By YEMISI IZUORA
Unarguably, the availability of reliable electric power supplies is an essential precondition for the functioning of modem economies, both in developed and developing countries.
It has been established and proven that access to clean modern energy services is an enormous challenge facing Nigeria today, because energy is fundamental for socioeconomic development and poverty eradication.
Perhaps today, close to 60 per cent to 70 per cent of the Nigerian population does not have access to electricity. There is no doubt that the present power crisis afflicting Nigeria will persist unless the government diversifies the energy sources in domestic, commercial, and industrial sectors and adopts new available technologies to reduce energy wastages and to save cost.
Experts who have painstakingly examined the sector are of the view that a set of energy policy interventions, can make a major contribution to the sustainable economic, environmental, and social development of the country.
Energy efficiency leads to important social benefits, such as reducing the energy bills for poor households.
Many have argued from an economic point of view, that implementing the country’s renewable energy target will have significant costs, but these can partly be offset by selling carbon credits according to the rules of the ‘Clean Development Mechanism’ agreed some 10 years ago, which will result in indirect health benefits.
According to President of the Nigeria Consumer Protection Network (NCPN), Kunle Kola Olubiyo, Nigeria could benefit from the targeted interventions that would reduce the local air pollution and help the country to tackle greenhouse gas emissions.
Olubiyo, has often said that full exploitation and promotion of renewable energy resources, energy efficiency practices, as well as the application of energy conservation measures in various sectors such as in the construction of industrial, residential, and office buildings, in transportation, would help to strengthen the sector.
Energy he said plays the most vital role in the economic growth, progress, and development, as well as poverty eradication and security of any nation.
On his part Dr. Muda Yusuf, Chief Executive Officer, of the Center For The Promotion Of Private Enterprises, CPPE, while challenging policies that have weakened the sector, stated they Uninterrupted energy supply is a vital issue for all countries today. Yusuf, said they future economic growth crucially depends on the long-term availability of energy from sources that are affordable, accessible, and environmentally friendly.
Security, climate change, and public health are closely interrelated with energy. Energy is an important factor in all the sectors of any country’s economy.
The standard of living of a given country can be directly related to the per capita energy consumption.
Energy supports the provision of basic needs such as cooked food, a comfortable living temperature, lighting, the use of appliances, piped water or sewerage, essential health care (refrigerated vaccines, emergency, and intensive care), educational aids, communication (radio, television, electronic mail, the World Wide Web), and transport.
Energy also fuels productive activities including agriculture, commerce, manufacturing, industry, and mining. Conversely, a lack of access to energy contributes to poverty and deprivation and can contribute to the economic decline. Energy and poverty reduction are not only closely connected with each other, but also with the socioeconomic development, which involves productivity, income growth, education, and health.
The energy crisis, which has engulfed Nigeria for almost two decades, has been enormous and has largely contributed to the incidence of poverty by paralyzing industrial and commercial activities during this period.
Far way in 2012, The Council for Renewable Energy of Nigeria estimates that power outages brought about a loss of 126 billion naira (US$ 984.38 million) annually.
Apart from the huge income loss, it has also resulted in health hazards due to the exposure to carbon emissions caused by constant use of ‘backyard generators’ in different households and business enterprises, unemployment, and high cost of living leading to a deterioration of living conditions.
Using Power For Business Expansion
It has been proved that access to power expands the number and variety of business and job opportunities available because electricity means that businesses, such as hair salons, laundromats and welders, all of which rely on energy, can function. Energy also leads to the creation of new markets, businesses and job openings, which provide more opportunities for individuals to earn an income and lift themselves, their families and their communities out of poverty.
Furthermore, a lack of a consistent access to reliable power costs businesses and the economy as a whole. Even with access to energy, unreliable power like in the case of Nigeria makes operating a business even more challenging than usual. The manufacturing sector in Nigeria has consistently cried out over persistent outages causing enterprises to lose huge revenues in the informal sector.
Where back-up generators are limited, losses are higher with severe consequences for the health and growth of the wider economy, not to mention the dramatic impact in achieving other development objectives outlined by the Millennium Development Goals.
Power allows business owners and employees to increase working hours. This not only means that they can open their shop earlier and stay open later, but that business owners can complete other work related to owning and operating a business before and after daylight hours.
Electricity provides business owners with access to online information and resources. Power provides business owners with information that is critical to operating their business successfully, whether that information is about local or national markets, new economic policies or tax regulations. This allows small business owners in rural areas to engage with the wider business community and learn best practices from other individuals working in the same industry.
