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나이지리아 주나이지리아 대한민국대사관 2023/07/10
WEEKLY ECONOMIC TRENDS
Friday, 30/06/2023
Energy Resource & Infrastructure Trends
Nigeria’s OPEC Oil Production Shortfall Hits 80m Barrels, 44% in Five Months (Thisday Newspaper, June 27, 2023)
• Nigeria’s oil production continued to fall below the target set for it by the Organisation of Petroleum Exporting Countries (OPEC) in the first five months of 2023, leading to a production of just 56 per cent of total expected output during the period, data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed. THISDAY analysis of the data revealed that whereas the country was expected to produce an estimated 261.3 million barrels during the period, given a 1.742 million daily production quota and about 52.26 million barrels every month, Nigeria’s total volume between January and May 2023, was 181.5 million barrels.
• The slump in production, which had become more pronounced since 2020, left a deficit of 80 million barrels of crude oil not produced during the period. In monetary terms, at a conservative oil price of $70 to a barrel during the period, it means that Nigeria, between January and May, 2023 lost a whopping gross sum of $5.6 billion due to underproduction of its crude oil quota. In percentages, Nigeria was unable to produce about 44 per cent of its OPEC quota allocation during the period under consideration. A few weeks ago, the international oil cartel slashed Nigeria’s production baseline to 1.38 million barrels per day for 2024 due to the prolonged inability of the country to consistently meet its quota for the commodity. The decision of the Saudi-led coalition, which was accepted by the Nigerian delegation to the OPEC meeting in Vienna, came as a shock to many close watchers of the industry in the country.
• It is also believed that the decision does not bode well for a country, which gets over 90 per cent of its foreign exchange earnings from the export of the commodity. This year, Nigeria’s benchmark oil production in the budget is 1.69 million bpd, with a $75 price per barrel. However, while market forces and OPEC’s stabilisation policies have helped to keep prices around the expected benchmark, Nigeria’s production has been lagging behind. In all, out of the over 52 million barrels expected monthly volume, the country’s output was 39 million barrels in January, 36.5 million barrels in February and 39.3 million barrels in March.
• April was the most-hit in terms of the low volume of oil drilled, with Nigeria only able to produce 29.95 million barrels out of the over 52.3 million barrels expected cumulative production for the month. In May, the country produced 36.69 million barrels to continue the country’s deficit run. Recall that in April, after a period of seeming respite in terms of ramping up of drilling activities, Nigeria’s crude oil production fell to a seven-month low of 998,602 barrels per day, a blow to recent modest gains made from the renewed efforts by the federal government to tackle oil theft and pipeline vandalism in the Niger Delta.
• The depleted production figure for April was partly connected with the shutting down of oil platforms and declaration of force majeure by Exxon Mobil in Nigeria mid April, especially at the Qua Iboe asset. On January 3, President Muhammadu Buhari signed the N21.83 trillion 2023 Appropriation Bill into law, the largest in Nigeria’s budget in history. It was based on a N10.49 trillion revenue, N12.1 trillion deficit and N6.31 trillion estimate for debt servicing. From the total revenue of N10.49 trillion, independent revenue had the highest share of N2.62 trillion, non-oil revenue had N2.43 trillion, while N2.23 trillion was expected from oil revenue.
• The key assumptions included an oil price benchmark of $75 per barrel; exchange rate at N435.57 per dollar; oil production of 1.69 million barrels per day and inflation rate of 17.16 per cent. Inflation is currently over 22 per cent, while the exchange is over $750. The budget deficit may widen if oil production does not improve markedly. Nigeria’s continuing underproduction last month, was despite Qua Iboe growing from a slump of 1.9 million barrels in April to 4 million barrels in May while production at the Bonny terminal rose from 2.2 million barrels to 2.9 million barrels.
• But in spite the shortfall in OPEC production quota, the NUPRC data showed that Nigeria’s crude oil output grew by 185,000 barrels per day, to hit 1.183 million barrels daily output in May this year. It also saw output (crude and condensate) from Nigeria’s problematic Trans-Niger Pipeline (TNP) increase considerably during the month from 3 million barrels to 3.7 million barrels. While overall, oil production output grew 18.53 per cent compared to April 2023 when it fell to 998,602 bpd, total liquids in May was largely boosted by the increased flow through the TNP line which jumped 24 per cent.
