Economy
Devakumar Edwin Reveals Business Strategy of Dangote Refinery
By Dipo Olowookere
The Vice President for Oil and Gas at Dangote Industries Limited, Mr Devakumar Edwin, has highlighted the business strategy of the Dangote Petroleum Refinery and Petrochemicals located in Lagos.
Mr Edwin, while demystifying talks around the monopoly tag on the owner of the company, Mr Aliko Dangote, said someone has to start a project before others follow.
“Nigeria was one of the largest importers of cement, then we started manufacturing cement and then we became exporters, the same thing applies to sugar, salt and now fertiliser. This breakthrough opened the doors for other investors in those industries and Nigeria is better for it.
“What motivates Mr Dangote is his sheer interest in the Nigerian project. It is true, we are in business to make money but the question is where is the money going? Every money Dangote is making goes back to the Nigeria economy, from cement to salt, sugar, and fertiliser.
“The business strategy of the Dangote Refinery is to minimise the energy cost and the overall cost of production; build the most environmentally friendly; maximise value addition; maximise gasoline which is in high demand with about 55 per cent of the production capacity compared to 22 per cent of the existing refineries in Nigeria; strategically located marine infrastructure for crude receipt and product evacuation; state-of-the-art technology; produce Euro V products; provide crude flexibility and create a market of $21 billion per annum of Nigerian crude,” he said during a visit of the league of engineering bodies in Nigeria to the facility over the weekend.
The group comprised the National Society of Engineers (NSE), the Nigerian Academy of Engineering (NAE), the Association of Consulting Engineering in Nigeria (ACEN), and the Council for the Regulation of Engineering in Nigeria (COREN).
The president of NSE, Mrs Margaret Oguntala, described the Dangote Refinery as “mind-blowing,” saying, “What I see here today will blow the mind of any engineer; it is just like the movies.”
Speaking on behalf of NAE, Prof. Azikwe Peter Onwualu charged Mr Dangote to ignore naysayers, noting that, “Whatever you are doing, keep it up.”
The president of COREN, Prof. Sadiq Abubakar, said the Dangote Refinery has proven that “Nigerians are no less in engineering globally.”
Economy
Nigeria’s Positive Trade Balance Grows 43.6% in Q3 2024
By Adedapo Adesanya
Nigeria recorded another positive trade balance in the third quarter of 2024, growing 43.6 per cent as the country’s total merchandise trade stood at N35.2 trillion.
A positive trade balance (surplus) occurs when there is a higher export value than import as it stood at N5.8 trillion, in the period under review.
This represents an increase of 81.4 per cent compared to the value recorded in the corresponding period of 2023 and a rise of 13.3 per cent over the value recorded in the preceding quarter.
In the quarter under review, exports accounted for 58.3 per cent of total trade with a value of N20.5 trillion, showing an increase of 98 per cent over the value recorded in the third quarter of 2023 at N10.4 trillion and 16.8 per cent compared to the value recorded in Q2 2024 at N17.5 trillion.
Nigeria’s export trade continued to be dominated by crude oil exports.
In the third quarter of 2024, crude oil export was valued at N13.4 trillion representing 65.4 per cent of total exports while the value of non-crude oil exports stood at N7.1 trillion accounting for 34.6 per cent of total exports; of which non-oil products contributed N2.5 trillion or 12.2 per cent of total exports.
On the other hand, the share of imports accounted for 41.7 per cent of total trade in the third quarter of 2024 with the value of imports amounting to N14.5 trillion in Q3, 2024.
This value indicates an increase of 62.3 per cent compared to the value recorded in Q3 2023 (N9.0 trillion) and 8.7 per cent over the value recorded in Q2 2024 (N13.5 trillion).
China remains Nigeria’s highest trading partner on the import side in the third quarter of 2024, followed by India, Belgium, United States of America, and Malta.
The most traded commodities imported during the quarter were Motor spirit ordinary, Gas oil, Durum wheat, Cane sugar meant for sugar refinery and used vehicles, with diesel or semidiesel engines, of cylinder capacity >2500cc.
The top five trading export partners were Spain, the United States of America, France, the Netherlands and Italy.
The most exported commodities included crude oil, liquefied natural gas, other petroleum gases in a gaseous state, Floating or submersible drilling or production platforms, and superior-quality Cocoa beans.
Economy
OPEC+ Retains Nigeria’s Output Benchmark at 1.5mbpd
By Adedapo Adesanya
Nigeria’s daily oil production quota will remain unchanged at 1.5 million barrels per day after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) on Thursday deferred the commencement of its proposed oil production cuts by a year, until the end of 2026.
The move was necessitated by weak demand and rising output by non-members of the international oil cartel.
OPEC sets a production target for its members as a way of curbing oversupply and ensuring price stability.
