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Biofuel: NNPC Signs MoU With Kogi, Plans Stations Nationwide

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  • Biofuel: NNPC Signs MoU With Kogi, Plans Stations Nationwide

The Kogi State Government on Tuesday signed a Memorandum of Understanding with the Nigerian National Petroleum Corporation for the production of biofuel using cassava and sugarcane.

Both parties signed the MoU at the headquarters of the NNPC in Abuja, as the corporation announced plans of establishing biofuel filling stations nationwide in order to serve vehicles being powered by the commodity.

The Kogi State Governor, Yahaya Bello, told journalists that the initiative would create millions of jobs in his state and for Nigerians at large.

Bello said, “The takeaway from this particular signing of the MoU between Kogi State and the NNPC is that over two million jobs will be created in Kogi State as a result of this cassava and sugarcane development project that will be feeding the biofuel plant that is coming up in the state.

“The multiplier effect of this is that Kogi State will be more secured because the youths will be taken off the streets. So, as a state, we are committed to providing security and an environment that is conducive for this project in order to ensure that it is a success and benefits the good people of the state and Nigeria at large.”

On the projected completion date for the project, the governor stated, “The target period for its completion is about 36 months.”

Reacting to concerns about food security since cassava and sugarcane will be used for the production of biofuels, Bello stated that Kogi had abundant cassava that it had been unable to completely consume.

“As a matter of fact, we are producing cassava in excess now that we can’t even consume as a state. And eventually, we will produce enough for the refinery and for food consumption in the state,” he added.

Speaking on the financial commitment for the project, Bello said the African Development Bank was being contacted by the state government.

“From Kogi State, there is no financial commitment so far. However, we are approaching the African Development Bank, where we shall secure their commitment and ensure that we have enough funds to develop infrastructure in the state for the production of cassava and the biofuel project. We are looking at a whole lot of money for this project,” he said.

The Group Managing Director, NNPC, Maikanti Baru, noted that a lot of cassava and sugarcane growers had been contacted to cultivate the plants in Kogi, adding that the corporation was also looking at establishing biofuel filling stations across the country.

He stated, “As part of this initiative, we have the out-growers programme whereby beyond the plantations that are meant for the plants, the farmers in the immediate environment will be given advanced seeds and seedlings to go and plant, and we will use both for the plants as well as for export. So they are all in tandem.

“Specifically, we can put in up to 10 per cent of biofuels into our normal PMS supply so that normal vehicles can use them. But the focus we have with the level of biofuels that are being generated all over is to be able to have biofuel filling stations so that those vehicles that are designed to run on biofuels can take 100 per cent biofuels. So, we have a sufficient plan for that.”

The NNPC said in a statement that the fuel-ethanol processing plant would produce 84 million litres of biofuel per year.

Baru said the project would yield a cane mill and a raw and refined sugar plant of 126,000 tonnes annually.

He stated that the bagasse co-generation plant would also generate 64 megawatts of power, stressing that it would include a carbon dioxide recovery and bottling plant with capacity for 2,000 tonnes per year.

He was quoted in the statement as saying, “The sugarcane feedstock plantation will be on 19,000 hectares and it will produce animal feeds of 63,000 tonnes per year.”

Baru said the NNPC was pleased to know of another opportunity in the Alape Staple Crop Processing Zone in Kogi State, which was a vast agro allied business opportunity that would provide suitable agronomics for the cultivation of sugarcane, cassava and oil palm.

He said the signing of the MoU would lead to the formation of a Special Purpose Vehicle to steer the future activities of the proposed project, stressing that the project was central to the attainment of economic development on the basis of value-added investment portfolios, environmental sustainability, climate change mitigation, wealth and job creation to reduce the poverty index, while balancing the ecosystem, and maintenance of national and global security.

“The NNPC is committed to implementing Nigeria’s nationally determined contribution under the Paris Agreement aimed at combating global climate change, to which President Muhammadu Buhari signed and deposited Nigeria’s ‘Instrument of Ratification’ to the United Nations Framework Convention on Climate Change in May 2017,” he added.

Baru said the proposed NNPC biofuels project in Kaba/Bunu, Kogi State, would be an integrated feedstock plantation and process complex on a land mass of 20,000 hectares of sugarcane and 15,000 hectares for cassava with potential for further expansion.

He explained that the corporation had carried out seven bankable feasibility studies, which included three integrated sugarcane fuel ethanol projects in Benue, Kebbi and Gombe states; two integrated cassava fuel ethanol projects in Ondo and Anambra states; and two integrated oil palm biodiesel projects in Rivers and Cross River states.

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.

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Seme Border Sees 90% Decline in Trade Activity Due to CFA Fluctuations

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The Seme Border, a vital trade link between Nigeria and its neighboring countries, has reported a 90% decline in trade activity due to the volatile fluctuations in the CFA franc against the Nigerian naira.

Licensed customs agents operating at the border have voiced concerns over the adverse impact of currency instability on cross-border trade.

In a conversation with the media in Lagos, Mr. Godon Ogonnanya, the Special Adviser to the President of the National Association of Government Approved Freight Forwarders, Seme Chapter, shed light on the drastic reduction in trade activities at the border post.

Ogonnanya explained the pivotal role of the CFA franc in facilitating trade transactions, saying the border’s bustling activities were closely tied to the relative strength of the CFA against the naira.

According to Ogonnanya, trade activities thrived at the Seme Border when the CFA franc was weaker compared to the naira.

However, the fluctuating nature of the CFA exchange rate has led to uncertainty and instability in trade transactions, causing a significant downturn in business operations at the border.

“The CFA rate is the reason activities are low here. In those days when the CFA was a little bit down, activities were much there but now that the rate has gone up, it is affecting the business,” Ogonnanya explained.

