Business
Tanzania: Taking Steps to Enhance Fiscal Sustainability
DAR ES SALAAM – A team from the International Monetary Fund (IMF), led by Paolo Mauro, visited Tanzania during February 12–25, 2014. The mission completed the assessment of the recent performance under the Standby Credit Facility (SCF) and discussed a possible new Policy Support Instrument (PSI) program.i The mission met with Hon. Saada Mkuya Salum, Minister of Finance, Professor Benno Ndulu, Governor of the Bank of Tanzania, and other senior government officials.
Mr. Mauro released the following statement at the end of the mission:
“Performance under the government’s IMF-supported SCF program has been broadly favorable. Economic growth remains strong. With continued prudent monetary policy and benign developments in food prices in the region, inflation is expected to further moderate by mid-2014 to the medium term target of 5 percent. The current account deficit widened further in 2013, as the global prices of gold and traditional exports weakened.
“Fiscal pressures last year (fiscal year 2012/13, July to June) resulted in the ceiling on net domestic financing agreed under the government’s IMF-supported program being breached by 1.2 percent of GDP. During the current fiscal year (2013/14), revenues are falling short of the assumptions embedded in the budget approved by Parliament. To attain a fiscal deficit close to the 5 percent of GDP target in the budget, the government has been appropriately cautious in releasing funds for budget implementation. The upcoming mid-year budget review is expected to reduce expenditure allocations to align these with available resources. Meanwhile, expenditure arrears have increased considerably, especially for road projects. To preserve the credibility of fiscal policy, further policy measures are needed to avoid the accumulation of new arrears and to clear existing ones after verification.
“Preserving macro-economic stability is necessary for rapid growth to continue in the medium term. The key challenge is to preserve fiscal space for infrastructure investment and priority social spending while gradually reducing the fiscal deficit to maintain debt sustainability. The government’s tax policy reforms under preparation, including a review of the value added tax, have the potential to improve efficiency and to mobilize additional resources while sharing the burden more fairly. Nevertheless, the revenue shortfalls and subsequent expenditure compression experienced during the current fiscal year reinforce the importance of making realistic revenue assumptions during the upcoming budget cycle.
“Agreement was reached at the technical level on policy measures that, once endorsed by the Government, would permit concluding the final review under the SCF, subject to approval by the IMF’s Executive Board. Broad agreement was also reached on the general outlines of a program that could eventually be supported under a new PSI, once detailed discussions are completed.
“The next IMF Executive Board meeting is tentatively planned for late April 2014.
“The IMF team is appreciative of the constructive and open policy dialogue and thanks the authorities for their warm hospitality during the visit.”
i The SCF supports low-income countries that have reached broadly sustainable macroeconomic positions, but may experience episodic, short-term financing and adjustment needs, including those caused by shocks. The SCF supports countries’ economic programs aimed at restoring a stable and sustainable macroeconomic position consistent with strong and durable growth and poverty reduction. It also provides policy support and can help catalyze foreign aid. The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF’s Executive Board, signal to donors, multilateral development banks, and markets the Fund’s endorsement of a member’s policies.
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.”





