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Business News

NNPC to extend trade relations with Turkey

The Nigerian National Petroleum Corporation (@NNPCgroup) has stated its desires to extend the trade dealings between Nigeria and the Republic of Turkey.

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NNPC

The Nigerian National Petroleum Corporation (NNPC) has expressed its desire to extend trade dealings between Nigeria and the Republic of Turkey.

The Corporation said the main reason for the improved trade relation was to foster cooperation between its Turkish counterpart in infrastructural development and other areas of common interest to Nigeria and Turkey.

The Group Managing Director of NNPC, Mallam Mele Kyari, made this disclosure while receiving the Turkish Ambassador to Nigeria, His Excellency Melih Uluren, during a courtesy visit to the NNPC Towers in Abuja.

We are looking forward to greater cooperation between NNPC and Turkish Petroleum industry such that we find a business in other areas like infrastructural development that both countries will be interested in promoting to the benefit of both countries.”

[READ: Petrol to gulp 53% of Dangote refinery’s daily production]

Further details: In a statement signed by the Group General Manager, Group Public Affairs Division of NNPC, Ndu Ughamadu, Kyari said the Turkish national oil company has trade relations with NNPC and the Corporations wants to build on it.

The Turkish Ambassador, who came to felicitate with the NNPC GMD, on his appointment, said his country was eager to deepen economic ties with Nigeria.

A look into the Nigeria-Turkey trade relation shows that Turkey is the 8th biggest export market for Nigeria. According to the recent data from the National Bureau of Statistics (NBS) for the period of Q1 2019, Turkey accounted for 3.96% of Nigeria’s total export.

  • In the first quarter of 2019 alone, Nigeria exported goods worth of N179.8 billion to Turkey.
  • Out of the total goods exported to Turkey, oil export accounted for N76.5 billion.
  • Also, Nigeria’s non-oil export to Turkey was estimated at N103 billion.

Why this matters: A stronger trade relations between the two nations may further create room for more export revenue for Nigeria’s economy.

  • Turkey is one of the countries that imported more of Nigeria’s non-oil products in Q1 2019. Hence, for Nigeria’s non-oil export, the trade relations may further improve agricultural export.
  • For instance, Turkey imported an estimated N6.7 billion Sesamum seeds from Nigeria in Q1 2019.
  • Other non-oil products exported to Turkey include calcium sulphate and crude salt.
  • Also, since Turkey is one of Nigeria’s major trade partners in crude oil export, a stronger trade tie means a bigger market for Nigeria’s oil export trade.

[READ FURTHER: Mobil’s tepid recovery stirs optimism]

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Economy & Politics

CBN extends Covid-19 forbearance for intervention loans by another 12 months

CBN will continue to charge an interest rate of 5% for its intervention loans for another 1 year.

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New CBN guidelines ban MMOs, PSPs, Operators from receiving diaspora remittances

The Central Bank of Nigeria has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered. The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The CBN also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

See excerpt from Circular

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.

What this means

Companies who secured intervention funds from the CBN or through any of its on-lending banks will continue to service the loans at an interest rate of 5% per annum instead of 9%.

  • They can also get another year of not needing to pay back the principal sum collection. However, they will need to apply.
  • Whilst this move helps the small businesses continue to manage their cash flow, it means the CBN will record a reduction in its income extended under such facility.
  • Regulatory forbearance is a widely adopted concept during an economic crunch and it is meant to help stimulate businesses. These pronouncements if implemented will only affect those who borrow from the CBN or BOI but those who do not will miss out.
  • Download the circular here.

 

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Energy

LNG boss tasks FG to begin the monetization of Nigeria’s gas

Mr Attah has urged the FG to take the gas sector more seriously as the future of Nigeria’s energy lies with it.

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The MD and CEO of Nigeria LNG Limited Mr. Tony Attah has tasked the Federal Government to begin the revamping and monetization of the Gas sector in Nigeria.

He made this statement while making his presentation at the 2nd virtual Nigerian Gas Association (NGA) Industry Multilogues, with the theme: “Powering Forward, Enabling Nigeria’s Industrialization via Gas.”

Mr. Tony Attah drew the attention of the audience to the hidden treasure in the Nigerian Gas industry which he believes is not getting enough attention from the government.

On the future of gas as an alternative energy source, Mr. Attah stated that the developed world is already keying into gas as an alternative to crude oil. Gas has proven to be a cleaner and more sustainable alternative.

He exclaimed that Nigeria is very rich in gas and yet poor in energy. Nigeria is the 9th country with the largest gas reserves in the world but makes very little use of it.

Mr. Attah went further to paint a clear picture of the promise of investing in gas using the success achieved by Qatar. Qatar is currently the largest LNG exporter in the world.

We just touched on a quick case study of Qatar. Someone mentioned Qatar already from a poor fishing country to a gas giant and it took just 10 years, which is why we, as Nigeria LNG, firmly believe in the conversation and the narrative about the declaration of the decade of gas.

“We believe it is possible. If you look at Qatar from 1995, when they really went into gas development, we were just two years behind Qatar. So, Qatar’s first LNG was in 1997.

Nigeria’s first LNG was in 1999, just two years behind. But then, within 10 years, because of the deliberateness of the government and focus on gas, they have gone to 77 million tonnes and we are at best, 22 million tonnes,” Attah said.

Mr. Attah stressed further the importance of the gas sector in Nigeria’s future. He recalled that the Nigerian Government declared 2021-2030 as the decade of gas. He pleaded with the government to take the sector more seriously as the future of Nigeria’s energy lies with it.

Gas is the future. That future is now, and just as the Minister of State has made us to realize, gas is food in fertilizer. Gas is transport as you saw in the Auto gas project that was declared.

Gas is life, as a matter of fact, for cooking, for heating, for existence. Gas is development in manufacturing, gas is power. Gas is everything. “We think it’s time for gas. It’s time for Nigeria to diversify and that is why we fully support the decade of gas,” he said.

What you should know

  • Early last year, the director of the Department of Petroleum Resources (DPR) Mr Sarki Auwalu confirmed that Nigeria’s proven gas reserve stood at 203.16 trillion cubic feet.
  • Nigeria has the 9th largest gas reserves in the world. It is also the 6th largest exporter of gas.
  • The Federal Government declared the year 2021–2030 as the “Year of the Gas“. It pledged to finally kick start the development and commercialization of Nigeria’s huge gas reserves.

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