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Nigeria Loses N25b Yearly to Importation of Foreign Lottery Technology

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  • Nigeria Loses N25b Yearly to Importation of Foreign Lottery Technology

The acquisition, deployment and maintenance of lottery technologies in Nigeria are causing the country a yearly loss of about N25 billion.

This was disclosed in Lagos by the Managing Director and Chief Executive Officer of Lotgrand – operator of Grandlotto Yellow Terminal brand – Niyi Adekunle, whose company promotes the lotto business in Nigeria with the Machine Number Series (MNS).

The loss, in essence means that the sector requires indigenous technology, both software and hardware to curb the increasing capital flight.

Accordingly, lotteries are extremely thrilling, and “promise players good profit”. As such, lottery operators strive to make these games even more fun by utilising technology.

“We can save huge foreign exchange for the benefit of the economy if our technology sector can support our business with the right technology software and hardware,” Adekunle stated.

Before now, experts have argued that the development of a nation is not only tied to available human capital but equally on its social and economic resources. According to the experts, several developed countries consolidated on these natural endowments to re-write their history on sound economic footing worthy of emulation by the global community.

Lottery therefore, they say, is a social resource that has positively changed the economic fortunes of several nations.

A Guardian 2015 report titled: ‘Another push for economic growth through lottery’, revealed that in South Africa, for instance, 82 per cent of the population play lottery, at least, once in a week.

In 2012 alone, lottery share of funds to the country’s finances was put at about N141.3 billion.

Morocco is another country, the report noted to be reaping large from lottery promotions. With a population of 35 million, the country got a posted revenue contributions to the Central government to the tune of $15 million in 2012, an equivalent of N2.6 billion.

In Niger Republic, more than 45 per cent of the population play lottery because the citizens are aware that over the years, lottery proceeds are being used by the government to fight desertification and for the provision of bore holes for rural communities even as several lottery winners continue to enjoy sponsorship to Mecca to perform Holy pilgrimage year-in-year-out.

According to Adekunle, Grandlotto Yellow Terminal brand, technology hardware component alone constitutes 40 per cent of lottery operators’ technology spends. “Payment for the acquisition of software licenses and support services constitute another 20 and 40 percent of our annual technology budget spends respectively,” he explained.

Adekunle explained that the game has more followers than online casino and “it is easy to play”.

Amid a highly competitive digital landscape in the lottery industry in the country, Adekunle projected that the operators’ yearly spends on technology would witness an exponential increment in 2017.

“I see more players in the industry spending huge on instant game inventory management systems, lottery gaming systems, retail point-of-sale technology, mobile apps, USSD platform, data and communications links and internet platforms,” he added.

While forecasting the growth rates in mobile lotteries sales in 2017, he said smart operators are now adopting the USSD codes to attract new set of target market and obtain a higher percentage of infrequent players and net new audience.

An ICT expert, Razack Olaegbe, further provided insight into the issue, saying that Nigeria has the capacity to develop local technologies. “It is just that local innovators are not looking in that direction. All of them are focusing on fintech, no one is exploiting the opportunities in lottery technology.”

On the success of lottery operations in the country, Olaegbe said the local lottery system has been successful with one lottery company paying over N500 million bonus to one winner in a single game with others companies paying a combined N1 billion a year in bonus. Lotto, sports betting, casino, online betting, among others all generate more than N25 billion a year across the country.

According to him, the industry is growing but under reported industry. “The economic recession has exposed more people to playing lotto, sport betting, online betting and casino. The bonus paid by all the lottery operators is more than N25 billion.”

Adekunle challenged indigenous IT players to focus their innovations on the lottery industry and compete for a big chunk of the market share so that the local economy can reap from the hyper growth of the lottery industry.
He lamented that with the country’s high level of sophistication and global view, the country has remained “net importer of lottery technologies”.

The 2015 Guardian report, quoted the Director-General of National Lottery Regulatory Commission (NLRC), Adolphus Ekpe, as saying that the commission was poised to sanitise the industry and rid it of illegal operators as well as make the legal operators play by the rules.

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.

Crude Oil

Brent Crude Rises to $69 on IEA Report

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Oil prices rose after the release of the International Energy Agency’s (IEA)  closely-watched Oil Market Report, with WTI Crude trading at above $66 a barrel and Brent Crude surpassing the $69 per barrel mark.

Prices jumped even though the agency revised down its full-year 2021 oil demand growth forecast by 270,000 barrels per day (bpd) from last month’s assessment, expecting now demand to rise by 5.4 million bpd. The downward revision was due to weaker consumption in Europe and North America in the first quarter and expectations of 630,000 bpd lower demand in the second quarter due to India’s COVID crisis.

The excess oil inventories of the past year have been all but depleted, and a strong demand rebound in the second half this year could lead to even steeper stock draws, the IEA said yesterday, keeping an upbeat forecast of global oil demand despite the weaker-than-expected first half of 2021.

However, the upbeat outlook for the second half of the year remains unchanged, as vaccination campaigns expand and the pandemic largely comes under control, the IEA said.

Moreover, the global oil glut that was hanging over the market for more than a year is now gone, the agency said.

“After nearly a year of robust supply restraint from OPEC+, bloated world oil inventories that built up during last year’s COVID-19 demand shock have returned to more normal levels,” the IEA said in its report.