The unpredictability of the CFA exchange rate has added complexity to trade operations, with importers facing challenges in budgeting and planning due to sudden shifts in currency values.

Ogonnanya highlighted the cascading effects of currency fluctuations, wherein importers incur additional costs as the value of the CFA rises against the naira during the clearance process.

Despite the significant drop in trade activity, Ogonnanya expressed optimism that the situation would gradually improve at the border.

He attributed his optimism to the recent policy interventions by the Central Bank of Nigeria, which have led to the stabilization of the naira and restored confidence among traders.

In addition to currency-related challenges, customs agents cited discrepancies in clearance procedures between Cotonou Port and the Seme Border as a contributing factor to the decline in trade.

Importers face additional costs and complexities in clearing goods at both locations, discouraging trade activities and leading to a substantial decrease in business volume.

The decline in trade activity at the Seme Border underscores the urgent need for policy measures to address currency volatility and streamline trade processes.

As stakeholders navigate these challenges, there is a collective call for collaborative efforts between government agencies and industry players to revive cross-border trade and foster economic growth in the region.

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CBN Worries as Nigeria’s Economic Activities Decline

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Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN) has expressed deep worries over the ongoing decline in economic activities within the nation.

The disclosure came from the CBN’s Deputy Governor of Corporate Services, Bala Moh’d Bello, who highlighted the grim economic landscape in his personal statement following the recent Monetary Policy Committee (MPC) meeting.

According to Bello, the country’s Composite Purchasing Managers’ Index (PMI) plummeted sharply to 39.2 index points in February 2024 from 48.5 index points recorded in the previous month. This substantial drop underscores the challenging economic environment Nigeria currently faces.

The persistent contraction in economic activity, which has endured for eight consecutive months, has been primarily attributed to various factors including exchange rate pressures, soaring inflation, security challenges, and other significant headwinds.

Bello emphasized the urgent need for well-calibrated policy decisions aimed at ensuring price stability to prevent further stifling of economic activities and avoid derailing output performance. Despite sustained increases in the monetary policy rate, inflationary pressures continue to mount, posing a significant challenge.

Inflation rates surged to 31.70 per cent in February 2024 from 29.90 per cent in the previous month, with both food and core inflation witnessing a notable uptick.

Bello attributed this alarming rise in inflation to elevated production costs, lingering security challenges, and ongoing exchange rate pressures.

The situation further escalated in March, with inflation soaring to an alarming 33.22 per cent, prompting urgent calls for coordinated efforts to address the burgeoning crisis.

The adverse effects of high inflation on citizens’ purchasing power, investment decisions, and overall output performance cannot be overstated.

While acknowledging the commendable efforts of the Federal Government in tackling food insecurity through initiatives such as releasing grains from strategic reserves, distributing seeds and fertilizers, and supporting dry season farming, Bello stressed the need for decisive action to curb the soaring inflation rate.

It’s worth noting that the MPC had recently raised the country’s interest rate to 24.75 per cent in March, reflecting the urgency and seriousness with which the CBN is approaching the economic challenges facing Nigeria.

As the nation grapples with a multitude of economic woes, including inflationary pressures, exchange rate volatility, and security concerns, the CBN’s vigilance and proactive measures become increasingly crucial in navigating these turbulent times and steering the economy towards stability and growth.

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Sub-Saharan Africa to Double Nickel, Triple Cobalt, and Tenfold Lithium by 2050, says IMF

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In a recent report by the International Monetary Fund (IMF), Sub-Saharan Africa emerges as a pivotal player in the global market for critical minerals.

The IMF forecasts a significant uptick in the production of essential minerals like nickel, cobalt, and lithium in the region by the year 2050.

According to the report titled ‘Harnessing Sub-Saharan Africa’s Critical Mineral Wealth,’ Sub-Saharan Africa stands to double its nickel production, triple its cobalt output, and witness a tenfold increase in lithium extraction over the next three decades.

This surge is attributed to the global transition towards clean energy, which is driving the demand for these minerals used in electric vehicles, solar panels, and other renewable energy technologies.

The IMF projects that the revenues generated from the extraction of key minerals, including copper, nickel, cobalt, and lithium, could exceed $16 trillion over the next 25 years.

Sub-Saharan Africa is expected to capture over 10 percent of these revenues, potentially leading to a GDP increase of 12 percent or more by 2050.

The report underscores the transformative potential of this mineral wealth, emphasizing that if managed effectively, it could catalyze economic growth and development across the region.

With Sub-Saharan Africa holding about 30 percent of the world’s proven critical mineral reserves, the IMF highlights the opportunity for the region to become a major player in the global supply chain for these essential resources.

Key countries in Sub-Saharan Africa are already significant contributors to global mineral production. For instance, the Democratic Republic of Congo (DRC) accounts for over 70 percent of global cobalt output and approximately half of the world’s proven reserves.

Other countries like South Africa, Gabon, Ghana, Zimbabwe, and Mali also possess significant reserves of critical minerals.

However, the report also raises concerns about the need for local processing of these minerals to capture more value and create higher-skilled jobs within the region.

While raw mineral exports contribute to revenue, processing these minerals locally could significantly increase their value and contribute to sustainable development.

The IMF calls for policymakers to focus on developing local processing industries to maximize the economic benefits of the region’s mineral wealth.

By diversifying economies and moving up the value chain, countries can reduce their vulnerability to commodity price fluctuations and enhance their resilience to external shocks.

The report concludes by advocating for regional collaboration and integration to create a more attractive market for investment in mineral processing industries.

By working together across borders, Sub-Saharan African countries can unlock the full potential of their critical mineral wealth and pave the way for sustainable economic growth and development.

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