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PIB; Will the jinx be broken this time around?

Many stakeholders hold strongly that new investments in the oil sector is dependent on the passage of the PIB.

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PIB; Will the jinx be broken this time around?, President Buhari may sign 2020 Budget tomorrow, President Buhari approves N37 billion for National Assembly renovation, President Buhari appoints Sarki Auwalu to head DPR , FG may stop interstate and inter-town travels, COVID-19: President salutes Elumelu, Dangote, Atiku, Banks, others for support, Naira export earnings, Covid-19: FG to set up N500 billion intervention fund, sovereign wealth, FG issues guidelines on implementation of gradual easing of lockdown nationwide, Electricity: FG approves one year waiver of import on meters, Buhari backs Lagos State Government Judicial Panel of Inquiry

News reports say President Mohammed Buhari has finally sent the Petroleum Industry Bill to the Senate for consideration and passage. The Bill according to media sources among other things still proposes the restructuring of the Nigerian National Petroleum Corporation and the Petroleum Products Pricing Regulatory Agency. The NNPC will be replaced by a limited liability company, which shall be called Nigerian Petroleum Company (NPC Limited). The bill also proposes the establishment of an agency known as the Nigerian Upstream Regulatory Commission which will be responsible for the technical and commercial regulation of upstream petroleum operations alone.

READ: Nigeria to handover TAM of refineries to Indian companies

The Petroleum Industry Bill (PIB) was first introduced to the National Assembly in December 2008. A presidential committee set up in 2007 to look into the oil and gas sector came up with this bill, which aims to increase transparency at the NNPC and to increase Nigeria’s share of oil revenue. Drafts of the bill, however, became very contentious due to objections from the international oil companies (IOCs) and the Nigerian National Petroleum
Corporation (NNPC). Consequently, the bill was never passed into law. Towards the end of 2015, the PIB was amended to speed up its passage and was broken into different bills, one of which was the PIGB, to address the governance framework of the oil industry. The Senate President noted that the plan was to expedite the aspects of the old law that were not controversial while the controversial areas could be placed on hold. The two houses passed
the PIGB in 2018 but the President did not sign the bill till it ran out of time.

READ: FG projects $2 billion annual revenue from Escravos Gas project

In all the versions of the Bill, key themes that have constantly featured include; The ownership and management of petroleum resources, functions and powers of the Minister of Petroleum, the establishment of the Nigerian Petroleum Regulatory Commission (NPRC) to act as a regulator for the industry and the restructuring of the NNPC. According to the Minister of State for Petroleum Resources Timipre Sylva, this version that has been sent to the National Assembly is a harmonisation of all the existing versions from 2000 to date with necessary adjustments to address the concerns raised by the industry players. One of such concern was the recommendation of a single regulator for the entire industry as was stated in the PIGB which has been addressed in the current version of the bill.

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READ: FEC approves $40 oil benchmark for 2021 budget

With more than a decade of deliberations and revisions, it will be a great relief to all stakeholders if this version of the Bill is finally passed into law. Currently, Nigeria is said to have one of the least competitive Deepwater fiscal terms in Africa and is increasingly losing significant amounts of potential investments to other African countries. Many stakeholders hold strongly that new investments in the oil sector is dependent on the passage of the PIB which would take a more holistic approach in addressing issues around the fiscal terms especially following the passage of the Deep Offshore and Inland Basin Production Sharing Contracts (amendment) Bill, 2019 (PSC Amendment Bill).


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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Columnists

Nigerian women need over 50% representation in government by 2023

In Nigeria, there is still a need for Nigerian women to have up to 50% representation in government.

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Women are taking part in the governance and nation-building of their countries. In October 2019, the global participation rate of women at the national level was 24.5% compared to 8% in 2013 which is quite reassuring. However, in Nigeria, there is still a need for Nigerian women to have up to 50% representation in government.

The reason more women are needed in governance is that they have the expertise to aid in achieving a stronger and vibrant democracy. According to Mr Ban Ki-moon, the former Secretary-General of the United Nation, “When we empower women, we empower communities and nations and the entire human communities.”

A good number of women in Nigeria have made a significant impact on governance and nation-building. Historically, once women come together, they can make things happen because they understand their issues and can articulate them from a point of succinct comprehension.

Mrs. Fumilayo Ramson-Kuti was an activist and a political campaigner – 30 years ago, when there was a tax levy on women in Egba land, she coordinated a women’s union group after a long tussle with the colonial administration and traditional rulers.

Dr. Ngozi Okonjo-Iweala is another prominent woman in the global space. She served as Nigeria’s Finance Minister and also as Nigeria’s Foreign Affairs Minister. Currently, she is on the verge of becoming the first female and the first African Director-General of the World Trade Organization (WTO).

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Asides from these two, a lot of women are making waves in society – not only in politics but also in managerial positions and businesses.

Factors that hinder women’s participation in politics

 In 2016, there was a study by McKinsey that revealed that only 5% of women are CEOs of companies, 22% cabinet members, while 24% are elected to official positions in Africa.

More so, in the last election 2019 in Nigeria, there were up to 3000 women candidates across all the parties. However, only 64 women were elected and appointed into political offices. Looking at the figures, there is a clear indication that it is very low and needs to be addressed as the 2023 election approaches.

