Business
Depreciation: ABCON urges CBN to float Naira
The Association of Bureaux Des Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to float the Naira to halt its further depreciation.
The President of ABCON, Alhaji Aminu Gwadabe, made the appeal on Saturday in an interview with the News Agency of Nigeria (NAN) in Lagos.
Gwadabe said that the CBN should do all within its powers to undertake a sustained injection of dollar in the market to reverse the loss in the value of the naira at the parallel market.
“It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float.
“CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.
“Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira,” Gwadabe said.
The financial expert said that the CBN could gradually buy back the Dollars used in its intervention from the open market at a lower exchange rate for a decent profit.
He argued that the the next phase would be to strengthen the Naira in the medium to long-term, adding that both fiscal and monetary policies should be aligned to stimulate the tradable sector.
On CBN’s Monetary Policy Rate (MPR) at 13 per cent, Gwadabe said that the adjusted rate would stifle growth.
He said efforts targeted at reducing Inflation in an underperforming economy should focus on stimulating the supply side.
“Increasing the MPR contracts the supply side, it is the wrong prescription.
“Let’s not copy the Americans who target inflation with FED rates to curb money supply; their factors of production have been fully mobilized, ours is at less than 20 per cent and requires stimulation of the supply side.
“Lowering the MPR to around 5 per cent looks more appropriate.
“The U.S. per capita GDP is around 66,000 dollars, ours is $1,500 in real terms which underscores the need for a pro supply side monetary policy,” Gwadabe said.
He said the CBN should reverse his mandate to banks to pay recipients of Diaspora remittances in dollars.
According to him, most of the dollars end up under pillows outside of the mainstream banking system with no utility for capital mobilization and imports.
“It fuels currency substitution, it puts pressure on the Naira exchange rate and inflation and does not have a statutory backing unlike Domiciliary accounts, therefore, it is illegal,” Gwadabe said.
The ABCON boss said that Nigeria had a long history of stifling the tradable sector (oil excluded), first through the Commodity Boards, the Arbitrage Kingpins, the bastion of corruption that straddled the export ecosphere whom Babangida dismembered in 1986.
“They bought low at the farm gates and sold high at the international export markets, much of the difference ended up in their private pockets.
“They impoverished the cocoa, groundnut, palm oil producers, etc. and eventually drove them out of business, not oil.
“Today, they have reincarnated as plethora of gatekeepers including the Nigerian Export Supervision Scheme at the ports exacting tolls from exporters.
“Poor infrastructure, power supply and generally unskilled labor further compound the weakness of our tradable sector.
“Any wonder why Ghana’s annual non-oil export is 13.1 billion dollars, while Nigeria’s is 1.3 billion dollars, We have a long way to go,” Gwadabe said.
He said that all the indices suggest that the Naira holds more of a downside potential than it does of an upside because the present monetary and fiscal authorities will continue to tether in the zone of docility.
The ABCON boss said the fall of the Naira is fueled majorly by the innate desire for self-preservation of some people and corporates who substitute a weaker currency for a stronger one.
He said that the paradigm has evolved over time to the current crescendo of panic buying of forex, most of which will end up under pillows and Offshore.
He said that this phenomenon can’t be adjudicated by the authorities.
“it’s typical consumer behaviour. Nigerians are sitting on an estimated 100 billion dollars chest outside the country’s mainstream banking system.
“Today’s panic buying causes currency to drop in value thereby inducing tomorrow’s panic buying which in turn results in further decline of the value of the currency and so forth.
“Panic buying is driven more by psychology and less by economic fundamentals, so the solution has to be psychological too,” Gwadabe said.
Business
Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd
Enhanced adoption of artificial intelligence and other digital technologies to improve operations in Nigeria’s oil and gas industry is taking the centre stage in relevant circles.
The issue came up strongly when the President-elect of the Nigerian Institute of Petroleum and Gas Engineers NIPetGE, Prisca Kanebi, paid a courtesy call at the Nigerian National Petroleum Company Limited (NNPC Ltd), Abuja.
Biztellers reports that the Kanebi led delegation was received by the Group Chief Executive Officer of the NNPC Ltd, Bayo Ojulari, represented by the Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye.
