Nigeria will need more than oil to lift economy
Nigeria will get another chance this year to lay the building blocks of a long-touted transition away from oil and finally set the economy on the path to robust growth. There is a consensus among development economists and analysts that Africa’s largest economy is due for a new growth driver after several years of gorging itself on petrodollars. “As the world shifts its attention to non-fossil energy sources, it is important that Nigeria gets its non-oil economic strategy right,” analysts at FBNQuest said. A non-oil economic strategy is simply a growth strategy that is not dependent on oil and it could mean either of several things, according to economists polled in a BusinessDay survey. It could mean an investment-led growth whereby the government goes on an energetic pursuit of private capital to plug the gaps in infrastructure and several sectors of the economy. This would mean that the several challenges confronting the ease of business in the country are tackled once and for all, according to Muda Yusuf, former director-general of Lagos Chamber of Commerce and Industry (LCCI). “If there were any doubts before, it is now well known that the government alone cannot create jobs for our fast-growing population and reduce poverty because it doesn’t have the resources,” Yusuf told BusinessDay. “It is time we tried a more viable approach which is to allow the private sector to play the lead role while the government creates an enabling environment rather than compete with or stifle the private sector,” Yusuf said. The private sector is the primary source of jobs the world over, even in Nigeria.
Here is why oil price hits $80 in first week of 2022
The decision of the Organisation of Petroleum Exporting Countries (OPEC) and its allies known as OPEC to add another 400,000 barrels per day to its total oil production in February is having a multiplier effect on the international market as oil price hits $80 for the first time in 2022. On Tuesday, Brent crude climbed 1.09 percent to $80.07 a barrel — the highest since November 2021 while the U.S. West Texas Intermediate (WTI) crude futures also witnessed a corresponding increase of 1.05 percent to $77 a barrel. “The oil market is bullish today as a result of optimism sourced from today’s monthly OPEC meeting, which is helping oil prices trade higher,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen told Reuters. Four OPEC sources told Reuters that the group agreed in their meeting on Tuesday to add 400,000 barrels per day (bpd) to output in February because it expects the Omicron variant to have a short-lived impact on demand. “Though Omicron cases continue to climb in key geographies, the absence of widespread lockdown restrictions will likely keep near-term demand concerns in check,” RBC analysts said in a note. As oil prices continue to rally more recently, Nigeria’s expenses on fuel importation continue to dampen potential market advantages attached to the price increases. Increased global price of crude oil may not feed into significant economic outcomes for Nigeria since the country’s financing on the imported resource is unsustainable and domestic refineries are currently aground.
Read also: Oil and global market update
Covid-19 variant detected in France not a threat, WHO says
The World Health Organization (WHO) on Tuesday said the coronavirus variant found in France has not morphed into a threat since it was first identified in November. The variant was identified in 12 people in the southern Alps around the same time that omicron was discovered in South Africa last year, according to Time. Omicron mutation has since travelled the globe and kindled record levels of contagion, unlike the French one that researchers at the IHU Mediterranee Infection, led by scientist Didier Raoult, nicknamed IHU. The variant “has been on our radar,” Abdi Mahamud, a WHO incident manager on Covid, said at a press briefing in Geneva on Tuesday. The first patient identified with the variant was vaccinated and had just returned from Cameroon, IHU researchers wrote in a paper published on the medRxiv server in late December where they first drew attention to the atypical mutations. It’s “too early to speculate on virological, epidemiological or clinical features of this IHU variant based on these 12 cases,” they wrote in the article, which hasn’t been peer reviewed. Raoult stirred controversy in the early stages of the pandemic by recommending treatment with hydroxychloroquine. The WHO monitors multiple variants, and when it finds one may pose a significant risk, it declares it a “variant of concern.” This one is only under investigation.