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Here are the major challenges affecting women’s involvement in politics in Nigeria.

  • Godfathers: In politics, godfatherism is a very big role. For women who are not able to build that network, it becomes a very big issue for them. To avert that, women are advised to create their own network in politics – support one another and assist each other in climbing the ladder, especially for those who are already in government.
  • Raising funds: Election campaigns are very expensive to participate in.
  • Religious factor/Traditional factors: A lot of people still feel women should be seen and not heard, because they are under a man and should be submissive. Cultural & religious barriers still exists, and it prohibits women from fully contributing to governance. The emergence of women as leaders does not need to subjugate their cultural and religious identities. Men & Women need to understand that it is only through joint decision-making and cooperation, that the society can thrive.

Here are what women can do to thrive in politics

For women to have 50% representation in government, here are what is needed.

  • Those already elected must see themselves as a springboard and position themselves strategically, so they can increase the number of women in political offices. It is also important for women to leverage technology and use social media to enable them to build a community of women leaders/activists.
  • Having already announced the date for 2023 election, it is imperative that women start preparing themselves ahead of the election and strategize on how to get more women elected to the government.
  • Finally, having a skill is very crucial for women who want to be community leaders.

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Columnists

Trump or Biden? How the US Presidential election will impact the stock market

A Trump victory will see a stock market bump, as traders buy shares to cover their Put options.

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US stocks are falling and volatility is going to increase as the US election head to a close on November 3rd. However, this is a systematic fall, meaning every stock in every sector is falling. Every sector save for a few healthcare stocks is down – irrespective of earnings. Why would Amazon stocks fall, even as demand is up?  This is a big market “tell” that the market sell-off has nothing to do with fundamentals.

Image 1 shows the Standard & Poor 500 index stocks categorized by sectors and industries.

Another key indicator that shows the market’s hand is the “VIX” – the trading symbol for the CBOE Volatility Index – that measures the implied volatility of the S&P 500 index. The VIX is muted, it’s up slightly – but nowhere near the levels seen in March and July of this year. What this tells us is that the market is less fearful. In other words, this is a planned sale by institutional investors not driven really by COVID-19 or stimulus fears.

Image 2

Why are all sectors in the market falling? The answer is simple; Investors are hedging against a Joe Biden victory in November.

Joe Biden‘s tax plan calls for an across the board tax hike on income, including Capital Gains taxes. This means if you filed as a single, bought the US Stocks in 2016 by buying the Vanguard Total Stock Market Index Investor (VTSMX), your return in 2019 would have been 52.2%. This return would have triggered a capital gains tax of 20%, if your income exceeded $441.451 as a single filer.

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Image 3

Donald Trump on the other hand will tax long-term capital gain at 39.6$% on income above $1m. The maths is simple, investors that have made money in the stock market under the Trump tax cuts have an incentive to sell their stocks today or buy a Put option – to take in cash today and wait.

If Biden wins, they pay Capital gains taxes at the lower 20%; if Trump wins, they already have banked on their cash.

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Can you see the opportunity?

If Trump wins, these investors have to buy back those shares. Thus, a Trump victory and the Republican Party retaining the Senate will see a stock market bump, as traders buy shares to cover their Put options.

This is a simple play – if you think Trump will win, buy the market and go bullish.

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Columnists

October PMI reveals rebound in economic activities

Manufacturing PMI has remained below 50 index points for the past six consecutive months.

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Manufacturing: Activity levels pick up albeit readings still below water

According to the Purchasing Managers Index (PMI) data released by the Central Bank of Nigeria (CBN) for the month of October, activity levels in the manufacturing and nonmanufacturing sectors strengthened even as readings remained below 50 index points. Specifically, the manufacturing PMI expanded to 49.4 in October from 46.9 in September, indicating slower contraction compared to the prior five months. Similarly, the nonmanufacturing PMI strengthened to 46.8 in October from 41.9 in September, halting two months of consecutive contraction in the index. That said, we note that Manufacturing PMI has remained below 50 index points for the past six consecutive months while NonManfacturing PMI has been below 50 index points for the past seven consecutive months.

Across the key indices in the manufacturing PMI, save for Supplier delivery time (-1.7) which recorded some deterioration, the remaining four indices in the manufacturing sector improved in October; Raw materials/WIP Inventory (+3.2), New orders (+4.8), Production level (+2.7) and Employment level (+1.9). We think the deterioration in Supplier delivery time reflects the impact of the nationwide unrest and peaceful protests on logistics and distribution channels of manufacturing firms. Furthermore, we note that while Employment
level and Raw material inventories improved in October, they remain below the 50-point mark which reflects weak labour employment and FX illiquidity challenges impacting ability to import critical raw materials. The data further revealed that, of the 14 surveyed subsectors in the manufacturing sector, six (compared to four in September) reported growth while 8 (compared to ten in September) contracted.

For non-manufacturing PMI, all four of the key metrics recorded improvement albeit they all remained below the 50-point mark. Across all the indices; Business Activity (+5.0), Level of new orders (+8.3), Employment level (+2.6) and Inventory level (+3.2) showed decent improvements. We think the decent recovery in Non-manufacturing PMI was driven by sustained recovery in activities of service-based organisations in the face of reduced covid19 restrictions.


CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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