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Nigeria, Niger Republic Sign MoU on Refinery, Pipeline Projects

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Kachikwu
  • Nigeria, Niger Republic Sign MoU on Refinery, Pipeline Projects

The Federal Government on Tuesday signed a Memorandum of Understanding with Niger Republic to build a hydrocarbon and pipeline refinery in Katsina State.

The Minister of State for Petroleum Resources, Ibe Kachikwu; and Nigerian Minister of Energy and Oil, Faomakoye Gado, signed the agreement on behalf of their respective countries at the new Banquet Hall of the Presidential Villa, Abuja.

President Muhammadu Buhari and President Muhamamdou Issoufou of Niger Republic witnessed the signing of the agreement.

The refinery, which is to be built in Mashi town of Katsina State, is targeting to produce between 100,000 and 150,000 barrels of crude oil per day. It is projected to create over 2,500 direct and 10,000 indirect jobs.

The duration for the completion of the modular refinery project is put at between three and four years.

At the signing of the agreement, Buhari stated that the refinery, which will be the sixth after those of Warri, Kaduna, two in Port Harcourt, and the Dangote Petrochemical and Refinery in Lekki area of Lagos, would be private sector, driven with the full support of the governments of both countries.

He gave December 2018 deadline for the submission of the technical details of the project.

The project will see the construction of a pipeline network that will supply crude oil from the Republic of Niger to the refinery.

Buhari assured all stakeholders of Nigeria’s commitment to pursue the partnership with vigour and determination.

He said, “Nigeria sees this cooperation on crude oil export from the Republic of Niger and construction of refinery facilities in Katsina State as a win-win situation for both nations.

“The initiative will not only provide a reliable market for the stranded crude from the Niger Republic, but will also provide petroleum products for Nigeria, as it aggressively pursues its aspiration on petroleum product self-sufficiency.”

Buhari said, “In addition, it is my hope that the current frontier exploration efforts in the northern part of the country (Chad Basin, Gongola Basin, Sokoto Basin, Bida Basin and Benue trough) will also result in the provision of additional hydrocarbon inflow to the corridors of the proposed pipeline and a potential refinery around Kaduna axis.

“I am happy that several productive engagements held between the Nigerian and Nigerien authorities have resulted in the positive agreements to progress with activities on this important project.”

A steering committee chaired by the Nigerian Minister of State for Petroleum Resources and the alternate chairman, the Nigerien Minister of Petroleum, will provide strategic leadership, direction and governance oversight for the project.

Also, a senior level joint technical team set to develop the implementation road map and strategy on both the refinery and pipeline projects is led by Nigeria’s Rabiu Suleiman and supported by the Director General, Hydrocarbon, Niger Republic.

Buhari added, “It is my expectation that by December 2018, this group will come up with a detailed road map and guidelines leading to actual execution of the projects.

“The detailed road map should cover the following: Bankable feasibility studies for both the refinery and pipeline projects; optimal project site, pipeline routes and details; security plan and selected consortia of investors for both the refinery and pipeline projects.”

Issoufou, on his part, said the signing of the MoU constituted an important step, which would be mutually beneficial to both countries.

He noted that both countries wanted to work together to extend their economies, adding that Africa would not develop unless it was strengthened.

Issoufou stated, “We need to expand power and integration. This MoU is important for us to strengthen cooperation between our two countries. We are working as pioneer to develop our value chain. Nigeria is the natural leader of the integration process.

“We have decided to put two strategic technical committees in place in order to achieve the objectives of the projects. In the next few years, our cooperation will be to celebrate the export of oil from Niger to Nigeria.”

Kachikwu, in his remarks, said already, several expressions of interest from prospective investors had been received.

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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South Africa’s Inflation Rate Holds Steady in May

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South Africa's economy - Investors King

South Africa’s inflation rate remained unchanged in May, increasing the likelihood that the central bank will maintain current borrowing costs.

According to a statement released by Statistics South Africa on Wednesday, consumer prices rose by 5.2% year-on-year, the same rate as in April.

The consistent inflation rate is expected to influence the decision of the six-member monetary policy committee (MPC), which is set to meet in mid-July. The current benchmark rate stands at 8.25%, a 15-year high, and has been held steady for six consecutive meetings.

