Daily Watch – New OPEC cuts come online, Sudan factions waffle over ceasefire

5th June 2023

The Organisation of Petroleum Exporting Countries (OPEC) and its allies agreed to cut global oil production by 1.393 million barrels daily, reducing Nigeria’s oil production quota by 20.7 percent. Under the new production schedule agreed upon in the virtual meeting, Africa’s biggest economy will decrease its quota to 1.380 million barrels daily from January to December 2024. Nigeria’s expected output quotas for August, September, October, and November were 1.826 million bpd, 1.830 million bpd, 1.826 million bpd, and 1.747 million bpd, respectively. However, Nigeria’s inability to meet previous quotas has shrunk dollar proceeds from oil sales. Many of the country’s crude lies are stranded as buyers turn to cheaper alternatives. Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data showed that crude production dropped to its lowest level in seven months, reaching 998,602 bpd in April.

President Bola Tinubu is leading a federal government delegation to meet with organised labour members over the proposed strike to protest the petrol subsidy removal. The Nigeria Labour Congress had earlier issued a notice of a nationwide strike from Wednesday over the fuel price hike resulting from the removal of fuel subsidy. Also, the FG said it was reviewing a long list of demands made by the Trade Union Congress (TUC), the top of which is the upward review of the minimum wage, which followed a two-hour meeting between the representatives of the Federal Government and the TUC at the Aso Rock Presidential Villa, Abuja. Sunday’s meeting comes four days after talks between the government, TUC, and Nigerian Labour Congress ended in a stalemate.

Ghanaian labour unions have asked the government for time to assess a proposal presented on Thursday to restructure pension funds worth around ¢30 billion ($2.7 billion). The West African country is looking to extend the maturity periods of cedi currency bonds that the pension funds hold in exchange for higher interest payments as part of efforts to save billions in near-term debt payments under a loan deal from the International Monetary Fund. Abraham Koomson, leader of the Federation of Labour, said after the meeting with the Finance Ministry that there was a certain amount of “mistrust of government promises.” He told Reuters that a firm decision could be expected by the end of June. Most eligible holders of Ghana’s local bonds participated in a domestic debt exchange in February. The pension funds were exempted after unions threatened to strike. In the proposal to the unions, the government aims to replace old bonds, which have shorter maturity periods with coupons averaging 18.5%, with new ones that have longer maturity dates and yields averaging 21%.

Saudi Arabia and the United States urged Sudan’s warring parties Sunday to agree to and “effectively implement” a new cease-fire as fighting showed no signs of abating in the northeastern African nation. Sudan descended into chaos after fighting broke out in mid-April between the military, led by Gen. Abdel-Fattah Burhan, and the paramilitary Rapid Support Forces (RSF), commanded by Gen. Mohammed Hamdan Dagalo. Saudi Arabia and the United States have been mediating between the warring parties for weeks. On 21 May, both countries successfully brokered a temporary cease-fire agreement to help deliver much-needed humanitarian aid to the war-torn country. However, their efforts were dealt a blow when the military announced that it would no longer participate in the cease-fire talks held in the Saudi coastal city of Jeddah. President Joe Biden’s administration imposed sanctions against key Sudanese defence companies run by the military, the RSF, and people who “perpetuate violence” in Sudan.