• Although total self-reported drilling by the NUPRC stood at 1.183 million barrels per day, but when condensate, which is excluded from OPEC computation is added, the data highlighted that output rose from 1.245 million bpd in April 2023, to 1.427 million bpd last month. However, despite the over 18 per cent additional output in May, Nigeria’s expected crude oil volume was still a far cry from the 1.742 million bpd allocated to the country by the international oil cartel. Beside other several challenges, Nigeria has had to battle the menace of oil theft and pipeline vandalism as well as waning investment in the oil sector, in the last few years, developments which have hobbled oil production in the country.
• Despite the low production, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, earlier in the month, insisted that by July 2023, Nigeria’s crude oil production will reach 1.8 million barrels per day and 2 million barrels per day by December 2023. He said: “The budget of this country is based on the cumulative production of our crude oil and condensates. Mind you, sometimes, these condensates are more expensive than the crude oil, so it’s the total liquids we are dealing with.“The total number of liquids as of today is up to 1.6 million barrels per day. We have a line of sight, by the end of July, we will hit 1.8 million barrels per day, and we will hit 2 million barrels per day by the end of December.”
Forex challenge driving petrol price towards N581 per litre (Vanguard Newspaper, June 27, 2023)
• There are strong indications that the national average price of petrol will rise further as marketers benchmark costs against rising exchange rates. Marketers who spoke to Vanguard yesterday, against the backdrop of continued depreciation of the naira, said the implication would be that their cost has also increased beyond the figure used in fixing current pump prices. The current national average pump price of N500 per litre was arrived at with an exchange rate of N661/$.
• Already, Vanguard findings have indicated that most major oil marketers have adjusted their prices to N492-495 in Lagos, contrary to the N488 earlier positions floated by the industry shortly after the removal of subsidy was announced by President Bola Tinubu on May 29, 2023. Also in Lagos, most independent marketers have adjusted further to an average of N515, while outside Lagos the pump price has jumped to over N650. The marketers said that with the closing rate at the Investors and Exporters, I&E, foreign exchange window since last week at about N770/$ the pump price is likely to hit N550 per litre by early next month.
Marketers begin importation
• This comes as the marketers begin the process of importing the product under the new market regime. But checks by Vanguard, yesterday, showed that as a result of the changes occasioned by forex, oil marketers are still finding the business environment very uncertain to raise funds for the importation of the product. It showed that although a few oil marketers have started negotiating with the banks, such engagements were being scuttled by the current instability in the business environment.
• But the oil marketers said they have not given up as efforts will be intensified to import commercial quantities of petrol. The first deliveries of 11 Plc, Ardova, and others are to arrive in mid-July Commenting on the development, yesterday, the Chief Executive Officer, of Ardova Plc, who doubles as Chairman of MOMAN, Mr Olumide Adeosun, said: “It takes a little bit of time to arrange the forex, which still is not optimal at present.
• “Then the logistics, availability of suitable vessels and other issues also affect operations. All the same, we expect to see some inflows from non-NNPC Limited sources in July 2023.’’ Also, commenting on prices, he said: “Prices may go up before they come down in any event.” The Managing Director/CEO of 11 Plc, Adetunji Oyebanji, who was also a former chairman of MOMAN, confirmed planned moves by his company to import the product, stressing “it is likely to be towards the middle of July 2023.” This means that major and independent oil marketers will still depend on NNPC Limited to bring in the product from the global market in at least the next month.
We have not started to import — IPMAN
• Like major marketers, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Mike Osatuyi, who confirmed that members had not started importation, said: “We now need more funds to put into the business than before. Remember, the exchange rate of the naira has also increased from over N400/ a dollar to over N700/per dollar. “We are currently discussing with the banks. It will take some time to conclude the various discussions before securing funds for the importation.”
No fixed price at depots — DAPPMAN
• Meanwhile, Vanguard gathered yesterday that the ex-depot price of petrol has risen tremendously in the past few weeks. Specifically, it indicated that from over N400 per litre, the ex-depot price of petrol has by yesterday, risen to N515 per litre, thus causing the pump price to rise further to over N500 per litre, from N488 in Lagos and environs.
• In a telephone interview with Vanguard, the Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, said the depot owners were not compelled to maintain a particular price. He said: “There is no uniform ex-depot price; each marketer, based on its individual market fundamentals, determines its own ex-depot price and any inefficient marketer loses customers because they’ll move to the cheaper, more efficient marketer.”
