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Egypt’s GDP growth seen slowing to 5.5% in current fiscal year

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Egypt’s economic growth is expected to slow to 5.5% in the fiscal year that began this month, below the government’s target and 5.8% the following year, a Reuters poll showed as Cairo nears the end of an IMF-backed economic reform programme.

Barring the oil industry, Egypt’s economy has struggled to attract foreign investors since the 2011 uprising that ended Hosni Mubarak’s 30-year rule.

Egypt’s non-oil private-sector activity contracted for the second consecutive month in June, according to the Emirates NBD Egypt Purchasing Managers’ Index (PMI). Private-sector activity has expanded in only five months over the last three years.

“Even as leading economic indicators point towards weak consumer spending and stress on local firms, rising investment and government spending are supporting higher economic growth,” said Nadene Johnson, an economist at NKC African Economics.

“Medium-term growth prospects remain promising thanks to the natural gas sector and higher investment, while consumption is expected to recover following the completion of inflationary reforms.”

Earlier this month, Egypt introduced its latest round of fuel subsidy cuts, raising prices by 16-30%, as it nears the end of the IMF programme.

Scaling back fuel subsidies that have been a strain on the budget for decades was a key plank of the three-year, $12 billion reform package signed with the International Monetary Fund in 2016, as Egypt’s economy struggled to recover from the turmoil that followed the 2011 uprising.

Other reforms included a sharp devaluation of the Egyptian pound and the introduction of a value-added tax.

“Rising fuel and electricity prices in association with energy subsidy reforms will keep inflation elevated in the coming months,” Johnson said. She expects the Central Bank of Egypt (CBE) to cut rates by 100 basis points in the fourth quarter of 2019.

To fuel growth, “interest rates need to be cut by at least 300 basis points,” said Allen Sandeep, head of research at Naeem Brokerage.

“And hopefully, that would increase spending and investments, and also ease the tightness in liquidity which we are currently witnessing,” he said.

Annual urban consumer price inflation plunged unexpectedly to 9.4% in June from 14.1% in May, before fuel prices were raised.

Core inflation, which strips out volatile items such as food, fell to 6.4% in June from 7.8% in May.

Millions of Egyptians live below the poverty line and struggle to meet basic needs. They have faced rising costs since the pound was devalued in November 2016.

Angus Blair, chairman of business and economic forecasting think-tank Signet, said Egypt’s inflation has long been higher than global averages.

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Nigerians’ participation in maritime sector rises to 40%, says NCDMB

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The Nigerian Content Development and Monitoring Board (NCDMB) says Nigerians’ participation in the maritime sector has increased to 40 per cent.

Mr Sumbi Wabote, Executive Secretary of the NCDMB, made the disclosure on Thursday while on inspection tour of the NigerBenue Transport Company Limited (NBTC) in Ovwian, Udu Local Government Area of Delta.

Wabote said that there was still much to do in order to achieve 100 per cent of Nigerians participation in the maritime industry, which according to him, had a lot of potential.

He said, “Nigeria has the manpower and innovative ideas, but lacked encouragement and right government policies to actualise the ideas.’’

Wabote commended the management of the NBTC for the innovative strategies to continue to grow in the business.

“For a company to survive till date since 1956 shows the strength of character of the owners and managers.

“They have continue to revolve in terms of new business style they see in order to actively participate in the business.

“We are told that the company started as a trading company in cotton and later metamorphosed into supporting and providing services to oil and gas sector.

“I have gone round the company, there is huge potential here.

“Looking at the strength of character of the owners and managers, I see opportunity for us to harness this particular facility to increase local content penetration, particularly in serving the oil and gas sector.

“Also, there is huge potential to create jobs for youths and actively support the offshore business that is emerging in our economy today,” he said.

Wabote said that the board was ready to support NBTC, noting that with the right focus, the company was prepared to deliver good services to the people.

