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International Energy Agency’s ‘Black April’ forecast torpedoes Nigeria’s 2020 budget

There is a strong indication that the Federal Government of Nigeria may still find it difficult to implement the adjusted 2020 budget that was recently sent to the National Assembly for vetting.



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There is a strong indication that the Federal Government of Nigeria may still find it difficult to implement the adjusted 2020 budget that was recently sent to the National Assembly for vetting. As you may well know, the adjusted budget was pegged at an oil price of $30 per barrel and crude oil production estimate of 1.7 million barrels per day.

Nigeria’s 2020 Appropriation Act was initially based on crude oil production volume of 2.18 million barrels per day, with a $57 benchmark per barrel. As of April 15, 2020, the price of Brent Crude was $27.69 per barrel.

Output cuts not enough: Last week OPEC and its allies agreed to deeper output cuts in a bid to save declining oil prices. Following the deal, Nigeria’s Minister for Petroleum, Timipre Silvia, announced that the country will now be producing 1.412 million barrels per day, as against 1.829 million barrels per day. With this volume, if crude oil is sold at an average price of $25 bpd in April, then the country would be earning N13.41 billion per day as against the N17.29 billion that was earned prior to the cut.

A new problem: Unfortunately, there is a troubling new twist to this arrangement. As Nairametrics reported, the International Energy Agency (IEA) has projected that global oil demand in April will be 29 million b/d lower than a year ago; down to a level last seen 25 years back (1995). This shows that no amount of output cut by producers can fully offset the near-term falls facing the market. Already, this month has been described as ‘Black April’, especially for a country  like Nigeria which has recently been facing serious troubles as far as revenue generation is concerned.

More work for the Presidency: If the IEA’s projection manifests, it means that the economic team of President Muhammadu Buhari will have more to do in order to quickly address the revenue shortfall of the budget. That is not all.

The government would still find it difficult to close the revenue gap with tax, as the commercial hub centre of the economy, Lagos, has been lockdown for about three weeks to control the spread of COVID-19. If the lockdown is prolonged extended beyond four months, 2020 would be a Black year for Nigeria.

But there is hope: The IEA report noted that there is hope for a rebound in the second quarter of 2020. Some part of the report said:

“Demand is expected to be 23.1 million b/d below year-ago levels. The recovery in 2H20 will be gradual; in December demand will still be down 2.7 million /d y-o-y.

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“If production does fall sharply, some oil goes into strategic stocks, and demand begins to recover, the second half of 2020 will see demand exceed supply. This will enable the market to start reducing the massive stock overhang that is building up in the first half of the year. Indeed, our current demand and supply estimates imply a stock draw of 4.7 million b/d in the second half.”

In the meantime, the global capital expenditure by exploration and production companies has been forecast to drop by about 32% to $335 billion in 2020. This will mark the lowest level since 13 years. Unfortunately, this will come with some negative implications as you can see in the quote below:

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“This reduction of financial resources also undermines the ability of the oil industry to develop some of the technologies needed for clean energy transitions around the world.”

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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NCC discloses application requirements for Proof of Concept trial license

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.



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The National Communications Commission (NCC) has released application requirements for trial frequencies in certain spectrum brands under the Proof of Concept (POC) Trial license.

This was disclosed on Wednesday, April 14, 2021, in a statement signed by the Director of Public Affairs, Dr Ikechukwu Adinde; and made public on the Commission’s verified Twitter account, @NgComCommission.

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

The requirements listed by the NCC include:

  • The PoC trial license application must only be granted to Original Equipment Manufacturers(OEMS)/Vendors, or operators in conjunction with their Original Equipment Manufacturers.
  • PoC trial shall not exceed a period of three months effective from the date of approval.
  • Equipment for Proof of Concept must be ‘Type-approved’ by the Commission.
  • Appropriate Spectrum fees must be paid in accordance with the NCC’s regulations.

In case you missed it

Nairametrics reported that Nigerian telco giant MTN recently announced its acquisition of an additional 10MHZ spectrum in the 800MHz band from Intercellular Nigeria Limited.

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Business News

Lagos State residents paid highest price for petrol in March 2021 – NBS

The NBS revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020.



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The National Bureau of Statistics (NBS) has revealed that Lagos State residents paid the highest average price for petrol in the country, in the month of March 2021, at N200.87 per litre; while Adamawa state residents paid the lowest average price in the month of March at N162.17 per litre.

The NBS also revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020 and N166.24 in February 2021.

This was disclosed in a report by the NBS CEO, Dr. Yemi Kale, yesterday, April 14, 2021, via his verified Twitter account @sgyemikale.

On kerosene the NBS said:

  • National Average Price/litre at N361.29 in March 2020.
  • The states with the highest average were Taraba (N466.67), Ebonyi ( N450) and Benue (N448).
  • The States with the lowest average prices were Bayelsa (N250), Yobe (N296.43) and Katsina (N318.33)

On Premium Motor Spirit (petrol):

  • National Average price/litre at N172.68 in March 2020
  • The states with the highest average were Lagos (N200.87), Ebonyi (N184.17) and Niger (N183.50)
  • The states with the lowest average prices were Adamawa (N162.17), Taraba (N162.67) and Bauchi (N164).

What you should know 

Recall that Nairametrics reported that the federal government has suspended plans to end its subsidy payments as reports indicate that the FG plans to spend N720 billion for the next 6 months on Premium Motor Spirit (PMS) subsidies.

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