The inflow of investment into Nigeria declined by $2.66 billion between the second and third quarter of this year, figures released by the National Bureau of Statistics (NBS) have shown.
 
According to the NBS capital importation report for the third quarter of this year posted on its website on Tuesday, the amount of investment the economy attracted in the third quarter was $2.85 billion, representing a decline of 48.21 per cent over the $5.51bn which the economy attracted during the second quarter of this year.
 
According to the report, when compared to the third quarter period of 2017, the $2.85bn investment for the economy in the third quarter of this year represents a decline of 31.12 per cent.
 
The report further puts the overall investment the economy attracted in the first nine months of 2018 at about $14.66 billion.
 
A breakdown of the $14.66 billion showed that the sum of $6.3 billion was attracted in the first quarter while the second and third quarters each attracted $5.51 billion and $2.85 billion respectively.
 
“The total value of capital importation into Nigeria stood at $2.85 billion in the third quarter of 2018.
 
“This was a decrease of 48.21 per cent compared to Q2 2018 and a 31.12 per cent decrease compared to the third quarter of 2017″, the NBS report says.
 
The NBS further revealed that the largest amount of capital importation by type was received through portfolio investment, which accounted for $1.73 billion or 60.5 per cent of total investment inflows, followed by “other investment”, which accounted for $601.53 million or 21.07 per cent of total investments.
 
The report also said foreign direct investment followed as it accounted for $530.63 million or 18.58 per cent of total capital imported in the third quarter.
 
By sector, the report said investment in equity dominated the third quarter of 2018 accounting for $1.67 billion of the total capital inflow in the quarter.
 
In terms of country of destination, the NBS report revealed that the United States emerged as the top source of capital investment in Nigeria in the third quarter of 2018 with $911.33 million, accounting for 31.91 per cent of the total capital inflow in the third quarter of 2018.
 
 
Source: NAN

The Nigerian Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said the Organisation of Petroleum Exporting Countries (OPEC) did not grant Nigeria further exemption in the current output cut deal because the country did not request for further exemption.

Kachikwu, who stated this in an interview with THISDAY, said: “We didn’t ask for exemption; we wanted to make sure everybody shared in the pain. If some happenstance occur, you are expected to come back to ask for exemption”.

It would be recalled that OPEC and their non-OPEC allies agreed to cut their outputs by 1.2 million barrels of oil per day (mbd), with OPEC countries accounting for 800,000 barrels a day (bpd) of the cut, while non-OPEC will cut 400,000 bpd.

According to Kachikwu, Nigeria could contribute up to 40,000 bpd to the 800,000 bpd OPEC will take out, representing about 2.5 per cent of the 1.7mbpd current production level of Nigeria.

On the output deal negotiations, Kachikwu said: “We had to navigate that. Nigeria had the unique responsibility of having to navigate the Saudis who we get along very well with, and the Iranians, who we get along very well with, and then try to sort of forge them to decide over and by the time we left yesterday (Thursday), some had agreed on the volume of cuts; some on the concept of cut or whether or not the language will be written into the resolution that will be announced.

“It was more of the mechanics of how do you present it to the market as opposed to the substance of the resolution itself and that was what we broke yesterday and decided to take a break and come back with cool heads today.

“If you are a unique country and your unique circumstances require that you will be given attention in a particular month to be exempted from that cut, you will write to the President of the OPEC Assembly and he will review that and come up with a decision,” Kachikwu explained.

Source: The Ripples

The Federal Government of Nigeria says African Natural Resources and Mines Ltd’s 600 million dollars (N183 billion) investment in integrated iron ore mining processing and steel production will boost the country’s economy.
 
The Minister of Finance, Zainab Ahmed, said this in a statement issued by Paul Abechi, the Special Adviser on Media and Communications in Abuja on Sunday.
 
Mrs Ahmed, who expressed the government’s delight over the development, said this during a meeting with the representative of the firm, Raj Gupta, in Kagarko Local Government Area of Kaduna State.
 
The minister said that the investment would also lead to increased revenue generation and job creation under the diversification policy of the federal government.
 