In March, industry stocks in the developed economies fell by 25 million barrels to 2.951 billion barrels, reducing the overhang versus the five-year average to only 1.7 million barrels, and stocks continued to fall in April.

“Draws had been almost inevitable as easing mobility restrictions in the United States and Europe, robust industrial activity and coronavirus vaccinations set the stage for a steady rebound in fuel demand while OPEC+ pumped far below the call on its crude,” the IEA said.

The market looks oversupplied in May, but stock draws are set to resume as early as June and accelerate later this year. Under the current OPEC+ policy, oil supply will not catch up fast enough, with a jump in demand expected in the second half, according to the IEA. As vaccination rates rise and mobility restrictions ease, global oil demand is set to soar from 93.1 million bpd in the first quarter of 2021 to 99.6 million bpd by the end of the year.

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Crude Oil

OPEC Expects Increase In Global Oil Demand Raises Members’ Forecast on Crude Supply

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The Organisation of Petroleum Exporting Countries (OPEC) yesterday lifted its forecast on its members’ crude this year by over 200,000 bpd and now expects demand for its own crude to average 27.65mn bpd in 2021.

This is almost 5.2mn bpd higher than last year and around 2.7mn b/d higher than an earlier estimate of the group’s April production.

According to the highlights of the organisation’s latest Monthly Oil Market Report (MOMR), OPEC crude is projected to rise from 26.48 million bpd in the second quarter to 28.7 million bpd in the third and 29.54 million bpd in the fourth quarter of the year.

The report also indicated a fall in Nigeria’s crude production from 1.477 bpd in February to 1.473, a difference of just about 4,000 bpd before rising again in April to 1.548 million bpd, to add 75,000 bpd last month.

OPEC stated that its upward revision of members’ crude was underpinned by a downgrade in the group’s forecast for non-OPEC supply, which it now expects to grow by 700,000 bpd to 63.6mn b/d against last month’s report’s projection of a 930,000 bpd rise to 63.83mn bpd.

The oil cartel projected that US crude output would drop by 280,000 bpd this year, compared with its previous forecast for a 70,000 bpd decline.

On the demand side, OPEC kept its overall forecast unchanged from last month’s MOMR, stressing that it expects global oil demand to grow by 5.95 million bpd to 96.46 million bpd this year, partly reversing last year’s 9.48mn bpd drop.

Spot crude prices fell in April for the first time in six months, with North Sea Dated and WTI easing month-on-month by 1.7 percent and 1 percent, respectively.

On the global economic projections, the cartel said stimulus measures in the US and accelerating recovery in Asian economies might continue supporting the global economic growth forecast for 2021, now revised up by 0.1 percent to reach 5.5 percent year-on-year.

This comes after a 3.5 percent year-on-year contraction estimated for the global economy in 2020.

However, global economic growth for 2021 remains clouded by uncertainties including, but not limited to the spread of COVID-19 variants and the speed of the global vaccine rollout, OPEC stated.

“World oil demand is assumed to have dropped by 9.5 mb/d in 2020, unchanged from last month’s assessment, now estimated to have reached 90.5 mb/d for the year. For 2021, world oil demand is expected to increase by 6.0 mb/d, unchanged from last month’s estimate, to average 96.5 mb/d,” it said.

The report listed the main drivers for supply growth in 2021 to be Canada, Brazil, China, and Norway, while US liquid supply is expected to decline by 0.1 mb/d year-on-year.

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Crude Oil

Oil Rises Over Concerns of Fuel Shortages

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Oil prices rose on Tuesday, as lingering fears of gasoline shortages due to the outage at the largest U.S. fuel pipeline system after a cyber attack brought futures back from an early drop of more than 1%.

Brent crude futures rose 35 cents, or 0.5%, to $68.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 49 cents, or 0.8%, to $65.41.

Benchmark gasoline futures prices rose 1 cent to $2.14 a gallon.

On Monday, Colonial Pipeline, which transports more than 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, said it was working to restore much of its operations by the end of the week.

Right now there’s a generalized anxiety premium being built into prices because of Colonial and it’s keeping a floor under the market,” said John Kilduff, partner at Again Capital LLC in New York.

Fuel supply disruption has driven gasoline prices at the pump to multi-year highs and demand has spiked in some areas served by the pipeline as motorists fill their tanks.

Traders booked at least four tankers to store refined oil products off the U.S. Gulf Coast refining hub after a cyber attack that knocked out the pipeline, shipping data showed on Tuesday.

North Carolina, the U.S. Environmental Protection Agency and Department of Transportation issued waivers allowing fuel distributors and truck drivers to take steps to try to prevent gasoline shortages.

OPEC on Tuesday raised its forecast for demand for its crude by 200,000 bpd and stuck to its prediction of a strong recovery in global oil demand this year as growth in China and the United States counters the coronavirus crisis in India.

Meanwhile, the rapid spread of infections in India has increased calls to lock down the world’s second-most populous country and the third-largest oil importer and consumer.

India’s top state oil refiners have already started reducing runs and crude imports as the new coronavirus cuts fuel consumption, company officials told Reuters on Tuesday.

On the bullish side for crude, analysts are expecting data to show U.S. inventories fell by about 2.3 million barrels in the week to May 7 after a drop of 8 million barrels the previous week, a Reuters poll showed.

Gasoline stocks are expected to have fallen by about 400,000 barrels, analysts estimated ahead of reports from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday.

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