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COVID-19: Take-off of Africa Free Trade Zone “AFCFTA” Postponed

The take-off of the Africa Free Trade Zone, which has been referred to as the world’s largest free trade zone, has been delayed.

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Take-off of Africa Free Trade Zone (AFCFTA) suffers set back

The take-off of the Africa Free Trade Zone (AFCFTA), which has been referred to as the world’s largest free trade zone, has been delayed.

According to the disclosure by a senior official of the zone, the implementation of an African Free Trade agreement will not take off on July 1, 2020, as earlier planned due to disruptions caused by the coronavirus outbreak.

The Secretary General of the African Continental Free Trade Area, Wankele Mene, said: “The Covid-19 situation has caused a major disruption…Governments are now engaged in a fight against the pandemic.

“It is obviously not possible to commence trade as we had intended on July 1 under the current circumstances.”

Recall that President Muhammadu Buhari, in July 2019, after delays and consultations with different stakeholders, signed the landmark African Free Trade Zone agreement (AFCFTA). The decision of the country, which is the largest economy in Africa, to sign the agreement was a huge boost to the deal.

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READ ALSO: ACFTA a potential game changer for Africa?

The 55 national continental free trade zone would, if successful, create a $3.4 trillion economic bloc, with 1.3 billion people across Africa and constitute the largest new trading bloc since the World Trade Organization was formed in 1994.

Though the agreement is already legally in force, several details need to be ironed out as part of phase one of the process, in order to make a reality, the July deadline for the commencement of trade in goods and services under the new tariff.

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The African Union cannot have its earlier scheduled meeting in Johannesburg, South Africa in May, to finalize the agreement, due to restrictions and lockdowns as a result of the coronavirus pandemic.
However, Mene said that a new date would be announced by the assembly for the implementation of the agreement.

READ ALSO: NCC to capitalize on AfCFTA to boost economic gains

Free trade agreements are designed to cut trade tariffs among member countries, help make a country’s exports cheaper, and get easier access to other markets. They remove border taxes or trade barriers, get rid of quotas so that there will be no limit to the amount of trades one can do, and so on. These tariffs are usually in the form of taxes.

 

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices

Exxon Mobil announced it will slash its global workforce by 15% over the next two years, as it struggles to preserve dividends.

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ExxonMobil to Divest oil fields in Nigeria, Domestic oil companies

Exxon Mobil Corp on Thursday, October 30, 2020, announced that it will reduce its global workforce by 15% by the end of 2022 – an unprecedented culling by North America’s biggest oil explorer, as the coronavirus pandemic hits energy demand, prices, and struggles to preserve dividends.

The job cuts are expected to include 1,900 U.S. jobs – mostly in Houston, the headquarters for its US oil and gas businesses – as well as layoffs previously announced in Europe and Australia and reductions in the number of contractors, some of which have already taken place.

This was disclosed in a statement that was released by the energy giant on Thursday, October 30, 2020.

The staff reduction is part of the latest effort by the Chief Executive Officer, Darren Woods, to curtail spending and halt the worst string of quarterly losses since Exxon assumed its modern form with the 1999 takeover of Mobil Corp.

What you should know

Exxon and other oil producers have been slashing costs due to a collapse in oil demand and prices, as well as ill-timed bets on new projects. The Big Oil rivals of Exxon are also cutting thousands of jobs in response to the pandemic-induced demand slump. BP Plc plans to slash 10,000 jobs, Royal Dutch Shell Plc will cut as many as 9,000 roles, and Chevron Corp. has announced around 6,000 reductions.

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Norton said that Exxon’s workforce stood at about 88,000 people, including 75,000 in-house employees and about 13,000 contractors as of year-end 2019.

Exxon’s job cut is a sign of its weakened financial position compared to its former status as the S&P 500 Index’s biggest company less than a decade ago, and a profit powerhouse used to ride out oil-price cycles.

This year’s downturn has been particularly damaging because it also affected refining, usually a cushion in times of low oil prices. Also, it came at a time when Exxon was already increasing borrowing to fund a large expansion program. The company was forced to retreat on these plans in April, reducing capital spending by $10 billion and delaying or scaling back most of the major projects.

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The stock has plunged more than 50% this year. Its dividend yield is now more than 10%, indicating that investors are anticipating a cut. Exxon maintained the quarterly payout on Wednesday and is expected to post its third consecutive quarterly loss when it reports earnings tomorrow.

What they are saying

The Company in its statement said, “These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions.’’

