- Nigeria, Morocco Gas Pipeline to Supply 15 Countries
Nigeria and Morocco have completed the feasibility study for the construction of the 5,660km Nigeria-Morocco Gas Pipeline and the facility will supply gas to at least 15 countries in West Africa, the Group Managing Director of the Nigerian National Petroleum Corporation, Maikanti Baru, announced on Monday.
Baru also stated that pre-Front End Engineering Design optimisation study for the pipeline was currently ongoing, adding that the facility would boost the region’s industries when completed.
This is coming as the Minister of State for Petroleum Resources, Ibe Kachikwu, announced that African countries were mobilising about $2bn to develop a financing body that will fund the energy sector.
Both the NNPC boss and the minister spoke at the Nigeria International Petroleum Summit in Abuja which had senior government officials from across Africa, Europe and America.
In his address at the summit, Baru said, “We need to collaborate especially in the area of infrastructure. Today, Nigeria and Morocco are collaborating to construct a gas pipeline that will traverse at least 15 West African countries with intake and offtake points in the various countries before it links with the existing Maghreb-Europe gas pipeline in Northern Morocco. The feasibility study has been concluded and the pre-FEED optimisation study is currently ongoing.
“This pipeline will help in the industrialisation of these countries. It will also meet the needs of consumers for heating and other uses. We see gas as a fuel to take Africa to the next level. New gas discoveries have been recorded offshore Senegal, Mauritania, Mozambique and are in various stages of development.”
He added, “Nigeria is also targeting to take FID on LNG Train 7 this year. So African countries need to collaborate and trade among each other not only in terms of oil and gas but also in other key sectors so that the multiplier effect is seen across our various economies.”
On his part, Kachikwu, who doubles as the President of African Petroleum Producers Organisation, stated that APPO was sourcing for about $2bn for an energy corporation.
He said, “We are presently looking at expanding the role of a particular financing body that we are going to be calling the African Energy Investment Corporation. The whole idea is to mobilise between $1bn and $2bn of resources to fund all the essentials necessary for us to properly collaborate.
“Today, most African countries are silos, everybody does their own thing; you build your own refineries, plants, gas turbines, etc. If we could just cross the Rubicon and be able to extend hands of infrastructural relationship across Africa, build joint pipelines, plants and refineries; begin to protect the African market, we would have taken a huge step, not only in the development of Africa but to the stabilisation of independent countries.”
The minister, however, noted that the oil sector in Africa was facing some challenges.
Kachikwu said, “On the challenge side, certain things jump out; such as shale, oil pricing, investment limitation, President Trump and so many other things. At the opportunity side, so many other things are going. However, with the opportunities arise challenges, especially those to do with the environment.
“Unless you get your policies right, unless you get your market place right, unless you get your collaborative mechanisms right and get your infrastructure right, you would face a huge amount of challenge in the competition for the very scarce resources and scarce capital.”
Kachikwu stated that aside from Nigeria’s effort in domestic gas supply, the country was also expanding frontiers in the export market.
He confirmed Baru’s position and stated that the Federal Government had executed the Memorandum of Understanding between NNPC and the Office National des Hydrocarbures et des Mines Morocco for collaboration in the construction of a gas pipeline from Nigeria to Morocco.
“The NGMP feasibility study was completed in July 2018 and the FEED Phase 1 scope is expected to be completed by end of Q1, 2019,” the minister said.
On the skills in Nigeria’s oil and gas sector, Kachikwu stated that over 90 per cent of the oil majors’ workforce was Nigerians.
“This means that some of the best skill sets are here. One of the things I found going into the NNPC in 2015 was that every detail of capability that you need to run a global company sat in NNPC. They are much trained, very well exposed. We have issues in terms of policies, but in terms of skill sets, we are solid,” the minister added.
He further noted that Africa’s place as a significant producer and net exporter of oil in the world was forecast to grow by about 15 per cent by 2020 due to new discoveries in some Sub-Saharan countries.
Kachikwu stated that in the last five years, nearly 30 per cent of the world’s oil and gas discoveries were in Sub-Saharan Africa, adding that it was estimated that Africa oil and gas would increase by 74 per cent by 2050.
“We need the right policies, the right partnerships and the right investments. And now is the only time,” he said.
IMF Staff Completes Virtual Mission to Lesotho
Lesotho has been struggling with the fallout from the pandemic and a sharp decline in revenues from the Southern African Customs Union (SACU); The authorities and the mission team made significant progress in their discussions on policies that could be supported by the IMF under a financial arrangement.
A team from the International Monetary Fund (IMF), led by Mr. Aqib Aslam, conducted a series of virtual missions, most recently from September 7 to October 15, 2021, to discuss the authorities’ economic and financial program and their request for IMF financial support.
The authorities and the mission team had productive discussions on policies that could be supported by the IMF under a financial arrangement. The program under discussion would aim to support a durable post-pandemic recovery, restore fiscal sustainability, strengthen public financial management, and ensure the protection of the most vulnerable. Other key structural reforms to be implemented include strengthening governance and fostering private sector investment to spur inclusive growth and employment over the medium term.
