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NNPC Announces New Date to End Gas Flaring

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  • NNPC Announces New Date to End Gas Flaring

The country is expecting over $25bn worth of investments in the gas sector, the Nigerian National Petroleum Corporation announced on Wednesday.

It also stated that policies that would put an end to the flaring of gas had been developed by the corporation, adding that gas flaring in Nigeria had reduced significantly from 25 per cent to 10 per cent in the last decade.

The Group Managing Director, NNPC, Maikanti Baru, stated these in different panel sessions at the ongoing 50th Offshore Technology Conference in Houston, United States, according to a statement issued in Abuja by the national oil firm’s spokesperson, Ndu Ughamadu.

While speaking at a panel session on new oil and gas horizons and procurement in Sub-Saharan Africa, Baru stated that huge opportunities abound in Nigeria’s gas sector, with the country expecting over $25bn investments over the next 10 years.

He described the Nigerian petroleum industry as the largest and most vibrant in Sub-Saharan Africa, with a lot of potential, especially in the deep water, and untapped gas resources.

According to him, Nigeria offers unique opportunities for investment in exploration, refining, storage, transportation, power, distribution and marketing of petroleum products, adding that the nation’s gas reform is anchored on a strategic framework that is focused on maximum economic impact through gas.

Speaking on the theme, ‘Nigeria’s Gas Flare Commercialisation, Prospects and Opportunities’, Baru explained that in the last decade, gas flaring had significantly reduced in the country.

He said the multi-pronged approach taken by the NNPC would ensure a sustainable solution to the historical problem of gas flaring.

Baru said the three-point strategy to arrest gas flaring included ensuring the non-submission of Field Development Plans to the Department of Petroleum Resources without a viable and executable gas utilisation plan, a move aimed at ensuring that no new gas flare in current and future projects.

Others are a steady reduction of existing flares through a combination of targeted policy interventions in the gas master plan, and the re-invigoration of the flare penalty through the 2016 Nigeria Gas Flare Commercialisation Programme and through legislation, that is, ban on gas flaring via the recent Flare Gas (Prevention of Waste and Pollution) Regulations, 2018.

Baru stated that the development would not only see Nigeria dropping from being the second highest gas flaring nation in the world to seventh, but would also signify a major milestone in the country’s gas commercialisation prospects.

“Total flares have significantly reduced to current levels of about 800mmscfd, and in the next one to two years, we would have completely ensured zero routine flares from all the gas producers,” he was quoted as saying.

Baru added that the NNPC had embarked on an aggressive expansion of its gas infrastructure network in order to create access to the market.

“Today, we have completed and inaugurated almost 600 kilometres of new gas pipelines, thereby connecting all existing power plants to permanent gas supply pipelines. We are also currently completing the construction of the strategic 127-kilometre Obiafu-Obrikom-Oben gas pipeline, ‘OB 3’, connecting the eastern supply to the western demand centres,” he noted.

Baru stated that aside looping the Escravos-Lagos Pipeline System 2 gas pipeline projects to increase gas volume capacity to at least 2Bcf/day, the corporation recently signed the contract for the 614-kilometre Ajaokuta-Kaduna-Kano pipeline project, which on completion, would deliver gas to the ongoing power plants in the areas and revive the manufacturing industries in the northern part of the country.

He said there was evidence that the interventions undertaken by the corporation were working as gas supply to the domestic market was growing at an encouraging rate, having tripled from 500mmcf/d in 2010 to about 1,500mmcf/d currently.

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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Economy

World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

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The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

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Nigeria’s Food Inflation Hits 40.66% Year-on-Year in May 2024

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Nigeria’s food inflation rate surged to 40.66% on a year-on-year basis in May 2024, a significant increase from 24.82% recorded in May 2023.

The latest figures from the National Bureau of Statistics (NBS) highlight the rising cost of essential food items, exacerbating the economic challenges faced by many Nigerians.

