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Nigeria’s intra-Africa trade increased by 40.8% to N1.84 trillion

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Nigeria’s trade with the rest of Africa increased from N1.306 trillion in 2022 to N1.839 trillion in the first half of 2023.

The increase represents a 40.8 percent Year-on-Year (YoY) in the first half of 2023, a reversal in the declining trend of the nation’s intra-African trade over the same period since 2020, in terms of value.

According ro the National Bureau of Statistics (NBS) Nigeria’s intra-African trade in H1’21 amounted to N1.47 trillion out of total foreign trade of N21.79 trillion; and N1.67 trillion in H1’20 out of N14.55 trillion total foreign trade recorded within the period.

The NBS data on Nigeria’s external trade with the rest of Africa also indicates that the intra-Africa trade is gaining more ground against total foreign trade recorded by the country in the past three years.

The National Bureau of Statistics (NBS) reports that Nigeria’s intra-African trade totalled N1.47 trillion in H1’21 and N1.67 trillion in H1’20 out of the total international trade recorded during those period, which was N14.55 trillion.

The NBS statistics on Nigeria’s external trade data with the rest of Africa also shows that intra-African trade is growing faster than overall international trade recorded by the nation during the previous three years.

The N1.839 trillion recorded in H1’23 represents 7.42 percent of the total foreign trade of N24.789 trillion recorded in the period.

Comparatively, the N1.306 trillion recorded in H1’22 represented 5.05 percent of the N25.843 trillion total foreign trade during that time; the N1.47 trillion recorded in H1’21 represented 6.75 percent of the N21.79 trillion total foreign trade during that time; and the N1.67 trillion recorded in H1’20 represented 11.48 percent of the N14.55 trillion total foreign trade during that time.

About 7.42% of the N24.789 trillion in total foreign trade that was registered throughout the period, or N1.839 trillion, was transacted during H1’23.

Africa’s GDP and its internal trade expanded fourfold over the past two decades, according to the report, which suggests that that intra-African trade is more resilient than exchanges with other regions of the world,

Africa’s trade and regional integration face several obstacles. Transportation and communication infrastructure for intra-African trade is less developed than those that connect Africa to the rest of the world.

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Finally, Dangote refinery set to commence operations as first crude shipment arrives

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Nigeria’s privately-owned Dangote refinery has received its first cargo of 1 million barrels of crude oil from Shell International Trading and Shipping Co. (STASCO).

In a statement released on Friday, Dangote Group said that the first of six million barrels of crude that would allow the refinery to make its first run came from Agbami, a deep water field operated by Chevron (CVX.N).

This will pave the way for the refinery to begin production of Premium Motor Spirit, diesel, aviation fuel, and liquefied Petroleum Gas.

The refinery was set to begin production in August but failed to. This raised concerns, as it had missed multiple deadlines over the years.

An agreement was signed in November by Nigeria’s state oil company, NNPC Ltd, to begin supplying the Dangote refinery with up to six cargoes of crude oil beginning this month. NNPC owns 20% of the refinery.

Nigeria is the largest oil producer in Africa, yet it frequently faces fuel shortages. It imports roughly 33 million litres of petroleum products per day, and spent $23.3 billion last year. None of Nigeria’s publicly owned refineries has worked to capacity for years, despite several investments to revive them. The failure of both the previous and current governments has contributed to the high level of national anticipation surrounding the Dangote refinery.

“Our focus over the coming months is to ramp up the refinery to its full capacity,” Dangote was quoted as saying in the statement.

Nigeria increased its output by 60,000 barrels per day to produce 1.49 million barrels of oil per day in October, the most in almost two years. Through a joint venture, the West African nation has introduced a new grade of crude known as Nembe as it increases its oil output.

More than 135,000 permanent jobs and 12,000 megawatts of electricity are anticipated to be generated by the Dangote refinery. Additionally, Nigeria would save $25–30 billion in foreign exchange annually. It is anticipated to bring $10 billion annually into the economy.

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Nigeria’s energy crisis increases production costs by 40%— Report

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A recent report by Nanyang Technology University’s Centre for African Studies has revealed that Nigeria’s poor electricity contributes to up to a 40% rise in the cost of manufactured products.

Nigeria’s manufacturing sector can employ a larger share of the labour force, and has far higher productivity than agriculture, according to a report titled “Back to Growth: Priority Agenda for the Economic Revival of Nigeria,” which was recently presented in Lagos by the author and Director of the Centre, Amit Jain.

“Electricity blackouts, together with transport bottlenecks, crime, and corruption, are among the key impediments to firm growth. Outages and voltage fluctuations are commonplace.

“This damages machinery and equipment. Consequently, most firms rely on self-supply of electricity through the use of generators, which increases the cost of production and erodes competitiveness”, the report said.

Nigeria’s underdeveloped power sector makes it difficult for the country to achieve widespread economic development and compels the majority of companies to produce a sizable amount of their own electricity. The nation has recently seen the departure of well-known companies due to growing operating expenses.

Given the challenges in ensuring steady power supply throughout the nation, the report suggested the government look into creating industrial clusters. The primary advantage of clustering businesses, according to the report, is that it makes it possible to prioritise infrastructure development in order to give businesses a competitive edge while providing access to resources like raw materials, skilled labour, and technology.

It read further, “The clusters should ideally be located within zones that are well connected with roads, power lines, and telecommunications.

“Although Nigeria has scored some success with informal clusters, such as the computer village in Otigba, Lagos; the auto and industrial spare parts fabricators in Nnewi; the leather tannery in Kano; and the footwear, leatherworks, and garment cluster in Aba, very few are working to their full potential.

“Lack of coordination between the federal and state governments and patchy implementation of industrial policy has meant that the infrastructure required to attract manufacturing investment is inadequate.”

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