For the first time in five years, Nigeria lost its crown as Africa’s largest oil producer to Angola.
According to data made available by Bloomberg Africa, Angola’s daily average oil output for August was 1.17 million barrels per day while Nigeria’s daily average output stood at 1.13 million barrels per day.
The data did not however come as a shock as Nigeria’s oil production has been on a steady decline since 2020. Investors King earlier reported that oil theft and vandalism are two serious issues affecting Nigeria’s oil production.
Some major oil companies which include Shell Nigeria had warned that oil theft poses an existential threat to Nigeria’s oil industry.
In July 2022, the Managing Director and Country Chair for Shell Petroleum Development Company of Nigeria Limited, Osagie Okunbor said oil theft was one of the reasons that Nigeria could not meet its OPEC quota of 1.8 million barrels a day.
Okunbor further disclosed that two of the company’s most important pipelines in Nigeria have been shut down with hundreds of thousands of barrels a day shut-in.
Similarly, the head of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe said in a statement that about 141 million barrels of oil was produced in the first quarter of 2022, but only about 132 million barrels of oil were received at export terminals.
“This indicates that over nine million barrels of oil was lost to crude oil theft which amounts to a loss in government revenue of about $1 billion … in just one quarter,” Komolafe said in a statement.
Investors King learnt that the extent of oil theft in the Niger Delta region is already forcing some oil companies out of the country to set operations elsewhere.
Barely six weeks after TotalEnergies announced the plan to sell its stake in a Nigerian oil joint venture, the company has decided to invest about $850 million in oil projects in Angola.
Nigeria Customs Service Collaborates with Key Agencies to Boost Non-Oil Exports
The Nigeria Customs Service (NCS) has joined forces with the Nigerian Ports Authority (NPA) and the Nigerian Export Promotion Council (NEPC) to establish five Export Processing Terminals (EPTs).
The initiative was unveiled during an enlightening workshop organized by the Nigerian Shippers Council (NSC) in collaboration with the Presidential Enabling Business Environment Council (PEBEC) in Lagos.
Speaking at the event, Mohammed Babadende, the Customs Area Controller (CAC) of Lilypond Export Command, shed light on the objectives and operations of these newly established terminals.
The five EPTs—Diamond Star, Esslibra, Bellington Cargo, Tenzik Energy, and Sundail Terminal—have been tasked with the crucial mandate of overseeing the stuffing, examination, and documentation processes for export cargo.
This consolidated approach aims to streamline and expedite the export process, reducing delays and enhancing efficiency.
Mr. Babadende emphasized the transformative impact of this collaboration on Nigeria’s non-oil export sector.
He stated, “Customs, in its efforts to enhance trade facilitation in non-oil export, has collaborated with the Nigerian Ports Authority and Nigerian Export Promotion Council in the establishment of Export Processing Terminals (EPTs).”
One of the key achievements highlighted by Mr. Babadende is the significant reduction in export processing time.
He stated, “Export cargoes can now access the ports within 48 hours for loading onto awaiting vessels.”
This improvement is expected to not only expedite the export process but also reduce shipping costs, contributing to the overall competitiveness of Nigerian exports in international markets.
Furthermore, this initiative addresses common challenges faced by exporters, such as delays and the lack of requisite phytosanitary certificates. By housing multiple agencies involved in the export process in one location, these challenges are minimized, and the risk of goods being rejected or returned due to delays is significantly reduced.
Also, the establishment of the EPTs has had a positive impact on security. Mr. Babadende pointed out, “It has eliminated the issue of pilfering of export boxes along the port corridors,” thus ensuring the safe transit of export cargo.
The collaborative effort between the Nigeria Customs Service, Nigerian Ports Authority, and Nigerian Export Promotion Council represents a significant step toward revitalizing Nigeria’s non-oil export sector.
As these Export Processing Terminals become fully operational, they are expected to play a pivotal role in boosting the country’s export capacity, fostering economic growth, and strengthening its position in the global market. Exporters and industry stakeholders are eagerly anticipating the positive outcomes of this partnership as it unfolds.
