Connect with us

Economy

FG Targets $1bn Revenue from New Gas Flare Policy

Published

on

Oil
  • FG Targets $1bn Revenue from New Gas Flare Policy

The federal government has said its new gas flare out plan – the Nigeria Gas Flare Commercialisation Programme (NGFCP) – has the capacity to improve the country’s Gross Domestic Product (GDP) by $1 billion annually.

It also has the capacity to cut down greenhouse gas emission by 13 tons within the same period.

The government disclosed this in a statement released recently, by the Programme Manager of the NGFCP, Mr. Justice Derefaka.

The statement provided an update on the government’s implementation of the programme and explained that some target milestones had been achieved.

Amongst the milestones achieved, it noted were the submission of the evaluation report by the NGFCP Proposal Evaluation Committee (PEC) of the Statement of Qualification (SOQ) exercise in response to the Request for Qualification (RfQ) package of the NGFCP as well as submission of a report by the Independent Observers Group (IOG).

The statement added “The design of the NGFCP according to our development partners is an innovative, robust and scalable approach to gas flare reduction – a “game changer” (first of a kind) consistent with the climate change action plans anticipated in the Paris Climate Change Accords which could be replicable in many other gas flaring countries around the world with Nigeria setting the pace.

“Overall, the NGFCP has the potential of generating approximately US$3.5 billion of inward investment. The potential GDP impact is estimated at plus US$1 billion per annum.

“It could potentially unlock 2 – 3 LNG trains, or around 3000MW electricity generation as well as generate circa 600,000MT of LPG per year giving 6 million households access to clean energy through LPG.

“The programme could also bring inflow of new infrastructure players to enable gas uptake and usage in previously unreachable regions and business development from gas companies to unlock new domestic markets for gas,” it explained.

Going further, it stated that assuming project sizes in the range of $10 to 40 million were executed, the NGFCP has a potential of triggering around 70 to 90 projects.

“And over a 1.5 – 2-year period, the NGFCP could generate approximately 26,000 direct jobs (assuming an average direct labour force of 300 people per project) and approximately 300,000 direct and indirect jobs.

“Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by ~13 million tons of CO2 per year, consistent with the president’s commitments to the reduction of greenhouse gases under the Paris Climate Change Agreement, which could also be monetised under an emission credits/carbon sale programme at a value range of US$400 – 500 million. The NGFCP is clearly a high-impact programme,” the statement added.

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.

Continue Reading
Comments

Economy

Nigeria Aims for N2 Trillion Annual Revenue from Marine and Blue Economy by 2027

Published

on

NIMASA

Nigeria has set an ambitious target of generating N2 trillion in annual revenue from this sector by the year 2027.

The revelation came from the Minister of Marine and Blue Economy, Adegboyega Oyetola, during an ongoing ministerial briefing in Abuja on Tuesday.

Outlined within a comprehensive strategy, the plan involves a three-pronged approach to significantly increase revenue generation and operational efficiency within the marine sector.

Oyetola highlighted the imperative of automating revenue collection processes to eradicate bottlenecks and enhance transparency and accountability.

By deploying revenue assurance technologies, the aim is to ensure accurate billing aligned with established contracts and services rendered, thereby preventing revenue leakage.

The ministry plans to commission revenue enhancement studies targeting various departments and agencies to identify avenues for maximizing the use of existing assets.

This includes leveraging concessions to the private sector and fostering public-private partnerships to ensure efficient utilization of national assets.

Recognizing the vast potential of the blue economy, Nigeria intends to embark on investment promotion campaigns aimed at both domestic and international investors.

This strategy seeks to unlock new revenue streams within the marine sector, paving the way for sustainable economic growth.

Minister Oyetola emphasized the importance of harnessing Nigeria’s marine and blue economy, noting its significant role in driving economic diversification and reducing dependency on traditional sectors.

He underscored the government’s commitment to fostering an enabling environment for investment and innovation within the sector.

The ambitious revenue target reflects Nigeria’s determination to tap into its vast marine resources, which have long been underutilized.

With strategic planning and concerted efforts, the country aims to position itself as a key player in the global blue economy, unlocking opportunities for sustainable development and prosperity.

As Nigeria charts its course towards achieving this ambitious goal, stakeholders across government, industry, and civil society will play a pivotal role in driving forward the necessary reforms and initiatives to realize the full potential of the marine and blue economy.

Continue Reading

Economy

Investor Optimism Dwindles One Year After Tinubu’s Reforms

Published

on

Bola Tinubu

One year into President Bola Tinubu’s administration, the initial investor enthusiasm over his ambitious economic reforms is fading.

Despite significant changes aimed at revitalizing Nigeria’s economy, persistent challenges such as currency volatility and high inflation are dampening investor confidence.

