Economy
Nigeria’s Current Sources of FX Inflows Unreliable—Emefiele
By Aduragbemi Omiyale
Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has expressed worry over the sources of foreign exchange (FX) inflows in Nigeria, describing them as unreliable as they are prone to external forces, which hurt the nation’s economy.
Nigeria, the largest economy in Africa, has struggled to strengthen its legal tender, the Naira, in the forex market due to a shortage of foreign currencies to meet the demand of end-users.
Despite the prices of crude oil rising on the global market, the country’s external reserves have continued to deplete because the apex bank dips its hands into the purse to defend the local currency in the FX market.
Nigeria relies on crude oil sales to earn forex but it has not been able to take advantage of the recent rise in the price of the commodity as well as the war in Ukraine instigated by Russia.
A few months ago, the CBN, in an effort to change the narrative, launched an initiative called CBN RT 200 aimed at generating $200 billion from non-oil exports in the coming years.
The central bank was in Lagos on Thursday for a Non-Oil Export Summit and the CBN chief stated that country’s foreign exchange challenges were beyond the powers of monetary policy, noting that efforts are being made to manage both the demand and supply side to meet forex obligations.
Attributing the current challenges of the Nigerian economy to a combination of local and global factors such as the COVID-19 pandemic, delays in global logistic value chains and local security challenges, he expressed concern that most of Nigeria’s current sources of FX inflows were unreliable and prone to fluctuations of global economic developments.
Mr Emefiele noted that the global economic challenges had impacted food production among others and had exerted undue pressure on the economy, thereby exposing the fragility of the Nigerian economy and making macroeconomic management very difficult.
“These problems call for urgent design and steadfast implementation of other supportive, structural, and complementary policies that are broad-based, coordinated and focused on complementing the work of the monetary authority,” he noted.
Reiterating the need for a more diversified economy, Mr Emefiele said Nigeria could be great without crude oil, the global price of which the country had no control over.
He, therefore, urged all stakeholders to regroup by working together to reposition Nigeria on a growth trajectory by taking diversification of the economy much more seriously, emphasising that Nigeria had very little choice left but to look inwards and find innovative solutions to its challenges.
In order to avoid sudden adjustments to Nigeria’s economic life, he said there was the need to focus on strategies that can help the country earn more stable and sustainable inflows of foreign exchange.
“We would need to follow the best practices of other countries and ensure that we protect ourselves a little bit from factors that are beyond our immediate control. This is the time to start working in synergy for the good of our nation.
“This is the time for us as a Banking Community to do more and support exporters who have been flying the flag of Nigeria in the international market space,” Mr Emefiele declared.
Although he admitted the enormity of the ultimate goal of $200 billion in non-oil exports over the medium term, Mr Emefiele expressed confidence that the goal was attainable, given the fact that many countries less endowed than Nigeria had achieved much in the field of agriculture.
To underscore his point, he said within a short period of implementing the Non-Oil FX Rebate Scheme, the country had recorded a significant increase in non-oil export repatriation, adding that eligible exporters had been paid over N3.5 billion in rebates.
In his remarks, the Governor of Lagos State, Mr Babajide Sanwo-Olu, lauded the CBN and other actors in the banking sector for supporting the efforts by the Federal Government and states, especially Lagos, to boost growth in the economy.
Mr Sanwo-Olu expressed optimism that the Lekki Deep Seaport, which he described as the largest in West Africa, will be handed over for use at the end of 2022, thereby providing enormous opportunities to exporters to ply their trade and by extension improve the export earnings of the country.
As part of efforts to decongest the Apapa and Tin Can Island Ports in Lagos, the Governor said the state government was awaiting approval for work to begin on the Badagry Ports in the Western part of Lagos.
By Dipo Olowookere
The presence of the bulls further strengthened the Nigerian Exchange (NGX) Limited on Tuesday, as the performance indices further gained 0.19 per cent.
The nation’s stock market survived profit-taking witnessed in the banking sector during the session, which crashed its index by 0.02 per cent.
This loss was offset by the gains recorded by the other sectors, with the insurance segment chalking up 0.49 per cent. The consumer goods space appreciated by 0.47 per cent, the industrial goods counter expanded by 0.04 per cent, and the energy sector rose by 0.03 per cent.
At the close of business, the All-Share Index (ASI) was elevated by 475.60 points to 246,659.56 points from 246,183.96 points, and the market capitalisation improved by N307 billion to N159.119 trillion from N158.812 trillion.
The market breadth index was positive yesterday after the bourse finished with 34 price gainers and 22 price losers, implying strong investor sentiment.
UPDC REIT grew by 9.86 per cent to N11.70, Thomas Wyatt advanced by 9.73 per cent to N3.72, Ikeja Hotel climbed 9.53 per cent to N46.55, The Initiates went up by 9.52 per cent to N33.95, and Neimeth increased by 9.47 per cent to N9.25.
