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LCCI, NACCIMA, Others Back Atiku on NNPC Privatisation

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NNPC - Investors King
  • LCCI, NACCIMA, Others Back Atiku on NNPC Privatisation

The Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf; National Vice-President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Remi Bello; and a former President of the Association of National Accountants of Nigeria, Dr. Sam Nzekwe, have supported the position of the presidential candidate of the Peoples Democratic Party, Abubakar Atiku, that the Nigerian National Petroleum Corporation be privatised.

Last week Wednesday, Atiku declared that he would privatise the NNPC if elected, describing the corporation as a mafia-organisation.

Commenting on the development, the LCCI DG said the presidential candidate’s position was the way to go if the NNPC must perform optimally as an oil firm.

Yusuf said, “His (Atiku) position is consistent with the current reforms that are being negotiated. And I think it is consistent even with the Petroleum Industry Bill because the whole idea of that bill is to disengage as much as possible the government from the control and management of the oil and gas industry.

“The government should be restricted to the regulatory aspect of the business and not getting directly involved. That’s my sense of what the reform is all about and that’s my sense of what the PIB is also all about. So what he (Atiku) has said is not so much different from the reforms that are being contemplated by stakeholders.”

He added, “And I believe that that is the way to go. We can have a model where the government will not actually sell all the shares but can retain some, just like the NLNG (Nigeria Liquified Natural Gas) model where the government has 49 per cent and the private sector has 51 per cent.

“The NLNG is being managed by the private sector and you can see the kind of success we are getting from that company. The government is making billions of dollars in terms of dividend and on top of that NLNG is paying a lot of tax also in foreign exchange.”

Also, in his response on whether it was okay for the NNPC to be sold to private investors, the vice-president of NACCIMA stated that the privatisation of the oil firm was the right thing to do presently.

Bello said “I don’t think there should an objection as to whether the NNPC should be privatised. We cannot be talking from the two sides of our mouths because if we believe the saying that the government has no business to be in business then NNPC is the kind of business, that shouldn’t be a public asset.

“So, yes, I think it is the way to go and the corporation should be privatised. Once due diligence is followed and act of corruption is removed, then, of course, that’s the way to go.”

Nzekwe, on his part, stated that the privatisation of the national oil firm was long overdue, but stressed that it must not be sold to the wrong investors in order to avoid the kind of concerns currently faced in the power sector.

He said, “That is what we need right now because there is a lack of transparency at the NNPC. People don’t know what they are doing there. But my concern is that to whom are you going to sell the corporation to? This is because it may end up in the hands of those few Nigerians who will still make it not to work.

“They may buy it at very cheap rates and can’t revamp it as required. However, my opinion is that it be sold in form of shares where an average Nigerian can own some stake in the corporation, instead of selling it to the privileged few and they run it just like what we are seeing now in the power sector.”

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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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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