At the end of the visit, Mr. Aslam issued the following statement:
“Lesotho has been experiencing twin economic shocks resulting from the pandemic and a decline in revenues from the Southern African Customs Union (SACU) that have proved to be highly volatile. Public expenditures have been increasing while SACU revenues were buoyant but have not adapted to their decline and the limited growth in other revenue sources. At the same time, the economy has been in recession since 2017. The resulting fiscal and external imbalances, if left unaddressed, would continue to put pressure on international reserves and lead to government payment arrears.
“Discussions emphasized the need to support a robust and inclusive post-pandemic recovery. To this end, the mission discussed with the authorities a number of options for containing the fiscal deficit to a level that is sustainable and can be fully financed. The team noted that the adjustment should be focused on expenditure measures while boosting poverty-reducing social spending to protect the most vulnerable. Complementary actions include efforts to broaden financial access and inclusion; strengthen financial supervision; modernize the legal frameworks for bank lending, business rescue, and restructuring, and digitalize payment systems.
“On the fiscal front, efforts should focus on addressing the public sector wage bill, which is one of the largest in the world compared to the size of the economy; saving on public sector and official allowances; better targeting education loans; streamlining the capital budget and initiating gender-responsive budgeting. Discussions also considered measures to modernize tax policy and improve domestic revenue mobilization. The mission noted the need to address long-standing PFM issues to ensure the provision of reliable fiscal data, the integrity of government systems, and the sound use of public resources.
“Significant progress was made during the visit, and discussions will continue in the coming weeks. If agreement is reached on policy measures in support of the reform program, an arrangement to support Lesotho’s economic program would be proposed for the IMF Executive Board’s consideration.
“The IMF team thanks the authorities for their hospitality and constructive discussions.”
The IMF mission met with Prime Minister Majoro, Minister of Finance Sophonea, Central Bank Governor Matlanyane, and other senior government officials. The team also met with representatives of the diplomatic community, private sector, civil society, and multilateral development partners.
Nigeria’s Inflation: Prices Increase at Slower Pace in September 2021
Prices of goods and services moderated further in Africa’s largest economy, Nigeria in the month of September 2021, the latest report from the National Bureau of Statistics (NBS) has revealed.
Consumer Price Index (CPI), which measures the inflation rate, grew at 16.63 percent year-on-year in September, slower than the 17.01 percent rate achieved in the month of August.
On a monthly basis, inflation rose by 1.15 percent in September 2021, representing an increase of 0.13 percent from 1.02 percent filed in August 2021.
Food Index that gauges price of food items grew at 19.57 percent rate in the month, below the 20.30 percent rate recorded in August 2021.
The increase in the food index was caused by increases in prices of oils and fats, bread and cereals, food product N.E.C., fish, coffee, tea and cocoa, potatoes, yam and other tuber and milk, cheese and egg.
However, on a monthly basis, the price of food index rose by 0.20 percent from 1.06 percent filed in August 2021 to 1.26 percent in September 2021.
The more stable twelve months average ending in September 2021 revealed that prices of food items grew by 0.21 percent from 20.50 percent in August to 20.71 percent in September.
Prices of goods and services have been on the decline in Nigeria in recent months, according to the NBS. However. on masses are complaining of the persistent rise in prices of goods and services across the nation.
Some experts attributed the increase to Nigeria’s weak foreign exchange rate given it is largely an import-dependent economy.
Global Debt Rises by $27 Trillion to $226 Trillion in 2020 – IMF
The pandemic has led to an unprecedented increase in debt—issued by governments, nonfinancial corporations, and households the IMF estimated in the latest Fiscal Monitor report. In 2020 global debt reached $226 trillion and increased by $27 trillion, the IMF estimated Wednesday (October 13) in Washington, DC.
High and growing levels of public and private debt are associated with risks to financial stability and public finances, said Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department.
“According to preliminary estimates from the Global Debt Database, global debt by governments, households, and non-financial corporations reached $226 trillion. That represents an increase of $27 trillion relative to 2019. Both the level and the pace of increase are record highs. We know that high and rising debts increase risks to financial stability and public finances,” Gaspar said ahead of the Fiscal Monitor release.
Gaspar emphasized that countries with a high credibility fiscal framework benefit from better bond market access. They also experience lower interest rates on sovereign bonds.
“A strong message from the fiscal monitor is that fiscal credibility pays off. Countries that have credible fiscal frameworks benefit from better and cheaper access to bond markets. That’s a precious asset to have in an uncertain and difficult times like COVID 19. Fiscal credibility pays off!,” added Gaspar.
He also recognized that while the international community has provided critical support to alleviate fiscal vulnerabilities in low-income countries, still more is needed.
“In 2020, the IMF’s rapid financing and the G20 Debt Service Suspension Initiative contribute to make resources available to the countries that need it the most. But more is needed. With a general allocation of SDRs of $650 billion, liquidity has been provided, but much more could be achieved if rich countries would make part of their resources available to the developing world. By doing so, donors would be contributing to fighting the pandemic and to the achievement of sustainable and inclusive growth,” said Gaspar
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