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Nigeria’s External Reserves Rise 2.83% Amid Foreign Inflows

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In a testament to Nigeria’s economic strength, the country’s external reserves have surged by 2.83% year-to-date, propelled by increased foreign capital and remittances.

Recent data from the Central Bank of Nigeria (CBN) reveals a noteworthy uptick, with foreign currency reserves reaching $34.11 billion as of March 7, 2024—up from $33.17 billion at the beginning of the year.

This boost in reserves, comprising foreign currencies, gold, and other international assets, reflects Nigeria’s ability to navigate and thrive amid global economic currents.

Recall that on Wednesday, the CBN unveiled a striking surge in Diaspora remittances.

February witnessed an extraordinary spike, with remittances skyrocketing by an astounding 433%, surging to $1.3 billion compared to the $300 million reported in January.

It said “We saw a 1.0 percent week-on-week (w/w) accretion in the foreign reserves to $34.02bn as of March 6th, 2024, owing to foreign capital inflow (evident in the year-to-date (YTD) foreign net inflows of $822.6m through the NAFEM window) following CBN’s drive to attract FX, analysts at Afrinvest Securities Limited.”

On Friday, the Naira experienced a 1.55% depreciation, with the dollar quoted at N1,627.40, marking a decline from Thursday’s N1,602.17, as reported by the FMDQ Securities Exchange.

The intraday high also weakened to N1,640 per dollar on Friday, compared to N1,635 on Thursday.

However, the intraday low showed improvement, reaching N1,413/$1 on Friday, stronger than Thursday’s N1,470/$1.

Notably, there was a substantial increase in dollar supply, rising by 63.48% to $269.35 million on Friday, up from $164.76 million recorded on Thursday.

In the parallel market, commonly referred to as the black market, the Naira remained stable at N1,620 per dollar.

Governor Olayemi Cardoso of the Central Bank of Nigeria (CBN) announced, following the Monetary Policy Committee (MPC) meeting on February 27, 2024, that the country’s external reserves had increased to $34 billion from the initial $33 billion at the beginning of the year.

Moreover, on February 5, 2024, the CBN reported a reduction in the inherited $7 billion FX backlog to $2.2 billion.

The CBN expressed its commitment to resolving the outstanding balance, demonstrating efforts to address foreign exchange challenges.

According to a weekly report by Afrinvest, the Naira maintained stability across the FX market, trading within a similar band as the preceding week.

The report highlighted a 41.4% improvement in activity at the NAFEM Window, totaling $421.6 million, a notable increase from the previous week’s $473.1 million.

Furthermore, the report indicated a 4.9% week-on-week depreciation of the Naira against the dollar at the NAFEM Window, with the exchange rate falling to N1,627.40/$1.00.

Additionally, the parallel market witnessed a 5.3% week-on-week dip in the Naira against the dollar, settling at N1,600.00/$1.00.

It said “We note that the spread between the NAFEM and parallel rates sustained its streak for the second week though the weekly average declined 98.8 percent to N27.40.

“In the week ahead, the Naira is likely to trade within a similar band across FX segments, supported by intensified regulatory spotlight, the analysts.”

In a press briefing held in Abuja, Hakama Sidi Ali, the acting director of corporate communications at the Central Bank of Nigeria (CBN), underscored a substantial increase in overseas remittances, surpassing four times the figures from the preceding month.

Ali emphasized the heightened interest of foreign investors in Nigerian assets, revealing investments exceeding $1 billion in February alone.

Additionally, she highlighted a positive trajectory in total portfolio flows for 2024, reaching $2.3 billion, showcasing promise compared to the $3.9 billion recorded for the entire previous year.

In addition, Ali highlighted that the momentum of increased foreign exchange inflows continued into March 2024.

This surge was attributed to a heightened investor appetite for short-term sovereign debt following adjustments to benchmark interest rates.

A significant development was observed in government securities issuances, with substantial oversubscription.

Foreign investors took a leading role, contributing to over 75 percent of the total bids received during auctions conducted on March 1 and 6, 2024.

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Adoption of AI Feature as NIPetGE Pays Courtesy Call at NNPC Ltd

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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.

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FHC Orders NUPRC to Comply with PIA

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Local Firms Lead Revival of Idle Oil Wells – SPE

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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.”

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