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UK Growth Revised Up To 5.5% Amid Higher NHS Spending And Exports Rise

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UK growth revised up to 5.5% amid higher NHS spending and exports rise

Higher NHS spending, stronger investment and a bounce back in exports helped the UK economy to recover more quickly from the lockdown at the start of the year, official figures have shown.

After shrinking by 1.4% in the first three months of the year, the economy grew by a record 5.5% in the second quarter as restrictions on activity were eased.

The Office for National Statistics said the contraction in the first quarter was smaller than the 1.6% previously estimated while growth in the second quarter was revised up from 4.8%.

The upgrade to growth meant gross domestic product was 3.3% below its level in the final three months of 2019 – the last period before the UK was affected by the Covid-19 pandemic. The shortfall from the pre-virus peak was identical to that in Germany, similar to the 3.2% in France, and smaller than the 3.8% shortfall in Italy, although the figures predate the slowdown in the third quarter caused by the “pingdemic”, supply chain strains and the energy crisis.

Jonathan Athow, the deputy national statistician for economic statistics, said health services and the arts had performed better than initially thought between April and June.

“The revised figures also show households have been saving less in recent years than previously thought. Household saving fell particularly strongly in the latest quarter from the record highs seen during the pandemic, as many people were again able to spend on shopping, eating out and driving their cars.”

A breakdown of the latest GDP figures shows upward revisions to three of the elements that contribute to growth: government spending, business investment and trade.

The ONS said government spending was up by 8.1% in the second quarter, up from 6.1%, while business investment increased by 4.5% rather than the previously estimated 2.4%.

There was also an improvement in the UK’s trade performance as the economy reopened and companies adjusted to new post-Brexit rules. Export growth in the second quarter was revised up from 4% to 6.2% while imports were revised down from 6.5% to 2.4%. Trade contributed 1.0 percentage points to the UK’s growth in the second quarter rather than subtracting 0.7 points as originally thought.

Ruth Gregory, a UK economist at Capital Economics, said the fact that the economy had grown more quickly in the second quarter meant it had less spare capacity and more prone to inflationary pressure.

“Today’s release suggests the economy is closer to its pre-pandemic level than we had previously thought and raises the risk that the Bank of England hikes interest rates sooner than our forecast of May 2022.”

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Business

Adopting CNG can reduce Nigeria’s inflation – FG

The Nigerian government has said that successfully adopting Compressed Natural Gas can reduce inflation, which soared to 33.69 per cent in April 2024.

The Programme Director of the Presidential Initiative on Compressed Natural Gas, Pi-CNG, Michael Oluwagbemi, disclosed this during a one-day South-South and South-East stakeholders’ engagement meeting in Port Harcourt, Rivers State.

He noted that Nigerians can realize between 40 to 50 per cent savings from petrol upon adopting CNG.

“It can reduce inflation. It is cheaper. You can realize between 40% and 50% savings from patrol. This is good for Nigeria, and it is safer.

“It is 18 times safer than petrol and diesel. It is cleaner and safer for the environment,” he said.

He added that Nigeria would save about $2.5 billion by converting every one million vehicles to CNG.

Recall that President Bola Ahmed Tinubu asked all federal government ministries, departments and agencies to procure CNG buses.

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Business

Nigeria won’t need to import fuel by June — Dangote

Aliko Dangote, Chairman of the Dangote Group, announced that by next month, Nigeria will no longer need to import gasoline due to the operational plans of the Dangote Refinery.

Speaking as a panellist at the Africa CEO Forum Annual Summit in Kigali, Dangote highlighted that the refinery, which has already commenced supplying diesel and aviation fuel in Nigeria, has the capacity to fulfil the diesel and petrol needs of West Africa and the aviation fuel requirements for the entire African continent.

Dangote emphasised, “Right now, Nigeria has no cause to import anything apart from gasoline, and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.”

Highlighting how far the oil company has come, Dangote expressed how they are focused on ensuring that the continent will depend less on imports in the near future.

“We have enough gasoline to give to at least the entire West Africa, and diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico,” he said.

“Today, our polypropylene and our polyethene will meet the entire demand of Africa, and we are doing base oil, which is like engine oil; we are doing linear benzyl, which is a raw material to produce detergent. We have 1.4 billion people in the population; nobody is producing that in Africa.

“So, all the raw materials for our detergents are imported. We are producing that raw material to make Africa self-sufficient.

“As I said, give us three or a maximum of four years, and Africa will not, I repeat, not import any more fertiliser from anywhere.

“We will make Africa self-sufficient in potash, phosphate, and urea; we are at three million metric tonnes, and in the next twenty months, we will be at six million metric tonnes of urea, which is the entire capacity of Egypt. We are getting there.”

Dangote recalled how his dream for further investment in Africa as well as ending fuel importation in Africa has culminated in what is now one of the biggest refineries in the world.

“For some of us, despite the boom of the capital market in the US—you know, Google, Microsoft, and the rest—we didn’t participate; we took all our money and invested in Africa.

“We had this dream just about five years ago, and we said we wanted to move from five billion dollars in revenue to thirty billion dollars in revenue, and we made it happen. It is possible and now we have made it happen and now we have finished our refinery.

“Our refinery is quite big; it is something that we believe that Africa needs. If you look at the whole continent, there are only two countries that don’t import petroleum products, which is a tragedy.

“They are only Algeria and Libya. The rest are all importers. So, we need to change and make sure that we don’t just go and produce raw materials; we should also produce finished products and create jobs.

Speaking further, the African richest man said, “One of the things we also need to know as Africans is that we produce raw materials and export them when you export raw materials and somebody now keeps importing things into your continent and dumping goods. what you are importing is poverty and exporting jobs. So, we have to change that narrative.”

“We just commissioned in February, and now we are producing jet fuel, diesel, and by next month, gasoline.

“What that would do is that we would be taking most of the African crude that is being produced and also be able to supply not only Nigeria because our capacity is too big for Nigeria, but it would also supply West Africa, Central Africa, and also South Africa.

“We have 650,000 barrels per day, 1 million metric tonnes of polypropylene, and 590,000 metric tonnes of carbon black; those are the raw materials—ink, dyes and co.

“We are expanding more. This is the first phase and we are going out to the next phase, which will start early next year.”(tribune)

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Business

Customs FX rate for import duties rises to N1,530/$

The foreign exchange (FX) rate for import duties has been adjusted by the Nigeria Customs Service (NCS) to N1,530 per dollar.

This was adopted on Friday, May 17, representing a 6.13 percent increase compared to the N1,441.58 adopted on May 6.

The NCS always adopts FX rates recommended by the Central Bank of Nigeria (CBN) for import duties based on trading activities in the official FX market

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