Only last week the Nigeria Association of Chambers of Commerce Industry Mines and Agriculture, NACCIMA, called for overall policy review that will deal with rising inflation in the country.
The Association insists that an approach to reduce the current rate of inflation is to conduct a comprehensive analysis of all the causes contributing to the inflation’s rising trend and to implement control measures that can halt their effects. According to NACCIMA, It has never been more important than it is now for multi-sector, intergovernmental agencies/ministries, and the organised private sector of Nigeria to have their technical submissions regarding the likely future course of action considered.
Responding to the decision of the Monetary Policy Committee, MPC, of the Central Bank of Nigeria, CBN, to raise the Monetary Policy Rate from 14 per cent to 15.5 per cent, the Director General, DG, of the Association, Shola Obadimu, observed that this
is the third move by the Bank in 2022 in response to the continuous increase in inflation rate.
Obadimu, noted though the approval reflects the resolve of the Bank to stem the rising rate of inflation, nonetheless he felt this should have been accomplished in close cooperation with the Organized Private Sector.
According to him, The persistent increase in interest rates may not be sufficient to reduce the inflation rate.
The Association argued that even though this is primarily a strategy to manage inflation but again does not address the underlying cause of inflation, which is rising food costs caused by several variables, including the devaluation of the Naira and the cost of energy, which has impacted production and transportation.
To attain low inflation rates, the government must assure monetary stability, a continuous electricity supply, and security to promote inclusive economic growth, stressed the DG.
“While we suspected that the government believed that the country’s inflation could be controlled by a one-directional review, we as the organised private sector feel that the country’s pressing inflationary condition is the result of multiple factors.
“And that relying just on monetary policy to restrain its unabated growth may be ineffective as opposed to producing the desired outcome. The ramifications of the increase in the interest rate would negate the proliferation of ease of doing business, the impact of which most businesses are still uncertain about.” NACCIMA warned.
He went to state that , “Following this policy, the majority of SMEs would begin to have less discretionary income because of increased interest payments, reducing their capacity to invest, reinvest, and hire additional personnel. Due to higher interest rates, it would be more challenging for businesses to repay their loans, and the majority could be threatened with insolvency.
“Consequently, the survival of most small and medium-sized businesses is threatened by the rising costs of capital and production, which result in an increase in the price of finished items. In fact, and in a practical sense, the majority of the population has diminished purchasing power, while the percentage of individuals living at the base of the pyramid continues to rise. This new regulation will cause increased hardship for businesses and individuals.
Government may need to undertake a policy review to eliminate additional inflationary drivers. Our hope is that the government will place greater emphasis on the contribution of special industries and Micro, Small, and Medium-Sized Enterprises to the economy and offer more developmental financing to mitigate the consequences of production cost increases.”
Noting the consequences of the increase, NACCIMA said that the current state of the economy has severely diminished the production capability of the majority of industries; enterprises are already closing.
“Small and medium-sized firms, which accounted for 91% of all businesses in the country and employed about 60% of the working population, would be severely harmed by the implementation of this new policy, since it would inevitably result in an increase in operating costs.
“As the cost of raw materials increases for firms, they are forced to raise prices regardless of demand as a result of inflation’s root causes. Attempts by the government to restrict the circulation of money would inevitably result in a rise in the price of products and consumables, as well as a decline in the standard of living.
“Most employers of labour would continue to find it difficult to accede to the desires of their employees, as employees may request a raise. If companies fail to maintain competitive salaries, they may face a labour shortage. Which has been the case in the largest number of businesses in most industries in present Nigeria. Due to the status of the economy, average youth, the brightest minds, and specialists are on the verge of movement/escape. We believe before voting on a policy, it is necessary for decision-makers to always study the policy’s dynamic from a holistic and contextual perspective.”
He said the impact of the Monetary Policy Rate on industries, particularly the manufacturing sector, is unquestionably considerable, adding, the manufacturing industry already faces several obstacles, including high exchange rates, forex scarcity, currency depreciation, the cost of diesel, and insecurity.
Considering not only the interest rate, but also the concurrent introduction of the increase of Cash Reserve Ratio from 22.5 per cent to 32.5 per cent banks will be dissuaded from lending money or may explore mergers to meet the effects of CRR and MPR, said the DG, pointing that all these variables may contribute to a decline in the business viability, which will have a negative impact on the economy.
