Nigeria’s Gross Domestic Product (GDP) grew while oil production dropped between the first and second quarters of 2024, according to official data.

The GDP grew by 3.19 per cent year-on-year in real terms in the second quarter of 2024, the National Bureau of Statistics has said.

The NBS said this growth rate is higher than the 2.51 per cent recorded in the second quarter of 2023 and higher than the 2.98 per cent growth in the first quarter of 2024.

The statistics bureau said this in its “Nigerian Gross Domestic Product (GDP) Report Q2 2024” released on Monday.

The report said the GDP’s performance in the second quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 3.79 per cent and contributed 58.76 per cent to the aggregate GDP.

It said the agriculture sector grew by 1.41 per cent, from the 1.50 per cent growth recorded in the second quarter of 2023.

It added that the growth of the Industry sector was 3.53 per cent, an improvement from -1.94 per cent recorded in the second quarter of 2023.

In terms of share of the GDP, the bureau said the Industry and Services sectors contributed more to the aggregate GDP in the second quarter of 2024 compared to the corresponding quarter of 2023.

“In the quarter under review, aggregate GDP at basic price stood at N60,930,000.58 million in nominal terms. This performance is higher when compared to the second quarter of 2023 which recorded aggregate GDP of N52,103,927.13 million, indicating a year-on-year nominal growth of 16.94 per cent,” the report said.

Oil sector

The bureau noted that the nation in the second quarter of 2024 recorded an average daily oil production of 1.41 million barrels per day (mbpd), higher than the daily average production of 1.22 mbpd recorded in the same quarter of 2023 by 0.19 mbpd and lower than the first quarter of 2024 production volume of 1.57 mbpd by 0.16 mbpd.

It said the real growth of the oil sector was 10.15 per cent (year-on-year) in Q2 2024, indicating an increase of 23.58 per cent points relative to the rate recorded in the corresponding quarter of 2023 (-13.43 per cent).

The NBS explained that the growth increased by 4.45 per cent points when compared to Q1 2024, which was 5.70 per cent.

“On a quarter-on-quarter basis, the oil sector recorded a growth rate of -10.51 per cent in Q2 2024.

“The oil sector contributed 5.70 per cent to the total real GDP in Q2 2024, up from the figure recorded in the corresponding period of 2023 and down from the preceding quarter, where it contributed 5.34 per cent and 6.38 per cent respectively,” the report said.

Non-oil sector

The non-oil sector grew by 2.80 per cent in real terms during the reference quarter (Q2 2024).

The NBS said this rate was lower by 0.78 per cent points compared to the rate recorded in the same quarter of 2023 which was 3.58 per cent and relatively same with the 2.80 per cent recorded in the first quarter of 2024.

“This sector was driven in the second quarter of 2024 mainly by financial and insurance (financial institutions); information and communication (telecommunications); agriculture (crop production); trade; and manufacturing (food, beverage, and tobacco), accounting for positive GDP growth,” it said.

In real terms, the bureau said the non-oil sector contributed 94.30 per cent to the nation’s GDP in the second quarter of 2024, lower than the share recorded in the second quarter of 2023 which was 94.66 per cent and higher than the first quarter of 2024 recorded as 93.62 per cent.

 

PT

The Director General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has observed that Nigeria’s Gross Domestic Product (GDP) growth rate on average has been steadily declining since 2014, signalling a downturn in the economic well-being of the average Nigerian.

Okonjo-Iweala, speaking at the annual General Conference of the Nigerian Bar Association (NBA) on Sunday, noted that the country’s economic fortunes experienced a reversal following the decade between 2000 and 2014, during which the average GDP growth rate was approximately 3.8%.

According to the Director-General of the WTO, this consistent GDP growth outpaced the nation’s population growth, which was only around 2.6% annually.

However, she pointed out that since 2014, the situation has reversed, with GDP showing a negative growth rate of 0.9%, as the government has been unable to sustain the positive growth achieved by previous administrations.

“Many of the big problems the NBA is grappling with today has its root in Nigeria’s failure to sustain rate of economic growth and development that consistently outpaced the growth of our population.  

“We have had episodes of reforms and faster economic growth that was not merely a function of the price of oil. But we have been unable to consolidate and build on them and millions of our compatriots have paid the price in terms of diminished job prospects and human well-being.  

“For example, in the decade between 2000 and 2014, we had an average GDP growth rate of 3.8% well above our population growth rate of 2.6% per annum, meaning that people were on average truly improving their standard of living.  

“During the following decade, average annual GDP per capita has been negative around minus 0.9% meaning people were worse off because we were not able to sustain prior positive growth momentum,” Okonjo-Iweala added. 

