- NNPC Loses N10.96 Billion as Kaduna Refinery Stays Dormant
The Nigerian National Petroleum Corporation (NNPC) managed Kaduna Refinery and Petrochemical Company (KRPC), one of the Four (4) crude oil refineries in Nigeria, has remained paused in a state of dormancy.
In the June 2018 monthly Oil and Gas Report of the NNPC, it was pointed out that the corporation’s trading surplus experienced a drop from N18.11 billion to N7.15 billion in May/June 2018; totaling to a N10.96 billion loss in one month.
According to the report, the performance analysis of the refineries in Nigeria revealed that the Kaduna refinery productivity has remained at a zero level; being that, despite receiving up to 78,833 metric tonnes of crude oil commodity in the months of May and June 2018, the KRPC however, refined no crude oil.
Nevertheless, The Warri Refinery and Petrochemical Company in May/June processed a 246,039 metric tonnes and 138,310 metric tonnes respectively; revealing a drop to 27.04 percent from 46.55 percent.
Unlike the low-performance level of the Warri refinery and the zero performance of the Kaduna refinery within the period under review, the Port Harcourt Refinery Company processed a 132,595 metric tonnes in May and an increased 237,875 metric tonnes in June; revealing a growth of 27.68 percent from 14.93 percent.
Although refineries in Nigeria have been in a low-performance level, the Federal Government have on several occasions called for investment in the industry.
IMF Calls for Major Reforms to Turn Zimbabwe’s Economy Around
Zimbabwe needs a “broader reform and stabilization agenda” to sustain an almost year-long effort by authorities to support the local currency and lower inflation, the International Monetary Fund said.
The government should address pandemic-related health and social challenges, coordinate fiscal, foreign-exchange and monetary policies, and implement structural reforms aimed at improving the business climate and curbing corruption, an IMF spokesperson said Friday in an emailed response to questions.
Zimbabwe reintroduced its own currency in 2019 after a 10-year hiatus and has been battling bouts of high inflation and shortages of everything from foreign currency to food. The local unit, which was pegged at parity to the U.S. dollar two years ago, has plunged to 84.6 against the greenback, while annual inflation stands at 194%.
The IMF plans to hold a virtual staff visit in the first half of June, which would be a precursor to the country’s enrollment in a staff-monitored program. A previous program ended in February 2020, when the fund said Zimbabwe had gone “off track.”
“Fund staff will discuss recent macroeconomic developments, the authorities’ efforts in addressing the Covid-19 pandemic and vaccine roll-out, economic outlook and policies and capacity development priorities,” the spokesperson said.
Zimbabwe’s Treasury estimates the economy will grow 7.4% this year, though that’s more optimistic than the IMF’s 3.1% projection. Finance Minister Mthuli Ncube has forecast the inflation rate will drop to 15% by year-end.
“Fund staff take note of the authorities’ efforts to stabilize the local currency and lower inflation over the last few months,” the spokesperson said.
The government has yet to provide a clear plan on how the country will expunge almost $10 billion of debt owed to multilateral lenders including the World Bank, Paris Club and African Development Bank that are crucial for it to access fresh credit lines. The solution lies in “sound policies and donor support needed to resolve the debt overhang problem,” according to the IMF.
Inflation Remains High at 18.12 Percent, Says Experts
Nigeria’s inflation moderated slightly to 18.12 percent year-on-year in April from 18.17 percent posted in the month of March, according to the latest report from the National Bureau of Statistics (NBS).
Even though food inflation also slowed down to 22.72 percent in the month, compared to 22.95 percent filed in the previous month, experts have said the nation’s inflation rate remained high and above the 9 percent target of the Central Bank of Nigeria.
Speaking on the inflation report, the Head of Research at Agusto Consulting, Mr. Jimi Ogbobine, said: “We can’t say we are winning the war against inflation because it is still above 18 per cent; especially because at 18 per cent, inflation is still at double-digit, whereas the limit of the CBN’s inflation target is nine per cent. And that means is that we can still be referred to as a high inflation environment.
“I think we need to start looking at our current inflation as a security issue even beyond the basic of economics and beyond economic preview. It means it is affecting lots of families, it is increasing poverty levels and it means that the purchasing power of disposable income is weak and when you bring in high unemployment and an increase in working poor.”
Another expert, Mr. Ayodeki Ebo, the Head, Retail Investment, Chapel Hill Denham, said: “The inflation figures came as a surprise, but looking at it, it was majorly due to the high base effect of food inflation, which was a result of last year’s lockdown, which started in April and led to a sudden jump in prices.”
Commenting on what can be done to rein in Nigeria’s high inflation rate, Ebo said: “The issue of insecurity needs to be tackled and we need to also increase production so there is enough supply.
“We need to also intensify investments into agriculture so that yields can also increase. Other things are long term, which would help reduce distribution like having a functioning rail network would really impact on the cost of distribution.”
On his part, Prof. Uche Uwaleke, the Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Abuja Branch, said the risks to the inflation outlook were still present.
“It is difficult to interpret this marginal drop in headline inflation to mean the beginning of a downward trend in the inflation rate.
“This is because the risks to the inflation outlook are still present. These include insecurity, which directly impacts food inflation, the recent devaluation of the naira, and the likely hike in the pump price of fuel and electricity tariffs,” he added.
Accordingly, Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, explained that the moderate decline was “not a turning point” in inflationary pressure.
He said: “It is only a marginal drop which may have arisen from one or a few reasons. The factors that have caused hyperinflation have not improved.
“We have not had an improvement in security, they have rather worsened. The prices of petroleum products are expected to align with global prices of crude oil, as the oil subsidy has technically been discontinued.
“We are therefore not expecting a further drop in inflation rate, if well measured, in the next month.”
Nigeria’s Food Inflation Drops Marginally in April 2021
Food inflation in Nigeria, Africa’s largest economy, slowdown marginally from 22.95 percent in March to 22.72 percent in the month of April, the National Bureau of Statistics (NBS) reported on Monday.
Increases were caused by surged “in prices of Coffee, tea and cocoa, Bread and cereals, Soft drinks, Milk, Cheese and egg, Vegetable, Meat, Oils and Fats, Fish and Potatoes, Yam and other tubers.
On a monthly basis, the food sub-index grew by 0.99 percent in April 2021, down by 0.91 percent when compared to the 1.90 percent filed in March 2021.
The average annual rate of change of the Food sub-index for the twelve-month period ending April 2021 over the previous twelve-month average was 18.58 percent, representing an increase of 0.65 percent from the average annual rate of 17.93 percent recorded in March 2021.
Nigeria’s Inflation rate moderated to 18.12 percent year-on-year in April.
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