“In a bid to diversify away from oil and increase government revenues, I met with African Natural Resources and Mines Ltd and they are investing 600 million dollars in an integrated iron ore mining, processing and steel production project in Kagarko Local Government, Kaduna State.
 
“This is about the first major investment in the mining sector in more than two decades.
 
‘‘The project will have a capacity of 5.4 metric tonnes per annum and will create 3,500 direct jobs and thousands of indirect jobs,” the minister said.  
 
“About 36 megawatts of electricity is to be generated from the waste heat which will increase power supply to Kagarko Local Government to help develop other industries and urbanise the local area.
 
‘‘The surplus will also be added to the national grid,” she said.
 
Mrs Ahmed explained that the company’s steel would carry out beneficiation, pelletising and convert iron into direct steel for manufacturing.
 
She added that it would galvanise the industrial space into a hub of production of finished goods for local consumption and export to foreign countries.
 
She predicted that the project would massively impact on the local people and the nation at large, based on the potential it has to transform the socio-economic life of Nigerians.
 
“This project will drive industrial and community development, generate more power, create employment for locals, substitute imports, crude steel production, royalties and reposition the mining sector,” she said. 
 
 
Source: NAN

Two of the largest banking and financial services institutions in the world, HSBC and UBS, have recently closed their local representative offices in Nigeria.

There’s also trouble brewing elsewhere in Nigeria’s business world that’s prompted fears about the climate for foreign direct investment in the country. Foreign direct investment is an investment made by a firm or individual in one country into business interests located in another country.

For instance, Nigeria’s government in September accused HSBC of money laundering after an analyst working for the lender said a second term for President Muhammadu Buhari may stall economic recovery in Africa’s biggest oil producer.

There are also tensions between Nigeria’s central bank and the South African telecom company MTN. In 2015, MTN was fined about $5bn for failing to cut off unregistered SIM cards. This was later reduced to $1.7 billion after a long legal dispute and the intervention of South Africa’s then President Jacob Zuma.

Recently, the central bank has ordered MTN to repatriate $8 billion it said has been taken out of the country illegally.

Analysts are concerned that the Nigerian government’s attitude towards MTN and the two banks may erode the confidence of foreign direct investors. Their fears seem to be well founded: foreign direct investment in Nigeria fell to $1 billion in the first half of 2018, from $1.48 billion in the first half of 2017.

Foreign direct investment is crucial for any economy. So how can Nigeria attract and keep the right kind of investment from global companies? Compromise will be key, both for the government and foreign firms.

Why foreign direct investment?

Foreign direct investment is often preferred to exporting. That’s because while exports merely involve moving goods from one country to another, foreign direct investment actually involves an investor establishing foreign business operations or acquiring foreign business assets.

This often includes establishing ownership or controlling interest in a foreign country (for instance an American business establishing a physical business presence in Nigeria). Many emerging economies like China, Brazil, Vietnam and India have built their growth on FDI flows.

The trick is to attract “quality foreign direct investment” that links foreign investors into the local host country economy. The International Growth Centre, a British-funded research centre that aims to promote sustainable growth in developing countries, characterises “quality” here as contributing to:

  • decent and value-adding jobs and enhancing the skill base of host economies;

  • transfer of technology, knowledge and know-how;

  • boosting competitiveness of domestic firms and enabling their access to markets.

What Nigeria can do

There are a few things Nigeria can do to boost foreign direct investment. For starters, it must play fair. Foreign and domestic businesses should be treated equally. They should be open, transparent and dependable conditions for all kinds of firms.

Another area that needs attention is infrastructure. Businesses need easy access to ports, an adequate and reliable supply of energy and relative certainty that the country will be good to invest in. Good institutions also promote FDI.

The government should encourage partnerships between foreign and local businesses. Foreign firms might be familiar with global good business practices, but local firms will be more familiar with the indigenous context. This synergy could be very beneficial.

It’s also critical that Nigeria gets its regional governments involved: there are many regions in Nigeria, and these regions all have unique opportunities and challenges. Our latest research shows that when the central government of Nigeria ran out of ideas and foreigners wanted to exit the agricultural sector, the regional government of Kwara state stepped in to create a positive business climate based on the cooperation of local banks, community members, and the foreigners themselves culminating in the Shonga farms public-private venture.

