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Nigeria Drops to Seventh Position as Cocoa Producer

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Cocoa farm

Nigeria has dropped to the seventh position from fourth as a top cocoa producer in the world, according to data made available by the International Cocoa Organisation.

The President, Cocoa Association of Nigeria, Mr. Sayina Riman, said the review of the rankings was made by the ICO based on the country’s 2015/2016 production projection of 190,000 metric tonnes.

“Nigeria has fallen from four to seven. It is shocking to us. The ranking was announced to us at a meeting that our 2015/2016 production figure leaves us at 190,000 metric tonnes,” he said.

According to the ICCO statistics, Nigeria occupied the fourth position in the 2013/2014 season based on its estimated production output of 230,000 metric tonnes after Côte d’Ivoire, Ghana and Indonesia.

Riman, who said that the 2015/2016 season yielded about 275,000 metric tonnes for the country, expressed optimism that the new planting season would yield between 280,000 metric tonnes and 300,000 metric tonnes provided that the production factors were favourable.

The output of 275,000 metric tonnes fetched the country about $792m in that period based on the ICCO daily price of $2,878.55 per tonne of cocoa beans on September 15, 2016.

This shows that cocoa production rose by 17 per cent from 235,000 metric tonnes in the 2014/2015 planting season to 275,000 metric tonnes in the 2015/2016 season.

The production of individual countries, according to the ICCO, is based on cocoa beans purchased or reaching the ports of the countries concerned and consequently, may differ from the harvested crop.

Riman, however, explained that many exporters were avoiding the ports and were smuggling cocoa beans out of the country, because they were discouraged by the earnings from the commodity, which had been restricted to N305 to $1 adopted as the interbank rate.

According to him, it is not profitable for exporters because the export business is done with loans at 29 per interest rate.

He explained, “Last year, the drought adversely affected our cocoa output and secondly, the monetary policy affected us. We have the limitations of not having free access to our proceeds as they come and some cocoa beans are now being smuggled to other countries so that exporters can have their proceeds there.

“What the CBN is doing, which is not acceptable to the export commodity sector, is that they still want us to change the export proceeds at the interbank rate. The parallel market rate is N420 to the dollar, while the interbank rate is N320.

“Who takes the N100 difference? We understand the system perfectly well that some people may be round-tripping the money. We are borrowing money at 29 per cent interest rate and you are still asking people, without providing any form of incentive, to bring their money and sell at the interbank rate. This is affecting the commodity sector.”

The CAN president stressed, “It is a boost to the economy if they allow us unfettered access to our proceeds. During former President Olusegun Obasanjo’s regime, we found out that our export proceeds through the agricultural sector were about $770m but that was shared because of the monetary policy of the CBN then. We went to the President and they gave us unfettered access. And when that was done, incentives were also added. The proceeds rose from $770m to $12bn.”

Nigeria’s cocoa performance in the global market in the past years had been hampered by dry weather, scanty rainfall as well as old and worn trees.

The Federal Government, during the last administration, targeted a yearly increase that would raise production to around 700,000 metric tonnes in 2016 and one million metric tonnes by 2020.

As such, farmers were provided with early-maturing, high-yielding and disease-resistant beans that mature in about 18 months to replace seedlings with four to five years’ maturity rate.

“We have distributed more than 140 million seedlings of high-yielding cocoa varieties to recapitalise the cocoa plantations, because they are old. That will give us a yield of almost five times. By 2020, Nigeria should be certainly in the one million metric tonnes cocoa production club,” the immediate past Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, had said in 2014.

The Chief Executive Officer, Nigerian Export Promotion Council, Mr. Segun Awolowo, last year said that a drop in cocoa production would adversely affect the target to increase yield.

“We need to scale up production; the idea is to surpass Ivory Coast and Ghana. Ghana is already at 700,000 metric tonnes, and we are still hovering around 240,000 metric tonnes, but the idea was to get to 500,000 metric tonnes in the next few years,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Energy

Refining Sector Accounts For 3% of Global Emission – ARDA

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The African Refiners and Distributors Association (ARDA) has revealed that the refining sector only accounts for 3% of the global energy sector emission. 

Oil and Refining Research Analyst, Maryro Mendez, stated this at the second Refining and Specifications Virtual Workshop organised by the ARDA and monitored by Investors King.

According to Mendez, “the refining sector accounts for only three percent of the global energy sector emissions. While refineries’ contribution to global energy sector emissions is low, the opportunities for reducing them are significant.

“Refineries globally have started thinking about measuring, monitoring and reducing carbon emissions and environmental sustainability has to be a priority for refiners and Africa is no exception.”

According to her, because fuel combustion accounts for 80% of refinery carbon emissions, fuel source and energy optimization would provide the greatest chance to minimize emissions.

“The challenge is not technical but is commercial with facilities requiring sufficient incentive and capital to invest without impacting on their competitive position”, she added.

The association further revealed that Nigeria and other African countries would need to minimize sulphur levels while noting that upgrading their existing refineries would require at least $15.7 billion.

Anibor Kragha, ARDA’s Executive Secretary stated that adopting a standardized specification will prevent the importation of fuels that do not match AFRI specifications into Africa.

“New process units required are to improve key fuel specifications, especially Naptha Hydrotreater (NHdT), Diesel Hydro-desulph. (DHDS), Benzene Extraction, Sulphur, and Hydrogen Plants.

“Another key focus area is for African countries, especially those sharing common fuel supply chains to develop an integrated policy covering both fuel quality and vehicle exhaust emissions.

“This is to achieve the ultimate objective of clean air in our African cities. Without this integrated and coordinated policy, the objective of clean air will not be realized whether by imports or local production,” he said.