Nigeria must sustain good economic policies 

Speaking further, Okonjo-Iweala said the country needs to sustain good economic policies irrespective of the administration or political party in power in order to foster development in the country.

• The former Finance Minister said policy inconsistencies have accounted for the reversal in the fortune of the nation’s economic development.
• Furthermore, she advocated for a social contract between the government and the people which will go beyond the political party in power.
• According to her, this social contract must be generally accepted on what economic policies should be followed regardless of who is in power.

“Maintaining good economic and social policies; maintaining policy consistency and adding more reforms on top of that will lead us along the path of good progress that we all desire,” she added.  

What you should know 

• Nigeria’s Gross Domestic Product (GDP) growth declined to 2.98%, lower than the rate recorded in the fourth quarter of 2023 which was 3.46%, according to a report from the National Bureau of Statistics (NBS).
• However, the GDP growth rate in the quarter is higher than the figure recorded in the corresponding quarter of 2023 which was 2.31%.

GDP measures the economic activities of a country.  

• In the past decades, Nigeria’s economic growth has been moderate as a result of low exports, a reduction in the sales of oil which accounts for about 90% of our revenue as well as other economic challenges in the country.
• Meanwhile, President Bola Tinubu has continuously said he would increase Nigeria’s GDP to a $1 trillion economy, but many analysts believe such a goal may not the feasible amid growing concerns of high inflation, low employment rate as well and rising national debt.

 

Nairametrics

In a bewildering turn of events that defies logic and business sense, Nigeria's national oil company, NNPC, has managed to orchestrate what can only be described as the most absurd corporate acquisition in modern history. The saga of NNPC Retail's purchase of OVH Energy Marketing Limited has morphed into a Kafkaesque nightmare where the acquired entity now controls the acquirer, raising serious questions about the competence, integrity, and motives of those at the helm of Nigeria’s national oil company.

This farcical transaction, shrouded in secrecy and mired in controversy, represents a gross betrayal of public trust and a blatant disregard for corporate governance principles. How does a profit-making state-owned enterprise end up being swallowed by the very company it purportedly acquired? The convoluted web of dealings involving NNPC Retail, OVH Energy, and Nueoil Energy reeks of backroom deals and possible corruption at the highest levels.

The recent court order dissolving NNPC Retail without winding it up and transferring its assets to OVH Energy is nothing short of scandalous. It effectively hands over a critical national asset to private hands through a legal sleight of hand. This maneuver not only undermines Nigeria's energy security but also raises alarming questions about the protection of public interests in the country’s judicial system.

The silence and apparent complicity of regulatory bodies in this matter are deafening. Where are the Securities and Exchange Commission, the Corporate Affairs Commission, and other watchdogs tasked with ensuring transparency and fairness in corporate dealings? Their inaction in the face of such a glaring anomaly is a damning indictment of Nigeria’s regulatory framework.

Most troubling is the impact on NNPC Retail's workforce, now left in limbo, unsure of their future in an organization that has been essentially hijacked. The installation of OVH's former CEO as the new head of NNPC Retail adds insult to injury, signaling a complete takeover masked as an acquisition.

This debacle demands immediate and thorough investigation by anti-corruption agencies. The Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) must swing into action to unravel this mystery. How did a struggling company manage to turn the tables on its buyer, effectively gaining control of a profitable state enterprise?

The House of Representatives' initial investigation, marred by controversy and eventually dissolved, points to possible high-level interference. The transfer of the probe to another committee must not be allowed to become a means of burying this scandal. Nigerians deserve answers and accountability.

This "acquisition" is not just a business transaction gone wrong; it is a national security issue. With NNPC Retail responsible for importing virtually all of Nigeria's petrol, its transfer to private hands through such dubious means puts the entire nation at risk.

The NNPC leadership's defense that they now operate as a private entity rings hollow. A company wholly owned by the Nigerian people cannot simply be handed over to private interests through corporate gymnastics without proper scrutiny and safeguards.

This editorial calls for immediate action:

1. A freeze on all aspects of this transaction pending a comprehensive, independent investigation.

2. Full disclosure of all documents and decisions related to this deal.

3. A public inquiry into the roles played by all parties involved, including government officials and judiciary members.

4. Immediate intervention by anti-corruption agencies to probe possible criminal aspects of this deal.

5. A review of the legal framework governing the privatization of state assets to prevent future abuses.

The NNPC-OVH saga is more than a corporate scandal; it is a litmus test for Nigeria's commitment to transparency, accountability, and the rule of law. The eyes of the nation and the international community are watching. It's time to unravel this riddle and hold those responsible to account. Anything less would be a betrayal of the Nigerian people and a green light for further plunder of the country’s national resources.​​​​​​​​​​​​​​​​

 

The Central Bank of Nigeria (CBN) has increased the rates for the Standing Deposit Facility (SDF) as part of its ongoing efforts to manage liquidity in the financial system.

