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Nigeria Plans to Cut Trade Deficit With UK, Says NEPC Boss

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  • Nigeria Plans to Cut Trade Deficit With UK, Says NEPC Boss

The Chief Executive Officer of the Nigerian Export Promotion Council (NEPC), Mr. Segun Awolowo, has said Nigeria is making serious plans to improve on her trade balance with the United Kingdom.

He said the country currently has a trade deficit of about $30 billion.

Awolowo, whose agency is responsible for promoting the country’s export, said part of the new thinking by the federal government is to take advantage of emerging trade potential as a result of Britain’s move to exit the European Union common market bloc.

Speaking in an interview on the ARISE Television in Abuja, Awolowo said government had identified 11 potential areas of investment under the recently launched Nigerian Economic Recovery Lifeline to boost export trade.

He said the measures being pursued to achieve the economic targets set by government is to try and improve on our productivity and productive capacity

On what his organisation is doing to position the country for a mutually rewarding trade relations with Great Britain, Awolowo said: “We in Nigeria traded only one commodity with the UK over the years, that is oil. In fact we never added value to it and we are just about making a serious attempt to diversify the economy.”

NEPC boss said the federal government had last week released the Nigerian Economic Recovery Lifeline which contains what will be used to get over the recession.

He explained that there would be strong emphasis on export drive, adding that “once we are able to trade on other things, we will have a favorable balance in our trade deficit.

Awolowo also highlighted some of the measures to help boost the country’s exports, saying: “What we are doing at NEPC is what we call the zero altar.

“We are saying let’s imagine that Nigeria has no oil at all, the plan is all about increased productivity, raising the productive capacity of Nigerians . We gave identified 11 sectors where we will say look these are the areas that Nigeria should go into so that we can earn money,” he said.

Speaking about the country’s recession, the NEPC boss said the main reason we are in that situation is due to lack of foreign exchange and our inability to generate enough foreign exchange. He said that major cause of our predicament is our propensity for high import as against low export trade.

“Nigeria’s trade figure in 2014 is just $17billion, in 2015 it came down to $15 billion and 2016 the figure was a little over $40 billion. So we have a deficit of over $30 billion, while we have an import bill of about $50 billion.”

Awolowo expressed the hope that with proper implementation of the economic blue print, especially with the emphasis on diversification of the economy, Nigeria can benefit from the opportunities from the Brexit phenomenon.

“So Britain is very key, they are our largest foreign direct investment partner and this is the time we are keen in getting them to invest in the manufacturing industry in Nigeria. So that market is very big and very attractive,” he added.

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

Oil Prices Dip Amidst Middle East Tensions, Market Reaction Limited

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Oil prices fell on Monday as market participants reevaluated their risk premiums in the wake of Iran’s weekend attack on Israel, which the Israeli government said caused limited damage.

Brent crude oil, against which Nigerian oil is priced,  dipped by 50 cents, or 0.5%, to $89.95 a barrel while West Texas Intermediate (WTI) oil fell by 52 cents, or 0.6%, to $85.14 a barrel.

The attack, involving over 300 missiles and drones, marked the first assault on Israel from another country in more than three decades. It heightened concerns over a potential broader regional conflict impacting oil traffic through the Middle East.

However, Israel’s Iron Dome defense system intercepted many of the missiles, and the attack resulted in only modest damage and no reported loss of life.

Warren Patterson, head of commodities strategy at ING, noted that the market had largely priced in the potential attack in the days leading up to it. The limited damage and the absence of casualties suggest that Israel’s response may be more measured, which could help stabilize the oil market.

Iran, a major oil producer within OPEC, currently produces over 3 million barrels per day (bpd) of crude oil. The potential risks include stricter enforcement of oil sanctions and the possibility of Israeli targeting of Iran’s energy infrastructure, according to ING.

Nevertheless, OPEC possesses over 5 million bpd of spare production capacity, which could help mitigate any supply disruptions.

Analysts from ANZ Research and Citi Research have suggested that further significant impact on oil prices would require a material disruption to supply, such as constraints on shipping in the Strait of Hormuz. So far, the Israel-Hamas conflict has not had a notable effect on oil supply.

The market remains watchful of Israel’s response to the attack, which could influence the future trajectory of oil prices and broader geopolitical tensions in the region.

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Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

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Crude Oil

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

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Oil Prices Edge Higher Amidst Fear of Middle East Conflict

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Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

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