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Economy & Politics

Nigeria’s Crude oil exports expected to hit 5 months high in October

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Economic activities in the country could witness a further uptick in the last quarter of the year as crude oil exports are forecast to hit a 5 month high of 1.73 million barrels per day in October.

Increased crude oil imports impact the economy in the following ways.

Foreign reserves

Increased crude oil sales mean the country would be able to maintain foreign exchange reserves at their current level. Data from the Central bank of Nigeria(CBN)’s website place the foreign reserves at $46.2 billion as at August 23, 2018.

This, in turn, provides the necessary liquidity for the Central Bank of Nigeria (CBN) to keep the exchange rate at its current band, as well as keep the country within a stable import cover. The CBN has kept the Naira trading at N360 to the dollar through weekly sales of foreign exchange.

Import cover is the number of months imports can be covered with foreign exchange reserves. Nigeria is a largely import-dependent country both for finished goods and inputs required by industries.

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The 3rd quarter of the year tends to witness higher imports as businesses stock up in preparation for the festive season.

Political tensions in Nigeria and crisis in other emerging countries have led to foreign portfolio investors pulling out of the capital market. This, in turn, could pressure on the exchange rate.

More revenue for the government

Increased crude oil sales also translate to more revenue across all tiers of government. The last two Federal Account Allocation Committee (FAAC)meetings were deadlocked due to protests by the states pertaining to the drop in allocation shared.

Companies

Companies operating in the oil sector as well as those servicing them also benefit. These include those with upstream activities such as Seplat, and Oando as well as construction firms like Julius Berger which are heavily dependent on large-scale contracts mostly funded by the government.

Investors

Investors in these firms could thus expect a better dividend payment, compared to 2017 and as well as returns in terms of capital appreciation.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Economy & Politics

FG meets group to access AfCFTA’s $650 billion market

AfCFTA is aligned to the ministry’s twin national objectives of industrialization and export based diversification.

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FG meets group to access AfCFTA's $650 billion market, UNIDO’s $60m investment programme to boost Nigeria’s industrialisation - FG, FG to strengthen economic ties with Turkey, FG moves to facilitate tax incentives for SMEs, Made-in-Nigeria vehicles gulp N364 billion from FG

The Ministry of Industry, Trade and Investment has met with executives of the Nigerian Agribusiness Group (NABG) on the implementation of the African Continental Free Trade Area (AfCFTA) and access the continent’s market worth $659 billion, in mostly manufacturing goods and services.

This was disclosed by the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo during the meeting on Monday.

READ: AfCFTA delay: A bane to Africa’s $3.4 trillion economic bloc

The minister emphasized on the importance of AfCFTA, as it is aligned to the ministry’s twin national objectives of industrialization and export based diversification. It provides us with a preferential access to African market worth over $650bn, in mostly manufactured goods .

Back story: Nairametrics had reported when Aissata Koffi Yameogo, ECOWAS’ Programmes Officer in charge of implementing AfCFTA rules of origin in the continent, said that the implementation will expand market for the manufacturing industry to 1.3 billion West African citizens, without additional duties and fees.

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“It will build production capacity in the region and develop the value chain, and increased export to other African states” she added.

The benefits would also encourage member states to specialise in the production of a certain good where they have a comparative advantage, thus enhancing the quality and quantity of local production and creating more jobs.

He said, “This would improve our competitiveness and the perception of our products and services in the African market. Intra-African trade in Agro products and services will develop our local value chain, create jobs and increase our GDP.”

READ ALSO: Plentywaka raises $300,000, seeks partners as it launches operations in Abuja

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According to International Monetary Fund (IMF), the elimination of tariffs could boost trade in Africa by 15-25% in the medium term, and once fully implemented, is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion.

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Economy & Politics

INEC to introduce election results viewing portal

INEC says the policy would be tested at the Nasarawa State Constituency Bye-Election.

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INEC to introduce election results viewing portal, INEC headquarters gutted by fire

The Independent National Electoral Commission, INEC, has announced the introduction of a dedicated public portal called the INEC Result Viewing (IreV), which would enable Nigerians to view real-time results in polling stations.

This was announced Thursday evening in a statement signed by Festus Okoye, INEC’s Commissioner and Chairman of Information and Voter Education Committee.

READ MORE: FIRS boss wants to tax street traders, artisans, others 

“ The Commission is aware that result management has remained a major source of mistrust in our electoral process. INEC is determined to address any source of this concern through enhancing the level of transparency in the conduct of elections,” INEC said.

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READ ALSO: Buhari orders payment of stranded NDDC scholarship students, commission gives reason for delay

INEC also said that it is an important principle for votes during elections to be correctly counted. This new initiative is a major step towards achieving that goal. However, INEC said this does not constitute electronic collation of votes just yet. Instead, “the collation of election results shall remain as provided for by law, a manual process of completion.”

IreV would be tested during the Nasarawa State Constituency Bye-Election scheduled for August 8th, INEC said.

READ MORE: 4.48 million beneficiaries apply for N-Power jobs in 16 days

Concerned Nigerians are advised to visit inecresults.com, create an account, and fill in their details which will lead them to the portal to oversee the collation of votes.

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Economy & Politics

Chinese Loans: Clauses are international standard terms – Amaechi

The probes into Nigeria’s use of foreign loans could negatively affect how foreign lenders perceive the country.

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Nigeria Air, FG states why there is no hurry to resume train operation, Lagos blue rail line ready 2022 , Chinese Loans: Clauses are international standard terms - Amaechi

Nigeria’s Minister of Transport, Rotimi Amaechi, said the clauses contained in Nigeria’s Chinese loans for infrastructural development are standard international commitment clauses. In other words, such are regular, applicable clauses whenever a country goes into a trade agreement with another country.

The Minister revealed this while on Channels Television’s evening political talk show, Politics Today.

Back story: The Nigerian Senate called a hearing last week, asking the Minister to explain the clauses on Chinese-funded infrastructure projects in Nigeria. Instead, the Minister argued that the probe into Nigeria’s use of foreign loans to finance infrastructure projects could negatively affect how foreign lenders perceive the country and also impact further financing for future projects.

(READ MORE: China more willing to restructure Africa’s debt than private creditors)

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Later during his recent Channels TV interview, the Minister said Nigeria is not Madagascar or Sri Lanka and has been keeping up with payment plans for the loan. “ No country has complained about Nigeria’s loan obligations,” Amaechi said.

Although he acknowledged Nigeria has debt over revenue problems, he made it clear that “that does not mean we have at any point in time refused to pay our loans.”

Amaechi then claimed that only a criminally-minded person would have issues with the loan terms. “Only those who don’t want to repay are worried about the clauses. If we repay our loans we won’t get arbitration,” he said.

The Minister also disclosed that the Ministry of Finance has repaid up to $98 million of the loans, adding, “those are standard international commitment clauses” and that no loan can be taken by the government without the approval of the National assembly.

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