This decision was detailed in a circular issued on August 26, 2024, following the 296th Monetary Policy Committee (MPC) meeting, where key adjustments to interest rate policies were approved.

The CBN revised the Asymmetric Corridor around the Monetary Policy Rate (MPR) from +100/-300 basis points (bps) to +500/-100 bps. This significant shift aims to discourage banks from holding excess liquidity at the central bank and to promote increased lending activities.

New Operational Rates for Banks 

The Standing Lending Facility (SLF) rate, which banks use to borrow short-term funds from the CBN, has been raised to 31.75%.

The SDF rate, applicable to deposits made by banks at the CBN, has been increased to 25.75%. The circular also specifies that:

• Commercial and Merchant Banks will receive 25.75% on deposits up to ₦3.00 billion, while deposits exceeding this amount will attract a lower rate of 19.00%.
• Payment Service Banks will receive 25.75% on deposits up to ₦1.50 billion, with amounts above this threshold earning 19.00%.

These new rates are effective immediately, with all authorized dealers expected to adhere to the updated guidelines.

What this means 

The CBN’s latest adjustments are expected to have broad implications for the banking sector. By raising both SLF and SDF rates, the central bank aims to curb excess liquidity, which is often a precursor to inflation.

• The reduction in interest rates for excess deposits is also intended to push banks toward more active lending rather than merely holding funds at the CBN.
• The changes are likely to impact the cost of funds for banks, influencing the interest rates offered to customers for both loans and deposits.
• While tighter liquidity conditions may lead to higher lending rates and potentially slower credit growth in the short term, the move could help stabilize inflation over time.
• The increase in the SLF rate means that banks looking to borrow money from the central bank to cover short-term liquidity positions will now face higher interest costs.

Sector analysts often interpret reliance on the SLF as a sign of liquidity challenges, indicating that banks tapping into this facility may be under financial strain.

Backstory: The Central Bank of Nigeria (CBN) at its 296th MPC meeting had retained the liquidity ratio at 30% with the MPC emphasizing its commitment to stay on course with its tightening cycle in view of the urgent need to address inflationary pressures.

The bank during its MPC meeting continued its monetary policy tightening spree by raising interest rates by 50 basis points to 26.75%.

 

Nairametrics

Gaza ceasefire talks in Cairo continue to iron out details, White House says

Negotiations in Cairo to achieve a ceasefire in Gaza and a hostage deal are still pressing ahead, White House national security spokesperson John Kirby said, adding that the discussions will continue on the working-group level for the next few days to iron out specific issues.

Speaking to reporters in a virtual briefing, Kirby pushed back on suggestions that the talks have broken down, and said, on the contrary, that they were "constructive".

"The talks actually progressed to a point where they felt like the next logical step was to have working groups at lower levels to sit down to hammer out these finer details," Kirby said.

Brett McGurk, U.S. President Joe Biden's top Middle East aide at the White House who has been participating in the talks, will soon leave Cairo after staying an extra day to start the working-group talks, Kirby said.

One of the issues to be tackled by the working groups will be the exchange of hostages Hamas is holding and Palestinian prisoners that Israel is holding, Kirby said.

He said the details to be settled included how many hostages may be exchanged, their identities, and the pace of their potential release.

Months of on-off talks have failed to produce an agreement to end Israel's military campaign in Gaza or free the remaining hostages seized by Hamas in the militant group's Oct. 7 attack on Israel that triggered the war.

The latest round of negotiations came under the threat of a regional escalation. Over the weekend, Hezbollah launched hundreds of rockets and drones at Israel as Israel's military said it struck Lebanon with around 100 jets to thwart a larger attack.

But Kirby said the cross-border warfare over the weekend has not had an impact on the talks.

Key sticking points in ongoing talks mediated by the United States, Egypt and Qatar include an Israeli presence in the so-called Philadelphi Corridor, a narrow 14.5-km-long (9-mile-long) stretch of land along Gaza's southern border with Egypt.

"There continues to be progress and our team on the ground continues to describe the talks as constructive," Kirby said.

Hamas official Taher Al-Nono reiterated to Qatar’s flagship Al Jazeera Mubasher on Monday that remarks made by the U.S. regarding the status of the ceasefire talks are “inconsistent with the truth and their objective is to support the positions of the occupation.”

In a statement on Sunday, the Palestinian group said that talk of an imminent deal is false.

Two Egyptian sources on Sunday said Israel expressed reservations about several of the Palestinian detainees Hamas is demanding be released, and Israel demanded their exit of Gaza if they are released.

