- Nigeria Produced Above OPEC Oil Quota in Feb – Report
Nigeria, Africa’s top oil producer, pumped more crude oil in February than the quota given by the Organisation of Petroleum Exporting Countries, a new survey has shown.
OPEC and 10 non-OPEC countries agreed in December to cut oil production by 1.2 million barrels per day effective from January for an initial period of six months to help balance the market and support prices.
Nigeria, which was exempted from the previous production cuts deal, agreed to a quota under the current accord. With a reference level of 1.738 million bpd, the country was given a new quota of 1.685 million bpd.
But Nigeria pumped 1.88 million bpd in February, 190,000 bpd above its cap, S&P Global Platts’ survey of industry officials, analysts and shipping data found.
The country has started production from a new deepwater field, Egina, though the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has suggested that he might seek to have those barrels classified by OPEC as condensates, which is not subject to the quotas.
Nigeria also considers Agbami grade as a condensate, while S&P Global Platts and some other secondary sources used by OPEC to monitor production classify it as crude.
The nation’s crude oil production including condensates fell to 1.999 million bpd in January from 2.081 million bpd in December, according to the Ministry of Petroleum Resources.
President Muhammadu Buhari said last month that the country could consider a reduction in crude oil production in support of efforts to shore up the price of the commodity.
He said, “As a responsible member of the Organisation of Petroleum Exporting Countries, Nigeria was willing to go along with the Saudi initiative in limiting output so that prices would go up.”
The 2019 budget proposal, presented to the National Assembly on December 19 by President Buhari, was based on oil production of 2.3 million bpd (including condensates), with an oil benchmark price of $60 per barrel.
OPEC’s crude oil production in February modestly declined to 30.80 million bpd in February, the survey showed.
The figure is a 60,000 bpd drop from January and is the group’s lowest output level since March 2015, when Gabon, Equatorial Guinea and Congo had yet to join the organisation but Qatar was still a member.
Despite the fall, OPEC still has more cutting to do to fully comply with its supply accord that went into force in January. The 11 members with quotas under the deal achieved 79 per cent of their committed cuts in February, and remain 170,000 bpd above their collective ceiling. This is a slight improvement on January’s 76 per cent, with Nigeria and Iraq producing far in excess of their cap, according to Platts calculations.
Iraq produced 4.67 million bpd in February, according to the survey, 160,000 bpd above its quota.
The country has consistently lagged in compliance with its committed cap, both under the current deal and under the previous accord, which ran from 2017 to 2018.
Iraqi officials have sought exemptions from the deal, saying their war-torn country needed oil revenues to rebuild from its devastating fight against the Islamic State. But other members have pressured the country -largely to no avail – to conform to its quota.
Libya, which this week lifted the force majeure at its 300,000 bpd Sharara field after almost three months, pumped 870,000 bpd in February, a slight rise from January, according to the survey.
The first cargoes of Sharara crude since production restarted are expected to be lifted this weekend.
Venezuela and Iran, both under US sanctions, and Libya, where instability continues to impact output, are exempt from the deal.
The February output figures will be reviewed by a six-country monitoring committee of the OPEC/non-OPEC coalition, which meets on March 18 in Azerbaijan to discuss market conditions and assess compliance with the deal. The committee is co-chaired by Saudi Arabia and Russia.
Saudi Arabia, OPEC’s largest producer, has made good on its pledge to lead the coalition by example, slashing its output to 10.15 million bpd in February, the survey found. That is 160,000 bpd below its quota of 10.31 million bpd and the kingdom’s lowest output level since May 2018.
Venezuela, whose oil production has been declining for years due to underinvestment, technical problems and labour issues, pumped 1.10 million bpd in February, down 60,000 bpd month-on-month, as it has struggled to sell its crude since US sanctions were imposed in late January.
Iran managed to keep production steady in February, at 2.72 million bpd, the survey found, as several buyers in the month took advantage of sanctions waivers the US granted to eight countries to purchase Iranian crude.
COVID-19 Wiped Off $5B Diaspora Remittances, Says FG
The Federal Government said that the COVID-19 pandemic has wiped off 20 percent of the $25bn annual diaspora remittances to Nigeria.
The government noted that various targeted programmes were being implemented to shore up the deficit.
Disclosing this at a press briefing in Abuja on Thursday to announce the 2021 Diaspora Day celebration scheduled for July 25, the Chairman, Nigerians in Diaspora Commission, Abike Dabiri-Erewa, said the home remittances were over 83 percent of the national budget and 6.1 percent of the Gross Domestic Product.
The World Bank had said remittances by Nigerians in the Diaspora declined by 27.7 percent in 2020. It had also put remittances into the country in 2019 at $21.45bn.
