There are indications that OPEC+ is close to a decision to bring forward its next meeting to June 4, as against the earlier date of June 9-10, in order to discuss an extension of its current output cut beyond the June period.
This was earlier proposed by OPEC’s President, who is also the Algerian Energy Minister, Mohamed Arkab. The change of date is to give the oil cartel more flexibility to change its current production limits.
Note that OPEC members usually take a decision on their plans for oil trade for the month of July in the first week of June, so as to give them time to react quickly to decisions at the meeting.
OPEC+ is considering extending the current output cuts for one to three months, as a short term measure, in order not to disrupt the rebalancing of the market. This is just as it was reported that Russia wants to start easing the output cut from July.
The current output cut for the cartel is 9.7 million barrels for May and June. This was initially meant to be eased to about 7.7 million barrels a day in July.
In the meantime, reports have suggested that Russia has no objection to bringing forward the next meeting of OPEC and its allies to June 4. The lack of opposition from Russia to an earlier date suggests that it might be moving closer to an agreement with Saudi Arabia on how to extend the output cuts.
It must be noted that oil prices have rallied, as the output cuts coincided with a stronger than expected rebound in demand following the easing of global COVID-19 lockdowns. However, there are fears that the easing of lockdown could trigger a second wave of the pandemic which would negatively affect demand.
There might be some stumbling blocks to the agreement on output cut extension, as member countries like Nigeria and the state oil company of Abu Dhabi have already announced plans to increase exports in July, in line with the OPEC+ deal in April. Nigeria was also one of the OPEC countries that failed to comply with the output cut allocated to it in the month of May. In fact, Nigeria only implemented 19% of its output cut.
Meanwhile, Nigeria’s export prospects got a boost with the return of China, following the re-opening of the Chinese economy. Nigerian crude had struggled to get to its traditional market in Asia, just as intense price pressure had rendered its sweet crude unattractive.
(READ MORE: Oil market still uncertain over OPEC+ deal)
The Chinese buyers who would normally buy only 1-2 cargoes from Nigeria, had 4 vessels sailing off to the Asian country in the month of April. The trade figure for May is even much better, because as much as 7 cargoes were also shipped to China, comprising of about 9 million barrels. This is expected to be even higher in June.
The surge in exports to China was however aided by an unprecedented drop in grade differentials, as most flagship Nigerian grades are sold at discounts against the real market prices.
Cryptocurrency market bearish as ICP and SHIBA make top 20 entry
ICP and SHIB made entries into the top 20 coins by market capitalization, taking the #5 and #17 spot respectively.
In the last 24hrs, the cryptocurrency market space took a hit amidst a decline in the Dow Jones Industrial Index, S&P500 and NASDAQ composite index. Although there is no known reason for the current decline, it is important to know that the cryptocurrency space is known for its volatility, and these types of dumps are expected.
With the decline in certain major cryptocurrency like Bitcoin, Ethereum and Binance, it is important to also note that 2 coins, Internet Computer (ICP) and Shiba Inu (SHIB) made entries into the top 20 coins by market capitalization, calculated by coinmarketcap, taking the #5 and #17 spot respectively.
Internet Computer (ICP)
ICP was listed yesterday on coinmarketcap with the price currently trading $459.24 which represents 213.58% gain from its all-time low. It has a market cap of $56,830,052,964 and a circulating supply of 123,747,068 units.
Internet Computer is the world’s first blockchain that runs at web speed with unbounded capacity. It also represents the third major blockchain innovation, alongside Bitcoin and Ethereum. It is a blockchain computer that scales smart contract computation and data, runs them at web speed, processes and stores data efficiently, and provides powerful software frameworks to developers. By making this possible, the Internet Computer enables the complete reimagination of software, providing a revolutionary new way to build tokenized internet services, pan-industry platforms, decentralized financial systems, and even traditional enterprise systems and websites.
Shiba Inu (SHIB)
The Shiba Inu is currently trading at $0.000032. The coin is up 108.12% in the last 24 hours as a result of its listing on the Binance exchange. It has a market capitalization of $12,527,102,361 and a circulating supply of 394,796,000,000,000 units.
Shiba Inu coin is a cryptocurrency meme token and allows users to hold trillions of them, according to its website. These tokens are listed and incentivized on the ShibaSwap, its decentralized exchange. Its website claims to have locked 50% of its total supply to Uniswap, while the remaining have been burned to Ethereum founder Vitalik Buterin. The tokens feature the same Shiba Inu dog as Dogecoin, which has rocketed in popularity recently. The Shiba token is nicknamed the “Dogecoin Killer” as it aims to replicate and surpass the success of Dogecoin.
How FG can implement blockchain technology for efficient service delivery
Blockchain technology is an efficient and cheaper platform for governance as it curbs middlemen and bureaucratic channels, makes processes more effective and adequately reduces fraud.