The idea for an African refinery association was conceived in the late 1970s, and the first sub-Saharan African initiative – the Association of Refiners and Distributors of Oil Products (ARDIP) – was launched in September 1980, led by the SIR refinery in Cote D’Ivoire, with counterpart refineries in Senegal, Sierra Leone, Liberia, Ghana, and Gabon.

Mr Joel Dervain, the then Managing Director of SIR, re-activated the campaign for an association to promote technical and commercial best practices among African refiners and their stakeholders in 2006. The African Refiners Association (ARDA) was then created on March 23, 2006 in Cape Town, South Africa, with the help of his colleagues at SONARA, SAR, TOR, SOGARA, and NATREF.

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African Energy Chamber to Host Energy Transition Forum at The 2022 Energy Week  

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African Energy Chamber (AEC) says it will host the Energy Transition Forum, in partnership with public and private sector organisations, government representatives, energy stakeholders and investors in October. 

In a statement made available to Investors King AEC stated that “The Energy Transition Forum will address critical issues such as the lack of adequate funding, the diversification of the energy mix, workforce development, and regulatory reforms necessary to enable Africa to expand its energy sector to address energy security, affordability, access, and sustainability matters”.

“With some 600 million people across the continent living in energy poverty and over 900 million without access to clean cooking, Africa needs to exploit all of its vast natural resources in order to make energy poverty history by 2030. In this respect, stakeholders across the continent are opting for an integrated approach to developing energy resources whereby every resource is utilized in order to kickstart economic growth and electrification. With over 125.3 billion barrels of crude oil, 620 trillion cubic feet of gas, and nearly 16.4 billion short tons of coal, the continent is well-positioned to drive economic growth,” it added. 

Executive Chairman of the AEC, NJ Ayuk, said: “With nearly 66 per cent of the world’s population living without electricity access based in Africa, the continent needs to ramp up the production of all its energy resources including gas, oil, wind and solar to ensure energy poverty is history by 2030. The AEC is honored to host the Energy Transition Forum at AEW 2022 where an African narrative of a just and inclusive energy transition that is fit for Africa will be developed. We will go from Cape to Cairo with a well-defined African message. Africans and the energy sector have a rare chance to define the narrative and we must.” 

The Energy Transition Forum is bringing together investors, regulatory authorities and energy market players to discuss the role of gas in Africa’s energy future and energy transition. The challenges of limited investments in gas exploration, production, and infrastructure development in gas-rich countries such as Nigeria, Algeria, Egypt, Niger, and Mozambique will also be addressed.

According to the AEC, climate change continues to impact Africa, leading to an increasing number of African countries such as Nigeria, Namibia, Morocco, South Africa, Uganda, and Kenya introducing policy reforms and initiatives to scale up renewable energy penetration in Africa. 

Investors King gathered that Nigeria has vowed to achieve climate neutrality by 2060 by increasing the share of natural gas and renewables in its energy mix while Namibia aims to make the development of hydrogen central to its energy policy. At the same time, South Africa has introduced its Hydrogen Society Roadmap to fast-forward the development of local content and hydrogen infrastructure whilst Morocco’s Law 13-09 and Egypt’s net metering scheme aims to expand distributed renewables development.

The chamber added that the AEW 2022, under the theme – “Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment” will feature high-level meetings and panel discussions where government ministers, investors, academia, and energy market stakeholders will discuss how Africa can attract funding to boost exploration, production and infrastructure development to ensure secure supply while remaining a climate champion. 

The African Energy Week is scheduled to take place from 18th – 21st October 2022 in South Africa at Africa’s premier event for the oil and gas sector.

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Siemens Announces Plan to Transit From Fossil to Sustainable Energy

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Technology giant, Siemens Energy has announced a transit from fossil to sustainable energy through a management restructuring and shares evaluation.

This comes after the company launched a voluntary cash tender offer to acquire all outstanding shares in Siemens Gamesa Renewable Energy, or approximately 32.9 percent of Siemens Gamesa’s share capital which it does not already own.

Chairman of the Supervisory Board of Siemens Energy AG, Joe Kaeser, said: “The full integration of SGRE is an important milestone for Siemens Energy’s positioning as a driver of the energy transition from fossil to sustainable energy solutions.

“This will benefit customers, employees, shareholders, and ultimately society. It is critical that the deteriorating situation at SGRE is being stopped as soon as possible, and the value-creating repositioning starts quickly. The Supervisory Board strongly supports the Executive Boards plans for the integration of SGRE”.

According to a statement from the company, starting from October, the former gas and power segment will be divided into three business areas.

The largest of the new business areas, with sales of around 9 billion euros (9.6 billion dollars), is gas services. This included the gas and large steam turbine business and associated services.

It is followed by grid technologies with sales of 5.8 billion euros in the areas of power transmission and energy storage. The smallest business area is the transformation of the industry with sales of 3.9 billion euros.

Here, the focus was on reducing energy consumption and carbon dioxide emissions in industrial processes from hydrogen to automation and industrial steam turbines to compressors. Logistics, IT and procurement divisions were to be bundled together.

The removal of some levels of management at Siemens Energy was expected to bring faster decision-making processes. Where there were previously up to 11 levels in the firm’s hierarchy, there would be a maximum of six in the future. This would eliminate around 30 per cent of the previous management positions, Siemens Energy said. The employees affected would be given other tasks within the business, according to the statement.

Siemens Energy claims that after full integration, the combined group could see cost synergies of up to EUR 300 million within three years, owing to lower supply chain and logistics costs, aligned project execution, joint and integrated R&D efforts, and cost savings through an optimized administrative setup.

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