Nigeria’s Per Capita Debt Skyrockets: Each Nigerian Now Owes N396,376.19
The National Bureau of Statistics (NBS) has released a sobering report on the country’s public debt, revealing that each Nigerian citizen now carries a heavy financial burden of N396,376.19 in terms of debt per capita.
The NBS’s report paints a grim picture of Nigeria’s fiscal landscape, showing that the nation’s total public debt has surged by 75.27 percent from N49.85 trillion in the first quarter of 2023 to N87.38 trillion at the close of the second quarter of 2023.
In plain monetary terms, this represents an alarming increase of N37.53 trillion in a mere three months.
To calculate the debt per capita, the Independent Corrupt Practices and Other Related Offences Commission (ICIR) divided the total public debt by Nigeria’s estimated population, which stands at approximately 220.4 million, according to the World Poverty Clock.
Breaking down the debt by categories, it was revealed that the federal government’s total external debts amounted to a substantial N29.9 trillion, with the 36 states and the Federal Capital Territory collectively carrying N3.35 trillion in external debt.
On the domestic front, the federal government’s debt reached a staggering N48.31 trillion, while the states and the Federal Capital Territory collectively owed N5.82 trillion.
A notable portion of this debt comprises the N22.71 trillion in Ways and Means Advances extended by the Central Bank of Nigeria (CBN) to the federal government.
It’s worth noting that these figures also encompass new borrowings made by both the federal government and sub-national entities from local and external sources.
The Ways and Means Advances, a financial mechanism employed by the federal government in times of emergencies, allows for short-term loans from the CBN.
However, these loans are restricted by Section 38 of the CBN Act which stipulates that the loan should not exceed five percent of the country’s previous year’s actual revenue.
It has been reported that CBN’s lending in this regard exceeded the Act’s limits, extending loans of $49.2 billion to the previous government.
According to the NBS, as of the end of June 2023, the domestic debt stood at an alarming N54.13 trillion (equivalent to $70,264.58 million), while the external debt reached N33.25 trillion (equivalent to $43,159.19 million).
A closer look at the regional debt distribution reveals that Lagos State carries the heaviest domestic debt burden in Q2 2023, with an eye-watering N996.44 billion.
Delta State follows closely behind with N465.40 billion, while Jigawa State finds itself at the other end of the spectrum with the lowest domestic debt of N43.13 billion, just ahead of Kebbi State with N60.94 billion.
The alarming debt per capita figure underscores the urgent need for Nigeria’s policymakers to address the nation’s fiscal challenges and implement prudent financial management strategies. As the nation grapples with this daunting burden, the path to economic stability and prosperity appears more challenging than ever.
Dollar Shortage Sparks Concerns Among Oil Marketers Over Fuel Importation
Expectations soared when oil marketers championed the removal of fuel subsidies and deregulation of Nigeria’s downstream sector.
However, months after the removal of subsidies and deregulation, concerns are growing about the potential resurgence of the country’s perennial fuel scarcity.
While President Bola Tinubu’s pronouncement in May marked the end of fuel subsidies, the Nigerian National Petroleum Company Limited (NNPCL) still monopolizes petrol importation despite the anticipated influx of independent oil marketers.
Emadeb Energy imported 27 million liters of petrol in July, but since then, independent marketers have struggled to secure imports, leaving NNPCL as the sole importer.
This monopoly undermines the sector’s deregulation, enabling NNPCL to set prices, raising concerns of renewed fuel scarcity.
Marketers attribute their hesitance to forex scarcity and rising international crude oil prices. The challenge deepens as oil prices surge to $94.95 per barrel, and the exchange rate reaches N770/$.
With Nigeria’s fuel prices skyrocketing from N180-200 per liter to N614-700 per liter after subsidy removal, many worry they might breach N720 per liter due to currency devaluation and global oil price hikes.
Dangote’s long-anticipated 650,000 barrels per day refinery, initially set for August, now promises hope to ease the crisis.
Experts advise diversifying focus to existing refineries, particularly Port Harcourt, rather than relying solely on Dangote’s private venture. This would curtail importation costs and reduce vulnerability to market volatility.
While Nigeria navigates these challenges, it remains crucial to bolster domestic refining capacities and ensure energy security, shifting from dependence on imports to sustainable local production.
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