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IMF Warns Nigeria Over Dwindling Oil Revenue

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The International Monetary Fund (IMF) has warned Nigeria and other oil-producing countries in Sub-Saharan Africa to expect dwindling oil revenues in the coming years as the world transitions from fossil fuels to cleaner energy.
In a new report titled “Savings from Oil Revenues Could Help Africa’s Producers Manage Price Swings,” the fund said oil exporters in sub-Saharan Africa should target buffers of around 5 to 10 per cent of gross domestic product to manage large swings in oil prices.
It means Nigeria would need to maintain annual fiscal surpluses of at least one per cent per annum over a 10-year period.
IMF’s latest Regional Economic Outlook showed that oil prices have fluctuated from lows of $23 per barrel to a peak of $120 in the last two years, resulting in highly uncertain revenues in oil-dependent economies.
According to the report, most oil exporters in the region have not accumulated enough savings to insure against unpredictable oil price changes.
It added that sovereign wealth funds in sub-Saharan Africa hold assets of just 1.8 per cent of gross domestic product, compared to 72 per cent in the Middle East and North Africa, forcing countries to borrow or draw down financial assets whenever oil prices fall.
The report read in part, “As a result, in the decade through 2020, the region’s oil producers have grown over two percentage points slower per year than non-resource intensive countries. Debt service costs have also been almost twice as high as in other sub-Saharan African countries
“Moreover, as countries transition to low-carbon energy sources, oil revenues could sharply decline. By 2030, oil revenues in the region could fall by as much as a quarter and by 2050, by half. Building buffers now would help the region’s oil exporters navigate the transition toward clean energy while managing oil price fluctuations.”
Meanwhile, IMF has said Nigerian and other countries’ economies have grown below the regional average of 3.6 percent this year.
In a recent news blog titled, ‘Countries hurt by war and fragility need strong global partnerships, resources’ the IMF listed Burkina Faso, Central African Republic, Comoros, Eritrea, Mali, Nigeria, and Zimbabwe as countries affected by the low growth problem.
The Washington DC based financial body said that consumer prices had increased by more than 20 per cent on average this year, while public debt was approaching 60 percent of gross domestic product, a level not seen since the early 2000s.
The IMF also said that 12 per cent of the region’s population faced acute food insecurity, equivalent to two-thirds of the worldwide total.
The post read in part “Sub-Saharan Africa, home to about half of countries in the FCS category, has been hit particularly hard. Consumer prices have increased by more than 20 percent on average this year, while public debt is approaching 60 percent of gross domestic product a level not seen since the early 2000s.
“We forecast that economic growth in seven countries Burkina Faso, Central African Republic, Comoros, Eritrea, Mali, Nigeria, and Zimbabwe will be below the regional average of 3.6 percent this year.
“In addition, 123 million people, or 12 percent of the region’s population, face acute food insecurity, equivalent to two-thirds of the worldwide total”.

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Trade Modernisation: Customs’ CG Tours Huawei, Port In China

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The Comptroller-General  of the Nigeria Customs Service (NCS), Adewale Adeniyi, recently led his team to the Headquarters of Huawei, a famous information and communications technology company in Shenzhen, China, where he discussed opportunities embedded in Nigeria Customs Service Trade Modernisation Project.
This was disclosed in a press release made available to our correspondent in Lagos by the National Public Relations Officer (NPRO) of the Service, CSC Maidawa yesterday.
According to the release, the CGC’s visit to Huawei Headquarters was part of his official visit to the People’s Republic of China for the 6th Global AEO Conference that took place in the city of Shenzhen between Wednesday, 8th May, Friday, 10 May, 2024.
Stating the purpose of his visit to the company’s office on behalf of his team, CGC Adeniyi said, “We are also delighted to associate with the Global Leader Technology Services through the Team of Trade Modernisation.”
It would be recalled that the Service had, during the Huawei Connect 2023 held in Shanghai in October, 2023, expressed readiness to deploy some of the company’s latest products for use in its trade modernisation project.
The CGC, who urged Huawei’s company leadership to sustain their digitalisation services to NCS, also sought their support to collaborate with the Nigeria Customs Service to maintain their transformative journey with the company.
On his part, Xujing Xu, the Huawei Company’s Vice President of Smart Transportation, welcomed the delegation of the NCS led by Adeniyi and the Management Team of the Trade Modernisation Project (TMP) Limited, led by Chairman Saleh Ahmadu.
He expressed confidence that their collaboration will benefit all parties involved, noting that “the foundational work for this transformation is already underway”.
The TMP Chairman, Saleh Ahmadu, during his address, said Huawei is living up to expectations to deliver its mandate under the auspices of Trade Modernisation Project Limited.
He appreciated the support accorded to him by the CGC and his management team towards the success of the NCS Trade Modernisation Project.
In his bid to upscale the level of NCS modernisation, the Comptroller-General of Customs, alongside members of the Trade Modernisation Project led by Chairman Saleh Ahmadu, visited Lantan Port to witness the level of automation and technological solutions provided by Huawei and other tech partners.