Sharp practices
• It was also learned that some oil marketers have cashed in on the instability in downstream to make brisk businesses, including pump manipulation and diversion to generate maximum profit. The Chief Executive, of Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Farouk Ahmed did not respond when Vanguard reached out to him yesterday. But the agency recently said it had issued licenses to six companies to commence fuel importation into the nation. Although the agency refused to make known the identity of the companies, it was gathered that Eterna Oil Plc, Emadeb and Asharami Energy are among the six granted licenses.
Discos backtrack on tariff hike, await NERC approval (The Punch Newspaper, June 27, 2023)
• Power distribution companies, on Monday, backtracked on their earlier announcement of a tariff hike projected to take effect from July 1, 2023, as they stated that the Nigerian Electricity Regulatory Commission had yet to approve the hike. Various public notices from some of the Discos seen on Sunday had stated that the electricity tariff would be raised by about 30 to 40 per cent for selected categories of consumers on July 1, 2023. In a public service announcement from the Abuja Electricity Distribution Company, for instance, the Disco had said, “Effective July 1, 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.
• “Under the MYTO (Multi Year Tariff Order) 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption” But in an appeal by the same AEDC, issued on Monday, the firm asked its customers to disregard the planned tariff increase as approval for such an increment had not been received. “Please disregard the circulating communication, regarding the review of electricity tariffs. Be informed that no approval for such increments has been received. We regret any inconvenience,” the AEDC stated in its latest announcement. A senior official in NERC confirmed that the regulator had not given the Discos approval to announce the hike in tariffs.
• “The commission did not give them such approval,” the official, who pleaded not to be named due to lack of approval, stated. Reacting to the development, a former spokesperson of the AEDC and seasoned expert in the sector, Olabode Fadipe, said, “NERC never publishes any position or makes any official statement. It is the Discos that does that. Once the Discos receive approval from NERC, they effect the adjustment straightaway. “Discos perhaps got approval for 1st July and chose to put their customers on notice only to be told that their action was hasty. That end users have been told to ignore the message does not mean that the increase won’t be affected.”
• Although The PUNCH later reached out to a spokesperson for Ikeja Electric, Ayeni Akinola, who described the initial trending circular as “fake”, the circular advised customers with prepaid meters to purchase energy units in bulk before the price increment takes effect from July 1. “If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate. “For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August,” it stated. The PUNCH also reached out to the Assistant Manager Communications, Nigerian Electricity Regulatory Commission, Mary Anavhe, who dismissed an imminent increase in tariffs.
• The PUNCH further reached out to the spokespersons for Eko Disco and Ibadan Electric, Babatunde Lasaki, and Busolami Tunwase, respectively, including the Executive Secretary for the Association of Nigerian Electricity Distributors, Sunday Oduntan. While both Lasaki and Oduntan declined to pick up calls nor responded to inquiries on the development, Tunwase referred The PUNCH to NERC for an official response. “We are not responsible for tariff increase or decrease, NERC is. We only carry out such directives from NERC,” she said in a response note. However, when The PUNCH contacted Sani, he declined to respond to both calls and messages. A minor electricity tariff is slated to hold every six months. The last review was carried out in December.
Buhari hands over N974bn uncompleted road projects (The Punch Newspaper, June 27, 2023)
• President Bola Tinubu’s administration inherited 38 uncompleted road projects worth N979bn from the Muhammadu Buhari government, findings by The PUNCH have shown. The projects were identified through an analysis of the 2023 budget and cross-checked with the national monitoring and evaluation platform, EYEMARK, which was launched by Buhari in December last year. The PUNCH reports that despite assurances from the former President to ensure the completion of the roads before the end of his tenure, several key road networks were left half-done due to low revenue and other challenges. One of the critical projects is the expansion of the Abuja-Keffi dual carriageway and the dualization of the Keffi-Akwanga-Lafia-Makurdi road in Nasarawa State.
• Other key projects that have yet to be completed include the Benue State Phase 1, Lafia bypass, and 9th mile (Enugu)-Otukpo-Makurdi Road in Enugu and Benue States Phase II which reportedly costs about N32.5bn. Also on the list is the rehabilitation of the Ikorodu-Shagamu Road including the access road to Mosimi in Lagos State at the cost of N100m and the full scope development of Federal Capital Terriory Highway 105 (Kuje Road) from the airport expressway to the outer Southern Expressway with Spur at Kyami District valued at N54.95bn. The dualization of Akure-Ado Ekiti Road in Ondo/Ekiti states was put at N90bn. Other projects include the dualisation of Obajana Junction to Benin phase 2: Section 11 (Okene to Auchi) at the cost of N5bn.