This has kept the firm in Nigeria. It’s also brought private investors to the table, bolstering the firm and the local economy.

Nigeria should also tap into its huge diaspora. There are many Nigerians living outside the country who understand its challenges. They should be encouraged to help, or asked to work with their networks to invest in the country.

What foreign firms can do

Foreign firms also have a role to play. They can enhance their success in Nigeria (and elsewhere on the African continent) in several ways.

First, they need a long term strategic plan. This means thinking carefully about what sectors or activities to target. Many foreign firms come to developing countries when things are rosy but leave when conditions change. They don’t properly consider that solving such problems will gain them a competitive advantage in the long run.

If they stay and follow a learning curve, foreign firms will better understand the local business context. They’ll also gain credibility among ordinary people and possibly get more customers and support that way.

In the same vein, foreign businesses should create local solutions that meet ordinary people’s needs. The banks leaving Nigeria have been accused of only catering to the needs of wealthy Nigerians, who are perceived as corrupt. A more diverse portfolio that catered to the needs of ordinary Nigerians would have nullified this claim.

Foreign firms must also work closely with credible and strategic local firms, and be willing to enter into dialogue with the Nigerian government where necessary. This is crucial especially as administrations may change or government policy may evolve. Dialogue could ensure that all parties are on the same page.

Act local, think global

It’s unfortunate that these banking institutions have decided to leave Nigeria. Hopefully both the Nigerian government and other foreign investors can learn from this.

The main takeaway for both foreign investors and governments involved in foreign direct investment is that it would be prudent for all parties to act locally but think globally.The Conversation

 

Tolu Olarewaju, Lecturer in Economics, Staffordshire University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Chartered Institute of Bankers of Nigeria (CIBN) says it is encouraging Nigerians abroad to contribute to the development of the country’s economy, as part of its advocacy programmes.
 
The president of the institut, Uche Olowu, said this while speaking about some of the initiatives of the CIBN during the 53rd Annual Bankers Dinner in Lagos on Friday.
 
He said, “We have continued with our role as the conscience of the industry by paying more attention to constructive stakeholders’ engagements for the benefit of our corporate and individual members.
 
“In view of this, we organised, through our USA branch, a conference to encourage Nigerians abroad to invest more in the country’s economy for the good of the greater number of the populace.”
 
Mr Olowu said the governing council of the institute recently introduced a quarterly discussion to examine pertinent issues affecting the banking industry and came up with its position for the benefit of the various key stakeholders.
 
At the event, Governor of the Central Bank of Nigeria, Godwin Emefiele, said in addition to key macroeconomic concerns such as inflation and exchange rate stability, the CBN would ensure its policies and programmes focus on supporting job creation and fostering inclusive growth.
 
“I hope to use this opportunity tonight to convey a sense of the strong commitment of the Central Bank of Nigeria towards supporting measures that would wean the nation from its dependence on imported goods, create wealth and jobs for our teeming youths, and promote a more stable and resilient financial system,” he said.
 
 
Source: The daily mail
The Executive Secretary, Nigeria Shippers Council (NSC), on Sunday said the country was losing $9.1 billion yearly on freight revenue that would have accrued to its treasury,
 
He said the amount was being lost to foreign ships.
 
Mr Bello, who spoke on the feasibility of the proposed National Carrier, told the News Agency of Nigeria (NAN) in Lagos that foreign shipping lines were milking the country dry.
 
“We need to have a national carrier because of the profound economic impact it will have on our economy. We have lost so much in terms of earnings of freight to foreign shipping companies.
 
“Nigerians don’t operate any ship at all; that is on the part of the dry cargo. On the wet cargo, Nigerians don’t lift the crude and the Minister of Transportation, Rotimi Amaechi, thought that this imbalance is very dangerous to the economy.
 
“So he set up a committee with the Nigeria Shippers Council as chairman to lead the private sector and we started working with PIL which is a Singaporean shipping company.
 
“We signed an MOU with it about three years back but the operating atmosphere of shipping in Nigeria is murky and not profitable because there are many obstacles which include lack of incentives.
 