Embarking On Energy Transition
When Nigeria announced its energy transition plan in early September, the federal government knew from on start the enormity of work and resources that are required to achieve that critical task.
This is because the country’s energy sector which has witnessed funding constraints is faced with depressed challenges emanating from European community which has raised the red flag towards funding fossil projects.
At the flag off, Nigeria opened up to international funders for a $10bn jumpstart to the programme which includes solar expansion and a doubling of gas power generation.
The government aspires to provide universal access to electricity, and transition to cleaner energy sources, hoping to raise 100 million people out of poverty by 2030.
By then, the mission aims to provide electricity to almost 90 million people without power while putting the country on track to reach net-zero emissions by 2060.
Nigeria is counting on gas as a transition fuel to provide electricity and estimates the cost at $410 billion by 2060.
Because it would be futile race in trying to convince the European Union, to jettison campaign against fossil fuel funding, Vice President Yemi Osinbajo, at the dinner of the 60th anniversary of the Oil Producers Trade Section (OPTS) of the Lagos State Chamber of Commerce and Industry (LCCI), made a passionate appeal for group to key into the plan of action.
Osinbajo, spoke on the Theme: Nigeria Transitioning to Green Energy.
He began by thanking Rick Kennedy, Chair of the Oil Producers Trade Section of the LCCI, and acknowledged the group for its outstanding role in the growth and development of the oil and gas sector in Nigeria and for the numerous social development projects undertaken by its members through the years.
Laying foundation for the discussion the Vice President first highlighted some problematic issues in the transition process.
The most consequential subject globally in the next few decades will undoubtedly be Climate Change, he said.
Already, it is evident from so many adverse climate occurrences, floods, desertification, rising water levels, and record high temperatures that there is a global climate crisis.
The obvious, if difficult solution to the crisis is to stop carbon emissions and use green energy. The staple wisdom is that coal and fossil fuels are major pollutants. That being the case, it is proposed that countries and corporations should gradually reduce the use of these high pollutants and instead use renewable energy such as solar and wind, hydro and completely stop the use of these carbon emitters by the agreed target date of 2050.
“Now most countries including Nigeria of course agree that we must reduce global emissions to zero, in our case by 2060. We are major victims of the effects of climate change, but there are a few important issues that we have flagged to our wealthier brother-countries in the global north.” he said.
Osinbajo went to say that Nigeria along with other developing nations are faced with two, not one crisis, which he said included climate change and extreme poverty, the cause and consequence of which is energy poverty.
He said that lack of access to electricity for millions is a cause of deepening poverty.
The second he stated is that African countries are the least emitters of carbon today- less than 1 per cent of cumulative C02 emissions and that even if it triples electricity consumption in African countries (aside from South Africa) solely through the use of natural gas this would add just 0.6 per cent to global emissions.
So a lot of the flooding and adverse weather events that we are experiencing here are from emissions caused by the wealthier countries.
The third he mentioned is that the defunding of gas projects in order to force gas rich countries like Nigeria to stop using gas and use renewables instead is faulty.
These proposals to ban the funding of fossil fuel projects make no distinction between upstream oil and coal exploration; and gas power plants for grid balancing. Osinbajo, argued that no economy in the world has been known to use renewables, solely, to industrialize as solar power simply does not have the base load capacity yet for industry.
Fourthly, he continued is stopping the use of gas which then implies that we cannot use Liquified Petroleum Gas, LPG for clean cooking stoves to replace the use of kerosene, firewood and charcoal which are dirtier fuels that are widely used for cooking and other domestic purposes particularly in the rural areas. The use of firewood means deforestation, cutting down trees and of course desertification and then the loss of our carbon sinks.
The fifth is the double standards that wealthier countries have adopted on this issue. Today in the wake of the energy crisis, many European nations have made recent announcements to increase or extend their use of coal fired power generation through 2023, and potentially beyond. This is in violation of their climate commitments, and analysis suggests that this will raise power sector emissions of the EU by 4 per cent a significant amount, given the high base denominator of EU emissions.
The sixth and perhaps most crucial point is that we must take quick and informed actions in our National interest. “We must take the threat of no investments in fossil fuels including gas seriously. For an example, many European and other global North countries are setting aggressive targets for use of electric vehicles and the banning of combustion engine vehicles. Soon there may be only a few countries using combustion engines. It is also evident that while the Russia invasion of Ukrainian has shown the double standards in not allowing public funding for fossil fuel projects, the wealthier nations are still of the view that this is the correct policy and that even if public funding is to be allowed financing should not go beyond 2035.”
This he said Nigeria’s response has been the Energy Transition Plan which incorporates a comprehensive, data-driven and evidence-based plan, designed to deal with the twin crises of climate change and energy poverty.
Providing better understanding of the initiative, he said, “We anchored the plan on key objectives, including lifting 100 million people out of poverty in a decade, driving economic growth, bringing modern energy services to the full population and managing the expected long-term job loss in the oil sector due to global decarbonization.”
He added, “Given those objectives, the plan recognizes the role that natural gas must play in the short term to facilitate the establishment of base load energy capacity and address the nation’s clean cooking deficit in the form of LPG. Gas is of course critical to integrating a greater share of renewable energy in Nigeria’s energy mix. Also natural gas (methane) is an important chemical feedstock especially for ammonia production for fertilizers.”
To achieve these objectives by 2060, he said Nigeria would need $410b or $10b per annum above business as usual spending.
Engaging The OPTS
As the project is capital intensive he said the OPTS has a major role to play in that space.
Osinbajo asked the group, “Where do we get this from? In addition to conventional capital flows both from public and private sources local and international, we also made the case that we should be on the G7 Climate partners list which should attract significant funding ( I have held recent meetings with World Bank, US Treasury Secretary and only last week with the US special envoy on climate change).”
He said, It is also essential that we participate fully in the global carbon finance market. So we think the Voluntary carbon markets can play a significant role in directing private capital into climate action.
How do they work? A developer sets up a project that avoids certain emissions ( e.g. methane capture from landfills or removes carbon from the atmosphere by reforestation or replacement of diesel generators with solar power. The project is registered under a standard VCS, gold standard, and validation and verification is done by an independent body.
Carbon credits equivalent to the mitigation achieved are issued to the project subject to verification. The developer then sells the carbon credits to companies , governments or individuals seeking to compensate and or neutralize their emissions. Some Nigerian companies have already been doing lucrative carbon avoidance or removal projects that have yielded carbon credits. Amazon energy were contracted to do a Gas Flare Down project for an IOC in Kwale and the IOC utilized the carbon emissions reduction for carbon credits
Also given the escalating debt situations of many developing countries including Nigeria, especially in the aftermath of COVID 19 and the Russian- Ukrainian conflict, I think we should also bring Debt for Climate Swaps into the climate finance mix.
Debt for Climate (DFC) swaps are a type of debt swap where bilateral or multilateral debt is forgiven by creditors in exchange for a commitment by the debtor to use outstanding debt service payments for national climate action programs, he explained.
The creditor can use the transaction as a contribution to its on Nationally Determined ContributionsNDC. So we can increase the fiscal space for climate related investments and reduce our debt burden.
Osinbajo therefore added, “I think the Private sector must up its participation in the transition to Green energy journey. I suggest at least three ways to do so:
Greater involvement in the crucial conversations about what an economically just transition to zero emissions should be, The implementation of the Energy Transition Plan.
For example, the off-grid Solar space in Nigeria is becoming one of the most exciting in the world and Nigeria has programs such as the FGN’s Solar Power Naija, the Nigerian Electrification Program with the World Bank Group, & the African
Development Bank and also the Rural Electrification Fund providing almost $1 billion in financing and subsidies to drive 10 million connections.
“We are also working on clear guidelines for on-grid Solar before COP-27 to initially provide the structure for the rollout of at least 1,000MW.
“We are particularly pleased with the good work that All-On and Konexa have been doing all with funding from Shell (one of your key OPTS members), we also have NNPC partnering with the Rural Electrification Agency to rollout Solar Mini grids and Solar Home Systems across the country.
“We encourage OPTS to take the lead in Solar to help drive improvements in our energy mix and also accelerate the transition to having “energy” companies not just oil companies .”
Mr. Shubham Chaudhuri, Nigeria Country Director for World Bank confirmed that the bank plans “to commit over USD 1.5 billion towards the Energy Transition Plan on renewable energy, on power sector reforms, on clean cooking, and wherever opportunities arise.”
Also, Mr. Adam Cortese, CEO, Sun Africa stated that “the launch of Nigeria’s Energy Transition Plan has further accelerated our efforts, proving Nigeria to be fertile grounds for investments in the sector”. The company looks forward to seeking a USD 1.5 billion financing package from a US-based financial institution in support of Nigeria’s energy transition.
