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Brexit: Commonwealth, NEPC to Work on Impact on Nigeria

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  • Brexit: Commonwealth, NEPC to Work on Impact on Nigeria

The Executive Secretary/Chief Executive Officer of the Nigerian Export Promotion Council (NEPC), Mr. Segun Awolowo, wednesday said the Secretary General of the Commonwealth, Patricia Scotland, has agreed to work with the council on a trade paper on the challenges and opportunities of the Brexit on Nigeria.

Speaking on the impact of Brexit on Nigeria on ARISE TV in Abuja, Awolowo said since the Britain has triggered the Brexit process, it means both opportunities and challenges.

“There are two words to describe this which is opportunities and challenges. Of the two countries, Britain is a big economy in the world and Nigeria is the 24th largest economy in the world and with the colonial background, we have a strong relationship with the United Kingdom (UK). “Nonetheless, trading with a big economic block in base is much better to do but even that has its challenges.

“For Nigeria, we tried negotiating a very complex free trade agreement that is the partnership agreement with the EU and I think two other nations in West Africa but have not signed yet. So of course it is easier negotiating with a single country so that is the immediate advantage in that and when it is a partner, historically because we have about two million Nigerians in Diaspora so it is a big market for export and services both in ICT and financial sector. So that is why I would say there are opportunities and challenges but even with that, we don’t know how this is going to extend to us,” he said.

According to him, whatever the outcome is, Nigeria is going to trade with Britain, stressing, “It is just going to be on how we direct our trade. And I think Nigeria is very important we are their second largest trading partner in Africa and they are our third largest trading partner. So we are going to trade anyway.”

Speaking on the trade deficit with UK, Awolowo explained that Nigeria has been trading only one commodity over the years and that is oil.

“We are just in a position of a serious attempt to diversify the economy. Nigeria has released its Nigerian economic recovery and growth plan which is what we are going to use to get us out of this recession. And on the background of that is the strong emphasis on export because we believe once we are able to trade other things than oil then we would have a balance in our trade deficit all across the world. So Britain is very key. They are our largest foreign direct investment partner and this the time we are urging them to invest in manufacturing and industry in Nigeria. So that market is very big and very key,” he said.

Meanwhile, a chemist and pharmacist, Mr. Sam Ohuabunwa, has called for the issuance of new standards that will control the level of benzene in food products in the country, the former Chief Executive Officer of Neimeth Pharmaceuticals Plc, who made call against backdrop of controversy Fanta and Coke.

Benzene in soft drinks is a public health concern and has caused significant outcry among environmental and health advocates.

Speaking on ARISE TV, Ohuabunwa said scientific fact available showed that this reaction does occur but might not be a such a great harzards.

“However, most countries, have gone ahead to limit the benzene content in soft drinks and any liquid. They try and accept standards, I believe that is the issue in our country and believe we need to set standards local manufacturers can comply with,” he said.

He called on the Nigerian Bottling Company to be transparent by coming out with more information on its products, adding that the company should also comply with what they have been asked to.

He disclosed that benzene is present in the water we drink.

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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Gold

Gold Steadies After Initial Gains on Reports of Israel’s Strikes in Iran

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Gold, often viewed as a haven during times of geopolitical uncertainty, exhibited a characteristic surge in response to reports of Israel’s alleged strikes in Iran, only to stabilize later as tensions simmered.

The yellow metal’s initial rally came on the heels of escalating tensions in the Middle East, with concerns mounting over a potential wider conflict.

Spot gold soared as much as 1.6% in early trading as news circulated regarding Israel’s purported strikes on targets in Iran.

This surge, reaching a high of $2,400 a ton, reflected the nervousness pervading global markets amidst the saber-rattling between the two nations.

However, as the day progressed, media reports from both countries appeared to downplay the impact and severity of the alleged strikes, contributing to a moderation in gold’s gains.

Analysts noted that while the initial spike was fueled by fears of heightened conflict, subsequent assessments suggesting a less severe outcome helped calm investor nerves, leading to a stabilization in gold prices.

Traders had been bracing for a potential Israeli response following Iran’s missile and drone attack over the weekend, raising concerns about a retaliatory spiral between the two adversaries.

Reports of an explosion in Iran’s central city of Isfahan further added to the atmosphere of uncertainty, prompting flight suspensions and exacerbating market jitters.

In addition to geopolitical tensions, gold’s rally in recent months has been underpinned by other factors, including expectations of US interest rate cuts, sustained central bank buying, and robust consumer demand, particularly in China.

Despite the initial surge followed by stabilization, gold remains sensitive to developments in the Middle East and broader geopolitical dynamics.

Investors continue to monitor the situation closely for any signs of escalation or de-escalation, recognizing gold’s role as a traditional safe haven in times of uncertainty.

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Commodities

Global Cocoa Prices Surge to Record Levels, Processing Remains Steady

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Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

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Crude Oil

Dangote Refinery Leverages Cheaper US Oil Imports to Boost Production

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The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

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