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Economic Crisis: CBN Forecast Further Naira Fall In Jan

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Barely five days to the end of the year 2020, the Central Bank of Nigeria (CBN), has disclosed that a survey carried out by its Statistics Department revealed that the Naira was expected to depreciate further in January, 2021.
The report, titled, ‘December 2020 Business Expectations Survey Report’, added that there might also be a steady rise in interest rate from December till the next six months.
The Naira witnessed a sharp fall in recent weeks, reaching its lowest on November 30, 2020, when it exchanged for N500/$1.
Since then, the Dollar has been hovering between N460 and N470.
As at last Friday, however, $1 exchanged for N465 in the parallel market.
Also, the Nigerian economy had on November 21 slid into its second recession in five years when the economy shrank again in the third quarter.
The recession is said to be the worst in 36 years, according to the data obtained from the World Bank.
The Federal Government and some economists had expressed optimism that the country would exit the recession in 2021.
Meanwhile, in the 11-page survey report, the CBN said it conducted the survey online from December 7 to 11, with a sample size of 1,050 businesses nationwide.
It noted that a response rate of 91.3 per cent was achieved and that the sample covered the agriculture/services, manufacturing, wholesale/retail trade and construction sectors.
It added that the respondent firms were made up of small, medium and large corporations covering both import-oriented and export-oriented businesses.
The report partly read, “Respondent firms expect the naira to depreciate in the current month and next month but appreciate in the next two months and the next six months.
“Inflation level is expected to rise in the next six and 12 months as firms expect the average inflation rate in the next six months and the next 12 months to stand at 13.24 and 14.51 per cent, while borrowing rate is expected to rise in the current month, next month, next two months and the next six months with indices of 19.2, 14.9, 14.7 and 14.3 points.”
In the survey, respondent firms expressed pessimism on the macro economy, while their outlook on the volume of business activities, average capacity utilisation, the volume of total order and financial condition (working capital) were positive.
The CBN stated that respondent firms identified insufficient power supply, unfavourable economic climate, competition, high interest rates, unclear economic laws, financial problems, unfavourable political climate, access to credit, insufficient demand, lack of equipment, lack of materials input, and labour problems as major factors constraining business activities in December, 2020.
In a separate development, the apex bank in a communiqué number 133 of the Monetary Policy Committee meeting held on November 23 and 24 and signed by the Governor of the Central Bank of Nigeria, Godwin Emefiele, said the aggregate domestic credit grew by 7.61 per cent in October, 2020, compared with 7.35 per cent in the previous month.
This, it said, was as a result of the bank’s policy on Loan-to-Deposit Ratio, supported by its interventions in the various sectors of the economy, adding that total bank credit grew in the banking industry by N290.13billion between the end of August and the middle of November.
The communiqué added, “Total gross credit by the banking industry stood at N19.54trillion as at November 13, 2020, compared with N19.33trillion at the end of August, 2020, an increase of N290.13billion.
“When compared with N15.56trillion at the commencement of the LDR policy in May, 2019, total gross credit increased by N3.97trillion, these loans were granted mainly to manufacturing (N738billion), general commerce (N874billion), agric and forestry (N301billion), construction (N291billion), and ICT (N231billion), just to mention a few.”
The communiqué noted further that the MPC observed the gradual improvement in the manufacturing and non-manufacturing Purchasing Managers’ Indices, which rose to 50.2 and 47.6 index points respectively, in November, 2020, compared with 49.4 and 46.8 index points in October, 2020.
It added, “This development signposts an increase in economic activities, driven by growth in new orders, improved supply delivery time, rising production levels and new export orders. The employment level index component of the manufacturing and non-manufacturing PMIs also improved in November, 2020 to 47.3 index points and 46.7 index points, respectively, compared with 46.0 index points and 44.2 index points in October, 2020.
“The committee, however, noted the likely downside risk to growth of the recent unrest in the country, warning that this may adversely impact economic recovery in the near term.”
Meanwhile, on respondents’ opinion over the control of inflation, the CBN report said the respondents decried the poor management of inflation by the government.
It said, “Respondent firms expressed dissatisfaction with the management of inflation by the government, with a negative net satisfaction index -33.5 in December, 2020.”
On the business outlook, the report showed that at -15.2 index points, the overall confidence index on the macro economy was pessimistic in December, 2020 while respondents were optimistic in their outlook for the month of January, 2021 with a confidence index of 29.4.
The respondents also expressed optimism in the overall business outlook for February and June, 2021 as shown in a greater confidence of the economy with 39.2 and 55.2 index points, respectively.
It added, “The pessimism on the macro economy in the current month was driven by the opinion of respondents from agriculture/services (-10.4 points), wholesale/retail trade sectors (-1.7), construction (-1.6 points) and manufacturing sectors (-1.6 points).
“The major drivers of optimism for next month were agriculture/services (16.8 points) and manufacturing sectors (10.3 points). Further analysis revealed that businesses that were neither import and export-oriented (-9.5 points), both import and export-oriented (-3.4 points), importers (-2.0 points) and exporters (-0.2 points), drove the negative business outlook for the month under review.”
In terms of employment and expansion plans, the report said respondent firms’ opinion on the volume of business activities indicated a favourable business outlook for January and February, 2021, with indices of 47.7 and 55.0, respectively.
It added, “Businesses also hope to employ in January and February, 2021 as the outlook was positive at 18.5 and 21.5 index points, respectively.
“The breakdown by sector showed that the agric/services sector with (20.5 points) has the highest prospect for employment in the next month, followed by construction sector with an index of 17.9 points, manufacturing sector (16.7 points) and wholesale/retail trade (13.4 points).
“Respondents were also optimistic about the volume of business activities and employment outlook index in the next six months as all indices were positive. An analysis of businesses with expansion plans in January showed that the agric/services sector and construction sector have the highest disposition to expand with 52.9 index points each.”

