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Nigeria’s Export Grows by 60 Percent

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  • Nigeria’s Export Grows by 60 Percent

Nigeria’s exports appreciated by 59.9 per cent between 2016 and 2017, the Federal Government said yesterday.

Tax revenue jumped by 51 per cent last year.

Vice President Yemi Osinbajo and Minister of Budget and Planning Udoma Udo-Udoma gave the figures at the FT Nigeria Summit on “Dispelling Uncertainty and Building Resilience’’ in Lagos.

The minister said the implementation of the Economic Recovery and Growth Plan (ERGP) gave rise to the export boost, driven by the non-oil sector.

He said the agricultural sector’s export grew from N6.7 billion in 2016 to N170 billion in 2017. Yam was among the products exported.

Udoma said solid minerals export also rose from N44 billion in 2016 to N102 billion in 2017.

Speaking on the theme: “Delivering economic resilience”, he said the ERGP and other policies had made great impact on the economy.

Udoma said the country’s business climate had improved with the government focusing on creating an environment for private sector investment.

“We have tackled those issues that made Nigeria not to be competitive in the past, such as ease of getting visas and acquiring land, among others,” he said.

The minister said the growth of other indices, such as foreign reserves, inflation rate, Gross Domestic Product were encouraging and made the economy more resilient.

“We have built up our foreign reserves, in June 2016 it was 26.51billion dollars but today it’s about 44 billion dollars,” the minister said.

He said the growth in the country’s reserves was achieved with prudent management.

He explained that the ERGP was a plan developed after a extensive consultation and was built on the work of the previous government.

According to him, the plan was designed to achieve more prosperous economy where Nigerians grow what they eat.

“It is to raise the productivity of Nigeria and Nigerians. We want to be a major engine of production where we produce enough for ourselves and enough for export to other countries.

“The plan drives the budget and drives all government activities,” he said.

Udoma said the plan helped the economy to get out of recession and ro become resilient.

He said the country had achieved 15 consecutive months of decline in inflation rate, which he said was still high.

“It is not where we want it to be, our target is single digit of nine per cent.

It is still too high but it is moving in the right direction,” Udoma said.

He added that the gap in exchange rate between the parallel market and official market was also narrowing and stabilising.

Udoma said the administration inherited a very challenged economy that was highly dependent on one commodity.

He explained that over 70 per cent of government revenue and 90 per cent of foreign exchange earnings depended on crude oil in the past.

Vice President Osinbajosaid the 51 per cent growth year- on-year was due to aggressive tax policies introduced by the Federal Government.

Speaking on “Nigeria beyond oil- The pathway to transformation’’, Osinbajo said “Aside from oil, tax revenues have gone up by 51 per cent in 2017. We are recording high tax revenue in the history of the country.’’

Osinbajo said that tax to Gross Domestic Product (GDP) would be above six per cent it used to be, going by growth recorded in tax revenue.

On external debt, he assured Nigerians that the current debt profile was still small and nothing to worry about when compared to thev GDP.

Osinbajo said that the country’s debt to GDP was 21 per cent, compared with Ghana that was around 70 per cent and South Africa 50 per cent, USA 101 per cent.

He stated that the country’s debt to revenue as at Nov. 2017 was 34 per cent down from about 60 per cent in the past.

“The reason why we have the alarmists is because this is only a snapshot, if you take a snapshot of Nov. 2017, you are not looking at revenue, you might say that the debt is very high.

“So, you cannot respond to these things by snapshot because you are not taking into account the revenue.

“Our external debt is not something we should worry about, we have managed debt very well,’’ he said.

On privatisation, he said that government was still committed to privatisation exercise and was too looking at assets that needed to be privatised.

He said that government would concession General Electric and the four major airports in the country.

Managing Director, Financial Times Live/Global Conferences & Events Mr James Gunnell, said that the summit would further brighten Nigeria’s complex economic and investment climate.

The summit would enable senior policy makers, major international investors, and multilateral organisations to put forward concrete recommendations and realistic solutions aimed at facilitating growth and overcoming the challenges the country was facing.

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 Slip as Japan’s Rising Inflation Signals Rate Hikes

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Crude oil fell in early trading on Friday as concerns over sustained high interest rates in both Asia and the United States weighed on the outlook.

This trend is attributed to Japan’s increasing inflation, which is prompting expectations of imminent rate hikes by its central bank.

Brent crude edged declined by 11 cents to settle at $85.60 per barrel while the U.S. crude oil declined by 9 cents to $81.20 per barrel.

Recent data revealed that Japan’s core consumer prices rose by 2.5% in May compared to the same month last year. This increase marks a growth from the previous month, suggesting that the Bank of Japan is likely to raise interest rates in the upcoming months to curb inflation.

In the United States, data released on Thursday showed a decrease in the number of new unemployment claims for the week ending June 14, indicating continued strength in the job market.

This persistent robustness in employment raises the likelihood that the U.S. Federal Reserve will maintain higher interest rates for a longer period.

Higher interest rates typically have a dampening effect on economic activity, which can subsequently reduce oil demand.

The prospect of prolonged elevated interest rates in two major economies has therefore put downward pressure on crude oil prices.

Despite the downward trend, oil prices received some support from the latest figures from the Energy Information Administration (EIA).

The data showed a drawdown in U.S. crude inventories by 2.5 million barrels in the week ending June 14, bringing the total to 457.1 million barrels. This exceeded analysts’ expectations, who had predicted a 2.2 million-barrel reduction.

Also, gasoline inventories fell by 2.3 million barrels to 231.2 million barrels, contrary to forecasts that anticipated a 600,000-barrel increase.

