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Fuel Scarcity Menace In Nigeria



Fuel scarcity has been noted to be one of the maladies of the Nigerian economy (Sunday Akpan, 2020). Nigerian economy with a rising population of about 200 million, was formally a predominant Agricultural based economy before the advent or discovery of crude oil in Oloibiri River state in 1958. Shell started exploration earlier before a merger occurred between  two major companies Shell and BP. They both had a 50/50 joint venture share in 1960 which led to the establishment of the Nigerian Petroleum Refinery Company (NPRC). This pact between these companies gave birth to the first oil refinery in Rivers.

Currently, there are four oil refineries in Nigeria (Warri, Port-Hacourt, Kaduna) but they are not functional. The Nigeria crude oil is refined majorly in the United States of America, Netherlands, United Kingdom, France, and Belgium. It is also Interesting to note that Nigeria is a frontline member of the Organization of Petroleum Exporting Countries (OPEC), with 2.7 barrels of crude oil production and 445000 barrels refining capacity per day. It is said to be the largest oil producing country in Africa and the 6th in the world (Oduntan, 2015). Nigeria appears to be the only oil-producing country globally where fuel availability is a major challenge over the years (Ugwu, 2016). 

Fuel Scarcity could be described as the non-availability of fuel in time of need at the approved price. In other words, fuel scarcity is not limited to the absence of fuel at the required time, but also the availability of it at a higher rate (Nnabuife  etal, 2016). Fuel Scarcity usually happens when the government or petroleum marketers wants to increase the pump price so there is false scarcity then the hike is effected. Nigeria has witnessed different periods of fuel scarcity from Gen Yakubu Gowon regime in (1966-1975), it was increased from 6k to 8.45k, in 1993. During Gen Sani Abacha regime in 1996, he increased the pump price three times from N5-11N at this period the refineries where not functional and were left with the option to export our crude oil.

President Obasanjo increased pump price seven times from   N20 to N75. It is important to note that only late president  Shehu Musa Yar’adua that did not increase fuel price during his tenure. Dr Jonathan regime had relatively stable pump price from N75 to N147  this happened 1st January 2012 when the then president removed subsidy and the whole nation revolted before it was brought down to N97 then to N87. President Muhammadu Buhari regime has seen fuel price fluctuating from N87 to 147 now current pump price at N165 at filling stations and to as high as 500 buying from black market.

Fuel scarcity is caused by different factors which are not limited to the following; Removal of subsidy as seen during the President Jonathan Ebele Goodluck administration. The then government wanted to use the subsidy money for revitalization of the economy, this was not welcomed by the Nigerian Masses. In 2014 the government decided to pursue the initiative of subsidy removal by lowering number of licenses to independent marketers and importers. But this was unsuccessful and made fuel in circulation to be reduced causing unnecessary fuel scarcity

In 2017 The scarcity was caused by rumors of increased pump prices. This rumor pushed people into panic buying.  The Independent Petroleum Marketers Association of Nigeria (IPMAN) during that period withdrew their service, this worsened the situation of fuel scarcity.

The current fuel scarcity started sometimes in January in Lagos when adulterated fuel was noticed from the petrol imported from Europe. Where particles of methanol was found in about four petrol cargoes, this was only noticed when motorists who purchased fuel had problems with their cars had to report the development. The GMD OF NNPC ordered an investigation into the course of the problem.

The report of the investigation by the quality inspection officers had it that there was presence of emulsion particles in four cargoes owned by MRS, Oando, Duke Oil, Emandeb/Hyde/AY/Maikifi/Brittania-U Consortium. Since this report was established the petroleum companies have refuted such claims. The GMD of NNPC Ltd and everyone who failed to do their work has not been sanctioned and it has been over a month.

Nigerians are suffering the inaction of the Government, the multiplier effects has negatively affected manpower productivity, people spend long hours on fuel queue hoping to get PMS in other to get along with their day, transportation has sky rocked to the highest minimum. The current double digit inflation is not helping matters, food prices has gone up. There is epileptic power supply and the major option of alternative power supply used by both private individuals.

Companies and government(generator) is mostly not a better a choice due to scarcity and hike in prices. You get to some offices and you see people sleeping or telling you there is no network due to power outage. Hundreds of cars have been damaged because of the purchase of black market fuel mixed with water or any other substance for profit making, this black market fuels are  sold exorbitantly. Nigerians indeed have a long span of patience, but our patience should not be taken for granted.

If it were a proper democratic government, solutions should have been implemented, persons involved should have been sacked or suspended but absolutely nothing has been done, meaning this will definitely repeat itself in the near future since there is no consequence for this action.

Written By Ojamaliya Abuh, An Economist.




Tosin Eniolorunda: Fighting fraud related issues in financial ecosystem requires collaboration



Nigeria’s financial system has come under renewed scrutiny against the backdrop of the increase in the value of electronic payment transactions in Q1 2023 and the challenges posed by bad faith actors who exploit gaps in the payment systems even as Nigerian financial institutions have reported ₦159 billion ($201.5 million) lost to fraud since 2020. There is a need for all players in the financial services sector to come together in tackling these challenges.

Group CEO, Moniepoint Inc., Tosin Eniolorunda during a courtesy visit to the Chief Executive Officer, Fidelity Bank, Nneka Onyeali-Ikpe in Lagos. Onyeali-Ikpe, who welcomed the Moniepoint boss, used the opportunity to reaffirm her bank’s appreciation for the patience and understanding demonstrated during its banking channel integration optimization which resulted in service disruptions and the inability of Moniepoint customers to receive financial inflow.

It will be recalled that Fidelity Bank had recently announced to its customers and the general public, the resumption of interbank transfers to all licensed financial institutions in the country. This was following speculative reports from various media publications that the bank had imposed transaction restrictions on some neo banks operating in the country.  

During conversations around the growth of the digital payments segment and contributions of the financial services to Nigeria’s socio-economic development, Tosin Eniolorunda used the occasion to stress the point that Moniepoint as a responsible and compliant organization takes customer KYC very seriously. “KYC is not merely an acronym but indeed a cornerstone in establishing trust, ensuring security, and complying with regulatory standards. All accounts created on our platform have BVN verification and in addition to this we perform a liveliness check at the point of onboarding. This is a comparison of the account holder’s life picture and the BVN image as a way to reduce impersonation,” Eniolorunda maintained.

He continued, “we have zero tolerance for fraud and typically go all out to ensure that we track fraudsters and fraudulent transactions on our platforms. We have deployed and utilize robust fraud detection systems and technologies that can analyze patterns, identify anomalies, and detect suspicious activities in the system. As such we are better empowered to identify potential fraud incidents and trigger alerts for further investigations and remedial actions.”


As partners in deepening the CBN’s mandate of ensuring provision of adequate and convenient financial services to consumers and guaranteeing their protection as well as the various undercurrents in the financial services industry, Moniepoint and Fidelity agreed to work closely together to develop a tightly knit mechanism to stem the menace of fraudulent transactions and collaboratively push through in addressing payment challenges in the country.

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Angola becomes ATI’s 21st Member State, pays USD25m in capital subscription fees



The Republic of Angola has become the 21st African Member State and the 1st Lusophone Member State of pan-African insurer, Africa Trade Insurance Agency – ATI, after paying a capital subscription of USD25 million. The membership was funded the Angolan National Treasury resources and proceeds from the landmark BITA water project – a strategic public investment for the construction of infrastructure for the treatment, supply and storage of drinking water that will benefit 2.5 million people in Angola.

Welcoming Angola’s membership, ATI’s Chief Executive Officer, Manuel Moses, noted the country’s demonstration of its commitment to diversify its economy through ATI’s trade and investment risk mitigation solutions.

“We are happy to support Angola in its quest to economic diversification and becoming an agricultural powerhouse on the African continent. Angola’s membership is timely as ATI’s risk mitigation and credit enhancement services will act as a catalyst for strengthening and diversifying Angola’s economy, supporting both increased investment, exports and trade under Africa’s continental framework of the AfCFTA,” Mr. Manuel said.

Under this one of a kind blended finance and guarantee innovative structure, the Republic of Angola – along with the lenders covered by ATI under the transaction – agreed for the use of proceeds under the syndicated loan to also include the financing for the purpose of Angola becoming a member of ATI. ATI provided guarantee and insurance support for this World Bank’s partially guaranteed facility to the Government of Angola for the expansion and improvement of water supply service in the urban and peri-urban belts of Luanda.


Current exposure

ATI’s gross exposure in Angola, the largest country in Southern Africa Region, currently stands at USD467M mainly in construction, energy & gas, trade & transport, water supply and wholesale & retail sectors, with transactions valued at USD1.4B.

“This development was made possible because of ATI’s pan African mandate that allows the organization to cover transactions in Angola and beyond, despite ATI non-membership.  Now that Angola is a fully-fledged shareholder of ATI, the country can fully access more of ATI’s guarantee solutions to attract more Foreign Direct Investments and boost its internal and external trade across the region,” Mr. Manual explained.

Angola’s economy is mainly driven by its oil sector but the country seeks to pursue new growth models for economic diversification through the agricultural sector and private sector development.

With ATI’s support, Angola is on the path to fiscal consolidation, manage their debt ceiling, increase in public and private investment, in order to resume the ascending curve of sustainable and inclusive economic growth as well as human development.

ATI has grown from a small African start-up in 2001 into a pan-African institution with presence across Africa and with a significant global reach. Besides Angola, other member countries include Benin, Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Senegal, South Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe.

