Energy
FG to provide solar energy to 5 million Nigerians within 12 months
This means that more Nigerians will have access to electricity via a reliable and sustainable solar system.
The Federal Government has announced plans to provide solar home systems to 5 million Nigerian households within the next 12 months, as part of the Economic Sustainability Plan.
The disclosure was contained in an address by President Muhammadu Buhari at the first year Ministerial Performance Review Retreat held at the Presidential Villa in Abuja on Monday, September 7, 2020.
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The President who was represented by the Vice President, Yemi Osibanjo, said in his address that we must not forget that most Nigerians are not even connected to electricity at all.
The president said that government has already begun the process of providing financing support through the CBN for manufacturers and retailers of Off-Grid Solar Home Systems and Mini-Grids who are to provide the systems. He said that this initiative will provide 250,000 jobs and impact about 25 million beneficiaries.
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The President in his statement said, ‘’The five million systems under the ESP’s Solar Power Strategy will produce 250,000 jobs and impact up to 25 million beneficiaries through the installation. This means that more Nigerians will have access to electricity via a reliable and sustainable solar system.’’
The president also disclosed that the support to Solar Home System manufacturers and the bulk procurement of local meters will create over 300,000 local jobs while ensuring that we set Nigeria on a path to full electrification.
Energy
BUA Group awards contract for polypropylene plant in its refinery project
The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.
Nigeria’s leading indigenous conglomerate, BUA Group has announced that it has signed a contract agreement with Lummus Technology for the establishment of a polypropylene plant in its refinery and petrochemical project.
The completion of the project is to help boost Nigeria’s capacity to meet the country’s increasing demand for petrochemical products.
The Chairman of BUA Group, Abdul Samad Rabiu, while disclosing the contract agreement, expressed confidence in the capacity and technical expertise of Lummus Technology to deliver a best-in-class project.
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What the Chairman of BUA Group is saying
Rabiu in his statement said, “We are pleased to sign this polypropylene contract for our BUA refinery and petrochemicals project with Lummus Technology, a world leader in delivering polypropylene solutions, which will solve the increasing demand for high-performance grade polypropylene in Nigeria, the Gulf of Guinea as well as the Sub-Saharan Africa Region.
“We are confident in the capacity and technical expertise of Lummus Technology to deliver a best-in-class, 285,000 tpy polypropylene unit for our refinery project scheduled to come on stream in 2024.’’
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What the President/Chief Executive Officer of Lummus Technology is saying
On his part, the President/Chief Executive Officer of Lummus Technology, Leon de Bruyn, said that he was looking forward to working with BUA refinery on the project.
Leon said, “We look forward to working with BUA Refinery on this critical project and supporting the first Novolen polypropylene unit in Nigeria. Our world-class Novolen technology is well suited to meet Nigeria’s increasing demand for the growing petrochemical products market.
It offers a flexible range of industry-leading products for all PP applications, and the industry’s lowest overall capital and operational costs while providing customers with high process reliability and flexibility in responding to market needs.”
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What you should know
Lummus Novolen Technology GmbH licenses polypropylene technology and provides related engineering and technical support/advisory services. Novolen also supplies NHP® catalysts for the production of high-performance polypropylene grades in the Novolen process, and NOVOCENE® metallocene catalyst for the production of special polypropylene grades.
Currencies
How rise in oil prices will impact exchange rate
Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.
Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.
Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.
Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.
Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.
READ: Nigeria records highest trade deficit since 1981
Why oil price is rising
The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.
- Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
- Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.
What it means for the exchange rate
Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.
This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:
- An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
- Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
- Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.
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The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.
Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.
However, the inclusivity of this growth may still be in question.