• Other unfinished road projects include the construction of Bichi township roads (N1.40bn); Dawakin Tofa-Gwarzo-Dayi Road in Kano (N2bn); 5.4km Abuja- Keffi Expressway and the 220km Keffi- Akwanga-Lafia- Makurdi federal roads in the North-Central geo-political zone of the country awarded for N166.36bn. Others are the Keffi-Akwanga-Lafia road project valued at N101.1bn, the Chanchangi bridge along the Takum-Wukari road in Taraba State at the cost of N100m, dualisation of the Jattu-Fugar-Agenebode road and the reconstruction of Irekpa-Fugar-Agenebode road in Edo State at the cost of N250m. Another project is the Lagos-Ibadan Expressway, which reportedly costs about N315bn and is currently handled by Julius Berger Nigeria Plc and RCC. The 126.6km road is said to be at 85 per cent completion but the prolonged construction has subjected motorists and commuters to untold hardship, with many spending several hours in traffic daily.
• Also, N400m was allocated for the construction of the Bidda-Sacci-Nupeko road and the Nupeko/Patigi bridge across the River Niger linking Nupeko and Patigi in Niger/Kwara States. FG allays fears Speaking in an interview with The PUNCH on Sunday, the Director of Highways South-West, Adedamola Kuti, assured that all the outstanding projects would be completed. He noted, “The way things are done in the federal civil service is quite different. You would agree that the previous government inherited uncompleted road projects and they completed some of them even as they initiated new ones, so if the new administration has taken over the uncompleted tasks, we will ensure that those projects are completed. We are working hard and no project will be abandoned.”
• Findings by our correspondent on Sunday indicate that the Federal Government earmarked N25bn to pay off local contractors this year. The amount was contained in the 2023 budget However, the figure is a far cry from the N11trn owed to local contractors by successive administrations. The contractors who have completed the construction of various highways and other infrastructural projects across the country and issued certificates of completion have protested the failure of the authorities to pay them for contracts executed up to 12 years ago. The President of the Local Contractors Association of Nigeria, Dandy Rowland, had indicated in an interview last year that the government owed members of the association N28bn.
• Also, the former Minister of Works and Housing, Babatunde Fashola, during the ministry 2023 budget defence, had acknowledged that a total of N765bn unpaid completion certificates were still being owed while the government is committed to ongoing highway contractors to the tune of about N10.4tn. However, when our correspondent sought to get an update on the issue, a highly placed source in the ministry attributed the delayed payment to the harmonisation of the amounts with the finance ministry. The source added that there is no timeframe on when the contractors would be paid. The source said, “We are still harmonising our figures with that of the finance ministry.
• No payment has been made yet and there is no time frame when it (harmonisation) will be completed.” Meanwhile, the PUNCH has gathered that the freeze on financial transactions of the ministries, departments, and agencies by the current administration has not stopped payment to contractors involved in the construction of ongoing road projects. A source explained that though recurrent expenditure has been suspended, contractors are still being paid because it is under capital vote and paid directly by the federal government. “The recent ban on MDAs accounts has delayed all recurrent expenditure in the ministry, even our duty tour allowance has not been paid.
• TSA (Treasury Single Account) is currently compromised and that is why all payments have been stopped. The ministry can only process emergency payments like paying for a portrait picture of the new president. “However, contractors are still being paid because their budget is under capital vote and is under the federal government. All our contractors are still getting paid without hindrance because if it’s stopped, developments will cease in the country.” Efforts to reach the ministry’s spokesperson, Mrs Blessing Adams-Lere, proved abortive as she did not respond to phone calls. She had yet to reply to a text message as of press time.
Subsidy: Lack of license, foreign exchange, others hinder fuel importation (Vanguard Newspaper, June 26, 2023)
• Barely a month after deregulation, operators in the downstream sector have not been able to import petrol into Nigeria, due mainly to a lack of license and foreign exchange. Checks by Vanguard, weekend, indicated that many oil marketers that applied for license are still waiting for the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to release it. It also showed that the six companies, including Eterna, which got the license have not started importing the product into the country.
