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Nigeria’s Economic Challenge is Reversible, Says Emefiele

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godwin-emefiele
  • Nigeria’s Economic Challenge is Reversible

The fact that Nigeria is in a crucial point in its financial history notwithstanding, the situation has equally thrown up opportunities to future prosperity.

Consequently, Nigerians have been advised to remain bold and persistent in trying new ideas and taking up opportunities in entrepreneurship to be part of the collective efforts to revive the economy.

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, made the observations in his keynote address at the quarterly meeting of the Association of Chief Audit Executives of the Banks, in Lagos, last weekend.

Meanwhile, the bank’s chief has said that given the need to maintain good internal control, ethical practice, sound risk management, healthy and stress-free banks amid a challenging times, there would be constant policy initives for the industry.

While admitting that money is scarce, price of oil, which is the major source of foreign exchange and government revenue, has significantly reduced, and may remain so for a long time, he called for fundamental changes in attitudes, orientations and practices.

“Regrettably, because our economy is still largely import-dependent, this fuels the general rise in the prices of goods and services. Hence, there is a noticeable decline in the purchasing power of the people.

“If well tackled, the current situation can pave the way to future prosperity. Where and when necessary, we must remain bold and persistent, and never afraid to try new ideas, as these are major requirements in a time of change. That is why I am confident that Nigeria will overcome our current challenges.

“Change is the categorical imperative of the moment. It applies to CBN as the nation’s lender of last resort and the banking sector regulator; it applies to banks and other financial institutions; and even, change is required from the public that we all serve,” he said.

Represented by his Special Adviser on Financial Markets, Emmanuel Ukeje, he told banks’ internal auditors that the changes required may seem slow, rapid, procedural or radical at times, but the cumulative effect will alter the business environment.

He charged them to upgrade their capacities, operations and methods, as failure will make them to become victims of change, hence they must analyse opportunities and prepare for the future.

According to him, the possibility that a careless mistake or fraud, can destabilise an entire institution and have systemic effects on the industry should be of concern to all of us.

“In this era of change and challenge, you will notice and should continue to expect, a stream of policy initiatives from the central bank. Our objective is to use monetary policy tools, sectoral preferences in resource allocation and other forms of intervention to drive our national economic recovery.

“Deposit Money Banks are critical players for the realisation of the overall thrust of government and CBN. As such, banks are expected to faithfully implement CBN Policies and Guidelines.

As is the case in all systems and climes, some people including bankers and customers, may be tempted to take undue advantage of the occasional loopholes that may arise in the course of the expected policy readjustments. As internal auditors, you must not allow or encourage this,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 

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Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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