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Nigeria Loses $235bn Investments Amid $9bn Debt

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  • Nigeria Loses $235bn Investments Amid $9bn Debt

Nigeria has lost about $235bn worth of investments on the back of the failure to reform the oil and gas industry, even as the Federal Government struggles to pay up over $9bn cash call arrears to oil firms.

Oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria and National Union of Petroleum and Natural Gas Workers on Wednesday said the Petroleum Industry Bill should be passed to address the funding challenges in the industry.

The Chairman, PENGASSAN and NUPENG National PIB Committee, Mr. Chika Onuegbu, stated this at the 2nd Save Nigeria Oil and Gas Industry Roundtable Conference in Port Harcourt while making a presentation, a copy of which was made available to our correspondent.

He spoke on ‘The funding regimes in the Nigerian oil and gas industry: Challenges, failures and panacea’.

Onuegbu noted that the country had planned to increase crude oil production capacity to three million barrel per day in 2003 and four million bpd by 2010; raise crude oil reserves to 40 billion barrels by 2010, and eliminate gas flaring by 2008.

He said, “Suffice it to say that achieving and realising these objectives would inter alia require investments in the petroleum sector, which in turn would require the appropriate funding levels and mix to deliver the investments.

“It is therefore not surprising that Nigeria is yet to achieve any of the three key national aspirations for its oil and gas sector some seven years after the 2010 target year. To make matters worse, funding for the joint venture operations for some years now has been capped $5bn per annum, while arrears of cash calls have increased tremendously, rising to over $9bn as of September 2016.”

He said addressing the funding challenges was one of the key objectives of the Nigerian oil and gas sector reform, which was kick-started in April 2000 by the administration of President Olusegun Obasanjo but had continued to suffer setbacks.

Onuegbu said, “Consequently, Nigeria has lost some $235bn of investments due to its inability to legislate on the proposed reforms in its oil and gas industry: Over $15bn yearly investments withheld or diverted by investors to other countries because of the uncertainty as investors do not know which rules will guide their investments; and another $120bn potential earnings in six years, from 2010 to 2016 had the reforms proposal (PIB) been passed into law in 2009.”

He described the PIB as the long-term solution to the JV funding challenges in the industry, adding, “The use of ad hoc measures such as the recent cash call exit agreement to address fundamental challenges in the industry as funding will not stand the test of time; it is not sustainable and not international best practice.”

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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Investment

Saudi Arabia Aims for $80 Billion Tourism Investment to Fuel Vision 2030 Goals

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Saudi Arabia is embarking on a bold venture to attract up to $80 billion in private investment into its burgeoning tourism industry, a move pivotal to realizing its ambitious Vision 2030 objectives.

Tourism Minister Ahmed Al Khateeb unveiled the kingdom’s aspiration during an interview in Riyadh, emphasizing the imperative role of the private sector in spearheading investment endeavors.

With plans to disburse approximately $800 billion on tourism over the next decade, Saudi Arabia is steadfast in its pursuit to diversify its economy and reduce dependency on oil revenues.

Vision 2030 outlines a trajectory for the kingdom to metamorphose into one of the world’s premier tourist destinations, targeting 150 million annual visitors by 2030, a significant portion originating from overseas.

While the government and sovereign wealth fund have historically fueled tourism development, securing substantial foreign direct investment, particularly from the private sector, emerges as paramount in expediting Vision 2030 initiatives.

The kingdom’s fiscal projections, forecasting deficits until 2026, underscore the urgency of engaging private investors to actualize the ambitious tourism blueprint.

Saudi Arabia, having welcomed 100 million tourists in 2023, predominantly domestic travelers, eyes international markets such as India, China, the UK, France, and Germany for tourist influx.

A new program launched by the Ministry of Tourism aims to streamline investment processes, potentially unlocking $11 billion in private investment, bolstering Saudi Arabia’s tourism trajectory and reshaping its economic landscape.

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CBN Unveils Plan to Settle N1.64 Trillion Treasury Bills in Q2 2024

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The Central Bank of Nigeria (CBN) has announced its strategic approach to managing liquidity and meeting financial obligations by unveiling a comprehensive plan to settle Treasury Bills (TBs) worth N1.64 trillion during the second quarter of 2024.

This initiative, part of the CBN’s Nigeria Treasury Bills Issue programme, aims to regulate the money supply within the economy while effectively managing liquidity dynamics.

According to documents obtained by Investors King, the TBs settlement program is slated to commence on March 7th and conclude on May 23rd, 2024.

The CBN will focus on settling TBs with varying tenors, including N414.29 billion on 91 days, N43.74 billion on 182 days, and a substantial N1.18 trillion on 364 days.

The breakdown of the settlement plan reveals monthly settlements to address maturing TBs. In March, the CBN plans to settle N660.62 billion worth of TBs, followed by N292.17 billion in April and N688.3 billion in May.

Market analysts interpret this move as a testament to the CBN’s commitment to managing financial obligations and maintaining economic stability.

It provides investors with opportunities to engage in short-term financial instruments while contributing to overall liquidity dynamics.

The strategic settlement plan reflects the CBN’s proactive stance in navigating economic challenges and ensuring stability within the financial landscape.

As the apex bank implements these measures, stakeholders will closely monitor their impact on market dynamics and economic indicators, anticipating implications for investment decisions and monetary policy outlooks.

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China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

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China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

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