She explained that the remittances serve as economic buffers and safety nets to families for school fees, feeding, hospital bills and many other social support systems.
According to her, 30 percent of the remittances are channeled into investments including real estate, commercial businesses and others.
Responding to a question on the impact of the pandemic on the remittances, Dabiri-Erewa stated, “The COVID-19 pandemic has reduced the annual Diasporan remittances by 20 percent but doesn’t forget that we are also coming up with different programmes.
“Remittances actually go to support families but we are having targeted programmes from the diaspora, particularly housing which would be unveiled that day.”
The NIDCOM chairman stressed that the nation could not afford to ignore about 17 million Nigerians living outside the sovereign boundaries of the nation, sending home remittances of about $25 billion annually.
She noted that the National Diaspora Day 2021 celebration themed: ‘Diaspora integration for national peace and development’, would anchor on peace to accelerate diaspora engagement for national growth and development, adding that no nation succeeded in an atmosphere of insecurity, hatred and divisive tendencies.
Due to the COVID-19 pandemic and its consequences, Dabiri-Erewa explained that the diaspora day 2021 would be celebrated via a webinar and would feature the presentation of the recently approved National Diaspora Policy, nomination for awardees for the proposed National Diaspora Merit Award, presentation from the Diaspora Investment Summit Initiative, among other activities.
The President, Muhammadu Buhari, and other dignitaries, including the Deputy Secretary-General, United Nations, Dr Amina Mohammed; the Director-General, World Trade Organisation, Dr Ngozi Okonjo-Iweala and others will address the participants.
Nigeria Experience Worst Unemployment In A Decade, As More Youth Seek Migration To Escape Poverty – World Bank
The World Bank affirmed that Nigeria is currently going through one of its worst unemployment crises in recent times.
“Nigeria is facing one of the most acute jobless crises in recent times. Between 2014 and 2020, Nigeria’s working-age population grew from 102 million to 122 million, growing at an average rate of approximately 3 percent per year, the multilateral lender said in its latest report on Nigeria.
“Similarly, Nigeria’s active labour force population, that is, those willing and able to work among the working-age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labour force.
“Since 2018, however, the active labour force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians who are in the working-age population but not active in the labour force has increased from 29 million to 52 million between 2014 and 2020.
“The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth,” the World Bank report noted.
However, between 2010 and 2020, the international financial institution estimated that the unemployment rate rose five-fold, from 6.4 percent in 2010 to 33.3 percent in 2020, with the rates being particularly acute since the 2015/2016 economic recession and further worsened as COVID-19 led to the worst recession in four decades in 2020.
Increasingly, it noted that educated Nigerians were struggling to find employment opportunities in the country while unemployment rates increased substantially for Nigerians across all education levels over the years, becoming progressively challenging for educated Nigerians to find employment opportunities.
“Combined with significant demographic changes and increased aspirations of the youth, Nigeria’s unemployment crisis is creating migratory pressure in the economy.
“Unemployment is considered to be a key driver of migration. Consequently, multiple surveys show that the number of Nigerians, who are looking to migrate internationally is high and increasing,” it pointed out.
In the last few years, the bank stated that the number of persons eager to migrate has increased from 36 percent in 2014, to 52 percent in 2018, noting that the desire to migrate remains higher among unemployed (38 percent), youth (39 percent), secondary education graduates (39 percent), urban residents (41 percent) and post-secondary graduates (45 percent) in Nigeria.
It maintained that since there has not been an expansion of legal migration routes for youth increasingly eager to find opportunities in the overseas labour market, young Nigerians are opting for irregular migration routes to realise their hopes for a better life.
“What is worrying, however, is the increase in the number of forced and irregular migrants from Nigeria, “ it disclosed.
According to a new report by the multilateral lender, the socio-economic challenges facing Nigerians in the last 10 years have led to an astronomical increase in the number of citizens seeking asylum and refugee status in other countries.
The World Bank further estimated that there were 2.1 million Internally Displaced Persons (IDPs) in Nigeria in 2020 alone.
The, however, blamed a combination of rising unemployment, booming demographics, and unfulfilled aspirations as resulting in increasing pressure on young Nigerians to migrate in search of gainful employment overseas.
In addition, the Washington-based institution disclosed that the number of international migrants from Nigeria has increased threefold since 1990, growing from 446,806 in 1990 to 1,438,331 in 2019.
It explained that despite this trend, the share of international migrants as a proportion to Nigeria’s population has remained largely constant, increased slightly from 0.5 percent in 1990 to 0.7 per cent in 2019.
The lender said the recent rise in irregular migration notwithstanding, the share of international migrants in Nigeria’s population was much lower compared to the shares in Sub-Saharan Africa and globally.
