Business
Nigeria, Others May Continue In High Debts – Report
The economic outlook of Nigeria and some other countries of the world appears clouded with high inflation which has reduced private sector optimism and weakened consumer spending.
According to a report by the Organisation of Petroleum Exporting Countries (OPEC), this is in spite of the improvements in fossil fuel prices in the short term so indicated in the economic outlook.
OPEC indicated that this could increase uncertainty and make high debt levels to persist in Nigeria, and across some other countries of the world next year.
In its newly released Monthly Oil Market Report for July 2022, OPEC indicated that in May 2022, Nigeria’s composite Consumer Price Index rose to 17.7 per cent year-on-year, from 16.8 per cent year-on-year in the prior month.
Responding to the elevated inflationary pressures, the Central Bank of Nigeria (CBN) raised its policy rate by 150 bps to 13 per cent, bringing borrowing costs to the highest since April 2020.
“It was the biggest rate hike since July of 2016 amid concerns that persistent inflationary pressures could weigh on the country’s fragile recovery”, the report said.
Nigeria has been unable to increase its crude revenue despite the rise in crude prices, and consistent increases in production quota by OPEC.
The country’s output recently dropped to about 1 million barrels per day, further worsening its chances of taking advantage of the Russian/Ukraine war to earn more revenue.
OPEC’s forecasts put world GDP growth in 2023 at 3.2 per cent, with the assumption that the ramifications of the pandemic, geo-political developments in Eastern Europe and global financial tightening amid rising inflation do not negatively impact the 2023 growth dynamic to a major degree.
It also assumed that major economies revert back towards their growth potential. However, OPEC said the downside risk exists.
“Global inflation continues to be a major concern, along with the consequence of further monetary tightening measures by key central banks.
“The continuation of the pandemic into 2023 is another risk that could curb growth depending on the extent of measures taken to reduce contagion.
“While labour markets are forecast to remain tight, supply chain bottlenecks may not be resolved in the short term and high debt levels across the globe may persist”, the report said.
Although OPEC said the above-average fossil fuel prices support a firmly positive outlook for the rest of the year, however, it said “concerns over soaring inflation would increase uncertainty next year.
Brent International rose to $100.32 at 1:15PM last Wednesday after declining and closing at $99.22 per barrel on Tuesday. However, as at 12:52P on Thursday, prices slide back to $99 per barrel
The OPEC warning comes on the heels of a warning by the country’s Debt Management Office, that Nigeria needs to generate significantly more revenue beyond current levels to avoid debt distress.
A report said Nigeria lost a total of N4.2tn in crude oil revenue in the first six months of 2022 due to its inability to meet the daily production by OPEC.
While the country’s oil revenue is on a downward trajectory due to low production, its GDP grew by 3.11 per cent year-on-year in the first quarter of the year in real terms, following a 3.98% growth recorded in the previous quarter (Q4 2021).
Again, while the economy seems to be moving on a positive trajectory after the recession recorded in 2020, recent economic reality seems to be putting the recorded growth in jeopardy.
For instance, rising cost of goods and services in the country has forced organisations to reduce working hours, even as much as laying off staff due to surging operating costs.
Experts say policy actions to curb the rising inflation rate, triggered by the energy crisis, fuel scarcity amongst others need to be put in place, in order to avert what would seem as the third economic recession in just seven years.
The Nigerian Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.
Corlins Walter
The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.
King Onunwor
The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.