In the just concluded week, President
Muhammadu Buhari flagged off the construction of the 40-inch by 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline project in line with its objective to boost domestic gas utilization in
The AKK project (expected to be
completed in 24 months) was designed to
complement other major domestic gas
transmission systems which include, the existing 36-inch Escravos-Lagos Pipeline I and II with 2.2billion cubic feet per day capacity and the on-going East-West connection via the OB3 pipeline
featuring 2.4billion cubic feet per day capacity.
According to the Nigerian National Petroleum Corporation (NNPC), the project would originate from Ajaokuta, in Kogi State, cut across Abuja (FCT), Niger State, Kaduna State and terminate at Kano State.
The project is expected to support the addition of 3,600mega watts of power to the national grid and revitalise the textile industry.
Other benefits include: the development of Petrochemicals, fertilizer, methanol and other gas-based industries and job creation.
In another development, a recently released report by the Nigerian Stock Exchange (NSE) on domestic and foreign portfolio participation in equities trading showed that total equities market transactions increased year to date (YTD) in May 2020 when compared to transactions done in the corresponding period of 2019.
While transactions by domestic institutional and retail investors increased, those of foreign portfolio investors (FPIs) moderated as this category of investors invested more in fixed income securities for capital preservation.
As a result of increased flight to safety by investors, treasury bills stop rates dropped for all the three maturities (91-day, 182-day and 364-day stop rates fell to 2.45%, 2.72% and 4.02% in May 27, 2020 from 10.26%, 12.71% and 13.89% in May 30, 2019).
Total transactions on the nation’s bourse increased to N874.69 billion YTD in May 2020 (from N790.31 billion recorded YTD in May 2019) of which FPI transactions fell to N340.29 billion (from N376.05 billion). However, transactions by domestic players increased to N534.39 billion (from N414.25 billion).
Breakdown of the FPI transactions YTD in May 2020 showed that foreign portflio outflows increased by 18.55% to N235.61 billion foreign portfolio inflows plunged by 40.97% to N104.68 billion.
Local institutional transactions rose year on year (y-o-y) by 16.97% to N280.32 billion YTD in May 2020. Similarly, transactions by retail investors rose y-o-y by 45.52% to N254.07 billion.
Given the decline in foreign portfolio inflows in the equities market and the increase in their outflows, the NSE All Share Index (ASI) tanked by 5.86% to 25,267.82 index points on May 29, 2020 (from 26,842.07 index points on December 31, 2019).
On the foreign scene, US crude oil input to refineries rose further week-on-week by 1.37% to 14.03 mb/d as at June 26, 2020 (but 23.24% lower than 17.29 mb/d recorded in June 28, 2019); hence, refinery capacity utilization increased to 75.5% from 74.6% recorded in the preceding week (but away from 94.2% as at June 28, 2019).
Also indicative of increased demand, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell w-o-w by 1.33% to 533.53 million barrels (but higher by 13.88% from 468.49 million barrels as at June 28, 2019).
However, WTI crude fell by 4.98% to USD40.65 a barrel even as Brent crude moderated by 4.91% to USD43.14 a barrel although Bonny Light crude rose further by 5.18% to USD42.81 a barrel as at Thursday, July 2, 2020.
The administration’s sustained efforts at delivering infrastructure of high economic importance around the country, in this case, the gas pipeline project, would not only help meet the energy needs of industries but will also boost employment opportunities, thus improving productive capacity and standard of living in the country.