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Spain to Set up Manufacturing Companies in Nigeria

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  • Spain to Set up Manufacturing Companies in Nigeria

The Government of Spain has revealed plans aimed at setting up Spanish manufacturing companies among other businesses in Nigeria, which is targeted at exploring economic potential and build business relations Nigeria.

This is even as an official trade delegation has scheduled a visit to Nigeria in May 2017.The delegation having discussions with government agencies and familiarizing itself with the business environment in Abuja between May 8 and 9, and meeting with private sector operators in Lagos on May 10, 2017 before leaving for their home country.

Spanish Ambassador to Nigeria, Alfonso Barnuevo Sebastian De Erico, on Wednesday, dropped this hint, when he paid a courtesy visit to the Minister of Budget and National Planning, Senator Udoma Udo Udoma, in Abuja.

According to an official statement released by the Media Adviser to the minister, Akpandem James, and made available to journalists, the move is part of government efforts to attract foreign investment into the country to boost the economy.

De Erico said it was time the two countries looked into the future to find more ways of being mutually beneficial to each other, particularly now that the country has a government that is sold to good governance principles.

“We appreciate the effort of Nigeria in the area of transparency and fighting corruption. We appreciate also its economic policies; and these will take the country forward. We are very supportive of Nigeria and its policies”, he added.

The Ambassador said Spain has been investing in Europe over time and now needs to move its focus to Africa, with Nigeria as a preferred destination because of the country’s huge market potentials. “That is why we are bringing in Spanish companies to know the country and also explore investment opportunities available”, he explained.

He said though the number of Spanish companies already doing business in Nigeria is increasing, the planned trip is very special as the focus would be on some very specific areas, including Construction, Energy and Environment and Water and Sanitation.

De Erico told the minister that he would appreciate the full involvement of the Ministry of Budget and National Planning and other relevant Federal Government agencies in facilitating the realization of the planned visit as it has enormous potentials of enhancing trade relations and economic growth between the two countries.

The ambassador stressed that Nigeria and Spain have enjoyed long lasting political and economic relations, adding that the time has come to deepen the relationship with further investments in some sectors of the Nigerian economy.

Udoma, while acknowledging the contributions of Spain to Nigeria’s economy over the years, particularly in the oil and gas sector, said the Nigerian government is excited about the planned visit and assured it will be fully involved in ensuring its success.

“On the visit of Spanish companies to Nigeria, this is something that we will welcome. It is something we have been looking forward to; something that we are encouraging. We believe you have a lot to offer us and the Spanish companies will find Nigeria a convenient place to do business. We are improving our ease of doing business template and making sure that anybody who wants to do business in Nigeria has a much easier time.

“We are improving on our Visa system, to make it faster to get Visa. We are giving extra support to our Export Processing Zones in terms of infrastructure, to upgrade them so that they will be suitable and convenient places for companies in Spain that would want to go into manufacturing in Nigeria,” he stated.

He pledged the readiness of the Ministry not only to support the proposal of bringing in the companies to Nigeria but to liaise with the Ministry of Industry, Trade and Investment, the Nigeria Investments Promotion Council (NIPC) and other relevant agencies of government to facilitate the project.

The Minister told the Spanish envoy that Nigeria is very interested in expanding its agricultural potentials, solid mineral exploitation and infrastructure development, particularly in the area of roads, rail and power. Concerning infrastructure, he informed that Nigeria is exploring the option of partnership with the private sector to speed up the realization of a massive infrastructure upgrade within the shortest possible time.

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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Crude Oil

Oil Prices Sink 1% as Israel-Hamas Talks in Cairo Ease Middle East Tensions

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Oil prices declined on Monday, shedding 1% of their value as Israel-Hamas peace negotiations in Cairo alleviated fears of a broader conflict in the Middle East.

The easing tensions coupled with U.S. inflation data contributed to the subdued market sentiment and erased gains made earlier.

Brent crude oil, against which Nigerian oil is priced, dropped by as much as 1.09% to 8.52 a barrel while West Texas Intermediate (WTI) oil fell by 0.99% to $83.02 a barrel.

The initiation of talks to broker a ceasefire between Israel and Hamas played a pivotal role in moderating geopolitical concerns, according to analysts.

A delegation from Hamas was set to engage in peace discussions in Cairo on Monday, as confirmed by a Hamas official to Reuters.

Also, statements from the White House indicated that Israel had agreed to address U.S. concerns regarding the potential humanitarian impacts of the proposed invasion.

Market observers also underscored the significance of the upcoming U.S. Federal Reserve’s policy review on May 1.

Anticipation of a more hawkish stance from the Federal Open Market Committee added to investor nervousness, particularly in light of Friday’s data revealing a 2.7% rise in U.S. inflation over the previous 12 months, surpassing the Fed’s 2% target.

This heightened inflationary pressure reduced the likelihood of imminent interest rate cuts, which are typically seen as stimulative for economic growth and oil demand.

Independent market analysts highlighted the role of the strengthening U.S. dollar in exacerbating the downward pressure on oil prices, as higher interest rates tend to attract capital flows and bolster the dollar’s value, making oil more expensive for holders of other currencies.

Moreover, concerns about weakening demand surfaced with China’s industrial profit growth slowing down in March, as reported by official data. This trend signaled potential challenges for oil consumption in the world’s second-largest economy.

However, amidst the current market dynamics, optimism persists regarding potential upside in oil prices. Analysts noted that improvements in U.S. inventory data and China’s Purchasing Managers’ Index (PMI) could reverse the downward trend.

Also, previous gains in oil prices, fueled by concerns about supply disruptions in the Middle East, indicate the market’s sensitivity to geopolitical developments in the region.

Despite these fluctuations, the market appeared to brush aside potential disruptions to supply resulting from Ukrainian drone strikes on Russian oil refineries over the weekend. The attack temporarily halted operations at the Slavyansk refinery in Russia’s Krasnodar region, according to a plant executive.

As oil markets navigate through geopolitical tensions and economic indicators, the outcome of ongoing negotiations and future data releases will likely shape the trajectory of oil prices in the coming days.

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Commodities

Cocoa Fever Sweeps Market: Prices Set to Break $15,000 per Ton Barrier

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The cocoa market is experiencing an unprecedented surge with prices poised to shatter the $15,000 per ton barrier.

The cocoa industry, already reeling from supply shortages and production declines in key regions, is now facing a frenzy of speculative trading and bullish forecasts.

At the recent World Cocoa Conference in Brussels, nine traders and analysts surveyed by Bloomberg expressed unanimous confidence in the continuation of the cocoa rally.

According to their predictions, New York futures could trade above $15,000 a ton before the year’s end, marking yet another milestone in the relentless ascent of cocoa prices.

The surge in cocoa prices has been fueled by a perfect storm of factors, including production declines in Ivory Coast and Ghana, the world’s largest cocoa producers.

Shortages of cocoa beans have left buyers scrambling for supplies and willing to pay exorbitant premiums, exacerbating the market tightness.

To cope with the supply crunch, Ivory Coast and Ghana have resorted to rolling over contracts totaling around 400,000 tons of cocoa, further exacerbating the scarcity.

Traders are increasingly turning to cocoa stocks held in exchanges in London and New York, despite concerns about their quality, as the shortage of high-quality beans intensifies.

Northon Coimbrao, director of sourcing at chocolatier Natra, noted that quality considerations have taken a backseat for most processors amid the supply crunch, leading them to accept cocoa from exchanges despite its perceived inferiority.

This shift in dynamics is expected to further deplete stocks and provide additional support to cocoa prices.

The cocoa rally has already seen prices surge by about 160% this year, nearing the $12,000 per ton mark in New York.

This meteoric rise has put significant pressure on traders and chocolate makers, who are grappling with rising margin calls and higher bean prices in the physical market.

Despite the challenges posed by soaring cocoa prices, stakeholders across the value chain have demonstrated a willingness to absorb the cost increases.

Jutta Urpilainen, European Commissioner for International Partnerships, noted that the market has been able to pass on price increases from chocolate makers to consumers, highlighting the resilience of the cocoa industry.

However, concerns linger about the eventual impact of the price surge on consumers, with some chocolate makers still covered for supplies.

According to Steve Wateridge, head of research at Tropical Research Services, the full effects of the price increase may take six months to a year to materialize, posing a potential future challenge for consumers.

As the cocoa market continues to navigate uncharted territory all eyes remain on the unfolding developments, with traders, analysts, and industry stakeholders bracing for further volatility and potential record-breaking price levels in the days ahead.

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Crude Oil

IOCs Stick to Dollar Dominance in Crude Oil Transactions with Modular Refineries

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International Oil Companies (IOCs) are standing firm on their stance regarding the currency denomination for crude oil transactions with modular refineries.

Despite earlier indications suggesting a potential shift towards naira payments, IOCs have asserted their preference for dollar dominance in these transactions.

The decision, communicated during a meeting involving indigenous modular refineries and crude oil producers, shows the complex dynamics shaping Nigeria’s energy landscape.

While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had previously hinted at the possibility of allowing indigenous refineries to purchase crude oil in either naira or dollars, IOCs have maintained a firm stance favoring the latter.

Under this framework, modular refineries would be required to pay 80% of the crude oil purchase amount in US dollars, with the remaining 20% to be settled in naira.

This arrangement, although subject to ongoing discussions, signals a significant departure from initial expectations of a more balanced currency allocation.

Representatives from the Crude Oil Refinery Owners Association of Nigeria (CORAN) said the decision was not unilaterally imposed but rather reached through deliberations with relevant stakeholders, including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

While there were initial hopes of broader flexibility in currency options, the dominant position of IOCs has steered discussions towards a more dollar-centric model.

Despite reservations expressed by some participants, including modular refinery operators, the consensus appears to lean towards accommodating the preferences of major crude oil suppliers.

The development underscores the intricate negotiations and power dynamics shaping Nigeria’s energy sector, with implications for both domestic and international stakeholders.

As discussions continue, attention remains focused on how this decision will impact the operations and financial viability of modular refineries in Nigeria’s evolving oil landscape.

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