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Nigerian Ports Record Mixed Performance as Vessel Traffic Decline 2.3% in Q1

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  • Nigerian Ports Record Mixed Performance as Vessel Traffic Decline 2.3% in Q1

Despite efforts by the Nigerian Ports Authority (NPA) to ensure the nation’s ports run efficiently, Nigerian ports recorded mixed fortunes in the first quarter (Q1) of 2018.

Performance report released by the NPA during the Nigerian Port Consultative Council (PCC) quarterly meeting held in Lagos revealed that the number of vessels which called at the ports during the period shrunk by 2.3 per cent.

However, there was an improvement in the turn-around time of vessels. This increase, according to the report, was because of concerted efforts of the management of NPA to improvement on port infrastructure and implementation of federal government’s Executive Order on Ease of Doing Business.

Analysis of the numbers showed that vessel traffic slumped from 1,008 vessels in the fourth quarter of 2017 to 985 vessels during the period under review, representing a decline of 2.3 per cent.

Gross tonnage of ship stood at 31,693,650 as against 32,598,477 recorded in the fourth quarter of 2017, representing a decline of 2.8 per cent.

In the same vein, container traffic in the Q1 of 2018 dropped. Further analysis of the statistics showed that within the period under review, container traffic stood at 387,016 Total Equivalent Unit (TEUs), indicating a decrease of 7.1 per cent from 416,806 TEUs handled by the same ports in the fourth quarter of 2017.

Also, vehicle traffic within the period under review dropped as a total of 37, 584 vehicles were handled by NPA within the period under review, representing a decrease of 13.2 per cent from 43,338 units received in the previous quarter.

Conversely, the ports recorded an impressive cargo throughput, recording 18,729,889 metric tons of goods in Q1 as against the 17,250,334 metric tons of cargo the seaports received in the fourth quarter of 2017, indicating an increase of 8.6 per cent.

The inward traffic stood at 10,617,318 metric tons, representing 56.7 per cent of cargo throughput at the ports in the Q1 of 2018 while the outward cargo traffic was said to be 8,112,671 metric tons representing 46.3 per cent of the total cargo traffic.

However, the turn-around time of vessels stood at 3.8 days when compared with 4.1 days in fourth quarter of 2017 while berth occupancy rate was 32.8 per cent as against 33.8 per cent on fourth quarter 2017.

The Q1 2018 witnessed a significant growth in cargo traffic when compared with fourth quarter of 2017, however, there was a decrease of 2.3 per cent in the number of ships that call to the ports but the corresponding cargo traffic increased by 2.3 per cent due to increase in export cargoes especially LNG shipment and agricultural products.

Meanwhile, stakeholders said the decline in the port performance may not be unconnected to the poor port access roads, security challenges and some government’s policies which are not considered friendly to boost vessels traffic.

The NPA had in a bid to ensure efficiency at the port axed the Standard Organisation of Nigeria (SON) and others who were affected in the executive order from the ports across the country.

The Managing Director of the NPA, Ms. Hadiza Bala-Usman gave the directive at a stakeholders’ meeting comprising the Nigerian Customs Service (NCS), operators and major stakeholders in the port.

She listed the NPA as the landlord, the Nigerian Customs Service (NCS), Nigerian Maritime Administration and Safety Agency (NIMASA), Department of State Services (DSS), Nigerian Police, Nigerian Immigration Service (NIS) and the Port Health Authority (PHA) as the only agencies approved to operate in the ports.

“These are the seven agencies that are mandated and have approval to operate in the port, any agency that is operating in the port outside of these agencies are not required to and they should be aware that they need to vacate whatever location they are currently having within the port because the current approval and provision provides that they are not to operate in the port,” she said.

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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Commodities

Economic Strain Halts Nigeria’s Cocoa Industry: From 15 Factories to 5

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Once a bustling sector, Nigeria’s cocoa processing industry has hit a distressing low with operational factories dwindling from 15 to just five.

The cocoa industry, once a vibrant part of Nigeria’s economy, is now struggling to maintain even a fraction of its previous capacity.

The five remaining factories, operating at a combined utilization of merely 20,000 metric tons annually, now run at only 8% of their installed capacity.

This stark reduction from a robust 250,000 metric tons reflects the sector’s profound troubles.

Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria (COPAN), voiced his concerns in a recent briefing, calling for an emergency declaration in the sector.

“The challenges are monumental. We need at least five times the working capital we had last year just to secure essential inputs,” Oladunjoye said.

Rising costs, especially in energy, alongside a cumbersome regulatory environment, have compounded the sector’s woes.

Farmers, who previously sold their cocoa beans to processors, now prefer to sell to merchants who offer higher prices.

This shift has further strained the remaining processors, who struggle to compete and maintain operations under the harsh economic conditions.

Also, multiple layers of taxation and high energy costs have rendered processing increasingly unviable.

Adding to the industry’s plight are new export regulations proposed by the National Agency for Food and Drug Administration and Control (NAFDAC).