Conversely, Mecure depreciated by 9.95 per cent to N76.95, Haldane McCall dropped 9.86 per cent to trade at N3.29, CMFC declined by 9.85 per cent to N3.02, Trans-Nationwide Express lost 9.68 per cent to close at N2.80, and Academy Press shrank by 9.38 per cent to N5.80.
The activity level was mixed during the session, as investors traded 932.5 million equities worth N49.3 billion in 50,059 deals versus the 851.6 million equities valued at N49.6 billion transacted in 56,873 deals a day earlier.
This showed that the trading volume soared by 9.50 per cent, the trading value moderated by 0.61 per cent, and the number of deals retreated by 11.98 per cent.
The busiest equity for the day was Access Holdings, which sold 336.6 million units for N8.7 billion. FCMB exchanged 88.8 million units worth N1.0 billion, First Holdco transacted 72.7 million units valued at N7.7 billion, Zenith Bank traded 37.4 million units for N4.4 billion, and UBA transacted 32.1 million units worth N1.5 billion.
By Aduragbemi Omiyale
Thirty-one companies on Tuesday emerged as winners of the 2025 licensing round of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The energy firms competed to take control of 50 oil and gas blocks put on offer by the Nigerian government.
They were among the 143 companies that submitted 200 bids for the oil facilities drawn from diverse terrains, including the Niger Delta Onshore, Niger Delta Shallow Water, Niger Delta Deep Offshore, Benin Basin Onshore, Anambra Basin Onshore, Chad Basin Onshore and Benue Trough.
Business Post gathered that investors, however, were only interested in 37 out of the 50 oil blocks put up for sale by the NUPRC. This is the first time in Nigeria’s energy history that frontier basins would attract such a level of investor interest.
The organisations that won the bids include SSonic Petroleum Limited (PPL 2A29), CFP Pipeline and Flowlines (2A30), Dutchford E&P Limited (2A32), Attabanson Global Company Limited (2A33 and PPL 901), Rosem Energy Limited (2A38), Pivot-GIS Limited (2A39), Network E&P (2A40), Asharami (2A41), LexOil (2A42), BVOF (2A43), GupscoEnergy Limited (2A44 and 2A51), Saratoga (2A45), Volante (2A46), Concept-Reel Petroleum Services Limited (2A47 and 2A55), Clinton Oil Field (2A48 and 2A62) and Nuway Oaklane Limited (2A49).
Others are Ramec (2A50), Italia (2A53), Blueridge E&P (2A54), Up Energies Limited (2A56), AYM Shafa (2A57), Blackrock Holdings Limited (2A58), Funtay Integrated Business Limited (2A59), Riparian Development and Production Limited (2A60), Nikstallis (2A61 and PPL 900), Stardeep Petroleum (PPL 2010), Dakoda & U Limited (PPL308 and PPL 800), Southborne Oil and Gas Limited (PPL 902), Lanaka Petroleum (PPL 903) HighbanResources Limited (PPL 700), Eyre Energy Limited (PPL 801).
By Adedapo Adesanya
Oil prices rose roughly 2 per cent on Tuesday as investors reacted to mounting concerns that escalating hostilities between the United States and Iran and threats by Yemen’s Houthis to blockade Saudi Arabia could disrupt global energy supplies.
Brent futures rose $1.79 or 2.0 per cent to $91.01 a barrel, while the US West Texas Intermediate (WTI) crude gained $1.68 or 2.0 per cent to settle at $84.91 per barrel.
US forces bombed targets in the south and west of Iran while Iran targeted American sites in Bahrain, Kuwait and Jordan and at least one tanker was hit in the Strait of Hormuz.
Supply concerns resurfaced with the Strait essentially closed again and tanker traffic at multi-month lows, to the level from before the ceasefire between the US and Iran, which appears to be over at the moment.
Prices could go much higher if the renewed conflict drags on for a few more months, as the world has now drained a lot of the buffers that had kept oil surges in check between March and May.
Drained strategic and commercial inventories in many key oil-consuming economies, including the US, are setting the stage for further oil price rallies during the busiest oil demand season.
The just-declared Houthi blockade on Saudi maritime shipping has already begun to witness ill-effects, as reports emerge of two oil tankers having made U-turns while initially en route toward the Suez Canal. It was reported that their crews received threats from Houthi militants in Yemen.
The two oil tankers, which loaded Saudi crude for China and India, made U-turns in the Red Sea and headed toward the Suez following the warning from the militia.
Meanwhile, Kuwait’s power and desalination plants caught fire for a second straight day as US and Iran traded strikes for a tenth day.
As Russia’s war with Ukraine expands beyond Ukraine’s borders, the Caspian Pipeline Consortium (CPC) has stopped receiving oil from Kazakhstan after suspending loadings on Monday due to attacks on oil tankers at its Black Sea terminal.