“Gasoline finally came to life and posted its first strong report of the summer driving season,” remarked Bob Yawger, director of energy futures at Mizuho in New York, highlighting the surprising uptick in gasoline demand.

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Crude Oil

Nembe Creek Oil Field Halted After Leak, Impacting 150,000 bpd

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Nigeria’s oil output has taken a significant hit following the shutdown of the Nembe Creek oil field due to a major oil leak.

The Nembe Creek oil field, responsible for producing approximately 150,000 barrels of crude oil per day (bpd), was forced to cease operations on June 17, 2024.

The leak occurred on the Nembe Creek Trunk Line (NCTL), a critical pipeline that transports oil from the Nembe Creek oil field to the Bonny Oil Export Terminal.

The operator of the pipeline, Aiteo Eastern Exploration and Production Company, confirmed the leak and the subsequent shutdown in a statement released yesterday.

Aiteo reported that the leak was discovered during routine operations in the Nembe area of Bayelsa State, located in Nigeria’s oil-rich Delta region.

This region is notorious for environmental degradation due to decades of oil spills, which have severely impacted local agriculture and fishing industries.

Following the discovery of the leak, Aiteo activated its Oil Spill and Emergency Response Team and shut down all production from Oil Mining Lease (OML) 29 as a precautionary measure to prevent further environmental damage.

“While we regret the production losses and the potential environmental impact, our current priority is to expedite an efficient spill management process in line with regulatory standards and collaborate with all stakeholders to restore production and mitigate associated risks,” said Victor Okronkwo, Managing Director of Aiteo Eastern E&P.

The exact cause of the leak remains unknown. Aiteo emphasized that the shutdown was a precautionary step to contain the spill and minimize environmental harm.

The company has notified its joint venture partners and relevant regulatory bodies, including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the National Oil Spill Detection and Response Agency (NOSDRA), about the incident.

This development comes as a setback for Nigeria, which holds Africa’s largest natural gas reserves and is a major oil producer.

The country’s oil sector has faced numerous challenges, including aging infrastructure, theft, and environmental issues, which have hindered its ability to maximize production and exports.

The Nembe Creek shutdown also highlights ongoing concerns about the safety and reliability of Nigeria’s oil infrastructure. The NCTL has been a frequent target of oil theft and sabotage, exacerbating the challenges of maintaining a steady oil output.

Energy analysts believe that the latest incident could impact Nigeria’s ability to meet its export commitments and exacerbate the country’s economic challenges.

The Nigerian government, under President Bola Tinubu, has been making efforts to attract investment into the energy sector to boost production and address infrastructure deficits.

“The government will hope this offers confidence not only in the quality of the Nigerian resource base, but also in the government’s pledge to improve ease of doing business,” said Clementine Wallop, director of sub-Saharan Africa at political risk consultancy Horizon Engage.

As Nigeria works to address the immediate spill and restore production, the broader implications for the country’s oil sector and its environmental impact remain to be seen.

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Crude Oil

Brent Crude Nears Seven-Week Highs as Market Eyes US Inventory Report

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Brent oil, the international benchmark for Nigerian crude oil, remained steady on Thursday, hovering just below seven-week highs as the escalating conflict in the Middle East raised concerns over potential supply disruptions.

At the same time, the market eagerly awaits U.S. inventory data for further indications of demand trends.

August Brent crude rose 28 cents, or 0.3%, to $85.35 a barrel while the U.S West Texas Intermediate (WTI) oil gained 13 cents, or 0.2%, to $81.70 a barrel.

“There was no WTI settlement on Wednesday due to a U.S. public holiday, which kept trading subdued,” noted Ricardo Evangelista, an analyst at ActivTrades.

“However, oil prices are likely to remain supported around current levels due to a growing geopolitical risk premium driven by conflict in the Middle East.”

Israeli forces have intensified their operations in the Gaza Strip, targeting areas in the central region overnight while tanks advanced into Rafah in the south.

The escalating violence has heightened fears of a broader conflict that could impact oil supplies from the region.

“Expectations of an inventory build appear to be overshadowing fears of escalating geopolitical stress for now,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

Investors are keenly awaiting the release of U.S. inventory data from the Energy Information Administration (EIA) later on Thursday, delayed by a day due to the Juneteenth holiday.

An industry report released on Tuesday by the American Petroleum Institute (API) indicated that U.S. crude stocks rose by 2.264 million barrels in the week ending June 14, while gasoline inventories fell, according to market sources.

The summer season typically sees an uptick in oil demand due to increased refinery runs and weather-related risks.

“Ongoing production cuts by the OPEC+ group, combined with seasonal demand, should tighten oil balances and lead to inventory draws during the summer months,” J.P. Morgan commodities analysts wrote.

Refining margins have also improved, with the ICE gasoil futures premium to Brent crude jumping to $20.63 a barrel on Wednesday, a two-month high.

“Firmer fuel refining margins provide a healthy dose of encouragement for those expecting improvements on the demand side,” commented Tamas Varga, an analyst at PVM.

In other economic news, the Bank of England’s decision to keep its main interest rate unchanged at a 16-year high of 5.25% ahead of the national election on July 4 has been noted by market observers.

Higher interest rates generally increase the cost of borrowing, which can slow economic activity and dampen oil demand.

As the market braces for the upcoming EIA inventory report, analysts and traders are closely watching for any signals that could influence oil prices in the near term.

The delicate balance between geopolitical tensions and supply-demand fundamentals continues to play a critical role in shaping the oil market landscape.

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