The data showed that the number has risen by over 1,380 percent in the years between 2010 and 2019, indicating that in comparison, the number of persons coming into Nigeria from outside has been relatively stagnant in the decade under consideration.
“An important trend that is observed in the data is the rise in the number of refugees and asylum seekers from Nigeria. The share of refugees and asylum seekers from Nigeria has increased drastically in the last decade, growing from 27,557 in 2010 to 408,078 in 2019,” it stated.
It noted that although the country was reaping dividends from the success of its citizens in the diaspora, which was put at five percent of its Gross Domestic Product (GDP) in 2019, when it comes to the discourse on international migration, the narrative has not been palatable.
It stressed that to ensure mutual cooperation, the European Trust Fund for Africa (EUTF), which was established in 2015, with the aim to promote areas of mutual development interest between Europe and Africa, has since provided more than €4 billion in aid to African countries to address various development-related challenges and priorities in Africa.
Since its inception, the EUTF, the bank stated, has provided more than €770 million for migration-related projects in Nigeria, with most of the funds invested in border control measures, awareness campaigns to stop trafficking, and the creation of jobs domestically, including for returned Nigerian migrants.
While predicting that by 2100, Europe’s working age population between the ages of 20 and 64 would decline by 30 percent owing to low birth-rates and increased longevity, it further projected that at same time, the working age-population in Nigeria could increase by 140 percent.
“By expanding legal pathways for migration and implementing supporting measures to reap dividends from current migrants in the diaspora, Nigeria can further benefit from international migration.
“Nigeria’s institutions are well-placed to promote managed migration approaches that help create opportunities for prospective Nigerian job seekers to find employment internationally and can be supported to help design schemes that increase the returns to human capital investments for Nigerian youth,” the report concluded.
African Development Bank Group and Ethiopia Sign $118 Million Grant Agreement to Support Agro industrial park, Youth Employment
The African Development Bank Group and the Government of Ethiopia have signed two separate grant agreements for new projects to boost youth employment and electricity trade between Ethiopia and Djibouti.
The grants fall under the Bank Group’s concessional lending window, the African Development Fund, and will go towards the Productivity Enhancement to Support Agro Industrial Parks and Youth Employment Project worth $47 million, and the $71 million Ethiopia-Djibouti Second Power Interconnection Project, which aims to boost electricity trade between Ethiopia and neighbouring Djibouti.
The industrial parks and youth project will see the development of irrigation and water management infrastructure around the Integrated Agro-Industrial Parks, offering opportunities for graduate “agri-preneurs” to establish agro-related, commercially viable businesses. The $102 million venture is being co-financed with the Arab Bank for Economic Development in Africa (BADEA), with a $5.25 million contribution by the Ethiopian government.
Under the scheme, 12,607 ha of irrigated land would be developed and about 3,000 youths will receive both agronomic/agriculture and business development training. Bank financing is expected to cover 4,607 ha and BADEA financing another 8,000 ha.
The irrigation infrastructure will strengthen water users’ associations; protect the water-shed areas around the irrigation schemes; go towards training farmers and youth agri-preneurs on soil and water conservation practices, agricultural production, value addition and marketing; and support established youth SMEs to access credit.
The project will be implemented over a five-year period (2021-2026) under the supervision of the Ministry of Water, Irrigation and Energy and the country’s Irrigation Development Commission.
The Ethiopia-Djibouti Second Power Interconnection Project follows an earlier Bank-financed power interconnection project between the two countries, and builds on its accrued benefits over the last 10 years. It will enable the construction of about 300 km of interconnector lines, 170 km of transmission lines to reinforce the network within Ethiopia, and new construction and expansion of substations in the two countries. In Djibouti, expected benefits include a 65% increase in customer connections and a sharp reduction in the use of thermal generation plants from 100% to around 16%. In Ethiopia, the project would lead to higher incomes from the power trade which over the last 10 years stood at over $275 million in revenue from power exports.
Upon completion, Ethiopia’s revenue from power exports will increase, while at the same time boosting Djibouti’s access to reliable, affordable, and clean electricity and lowering its greenhouse gas emissions.
“By enhancing economic ties through increased cross-border power trade and improved economic competitiveness, the project will contribute towards harnessing regional peace and stability and addressing regional fragility,” said Dr. Abdul Kamara, Deputy Director General, East Africa Regional Development and Business Delivery Office of the African Development Bank.
The Board of Directors of the African Development Bank Group approved funding of both projects on 7 July 2021. The grant agreements were signed on 21 July 2021 by Ethiopian Finance Minister Ahmed Shide, and Kamara.
The African Development Bank is a major player in Ethiopia’s development agenda and currently has operations valued at about $1.76 billion, covering basic services, energy, transport, water supply and sanitation, agriculture, governance, and the private sector.
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