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PH Refinery Under-goes Licensing, Minister Defends Rehabilitation Exercise

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The Port Harcourt Refining Company is currently undergoing various licensing processes following the supply of crude to the plant after it was mechanically completed in December 2023.
Senior officials at the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited disclosed this last Saturday. Similarly, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, earlier insisted that the plant was at its final rehabilitation stage.
“The mechanical work at the Port Harcourt refinery has been completed. Also, crude oil has been sent to the plant. What is being awaited now has to do with licensing and the like. Now, these licenses are given based on some set of time-frames.
“Some officials involved in issuing these licenses are still observing the plant. Some of them came in last month and they are still there checking everything. They will also have to test-run the plant and all this will be at their pace. Most of them are foreigners and you can’t rush them.
“They have their integrity to protect, for if anything contrary happens at the refinery, the officials might be held accountable and their insurance firms would have to pay for any damage. So it is not entirely on our part when it comes to the takeoff of the refinery,” a petroleum ministry official, who spoke in confidence due to lack of authorisation to talk about the matter, stated.
In March this year, the Group Chief Executive Officer of NNPC, Mele Kyari, said the Port Harcourt refinery had received 450,000 barrels of crude oil and would begin operations in April. This, however, did not happen.
Kyari had disclosed this at a press briefing after he appeared before the Senate Ad-hoc Committee investigating the various Turn Around Maintenance projects of the country’s refineries.
“We did a mechanical completion of the refinery, which was what we said in December. We now have crude oil already stocked in the refinery. We are doing the regulatory compliance tests that must happen in every refinery before you start it, and I assure you that this Port Harcourt refinery will start in the next two weeks.
“Completing the mechanical work means that you are done with the rehabilitation work, now you have to test to see how it works. Of course, we have also completed the mechanical work on the Warri refinery. It is also undergoing regulatory compliance; processes that we are doing with our regulator, and this will soon be completed and it will be ready.
“Kaduna refinery will be ready by December. We have not reached that stage in Kaduna, but we promise Kaduna will be delivered by December,” the NNPC helmsman had stated.
On the volume of crude pumped to the plant at the time, Kyari had said, “All crude lines are active and have delivered over 450,000 barrels into the Port Harcourt refinery.”
Earlier at a press briefing on developments in the oil sector on Friday, the petroleum minister defended the ongoing work at the Port Harcourt refinery, as he told journalists that it often takes time before refineries start pumping out refined products after their mechanical completion.
Lokpobiri cited the Dangote Petroleum Refinery as an example, stating that the plant did not start releasing refined products immediately after its inauguration by former President Muhammadu Buhari in May 2023.
Dangote refinery first released diesel into the Nigerian market in March 2024, followed by aviation fuel, but has yet to release petrol, which is largely consumed nationwide.
“Port Harcourt refinery is still in the final stage of rehabilitation. After the flares at the refinery in December (2023), a lot of work has to be done. Recall that Dangote refinery was commissioned by (former) President Buhari before he left. But when did they start producing products? It took a long while.
“So it’s not just as easy as Nigerians may think. The best example is that between when Buhari commissioned the Dangote refinery and when it started bringing the products it took a long time. So I believe that within a short time we will get clarity on it (Port Harcourt refinery),” Lokpobiri stated.
The minister, however, stated that though he normally received briefings from NNPC on the status of the plant, he had always asked the company about when the refinery would eventually be completed.
“I would like you to also go to NNPC. They awarded the contract. They report to me. But they awarded the contract. They are the people who are paying for the contract. And it’s always good to get the information right from the source. I get briefed from time to time.
“The same question people are asking me is what I’m also asking them (NNPC). When are we going to actually get this thing done? But they always said, look, Dangote refinery took some time. So it’s not just as easy as we think.
“And I think all of you here are witnesses to the Dangote refinery. When it was inaugurated by Buhari and when they started bringing our products. Even up till now, they haven’t started bringing out PMS. It takes time. But our own as a government is to ensure that we support them in any way we can,” Lokpobiri stated.
He, however, assured Nigerians that the government was working hard to ensure that the refinery commences the release of refined petroleum products in earnest, as this would impact positively on the country’s economy.

