also in January this year directed to deduct stamp duty on old foreign transactions between January 2021 to December 2023 by January 31, 2024. Before that, the electronic money transfer levy was only applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent.

In a message sent to their customers on Wednesday notifying them of the deduction, one of the banks wrote:

“Dear Valued Customer,

“We write to inform you that the Federal Government of Nigeria has directed that all banks remit stamp duty on all loans.

“In line with this directive, 0.375% on every principal loan amount disbursed will be debited and remitted to the Federal Government of Nigeria.

“However, all existing approved loans remain unchanged and are to be fully repaid in line with the terms and conditions. We are committed to offering you exceptional service every step of the way.”

According to the Federal Inland Revenue Service (FIRS), Stamp Duty is an indirect tax in Nigeria governed by the Stamp Duties Act (SDA), CAP S8 LFN 2004 (as amended).

It is a tax charged for a stamp or seal applied on a written or electronic document which if executed, makes it a legal document and will be admissible in any court of law.

Last year, a former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, disclosed that the total revenue collected as stamp duty on behalf of the Federal Government in 6 years, between 2016 and 2022, stood at N370.686 billion.

The disclosure came amid allegations by a member of the House of Representatives, Muhammed Kazaure, who claimed that a humongous sum of N89 trillion collected as stamp duty had been allegedly stolen.

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Business

With N50 difference, parallel/official exchange rates near convergence

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The naira, on Wednesday, appreciated at the parallel section of the foreign exchange (FX) market, gaining 6.25 percent to trade at N1,350 per dollar.

Currency traders in Lagos, also known as bureau de change operators (BDCs), quoted the buying rate of the greenback at N1,300 and the selling price at N1,350 — leaving a profit margin of N50.

At the official section of the FX market, the local currency appreciated by 5.97 percent to N1,300.43/$ on Wednesday — from N1,382.95 on March 26.

At the FMDQ Exchange, a platform that oversees official FX trading in Nigeria, the naira recorded a high of N1,460 and a low of N1,200.

With a N50 difference, the official and parallel market exchange rates are nearing convergence — a situation that (at a sustained full convergence) could dry up street market patronage in favour of the official side.

On March 26, the Monetary Policy Committee of the Central Bank of Nigeria (CBN) raised the monetary policy rate (MPR) from 22.75 percent to 24.75 percent.

Speaking on the rationale behind the raise, Olayemi Cardoso, CBN governor, said the major objective of the apex bank is to manage inflation, but said the bank is not “unmindful of the impact that the interest rate increases are having”.

He said with the interest rate increases, the FX market “becomes a lot more lively” — a situation the CBN governor said is reducing the exchange rate and cost.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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