Exxon’s spokesman, Casey Norton, through an email said that the total reduction means the company will reduce its workforce by about 14,000 people, split between employees and contractors from year-end 2019 levels. The cuts will come through attrition, targeted redundancy programs in 2021, and scaled-back hiring in some countries.

What this means

Another set of job losses in the oil sector in Nigeria is looming. Nigeria is one of Exxon’s biggest operational bases in oil and gas exploration and production globally. Also, this is another setback after Shell announced 9,000 job cuts globally, which includes Nigeria, and the announcement by Chevron that it plans to reduce its staff strength in Nigeria by 25%.

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Economy & Politics

WTO: US opposing consensus to declare Okonjo-Iweala as DG – Foreign Affairs Ministry

The Ministry announced Okonjo-Iweala has secured the support of the majority of the member nations but is being opposed by the US.

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Ngozi Okonjo Iweala, World Bank, Davos, World Economic Forum, WTO accepts nomination of Okonjo-Iweala as DG despite opposition from Egypt,WTO:  Happy to be in final rounds of DG Campaign- Okonjo Iweala

The Ministry of Foreign Affairs announced in a statement that Nigeria’s candidate for Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, has secured the support of the majority of the member-nations – but is yet to be declared and returned as the winner, as the United States is opposing the consensus.

This was announced in a statement by the Ministry on Thursday evening to inform the nation that the third and final round of the selection process of the WTO DG position was formally announced on Wednesday 28th October 2020.

What you should know

Nairametrics reported this week that Dr. Ngozi Okonjo-Iweala is close to being appointed as the new Director-General of the World Trade Organisation (WTO).

A group of ambassadors also known as “troika” had proposed Okonjo-Iweala to lead the WTO giving her a clear path to becoming the first woman to head the WTO since it started 25 years ago. The three ambassadors are thought to wield significant powers in determining what is a very “intricate and opaque” process.

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The U.S President, Donald Trump blocked the appointment of Ngozi Okonjo-Iweala as the WTO’s next DG on Wednesday, citing support for South Korea’s Yoo Myung-hee.

Dr. Okonjo-Iweala stated that she is positive despite hiccups in her bid to emerge as the next DG of the organization. She said, “Happy for the success & continued progress of our WTO DG bid. Very humbled to be declared the candidate with the largest, broadest support among members and most likely to attract consensus. We move on to the next step on Nov 9, despite hiccups. We’re keeping the positivity going.”

The Ministry of Foreign Affairs said in its statement that, “Dr. Ngozi Okonjo-Iweala has secured the support of the majority of the member countries, but is yet to be declared and returned the winner. This is because apart from winning the election, all 164 Member States of WTO were expected to adopt the winner by consensus. In accordance with the rile of the procedure of the WTO.”

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It is important to highlight that Dr. Okonjo-Iweala has secured cross-regional backing with only the United States opposing the consensus.

The Ministry added that a meeting would be held by the General Council of the WTO on the 9th of November 2020 to declare a final decision on the election process.

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Coronavirus

COVID-19 Update in Nigeria

On the 29th of October 2020, 150 new confirmed cases and 2 deaths were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 62,521 confirmed cases.

On the 29th of October 2020, 150 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 3,008 samples across the country.

To date, 62,521 cases have been confirmed, 58,249 cases have been discharged and 1,141 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 620,758 tests have been carried out as of October 29th, 2020 compared to 617,750 tests a day earlier.

COVID-19 Case Updates- 29th October 2020,

  • Total Number of Cases – 62,571
  • Total Number Discharged – 58,249
  • Total Deaths – 1,1141
  • Total Tests Carried out – 620,758

According to the NCDC, the 150 new cases are reported from 9 states- Lagos (89), Rivers (19), Ogun (11), Bayelsa (9), Kaduna (8), Plateau (8), Taraba (3), Osun (2), Delta (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 21,106, followed by Abuja (6,028), Plateau (3,630), Oyo (3,433), Rivers (2,809), Edo (2,657), Kaduna (2,641), Ogun (2,027), Delta (1,814), Kano (1,746), Ondo (1,666), Enugu (1,314),  Kwara (1,069), Ebonyi (1,049), Katsina (952), Osun (925), Abia (898), Gombe (883).  Borno (745), and Bauchi (711).

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Imo State has recorded 616 cases, Benue (491), Nasarawa (482), Bayelsa (412),  Ekiti (332), Jigawa (325), Akwa Ibom (295), Anambra (277), Niger (274), Adamawa (257), Sokoto (165), Taraba (146), Kebbi (93), Cross River (87), Yobe (82), Zamfara (79), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

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