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Nigeria Loses N115bn to Crude Terminal Shutdown

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  • Nigeria Loses N115bn to Crude Terminal Shutdown

With global oil prices trading above the $50 per barrel mark since November 30, the shutdown of the Forcados terminal, through which the nation’s largest crude oil grade is exported, has led to a loss of at least N115bn in 24 days.

Wednesday, December 21, 2016 marked exactly 10 months that Shell, the operator of the terminal, declared force majeure on the export of Forcados.

The force majeure, a legal clause that allows it to stop shipments without breaching contracts, came a week after the Forcados export line was attacked by militants in the Niger Delta. It has yet to be lifted as of the time of filing this report.

The Presidency had in late October quoted the Shell Director, Mr. Andrew Brown, as saying that the oil major had resumed crude exports from the facility following repairs. He reportedly said this at a meeting with President Muhammadu Buhari.

In early November, there was another attack on the Trans Forcados oil pipeline carrying crude oil and gas to the Forcados export terminal.

According to the Nigerian National Petroleum Corporation, at Forcados terminal alone, about 300,000 barrels of oil per day have been shut in since February 2016 following the force majeure declared by Shell Petroleum Development Company.

“A number of crude oil lifting was deferred until the repair is completed. Other major terminals affected by the renewed spate of vandalism include Bonny, Usan, Qua Ibo, and the recently attacked Nembe Creek trunk line,” the NNPC said in its latest monthly report.

The International Energy Agency had in April estimated that Nigeria could lose about $1bn (N197bn) in revenue by May, when repairs of the Forcados terminal were expected to have been completed.

The IEA said, “The Forcados terminal in Delta State, one of Nigeria’s biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could lose about $1bn between February, when force majeure was declared, and May, when repairs are expected to be completed.”

But as of Friday December 23, the force majeure had not been lifted.

At an average oil price of $53 per barrel and exchange rate of N305 to the dollar, the country lost at least N115.2bn from December 1 to 24.

The Media Relations Manager, SPDC, Mr. Precious Okolobo, told our correspondent in a telephone interview on Friday that he could not tell when the terminal would come back on stream.

“Forcados terminal is still shut down. I cannot give precise timing on when the pipeline will be reopened,” he said.

Oil exports account for about 80 per cent of the Nigerian government revenue, and exports sales are accrued to the government’s account two or three months later.

The nation’s oil output plummeted to near 30-year lows of around 1.4 million barrels per day in May from 2.2 million bpd earlier in the year as attacks on oil facilities in the Niger Delta rose at an alarming rate.

Reuters reported that trading was thin on Thursday with the approaching holidays, with Nigerian crude still in overhang while some programmes were slow to emerge due to strikes at ExxonMobil’s fields.

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.

Economy

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

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Zainab Ahmed Finance Minister

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said Nigeria’s Excess Crude Account (ECA) stood at $72,411,197.80 as of January 20th, 2021.

The minister disclosed this at the first National Economic Council (NEC) meeting of the year presided over by Yemi Osinbajo, Vice President and had in attendance State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials.

Ahmed said “Excess Crude Account (ECA), balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28,800,711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

The minister also said President Muhammadu Buhari has approved N6.45 billion for the setting up of gas plants in 39 locations nationwide in an effort to increase COVID-19 treatment.

What is Excess Crude Account (ECA)

Excess Crude Account (ECA) is an account used to save the disparity in the market price of crude oil and budgeted price of crude oil as stipulated in the Federal Government Appropriation Bill.

Key Takeaways of Excess Crude Account (ECA)

  • Excess Crude Account (ECA) was established in 2004 by the Federal Government to stabilize Nigeria’s economy and smooth out the effect of crude oil fluctuation on Africa’s largest economy.
  • The ECA rose to its highest of $20 billion in November 2008 during the global oil boom when prices were above $100 per barrel.
  • Controversy, allegations of corruption, and uncertain performance have trailed the ECA since creation.
  • The balance plunged from $20 billion in 2008 to $72.4 million in January 2021.

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Economy

AfCFTA: Nigeria Customs Service Requested For Detailed Role In The Free Trade Agreement

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AfCFTA: Nigeria Customs Service Requested For Detailed Role In The Free Trade Agreement

Nigeria Customs Service (NCS) requested for a proper and detailed role expected to be carried out in the implementation of the African Continental Free Trade Area (AfCFTA) agreement.

The NCS said detailed explanations of roles and responsibilities of all parties involved in the free trade agreement should be spelled out to avoid overlapping of duties and to achieve a seamless implementation of AfCFTA.

Mr. Joseph Attah the Public Relations Officer, on behalf of the Comptroller-General of the NCS, Col Hameed Ali (Rtd.), issued a statement to address the call for a detailed role of the Customs.

“Our functions are highly automated and primarily systems-driven, hence the need to methodically harvest and integrate all data associated with AfCFTA into our system for easy deployment, access, and use by the trading public.

“We, therefore, await the National Action Committee (NAC) on the list of duties and charges waived for liberalised goods under AfCFTA. The list of the 90 percent liberalised national trade offers (NTOs); list of the 70 percent non-liberalised exclusive goods at the regional level; and list of the 3 percent non-liberalised sensitive goods.

“The appointment of a competent authority responsible for issuing and authenticating certificates of origin and registering enterprises and products within the region.” He said.

In the statement, NCS pledges commitment to the success of the trade pact and also identifies the transformational impact the free trade agreement would have on businesses in Nigeria and the Africa continent at large.

“Also, it is pertinent to inform the public about steps which must be taken to enable its smooth and full implementation,” He added

NCS recommended that the member-country of the free trade agreement should have a representative in the continental chamber, this is to ensure transparency and build the confidence of the members in the system.

“This, in our view, should be complementary to the activities of the various chambers of commerce of each country in the region. While awaiting clear directives concerning tariffs for all goods covered by this agreement, we want to assure the public of our preparedness to fully deploy our services at the shortest notice.

“Our desire is to imbue trust in the system while guaranteeing the economic safety and wellbeing of businesses within the country,”  NCS noted.

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COVID-19: Nigeria Record Highest New Cases on Thursday as Continent Death Nears 83,000

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COVID-19: Nigeria Record Highest New Cases on Thursday as Continent Death Nears 83,000

The largest African economy, Nigeria recorded her highest ever COVID-19 new cases on Thursday, 21st of January.

Nigeria recorded her highest daily count of 1,964 new COVID-19 cases on Thursday, this was 300 higher than the previous high record of 1,664 new COVID cases it recorded on the 7th of January, 2021.

The country has recorded a total of 116,655 cases, 93,646 recoveries and, 1,485 deaths across the states since the outbreak of the Corona Virus.

According to health experts, the daily increase of new cases in the new year could be ascribed to the massive gatherings during the festive season, the relaxation of COVID-19 protocols in the various parts of the country, and in the two major airports, Lagos and Abuja airport.

The adverse effect of the global health pandemic has seen Africa recorded 82,781 COVID-19 death cases across the continents.

Confirmed Cases of COVID-19 from 55 African countries reached 3,364,031, reported deaths were 82,781 and, 2,809,825 were reported to have recovered as of January 22, 2021

The Africa country with the most reported COVID-19 cases in South Africa with a total of 1,380,807 cases of which 39,501 are death cases. Other most-affected countries are Morocco (463,706), Tunisia (190,884), Egypt (159,715), Ethiopia (132,326), and Nigeria (116,655).

The numbers are compiled by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (world map) using statistics from the World Health Organization and other international institutions as well as national and regional public health departments.

 

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