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BIG STORY

FOREX: Dollar Hits N615, Local Raw Materials Sourcing Drops To 52%

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The pressure on the foreign exchange market keeps growing, with the dollar exchanging at N615 at the parallel market in Lagos and Abuja.

This is even as the percentage of local raw materials sourced by Nigerian manufacturers declined to 52.4 percent in 2021, from 57.5 percent obtained in 2020, according to data from the Manufacturers Association of Nigeria.

Market research showed that a dollar sold for N613 and N614 at Zone 4 in the Federal Capital Territory, Abuja, but the rate was N615 at Amuwo Odofin and Lagos airports on Tuesday.  At Abuja airports, a dollar was sold for N615. The situation was different at the Importers and Exporters window where a dollar went for N415.64, putting the margin between the official and the parallel markets at N199.36.

Bureau de Change players said dollars were becoming increasingly scarce and the price could get to N700 before the end of the year.

“We are looking for dollars to buy, but we can’t find it anywhere. People are hoarding their dollars and waiting for prices to rise further,” Aminu Bala, one of the BDCs in Zone 4, Abuja, said in pidgin English.

Abdullahi Isah, a BDC at Amuwo-Odofin in Lagos, lamented that they bought at N610-N612, saying that scarcity of dollars was hurting their business and the economy.

According to the President, of the Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, no sensible person would like to sell his or her dollar when prices could rise within the shortest possible time.

Gwadabe noted that the naira was facing a war of attrition, worsened by currency substitution, speculation, politics, and exclusion of BDCs from the FX market.

He said due to the one-month notice given to travelers who needed basic allowances, many of them were finding their way to the parallel market, putting further pressure on the market.

Gwadabe called for the reinstatement of BDCs to the FX market, stressing the need for market liberalization.

Nigeria is facing a dollar crunch, coupled with declining government revenue and oil production. The revenue of the Federal Government has declined from N970.57 billion in July 2021 to N680.783 billion in May 2022.

Nigeria earned about $10bn in non-oil exports in 2021, but this is just about 30 percent of what Bangladesh earned from its textile exports last year. Oil production fell to 1.2 million barrels per day in April 2022 from 1.238 million barrels in March, according to OPEC Monthly Oil Market Report. This is far from the oil benchmark of 1.88 million barrels per day in the 2022 budget.

Manufacturers are also in the mix, scrambling for dollars to import inputs, spare parts, and machinery.

According to the Manufacturers Association of Nigeria, the decline of local input sourcing from 57.5 percent to 52.4 percent was attributed to the scarcity of raw materials.

“Since the full opening of the economy following the lockdown associated with the COVID-19 pandemic, local raw materials and other manufacturing inputs have been relatively scarce and costly. This has also affected the output of the sector negatively,” MAN said.

Professor of Ceramics Engineering, Patrick Oaikhinan, explained that his experience in ceramics-related raw materials showed that Nigeria was still far from developing its raw materials.

“The major reason companies are sourcing raw materials from abroad is the absence of details about chemical and mineralogical compositions of raw materials. Firms are also unaware of the physical and mechanical properties and areas of applications in various industries of these raw materials,” he said.

“We do not know the extent of the deposits, much less the chemical and mineralogical compositions of our raw materials. We do not have the laboratory to characterize the raw materials. If you do not know these compositions, you cannot formulate the products. If you are using trial and error, you cannot get the desired quality. Many local industries do not have the laboratories to characterize the raw materials before use because it is expensive,” he explained.

He called for a policy to develop the local raw materials and make them more marketable.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, who interacted with manufacturers while he was the director-general of the Lagos Chamber of Commerce and Industry, said it was high time Nigeria addressed the issue of its core industries.

“If we want to promote industrialization and self-reliance, we need to address the issue of our core industries. When I say core industries, I mean industries that form the pillar for other industries.

“Iron and steel is number one. Look at how much investment we have made in Ajaokuta Complex. The whole vision was to have an iron and steel sector that will support industrialization. The country wanted to get flat sheets, spare parts, and iron rods, among others, from Ajaokuta, but we didn’t make any headway. The second major one is petrochemicals. Look at the packaging industry. Almost 90 percent of packaging products are plastics.  Next is the Aluminium Smelter Company of Nigeria. It was a gas-based industry and the vision then was to use it to support cable and wire industries, but again we made a complete mess of it.”

He said Nigeria must fix these industries urgently before talking about the industrialization of any kind.

BIG STORY

National Assembly Passes Life Imprisonment Bill For Nigerian Drug Traffickers

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In a bid to tackle drug-related crimes, the National Assembly has amended the National Drug Law Enforcement Agency (NDLEA) Act, introducing life imprisonment for drug offenders and traffickers.

This comes after the Senate and House of Representatives adopted the harmonised report on the amendment.

Senator Tahir Monguno, Chairman of the Senate Conference Committee, presented the report, highlighting that the amendment introduces stricter penalties to deter drug-related crimes.

“Any person who unlawfully engages in the storage, custody, movement, carriage or concealment of dangerous drugs or controlled substances and, while doing so, is armed with an offensive weapon or disguised in any manner, commits an offence under this Act and is liable, upon conviction, to life imprisonment,” Monguno said.

The Senate approved the amendment through a voice vote during Thursday’s plenary, which was presided over by Deputy Senate President Barau Jibrin.

In addition, the Senate passed the Revenue Mobilisation, Allocation, and Fiscal Commission Bill, 2024, aimed at replacing the 2004 RMAFC Act. Yahaya Abdullahi, Chairman of the Senate Committee on National Planning and Economic Affairs, stressed the need for the commission’s reform, citing Nigeria’s declining revenue and increasing population.

“The Act, last revised over 20 years ago, no longer reflects Nigeria’s evolving economic realities. This bill proposes additional funding and a restructured operational framework for the commission to improve its efficiency,” Abdullahi explained.

He further emphasised the need for adequate funding from the Federation Account for the RMAFC to effectively carry out its constitutional duties.

The bill, passed after deliberations and a majority vote, now awaits President Bola Tinubu’s assent to become law.

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BIG STORY

UPDATE: We’re Ready To Provide Evidence For Trial Of Simon Ekpa — Enugu Government

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The Enugu State Government has expressed its readiness and willingness to provide evidence to assist in the prosecution of Simon Ekpa, who was arrested in Finland on Thursday over allegations of sponsoring terrorism in Nigeria.

Enugu State Government made this offer in a statement released by the Secretary to the State Government, Prof. Chidiebere Onyia, on Friday.

In the statement, the Enugu State Government also commended the Government of the Republic of Finland for the arrest of Ekpa, whom it described as “the Finland-based leader of the criminal gang, Autopilots.”

The Enugu State Government further referred to Simon Ekpa as “a common criminal, con man, and terrorist, who has no interest of Igbo people at heart.”

It added that Ekpa “is a murderer and fraudster, who delights in killing his people and living large off their misery.”

“Enugu State was ready and willing to provide evidence of Ekpa-sponsored atrocities against Ndigbo to aid his trial and conviction, whether in Finland or Nigeria.”

“The Enugu State Government welcomes the arrest of the Finland-based terrorist, Simon Ekpa.”

“His arrest and trial will no doubt go a long way in strengthening peace, security, and stability in all parts of the South East.”

“This arrest is in line with the demand of Governor Peter Mbah Administration, which has repeatedly made it known that Ekpa is a megalomaniac, common criminal, murderer, and fraudster, who takes joy in feeding fat on the manipulated emotions of Ndigbo and inflicting misery on the South East region.”

“Ekpa has for long, and unfortunately from Finland, made a living by creating a siege climate and mentality in the South East, destroying lives, property, and the Igbo trademark of entrepreneurship and hard work.”

“He thrives on manipulating, exploiting, and extorting the people on the pretext of fighting for their interest and for the restoration of Biafra,” the government said.

Ekpa was arrested and detained alongside four other suspects by the government of Finland on charges of sponsoring terrorism in Nigeria, according to local newspapers in the European country.

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BIG STORY

Much Ado About Meddlesome Minions, And Messengers Of Misinformation — By Tayo Williams

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There is a growing phalanx of pseudo-intellectuals parading the social media space with faux and fictitious knowledge of the indigenous oil and gas industry, and it is scary because of the grave danger they portend and present for the average Nigerian.

From X (formerly known as Twitter) to Facebook and even the photos and videos-sharing site, Instagram, they abound, in their inglorious number, lending their platforms to deliberately distort facts and spread misinformation especially to favour the narratives propounded by popular Nigerian businessman Aliko Dangote, owner of the Dangote Petroleum Refinery.

