Nigeria Sees End to 2014 Budget Wrangling Before Easter
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Nigerian Central Bank Will Keep Policy Tight, says Finance Minister
LinkFrance Renews Investment Drive in Nigeria, Launches French-African Foundation for Growth
LinkFrance Renews Investment Drive in Nigeria, Launches French-African Foundation for Growth
Minister of Finance, Dr. Ngozi Okonjo-Iweala
- Okonjo-Iweala says France has ‘reshaped’ its investments in Nigeria
Ndubuisi Francis
With the world increasingly seeing Africa as the preferred investment destination, France has launched the French-African Foundation for Growth, a new initiative designed to renew economic ties between the European nation and the African continent.
The Foundation’s headquarters is to be based in Nigeria, with the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala already applauding France’s reinvigorated interest in Africa.
The Foundation was formally launched in Abuja at the weekend by the French Minister of Economy and Finance, Pierre Moscovici and her Nigerian counterpart Okonjo-Iweala.
African ministers of finance and planning participating at the just ended 7th Joint Annual Meetings of the United Nations Economic Commission for Africa (UNECA) as well as the Deputy Secretary-General of the United Nations, Mr. Jan Eliasson were in attendance.
Export Week: Making money from MINTS
LinkExport Week: Making money from MINTS
Ahead of Export Week (April 7 and 11), UKTI and Swindon Business News have teamed up to offer expert advice in a series of features, kicking off today with UKTI International Trade adviser Patrick Bos looking at the opportunities in the MINT countries
For those of you who have taken up the export challenge in recent times, you will no doubt have heard the world talking about the BRIC markets (Brazil, Russia, India and China) and how these powerhouse economies hold the key to a profitable future.
The economist Jim O’Neill, responsible for introducing the term BRIC back in 2001, has been at it again and ha
s a new term for us all to learn – the MINT countries.
Mexico, Indonesia, Nigeria and Turkey (MINT) are the new kids on the block and considered by many, including O’Neill, as the emerging economic giants. It’s true to say that over the past decade British companies have fallen behind their European and global counterparts when it comes to trade and investment. Many nations are enjoying far more fruitful relationships with the BRIC countries and to keep the UK economy growing we must exploit more export opportunities.
So why focus on these four new markets?
The MINT countries have a few key themes in common; young populations, useful geographic placement, and (Turkey excepted) by being commodity producers. These characteristics echo those that made their BRIC predecessors so successful and for this reason it’s important that British businesses are quick off the mark to ensure that they’re strategically positioned to get an equal piece of the pie this time around.
Let’s take a closer look at each of the MINT markets and what makes them so special.
Mexico
Mexico has the distinct advantage of being neighbours with both the US and Latin America and this can only be a benefit as patterns of world trade change. With an average age of 27, it boasts a rapidly growing young population from which we are already seeing a large rise in domestic consumption, with a clear appetite for British products and services.
Many large original equipment manufacturers (OEMs) are choosing Mexico as a base, which has created significant supply chain opportunities for smaller companies. This, complemented by a well-educated workforce, has meant that Mexico is now moving up the value chain – away from the traditional maquiladoras (assembly plants) and textile industries into engineering, IT, research and development, and the creative industries.
Driven forward by its young president Enrique Peña Nieto and his equally young colleagues this is a market that means business and where expectations are high.
Indonesia
With a population of more than 251m, Indonesia has a growing, and affluent, middle class, which is estimated to be at least 35m strong. This young population is earning more money each year and figures show that these individuals aren’t afraid to spend their new found wealth. Young adults are no longer commuting on bicycles; instead they are buying cars.
The largest economic sector in Indonesia is manufacturing and processing, which contributes around 24% of the Gross Domestic Product (GDP). Some major industries in this sector are food and beverages, machinery and transportation, chemical and textiles. Other significant sectors include agriculture and hospitality.
Although there are always risks, the opportunities in Indonesia are good if businesses go about it the right way. There is a massive requirement for infrastructure development in Indonesia and opportunities could easily rival those of the BRICs.
Nigeria
If recent reports are true, Nigeria could soon become the biggest economy in Africa, overtaking South Africa for the honour. The Nigerian government has worked hard in recent years to transform the economy through structural reforms that have been aided by high oil prices.
