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‘Nigeria Lost $1.150bn of Potential Gas Income to Flaring in 2016’

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  • ‘Nigeria Lost $1.150bn of Potential Gas Income to Flaring in 2016’

In 2016 alone, Nigeria could not earn about $1.150 billion potential gas revenue because as much as 275 billion cubic feet (BCF) of natural gas were flared from oil fields in the Niger Delta, a taskforce of the federal government has said.

The taskforce – Nigerian Gas Flare Commercialisation Programme (NGFCP) – which is situated in the ministry of petroleum resources and chiefly responsible for designing the programme to commercialise the volume of gas flared in country, explained that in addition to revenue lost, the flared gas could have generated 3000 megawatts of electricity for Nigeria, but could not.

According to the NGFCP, the monies lost by Nigeria to flared gas were in two forms – $800 million in revenue and $350 million that could have been earned in emission credit.

The NGFCP Steering Committee Chairman, Mr. ‘Gbite Adeniji, who is also a senior technical assistant (STA, Upstream and Gas) to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated this in a recent presentation he made to the Executive Secretary of the Petroleum Technology Development Fund, Dr. Bello Gusau, when he visited him at the PTDF headquarters in Abuja with his team.

In the presentation which was obtained by, Adeniji, explained the NGFCP had identified 179 gas flare sites spread across on-shore, swamp, shallow offshore and deep offshore areas of the Niger Delta region.

He stated that these sites were burning an approximate volume of about 750 million standard cubic feet per day (mmscf/d) of gas.

According to him, in 2016 alone, about 275BCF of gas was flared, which he noted could have generated about 3000MW of electricity; generated about $800 million in revenue and earned about $350 million emission credit value.

‘Gbite, equally indicated that recent data obtained by the programme placed the figure of flared gas volume at about 1BCF per day, suggesting an increase from the 2016 figures.

He listed the intentions of the programme to include reduction of gas flaring in the Niger Delta; as well as initiation of a market-driven solution for the flares to benefit the communities and Nigeria’s economy.

He informed that President Muhammadu Buhari, has approved a regulations developed by the NGFCP to legally back its operations which would include harnessing all flare gas free of cost at the flare sites without payment of royalty; subjecting the flare sites to competitive bidding; issuance of permit to access flare gas to third party investors; increase the flare penalty payment to the government; mandate flare gas data measurement through metering; and mandate the department of Petroleum Resources (DPR) to publish annual data on flared gas.

‘Gbite, equally sought the involvement of PTDF in the NGFCP especially in cases of partnership to develop and implement strategies towards building human and institutional capacity to support the flare-out programme.

He also informed that he wanted the PTDF to assist in developing strategies to support the NGFCP with training in matters connected with the gas value chain, as well as the development of indigenous manpower and technology acquisition on gas flare reduction projects.

Based on ‘Gbite’s requests, Gusau, said the PTDF would be ready to partner with the NGFCP especially in the areas of capacity development to ensure the country’s efforts at reduce gas flaring through harnessing of flared volumes would be realised.

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.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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Nigeria Will Benefit Less From African Trade Deal – NESG

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Nigeria Will Benefit Less From African Trade Deal – NESG

Nigeria and other resource-based countries will benefit less from the African Continental Free Trade Area than economies that are more diversified, the Nigerian Economic Summit Group has said.

The NESG, a private sector-led think-tank, said in its 2021 Macroeconomic Outlook that Nigeria could reap more gains through export diversification away from crude oil.

It said trade in Africa remained dominated by raw materials and less processed products, adding that on average, minerals and agriculture accounted for 44 per cent and 16 per cent of intra-African trade respectively between 2007 and 2017.

The NESG said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.

“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.”

“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic,” it added.

The group said the World Bank estimates revealed that the AfCFTA would promote manufacturing exports over natural resources, agricultural and services exports, and that manufacturing exports would account for one-third of the projected total exports of $2.5tn by 2035.

It said, “Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.

“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.

“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.”

According to the NESG, for Nigeria to maximally benefit from the trade deal, there is an urgent need to also address transport infrastructure bottlenecks and provide improved logistics.

It said, “Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.

“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.

“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.

“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”

The group noted that owing to the outbreak of COVID-19, the implementation of the AfCFTA was postponed from July 1, 2020 to January 1, 2021.

It said, “The key goal of the free trade pact is to expand the volume of intra-African trade, which stood at 16 per cent in 2018 .“Till date, 36 countries, including Nigeria, have ratified the agreement. The trade deal is expected to create a single market with a combined GDP of $2.5tn and total population or market size of 1.2 billion.”

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