Since the refinery began operations earlier in the year, it has been one week, one controversy allegedly orchestrated by Dangote in a brazen attempt to arm-twist the Nigerian National Petroleum Corporation Limited, NNPCL, into playing by his rules.

Those conversant with the modus operandi of Dangote and his refinery say the long-drawn warfare with every institution and individual in the oil and gas value chain is nothing but a self-seeking and mindless profit maximisation tactic.

Whilst nobody begrudges Dangote’s drive for profit as a businessman, perhaps he needs to be reminded that the NNPC has a mandate to ensure and provide energy security in a way that is affordable and sustainable for the generality of Nigerians. And, the NNPCL management has declared in very unambiguous terms that it would not pander to the din of the market whether orchestrated by Dangote, his rampaging minions or anyone else.

The truth, however, is that there is an increasing army of vacuous, vicious, and vile individuals strutting the social media space defending and propagating outright and outlandish falsehoods. Of particular concern is one Kelvin Emmanuel who has become the unofficial mouthpiece of the Dangote Refinery. Going from one media house to the other, he pulls figures out of the air and projects obnoxious untruths on hapless Nigerians. With the backing of his paymaster’s billions, it is no surprise that this otherwise irrelevant and fatuous character now commands appearances on major television stations.

But it is on X that he has made lying glibly and gratuitously the Holy Grail. He once premised Dangote’s inability to secure feedstock for his refinery on the government and the NNPCL. While peddling this untruth, he conveniently forgets that the refinery had a seven-year window, during its construction phase, to lock in feedstock supplies that could last a minimum of five years. Dangote did none of that. As it would later unfold, his game plan, which Emmanuel glossed over, was to monopolise equity oil and production quotas to serve his business interests.

Another deliberate misinformation from the Dangote camp was the allegation that International Oil Companies (IOCs) and other industry players were trying to sabotage his interests. Apart from being an investor in the Dangote Refinery, the NNPC still supplies gas to various Dangote companies across Nigeria. How can anyone or any institution jeopardise their investment? What further proof of faith does Dangote and his minions need to know that the NNPC is their cheerleader, and is here to make operating in the industry seamless and a win-win for all?

Echoing Dangote’s baseless stance, Emmanuel also called for the sack of Mr. Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), regulators of Nigeria’s midstream and downstream value chain. By Emmanuel’s warped reckoning, Ahmed had no locus to speak against Dangote or his enterprise because the latter questioned the quality of the product from Dangote Refinery and other local refineries in comparison with imported ones. Of course, Emmanuel’s was a lone voice in the wilderness because those who understand the invaluable role that the NMDPRA plays in the industry did not as much as dignify his tirade with a glance.

In a robust response to Emmanuel’s groundswell of egregious lies, Ibrahim Y. Kabo, a petroleum engineer based in Abuja, described him as “Someone who has not seen the inside of a refinery before Dangote built one, let alone understood the mechanism of the energy industry, …(yet) assuming the role of an authority in oil and gas matters.”

He went further to lampoon Emmanuel for stating that only Dangote Refinery’s products meet specifications while others are all sub-standard. “The obvious question is: whose specifications? For a refinery that has barely made four of seven pre-inauguration certifications, it sounds somehow laughable to suddenly assume the role of regulator in an industry you’ve barely entered,” Kabo said.

In the article, entitled, “The Hand of Aliko, the Voice of Kelvin: Inside Dangote Refinery’s Media Stunt Lab”, Kabo declared that from all Emmanuel’s interviews and pretensions to be an industry expert, one thing is obvious: “He lacks an understanding of both the mandate and the reach of NNPC as a national oil company.”

Kabo adds that, “Downstream is the least of NNPC’s business interests. The mandate, as per PIA (Petroleum Industry Act), is to facilitate both the extraction and commercialization of Nigeria’s oil and gas resources. 20 billion dollars may be a lot, but NNPC and industry regulators routinely handle projects of that magnitude. At best, Dangote and (Emmanuel’s) ranting are an irritation. I believe that’s why NNPC openly declared it was not interested in being Dangote’s off-taker.”

Like the Yoruba saying goes, derision does not stop the sweetness of the honey. The meddlesome minions and messengers of misinformation can continue dancing naked in the marketplace, but what is most important is that the NNPCL has assured that it will not cease doing everything in its capacity “to harness the possibilities of oil and gas, address energy demand and drive the national economy, and become the number one oil producer and supplier in Africa.”

 

Tayo Williams is a Lagos-based media executive

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