Nigerians to pay more on non-alcoholic, carbonated beverages
Beginning this year, Nigerians will be expected to pay tax on consumption of non-alcoholic, carbonated, and sweetened beverages as contained in the new 2021 Finance Bill currently before the National Assembly. This is part of the government’s policies to ramp up low revenues, which authorities say pose major fiscal constraints along with ballooning debt. Zainab Ahmed, minister of finance, budget, and national planning, disclosed this during the public presentation and breakdown of the highlights of the 2022 budget in Abuja on Wednesday. The government has concluded plans to end fuel subsidies by July 2022, paving the way for the full implementation of the Petroleum Industry Act (PIA), the minister disclosed. “We have only provided a subsidy for petrol from January to June,” she responded to a question at the event, “And that means that from July, there is no provision that we made for fuel subsidy. “Our assumption is that by June, we would have been able to work through a process together with all stakeholders including the National Oil Company, all the regulators in the oil and gas sector, different MDAs that have a role to play as well as businesses and labour organisations.” Moreover, by removing subsidies the government is only complying with the PIA, which specifies that all petroleum products should be deregulated. She, however, said there were also other proposals in this regard, including identifying through the transparent workers union, commercial vehicle drivers, get them registered and pass the subsidies through them using vouchers. The minister also explained that while revenue currently remained the major challenge of the government, efforts were ongoing to ensure effective implementation of the strategic revenue growth initiatives to improve revenue collection, expenditure management, and fiscal sustainability.
Inside Mafab’s plan to become major Nigerian telco
After emerging as one of the two provisional winners of the 5G spectrum licence, Mafab Communications has set out plans to become a major Nigeria’s telecommunications operator, according to a proposed document seen by BusinessDay. In the document, the company discloses it is going to the market to raise $350 million via equity to finance the cost of the spectrum licence and other associated projects costs. The little known telecom operator is hoping to complete the funding before the licence fee deadline. The Nigerian Communications Commission (NCC) had noted that the two winners were expected to complete payment of the winning bid price for the auction at $273.6 million for each lot of 100 MHz TDD licence by February 24, 2022. That means Mafab Communications has less than seven weeks to come up with the money. In the document, Mafab is not only looking to raise $350 million via equity, but also intends to raise $1.59 billion via debt to complete a total of $1.9 billion funding activity. Mafab plans to offer 70 million units of its shares at N5 for equity funding. The company has a broad target of deploying into over 6,000 sites within a five-year period. Sites here may refer to the 40,000 base transceiver sites that are located in different parts of Nigeria. It intends to deploy into 1,000 sites in the first year, 2,500 in the second year, 4,000 in the third year, 5,000 in the fourth year, and 6,000 in the fifth year. Within that timeline, the company also hopes to have grown its subscriber base to 7.5 million. To achieve the targets, it has itemised three strategies – first of which is to secure the licence for 5G, the second is to obtain 3G and 4G deployment licences, and the third strategy involves the acquisition of operational assets such as a full Network Functions Virtualisation (NFV) architecture and modular data centres.
Buju acquires music NFT as Afrobeats meets the metaverse
On new year day, 2022 Nigerian music artist Daniel Benson popularly known as Buju announced on his Instagram page the launch of the Non-fungible token (NFT) music collection on the metaverse community. This is the first by a Nigerian artist and he names the project ‘Heads by Buju’. According to the artist on his Instagram post, “My NFT project @headsbybuju which gives everyone the opportunity to connect with me on a deeper level and experience so much more music and creativity on the metaverse is launching and I want you to be part of it,” Benson said. He also stated that he’ll be giving out free NFTs to lucky fans that join the community. “I’m giving out 20 ‘Buju heads’. The first 1000 people who join the community qualify for a draw to win this,” he added.
The singer urged his fans to join the space to explore incredible things that can be achieved in the metaverse. Non-fungible token (NFT) is a digital asset that serves as a secure record of ownership for an item or collection of items, stored on select blockchain ledgers such as Ethereum and Solana. In this case music collections. The music industry has always been heavily reliant on technology. Technological innovations have influenced how music is made, played, stored, distributed, and enjoyed, from the first discs to streaming services like Spotify, Apple Music, Boomplay, and so on, from the birth of record changing to the rise of modern electronic sound.
