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Nigerian Economy Remains under Great Threat, US Warns

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  • Nigerian Economy Remains under Great Threat, US Warns

The United States military yesterday warned that the Nigerian economy remains under great threat following the surge in criminal activities in the Niger Delta and the threats by militants to resume bombing of oil facilities in the region. The rise in lawless activities around the Gulf of Guinea was also identified as another threat to Nigeria’s economy.

The warning from the Commander of the United States Naval Forces in charge of Europe and Africa, Admiral Michelle Howard, is coming amid a ray of hope by the National Bureau of Statistics (NBS) that Nigeria was now out of economic recession with a growth rate of 0.55 per cent.

Howard, who was speaking while presenting the US Presidential Medal of Honour to Nigeria’s Deputy Military Attachee to the US, Navy Captain Kolawole Oguntuda, at the Naval Headquarters in Abuja said: “Oil extraction and production accounts for 75% of Nigeria’s revenue with the vast majority of oil infrastructure existing off shore or really close inshore. So terrorism, criminal networks, illegal bunkering with damages of oil pipeline directly threatens Nigeria economy.

“That is where navies come in. I, as the commander, regards the Nigerian Navy as a key regional partner in securing the Gulf of Guinea and I seek to strengthen our relationship by assisting in economic security and enhancing regional stability.”

Speaking, the Chief of Naval Staff (CNS), Vice Admiral Ibok-Ete Ekwe Ibas assured that the Nigerian Navy was ready and capable of containing threats posed by the Niger Delta militants.

“We actually don’t need people from outside to tell us how strategic Nigerian Navy is in securing our environment, maritime space and the Gulf of Guinea.

“The maritime environment has seen a spate of piracy attacks, robbery, especially last year. We also saw some elements of resource theft, including illegal fishing in our waters, human trafficking, arms trafficking as well as drug trafficking, not to mention waste dumbing and environmental concerns.

“The strategic role Nigeria plays is what has brought in America. For the threats you mentioned in the Niger Delta, one thing I want to assure you is that so long as human beings exist, there will always be conflicts, and once there are conflicts, there would always be ways of resolving those conflicts.

“For Nigerian Navy, we will continue to build our capacity and capabilities to enable us contain such threats,” Ibas stated.

On securing Nigeria’s maritime territory, the CNS added: “If Nigeria is the main concern to look at in the sub-region, Nigeria therefore becomes an important country for those who have interest in this region, to come and have conversation to see how they can enhance the maritime law enforcement agencies, in this case, the Nigerian Navy in particular, to see how we can make the maritime environment secured and promote trade and prosperity in the region.

“US government has always been offering us support. The sea do not belong to any particular individual, they are global commons, and transnational crimes that occur, means that from one country to the other, your security can be compromised if the sea space is not properly governed.

“So, for US, wherever they have interest, they are ready to provide the needed support. And I think it stands for Nigeria also, where we have to ensure that the Gulf of Guinea is secured, including the security of neighbouring states.”

Udoma: Steps Taken to Reflate Economy Got Nigeria Out of Recession

In a related development, the Minister of Budget and National Planning, Udo Udoma has declared that the steps taken by the federal government to reflate the economy through the Economic Recovery and Growth Plan (ERGP) culminated in the country exiting recession in the second quarter of 2017.

Udoma, who was a guest of Arise TV recalled that earlier in the year, the Buhari administration unveiled its flagship programme – Economic Recovery and Growth Plan (ERGP) – “that sets out strategy for the next four years on what we intend to do to get the economy firstly out of recession and on to a sustained diversified inclusive growth.”

According to the minister, the target was to achieve a 7 per cent growth by 2020, adding that focusing on the five execution priorities of the ERGP helped in seeing the economy out of contraction.

Udoma added: “The steps that we have been taking to reflate the economy, to make it easier to do business, focused on the five execution priorities – stabilising the macroeconomic framework, agriculture, transportation, power and energy and manufacturing. These are things that have helped to get us out of the recession and those are things that are going to get us into the path of sustaining it.”

The Budget and National Planning Minister said the administration was taking some measures to ensure that the economy takes a firm footing.

He said: “What we are trying to do basically is to diversify the economy. It is true I do agree that at the moment we are dependent on one commodity – crude oil. That is something that we inherited and our plan is to move out of that dependency, but to move out of that dependency, we need the resources from crude oil and that is why we have a lot of initiatives in the Niger Delta to try and get oil production back.