According to a statement made available on Sunday, discussions at the meeting focused on the future of Nigeria’s hydrocarbon industry amid global energy transition concerns, technological changes and sustainability targets.
ALSO READ: NNPC Ltd, IOCs Raise Crude Supply to Local Refineries by 103% in 4 Months
The statement indicated that the NNPC Ltd acknowledged the role of NIPetGE in policy advocacy, technical development and innovation within the sector.
Speaking during the meeting, Kanebi highlighted recommendations from the institute’s recent conference, including the proposed establishment of a national centre for intelligent energy systems to support the deployment of artificial intelligence, the Internet of Things and robotics across the petroleum value chain.
She also commended the Federal Government’s decarbonisation efforts and reiterated the institute’s support for policies aimed at improving sustainability in the industry.
The institute also recommended the creation of a hydrocarbon-linked emissions trading system to allow Nigeria to take part in global carbon markets.
The institute also proposed fiscal incentives to support local manufacturing and service delivery in the oil and gas sector, as well as the expansion of the Energy Transition Plan to include measurable upstream decarbonisation targets backed by tax credits.
Other proposals included increased public-private partnerships in emission control infrastructure, carbon capture projects and hybrid renewable energy initiatives.
Both organisations also stressed the need for stronger collaboration between industry and academic institutions to improve professional capacity and align petroleum engineering practice in Nigeria with international standards.
The institute further disclosed that its bill seeking chartered status had passed second reading and was progressing towards a third hearing at the National Assembly.
It added that NNPC Ltd pledged support for future collaborations with the institute on initiatives aimed at improving efficiency and innovation in the energy sector.
Business
FHC Orders NUPRC to Comply with PIA
Business
Local Firms Lead Revival of Idle Oil Wells – SPE
Nigeria’s indigenous oil and gas companies are reopening dormant wells and ramping up production from assets acquired from international oil companies (IOCs) to boost crude oil output.
The Society of Petroleum Engineers (SPE), Nigeria Council, made the assertion through its Chairman, Francis Nwaochie, on the sideline of the Offshore Technology Conference (OTC) which ended at the weekend in Houston, Texas.
Nwaochie said indigenous operators were already taking advantage of opportunities created by disruptions in the global energy market to increase production from existing assets.
According to him, local firms that recently acquired onshore and shallow water assets from IOCs were aggressively reviving inactive wells and maximizing available infrastructure to raise output levels.
“What we are seeing now is that indigenous companies are reopening wells from the assets they acquired from the IOCs. Some of them have almost doubled production from those existing assets,”.
He explained that the renewed focus on dormant wells and existing facilities had become critical at a time the global oil market was facing supply shortages triggered by geopolitical tensions in the Middle East.
The SPE Nigeria Council Chairman noted that Africa, particularly Nigeria, was well positioned to benefit from the supply gap because of the continent’s relative stability compared to some other oil-producing regions.
“There is a huge opportunity for Africa right now. The focus is gradually shifting to Africa because of the volatile environment in many other producing regions.”
He stated that indigenous operators were leveraging digital technologies, financing opportunities and local expertise to improve production efficiency and optimise existing fields.
He added that stronger implementation of local content policies was also helping to create a more stable operating environment for oil and gas investments.
“Local content is very critical. Once communities and local companies clearly understand their roles and benefits, then you create peace across the industry. Business only thrives in peaceful environments.”
ALSO READ: Nigerian Navy Recovers Large Cache of Illegal Refined Petroleum Products
Nwaochie also stressed the need for Nigeria to move beyond crude oil production and begin developing indigenous technologies for the energy industry.
According to him, SPE Nigeria Council was actively supporting innovation and technology development among young Nigerian engineers and researchers.
He disclosed that the association was engaging the National Universities Commission(NUC) on reforms to engineering curricula in universities to better prepare graduates for the future of the energy industry.
“One of our major focuses in SPE is technology development. We should not only import machines and equipment, we must begin to develop our own technologies locally.”
Nwaochie revealed that SPE was already supporting local innovators working on technologies such as remotely operated underwater vehicles (ROVs), noting that indigenous technology development will strengthen Nigeria’s economy and deepen local participation in the oil and gas sector.
“We may not get everything right immediately but we must start somewhere. That is how countries that dominate the global energy industry built their capacities.”