Responding, the Chief Executive Officer (CEO) of NBTC, Mr Moses Taiga, said that the company had decided to remain in Delta to create jobs and add values to the standard of living of the people.

Taiga said that the company had good rapport with its host community.

“We don’t have any reason to leave; we have come to create jobs for people in Warri and its environs where we are located.

“We do not have unusual problem with youths, we look at their demands and act accordingly,” he said.

Edited by Olagoke Olatoye (NAN)

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Maritime: NIMPORT urges responsible adoption of Blue Economy ideals

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A ports and terminals promotion body, the Nigerian International Maritime Ports and Terminals (NIMPORT) has called for caution by the Federal Government before actualising the ideals of the Blue Economy in the nation’s maritime sector.

The NIMPORT Chairman, Mr Fortune Idu, made the call in an interview with the Nigeria News Agency in Lagos on Thursday.

Idu said that a necessary precursor to proper adoption of the blue economy ideals was a safety and environmentally-friendly policy.

The Nigerian Maritime Administration and Safety Agency (NIMASA), which is the apex regulatory and promotional maritime agency in Nigeria, has over time and in diverse national and international forums expressed its commitment to the ideals of actualising the blue economy.

NIMASA defines the blue economy as dealing with the totality of all economic activities associated with the oceans, seas, harbours and coastal zones.

It also includes aquaculture, biomedicine, boats and shipbuilding, ship repairs, defence and security, amongst others, all geared toward wealth and job creation for the growth and development of the Nigerian economy.

“Going blue economy is all about full utilisation, optimisation or exploitation of the resources under the water. There is need for it to be done responsibly.

“When a safety and environmentally-friendly policy is put in place, it will protect human beings and protect the ecosystem first, before the exploitation of the country’s water resources takes place,’’ Idu said.

According to him, the first step is not just to dive down the water and start to excavate whatever is there but for us to design a process that is environmentally-friendly and has a lot of safety implications.

The NIMPORT chairman urged the government through NIMASA to undertake research into the full implications of actualising the blue economy before advancing with its commitment.

“For a country like Nigeria that is blessed abundantly with a lot of solid mineral resources; on the surface, I think going a bit further to find out what the ocean or the water has for us and beyond just using it as a means of transportation, could be interesting.

“This is interesting in the sense of the opportunities for diversification of economic options. However, my advice is before we go into this area, we need to think deeply and do a lot of research work.

“We should understand that anything done to alter or change or influence the ecosystem of the water, the aquatic system, is something which becomes very difficult to revert, especially when it comes to pollution,’’’ he said.

Idu pointed out that going into research was essential because the country was already saddled with trying to clean up pollution as regards oil spillage and all other forms of industrial pollution on our waters.

He noted that the country’s water banks today were filled with a lot of solid waste, some of which were non-degradable materials like plastic and they had yet to be cleared.

He said that going under the water to exploit would technically affect the ecosystem of the water, saying that part of the air that we breathe actually came from activities within the water.

“All the fishes that live in the water and all the other living organisms in the water help to support the general ecosystem of where we live.

“We are healthier when our waters are healthy, so it is very important that we look and do whatever we have to do responsibly,” Idu said.

The NIMPORT chairman said that exploitation was basically a business venture but protection was normally not a business venture.

He noted that most business people did not look at the initial consequences of their actions because they were more focused on profitability.

Idu urged NIMASA to put in place a policy that would protect the maritime environment, saying that the protection would have to come in form of regulation.

Edited by Oluyinka Fadare/Adeleye Ajayi (NAN)

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OPEC+ likely to extend oil supply cuts until June – sources

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OPEC and its allies are likely to extend existing oil output cuts when they meet next month until mid-2020, with non-OPEC oil producer Russia supporting Saudi Arabia’s push for stable oil prices amid the listing of state oil giant Saudi Aramco.

OPEC meets on Dec. 5 at its headquarters in Vienna to be followed by talks with a group of other oil producers, lead by Russia, known as OPEC+.