Central Bank Governor Lesetja Kganyago has repeatedly emphasized the need for inflation to fall firmly within the 3% to 6% target range before considering any reduction in borrowing costs.

“We will continue to deliver on our mandate, irrespective of how our post-election politics plays out,” Kganyago stated earlier this month in Soweto. “The only impact is what kind of policies any coalition will propose. If the policies are not sustainable, we might not have investment.”

While money markets are assigning a slim chance of a 25-basis point rate cut in July, they are fully pricing in a reduction by November.

Bloomberg Africa economist Yvonne Mhango anticipates the rate-cutting cycle to begin in the fourth quarter, supported by a sharp drop in gasoline prices in June and a rally in the rand.

The rand has appreciated more than 3% since Friday, following the ANC’s agreement to a power-sharing deal with business-friendly opposition parties and the re-election of President Cyril Ramaphosa.

In May, the annual inflation rates for four of the twelve product groups remained stable, including food and non-alcoholic beverages.

However, transport, alcoholic beverages and tobacco, and recreation and culture saw higher rates. Food prices increased by 4.3% in May, slightly down from 4.4% in April, while transport costs rose by 6.3%, up from 5.7% and marking the highest rate for this category since October 2023.

The central bank’s cautious stance on monetary policy reflects its ongoing concerns about inflation.

Governor Kganyago has consistently voiced worries that the inflation rate is not decreasing as quickly as desired. The MPC’s upcoming decision will hinge on sustained inflationary pressures and the need to balance economic stability with fostering growth.

As South Africa navigates its economic challenges, the steady inflation rate in May provides a measure of predictability for policymakers and investors alike.

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Ghana Reports Strong 4.7% GDP Growth in First Quarter of 2024

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Ghana one cedi - Investors King

Ghana’s economy showed impressive growth in the first quarter of 2024 with the Gross Domestic Product (GDP) expanding by 4.7% compared to the same period last year, according to Government Statistician Samuel Kobina Annim.

This represents an increase from the 3.8% growth recorded in the previous quarter and should provide a much-needed boost to the ruling New Patriotic Party (NPP) as the nation approaches the presidential elections scheduled for December 7.

The positive economic data comes amidst a challenging backdrop of fiscal consolidation efforts under a $3 billion International Monetary Fund (IMF) rescue program.

The government has been working to control debt through reduced spending and restructuring nearly all of its $44 billion debt.

This includes ongoing negotiations with private creditors to reorganize $13 billion worth of bonds.

The latest GDP figures are seen as a vindication of the NPP’s economic policies, which have been under fire from the main opposition party, the National Democratic Congress (NDC).

The opposition has criticized the government’s handling of the economy, particularly its fiscal policies and the terms of the IMF program, arguing that they have imposed undue hardship on ordinary Ghanaians.

However, the 4.7% growth rate suggests that the measures taken to stabilize the economy are beginning to yield positive results.

Analysts believe that the stronger-than-expected economic performance will bolster the NPP’s position as the country gears up for the presidential elections.

“The growth we are seeing is a testament to the resilience of the Ghanaian economy and the effectiveness of the government’s policies,” Annim stated at a press briefing in Accra. “Despite the constraints imposed by the debt restructuring and IMF program, we are seeing significant progress.”

The IMF program, which is designed to restore macroeconomic stability, has necessitated tough fiscal adjustments.

These include cutting government expenditure and implementing structural reforms aimed at boosting economic efficiency and growth.

The government’s commitment to these reforms has been crucial in securing the confidence of international lenders and investors.

In addition to the IMF support, the government has also been focused on diversifying the economy, reducing its reliance on commodities, and fostering sectors such as manufacturing, services, and technology.

These efforts have contributed to the robust growth figures reported for the first quarter.

Economic growth in Ghana has been uneven in recent years, with periods of rapid expansion often followed by slowdowns.

The current administration has emphasized sustainable and inclusive growth, seeking to ensure that the benefits of economic progress are widely shared across all segments of the population.

The next few months will be critical as the government continues its efforts to stabilize the economy while preparing for the upcoming elections.

The positive GDP growth figures provide a strong foundation, but challenges remain, including managing inflation, creating jobs, and ensuring the stability of the financial sector.

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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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