With a population of more than 160m people, Nigeria is an increasingly important market for British companies and the UK is already one of the largest investors, in sectors from oil and gas to financial services, to agriculture.
For years Nigeria, along with Kenya, has been touted as the best country to profit from rapidly developing African economies. There are considerable challenges here, from corruption to theft, but Nigeria is a high-population market of growing wealth and opportunity.
Turkey
If Turkey can sort out its political problems the country could one day become one of the fastest growing European economies.
Nearly half of its 80m population is under the age of 25, and Turkey is positioned sweetly between Europe and Asia with the potential to act as a gateway to the Middle East.
Its recent economic growth record and its talented, young workforce offer a compelling background for UK and European trade and investment.
Like any new market, if you want to be successful and fully realise your potential in Turkey, it’s crucial to understand the culture of the market and how business operates locally.
Getting it right in the MINT markets
The new hype around the MINT markets has admittedly got me quite excited about the potential for lucrative new trade agreements, but I strongly recommend that anyone considering trading with or in these countries should always look at each on their merits, because they are varied and require a separate approach.
As an International Trade Adviser for UK Trade & Investment I’m always happy to discuss how export can help you to grow your business, whether you’re new to international trade or are an experienced exporter.
Border Cities Focus on Economic Growth, Infrastructure Despite Drug War
LinkProgress in spite of peril? That’s how you can tell that an economy and a country are growing for the better.
Nigeria could be World’s 15th largest economy by 2050, says economist
LinkNigeria could be World’s 15th largest economy by 2050, says economist
From the mouth of MINT creator Jim O’Neill.
Nigeria could be World’s 15th largest economy by 2050, says economist
Published: March 20,2014
“You have one ingredient in a very substantial way; you have a large and young population that is outstanding significantly,”
A former Chairman of Goldman Sachs Asset Management, Jim O’Neill, said Nigeria could be the world’s15th largest economy if its large population actively participated in economic development.
Mr. O’Neill made the prediction at the ongoing 20th Nigerian Economic Summit in Abuja on Thursday.
The theme of the summit is “Transforming Education through Partnerships for Global Competitiveness”.
He said that events in Brazil, India, Russia, and China had shown that with their large populations, they could engage the world. He said economic growth was driven over a long term by population and productivity.
Mr. O’Neill said that with all available indices, Nigeria had already been listed among the expected 15 largest economies by 2050.
“What you are seeing today is the list of the 15 largest economies by 2050 and Nigeria is there. This means that Nigeria can be the 15th largest economy by 2050.
“You have one ingredient in a very substantial way; you have a large and young population that is outstanding significantly,” he said.
According to him, if the population is properly harnessed, Nigeria will make it to be the 15th largest economy by 2050.
The management consultant, therefore, urged the Federal Government to ensure that all the strategies it had put in place to drive the economy were implemented.
He said that the Growth Environment Score, GES, had indicated that the largest economies in the world also had large population growth. He noted that the countries that formed 11 largest economies in the world contributed 70 per cent of the world population.
“So, if the 15 countries can do the right things and improve productivity, the world will be diversified and be better.
“There are various variables to help them and education is one of them,’’ he said.
Mr. O’Neill also charged the government to strive to improve power supply in the country, adding that the country should emulate South Korea, which shared similar indicators with it.
“Today, South Korea has the wealth of a level which is very similar to the so-called G-7 developed nations.
“They are the only large population which has made that change in my life time.
“So, where they did well, you can emulate, harness and develop your society along those lines and you will get to be where they are today,” he said.
He said that the South Korean situation was possible in Nigeria because the country had more than two times Korea’s population, adding that by 2050, Nigeria would be six times more and wealthier than South Korea.
He noted that no fewer than 45 million people in South Korea had access to modern technology which they used in helping the growth of the country’s economy.
“If 170 million population of Nigeria is given that tradition, especially the young people, it is a huge change influence, and the second aspect is power.’’
Mr. O’Neill called for more trade among neighboring countries in Africa in order to improve economic activities in the region.
According to him, if Nigeria can trade with other African nation, it will be more self-fulfilling.
He added that “everything else is education; get all your young people into proper education to give them chance to develop their skills to contribute to growth and development of the economy.
