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Nigeria Must Ensure Stable Power Supply for Economic Growth—Adesina

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akinwumi adesina AfDB President

By Adedapo Adesanya

The Nigerian government has been advised to address its power supply crisis if it intends to revamp the struggling economy.

The President of the African Development Bank (AfDB) Group, Mr Akinwumi Adesina, said this over the weekend during his lecture on Building a Global Nigeria to mark the 90th birthday anniversary of Nigeria’s fomeYakubu Gowon in Abuja.

He lamented that his country of origin loses about $29 billion annually due to a lack of reliable power supply, amounting to a 5.8 per cent loss in the nation’s Gross Domestic Product (GDP), noting that the major challenge facing Nigeria’s manufacturing industries was the high cost and unreliability of electricity supply.

The AfDB boss said that load shedding and the inconsistent availability of electricity had resulted in high and uncompetitive manufacturing costs.

According to him, most Nigerian manufacturing companies are providing their energy with a high dependence on generators, diesel and heavy fuel oil.

“It has been estimated by the IMF that Nigeria loses about $29 billion annually, that is 5.8 per cent of its GDP, due to a lack of reliable power supply.

“The report also indicates that Nigerians spend $14 billion yearly on generators and fuel. There is no other way to say it, lack of electricity is killing Nigerian industries,” he said.

He quoted the Manufacturers Association of Nigeria (MAN) as saying industries spent N93.1 billion on alternative energy in 2018.

“Today, no business can survive in Nigeria without generators. Nigeria has gas and crude oil in abundance, which can be vital means of generating electricity, yet, 86 million people live daily without electricity.

“Today, Nigeria is the number one country in the world in terms of the total number of people without electricity,” he said.

Mr Adesina said that it was a situation that called for the government’s attention so as to boost the country’s economy.

He said that to achieve a global Nigeria, the country must have universal access to electricity.

Highlighting AfDB‘s contributions, Mr Adesina said that the bank had invested massively in the power sector to support the implementation of Nigeria’s Power Sector Recovery Programme by providing 200 million dollars for the Nigeria Electrification Project.

“To support Nigeria and other African countries, the AfDB invests massively in the continent’s power sector.

“This is through the provision of 200 million dollars for the Nigeria Electrification Project, which is designed to fill the country’s electricity access gap.

“We have also invested $210 million in the Nigeria Transmission Project to strengthen the grid power evacuation and regional interconnection,” Mr Adesina said.

According to him, a major component of AfDB’s energy strategy is the launch of the Desert to Power initiative, a $20 billion initiative to provide electricity.

He said that the initiative would provide electricity for 250 million people across 11 countries of the Sahel, including Northern Nigeria.

He said that it was expected that Desert to Power would create the world’s largest solar zone.

“This initiative will draw lessons from successful projects already financed by the bank, including the Noor Ouarzazate solar PV power project in Morocco and the Ben Ban solar project in Egypt.

“The President of the World Bank Group, Ajay Banga and I made the decision that the two institutions will work together to connect 300 million Africans, including Nigerians, to electricity by 2030,” Mr Adesina said.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

NASD OTC Securities Exchange Closes Flat

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Nigerian OTC securities exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.

As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.

However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.

In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.

But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.

When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.

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Economy

Naira Firms to N1,534/$1 at NAFEM, Crashes to N1,680/$1 at Black Market

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naira official market

By Adedapo Adesanya

The Naira appreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N14.79 or 0.9 per cent to trade at N1,534.50/$1 compared with the preceding day’s N1,549.29/$1 on Thursday, December 12.

The strengthening of the domestic currency during the trading session was influenced by the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN).

The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.

The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN; publication of real-time prices and buy-sell orders data from this system has lent support to the Naira at the official market.

Equally, the local currency improved its value against the British Pound Sterling by N3.91 to wrap the session at N1,954.77/£1 compared with the previous day’s N1,958.65/£1 and against the Euro, the Nigerian currency gained N2.25 to sell for N1,610.41/€1 versus N1,612.66/€1.

However, in the black market, the Naira crashed further against the US Dollar on Thursday by N10 to quote at N1,680/$1 compared with Wednesday’s closing rate of N1,670/$1.

Meanwhile, the cryptocurrency market majorly corrected after earlier gains as US President-elect Donald Trump reiterated his ambition to embrace crypto assets, but a bond market rout dragged risk assets lower.

Mr Trump said, “We’re going to do something great with crypto” while ringing the opening bell at the New York Stock Exchange, reiterating his ambition to embrace digital assets in the world’s largest economy and create a strategic bitcoin reserve.

Alongside, the European Central Bank trimmed its benchmark interest rates by 25 basis points and in its dovish policy statement hinted that more rate cuts were likely to happen.

The biggest loss was made by Cardano (ADA), which fell by 4.9 per cent to trade at $1.10, followed by Ripple (XRP), which slid by 4.1 per cent to $2.33 and Dogecoin (DOGE) recorded a value depreciation of 2.9 per cent to sell at $0.4064.

Further, Solana (SOL) slumped by 1.8 per cent to $225.89, Binance Coin (BNB) slipped by 1.3 per cent to $746.92, Bitcoin (BTC) declined by 0.6 per cent to $99,998.18, Ethereum (ETH) crumbled by 0.5 per cent to $3,909.43, and Litecoin (LTC) dipped by 0.3 per cent to $121.52, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

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Economy

Oil Market Falls on Expected Increase in Supply Surplus

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By Adedapo Adesanya

The oil market slumped on Thursday, pressured by an expected increase in supply, supported by rising expectations of a Federal Reserve interest rate cut.

The International Energy Agency (EIA) made a slight upward revision to its demand outlook for next year but still expected the oil market to be comfortably supplied, with Brent crude futures losing 11 cents or 0.15 per cent to trade at $73.41 per barrel and the US West Texas Intermediate (WTI) crude futures declining by 27 cents or 0.38 per cent to finish at $70.02 per barrel.

The IEA in its monthly oil market report increased its 2025 global oil demand growth forecast to 1.1 million barrels per day from 990,000 barrels per day last month, largely in Asian countries due to the impact of China’s recent stimulus measures.

At the same time, the IEA expects nations not in the Organisation of the Petroleum Exporting Countries and Allies (OPEC+) group to boost supply by about 1.5 million barrels per day next year, driven by the US, Canada, Guyana, Brazil and Argentina – more than the rate of demand growth.

On Wednesday, OPEC cut its demand growth forecast for 2024 for the fifth straight month.

The IEA said that, even excluding the return to higher output quotas, its current outlook is to a 950,000 barrels per day supply overhang next year, which is almost 1 per cent of the world’s supply.

The Paris-based agency said this would rise to 1.4 million barrels per day if OPEC+ goes ahead with its plan to start unwinding cuts from the end of next March.

Next year’s surplus could make it harder for OPEC+ to bring back production. The hike was earlier due to start in October 2024, but OPEC+ has delayed it amid falling prices.

Meanwhile, inflation rose slightly in November increasing the possibility of a US Federal Reserve rates cut again as the data fed optimism about economic growth and energy demand.

Support also came as crude imports in China grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.

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