Business
US Projects $17bn For Nigeria From Oil Assets Sale
The Federal Government is expected to make up to $17billion if it sells down its stake in most joint-ventures oil and assets, according to JP Morgan.
The United States bank’s projection came against the backdrop of the government’s plan to boost foreign exchange earnings and external reserves in order to ease forex pressure.
The US bank stated this in a report titled, “Nigeria: reform pause rather than fatigue (CBN’s financial accounts open a can of worms)”.
The lender said the Central Bank of Nigeria’s net FX reserves were around $3.7bn as of the end of 2022, down from the $14bn it was at the end of 2021, based on its recently released reports.
It said, “Based on partial information from the audited financial accounts, we estimate that CBN’s net FX reserves were around $3.7bn at the end of last year, from $14.0bn at end-2021. In arriving at the said estimate we make a few assumptions which if incorrect would substantially change the picture.
“They include: (i) an addition of $5bn in IMF Special Drawing Rights to external reserves in order to arrive at total gross FX reserves of $37.8bn, broadly in line with the 30-day moving average of $37.08bn previously published on the central bank’s website; (ii) adjusting the gross external reserves with three key FX liability lines that include FX forwards (US$6.84bn), securities lending ($5.5bn) and currency swaps (US $21.3bn).
“And (iii) estimating currency swaps by backing out FX forwards and outstanding OTC Futures balances from an overall aggregate published i n the financial accounts”.
According to JP Morgan, the low net forex reserves mean a continued forex market pressure, adding that the CBN can still source forex at commercial and semi-commercial rates.
The highly profitable nature of the currency swap arrangements between the CBN and domestic commercial banks is expected to continue for some time, it said.
On the government assets which can provide succor in the medium term, it stated, “For example, the President’s policy advisory council has recommended the government sell down its stake in the most joint-venture oil and gas assets, a proposal that is estimated to bring in up to $17bn”.
The US bank further said the recently announced $3bn loan to the NNPC could help partly improve FX liquidity conditions in the market, with the oil company selling the dollars to the CBN and remitting the naira proceeds to the government as upfront payments for oil revenues and taxes.
The large external financing needs of the private sector will, however, sustain forex pressures, the bank warned.
Structural balance of payments deficit and a worse starting point for net FX reserves than previously anticipated are affecting the government’ ability to transition to a significantly more flexible exchange rate regime, according to the US bank.
This process of rebuilding reserve buffers is likely to be protracted as significant reforms are needed to attract foreign direct (and portfolio) investment on a multi-year basis, it said.
It added, “Perhaps short-term fixes could involve a swift improvement in oil output and significantly tighter monetary policy – authorities will have to increase the frequency of OMO auctions, which resumed last week”.
While commenting on Nigeria’s inflation rate, the bank projected that inflation rate will spike to 28 per cent by the end of 2023, and the naira will further depreciate despite the CBN’s efforts to stabilise the foreign exchange market.
The projection by JPMorgan is three percentage points higher than the 25 per cent inflation projection by the World Bank for 2023 because of petrol subsidy removal.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter