The National Bureau of Statistics of Nigeria, or NBS, has reported at the start of September that the value of Nigeria’s capital imports fell to $1.29 billion. This means that there is an active decline of 77.88 percent in the value. This is especially troublesome considering the fact that during the first quarter of 2020 the capital import used to be $5.85 billion.
This means that cumulatively, on a year-to-year basis, the drop amounted to a whopping 78.60 percent from what it used to be in the second financial quarter of 2019 ($6.05 billion).
It is no secret that this large decline is largely attributed to the ongoing novel coronavirus pandemic which is currently plaguing the world. Nigeria is not the only country that has been affected by the global problem. Almost every other country in the world is having financial problems with global economies like the US and UK shrinking by 20%. In Nigeria during the period between April and June the Foreign Direct Investment, or FDI, calculated in equities and other capital, has fallen by 30.65 percent on a quarterly and by 33.41 percent on yearly basis. The current number is sitting at $148.59 million. According to NDS, the FDI accounts for almost 12 percent of the total capital that has been imported in the second quarter of 2020. One of the leading causes is portfolio investment (equities, bonds, foreign exchange market, etc). These investments accumulate to 29.76 percent of the total inflow of foreign money. This unit has fallen by an incredible 91.06 percent just between the first and second quarters of 2020 to $385.32 million.
Major capital investment contributor is classified under “other investment” and comprises trade credits, currency deposits, loans, etc. The statistics show that these types of investments account for as much as 58.77 percent of total imported capital or $761.03 million. The decline here is also quite visible as there is a drop of 42.81 percent on quarter to quarter and 48.60 percent on yearly basis.
According to the report made by the NDS, during these times of crisis, Great Britain has become a major capital investor of Nigeria in the second quarter where the inflow of money shows $428.83 million. This is 33.12 percent of the total capital inflow in the second quarter of 2020.
The largest capital importing state is still considered to be Lagos with $1.13 billion or 87.30 percent of the total capital inflow in Q2 of 2020 closely followed by the states of Abuja and Ogun in second and third positions. However, the difference of capital investment here is quite troubling since Abuja has only $145.30 million and the Ogur state is netting $11 million which are 11.20 percent and 0.85 percent of the capital importing total.
The foreign exchange market (Forex, FX) in Nigeria is starting to boom though. Due to the novel coronavirus which has left a huge number of residents unemployed and others locked up in their own homes the number of people who started researching additional ways to generate income has increased by a significant amount. Forex has proved to be a useful instrument in this battle against unemployment. The educational material is freely available online, so it isn’t far from reality that anyone with a decent computer, smartphone, or even a tablet could go through some materials over the internet.
Choosing a proper, licensed broker is also quite an endeavor. However, it is made easier due to the efforts of regulatory bodies that work hard on licensing these firms which afterward have the ability to offer reliable services. If you’re a trader, you can read online forex reviews here to choose your desired broker, test the waters with a demo account, invest, and start trading currency pairs. It is a unique opportunity for people living in developing countries that do not have enough finances to manage the Coronavirus pandemic. This has been successfully done by countries like South Africa, which has introduced its own regulatory body – Financial Services Conduct Authority (FSCA) – that managed to put the country on the global playfield with the South African rand now becoming the 18th most traded currency on Forex globally.
The reason FX is profitable now is because of the Nigerian naira pushing the limits. The currency has become stronger during the last couple of months (everything is comparable) but this can be largely attributed to the fact that the decrease in imports leaves more focus on exports which directly translates to the strengthening of the local currency. However, the margin at which it strengthened leaves something to desire more. Unfortunately, the Nigerian naira has been devaluing for a very long time now and unless something changes in the inner politics of the nation it is not going to improve. The devaluation happens due to the oil prices jumping around constantly. Nigeria is extremely dependent on the crude price. This has gone to the extent where there are multiple exchange rate policies for naira. Currently, it is sitting around N381 which is a 21 point increase from what it used to be prior to the lockdown.
Fuel: MOMAN, NNPCL Collaborate To Improve Distribution
Major Oil Marketers Association of Nigeria (MOMAN) says it is working with the Nigeria National Petroleum Company (NNPC) Ltd. to improve the distribution of petrol across the country.
Chief Executive Officer of MOMAN, Mr Clement Isong, said this in an interview with The Tide source in Lagos, Saturday, against the backdrop of the current scarcity of petrol and long queues at filling stations.
Isong said the association had been holding a daily logistic emergency meeting with the downstream management of NNPCL on how to improve the supply of petrol.
According to him, the collaboration with NNPCL will enhance the distribution of petroleum products in the country.
“We are doing depot to depot check-in and check-out to enhance efficiency, also having logistic supply meetings with NNPCL.
“There is also collaboration among our members to cushion supply to various MOMAN’s stations.
“We arranged it in a way that any MOMAN member who does not have product can pick from fellow members’ depot to minimise supply gaps,” he said.
Isong also said the effort was to improve the supply of petrol at filling stations across the country.
“NNPCL had an operational meeting with MOMAN to ensure that products are effectively distributed across the country.
“The logistics meeting was to ensure adequate distribution of products to stations across the country,” he added.
The helmsman said MOMAN members would be working late during the weekend to bridge product supply gaps.
He said MOMAN had been pushing out more products than it normally did.
Noting that the scarcity was as a result of delay experienced at the point of receiving products from offshore to onshore at the port, he said the logistics challenge had been resolved and members were currently trucking out products.
However, the oil marketers and petroleum depot operators, under the aegis of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), called for quick intervention by the Federal Government.
Its Chairman, Mrs Winifred Akpani, urged the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) to comply with the Federal Government’s directive to end payment of port charges in dollars for petroleum products brought into the country.
Akpani stated that accessing forex through the Central Bank of Nigeria (CBN) window would enhance their capacity, facilitate seamless supply of petrol, and birth a regime of sustainability in terms of storage, distribution and supply across the nation.
“DAPPMAN hereby calls on the government to establish a level playing field in the sector by giving petroleum marketers access to forex at the CBN exchange rate for their operations,” said Akpani.
He emphasised that accessing FX at the official rate would boost fuel supply across the country.
She added that the burden of sourcing forex through the parallel market for transactions domiciled in Nigeria had left petroleum marketers in dire straits.
She said, “Accessing dollars for our operations has been an insurmountable hurdle for petroleum marketers.
“The difference between CBN exchange rate and the parallel market exchange rate continues to get wider by the day.”
The reports that some filling stations owned by major oil marketers were seen selling petrol at regulated price of N170 per litre, while stations belonging to IPMAN members sell between N220 and N240 per litre.
FG Targets 40bn Barrels Oil Reserves By 2025 – Sylva
Minister of Petroleum Resources, Chief Timipre Sylva, says one of the key mandates of the Ministry is to grow oil reserves from the current 37 billion barrels to 40 billion barrels by 2025.
Sylva said this recently at the official ground-breaking of the Oil Prospecting Licenses (OPLs) 809 and 810 at the Kolmani River II well located at a border community between Bauchi and Gombe states.
The Kolmani Integrated Development Project was inaugurated by President Muhammadu Buhari with some top government officials including governors, cabinet members, captains of industry and Nigerian National Petroleum Company Ltd. (NNPCL) officials, among others in attendance.
He said he was particularly excited at the partnership between NNPCL, Sterling Global Oil, and New Nigeria Development Commission (NNDC), to carry out the drilling campaign.
“This is a testimony of the fact that the hydrocarbons sector still holds promise of returns on investment, highlighting the role that this resource will continue to play in the global energy mix,” Sylva said.
He recalled that in 2019 when the NNPC announced that it had encountered oil in ‘commercial quantities’ at the Kolmani River well II, the nation celebrated the news as a fitting outcome for years of geological investigations.
“In spite of the enormity of challenges that NNPC was confronted with, the day has come when we can collectively witness and celebrate drilling for hydrocarbons in the North of our dear country,” he said.
He said the Ministry was committed to finding and developing ways to end energy poverty, create shared prosperity and enthrone sustainable development.
Sylva said the Petroleum Industry Act (PIA) provided regulatory support and framework for achieving this mandate by providing Frontier Exploration Fund which the NNPC could utilise to deploy world-class cutting-edge technologies to de-risk exploration in frontier basins.
“The commencement of drilling of Kolmani fields which could hold as much as one billion barrels crude oil reserve, will significantly contribute in boosting our oil reserves and ensuring our continuous energy sufficiency,” he said.
He thanked the President for demonstrating his commitment to the uninhibited development of the petroleum industry.
In a remark, the Group Chief Executive Officer, NNPCL, Malam Mele Kyari, said the discovery of commercial oil and gas deposit at Kolmani oil field in 2019 was further appraised and validated by Kolmani team.
Kyari, while thanking the Bauchi and Gombe states governments and their partners said development of framework was put in place to guarrantee financing and technology required to deliver the integrated project.
He assured the President that it would leverage every mechanism including asset based financing framework for delivery of the project for it to stand out as the administration’s lasting legacies.
The Senate President, Dr Ahmad Lawan, also lauded the President for achieving a landmark feat, adding that the PIA provided in section nine, five and four 30 per cent of profit from oil exploration.
FG Beefs Up Security At Kolmani Oil Drill In N/East
Security measures have been beefed up at the Kolmani River II Oil Field located at a border community between Bauchi and Gombe States for Presidential flag-off of the Kolmani Integrated Development Project.
The Tide source reports that President Muhammadu Buhari performed the official ground-breaking ceremony of the Oil Prospecting Lease (OPLs) 809 and 810 at the Kolmani River II Well.last Tuesday.
The Nigerian National Petroleum Company (NNPC) Limited, in October 2019, announced the discovery of crude oil, gas and condensate in the Kolmani River.
The commercial quantity discovery was the first in the region after several crude oil exploration on the Upper Benue Trough.
The oilfield will be developed by Sterling Global Oil, New Nigeria Development Commission (NNDC) and the NNPC Ltd.
The historic event would signal commencement of commercial oil drilling and exploration in the oil field discovered in 2019 in the northern region.
The source reports that many officials of Nigerian security agencies, including the State Security Service, Nigerian Army, the Nigerian Air Force and Navy as well as the Nigerian Police are deployed at the site.
Some para military agencies including the Nigerian Security and Civil Defence Corps (NSCDC), the Federal Road Safety Corps and the Federal Fire Service are also on ground.
The officials of the NNPC Ltd, members of the cabinet and some medical teams with their equipment are also seen at the site.
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