In a related development, a training programme on Trends and Digital Solutions for Customs officials and the TMP team was organised by Huawei the same day, which focused on equipping officials with the necessary skills to navigate the digital landscape of modern trade.

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NERC Declares Most Discos Insolvent 

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Most of the lectricity Distribution Companies (DisCos) in Nigeria have been said to be technically insolvent and unable to not only pay for invoices sent to them from the electricity market, but also invest in network expansion projects.
Speaking at the 8th Africa Energy Market Place 2024 in Abuja, Chairman of the Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba, said the poor financial state of the DisCos makes it difficult for them to raise the needed capital to invest.
Garba noted that the challenges facing the sector were a culmination of past inactions and missteps by those saddled with the responsibilities of managing the sector, both at policy and operational levels.
According to him, “Today when you look at distribution companies, they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. It’s a herculean task.
“I also want to mention that implementing the power sector reform requires powerful political will to implement decisions that impact the wider public”.
On his part, the Minister of Power, Chief Adebayo Adelabu, said the government was working to get the distribution companies solvent and effective by unbundling their operations along state boundaries.
Adelabu insisted that the areas covered by the current DisCos are too large for them to deliver effective services to consumers.

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PH To Get Two CNG Refuelling Stations, Vehicle Conversion Parks

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Rivers State Capital, Port Harcourt, is set to have two Compressed Natural Gas (CNG) refuelling stations as well as two Vehicle Conversion Parks.
The Chief Executive Officer, FEMADEC Energy Limited, Fola Akinola, revealed this at the South-South/South-East Stakeholders Engagement Meeting on Presidential Initiative on CNG held in Port Harcourt, Weekend
Akinola, who stated that modalities have been concluded on the project, stressed the need for investment by stakeholders as a way of driving home the initiative of the Federal Government to ease the gas plight of its citizens.
Akinola said, “CNG is an old technology. We want to tell you that you have the opportunity to convert your vehicle from fuel to CNG. The stations will be launched in Port Harcourt and we are launching a refueling unit alongside. Rivers State is going to have a micro refuelling unit at Stadium Road and in GRA.
“For those that want to invest in CNG refuelling units, it is available. Even those who have fuel station facilities can as well invest in this”.
Earlier, the Programme Director, Presidential Initiative on Compressed Natural Gas, Michael Oluwagbemi, noted that Rivers State was the heart of oil and gas Region, insisting that the initiative was for the good of the nation as a whole.
“The initiative of the government is critical to our national development and to the well-being of the people. Rivers State is the heart of the oil and gas region”, he stated.
Oluwagbemi, however, expressed regret that over the last five to six decades, these resources have continued to waste.
“Nigeria is the second largest waste of oil and gas. We exploit it and waste it, then continue to suffer poverty. The President has set us on natural gas features and set up the nation on the path of growth. The use of gas ensures we have energy savings. Mind you, the price of Natural gas is controlled by the government.
“What the President is asking is to do more with the blessings God has given us. If we are able to move three million vehicles in the next three years, we are going to end the era of environmental degradation”, he said.
The Programme Director further said, “We will stop subsidising poverty, importing unemployment and exporting jobs.

By: Lady Godknows Ogbulu

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