The NBS report attributes the steep rise in food inflation to substantial price increases in several staple items.

Notably, the prices of Semovita, Oatflake, Yam flour, Garri, and Beans saw considerable hikes.

In addition, the cost of Irish Potatoes, Yams, Water Yam, Palm Oil, and Vegetable Oil also climbed significantly. Within the protein category, Stockfish, Mudfish, Crayfish, Beef, Chicken, Pork, and Bush Meat experienced notable price jumps.

The month-on-month food inflation rate in May 2024 was 2.28%, reflecting a slight decrease of 0.22 percentage points from the 2.50% recorded in April 2024.

This month-to-month decline was due to a slower rate of price increases for Palm Oil, Groundnut Oil, Yam, Irish Potatoes, Cassava Tuber, Wine, Bournvita, Milo, and Nescafe.

Despite the minor monthly decrease, the average annual food inflation rate for the twelve months ending May 2024 was 34.06%.

This marks a significant rise of 10.41 percentage points from the average annual rate of 23.65% recorded in May 2023.

The sharp rise in food inflation is raising concerns among economic analysts and policymakers, as it significantly impacts the cost of living for Nigerians.

The rising food prices are straining household budgets and contributing to an overall inflation rate that threatens economic stability.

In response to the inflationary pressures, the Nigerian government and relevant stakeholders are being urged to implement effective measures to stabilize food prices and address the underlying causes of inflation.

Efforts to boost agricultural productivity, improve supply chains, and tackle market inefficiencies are seen as critical to mitigating the inflationary trend.

The NBS report underscores the urgent need for comprehensive strategies to manage inflation and ensure food security for the population.

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Nigeria’s Inflation Rate Climbs to 33.95% in May, NBS Reports

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The National Bureau of Statistics (NBS) has revealed that Nigeria’s headline inflation rate rose to 33.95% in May 2024, a slight increase from the 33.69% recorded in April.

This 0.26 percentage point rise underscores the ongoing economic challenges the country faces as it continues to grapple with rising prices and economic instability.

The report highlights that on a year-on-year basis, the headline inflation rate increased by 11.54 percentage points compared to May 2023, when the rate was 22.41%. This significant annual increase indicates a persistent upward trend in the cost of living for Nigerians over the past year.

However, the month-on-month analysis presents a mixed picture. The headline inflation rate for May 2024 was 2.14%, slightly lower than the 2.29% recorded in April 2024. This 0.15 percentage point decrease suggests a marginal slowdown in the rate at which prices are rising month by month.

Urban vs. Rural Inflation Rates

The NBS report also provides detailed insights into urban and rural inflation dynamics. In urban areas, the inflation rate in May 2024 stood at 36.34% on a year-on-year basis, a substantial 12.61 percentage points higher than the 23.74% recorded in May 2023.

On a month-on-month basis, urban inflation was 2.35%, down by 0.32 percentage points from April 2024’s rate of 2.67%.

Conversely, the rural inflation rate for May 2024 was 31.82% year-on-year, which is 10.63 percentage points higher than the 21.19% recorded in May 2023.

Month-on-month, rural inflation slightly increased to 1.94% from 1.92% in April 2024, indicating a steady rise in prices in rural regions.

Implications and Responses

The continuous rise in inflation, particularly in urban areas, poses significant challenges for the Nigerian economy.

The increase in prices for essential goods and services such as food, transportation, and housing is putting immense pressure on household budgets and the overall standard of living.

Economic analysts suggest that the persistent inflationary pressures are driven by several factors, including supply chain disruptions, increased production costs, and fluctuating exchange rates. The impact of these factors is felt more acutely in urban areas, where the cost of living is inherently higher.

In response to these inflationary trends, policymakers are under pressure to implement measures that can stabilize prices and ease the financial burden on citizens.

Strategies such as tightening monetary policy, increasing food production, and improving supply chain efficiency are being considered to curb the rising inflation.

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