- Nigeria, Sao-Tome and Principe Award Three Oil Blocks to Total
Nigeria and Sao Tome and Principe on Thursday formally granted Total, a French international oil company, the exclusive right to begin exploration for crude oil in three blocks – 7, 8 and 11, located within the hydrocarbon-rich Joint Development Zone owned by both countries in the Gulf of Guinea.
Total was awarded the right to explore for oil in the JDZ blocks after negotiations were concluded and a Production Sharing Contract signed by the three parties involved in the deal.
The parties signed the PSC at a ceremony in Abuja on Thursday, where it was disclosed that the JDZ is an area in the Nigeria – São Tomé and Príncipe boundary speculated to be rich in oil and gas reserves.
Considering the fact that neither of the two countries could have explored the resources in the zone without interfering with their maritime rights, it was added that they agreed in a treaty to create a Joint Development Authority to develop the field and mutually benefit from its resources.
Parties to the deal then signed the JDZ in Abuja on February 21, 2001.
In his address at the PSC signing ceremony on Thursday, the Managing Director, Total Exploration and Production Nigeria, Nicholas Terraz, said his firm would invest more than $10m to acquire 3-dimensional seismic data of oil and gas prospects in the blocks.
According to him, it would be too early to estimate the hydrocarbon potential of the blocks, adding that more than 1,000 squares kilometres of the field would be explored.
He said, “This is for seismic acquisitions, and the investment is over $10m. It is too early to tell the quantity of the oil. We have a four-year exploration period and during which we will need to acquire the seismic data. Total will be funding 100 per cent for the time being.”
The Executive Director, Monitoring and Inspections at the JDA, Dr Ibiwari Jack, said while the potential of the oil blocks were unknown, Total’s exploration of same would provide partners with the details of the hydrocarbon content of the blocks.
He noted that the oil blocks assigned to Total had not been explored before now, and that the company would be the first to explore it.
“Having Total back to our JDZ gives us so much confidence. If others look back to see Total, they will want to come. The blocks they are into now, nobody has done any exploration there.
“They will go to do their seismic studies there and hopefully in the next one or two years, we will get to know the potential but the prospect is there, very huge,” said Ibiwari.
The Acting Chairman of the JDA, Dr Almajiri Geidam, stated that the signing of the PSC with Total was aimed at reviving activities at the JDZ after years of idleness.
Geidam noted that the JDA intended to also revive interests on the JDZ among investors and oil companies.
He said, “Since the JDA was established in January 2002, it has held two licensing rounds which culminated into the award of six blocks in the JDZ. Some exploration activity took place in most of the blocks that resulted in some discoveries of hydrocarbons.
“Today’s event, which is as a result of a careful re-engagement of the industry by the board, aimed at reviving the fortunes of the JDZ requires us to commend Total also for the renewed interest in the zone.”
He said the event was expected to elicit even more interest and confidence of other prospective investors as well as consolidate the existing cordial relationship between the Federal Republic Nigeria and the Democratic
Republic of Sao Tome and Principe.
“I wish to seize this opportunity to also reiterate the commitment of the board and members of staff of the JDA that we will work assiduously to ensure that the PSC signed today and indeed other existing PSCs are fully executed in accordance with the Abuja joint declaration on transparency and good governance signed by the two heads of state of the state parties,” Geidam added.
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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