The alliance agreed to extend the 2 million barrels per day and the 1.65 million barrels per day of cuts until the end of 2026 from the end of 2025 respectively, according to statements issued by the group on Thursday.
However, Nigeria which has been a laggard struggled for years to meet its monthly allocation of 1.78 million barrels per day minus condensates as prescribed by the group.
The country quota was revised then downwards to 1.5 million barrels per day in 2022.
Under its formal output strategy, the broader OPEC+ coalition is now restricting its combined production to 39.725 million barrels per day until December 31, 2026, after previously only applying this quota throughout 2025.
However, eight OPEC+ members — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman — will now extend their 2.2 million barrels per day voluntary production decline into the first quarter, and will begin hiking production incrementally between April and September 2026.
Nigeria, unable to meet its 1.5 million barrels per day, does not belong to this exclusive group. OPEC data puts Africa’s largest oil producer numbers at 1.3 million barrels on average.
Saudi Arabia’s quota will stand at 10.47 million barrels per day; Russia’s at 9.94 million barrels per day; Iraq’s at 4.43 million barrels per day production and Algeria’s at 1 million barrels per day output.
Despite these sets of production trims and ongoing conflict threatening the hydrocarbon-rich Middle Eastern region, global oil prices have remained subdued for the better part of this year, under pressure from a tepid demand outlook.
Brent crude, which Nigeria leverages its headline crude against, is currently trading at $72 per barrel.
Meanwhile, Nigeria has set an ambitious 2025 production target of 2.06 million barrels per day, inclusive of condensates, as outlined in the draft 2025 appropriation bill of N48.7 trillion. The bill also sets a $77 per barrel benchmark to fund the budget.
Economy
LCCI Predicts 4% GDP Growth For 2024 Amid Economic Challenges
By Adedapo Adesanya
The Lagos Chamber of Commerce and Industry (LCCI) foresees Nigeria’s economy closing the current year in positive growth up to 4 per cent.
This was disclosed by the president of the chamber, Mr Gabriel Idahosa, at the organisation’s Annual General Meeting (AGM) on Thursday in Lagos.
The LCCI forecast builds up on recent gross domestic product (GDP) released by the National Bureau of Statistics (NBS) which points out that Nigeria’s economy grew 3.46 per cent in the third quarter of 2024.
The body said achieving faster recovery requires the fiscal and monetary sides of the economy to promote policies that would encourage private capital flows to the economy.
According to him, fiscal and monetary authorities need to develop a medium-term growth plan anchored on boosting local production, supporting ease of doing business and attracting private investment.
Mr Idahosa said the plan should also focus on developing infrastructure, business-friendly regulatory policies, economic diversification, and employment generation.
“Nigeria is presently confronted with a myriad of challenges including sustained double-digit inflation, a steadily rising debt profile, revenue mobilisation challenges and others.
“We have advocated for a well-coordinated synergy between the fiscal and monetary authorities in engagement with the private sector to navigate the uncertain economic terrain.
“We will continue to engage with government in creating an enabling business environment where the private sector is empowered to grow, create jobs and generate revenue for the government,” he said.
Addressing some economic indices, the LCCI president noted that the private sector was currently plagued with increased borrowing costs and a pressured foreign exchange market.
He said recent hikes in the Monetary Policy Rate (MPR) had directly translated to higher interest rates, making it more expensive for businesses to access credit for working capital, expansion, and sustainability.
He said that rate hikes alone would not curb inflation without resolving the challenges of the real sector of the economy.
Mr Idahosa added that the country needed to diversify its exports by boosting local crude refining capacity production of petrochemical products and accelerating reforms in the and gas sector.
“The chamber looks forward to the sustained implementation of naira payments for crude oil sales to the Dangote refinery and other local refineries, which started on October 1, 2024.
“We urge the government to summon the courage to be consistent with the oil and gas sector reforms and implement the Petroleum Industry Act (PIA) fully.
“We see the long-term gains of these reforms if they are implemented under a conducive regulatory environment,” he said.
Speaking on the projected N47.9 trillion 2025 budget presented recently by President Bola Tinubu, Mr Idahosa said the key parameters and assumptions on which the budget was proposed were too optimistic in the face of some economic and social indicators.
On her part, Mrs Chinyere Almona, Director General, LCCI, urged government to create an enabling environment for businesses to thrive to enhance their productivity and contribute more meaningfully to the economy.
She noted that while the year was filled with very difficult reforms, businesses should stay the course on these reforms and things would improve.
Mrs Almona urged businesses to think of alternatives to improve efficiency, attract finance and be more productive, while hoping for the next year to be better.
She also called on authorities to focus on non-oil exports to attract more foreign exchange.
“When we talk of exports, we are not just talking of exporting raw materials but processing materials to command top dollar in the export market.
“At the chamber, we are looking for ways to improve our export and small and medium enterprises (SMEs) groups to improve their capacity and productivity to export more, ” she said.
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