”Fourthly, unwillingness or inability of Nigeria’s private sector to support this very important enterprise is another issue,” Mr Bello said.
 
Bello said that the committee for the national fleet implementation had to go back to look at it closely. “We have now retraced our steps”.
 
”The national fleet is such an important venture that it has to be painstakingly done. We are talking about one or two-year project,” he said.
 
He added that “what we have done was because the government is very serious about the economy, we were able to approach and get the audience of the Vice-President and we addressed the Economic Management Team on the vision.
 
This project, if we get it right, it means much more earnings for freight.
 
“Each year, we lose 9.1billion dollars in freight to foreign ships.
 
”Between 2004 and 2017, Nigeria recorded total vessel traffic of 25,256 vessels with the total gross freight of $39 billion and earning a paltry sum of $1 billion as levy for NIMASA.
 
“It means greater revenue for the government, employment for our people. It means setting up of associated industries, shipbuilding, ship repairs, involvement of our financial institutions like banks and insurance, even the pride of having ships flying the Nigerian flags”.
 
He said there were lots of reforms to be made and they include the flag administration and the ship registry of Nigeria.
 
”Both had to be reformed in line with the international standard so that we could attract people to come and register ships in Nigeria.
 
”We need vessel repairs and vessel building so that we don’t tow our ships to Singapore or Ghana for repairs. That will be a drain on the business.
 
”We need a reform of our nautical colleges, MAN Oron especially, so that they would produce the best of cadets so that cadets produced would have sea time experience, using Nigerian ships.
 
“If we have investments and we are able to establish the fleet, that means NIMASA will accord that fleet the status of national carrier.
 
”And if this is done, it means that they will have first priority in cargo; project cargos, Nigerian cargo, cargo belonging to federal, state and LGAs,” he said. 
 
 
Source: NAN
 
Data from the US Energy Information Administration has shown that imports of crude oil by the United States from Nigeria has reached an all time low.
 
This is believed to be on account of the growing production of Shale oil in the US.
 
According to the data, the US slashed its import of Nigerian crude to 904,000 barrels and 1.74 million barrels in July and August respectively, down from 7.77 million barrels in June and a peak of 10.33 million barrels in February this year.
 
Similarly, total imports by the US of crude from Nigeria declined to 45.79 million barrels in the first half of this year from 55.78 million barrels in the same period last year.
 
Trade in Nigerian crude remained subdued on Thursday as a high volume of unsold cargoes kept buyers reluctant to step in, according to Reuters, while traders estimated that nearly a quarter of the December programme remained available.
 
Offers for Nigerian Qua Iboe and Bonny Light, two of the nation’s grades, hovered around $1.65 a barrel above dated Brent, down from $1.70 earlier last week.
 
It would recalled that the Director of the Department of Petroleum Resources, DPR, Mordecai Ladan, had last week lamented that Nigeria’s most valued crude oil customers have abandoned the country.
 
It was reported in September that the US Atlantic Coast imports of West African crude oil were expected to decline due to harsh arbitrage conditions made difficult by the large premium of ICE Brent futures over West Texas Intermediate, as well as strong premiums for WAF grades.
 
According to S&P Global Platts, Traders tracking these grades exported in the US expected WAF imports to the USAC to fall to virtually zero.
 
 
Source: The Ripples

Nigeria’s inflation rate is expected to rise to about 11.4 per cent for the rest of this year till mid-2019, the Central Bank of Nigeria has said.

The CBN Governor, Godwin Emefiel*e, disclosed this while speaking on Nigeria’s outlook and policy thrust for 2019.

He said, “Inflation expectations are rising on the backdrop of anticipated politically related liquidity injections. For the rest of 2018 and towards mid-2019, Nigeria’s rate of inflation is projected to rise slightly to about 11.4 per cent and then moderate thereafter.”

The consumer price index, which measures inflation decreased to 11.26 per cent (year-on-year) in October2018, according to latest report by the National Bureau of Statistics on its ‘CPI and inflation report October 2018’.

The statistics revealed that this was a 0.02 per cent points lower than the rate recorded in September 2018 (11.28 per cent).

While speaking on the exchange rate, he said that although the CBN had so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets were expected to continue to exert considerable pressure on market rates.

