Nigerian central bank moves to push banks to increase lending will be a damp squib, meaning an interest-rate cut is in prospect, says John Ashbourne, senior emerging markets economist at Capital Economics in London.
Nigeria’s new oil chief reignites Buhari’s hopes for Lake Chad Basin
Ahead of his much-anticipated cabinet appointments, Nigeria's Muhammadu Buhari has named a new chief executive of the Nigerian National Petroleum Corporation (NNPC).
Mele Kyari, who was previously head of the national oil company’s Crude Oil Marketing Division (COMD) and Nigeria’s national representative to the Organization of the Petroleum Exporting Countries (OPEC), replaces Maikanti Baru, who was appointed in July 2016.
The Maiduguri-born administrator, described as an astute administrator by analysts, will now take on the task of managing a government parastatal whose reputation continues to dwindle. It is subject to frequent allegations of corruption, due to its handling of fuel subsidies, among other things.
For Adedamola Adigun, gas commercial adviser at the Nigerian Petroleum Development Company (NPDC), Kyari is the right man for the job:
Brilliant choice by PMB.
Very qualified candidate.
Hopefully, the typical issues wont prevail.
— Adetayo (@damoche) June 20, 2019
Kyari (no relative of Abba Kyari, the president’s all-powerful chief of staff who is also on the NNPC board) comes equipped with almost three decades of experience working at the NNPC and its subsidiaries. But beneath the surface and the wealth of knowledge it’s not hard to detect an ulterior motive behind the presidency’s choice.
Buhari’s well-known obsession with finding oil in the Lake Chad Basin stretches back a long time and the new oil chief’s appointment is expected to be the catalyst for an even more rigorous exploration, despite scepticism from industry insiders.
- Back in 2016, NNPC announced that it had discovered oil wells in Kyari’s home state of Borno, but issued sparse details.
- Earlier this year, it contradicted itself when it cautioned against heightened expectations of finding oil.
The ink on Kyari’s contract was yet to dry earlier this week when Baru announced that the search for oil in the Lake Chad Basin will resume, leaving the stage set for his successor to hit the ground running.
While success could breathe life into a region that has been devastated in Boko Haram’s decade-long war on constituted authority, the chances are very slim, and security for personnel remains a nagging concern.
Operations were halted in 2017 after Boko Haram ambushed a party of geologists from the University of Maiduguri, Kyari’s alma mater, who were working with the NNPC exploration team. Five were killed.
Bottom line: Over $340m had already been spent on the fruitless search for crude oil in the Lake Chad Basin by 2016. Does Nigeria have the funds to pump down the drain as it resumes exploration in the area?