Upon assuming office in late May 2023, Tinubu enacted a series of reforms intended to attract foreign investment and boost dollar liquidity.

These included eliminating costly fuel subsidies, appointing ex-Citibank executive Olayemi Cardoso as the new central bank governor, and overhauling the country’s exchange-rate policies, which effectively devalued the naira.

While these steps initially sparked optimism and increased dollar inflows, the momentum has since waned.

Kevin Daly, a portfolio manager at London-based Abrdn Investments Ltd., highlighted the need for further stability in Nigeria’s foreign exchange market before considering additional investments in local currency bonds.

“We are likely to add to local currency bonds once FX volatility declines, but the timing of that remains up in the air,” Daly remarked.

He emphasized that the central bank cannot be the sole provider of FX liquidity for the market, calling for more foreign portfolio flows and a degree of de-dollarization.

Data from Tellimer Ltd. reveals that investor inflows into Nigeria’s foreign-exchange market fell by nearly 20% in April, averaging $200 million daily, and dropped further to $180 million in the first three weeks of May.

Since June, the naira has depreciated by almost 67% against the dollar. Additionally, the reintroduction of fuel subsidies, following public backlash over rising living costs, has further complicated the economic landscape.

Inflation remains a significant hurdle, with rates soaring to approximately 33.7%, far outpacing the central bank’s policy rate of 26.25%.

This has deterred investors like Ayo Salami, chief investment officer at Emerging Markets Investment Management Ltd., from venturing into local currency bonds, deeming them unattractive under current conditions.

Another critical issue is the repatriation of funds. While Nigeria offers higher equity valuations and yields compared to some emerging and frontier markets, peers like South Africa, Egypt, Kenya, Turkey, and Pakistan present lower repatriation risks, more credible policy frameworks, and advanced policy corrections.

Ladi Balogun, CEO of Lagos-based FCMB Group, underscored the importance of consistent and clear policy direction to restore investor confidence.

“I think as long as we can be consistent and clear about policy direction, when it comes to monetary policy and the like, then I think you will see confidence return, then you will see liquidity return,” Balogun stated. “That is when you will see international investors come back.”

As Nigeria navigates these economic challenges, the road to restoring and sustaining investor confidence remains complex and fraught with hurdles. The coming months will be crucial in determining whether Tinubu’s administration can achieve the stability and growth it seeks.

Continue Reading

Economy

IMF Boosts China’s 2024 Growth Forecast to 5% Amid Strong Start

Published

on

growth

The International Monetary Fund (IMF) has raised its forecast for China’s economic growth in 2024 to 5%, up from its earlier estimate of 4.6%.

This adjustment reflects a robust expansion at the start of the year and additional government support aimed at stabilizing and invigorating the economy.

The IMF’s latest projection aligns with China’s target growth rate of around 5% for the year.

The upward revision comes on the heels of a better-than-expected 5.3% growth in the first quarter, indicating a strong recovery trajectory despite ongoing challenges in the housing market, which continues to dampen domestic demand.

Gita Gopinath, the IMF’s First Deputy Managing Director, highlighted the dual forces driving this positive outlook.

“We certainly are seeing that consumption is recovering, but it has some ways to go,” Gopinath noted in a recent interview with Bloomberg News.

“The strength we’re seeing in public investment remains. Private investment is still weak, mainly because of the weakness in the property sector.”

The IMF’s statement emphasized the need for Beijing to enhance monetary and fiscal support, particularly addressing the protracted housing crisis.

Gopinath underscored the urgency of protecting buyers of pre-sold unfinished homes and accelerating the completion of these projects to stabilize the sector.

Earlier this month, Chinese authorities unveiled new measures to support the real estate market.

These include easing down-payment requirements for buyers and injecting 300 billion yuan ($42 billion) of central bank funding to assist local governments in purchasing excess inventory from developers. However, Gopinath argued that these steps should be expanded.

“Fiscal policy should prioritize providing one-off central government financial support for the real estate sector,” she stated, adding that the current low inflation environment offers room for further monetary easing.

Beyond the domestic landscape, the IMF is also monitoring the implications of international trade tensions. Gopinath expressed concerns over the rising number of trade restrictions globally, noting that about 3,000 new trade barriers were introduced in 2023 alone, triple the number in 2019.

These developments are contributing to an emerging trend of geopolitical fragmentation in global trade.

“There has been an increase in more restrictive trade policies across countries,” Gopinath said. “Trade across countries that are more geopolitically aligned is holding up better than trade across countries that are less geopolitically aligned.”

The IMF’s revised forecast underscores a cautiously optimistic outlook for China’s economy.

While strong public investment and government support are driving growth, the ongoing weaknesses in the property sector and global trade tensions present challenges that need to be carefully navigated.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending