Economy

Natural Gas Exploitation: FG Expands LNG Production to 30 Million Tonnes Annually

Published

2 years ago

February 24, 2022

The Federal Government of Nigeria has begun the expansion of Liquefied Natural Gas, LNG production capacity to about 30 million tonnes per annum.

This, according to President Muhammadu Buhari commenced at Bonny with the ongoing N-LNG Train-7 project and the gas-powered economy initiative set for 2021-2030 as the decade of gas.

Buhari, on Tuesday, at the sixth Gas Exporting Countries Forum of Heads of State and Government in Doha, Qatar said natural gas will be explored more in Nigeria.

He told the global gas exporting countries present that the federal republic of Nigeria will invest and focus more attention on gas exploitation to enhance its economy.

Investors King reports that the federal government is embarking on projects and enacting policies to enable development in the oil and gas sector.

President Buhari was represented at the event by the Minister of State for Petroleum Resources, Chief Timipre Sylva.

He noted that the Petroleum Industry Act was introduced to make Nigeria dive deeper into natural gas and get more value from it.

Buhari assured that the Petroleum act would provide the required governance, regulatory and fiscal framework to enhance the growth of the gas industry.

Speaking on the initiatives of the government on gas exploitation, the President identified one of the gas initiatives as the National Gas Expansion Programme, channeled towards providing a framework and policy support for gas supply, utilisation in power generation and gas-based industries.

He stated that the Ajaokuta-Abuja-Kano gas pipeline is another initiative, hinting that it will aid five billion cubic feet per day of domestic gas utilisation in the near term and 5-Gigawatt power generation.

“Nigeria, a gas province with some oil, is committed to sustainable growth of natural gas exploitation and utilisation, both for domestic use and export via Liquefied Natural Gas and pipeline gas to sub-regional African countries.

“We therefore need to continue to assess the gas and energy market dynamics both in the short, medium, and long-term, with the aim of taking market opportunities and collectively address the challenges,” he stated.

Buhari urged policymakers, investors, energy industry decision makers, researchers, and technology developers to collaborate to establish modern energy sources like natural gas, to make it available and affordable to all.

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Economy

Zambia’s Finance Minister Faces Dual Challenge in Upcoming Budget Address

Published

15 hours ago

September 29, 2023

Samed Olukoya

As Zambia’s Finance Minister, Situmbeko Musokotwane, prepares to present the nation’s budget, he finds himself at a pivotal crossroads.

The second-largest copper producer in Africa is grappling with two pressing concerns: debt sustainability and soaring living costs.

Debt Restructuring Dilemma: Musokotwane’s foremost challenge is finalizing the $6.3 billion debt-restructuring deal with official creditors, led by China and France.

Delays have hindered disbursements from the International Monetary Fund (IMF) and left private creditors in limbo.

To reassure investors, a memorandum of understanding with the official creditor committee is urgently needed.

President Hakainde Hichilema emphasizes the importance of sealing these transactions to signal closure on this tumultuous chapter.

Plummeting Tax Revenue: The key copper-mining industry, which accounts for 70% of Zambia’s export earnings, is in turmoil.

First-half mining company taxes and mineral royalty collections have nosedived, adding to economic woes.

This, in turn, has depreciated the local currency, exacerbating imported inflation, particularly in fuel prices.

Rising Food Inflation: Musokotwane faces mounting political pressure to combat soaring living costs, with annual inflation reaching an 18-month high of 12%. Corn meal prices, a staple in Zambia, have surged by a staggering 67% in the past year.

Neighboring countries’ demand for corn has led to smuggling and further price spikes, raising concerns about food security.

Currency Woes: The kwacha’s value has been a barometer for the nation’s economic health. It depreciated by 16% since June 22, the worst performance among African currencies, reflecting the ongoing debt-restructuring uncertainty.

In his budget address, Musokotwane faces the daunting task of striking a balance between debt management, economic stability, and alleviating the burden on Zambia’s citizens.

The international community will keenly watch to see if his fiscal measures can steer the nation toward a path of recovery and prosperity.

Economy

IMF Urges Sub-Saharan African Nations to Eliminate Tax Exemptions for Fiscal Health

Published

1 day ago

September 28, 2023

Samed Olukoya

Sub-Saharan African countries have been advised by the International Monetary Fund (IMF) to tackle their fiscal deficits by focusing on eliminating tax exemptions and bolstering domestic revenue rather than resorting to fiscal expenditure cuts, which could hamper economic growth.

The IMF conveyed this recommendation in a paper titled ‘How to avoid a debt crisis in Sub-Saharan Africa.’

The IMF’s paper emphasizes that Sub-Saharan African nations should reconsider their overreliance on expenditure cuts as a primary means of reducing fiscal deficits. Instead, they should place greater emphasis on revenue-generating measures such as eliminating tax exemptions and modernizing tax filing and payment systems.

According to the IMF, mobilizing domestic revenue is a more growth-friendly approach, particularly in countries with low initial tax levels.

The paper highlights success stories in The Gambia, Rwanda, Senegal, and Uganda, where substantial revenue increases were achieved through a combination of revenue administration and tax policy reforms.

The IMF also pointed out that enhancing the participation of women in the labor force could significantly boost Gross Domestic Product (GDP) in developing countries.

The IMF estimates that raising the rate of female labor force participation by 5.9 percentage points, which aligns with the average reduction in the participation gap observed in the top 5% of countries during 2014-19, could potentially increase GDP by approximately 8% in emerging and developing economies.

In a world grappling with the weakest medium-term growth outlook in over three decades, bridging the gender gap in labor force participation emerges as a vital reform that policymakers can implement to stimulate economic revival.

Economy

Pipeline Vandalism Costs NNPC N34.47 Billion in 18 Months

Published

2 days ago

September 28, 2023

Samed Olukoya

The Nigerian National Petroleum Company Limited (NNPCL) has revealed that it spent nearly N34.47 billion in the past 18 months to combat the persistent issue of pipeline vandalism in the country.

The latest Oil and Gas Report from the Nigerian Extractive Industries Transparency Initiative covering 2021 disclosed that N22.05 billion was allocated to pipeline repairs and maintenance alone.

During the first half of 2021, NNPCL reported a distressing 350 pipeline points vandalized, highlighting the urgent need for countermeasures. In response, NNPCL has been actively collaborating with local communities and stakeholders to mitigate pipeline vandalism.

NNPCL’s CEO, Mele Kyari, attributed recent improvements to the introduction of Operation White and the Automated Downstream Operations and Financial Monitoring Centre.

These innovations have enabled NNPCL to enhance its monitoring capabilities and reduce illicit activities such as oil theft and cross-border smuggling of petroleum products, which previously led to supply disruptions and significant revenue losses.

Also, in January 2021, NNPCL received interest from 96 companies to participate in the rehabilitation of downstream facilities via the Build, Operate, and Transfer financing model.

However, despite the substantial investments, NNPCL continues to grapple with significant losses. The company disclosed that it loses 470,000 barrels per day of crude oil, amounting to $700 million monthly, due to oil theft.

In a related development, 10 individuals accused of vandalizing NNPCL’s pipeline on the high seas faced charges of conspiracy and willful tampering. They were ordered to be remanded in the Nigerian Correctional Service by Justice Akintoye Aluko of the Federal High Court in Lagos.

As pipeline vandalism remains a significant challenge, the Nigerian government and NNPC are determined to safeguard their critical infrastructure while exploring new ways to combat this menace.