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NEXIM Bank, NIWA, Others to Boost Non-oil Exports by $1.2bn

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  • NEXIM Bank, NIWA, Others to Boost Non-oil Exports by $1.2bn

The Nigerian Export-Import Bank has entered into a partnership with the National Inland Waterways Authority and Sealink Promotional Company Ltd to bridge the waterways infrastructure gap and enhance the country’s trade in the ECOWAS sub-region.

The tripartite memorandum of understanding, which was sealed in Abuja, would enhance Nigeria’s annual non-oil exports revenue to between $500m and $1.2bn annually.

The Managing Director, NEXIM Bank, Mr Abba Bello, signed the MoU on behalf of his bank, while the Managing Director, NIWA, Senator Olorunnimbe Mamora, and the Chairperson of Sealink Implementation Committee, Mrs Dabney Shallholma, signed on behalf of their agencies.

Speaking on the pact, Bello noted that the agreement was a public-private partnership framework, which was primarily designed to attract private sector investments under government agencies facilitative support at no cost to the government.

The MoU, he added, was intended to bridge infrastructure gap that would promote and enhance trade connectivity as well as spur Nigeria’s regional and global trade competitiveness.

Bello described the agreement as a significant milestone in the bank’s ongoing collaborations with all key national and regional maritime stakeholders, noting that it would be catalytic to the realisation of one of the priority projects under the ECOWAS Community Development Programmes.

The NEXIM bank boss said the effective implementation of the Sealink project and the safe utilisation of the inland waterways, would no doubt bridge logistics gaps that will attract and facilitate investment inflows.

This, he noted, would contribute to the realisation of one of the broad strategic objectives of the Economic Recovery and Growth Plan, which is building a globally competitive economy.

He said, “As a trade policy bank, NEXIM strategic interest and partnership in the regional Sealink Project is to promote and diversify exports as well as enhance trade connectivity in line with government’s objective to diversify the economy.

“Also, the bridging of maritime infrastructure gap is expected to significantly enhance exports of bulk solid minerals, thereby enhancing the Gross Domestic Product contribution of both shipping and solid minerals sectors from current levels of about 0.2 per cent.

“In value terms, it is projected that the signing of this Memorandum of Understanding would promote waterway operations for the hinterland, transit and coastal trade, especially for bulk cargo.

“It is noteworthy to highlight that it is projected that this development would enhance non-oil exports annual revenue receipts to between $500m and $1.2bn annually on bulk solid minerals exports.”

In his remarks, the NIWA boss said that the pact was necessary to ensure full integration of the potential of Nigeria’s resources.

Mamora said, “For too long, our economy has been dependent on oil and its derivatives.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Oil Firms Borrowed N130B From Banks in February – CBN

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Operators in the downstream, natural gas and crude oil refining sectors of the Nigerian oil and gas industry borrowed N130b from Nigerian banks in February amid the significant rise in global crude oil prices.

The debt owed by the oil and gas companies rose to N4.05tn in February from N3.92bn in January, according to the latest data obtained from the Central Bank of Nigeria on Monday.

Operators in the upstream and services subsectors owed banks N1.26tn in February, down from N1.27tn a month earlier.

The combined debt of N5.31tn owed by oil and gas operators as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.

Oil and gas firms received the biggest share of the credit from the deposit money banks to the private sector.

The slump in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.

A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, reflecting expectations of rising asset risk and weakening government support capacity over the next 12 to 18 months.

“Nigerian banks’ loan quality will weaken in 2021 as coronavirus support measures implemented by the government and central bank last year, including the loan repayment holiday, are unwound,” said Peter Mushangwe, an analyst at Moody’s.

The rating agency estimated that between 40 percent and 45 percent of banking loans were restructured in 2020, easing pressure on borrowers following the outbreak of the pandemic.

Another global credit rating agency, Fitch Ratings, had noted in a December 8 report that Nigerian bank asset quality had historically fallen with oil prices, with the oil sector representing 28 percent of loans at the end of the first half of 2020.

It said the upstream and midstream segments (nearly seven percent of gross loans) had been particularly affected by low oil prices and production cuts.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

The rating agency predicted that Nigerian bank asset quality would weaken over the next 12 to 18 months.

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Economy

Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

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The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

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NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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Petrol Importation - investorsking.com

The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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