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Oil Discovered in Nigerian North East Basin

The Minister of State for Petroleum has disclosed the finding of one billion barrels of oil reserves in North Eastern Nigeria. It is noteworthy that Chad and Cameron, nations in the same basin have combined oil reserves of approximately 1.7 billion barrels. This discovery could mean that the area may be classified as a potentially prolific oil producing region in West Africa.

CBN restricts forex access for import of milk & dairy products

In continuation of its policy of import substitution and forex intervention, the CBN has increased the list of items prohibited from accessing the foreign exchange market. The latest addition are milk and other dairy products. It is estimated that these account for approximately $1.2bn of Nigeria’s import bill. The difference between prior restrictions and this is that six major corporates have been allowed to import these items. The privilege is because the companies have demonstrated a commitment towards backward integration and have a huge work force.

OPEC cuts production limits

In the last four weeks, the growing menace and contagion of Covid-19 has rattled global markets. Fears of a slowdown in China’s growth and oil demand prompted the OPEC Technical Committee to call for additional output cuts of 600,000 barrels per day. This will bring the total production cuts to 2.3mbpd. It is therefore possible that Nigeria’s current quota of 1.7mbpd could be reduced. This will have a negative impact on the country’s fiscal and forex revenues.

In this edition of the FDC monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.

Enjoy your read.