“This may determine if you will be the 15th largest economy in the world by 2050.”
(NAN)
U.S. to provide $257,000 grant for Nigeria gas project
LinkU.S. to provide $257,000 grant for Nigeria gas project
U.S. to provide $257,000 grant for Nigeria gas project
The U.S. Trade and Development Agency (USTDA) is to offer $257,000 (about N39.84m) grant for a feasibility study for a gas-based industrial complex project in Nigeria.
The U.S. Consulate-General in Lagos in a statement on Wednesday said the grant was aimed at building business relationships between the U.S. and Nigeria’s emerging petrochemical industry.
The statement said that a ceremony to sign the deal would take place on March 20 at the U.S. Consul-General’s residence at Ikoyi, Lagos.
“Under the agreement to be signed, USTDA is providing $257,000 for the study.
“The study will evaluate various types of facilities which could produce different chemical outputs, including methanol, fertiliser, chemicals and petrochemicals.
“The study will also develop a simulation model that will provide the grantee with recommendations on which of these facilities should be included in the project.”
According to the statement, the study will include a market survey on the current demand of the different chemical outputs which can result from the project.
The statement said that the market survey would assess domestic and international markets for the potential chemical outputs from the facilities.
It explained that the study would provide the grantee with training related to the international fertiliser and petrochemical industry as well as the economics of fertiliser and petrochemical production.
“The project holds the potential to generate significant U.S. exports of goods and services between the U.S. and Nigeria’s emerging petrochemical industry,” it said. (NAN)
Source: Daily Independent
AEC to Boost Indonesia’s Tourism Sector
LinkAEC to Boost Indonesia’s Tourism Sector
AEC to Boost Indonesia’s Tourism Sector
Jakarta. Indonesia expects the implementation of Asean’s common visa will attract more foreign tourists to the archipelago.
The common visa, which grants visitors the right to enter any country within the Southeast Asian block using one single permit, will be implemented in conjunction with the Asean Economic Community on Dec. 31, 2015.
“The AEC could potentially boost tourism growth to over 10 percent from the current pace of 9 percent. The common visa will make it easier for tourists to travel to Indonesia,” Tourism and Creative Economy Minister Mari Elka Pangestu said on Tuesday.
Some 8.8 million foreign tourists visited Indonesia last year, up 9.2 percent from a year earlier, data from Central Statistics Agency showed.
Mari said a common visa could encourage tourists from across the region to visit Indonesia via certain transit locations, such as Singapore and Bangkok.
The minister expected all of Asean’s members to agree on the common visa before the AEC in 2015, with the latest country, Myanmar, to also weigh in this year.
The Asean tourism sector grew at an annual average of 8.3 percent between 2005 and 2012 and expanded 12 percent last year. If growth continued at its current pace, Mari said, the industry will be worth $480 billion over the next decade.
“This is why we should take the opportunity to strengthen our economy,” she said, adding that tourism contributes 3.8 percent of Indonesia’s $900 billion gross domestic product. The minister said the country is very competitive in terms of natural and cultural attractions for travelers.
Still, it lacks infrastructure, especially in transportation, to cope with a rising influx of visitors.
Edimon Ginting, deputy country director for Indonesia at the Asian Development Bank’s Indonesian Resident Mission, said the government needs to boost development of infrastructure ahead of the AEC.
“The government should respond quickly, they must see the AEC as encouragement to rapidly enhance and add to the country’s infrastructure in the next year,” Edimon said.
Nigeria giving SA a run for its money
LinkNigeria giving SA a run for its money
Nigeria giving SA a run for its money
March 17 2014 at 07:46pm
GCIS
President Jacob Zuma and Nigerian President Goodluck Jonathan during state visit to South Afria last year by the Nigerian president.
On March 31 Nigeria is going to shoot past South Africa to become the largest economy in Africa, says Peter Fabricius.
GDP – Gross Domestic Product – has always seemed to be one of the most objective measures of a country, like population size or land area. Turns out that it’s not. There isn’t, after all, a gynormous till somewhere at the Reserve Bank that automatically rings up every single commercial transaction in the country to total the nation’s GDP.
It is instead based on certain assumptions, not least how much weight the gnomes who calculate such things assign to different sectors of the economy.