A report on the Nigerian budget by BugIT last week revealed that Nigeria’s 2021 budget had 316 duplicated capital projects totalling N39.5 billion, a 14% increase to the security sector allocation with no audit done in 5 years and many others.
Other discrepancies discovered in the report include ZERO audit records of the N10.02 trillion received by the security sector between 2015 and 2021, a total of 117 federal agencies received allocations for “Security Votes” worth N24.3 billion despite many of these agencies already having allocations for “Security Charges” to cover each agency’s security needs, etc. These figures show that the government is permitting multiple leakages in its budget despite falling crude oil revenues and rising debt to revenue ratio.
The damning report was a catalyst for Socio-Economic Rights and Accountability Project (SERAP) to petition President Muhammadu Buhari to probe the reported N39.5 billion duplicated and mysterious projects inserted into the 2021 budget.
The Election problem
Nigeria also lacks transparency in her electoral process resulting in voter apathy, rigging and other forms of electoral fraud, post-election violence, and post-election litigations. The ugly situation is not lost on the Independent National Electoral Commission (INEC) which has called for better use of technology in the conduct of elections, stating that the introduction of technology would enhance the credibility of elections in Nigeria. The electoral umpire has also alluded to working with the National Assembly to introduce reforms to Nigeria’s Electoral Act.
“There is a need to introduce further technology to enhance the credibility of the elections that we are going to conduct in 2023. That explains why INEC intends to introduce new technology in the revalidation of register, that we have been putting in place since 2010-2011. The way forward is to introduce technology and ensure the register is credible and 2023 elections reflect this credibility and that election are better,” INEC said.
Can Blockchain offer this technology for transparent service delivery?
According to euromoney.com, a blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
The decentralised database managed by multiple participants makes blockchain technology a system that is difficult to change, hack, falsify or defraud.
In 2018, Sierra Leone became the first country in West Africa to conduct an election with the aid of the Blockchain, recording votes at 70% of the polling to the blockchain, a first of its kind to prevent electoral fraud.
“Sierra Leone wishes to create an environment of trust with the voters in a contentious election, especially looking at how the election will be publicly viewed post-election. By using blockchain as a means to immutably record ballots and results, the country hopes to create legitimacy around the election and reduce fall-out from opposition parties,” the developer, Agora said in a statement.
“Blockchain is the only technology that has been created which can provide an end-to-end verifiable and fully-transparent voting solution for the future” they added.
Perhaps, Blockchain is proof that it may indeed be possible to “ innovate to prosperity” using technology, especially in low trust societies like Nigeria bedevilled with poor public accounting and electoral processes.
This position is supported in a report by Northwestern University, citing that Blockchain’s smart contracts can improve efficiency in emerging markets like Nigeria.
“Blockchain technology has the potential to eliminate one of the most significant barriers to economic growth through private business transactions in developing countries—lack of trust,” the report said.
“Developing countries often lack effective or transparent institutions and are frequently plagued with corruption that weakens substantially their level of security in economic transactions.
First, because blockchain uses an open architecture, all transactions are publicly accessible, immutable, and verifiable by anyone. This helps to eliminate corruption and fraud from the transaction. Second, because all smart contract transactions are recorded along a blockchain and cannot be modified ex-post, a permanent and publicly accessible ledger is available to shed any doubt about payments or other transactions throughout the process. And third, because blockchain systems are automated, security in the enforcement mechanism is all but guaranteed. For instance, failure to deliver goods by a set time will automatically trigger a default clause that transmits payment of liquidated damages to the injured party without the intervention of a judge or arbitrator,” the report added.
Basically, the report suggests that if the Nigerian government pursues a policy on total efficiency in service delivery, blockchain could be the best alternative for the nation as it reduces corruption and fraud in multiple government sectors.
Olumide Adesina, a financial market analyst and Yahoo Finance Contributor says implementing a blockchain-driven service delivery model would make governance cheaper and reduce corruption.
“A blockchain is simply a digital ledger that records information on the network in such a way that it is almost impossible to forge, hack and manipulate despite being open source,” he said.
“This is an efficient and cheaper platform for governance as it curbs middlemen and bureaucratic channels, makes processes more effective and adequately reduces fraud,” he added.
Would the CBN’s crypto ban affect blockchain’s use in governance?
“The CBN ban has little or no effect on the blockchain, as its statutory powers only excluded Nigerian financial institutions from relating to Crypto Exchanges and platforms,” Adesina said.
The report of over N39 billion in duplicate expenses shows that even in a period of revenue decline, the government is struggling with curbing corruption in various sectors. The implementation of technology-backed solutions will not only save the nation from resource pilfering and wastage, but it will also be vital in electing credible government officials to oversee proper, efficient service delivery and governance.
Nairametrics | Company Earnings
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- FMDQ approves quotation of MTN’s Commercial Paper worth N73.5 billion.
- MTN Nigeria issues a 7-Year Series 1 bond worth N110 billion.
- Caverton Offshore Support Group reports profit after tax of N520 million in Q1 2021.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.