• The checks further indicated that despite the floatation of foreign exchange rates by the Central Bank of Nigeria, CBN, many oil companies still find it difficult to go into business. A visit to many private depots in Apapa, Lagos, showed that the oil marketers are not contemplating importation in the coming weeks because of uncertainties currently staring oil marketers in the face. This means the Nigerian National Petroleum Company Limited is the only entity still importing fuel into the country.
We have not started importing fuel — oil marketers
• The national president, Independent Petroleum Marketers Association of Nigeria, IPMAN, Elder Chinedu Okoronkwo, could not be reached for comments, yesterday. But in an interview with Vanguard, yesterday, the national operations controller of IPMAN, Mike Osatuyi, who noted said the oil marketers have not yet commenced the importation, said: “The cost of importing petrol has tripled because of subsidy withdrawal.
• ‘’We now need more funds to put into the business than before. Remember the exchange rate of the naira has also increased from over N400/ a dollar to over N700/per a dollar. “This means that a lot of funds are needed than before. it is not easy for a single company to bring out that level of money. So, we are discussing with the banks. ‘’It will take some time to conclude the various discussions before securing funds for the importation. The price of petrol may be high at the initial period, but it would drop later as many oil marketers begin to import the product.”
Ex-depot price rises to N505 per litre
• Already, he said the ex-depot price of the product has increased from over N400 per litre to N505 over the weekend, thus forcing the independent marketers that lift the product from private depots to sell at different prices, ranging from N510 -N530, depending on location, to recover cost.
It takes time to get license —Applicant
• A chief executive officer, who pleaded anonymity, said: “We have applied for license to import. We are waiting on the regulator. We also need huge foreign exchange at a competitive rate because it cost billions of naira to bring a mother vessel into the country. This has to be done in an environment of certainty.
• “We cannot dabble into fuel importation at this time. Adequate caution is required from everyone, including the banks that will provide the funds, to ensure that such investment could be recovered at least with minimal profit. ‘’It is a business that one can easily get his or her fingers burnt. We are currently watching the investment landscape and will import at the right time.”
Regulator keeps mum
• The Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Farouk Ahmed, did not respond when Vanguard reached out yesterday.
FG deploys more mini-grids in rural areas (The Punch Newspaper, June 26, 2023)
• The Federal Government has increased the deployment of mini-grids to boost power supply in rural communities and help cushion the effect of the recent removal of subsidy on Premium Motor Spirit, popularly called petrol. It disclosed this in a statement issued in Abuja on Sunday by the Rural Electrification Agency, adding that the mini-grids would provide 24/7 electricity in the communities where they were deployed.
• The Managing Director, REA, Ahmed Salihijo, who just inspected the 200KWp Solar Hybrid Mini-Grid in Danchitagi Community, Lavun Local Government Area, Niger State, said the facility, just like others, would cut down the volume PMS purchased by beneficiaries of the community. He explained that through the Nigeria Electrification Project-Performance Based Grant initiative, over 80 similar mini-grids had been deployed across the country, ensuring equitable access to electricity.
• Salihijo said the 200KWp mini-grid in Danchitagi Community was built to supply uninterrupted electricity to the area, which hosts about 2,670 people who were predominantly farmers. He explained that of the 534 consumers of electricity from the facility, 13 of them use it for services such as tailoring, welding, refrigeration and milling of rice, as well as other farm produce. “From the feedback we are getting, most people actually rely on petrol generators and with this mini-grid, it means that they are going to buy less of that petrol. “That means with the subsidy removal, this could serve as a palliative that will help them cushion the effects of the removal of subsidy,” the REA boss stated.
Disruptions threaten Nigeria’s oil production – EIA (The Punch Newspaper, June 25, 2023)
• A US agency, Energy Information Administration has said Nigeria was no longer Africa’s highest crude oil producer due to disruptions, which were threatening its production outputs. In its latest report on ‘Country Analysis Brief: Nigeria, EIA said Angola had overtaken Nigeria due to unplanned production outages. “For many years, more crude oil was produced in Nigeria than in any other country in Africa. However, unplanned production outages—or disruptions—in Nigeria have, at times, resulted in its crude oil production falling below that of Angola, the second-highest-producing country in Africa. Disruptions remain a significant and persistent downside risk to Nigeria’s crude oil production,” the report said.