“Yes, we are dependent but our plan is to move out of that dependency and therefore we are putting a lot of resources on agriculture and agriculture has been moving up, production has moved up. We are putting a lot of resources as well as to get manufacturing going, and in the 2017 Budget, we allocated funds for special economic zones in each of the geo-political zones of Nigeria.

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.

Economy

Stop Maize, Soybean Export to Reduce Scarcity – NIAL

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Stop Maize, Soybean Export to Reduce Scarcity – NIAL

The Nigerian Institute of Animal Science on Tuesday called on the Federal Government to halt the continued export of maize and soybean to reduce the scarcity of the commodities as well curb their price hike in Nigeria.

Registrar and Chief Executive Officer, NIAL, Prof. Eustance Iyayi, told journalists in Abuja that the poultry sector was currently hit by the severe scarcity of maize and soybean.

This, he said, was due to the continued export of the commodities, the COVID-19 pandemic, which had disorganised the international supply chain, lingering insecurity in the North-East, farmers/herders conflict and flooding in some parts of the country.

“Maize and soybean are being exported and this has exacerbated the situation leading to local scarcity and price escalation of the commodities in poultry production,” Iyayi stated.

He added, “The increasing prices of the essential commodities has resulted in the increase in price of finished feeds by about 75 per cent.

“This has led to the closure of small and medium sized poultry farms thereby threatening about 10 million jobs as a result of this scarcity.

“To set the poultry industry from total collapse, the institute urges the government to immediately halt the exportation of soybean and maize and grant import permit to importers at the official foreign exchange rate.”

Iyayi said there was shortage of soybean in Nigeria and other countries, stressing that the little amount being produced across the country should not be exported.

He said the current maize yield of about one to two tonnes per hectare being produced in Nigeria would not be enough to sustain the country.

The NIAL helmsman stated that the country should be producing between seven and 10 tonnes per hectare in order to meet the requirements for humans and animals.

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Economy

Petrol Landing Cost Jumps to N186, Oil Hits $64

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Petrol Landing Cost Jumps to N186, Oil Hits $64

Against the backdrop of the rising price of oil prices, the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.

Investors King had exclusively reported on February 9 that the landing cost of PMS rose to about N180 per litre on February 5 from N158.53 per litre on January 7.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N186.33 per litre on February 16, with the pump price of the product expected to be N209.33 per litre.

The international oil benchmark, Brent crude, closed at $63.96 per barrel on February 16, up from $59.34 per barrel on February 5.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.

Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).

The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.

The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).

Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.

The cost of petrol would be higher if the 410/$1 rate at which the naira closed on Monday at the Investors’ and Exporters’ Foreign Exchange Window was used. The naira closed at 480/$1 at the parallel market.

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

Oil marketers said recently that they were ready to resume importation of petrol if the foreign exchange was made available to them at a competitive rate.

“The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens,” the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said at a virtual press briefing.

Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.

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FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

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FG to Lift 100 Million People Out of Poverty With Gas Expansion Project

The Federal Government has said about 100 million Nigerians will be lifted out of poverty through the National Gas Expansion Programme (NGEP).

The Minister of State for Petroleum Resources, Chief Timipre Sylva, disclosed this on Monday during the inauguration of the NGEP in Ado Ekiti, Southwest.

Sylva said the project was “a practical demonstration of President Muhammadu Buhari’s commitment to lift 100 million Nigerians out of poverty by using gas value chain as catalyst for social and economic development in Nigeria”.

The minister said, “The programme has its main objective to reinforce and expand gas supply as well as stimulate demand in Nigeria through effective and efficient mobilisation and utilisation of all available assets, resources and infrastructure in the country.

“The programme is geared towards the implementation of Mr President June 12, 2019 promise to take hundred million Nigerians out of poverty within the current decade by ensuring that locally produced, available, accessible and affordable fuel is sufficiently supplied across the country”.

Sylva added that Nigeria was richly endowed with mineral resources, specifically, hydrocarbons, crude oil and natural gas with proven gas reserves of over 200 trillion cubic feet of natural gas, which he said had presented the country with opportunity to use gas as a catalyst for social economy renaissance.

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