That’s why Nigeria is going to shoot past South Africa to become the largest economy in Africa on March 31. Nigeria is rebasing its calculation of GDP, from the current base of 1990 to 2010.
That means, essentially, that GDP will give greater weight to new sectors of the Nigerian economy that have become more important since 1990 such as telecoms, IT, Nollywood and the rest of the entertainment industry.
Nigeria’s nominal GDP is now about $305 billion and South Africa’s about $350 billion. Rebasing will boost Nigeria’s GDP by 40 to 60 percent, according to Bismarck Rewane, MD of Nigeria’s Financial Derivatives Company, speaking at a seminar on the subject at the Gordon Institute of Business Science this month.
That means Nigeria’s GDP will immediately expand to somewhere between $427 billion and $488 billion, leaving South Africa a distant second.
What will that mean for both countries?
Rewane thought it would be mostly good for Nigeria, lowering its debt and fiscal deficit ratios and boosting investment.
On the downside, it would widen inequality and by lifting Nigeria from an officially low-income to a middle-income country, would reduce the amount of foreign development aid it received.
And for South Africa?
Well, clearly it will lose its coveted bragging rights as Africa’s largest economy. That will be particularly galling to some in the government and elsewhere who regard Nigeria as a rival.
Some fear that South Africa might also lose its position as Africa’s – unofficial – representative at international organisations like the G20 and Brics.
The consensus at the seminar, however, seemed to be that, if anything, Nigeria might become Africa’s second representative in those clubs, which would be a good thing.
In any case, the G20 and Brics would probably be reluctant to kick South Africa out.
Likewise, if the UN Security Council is ever expanded and two new permanent seats are created for Africa – as Africa wants – there should be no problem. If Africa gets only one seat, Nigeria’s chances of winning it will presumably now be improved.
Economically the impact on South Africa is harder to assess. Rewane suggested that when Nigeria became number one, “South Africa’s anaemic economy and faltering currency may appear less appealing” to investors.
However, Annabel Bishop of Investec Bank and Yvette Babb of Standard Bank did not forsee any great economic impact on South Africa.
Both pointed out the advantages that South Africa would continue to enjoy as the main gateway to Africa, including superior infrastructure, institutions, and financial systems and a vastly bigger capital market of about $1 trillion compared to Nigeria’s $100 billion.
A Nigerian in the audience objected that his country was being painted almost as a failed state, ignoring its high education standards and the dynamism of its entrepreneurs.
By contrast South Africa had been “almost a banana republic” last year as strikes had crippled the economy.
Babb insisted she was merely presenting a nuanced picture and that Nigeria would have to improve institutions and infrastructure if it was really to boom.
Ade Ayeyemi, a Nigerian who heads Citibank’s sub-Saharan operations from Joburg, had the second-last word, saying it was a quibble whether Nigeria or South Africa was the biggest.
“We’re all pygmies in Africa. We need to join forces to make Africa as a whole more attractive.”
The last word came from Lyal White of the Gordon Institute of Business Science who proposed that being overtaken by Nigeria would be good for South Africa, jolting it out of its complacency and spurring it on to greater things.
* Peter Fabricius is Independent Newspapers’ foreign editor.
Mexico’s Pemex mulls crude imports, more exports to India, Japan
LinkMexico’s Pemex mulls crude imports, more exports to India, Japan
Mexico’s Pemex mulls crude imports, more exports to India, Japan
BY DAVID ALIRE GARCIA AND ANA ISABEL MARTINEZ
MEXICO CITY Mon Mar 17, 2014 11:00am EDT
The logo of Mexican petroleum company Pemex is seen at their gas station in Mexico City November 23, 2012.
CREDIT: REUTERS/EDGARD GARRIDO
(Reuters) – Mexico’s Pemex PEMX.UL is considering crude imports to boost local refinery output, but at the same time, it expects to sell more oil to India and Japan to diversify its exportmarkets.
The state-owned company could begin imports of light and intermediate crudes as early as this year to improve production of higher-value refined products like gasoline, Jose Manuel Carrera, chief executive officer of its P.M.I. Comercio Internacional oil trading arm, said in an interview.
