- Nigeria’s FX Inflow Rose to $33.02bn in Second Half of 2016
The provisional cumulative inflow of foreign exchange (FX) into the Nigerian economy rose to US$33.02 billion as of December 2016, representing a 13.3 percent increase above the level in the first half of last year.
Of this amount, inflow through autonomous sources accounted for 62.3 percent, while inflow through the Central Bank of Nigerian (CBN) accounted for 37.7 percent.
The CBN disclosed this in its Financial Stability Report as of December 2016, obtained on its website Thursday.
According to the report, total FX outflow from the economy rose by 14.8 per cent to US$13.64 billion from the level in the first half of 2016. The rise in outflow was mainly attributed to the increase in the interbank forwards settled in the second half of 2016. The economy recorded a net FX inflow of US$19.38 billion, representing 12.21 per cent rise above the level in the first half of 2016.
The total autonomous inflow rose by 0.7 per cent to US$20.58 billion, compared to the level in the first half of 2016 due mainly to rise in invisibles by 2.5 per cent, of which 62.3 per cent was accounted for by ordinary domiciliary accounts. FX inflow through the CBN rose by 42.9 per cent above the level in the first half of 2016 to US$12.45 billion, due to increases in crude oil and non-oil export earnings. Receipts from crude oil sales rose by 22.7 per cent to US$5.66 billion, in the first half of 2016. This was attributed to the gradual increase in domestic production and international crude oil prices. The non-oil receipts rose by 65.5 per cent to US$6.79 billion in the second half of 2016, due mainly to increase in other official receipts.
“Foreign exchange outflow through the CBN rose by 15.5 per cent to US$12.39 billion, above the level in the first half of 2016. Of this amount, interbank utiliation accounted for US$7.99 billion, of which inter-bank forwards, inter-bank sales and others stood at US$4.17 billion (52.14 per cent), US$0.72 billion (8.92 per cent) and US$3.11 billion (38.9 per cent), respectively.
“Overall, the total foreign exchange transactions through the Bank resulted in a net inflow of US$0.58 billion in the second half of 2016, compared with a net inflow of US$0.96 billion in the corresponding half of 2015. This is, however, in contrast to a net outflow of US$2.03 billion in the first half of 2016,” it added.
Also, the report showed that the federal government retained revenue for the second half of 2016 increased to N2.558 trillion, above the levels of N1.898 trillion recorded in the first half of 2016 and the half- year budget estimate of N2.025 trillion for 2016. The increase in the retained revenue relative to the first half was mainly attributed to increase in non-oil receipts.
The breakdown of the retained revenue showed that the federal government share of the federation account was N1.26 trillion (49.4 per cent); the VAT Pool Account, N90.7 billion (3.5 per cent); the federal government Independent Revenue, N267.8 billion (10.5 per cent); share of excess crude Account, N141.4 billion (5.5 per cent); Exchange Gain, N316.4 billion (12.4 per cent) while others (including NNPC Refund) accounted for the balance of N479.3 billion (18.7 per cent).
“The fiscal stance of increased spending to address the challenges of the negative growth (recession) led to higher government expenditure in the second half of 2016. Consequently, federal government expenditure grew by 10.3 per cent to N4,024.8 billion, above N3,650.33 billion in the first half of 2016.
“It was, also higher than the budgeted expenditure of N3,127.27 billion for the second half of 2016. Recurrent expenditure component of the total expenditure accounted for N3,496.5 billion (86.9 per cent) while capital and statutory transfers components accounted for N264.9 billion (6.6 per cent) and N263.4 billion (6.5 per cent), respectively,” it added.
The fiscal operations of the federal government in the second half of 2016 resulted in an overall deficit of N1.467 trillion, compared with the N1.752 trillion recorded in the first half of 2016 and the budgeted deficit of N1.102 trillion for the second half of 2016.
Nigeria Earns Extra N318.4 Billion as Crude Oil Hits $67/Barrel
FG Generates Additional Income of N318.4 Billion as Crude Oil Hits $67/Barrel
The Federal Government earned an additional N318.36 billion in February following the surge in crude oil price above $60 per barrel.
Brent crude oil, against which Nigerian oil is priced, average $60 throughout the month of February.
In March, it rose to $67 per barrel.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, Nigeria’s crude oil price was retained at $40 per barrel for 2021.
However, she said the nation is presently producing below its 2.5 million barrel per day capacity at 1.7mbpd. This, she said includes 300,000bpd condensates.
“Although Nigeria’s total production capacity is 2.5mbpd, current crude production is about 1.7mbpd, including about 300,000bpd of condensates, which indicates compliance with OPEC quota,” the finance minister stated.
Going by the number, Nigeria is producing 1.4mbpd of crude oil without condensates, but with an additional $20 revenue when compared to the $40 per barrel benchmark for the year. It means the Federal Government realised an additional income of N318.360 billion or $20 X 1.4mbpd X 30days in the month of February.
Crude oil jumped to $68.54 per barrel on Friday following OPEC+’s decision to role-over production cuts.
Nigeria, Morocco sign MOUs on Hydrocarbons, Others
The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.
Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.
The statement said Nigeria would also produce ammonia and export to Morocco.
“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.
The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.
Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.
He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.
He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.
“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.
According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.
Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.
The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.
The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.
Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.
He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.
“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.
Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021
Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.
The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.
Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.
This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.
“Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.
“That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.”
Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.
“If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.
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