Speaking on the effects of Climate Change in Africa, Osinbajo explained that “climate change threatens crop productivity in regions that are already food insecure, and since agriculture provides the largest number of jobs, reduced crop productivity will worsen unemployment.
“It is certainly time for decisive action, and we just cannot afford to delay. African nations are rising to the challenge. All African countries have signed the Paris Agreement and some countries, South Africa, Sudan, Angola, and Nigeria have also announced net-zero targets.”
Giving more details on energy poverty in Africa, the VP noted that “the current lack of power hurts livelihoods and destroys the dreams of hundreds of millions of young people.
“And although Africa’s current unmet energy needs are huge, future demand will be even greater due to expanding populations, urbanization, and movement into the middle class.
“It is clear that the continent must address its energy constraints and would require external support and policy flexibility to deliver this. Unfortunately, in the wider responses to the climate crisis, we are not seeing careful consideration and acknowledgement of Africa’s aspirations.”
Underscoring the importance of collaboration, he noted that “we developed our Energy Transition Plan to engage with the rest of the world in a serious, thorough and data-backed manner.”
Osinbajo explained that “there is a clear need for African nations to engage more critically and vocally in conversations on our global climate future.
“More importantly, we need to take ownership of our transition pathways and design climate-sensitive strategies that address our growth objectives. This is what Nigeria has done with our Energy Transition Plan.”
Accepting The Challenge
Chairman of the Oil Producers Trade Section, OPTS, Rick Kennedy, earlier said the OPTS members have demonstrated resilience and commitment in the face of economic, security, environmental And funding challenges and have continued to make significant contributions to Nigeria’s development.
Kennedy, through his vice, Osagie Okunbor who is also the Managing Director of The Shell Petroleum Development Company of Nigeria Ltd (SPDC) and the Country Chair, Shell Companies, said as a group, the OPTS accounts about 90 per cent of Nigeria’s oil production and contributes significantly to the domestic and export gas production and supply.
“Over the last decade, OPTS member companies accounted for 40-60% of government revenue and 85-95% of export earnings.
The chairman recommitted the group to consistent exploration, development and production of Nigeria’s oil and gas resources in a manner that is sustainable and beneficial to the Nigerian people.
He also reassured of his members commitment to protecting the environment through safe and reliable operations consistent with industry standards and in compliance with government laws and regulations.
He added that members are continuing with efforts towards zero routine gas flaring and lowering emissions, as they have made forays into new energies in-country while evolving with the world’s movement towards cleaner, affordable energy.
According to him, OPTS are equally passionate about the implementation of the United Nations 17 Sustainable Development Goals because we recognize that business success is linked to society’s progress.
Towards that end, OPTS members continue to invest in good relations with host communities and partner with the government and the people to address gaps in accessing social amenities that enable and support good quality livelihoods.
Through their individual Corporate Social Responsibility programs, members have awarded over 138,300 national and international scholarships, contributed over $909 million to community development projects, over $58 million to medical facilities and programs and over $89 million to educational initiatives.
Most recently, OPTS members as responsible citizens, in partnership with the NNPC, have provided $30 million worth of aid to help government address the ravages of the coronavirus pandemic.
Members of the group have also been actualizing government’s intent with respect to increasing local content; namely developing human capacity and expanding technical capability and resources. For example: Chevron upgraded the Training and Conference Centre in Ogere, Ogun State from where over 400 trainees on operations and maintenance have graduated; ExxonMobil have delivered training to over 700 industry technicians at the Eket Technical Training Centre; Total Energies have continued to support the Institute of Petroleum Studies at University of Port Harcourt in order to provide students with theoretical and practical skills in the oil and gas industry; Shell has over the years embarked on several training and certification campaigns to develop local capabilities and training capacity; ENI provided subsea engineering training to graduate engineers as well as further project-based trainings to over 500 Nigerians; and so many more examples.
The group is working closely with the Nigerian Content Development Monitoring Board to ensure we achieve the local content mandate to create more jobs for Nigerians and shore up the technical expertise available in-country.
They have the intention to continue to invest in different trainings and education of Nigerians to be able to excel in local content as we want to create over 300,000 direct and indirect jobs over the next 10 years.
Recently, Nigeria launched its ‘Decade of Gas’ initiative, under the theme ‘Towards a gas-powered economy by 2030,’ that will work with the National Gas Expansion Programme to increase gas production.