Mexico, the world’s 10th-largest crude oil producer, has very rarely imported thecommodity, instead preferring a decades-long self-sufficiency. Still, it must import about half of its gasoline due to flagging refinery output at home.
“Pemex is analyzing in great detail how to optimize the diet of its national refining system with imported crudes … both light and intermediate,” Carrera told Reuters.
P.M.I. officials say crude imports would not exceed 20 percent of a refinery’s crude-processing capacity.
The company also aims to produce less fuel oil as Mexico’s power sector increasingly substitutes cheaper natural gas for the generation of electricity, said Carrera.
“Given the changing structure of demand in Mexico, it’s important to adjust the diet of our refineries,” he added.
Carrera said the timing of any crude imports remained unclear. He emphasized that P.M.I. was looking at light and intermediate grade crudes from West Africa, Colombia and the Middle East, not just the United States.
The head of Pemex’s refining unit said last year that any light crude imports to boost fuel output would only make sense in the next few years, before major new upgrades are completed.
Sector analysts say those projects, a $11 billion push to install deep conversion coking units at the company’s three biggest refineries, will probably be delayed through 2020.
MORE OIL TO INDIA, JAPAN
Mexico is the No. 3 crude supplier to the United States, but export volumes to its neighbor have fallen by 43 percent since 2004 to 850,000 bpd last year, the lowest level in two decades, according to the U.S. Energy Information Administration.
Light sweet crude output in the United States, the destination for about 70 percent of the 1.19 million barrels per day (bpd) of crude Pemex shipped last year, is booming because of surging volumes at major shale plays like the Eagle Ford formation in Texas.
With the United States increasingly energy-independent, Pemex needs new markets.
Analysts expect competition to intensify for heavy crudes in the Gulf coast refining sector in Texas and Louisiana, where most Mexican shipments go, as more West Canadian Select heavy crude is delivered to refiners over the next few years.
That could push out Mexican heavy crudes.
P.M.I. plans to lift crude export revenue beyond the $42.7 billion in 2013. That was down 11 percent from 2012 as the price of Pemex’s main heavy crude export, Maya, slipped and oil output slowed 5.3 percent, according to the company’s annual report.
By the end of 2014, Mexico’s export volumes to India are expected to grow by 50,000 bpd from around 105,000 bpd now, said P.M.I. Crude Oil Director Tomas Banos.
P.M.I. expects crude exports to Japan to double to 60,000 bpd by the end of 2014 because of two new clients, Banos added.
A one-time sale of 1 million barrels to refiner Cosmo Oil Co (5007.T) announced last month is the first Mexican crude bound for Japan in 11 years. Carrera said he also expected higher sales to European and U.S. West Coast clients, but did not say which.
“We want to sell barrels of Mexican crude to the Arabian Peninsula,” said Banos, adding that shipments should begin this year or next.
Banos said P.M.I. expected crude shipments to China, which began in 2010, to remain steady in 2014 at about 30,000 bpd. They are unlikely to grow beyond that due to adjustments Chinese refineries must make to process more Mexican crudes.
In December, Mexico ended Pemex’s 75-year monopoly on a wide range of oil industry activities, including exploration and production as well as first-hand gasoline sales.
It is unclear whether P.M.I. will remain Mexico’s only legal crude-sales agent when new exploration and production contracts start in the next couple years, said Carrera.
This, he added, is a key detail of the fine print of the reform Congress is debating.
“There are lawmakers who say that each operator should do as they see fit in an open market,” said Carrera. “But on the other side, there are lawmakers and currents that have suggested that one (national sales agent) makes sense.”
If BP Plc (BP.L), Exxon Mobil Corp (XOM.N) and other companies that may enter post-reform Mexico had to turn over any crude production there to a state-run sales agent, they would lose out on lucrative marketing revenue.
President Enrique Pena Nieto pitched the new contracts allowed under the reform, including production-sharing agreements and licenses, as necessary tools to lure significant streams of private investment and boost lagging oil production.
Mexican crude output averaged 2.52 million bpd in 2013, down a quarter since hitting a peak of 3.38 million bpd a decade ago.
(Reporting by David Alire Garcia and Ana Isabel Martinez; Editing by Dave Graham and Lisa Von Ahn)
MINT Countries 