• The EIA further explained that Angola’s production output surpassed that of Nigeria in April. “In the third quarter of 2022, operators of the Trans Niger pipeline and the Forcados export terminal closed their facilities for repairs. The closures triggered a sharp drop in Nigeria’s crude oil output, from 1.1 million barrels per day (b/d) in the second quarter to below 1 million b/d in the third quarter. Nigeria’s production recovered by the beginning of 2023, but the oil workers’ strike disrupted production again in April 2023. Crude oil production in Nigeria fell to slightly more than 1 million b/d in April of this year, dropping below Angola’s production, which was estimated at 1.1 million b/d that month,” the report said.
• Checks by The PUNCH on the Organisation of the Petroleum Exporting Countries production for April revealed that while Angola produced 1.063 million barrels per day in April, Nigeria’s output was a mere 999, 000 barrels per day. The agency then highlighted steps already taken by the Nigerian government to make the country more attractive for oil and natural gas investment. “On August 16, 2021, the Petroleum Industry Act was passed in Nigeria. The legislation is the culmination of a 20-year effort to overhaul the hydrocarbon industry’s legal framework, attract investor interest in upstream development, and address grievances of communities affected by oil extraction,” it further stated.
• It listed changes to Nigeria’s hydrocarbons legal framework to include creating two distinct industry regulators, the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority; restructuring the Nigerian National Petroleum Corporation (the national oil company), lowering the tax and royalty structure for crude oil production and modifying terms and conditions for upstream licensing and leasing. It, however, added that despite the legislative changes, oil theft and sabotage to export infrastructure continued to be major concerns because the damage caused production losses and environmental pollution. “Crude oil disruptions often force oil companies to shut down production and limit their ability to export crude oil,” EIA asserted.
Other Economic Trends
FG Okays Vehicle Importation Via Land Borders (Daily Trust Newspaper, June 30, 2023)
• The federal government may have lifted the ban on importation of vehicles through the land borders, it has been revealed. The development is projected to revitalise economic activities within the corridor. Daily Trust reports that the last administration had closed land borders between Nigeria and Cotonou, Benin Republic, and subsequently banned the importation of vehicles through that axis.
• The Director of Road Transport in the Ministry of Transportation, Ibrahim Musa, yesterday, however, disclosed that the federal government has approved the re-opening of the Seme border for the importation of vehicles. He disclosed this at the Economic Community of West African States (ECOWAS) meeting, organised between officials of Nigeria and Benin. Musa said the development followed complaints by freight forwarders operating at the border.
• The director, who spoke at the ECOWAS Monitoring Team’s visit to the Seme-Krake Joint Border Post, said, “I was here with the former minister of state for transportation when the freight forwarders pleaded that the border should be reactivated for the free movement of goods and services. “The former minister made us prepare a memo to that effect. It was considered and sent to the government.” Also speaking, the Customs Area Controller of Seme Border Command, Dera Nnadi, said the service has noticed a reduction in its revenue since the importation of vehicles was banned from the land borders
External reserves fall by $3bn in six months – CBN (The Punch Newspaper, June 30, 2023)
• Nigeria’s external reserves fell by $2.85bn in the first half of 2023 due to external debt finance among other challenges, figures obtained from the Central Bank of Nigeria have revealed. The CBN revealed in its figures on movement on foreign reserves that the reserves which commenced January 3, 2023 at $37.07bn fell to $34.22bn as of the end of June 26, 2023. According to the CBN, the reserves fell by $3.43bn in 2022, from $40.52bn as of the end of December 31, 2021, to $37.09bn as of December 29, 2022.
• At previous Monetary Policy Committee meetings, the former Governor, CBN, Godwin Emefiele, said, “The Committee, however, noted the marginal decline in the level of gross external reserves to $36.13bn in February 2023, from $36.4bn in January 2023, a decrease of 0.7 per cent, reflecting the downtrend in crude oil prices, as global uncertainties persist.” “The Committee, also, noted the moderate decline in the level of gross external reserves to $34.91bn in April 2023, from $35.14bn at end-March 2023, attributable to transactions in the foreign exchange market and largely to minuscule accretion to reserves from crude oil exports,” He said. A member of the MPC, Adeola Adenikinju, said current and capital accounts were higher in Q3, 2022 than in Q2, 2022.
