Capital repatriation lifts economy with $1.7b

Capital repatriation lifts economy with $1.7b, thanks to RT200FX scheme

By Jeph Ajobaju, Chief Copy Editor

A total $1.7 billion was imported into the economy in the first quarter of 2023 (Q1 2023), Central Bank of Nigeria (CBN) Governor Godwin Emefiele has confirmed.

He made the disclosure at the third Bi-Annual Non-Oil Export Summit in Lagos, where he also explained $970 million foreign exchange (forex) was sold into the Investors & Exporters (I&E) window.

The RT200FX programme of the CBN continues to positively impact the economy, he added, and warned shipping firms with undocumented cargoes from the country would be penalised.

“In the first quarter of 2023, a total of $1.7 billion was repatriated to the economy, while about $970 million was sold into the I&E window,” Emefiele said.

The CBN established the RT200FX initiative in February 2022 to stimulate non-oil exports with a $200 billion forex income target in the next three to five years.

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Oil and gas investment slides 74%

However, investment in oil and gas dipped 74 per cent between 2014 and 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed.

NUPRC Chief Executive Gbenga Komolafe, who made the disclosure at the Nigeria International Energy Summit in Abuja, said more than $27 billion invested in the sector in 2014 reduced to $6 billion in 2022 because of regional competition.

“Most of the international oil companies deprioritised Nigeria in their portfolios, leading to redirection of capital expenditure to other countries and attendant dwindling investment in Nigeria’s upstream sector,” he explained, per Daily Post.

“This under-investment is also reflected in the country’s rig count.

“On average, Nigeria had 17 active oil rigs in 2019, representing one of the highest counts on the African continent as at then. Nigeria’s average rig count declined to 11 in 2020, seven in 2021, 10 in 2022, but recently grew to 24 in April 2023, a positive signal of new investments trickling into the country.

“This is also a reflection of investors’ acceptance of effective implementation of the Petroleum Industry Act (PIA) by the regulator.

“In contrast, other OPEC member countries, such as Iran, Iraq, Algeria, Libya, Angola, had 117, 62, 31, 12 and nine active rigs, respectively, as of February 2023, as against Nigeria’s rig count, which stood at 13.”

Attracting more investment

Komolafe stressed the need for Nigeria to leverage on higher oil prices by doing all that is necessary to attract more investments and revive the upstream sector.

He stressed the need for oil and gas producers in Africa to embrace the reality of green transition and take strategic position to utilise opportunities presented by the unfolding era.

He sought climate action initiatives to reduce emissions reduction while ensuring Nigeria does not lose out in opportunities created by increasing demand for credit in Voluntary Carbon Markets.

“In response to dynamics of the energy transition and the global footprint, the NUPRC, as the industry regulator, has embarked on development of a regulatory framework for carbon-pricing system, to make businesses pay for their emissions and incentivise emission reductions through carbon credits.

“Accordingly, the Commission has risen to the occasion by establishing a new department, ‘Energy Transition and Carbon Monetisation’, saddled with regulation of the oil and gas carbon market and we will soon revert to the industry on proposed actions and measures in this regard.”

Komolafe disclosed Nigeria’s oil reserves reduced to 36.966 billion barrels in January 2023 due to a lack of investment in exploration.

Gas reserves, he added, stand at 208.83 trillion standard cubic feet.