Oladunjoye criticized these regulations as duplicative and detrimental, predicting they would lead to higher costs and penalties for exporters.

“These regulations will only worsen our situation, leading to more shutdowns and job losses,” he warned.

The cocoa processing sector is not only suffering from internal economic challenges but also from a tough external environment.

Nigerian processors are finding it difficult to compete with their counterparts in Ghana and Ivory Coast, who benefit from lower production costs and more favorable export conditions.

Despite Nigeria’s potential as a top cocoa producer, with a global ranking of the fourth-largest supplier in the 2021/2022 season, the industry is struggling to capitalize on its opportunities.

The decline in processing capacity and the industry’s current state of distress highlight the urgent need for policy interventions and financial support.

The government’s export drive initiatives, aimed at boosting the sector, seem to be falling short. With the industry facing over N500 billion in tied-up investments and debts, the call for a focused rescue plan has never been more urgent.

The cocoa sector remains a significant part of Nigeria’s economy, but without substantial support and reforms, it risks falling further into disrepair.

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Energy

Nigeria’s Power Sector to Get $7.5bn from $30bn African Electrification Initiative, Says Minister Adelabu

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Minister of Power Adebayo Adelabu has said that Nigeria is set to receive a portion of a $30 billion investment aimed at electrifying Africa.

During a visit to Splendor Electric Nigeria Limited, Adelabu revealed that the World Bank and the African Development Bank (AfDB) have committed to this ambitious initiative with Nigeria slated to receive approximately $7.5 billion, or 25% of the total fund.

The groundbreaking initiative is designed to extend electrification to an additional 300 million Africans over the next five years.

This large-scale project aims to address the energy deficit that has long plagued the continent and is expected to transform the power infrastructure significantly.

Adelabu expressed optimism about Nigeria’s role in the project, citing the country’s large population and ongoing power sector reforms as key factors in securing a substantial share of the funds.

“I want to inform you of the proposal or the intention, which is at an advanced stage, by the World Bank and the African Development Bank to spend about $30 billion to extend electrification to an additional 300 million Africans within the next five years. Nigeria is going to participate fully in this. I am confident that nothing less than 20% or 25% of this fund would come into Nigeria because of our population,” Adelabu stated.

The minister’s visit to Splendor Electric Nigeria Limited, a porcelain insulator company, underscores the government’s commitment to involving local businesses in the electrification drive.

The investment will focus on enhancing and upgrading power infrastructure, which is crucial for improving electricity access and reliability across Nigeria.

Despite the promising news, Nigeria continues to face significant challenges in its power sector. The country’s power grid has suffered frequent collapses, with the Nigerian Bureau of Statistics reporting less than 13 million electricity customers and frequent nationwide blackouts.

The International Energy Agency highlighted that Nigeria’s national grid experienced 46 collapses from 2017 to 2023, exacerbating the nation’s energy crisis.

To combat these issues, the government is also advancing the Presidential Power Initiative, a project in collaboration with Siemens, which aims to build thousands of new lines and numerous transmission and injection substations.

Adelabu noted that the pilot phase of this initiative is nearing completion and that Phase 1 will commence soon.

With over 200 million people and a chronic energy shortfall, Nigeria’s power sector is in urgent need of overhaul.

The additional $7.5 billion from the African Electrification Initiative represents a critical step toward achieving reliable and widespread electricity access.

The investment is expected to stimulate not only infrastructure development but also economic growth, creating opportunities for local companies and improving the quality of life for millions of Nigerians.

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Crude Oil

Oil Prices Climb as Markets Eye Potential US Rate Cuts in September

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Oil prices rose during the Asian trading session today on speculation that the U.S. Federal Reserve may begin cutting interest rates as soon as September.

Brent crude oil, against which Nigerian oil is priced, increased by 32 cents to $82.95 a barrel, while U.S. West Texas Intermediate crude oil climbed 34 cents to $80.47.

The anticipation of rate cuts stems from recent U.S. inflation and labor market data indicating a trend towards disinflation and balanced employment, according to ANZ Research.

The Federal Reserve is set to review its policy on July 30-31, with expectations of holding rates steady but providing clues for potential cuts in September.

The potential rate cuts could stimulate economic activity, increasing demand for oil. This optimism has been partially offset by recent concerns over China’s slower-than-expected economic growth, which could dampen global oil demand.

President Joe Biden’s announcement to not seek re-election and endorse Vice President Kamala Harris had minimal impact on oil markets.

Analysts suggest that U.S. presidential influence on oil production is limited, although a potential Trump presidency could boost oil demand due to his stance against electric vehicles.

In response to economic challenges, China surprised markets by lowering key policy and lending rates. While these measures aim to bolster the economy, analysts remain cautious about their immediate impact on oil demand.

With OPEC+ production cuts continuing to support prices, the focus remains on the U.S. Federal Reserve’s next moves.

Any decision to cut rates could further influence oil prices in the coming months, highlighting the interconnectedness of global economic policies and energy markets.

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