The World Bank Group says a higher global inflation rate is ahead, noting the current oil price rise may continue into 2022, after recording 80 per cent higher this year than what it was in 2020.
The latest Commodity Markets Outlook released on Thursday reported the global lender as saying higher oil prices were also impacting food security in some countries already.
This came as Brent Crude prices hit $86.10 per barrel early on Thursday, jumping to the highest level in three years, before retreating to just above $85 amid profit-taking.
Experts said the reluctance of OPEC+ to pump more in the short term suggests that oil prices will remain well supported for the remainder of this year.
Although Nigeria has set a $57 per barrel benchmark for the 2022 budget, it is expected to produce 1.88 million barrels per day while targeting N3.16 trillion from oil proceeds.
The World Bank outlook indicated that energy prices soared in the third quarter of 2021 and are expected to remain elevated in 2022, adding to global inflationary pressures and potentially shifting economic growth to energy-exporting countries from energy-importing ones.
“Energy prices, expected to average more than 80% higher in 2021 compared to last year, will remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease.”
The global bank however feared that non-energy prices, including agriculture and metals, are projected to decrease in 2022, following strong gains this year.
Chief Economist and Director of the World Bank’s Prospects Group, Ayhan Kose, said, “The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries.”
Agric budgets hit N874.83bn, food imports gulp N7.81tn
The Federal Government budgeted about N874.83bn for the Federal Ministry of Agriculture and Rural Development from 2016 to 2021, whereas the imports of agricultural goods into Nigeria during same period were estimated at N7.81tn, checks by our correspondent showed.
It was gathered that the highest imports of agricultural goods into the country during the period under review were recorded in 2021, as products valued at N2.74tn were imported last year.
On the other hand, the least imports within the same duration were reported in 2016. Nigeria’s agricultural goods imports in 2016 were estimated at N656.4bn.
Operators in the agric business space frowned at the development, outlining a plethora of reasons for the massive imports when compared to what was budgeted and often not fully released to the agric ministry during the review period.
Data from the 2016 to 2021 budgets for the ministry indicated that the government budgeted about N874.83bn for the ministry to drive the country’s agricultural sector during the six-year period.
Whereas data analysed by our correspondent from 24 different quarterly reports obtained from the National Bureau of Statistics on ‘Foreign Trade in Goods Statistics’ with respect to the total imports of agricultural goods into Nigeria showed that N7.81tn was spent on food imports.
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An analysis of the budgets for the agriculture ministry showed that in 2016, the ministry got a budget of N46.17bn for capital projects and N29.63bn for recurrent expenditures, making it a total of N75.8bn for that year.
Its budget for capital projects in 2017 was N103.79bn, while both the combined capital (N118.98bn) and recurrent (N53.81bn) budgets for the ministry in 2018 was N172.79bn.
In 2019, the FMARD’s capital and recurrent budgets were N107.21bn and N57.68bn respectively, translating into a total of N164.89bn.
Its 2020 capital budget was N124.4bn with a recurrent budget of N58.69bn, making it a total of N183.1bn.
The ministry’s 2021 capital budget was N110.24bn. It got N69.22bn for recurrent expenses, bringing its total budget for last year to N174.46bn.
Meanwhile data from the Foreign Trade in Goods Statistics of the NBS on total imports of agricultural goods imported into the country last year was N2.74tn.
Figures from the bureau’s quarterly reports showed that in the fourth, third, second and first quarters of 2021, the agricultural goods imports were N667.16bn, N789.1bn, N652.08bn and N630.2bn respectively.
Food or agricultural imports in 2020 gulped N1.713tn, as the country spent N532.4bn, N503.4bn, N415.6bn and N261.4bn importing agricultural goods in Q4, Q3, Q2 and Q1 respectively in 2022.
A total of N959.48bn was spent on agro-commodities’ imports in 2019, with N233.3bn spent in Q4, N239.9bn in Q3, N249.95bn in Q2 and N236.33bn in Q1.
