Crude oil production from Nigeria dropped the most in August among its peers in the Organisation of Petroleum Exporting Countries, paring the gain it recorded in the previous month.
Nigeria had in March lost the status of Africa’s top oil producer to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd.
OPEC’s Monthly Oil Market Report for September, which was released on Monday, showed that Nigeria’s oil output fell to 1.468 million bpd in August from 1.52 million bpd in the previous month, based on direct communication.
According to secondary sources, OPEC crude oil production stood at 33.24 million bpd in August, a decrease of 23,000 bpd over the previous month.
“Crude oil output increased mainly from Saudi Arabia and Iran, while Nigeria and Libya showed the largest drop,” the 14-member oil cartel said in the report.
Angola saw its oil output rise to 1.775 million bpd in August from 1.767 million bpd the previous month, based on direct communication, according to the OPEC report.
Libya’s production dropped to 292,000 bpd from 313,000 bpd, while Venezuela produced 2.104 million bpd, down from 2.117 million bpd.
Ecuador’s output fell to 542,000 bpd from 549,000 bpd, while Iraq saw its production dropped by 2,000 barrels to 4.354 million bpd.
Saudi Arabia, the biggest producer in the group, recorded the biggest increase in August as it produced 10.605 million bpd, up from 10.577 million bpd in the previous month.
Iran, which has continued to increase output in a bid to snap up more market share after sanctions were lifted, produced 3.653 million bpd, up from 3.631 million bpd.
According to the report, Africa’s oil supply is projected to average 2.12 million bpd in 2016. This represents a decline of 20,000 bpd year-on-year and reflects an upward revision of 10,000 bpd from the August report.
This year, oil production from Congo is only expected to grow by 50,000 bpd to average 320,000 bpd, while output in other African countries, despite increasing output from Ghana’s production start-up in the Tweneboa, Enyenra, Ntomme project and a production ramp-up in Jubilee field in the second half of the year, will decline or be stagnant, OPEC said.
It raised its forecast of oil supplies from non-member countries in 2017 as new fields come online and United States’ shale drillers prove more resilient than expected to cheap crude, pointing to a larger surplus in the market next year.
Demand for crude from OPEC will average 32.48 million bpd in 2017, down by 530,000 bpd from the previous forecast, according to the report.
Oil is trading at $47 a barrel, half its level of mid-2014, as a supply glut that OPEC hoped cheap oil would banish sticks around.
“It is expected that there will be higher non-OPEC production in the second half of 2016 compared to the first half,” OPEC said in the report.
The cartel expects non-OPEC supply to rise by 200,000 bpd in 2017, as against a previous forecast of 150,000-bpd decline.
Near-record OPEC output, and higher supply from outside, could make it harder for OPEC and Russia to come up with steps to support the market. Producers are expected to meet in Algeria on the sidelines of the International Energy Forum from September 26 to 28.
An attempt by producers to agree to a production freeze in April failed as Iran, wanting to boost oil exports that had been restrained by Western sanctions, refused to join and Saudi Arabia insisted all producers took part.
IMF Staff Completes Virtual Mission to Lesotho
Lesotho has been struggling with the fallout from the pandemic and a sharp decline in revenues from the Southern African Customs Union (SACU); The authorities and the mission team made significant progress in their discussions on policies that could be supported by the IMF under a financial arrangement.
A team from the International Monetary Fund (IMF), led by Mr. Aqib Aslam, conducted a series of virtual missions, most recently from September 7 to October 15, 2021, to discuss the authorities’ economic and financial program and their request for IMF financial support.
The authorities and the mission team had productive discussions on policies that could be supported by the IMF under a financial arrangement. The program under discussion would aim to support a durable post-pandemic recovery, restore fiscal sustainability, strengthen public financial management, and ensure the protection of the most vulnerable. Other key structural reforms to be implemented include strengthening governance and fostering private sector investment to spur inclusive growth and employment over the medium term.
At the end of the visit, Mr. Aslam issued the following statement:
“Lesotho has been experiencing twin economic shocks resulting from the pandemic and a decline in revenues from the Southern African Customs Union (SACU) that have proved to be highly volatile. Public expenditures have been increasing while SACU revenues were buoyant but have not adapted to their decline and the limited growth in other revenue sources. At the same time, the economy has been in recession since 2017. The resulting fiscal and external imbalances, if left unaddressed, would continue to put pressure on international reserves and lead to government payment arrears.