• He said, “Gross external reserves fell by 0.7 per cent to $36.13bn at end-February 2022 from $36.4bn at end-January 2022. This was driven by the rise in debt service payments and foreign exchange swap transactions. “The FGN’s net fiscal operations resulted in an expansionary fiscal deficit in February 2023 (m-o-m). The overall deficit rose by -N539.01bn in February 2023 compared to – N417.75 in January 2023. “Both government expenditure and revenue declined. FGN Debt increased owing to new borrowings to finance the deficit in the 2022 budget and new loans by subnational governments.”
• Another member of the MPC, Mike Obadan, said foreign exchange market pressures continue to pose challenges as supply-demand imbalances remained unrelenting. “The external reserves position has remained weak against the backdrop of the limited capacity of the country to earn foreign exchange from both non-oil and oil exports,” he said. A good handle on the oil theft and other challenges along with commencement of local refining of oil by the Dangote Refinery and Petrochemicals Company coupled with elimination of the notorious petrol subsidy regime should help to achieve stability in the foreign exchange market and exchange rate, he said.
Naira devaluation pushes up vehicles duties by 40% (The Punch Newspaper, June 26, 2023)
• The Central Bank of Nigeria and the Nigeria Customs Service have taken the ongoing foreign exchange reforms to the maritime sector with a 40 per cent increase in the exchange rate used for calculating import duty. The NCS on Saturday raised the exchange rate used for the calculation of import duty from N422.30/dollar to N589/dollar.
• The development, which has led to a corresponding 40 per cent increase in import duty on imported cargoes including vehicles, has angered operators in the maritime sector with clearing agents, freight forwarders, and importers calling for an immediate reversal of the policy. Stakeholders said the policy would lead to job losses in the maritime sector and a drastic fall in the number of imported vehicles. This, they said, could affect business and economic growth. Economists also said the government was insensitive, saying the policy was capable of affecting Nigerians negatively.
• Also speaking, the Founder of the National Council of Managing Directors of Licensed Customs Agents, Mr Lucky Amiwero, said, “The moment you allow the naira to float freely in terms of exchange, that is what you get. And it is going to affect the prices of goods. It is going to take a lot of licensed Customs agents out of work because most of them are going to lose their customers.” The Vice President of the National Association of Government Approved Freight Forwarders, Nnadi Ugochukwu, while remarking, said, “It will affect businesses, there is a container I have for someone, before now, we used to clear that container for N4.3m. With the new exchange rate, the clearing cost is now N6.5m.”
• Also speaking, the Secretary General of NCMDLCA, Mr Festus Ugu, “Even if the Federal Government wants to do exchange rate harmonisation, they should know how to go about it. This increase is a very big one.” However, an economist, Mr Ibrahim Tajudeen, said the policy “is in line with the overall reform of the foreign exchange market by the government. Also, it is not the first time that we are seeing such a thing. A few years ago when the currency was devalued, the exchange rate for clearing goods also increased. So it is consistent with the development or reforms going on in the foreign exchange market.
• Nevertheless, I recognise that Nigerians are going to feel the negative impact. And I think the government has to do something to help the masses at some point.” The PUNCH had reported that the CBN directed Deposit Money Banks to remove the rate cap on the naira at the official Investors’ and Exporters’ Windows of the foreign exchange market. This came barely a few weeks after President Bola Tinubu promised to unify the nation’s multiple exchange rates and less than a week before the suspension and detention of CBN Governor Godwin Emefiele, whose unorthodox monetary policies had become a stumbling block to investors and the economy.
• The CBN’s decision to float the currency was hailed by the organised private sector and economists who said the move would unify the country’s multiple exchange rates and bring sanitise the FX market. The development means buyers and sellers of foreign currency in the official FX markets are now allowed to quote rates they find comfortable in the FX market, as against the previous practice where rates were dictated by the Central Bank of Nigeria. Following the development, the naira has been on a free fall, weakening to 770.19/dollar at the close of trading at the I&E Window on Thursday, according to data from the FMDQ Securities Exchange
본 페이지에 등재된 자료는 운영기관(KIEP) 및 EMERiCs의 공식적인 입장을 대변하고 있지 않습니다.
| 이전글 | 나이지리아 계면활성제 시장 동향 | 2023-06-05 |
|---|---|---|
| 다음글 | 나이지리아 주간 경제 뉴스(6월 4주차, ENG) | 2023-07-10 |
