BUSINESS TRENDS: INDUSTRY INSIGHTS & POLICY CHANGES – VOL 2

Nigeria’s crude oil production plunged to a record low of 1.24 million barrels per day last month as a result of lingering disruptions, S&P Global Platts reported. The report quoted industry and ministry sources as saying that the country’s oil output had fallen sharply in the past few weeks due to an oil spill near the key Forcados export terminal. Shell Petroleum Development Company declared force majeure on crude loadings of key export grade Forcados on August 13th  due to ‘the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy’.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said that the earliest the corporation can issue its Initial Public Offer (IPO) to investors is in the next three years. The announcement is one of the outcomes of the Petroleum Industry Act recently signed on the state-owned corporation in the global market.

TRADE

Nigeria recorded a goods trade deficit of N1.9 trillion in the second quarter of 2021 as imports bills (N6.9tr) outweighed export earnings (N5.1tr) for the seventh consecutive quarter since Q3:2019. According to data released by the National Bureau of Statistics (NBS), the latest deficit however represents an improvement of 52.6% compared to the Q1:2021 goods trade deficit of N3.9tr.

The Ministry of Industry, Trade, and Investment have signed a Memorandum of Understanding with the Arabian Chamber of Commerce to facilitate collaboration for the upcoming Expo 2020 Dubai. According to the Minister of Industry, Trade and Investment, Niyi Adebayo, the MoU will also strengthen business relationships and promote enhanced trade relations between Nigeria and Gulf countries.

TELECOMMUNICATION

The Federal Executive Council (FEC) has approved the Fifth Generation Network, otherwise known as 5G for the nation. The Minister of Communications and Digital Economy, Dr. Isa Pantami, who disclosed this while speaking with newsmen at the end of the weekly FEC meeting presided over by President Muhammadu Buhari, also revealed that the council in approving the 5G took cognizance of the report of the International Telecommunications Union (ITU) and the World Health Organisation (WHO) that pronounced it safe to human health.

Read Also: Business Trends: Industry Insights & Policy Changes Vol 1

REST OF AFRICA

The African Development Bank (AfDB) and its development partners have announced plans to mobilize over $520 million to co-finance the first phase of the Nigeria Special Agro-industrial Processing Zone (SAPZ).

The Director-General, Nigeria Country Department, AfDB, Lamin Barrow, said the program, which will be implemented in phases across six the geo-political zones in Nigeria would also be rolled out in 18 other African countries.

GHANA

Moody’s Investor Services has affirmed Ghana’s foreign and local currency issuer rating at B3 (sub-investment grade) and maintained a negative outlook.

As per reports on September 8th, the B3 rating and negative outlook reflect Ghana’s high debt burden, which is unlikely to fall rapidly; continued weak debt affordability; high gross borrowing requirements; and ongoing liquidity challenges in the face of downside economic, social and financial risks in the aftermath of the coronavirus pandemic.

Economic activity continues to improve as Q2 2021 GDP printed at 3.9% relative to 3.1% in the previous quarter. The services sector was the star performer, with hotels and restaurants continuing to recover in the aftermath of the pandemic and lockdowns last year. This resulted in a 18.7% expansion in the quarter relative to 10.7% previously.

TANZANIA

On September 7th, the IMF approved a USD567.25mn loan for Tanzania under the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI), to support the government’s program to address the socio-economic impact of the Covid-19 pandemic.

CAMEROON

Cameroon expects to boost its rubber production by 6,667 tonnes in 2022, due to a government programme aimed at developing rubber tree plantations in the country. As per local reports on 10 September, the programme will provide support to small-scale farmers and restore and redevelop existing plantations to boost per-hectare yield.

ZAMBIA

According to the ministry of finance’s mid-year economic report, the Zambian economy is slated to have grown at 1.6% year-on-year (y-o-y) in 2021. Underpinning these figures will be the performance of the agriculture, manufacturing and information and communication technology sectors.

LIBERIA

Steel manufacturer ArcelorMittal signed a Mineral Development Agreement (MDA) with the government to expand the miner’s operations in Liberia. Under the agreement, ArcelorMittal is planning to invest USD 800 million to expand its rail, port, and processing facilities at its Yekepa iron ore mine in Nimba county.

SENEGAL

A five-year financing agreement between the governments of Senegal and the United States (US) came into effect on 09 September. Under the agreement, known as the Compact of the Millennium Challenge Corporation (MCC), the US government will provide a USD 500 million grant to address shortcomings in the local energy sector. The government of Senegal will provide a further USD 50 million in financing in addition to that provided by the MCC.

UGANDA

The latest data from the Bank of Uganda (BoU) shows that both exports and imports fell significantly in July. This decline benefitted the trade deficit which narrowed by 58.9%m-o-m in July to $196.4m.

KENYA

British Airways resumed on 06 September flights between London and Nairobi. The move comes after the airline suspended flights between the two cities over coronavirus-related concerns. Presently, the airline will only offer one flight per week (in both directions); however, it plans to return to its pre-pandemic schedule of daily flights soon.

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