The current oil supply cuts run through to March 2020.

On Dec. 5, Saudi Arabia is set to announce the final pricing of the initial public offering of Aramco in what it hopes will be the world’s largest IPO.

The oil price at the time is likely to be key to Aramco’s listing, expected around mid-December.

“So far, we have two main scenarios: either meet in December and extend the current cuts until June or defer the decision until early next year, meet before March to see how the market looks and extend the cuts until the middle of the year,” said an OPEC source.

“It is more likely that we will extend the agreement in December to send a positive message to the market. The Saudis don’t want oil prices to fall, they want to put a floor under the prices because of the (Aramco) IPO.”

OPEC sources said market conditions in the first quarter of 2020 remain unclear amid concerns of a slowdown in oil demand and weak output compliance by some producers such as Iraq and Nigeria, which is complicating the outlook.

An OPEC delegate said: “My feeling is that (an extension) to end-June to avoid meeting again early March, with the possibility of calling for an (earlier) meeting should market conditions require it … is the likely scenario as of today.”

The two sources said formally announcing deeper cuts looked unlikely for now although a message about better compliance with existing cuts could be sent to the market.

Saudi Arabia, OPEC’s de facto leader, wants to focus first on boosting adherence to the group’s production-reduction pact before committing to any more cuts, they said.

“The Saudis want to see how the rest of those who are not complying (with the cuts) do first. There are no numbers being circulated so far for deeper cuts or changing output quotas,” said the first OPEC source.

Amrita Sen, co-founder of Energy Aspects think-tank, which closely watches OPEC and Saudi oil policies, said a mere extension by OPEC+ of the existing output cuts until June might not be enough to support oil prices.

“The market expects a further cut and an extension until the end of 2020. In any other scenario, the market will sell,” she said.

Russian President Vladimir Putin set the tone for the December meeting last week, calling Saudi Arabia’s position ahead of the talks “tough”.

Moscow argues that it will find it hard to cut oil production voluntarily during the cold winter months, especially in western Siberia, where Russia produces two-thirds of its oil and where most of its well rigs are located.

Freezing temperatures make it difficult for Russia to shut in and restart wells in winter months.

“There is no doubt that Russia won’t let the Saudis down in case of a price collapse given the upcoming IPO,” said one source familiar with Russian thinking.

He added that Putin had developed close ties with Saudi Crown Prince Mohammed bin Salman and the Russian government was aware that the three-year-old partnership could fall apart if Russia did not support Riyadh.

The OPEC+ alliance has since January implemented a deal to cut output by 1.2 million barrels per day to help boost oil prices trading now at 62 dollars a barrel.

Edited by Abdullahi Mohammed/Tajudeen Atitebi (NAN)

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Beauty West Africa Exhibition: Visitors queue to get free haircuts

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As the 2019 Beauty West Africa exhibition entered its second day in Lagos, some visitors at the fair queued at the stand of Wahl Clipper Corporation to get  free hair cuts from international barbers.

Nigeria News Agency reports that the U.S.A-based firm displayed its clipper range and other hair dressing professional tools at the exhibition, in which numerous exhibitors are participating.

The Regional Sales Manager of Wahl, Mr Kunal Vimal, told NAN that the stand had received about 500 visitors since the opening on Nov. 20.

Vimal said that the company was open to receive more distributors to come on board, which was one of the reasons they were participating in the beauty fair.

“So far, we have had about 500 visitors at the stand to see our products and also indicate interest to do business with us, especially becoming distributors of our brands.

“We are also giving free haircuts to participants who visit our stand free-of-charge by our best barbers from Germany and Dubai.

“The barbers are part of Wahl’s Education and Training Team (WEAT). Each hair cut from where these barbers are based attracts minimum of €100 (one hundred Euros) but it is free for Nigerians,” he said.

The regional manager said that Nigerians were very particular about their looks, which stood them out globally.

He thanked the organisers of the exhibition for the opportunity to interface with Nigerians in the beauty and cosmetics industry.

A visitor, Mr Jude Eze, said that he had a haircut before coming, but when he saw the job done on someone at the stand, he could not resist another trim.

NAN reports that the 2019 Beauty West Africa Exhibition and Conference, which is the second in its series, started on Nov. 20, and will end on Nov. 22 at the Landmark Events Centre.

The exhibition was put together by the BtoB Events, organisers of the West Africa Automobile Show and Food and Beverage West Africa Exhibitions, to bring international brands into Nigeria for cross-border business opportunities.

Edited by Cecilia Odey/Oluwole Sogunle (NAN)

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ADB introduces new loan pricing for higher-income countries, economies

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The Asian Development Bank (ADB) says it approved the introduction of diversified financing terms for its developing member countries and economies, with higher income sub-groups paying higher maturity premiums for longer-term loans.

The Manila-based bank said in a statement released on Thursday that the new pricing structure will be effective on Jan. 1, 2021.

Recipients of the loans and grants from the ADB are classified under groups A, B, and C, according to their per capita income levels and creditworthiness.

The bank said only members in the three groups have access to loans and grants.

“Some of them will not be affected because they are vulnerable countries such as small island developing states.

“The list of countries under each category will be updated before the effectivity of the diversification with the latest Gross National Income (GNI) per capita data,’’ the ADB said.

The financing terms offered to Group A and B countries and economies are already diversified with a combination of grants, concessional loans and market-based loans.

Group C countries have a wider spread of per capita incomes but are all offered the same financing terms.

In the new pricing framework, the ADB said Group C countries would be divided into several sub-groups according to their GNI: lower-middle-income, upper-middle-income and high-income.

Higher-income sub-groups will pay higher maturity premiums for longer-term loans, the ADB added.

For instance, it said upper-middle-income countries with GNI per capita of $6,976 to $12,375 (in 2018 prices) will pay up to 30 basis points additional maturity premium depending on the loan tenor.

The ADB said the new pricing framework would provide more favourable terms to more vulnerable countries such as Small Island developing states and countries transitioning from Group B to Group C.

It said the additional income from the new pricing would supplement existing Technical Assistance Special Funds to support policy advice, institution building and knowledge sharing in ADB’s developing member countries and economies.

The pricing framework will also help build reserves for expanding ADB’s lending capacity in the long term, it added.

“The current flat pricing structure offered to our recipient countries borrowing only market-based loans does not reflect the high level of diversity among these countries in their income levels, capacities to mobilise domestic resources and access to capital markets,’’ said ADB President Takehiko Nakao.

“The new structure will enable us to continue engaging with countries at a more advanced stage of development on terms that remain fair and competitive with other multilateral development banks and contribute to ADB’s long-term sustainability.’’

The ADB said this reform reflects a regional landscape that had changed over the past 50 years.

“The situation in Asia and the Pacific region is now different compared to 1966 when ADB was established.

“Most ADB recipient countries are currently middle-income countries.

“These countries, though with relatively higher income and strong financial capacity, still need ADB’s support to tackle pockets of poverty, strengthen institutions and address climate change as well as other areas with externalities,’’ the ADB further said.

Established in 1966, the ADB encompasses 68 members, with 49 from the region.

Edited by Fatima Sule/Abdulfatah Babatunde (NAN)

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Anglo-South African Investec reports 17% fall in first half profit

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Anglo-South African financial services firm, Investec, said on Thursday its first half profit fell 17.2 per cent.

Headline earnings per share, the main profit measure in South Africa, stood at 22.7 pence in the six months to Sept. 30, compared with 27.4 pence a year earlier.

The bank’s adjusted basic earnings per share, which reflect profits made in the course of ordinary operations, were down by four per cent from 30.1 pence last year to 28.9 pence this year.

Edited by Abdullahi Mohammed/Adeleye Ajayi (NAN)

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