“Discussions emphasized the need to support a robust and inclusive post-pandemic recovery. To this end, the mission discussed with the authorities a number of options for containing the fiscal deficit to a level that is sustainable and can be fully financed. The team noted that the adjustment should be focused on expenditure measures while boosting poverty-reducing social spending to protect the most vulnerable. Complementary actions include efforts to broaden financial access and inclusion; strengthen financial supervision; modernize the legal frameworks for bank lending, business rescue, and restructuring, and digitalize payment systems.
“On the fiscal front, efforts should focus on addressing the public sector wage bill, which is one of the largest in the world compared to the size of the economy; saving on public sector and official allowances; better targeting education loans; streamlining the capital budget and initiating gender-responsive budgeting. Discussions also considered measures to modernize tax policy and improve domestic revenue mobilization. The mission noted the need to address long-standing PFM issues to ensure the provision of reliable fiscal data, the integrity of government systems, and the sound use of public resources.
“Significant progress was made during the visit, and discussions will continue in the coming weeks. If agreement is reached on policy measures in support of the reform program, an arrangement to support Lesotho’s economic program would be proposed for the IMF Executive Board’s consideration.
“The IMF team thanks the authorities for their hospitality and constructive discussions.”
The IMF mission met with Prime Minister Majoro, Minister of Finance Sophonea, Central Bank Governor Matlanyane, and other senior government officials. The team also met with representatives of the diplomatic community, private sector, civil society, and multilateral development partners.
Nigeria’s Inflation: Prices Increase at Slower Pace in September 2021
Prices of goods and services moderated further in Africa’s largest economy, Nigeria in the month of September 2021, the latest report from the National Bureau of Statistics (NBS) has revealed.
Consumer Price Index (CPI), which measures the inflation rate, grew at 16.63 percent year-on-year in September, slower than the 17.01 percent rate achieved in the month of August.
On a monthly basis, inflation rose by 1.15 percent in September 2021, representing an increase of 0.13 percent from 1.02 percent filed in August 2021.
Food Index that gauges price of food items grew at 19.57 percent rate in the month, below the 20.30 percent rate recorded in August 2021.
The increase in the food index was caused by increases in prices of oils and fats, bread and cereals, food product N.E.C., fish, coffee, tea and cocoa, potatoes, yam and other tuber and milk, cheese and egg.
However, on a monthly basis, the price of food index rose by 0.20 percent from 1.06 percent filed in August 2021 to 1.26 percent in September 2021.
The more stable twelve months average ending in September 2021 revealed that prices of food items grew by 0.21 percent from 20.50 percent in August to 20.71 percent in September.
Prices of goods and services have been on the decline in Nigeria in recent months, according to the NBS. However. on masses are complaining of the persistent rise in prices of goods and services across the nation.
Some experts attributed the increase to Nigeria’s weak foreign exchange rate given it is largely an import-dependent economy.
Global Debt Rises by $27 Trillion to $226 Trillion in 2020 – IMF
The pandemic has led to an unprecedented increase in debt—issued by governments, nonfinancial corporations, and households the IMF estimated in the latest Fiscal Monitor report. In 2020 global debt reached $226 trillion and increased by $27 trillion, the IMF estimated Wednesday (October 13) in Washington, DC.
High and growing levels of public and private debt are associated with risks to financial stability and public finances, said Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department.
“According to preliminary estimates from the Global Debt Database, global debt by governments, households, and non-financial corporations reached $226 trillion. That represents an increase of $27 trillion relative to 2019. Both the level and the pace of increase are record highs. We know that high and rising debts increase risks to financial stability and public finances,” Gaspar said ahead of the Fiscal Monitor release.
Gaspar emphasized that countries with a high credibility fiscal framework benefit from better bond market access. They also experience lower interest rates on sovereign bonds.
“A strong message from the fiscal monitor is that fiscal credibility pays off. Countries that have credible fiscal frameworks benefit from better and cheaper access to bond markets. That’s a precious asset to have in an uncertain and difficult times like COVID 19. Fiscal credibility pays off!,” added Gaspar.
He also recognized that while the international community has provided critical support to alleviate fiscal vulnerabilities in low-income countries, still more is needed.
“In 2020, the IMF’s rapid financing and the G20 Debt Service Suspension Initiative contribute to make resources available to the countries that need it the most. But more is needed. With a general allocation of SDRs of $650 billion, liquidity has been provided, but much more could be achieved if rich countries would make part of their resources available to the developing world. By doing so, donors would be contributing to fighting the pandemic and to the achievement of sustainable and inclusive growth,” said Gaspar
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