The industry supports these important steps towards ensuring Nigeria’s vast natural gas resources are utilized for the benefit of the nation. The gradual shift to gas is welcome and OPTS members are ready to partner with government and other stakeholders to deliver the country’s roughly 200 trillion cubic feet of gas resource. We are interested in the National Gas Expansion Programme and members are ready to invest more with the right fiscal environment.
The recent passage and signing into law of the Petroleum Industry Act (“PIA”) by President Muhammadu Buhari represents a major milestone in the reform of Nigeria’s oil and gas industry. OPTS will be working in partnership with all stakeholders to ensure a smooth and successful implementation of the PIA that will bring certainty to the regulatory and fiscal framework for the oil and gas industry.
To sustain the critical role of supporting the economy, OPTS continues to advocate for industry-wide collaboration with government to further address issues related to security of personnel and assets as well as reducing operating expenses. Furthermore, we, along with our many partners, are committed to helping further unlock Nigeria’s oil and gas resources to sustain and, where commercially competitive opportunities exist, invest and grow production in an efficient, responsible, and cost-effective manner.
As the strength of the nation’s economy, OPTS members continue to partner and collaborate with each other and collectively with government and other industry stakeholders as we jointly develop Nigeria’s vast resources in the oil and gas sector to achieve sustainable economic development and contribute positively to the Nigerian economy.
CBN To The Rescue
After the Central Bank of Nigeria (CBN), justified its Monetary Policy Committee (MPC) decision to increase Monetary Policy Rate (MPR) as a means of controlling rising inflation, the Bank said going forward it will restrict its intervention to critical sectors like the SMEs and the electricity sector for now.
Speaking on the various economic intervention initiatives by the CBN and the prospect of recouping the funds, Dr Yusuf Yila, director, Development Finance Department, said about nine trillion Naira had been invested in the various development finance interventions.
Yila, spoke on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.
Oriental News Nigeria, reports that the MPC, in its 287th meeting on Tuesday, increased the MPR by 150 basis points, from 14 per cent to 15.5 per cent.
The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built on. The CBN Governor, Mr Godwin Emefiele had said that the decision was informed by a persistent rise in the inflation rate and fragile economic growth.
Yila, however, said that all the monies would be recovered. According to Yila, N9.3 trillion has been invested in various development finance interventions, out of which N3.7 trillion has been repaid.
“Most of the loans are still under moratorium, especially those in manufacturing. Manufacturing forms the largest part of our portfolio, about 31 per cent,’’ he said.
He, however, said that one of the best performing interventions was the Commercial Agriculture Credit Scheme (CACS), where out of the N800 billion that was lent out, about N700 billion had been repaid.
Yila said that through the flagship agriculture intervention scheme, the Anchor Borrowers Programme, one trillion Naira had been lent out to smallholder farmers, while about N400 billion has so far been recovered.
In his comments, Hassan Mahmoud, CBN’s director, Monetary Policy Department said the MPC got to a point where stringent measures have to be taken to control inflation.
He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions.
“We raised the MPR because it is necessary to do so. The quantity of money in the system was too much for the economy to absorb,’’ he said.
He said that monetary policy tools were meant to deal with short-term risks, adding that the idea was to make the cost of funds expensive to drive down inflation.
According to Mahmud, the stimuluses that governments across the world provided for their citizens during COVID-19 increased the ability of people to spend, thereby, creating challenges with global supply.
“A lot of households and small businesses were injected with stimuluses; the U.S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.
“But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices go up,’’ he said.
He also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China as responsible for the rising global inflationary trend.
“That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply.
“The war resulted in some shortages which made prices go up.
“Then the COVID-19 lockdown in China. The country is the largest importer of commodities across the globe,’’ he said.
Speaking on the depreciation of the Naira, the Director, Trade and Exchange Department, Mrs Ozoemena Nnaji, said the apex bank was taking steps to firm up the currency.
Nnaji said that demand for foreign exchange outstripped supply currency, adding that the CBN was doing a lot to mop up supply.
“One of the steps is the Naira for dollar remittance drive, which has resulted in a huge increase in diaspora remittances.
“There is also the RT200 bringing in forex. Repatriation has gone up from 20 million dollars in the first quarter to about 600 million dollars in the second quarter.
“In this third quarter we are looking at more than one billion dollars of repatriated inflows,’’ she said.