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Government ends FX provision for mining companies in Sierra Leone. Here’s why

Published

3 years ago

May 14, 2022

Sierra Leone Petroleum Regulatory Agency has revealed that the country will no longer provide foreign exchange for mining companies and other large businesses to import oil as of June 1.

The stand was made known in a statement signed by Finance Minister Dennis Vandy on Thursday. The government accused the mining companies of “stockpiling diesel fuel”.

The policy directive is part of the government’s approach to mitigating the ongoing crisis in the country’s petroleum downstream sector, which has largely been attributed to the Russia-Ukraine conflict.

The statement also revealed that forex support by the Bank of Sierra Leone for petroleum product imports was estimated at $24 million in the first quarter of this year, and mainly benefited mining companies and other major commercial users.

“This situation is potentially getting serious as there is evidence that mining companies are stockpiling diesel fuel, constraining supply to the ordinary citizenry and small businesses,” The statement said.

According to the finance ministry, out of a total of 61,545,694 liters of diesel fuel uplifted by the OMCs between January and March, mining companies and other end-users uplifted 32,539,167, accounting for around 53 percent.

“This implies that while the government provides concessions to these agencies, they also enjoy non-pass-through costs as they are also heavily subsidized by the meager resources of foreign support by the Bank of Sierra Leone with the aim of cushioning the retail market,” The statement concludes.

Russia’s invasion of Ukraine in February has affected oil prices so much that prices soared to a 14-year high of $140 a barrel on March 7. The many effects of the war are felt across the world.

Related Topics:Featured Foreign exchange Sierra Leone

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

1 hour ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”

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Tanzania tells IMF economy projected to grow by 6% in 2025

Published

3 hours ago

December 20, 2024

Ifeoluwa Dada

Tanzania’s economy is expected to grow by about 6% in 2025 from an estimated 5.4% growth in 2024, its finance minister and central bank governor said in a letter to the International Monetary Fund (IMF).

Some of the potential risks to the performance in the near term would include intensification of regional conflicts, increased commodity price volatility, a global economic slowdown and natural disasters related to climate change, Finance Minister, Mwigulu Nchemba, and Central Bank Governor, Emmanuel Tutuba, said.

Real GDP increased by 5.3% in 2023 from 4.7% in 2022, propelled by private investments on the demand side and manufacturing, construction, and agriculture on the supply side.

Strict monetary policy and moderate food and energy prices contributed to the decline in inflation from 4.3% in 2022 to 3.8% in 2023. In 2023, the Tanzanian shilling lost 8% of its value due to a lack of foreign exchange.