For 2018, agricultural goods imports consumed N851.7bn. The amounts spent on imports in the fourth, third, second and first quarters were N218.8bn, N224.3bn, N224.5bn and N184.4bn respectively.
The NBS put the total amount of agricultural goods imported into Nigeria in 2017 at N886.7bn. It stated this in its fourth quarter report for 2017.
The Q4 2017 report also revealed the total amount of agricultural goods that were imported into the country in the preceding year of 2016 was put at N656.4bn.
It was observed in the various quarterly reports that the major agricultural goods imported into Nigeria included Durum wheat, crude palm oil, palm olein, among others.
Operators in the sector decried the huge imports of agricultural products into Nigeria, attributing this to the myriad of challenges in the sector.
The National President, All Farmers Association of Nigeria, Kabir Ibrahim, told our correspondent that the drop in exports and huge imports were due to reduced productivity in Nigeria.
He said the lack of agro-inputs and insecurity were also major constraints confronting industry and its operators in Nigeria.
He said, “Our productivity has gone down now, which means that the quantity available to export has gone down and as such we have to rely on imports to meet local demand. This is worrisome to not just farmers but to every genuine stakeholder in the agricultural industry in this country.”
Regulatory Commission Dares Buhari, Rejects Sale Of ExxonMobil’s Assets
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rejected President Muhammadu Buhari’s assent to the acquisition of ExxonMobil’s assets by Seplat Energy.
A statement from the presidency on Monday noted that the Minister of Petroleum, President Buhari had granted assent to the deal in which Seplat will acquire a 40 per cent stake of ExxonMobil oil assets around Akwa Ibom.
The statement cited the Petroleum Industry Act (PIA) 2021, as an incentive to drive Foreign Direct Investment and raise oil production from the assets.
However, in a response to media enquiries on the latest development about the transaction, the Commission Chief Executive, NUPRC, Engr. Gbenga Komolafe, in a statement, Monday night, clarified that the Commission in line with the provisions of the PIA 2021 is the sole regulator in dealing with such matters in the Nigerian upstream sector.
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“As it were, the issue at stake is purely a regulatory matter and the Commission had earlier communicated the decline of Ministerial assent to ExxonMobil in this regard.
“As such the Commission further affirms that the status quo remains. The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector,” the NUPRC noted.
Daily Trust learnt that NNPC now NNPC Ltd had been in a tussle with ExxonMobil over the transaction insisting that it has the first right of refusal, being in a joint venture with Mobil.
The Akwa Ibom government had also scolded the international oil company for proceeding on the assets lay off without recourse to the state hosting them.
JUST IN: Air Peace Suspends Flights To South Africa Over Aviation Fuel, Visa Delay
Citing the increasing cost of aviation fuel and scarcity as well as the delay in the issuance of visa to intending passengers, Air Peace has suspended its flights to South Africa.
The suspension, which takes effects from August 22, is for a period of 60 days, the Airline said in a notice.
Daily Trust reports that domestic airlines had been forced to adjust their schedules over the recurring scarcity of Jet fuel as well as the skyrocketing price of the product.
But added to this, according to Air Peace, was delay by the South African authorities to issue visa to prospective passengers which was said to be affecting the load factor on Air Peace’s flight to Johannesburg.
Air Peace in the notice expressed optimism that the issues which warranted the suspension would have been addressed before October.
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It said, “We hereby inform the flying public that effective from August 22, 2022, our Johannesburg flight operations will be suspended till October 8, 2022.
“This development is regretted but has become inevitable due to the delayed issuance of South African visas to travellers, worsening forex crunch and the increasing cost of aviation fuel as well as its scarcity.
“However, having informed the South African High Commission in Lagos of the effects of the difficulty in getting SA visas by Nigerians, which consequence is the abysmally low passenger loads on our flights to and from Johannesburg, we believe that the situation will have improved within the next 60 days. Hence, our willingness to resume operations on the October 8, 2022.
“Passengers whose flights are affected have the option of rescheduling to fly before August 22, 2022 or from October 9, 2022. Passengers can also request a refund…
“We apologise for the inconveniences caused and will keep the public updated while we hope the situation improves.”
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