Markets

Nigeria’s Economic Challenge is Reversible, Says Emefiele

Published

7 years ago

December 6, 2016

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.

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Samed Olukoya

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

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Crude Oil

Dangote Mega Refinery in Nigeria Seeks Millions of Barrels of US Crude Amid Output Challenges

Published

3 days ago

May 16, 2024

Samed Olukoya

The Dangote Mega Refinery, situated near Lagos, Nigeria, is embarking on an ambitious plan to procure millions of barrels of US crude over the next year.

The refinery, established by Aliko Dangote, Africa’s wealthiest individual, has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland crude for a duration of 12 months, commencing in July.

This development revealed through a document obtained by Bloomberg, represents a shift in strategy for the refinery, which has opted for US oil imports due to constraints in the availability and reliability of Nigerian crude.

Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, emphasized the allure of US crude for Dangote’s refinery.

Georgieva highlighted the challenges associated with sourcing Nigerian crude, including insufficient supply, unreliability, and sometimes unavailability.

In contrast, US WTI offers reliability, availability, and competitive pricing, making it an attractive option for Dangote.

Nigeria’s struggles to meet its OPEC+ quota and sustain its crude production capacity have been ongoing for at least a year.

Despite an estimated production capacity of 2.6 million barrels a day, the country only managed to pump about 1.45 million barrels a day of crude and liquids in April.

Factors contributing to this decline include crude theft, aging oil pipelines, low investment, and divestments by oil majors operating in Nigeria.

To address the challenge of local supply for the Dangote refinery, Nigeria’s upstream regulators have proposed new draft rules compelling oil producers to prioritize selling crude to domestic refineries.

This regulatory move aims to ensure sufficient local supply to support the operations of the 650,000 barrel-a-day Dangote refinery.

Operating at about half capacity presently, the Dangote refinery has capitalized on the opportunity to secure cheaper US oil imports to fulfill up to a third of its feedstock requirements.

Since the beginning of the year, the refinery has been receiving monthly shipments of about 2 million barrels of WTI Midland from the United States.

Crude Oil

Oil Prices Hold Steady as U.S. Demand Signals Strengthening

Published

3 days ago

May 16, 2024

Samed Olukoya

Oil prices maintained a steady stance in the global market as signals of strengthening demand in the United States provided support amidst ongoing geopolitical tensions.

Brent crude oil, against which Nigerian oil is priced, holds at $82.79 per barrel, a marginal increase of 4 cents or 0.05%.

Similarly, U.S. West Texas Intermediate (WTI) crude saw a slight uptick of 4 cents to $78.67 per barrel.

The stability in oil prices came in the wake of favorable data indicating a potential surge in demand from the U.S. market.

An analysis by MUFG analysts Ehsan Khoman and Soojin Kim pointed to a broader risk-on sentiment spurred by signs of receding inflationary pressures in the U.S., suggesting the possibility of a more accommodative monetary policy by the Federal Reserve.

This prospect could alleviate the strength of the dollar and render oil more affordable for holders of other currencies, consequently bolstering demand.

Despite a brief dip on Wednesday, when Brent crude touched an intra-day low of $81.05 per barrel, the commodity rebounded, indicating underlying market resilience.

This bounce-back was attributed to a notable decline in U.S. crude oil inventories, gasoline, and distillates.

The Energy Information Administration (EIA) reported a reduction of 2.5 million barrels in crude inventories to 457 million barrels for the week ending May 10, surpassing analysts’ consensus forecast of 543,000 barrels.

John Evans, an analyst at PVM, underscored the significance of increased refinery activity, which contributed to the decline in inventories and hinted at heightened demand.

This development sparked a turnaround in price dynamics, with earlier losses being nullified by a surge in buying activity that wiped out all declines.

Moreover, U.S. consumer price data for April revealed a less-than-expected increase, aligning with market expectations of a potential interest rate cut by the Federal Reserve in September.

The prospect of monetary easing further buoyed market sentiment, contributing to the stability of oil prices.

However, amidst these market dynamics, geopolitical tensions persisted in the Middle East, particularly between Israel and Palestinian factions. Israeli military operations in Gaza remained ongoing, with ceasefire negotiations reaching a stalemate mediated by Qatar and Egypt.

The situation underscored the potential for geopolitical flare-ups to impact oil market sentiment.

Crude Oil

Shell’s Bonga Field Hits Record High Production of 138,000 Barrels per Day in 2023

Published

3 days ago

May 16, 2024

Samed Olukoya

Shell Nigeria Exploration and Production Company Limited (SNEPCo) has achieved a significant milestone as its Bonga field, Nigeria’s first deep-water development, hit a record high production of 138,000 barrels per day in 2023.

This represents a substantial increase when compared to 101,000 barrels per day produced in the previous year.

The improvement in production is attributed to various factors, including the drilling of new wells, reservoir optimization, enhanced facility management, and overall asset management strategies.

Elohor Aiboni, Managing Director of SNEPCo, expressed pride in Bonga’s performance, stating that the increased production underscores the commitment of the company’s staff and its continuous efforts to enhance production processes and maintenance.

Aiboni also acknowledged the support of the Nigerian National Petroleum Company Limited and SNEPCo’s co-venture partners, including TotalEnergies Nigeria Limited, Nigerian Agip Exploration, and Esso Exploration and Production Nigeria Limited.

The Bonga field, which commenced production in November 2005, operates through the Bonga Floating Production Storage and Offloading (FPSO) vessel, with a capacity of 225,000 barrels per day.

Located 120 kilometers offshore, the FPSO has been a key contributor to Nigeria’s oil production since its inception.

Last year, the Bonga FPSO reached a significant milestone by exporting its 1-billionth barrel of oil, further cementing its position as a vital asset in Nigeria’s oil and gas sector.