27 Mar

Daily Watch – Nigeria’s AGOA export surges, Addax CEO nabbed in Switzerland

  • Nigeria’s non-oil export to the United States under the African Growth and Opportunity Act policy has continued to lag, recording $1.141 million in 2016. According to the AGOA trade statistics, non-oil exports to the US under the policy fell by 23.5 percent from $1.491 million in 2015. This is as the oil export under the policy continues to take the centre stage, accounting for 99.9 percent out of the $3.475 billion in AGOA exports to the United States in 2016. In addition, Nigeria’s energy export to the United States under the policy boosted trade balance between the two countries, creating a trade surplus of $2.390 billion in 2016. In the same year, exporters of chemical products, agro-products, mineral and metals enjoyed a duty-free trade deal. Chemical products valued at $80,000 were exported to the US; agricultural products worth $1.05 million, mineral and metal worth $6000 and other export products valued at $1,000 were also exported. Overall, the total export under AGOA in Nigeria rose by 148 percent from $1.402 billion in 2015 to $3.475 billion in 2016. Nigeria led countries that benefitted from the tariff-free export opportunity last year with South Africa and Angola coming behind it. AGOA, which is a United States’ trade policy, was enacted in 2000 as a legislation facilitating trade between exporters from sub-Saharan Africa and the United States, duty-free. After much clamour from the beneficiary countries, the export opportunity was extended in 2015 by another 10 years. This was after completing an initial 15-year validity period.
  • The FG is targeting an investment inflow of ₦14.67 trillion before the end of the 2017 fiscal period, figures obtained from the Ministry of Budget and National Planning have revealed. The proposed investment inflow represents an increase from the ₦13.6 trillion recorded in 2016. A breakdown of the figure showed that the private sector is expected to make the highest form of investment in the 2017 fiscal period with ₦10.75 trillion, an increase of ₦596 billion over the ₦10.16 trillion which the sector made in 2016. Based on the plan, the Federal Government is expected to make a total investment of ₦2.05 trillion in 2017 as against the ₦1.58 trillion investment it made in 2016. For the state governments, the ₦1.85 trillion expected in 2017 is the same amount reported from last year.
  • Capital released to the country’s ministries and government agencies under the 2016 budget has reached a record ₦1 trillion ($3.3 billion), the finance minister said on Sunday. Development in Nigeria’s economy has been stunted by a lack of much needed investment to improve its ailing road, rail and electricity network. “With the current stability in the oil price and the return of normalcy in Niger Delta, I am sure we will do more this year (2017),” said Kemi Adeosun, after stating that 2016 capital spending was the “highest so far in the history of this country”.
  • The NNPC said on Friday it was set to recover $184 million in crude oil swap under-deliveries recorded against three oil companies during the now defunct crude for product swap system. Nigeria replaced crude oil swap deals with a system under which it will directly sell crude oil to refiners and purchase refined oil products from them in 2016. The NNPC is in the process of reconciling transactions made as part of the defunct system. The companies involved were AITEO Energy Resource, Ontario Oil and Gas and the Taleveras group.
  • The CEO and legal director of Addax Petroleum have both been arrested and charged in Geneva with suspected bribery of foreign officials, the spokesman for the Swiss canton’s prosecutor said on Friday. A criminal procedure has also been opened against the company – bought by China’s state-owned Sinopec, Asia’s largest oil refiner in 2009 – prosecutor’s spokesman Henri della Casa said. “I can confirm that the Geneva prosecutor has opened a criminal investigation into bribery of foreign officials and that the company Addax and its director-general and legal director are the subject of it,” della Casa said. Le Temps quoted Saverio Lembo, a Geneva lawyer for Addax CEO Zhang Yi, as saying: “My client vigorously contests the charges against him. He plans to defend himself. For the rest, we will not comment on the procedure under way.” A lawyer for Addax confirmed to Reuters reports in the Swiss daily, Le Temps, that the investigation was linked to activity in Nigeria, but would not comment further.