Institutional members include African Development Bank, African Reinsurance Corporation, Atradius Group, Chubb, CESCE (Spanish ECA), Ministry of Finance India (represented by ECGC), SACE SIMEST, The Common Market of Eastern and Southern Africa (COMESA), Trade and Development Bank (TDB), Kenya-Re, The PTA Reinsurance Company (Zep-Re), and the UK Export Finance.

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The Impact on G7’s multi-billion dollar plan on Africa’s infrastructure gap



G7 Members (Photo: European Union)

In late June 2022, it was announced at the G7 Summit in Germany that a USD 600 billion lending initiative, the Partnership for Global Infrastructure Initiative (PGII), would be launched to fund infrastructure projects in the developing world, with a particular focus on Africa. The G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom (UK) and the United States (US) – explained the PGII would help address the infrastructure gap in developing countries.

The US

The US has recently renewed its focus on impact-building and financing strategic, long-term infrastructure projects in Africa, with the Export-Import Bank of the United States (EXIM) supporting infrastructure development on the continent. According to a 2020 report by McKinsey and Company – Solving Africa’s infrastructure paradox – the US accounts for 38% of global investors who have an appetite for African investment, by far the most of any country. In 2021, the US launched a refreshed “Prosper Africa initiative”, focusing on improving reciprocal trade and investments that create jobs and build infrastructure between the two regions. In 2022, the US announced it would mobilise USD 200 billion over the next five years as part of the PGII, in the form of grants, financing and private sector investments. Some deals have already been announced, including, for example, a USD 2 billion solar energy project in Angola, and the building of multiple hospitals in Côte d’Ivoire.

The EU

In February 2022, the European Commission announced investment funding for Africa worth EUR 150 billion. The funding package is part of the EU Global Gateway Investment Scheme and is said to be in the form of EU combined member funds, member state investments and capital from investment banks.

In early 2020, the European Commission published its Comprehensive Strategy with Africa, outlining the region’s plans for its new, stronger relationship with the continent. The strategy document laid out five top priorities for the EU in Africa: the green transition and improving access to energy; digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.

The UK

The UK is also making a strong play for influence, investment and trade with Africa, post-Brexit. Further to key summits in 2020 and 2021, finance is being redirected into Africa from the UK. In 2022, UK development finance institution (DFI), British International Investment (formerly CDC Group), announced it had exceeded its pledge to invest GBP 2 billion in Africa over the last two years. The UK’s Global Infrastructure Programme helps partner countries (including in the African continent) to build capacity to develop major infrastructure projects, setting up infrastructure projects for success and paving the way for UK companies to support these projects.

Further, in November 2021, it was announced that the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, were in negotiations to form a long-term Just Energy Transition Partnership. The partnership focuses on boosting the decarbonisation of the South African economy, with a commitment of USD 8.5 billion for first round financing. It is expected that 1-1.5 gigatonnes of emissions will be prevented over the next 20 years, assisting South Africa to accelerate its just transition. Discussions are also currently taking place to establish a similar partnership in Senegal.

African solutions

The African Development Bank noted in early 2022 that Africa’s infrastructure investment gap is estimated at more than USD 100 billion per year.  

DFIs are increasingly anchoring the infrastructure ecosystem in Africa – serving a critical function for project finance as investment facilitator and a check on capital. DFIs can shoulder political risk and access government protections in a way that others cannot, enter markets others cannot and are uniquely capable of facilitating long-term lending. The large amount of capital needed to fill the infrastructure gap, however, means that DFIs cannot bridge it alone. Private equity, local and regional banks, debt finance and specialist infrastructure funds are primed to enter the market, and multi-finance and blended solutions are expected to grow in popularity as a way to de-risk deals.

The African Union’s 55 member states have stated that their primary funding needs include support in terms of safety and security on the continent, as well help in implementing the African Continental Free Trade Agreement (AfCFTA) and the massive infrastructure investment it needs to be successful. The development of supporting infrastructure is key to boosting AfCFTA’s free trade potential, especially in terms of transportation, energy provision, internet access and data services, education and healthcare infrastructure projects.


Infrastructure projects in Africa now also have a heightened focus on improving Africa’s capacity for green, low-carbon and sustainable development, via, for example, clean energy, community healthcare and support, green transport, sustainable water, wildlife protection and low-carbon development projects. Funding such projects comes with responsibility –  projects must not only be bankable and yield attractive returns, but must also be sustainable and provide tangible benefits to local economies and communities. All of Africa’s major partners have noted they will prioritise projects that commit to Environmental, Social and Governance principles, and access to capital for large infrastructure projects is likely to contain sustainability requirements.

That the focus of the PGII is on the sustainability and the social impact of these projects in Africa is further evidenced in the White House briefing room statement issued at the launch in June 2022, where it was stated that the PGII will “mobilize hundreds of billions of dollars and deliver quality, sustainable infrastructure that makes a difference in people’s lives around the world…”

By: Michael Foundethakis, Baker McKenzie’s Global Head of Projects and Trade & Export Finance, and Africa Steering Committee Chair

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