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Firms Partner On Healthcare In Nigeria’s Oil Rigs

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Three companies: Nesto Aviation Services, ADAC HEMS Academy Germany, and Kasi Healthcare Offshore and Aeromedical Unit, have partnered to enhance access to emergency medical care for workers in Nigeria’s oil and gas sector.
This is in response to the fact that Nigeria’s oil and gas industry had witnessed several tragic incidents resulting in injuries and loss of life due to numerous factors.
Such factors includes aging infrastructure, lack of proper safety protocols, recklessness of operators, and inadequate monitoring and regulation by authorities.
Experts predict that the spate of accidents is likely to continue unless major reforms are implemented to improve safety standards in Nigeria’s oil industry.
According to The Tide’s source, to improve access to emergency medical care for workers in Nigeria’s oil and gas industry in offshore areas of the Gulf of Guinea in West Africa, Nesto Aviation Services (NestAv), through its General Manager, Ehis Uadiale, on behalf of the firms, issued a statement.
This, the statement said, was sequel to the launch of a regional air ambulance and Helicopter Emergency Medical Service (HEMS) Service for the oil and gas sector, saying the partnership would provide a dedicated critical care aircraft for injured personnel in the golden hour.
The service will also include transport for stroke victims, heart attack patients and traumatic injuries with complications, and to those who would otherwise have limited access to emergency services in the golden hour.
The NestAv boss said the partnership is also focused on servicing in the golden hour medical emergencies occurring at remote locations across West Africa and offshore locations in Gulf of Guinea.
“The programme will prioritise training local doctors, nurses and paramedics, creating jobs and building long-term capacity within the region.
“The partnership will also launch an Air Ambulance service, utilising a King Air Aircraft operated by NestAV, equipped with advanced medical equipment and basic life support and advanced life support trained aeromedical team from Kasi Healthcare Offshore and Aeromedical Unit”, the statement said.
It also quoted the Chairman of Nestoil Group, Dr. Ernest Obiejesi, as saying that, “We are the largest indigenous EPCC service provider for major IOCs in Sub-Saharan Africa.
“This partnership represents a significant leap forward in providing critical medical care across offshore and remote locations in the Gulf of Guinea.
“By bringing together our collective strengths, we are establishing a world-class Air Ambulance and HEMS programme that will have a profound impact on the health and well-being of workers in oil industry across the region”.
A representative of ADAC HEMS Academy Germany added that, “ADAC HEMS Academy is proud to conclude the signing of a framework agreement with Kasi Healthcare as medical ops provider and Nest AV as flight ops provider in this groundbreaking project”
He continued that, under the agreement, “We are committed to establishing in Nigeria a training site linked to the ADAC HEMS Academy that is recognized by the American Heart Association training of selected AHA course formats and qualification of Nigerian instructors.
“We are also Consulting on all aspects of the configuration and establishment of HEMS in Nigeria under this project. Our knowledge and experience in aeromedical training to ensure the success of this programme and empower local healthcare professionals.
“We are also proud to be working with two organizations licensed by the Nigerian Civil Aviation Authority (NCAA) both with a commitment to safety and excellence”, Medical Director, KASI, Dr Dayo Osholowu, further added.
The ceremony featured the signing of a Memorandum of Understanding between the three organisations, paving the way for the development of aeromedical capacity across more than 180 remote oil and gas locations within the Gulf of Guinea.
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Dangote Expects First Brazilian Crude Shipment

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Dangote Refinery is set to receive its first shipment of Brazil’s crude oil in its bid to achieving full operational capacity.
The purchase of Brazilian crude is a first for Nigeria and Dangote Refinery is billed to import a one-million-barrel cargo of Brazil’s Tupi crude, scheduled for delivery in the latter half of next month.
The Dangote refinery has been pivotal in reducing Nigeria’s reliance on imported fuel.
Despite being Africa’s largest oil producer, Nigeria has historically depended on foreign fuel imports to meet its domestic needs, with its refineries unable to meet demand fpr the product.
Nigeria hopes that importing crude and refining it locally will enhance Nigeria’s energy security, reduce import dependency, and lower fuel prices for Nigerian consumers.
Dangote Refinery’s ability to source crude oil from diverse global suppliers will be key to its success and Nigeria’s broader energy strategy.
The Brazilian crude, sold by Petrobras, is among the most cost-effective and suitable oil grades available on the global market.
Earlier this week, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reached an agreement with oil producers to supply crude oil to domestic refineries at market prices on Wednesday, ending a supply dispute that had strained relations with international oil companies.
This came after oil majors where chasetised for hindering local crude oil purchases by demanding excessive premiums or claiming that they had no available crude.
This move is part of Nigeria’s broader efforts to secure a stable supply of crude for its refineries at market prices, ensuring that the country’s energy infrastructure is resilient and capable of meeting its needs without over-relying on any single source.

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