Lower Oil Prices
Moody’s rating agency, has said, the coronavirus pandemic accelerates structural change in a collective demand for oil. Reducing the industry’s need to develop higher-cost reserves for reinvestment, and, support production levels and growth the next three to five years.
Will curtail industry investment — Moody’s
Moody’s rating agency, has said, the coronavirus pandemic accelerates structural change in a collective demand for oil. Reducing the industry’s need to develop higher-cost reserves for reinvestment, and, support production levels and growth the next three to five years.
Moody’s has reduced its medium-term oil price assumptions US$45-$65/barrel (bbl), down from US$50-$70/ bbl.
The price range reflects the view that oil prices will remain highly volatile, with periods outside the top or bottom ends of the range. Geopolitical issues or attempts to manage supply by the OPEC-plus group of oil-producing nations will also lead to price fluctuations from time to time, it said.
According to Moody’s, government measures to reduce the spread of the coronavirus have restricted oil-intensive activities such as domestic and international air travel, which will recover more slowly than overall GDP.
High inventories of both oil and fuels globally will further slow the pace of recovery in oil demand and prices.
In Ghana, the government has predicted significant oil revenue losses due to the oil price collapse. Finance Minister Ken Ofori-Atta told Parliament in March that at an average crude oil price of US$30 per barrel this year, the government will register a shortfall in oil receipts amounting to GH?5.7bn.
The shortfall will lead to a reduction in the annual budget funding amount from petroleum revenues. It will also trigger a fall in transfers to the Ghana National Petroleum Corporation (GNPC) by GH?642m, according to finance ministry estimates, which is nearly 40 percent of the national oil company’s original budgetary allocation of GH?1.7bn.
Experts predicted oil companies might be compelled to seek external funds to help finance key investments. International oil companies in Ghana, such as Irish major Tullow Oil, have announced cuts to capital expenditure for 2020 in the wake of the oil price decline.
In response to the exceptional decline in demand, Moody’s said the global oil industry has mobilized to implement significant production cuts—about 10 percent from December 2019 levels.
The OPEC-plus group of oil-producing nations has agreed to cut oil production for two years by about 7m barrels per day (bbl/day) from February 2020 levels, starting in May 2020.
The International Energy Association (IEA) estimates that by late 2020, world oil demand will return to levels some 6.5m bbl/day, or 6 percent, below pre-crisis levels.
European Union Invests Over €18 Million
To boost strategic agricultural investments for job creation through the inclusion of the private sector in agriculture, the European Union (EU), with the Government of Sierra Leone, has launched 15 Grants contracts worth over 18 (€18) million Euros.
On agricultural activities
To boost strategic agricultural investments for job creation through the inclusion of the private sector in agriculture, the European Union (EU), with the Government of Sierra Leone, has launched 15 Grants contracts worth over 18 million Euros (€18). The project expected to benefit about 8000 farmers. Increase the quality and quantity of Cocoa, Coffee, Cashew production, processing, marketing, and trading as part of the Government of Sierra Leone (GoSL) and the European Union Boosting Agriculture for Food Security Project (BAFS). Also, a total of 2,205 farmers are to improve food farming techniques adaptable to climate change, increased market access, and local entrepreneurship.
The ceremony took place on Thursday 20th February 2020, at the Miatta Conference car park, in Freetown. In attendance, the country's Vice President, Dr.Mohamed Juldeh Jalloh.
The grants will enable the beneficiaries to implement activities that will promote innovative and integrated farming techniques that will enhance market linkages for smallholder farmers and build their capacities to improve on their incomes as well as food and nutrition.
It would also support women and youth employment through small and medium-sized enterprise development activities.
The initiative fits into the Ministry of Agriculture and Forestry national agricultural transformation plan, which has four key priorities; rice self-sufficiency, life stock development, crop diversification, and sustainable forest and biodiversity.
Increased Production and Productivity
Permanent Secretary attached to the Ministry of Agriculture and Forestry, Mrs. Fatmata Mustapha, encouraged the recipients to take full advantage of the need to use the grants to further capacity in the increasing production and productivity along value chains.
Vice-President, Juldeh Jalloh expressed gratitude to the EU for facilitating the project; noting, that it was important for the Government’s drive for economic diversification. He said that President Julius Maada Bio, has over the years, continued to reiterate that agriculture was a priority in food-sufficiency that supports various value chains and encourages the growth of small-scale industries creating over 24,000 employment for women and youth.
The Minister of Planning and Economic Development, Dr. Francis Kai-Kai, noted the numerous challenges facing the agriculture sector ranging from low productivity, use of rudimentary technology, low-level infrastructure for marketing, among others.
These challenges recognized and addressed in the Medium Term National Development Plan (2019-2023) in cluster 2.1: Improving the productivity and commercialization of the agricultural sector.
In his statement, the Minister of Agriculture and Forestry, Dennis Vandi said the Ministry would provide the requisite enabling environment for the private sector, and development that would seek to improve the agriculture sector.
Tom Vens, the EU Ambassador, was convinced the new approach could unlock private investment and exploit significant opportunities in the agricultural sector with a specific focus on jobs for the youths. What was witnessed was the result of a highly competitive process in which a total of 67 applications and 15 projects emerged.
The EU support to BAFS recipients covers export cash crops and sustainable agriculture, diversification (Crops and Livestock). Support short value chains include non-formal micro-enterprises produced with artisanal methods, and a limited number of intermediaries between smallholder farmers, and the market. And support to large-scale value chains integrating formal and already well-established SMEs in the agribusiness sector.