This pressure, he added, could be amplified by the forthcoming elections, especially as the political marketplace heats up.

He said notwithstanding those pressures, the CBN was determined to maintain its stable exchange rate policy stance over the next few months, given the relatively high level of reserves.

“Gross stability is projected in the foreign exchange market given increased oil-related inflows and contained import bill. I would like to make it categorically clear that sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves,” he said.

While speaking on the balance of payments, he said it was expected to remain positive in the short term, and that oil prices continue to recover, adding that it was expected that the current account balance would strengthen even further.

“This will be supported by improved non-oil performance as diversification efforts begin to yield results to reduce undue imports,” he added.

Emefiele also said that the apex bank would explore the possibility of leveraging technology to enhance credit to critical sectors of the economy, especially agriculture and manufacturing.

 

Source: Punch

In its determination to ensure all the refineries belonging to the Nigeria National Petroleum Corporation (NNPC) begin to perform at full capacity, the Federal Government, Wednesday, said that it would collaborate with Saudi Arabia.

The Minister of State for Petroleum Resources, Dr. Ibe Kachukwu stated this in Abuja after playing host to the Saudi Minister for Oil and Energy, Khalid Al Falih.

According to Kachikwu, Nigeria was currently tapping from the vast experience of Saudi Arabia, adding that both countries would take strong business decisions on the matter in due course.

The minister, who was making comments on some of the discussions which the Federal Government had with the delegation from Saudi Arabia with respect to refineries at a press conference he addressed, said they looked at what the experience had been for the two countries.

He said: “As you know, the refineries have been very close to my heart. So, I did bring up the issues of experiences that we’ve had so far and he shared his own experiences in terms of successes that they’ve had.

“We’ve got an understanding to come look deeper into how they’ve done their own trajectory to get to where they are today and what experiences we can pick from there. No formal things agreed yet, but there is the willingness to collaborate and learn from one another. These are usually very strong business decisions and at the appropriate time, we will nosedive into the details of that.”

Kachikwu also stated that the meeting with the Saudi delegation was with respect to the current outlook in the global crude oil market, adding that Nigeria and Saudi Arabia, as members of the Organisation of Petroleum Exporting Countries, need to look at the prevalent dynamics in the crude market.

“OPEC is a very strong voice in the oil sector, not just in terms of satisfying the needs of members but also in stabilising the market fundamentals for the rest of the world. Quite frankly, working together is some of the fundamentals to what has been the resurgent OPEC and what we have done with pricing."

Also speaking at the press conference, Al Falih said his country was willing to share experiences with Nigeria on how to help Nigeria revamp its refineries.

Al Falih said: “Saudi Aramco has become successful to a large degree by building a number of large world scale refineries through joint ventures and finding very attractive financing schemes with foreign direct investments.

“There is technical, project management and financing success and Saudi Arabia is becoming a major exporter of value added products integrated with petrochemicals, which improves the profitability of manufacturing companies.”

The Saudi minister further revealed that he had invited Kachukwu to come and see how Saudi Arabian oil giant operates, adding that it would help to improve the operations of Nigerian refineries.

Nigeria has lost its most valued crude oil buyers, even as its erstwhile gas customers are now competing with it, the Department of Petroleum Resources said on Monday.
 
The Director, DPR, Mr Mordecai Ladan, said the oil and gas industry seemed to be under a new threat, which he described as the renewed dislike and global war against fossil fuels and the quest for renewable and cleaner energy.
 
“Over the years, the threat against fossil fuels had always been on paper, but today, it is more real than ever, based on some clear evidence I like to draw our attention to,” he said at the 18th edition of the International HSE Biennial Conference on the Oil and Gas Industry in Nigeria.
 
He said three among the biggest technology companies, including Google and Apple, had made attempts at electric cars to replace petrol and diesel engines, with that of Tesla taking the world by surprise.
 
Ladan said, “Not only did the first two releases of Tesla outsell sales forecasts, they were actually oversubscribed, and the demand keeps rising while new models are being added. As we speak, some of the big international oil companies here seated are funding gigantic researches into alternative fuels, which include the use of cheap, common algae.
 
 
 
Source: PunchNg

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