More than 40,400 Palestinians have been killed in the war, according to Gaza's health ministry. Most of its 2.3 million people have been displaced multiple times and face acute shortages of food and medicine, humanitarian agencies say.

 

Reuters

WESTERN PERSPECTIVE

Russia pounds Ukraine with missiles, drones for second day in row, Kyiv says

Russia launched several waves of missile and drone attacks overnight targeting Kyiv and other regions, Ukraine's military said early on Tuesday, a day after Moscow's biggest such attack of the war.

At least one person was killed when a civilian object was "wiped out" in the central Ukraine city of Kryvyi Rih, regional officials said.

Kyiv region's air defence systems were deployed several times overnight to repel missiles and drones targeting the Ukrainian capital, the region's military administration said on Telegram.

Reuters' witnesses reported at least three rounds of explosions overnight in Kyiv.

On Monday, Russia launched more than 200 missiles and drones, killing at least seven and damaging energy infrastructure in an attack condemned by U.S. President Joe Biden as "outrageous."

The size of the Tuesday attacks was not immediately known, but Ukraine's air force said it recorded the launch of several groups of drones and the take-off from Russian airfields of strategic Tu-85 strategic bombers and MiG-31 supersonic interceptor aircraft.

Reuters could not independently verify the reports. There was no immediate comment from Russia.

The Kremlin denies targeting civilians in the war that President Vladimir Putin launched against Russia's smaller neighbour with a full-scale invasion in February 2022.

The Russian defence ministry said that its strikes on Monday hit "all designated targets" in Ukraine's critical energy infrastructure.

Kryvyi Rih, Kyiv and central and eastern regions of Ukraine were under air raid alerts for most of the night, starting at around 2000 GMT on Monday.

Five civilians may be still under the rubble and four were injured as a result of the Russian attack, Oleksandr Vilkul, head of Kryvyi Rih's military administration, said on Telegram.

"The news is bad," Vilkul said.

 

RUSSIAN PERSPECTIVE

What we know about massive attack on Ukraine’s energy infrastructure

The Russian Armed Forces carried out a massive strike on the critical facilities of Ukraine's energy infrastructure that ensure the operation of the country’s defense industry, the Russian Defense Ministry said.

According to the ministry, all designated targets were hit.

TASS has put together the key facts we currently know.

Targets of the strike

- The Russian Armed Forces on Monday morning fired high-precision, long-range, air-launched and sea-launched weapons, used tactical aircraft and launched attack drones to carry out a massive strike on the critical facilities of Ukraine's energy infrastructure that ensure the operation of the country’s defense industry.

- The targets were electric substations in the Kiev, Vinnitsa, Zhitomir, Khmelnitsky, Dnepropetrovsk, Poltava, Nikolayev, Kirovograd and Odessa regions.

- The strikes also hit storage sites of Ukraine’s West-provided air-launched weapons at airfields in the Kiev and Dnepropetrovsk regions.

- Also struck were gas compressor stations in the Ivano-Frankovsk, Lvov and Kharkov regions.

Consequences

- According to the Russian Defense Ministry, all designated targets were hit.

- There are disruptions in energy supply across Ukraine.

- Deliveries of weapons and ammunition to the engagement line by rail were disrupted.

- The Ukrainian energy company DTEK announced emergency power cuts across Ukraine.

- The Ukrainian national railway company said on Telegram it was shifting to diesel locomotives due to power outages.

 

Reuters/Tass

 

Pavel Durov is a lot of things to a lot of people. Programming prodigy. Billionaire entrepreneur. Kremlin stooge. Free-speech fighter. Biological father to at least 100 kids.

Durov, the elusive founder of Telegram who was detained in France over the weekend, cuts the figure of a mysterious, globe-trotting tech bro with Mark Zuckerberg’s prodigiousness, Jack Dorsey’s bizarre lifestyle habits and Elon Musk’s libertarian streak – plus a similar obsession with pronatalism and fathering children. Durov said in July that he had fathered more than 100 children thanks to sperm donations he had made over the past 15 years.

Worth an estimated $9.15 billion according to Bloomberg and armed with an array of passports and residences, Durov has for a decade lived a life without borders, a man on an often-shirtless journey to secure the freedom of communication from the prying eyes of governments, democratically elected or otherwise.

Now, Durov’s legal trouble is drudging up an old debate, pitting Telegram’s end-to-end encryption, which keeps communications between users secure even from the company’s employees, against the security concerns of various governments and the European Union’s campaign to rein in big tech.

A pair of prodigies

Durov was born in 1984 in the Soviet Union but moved to Italy when he was a 4-year-old, the tech entrepreneur told right-wing pundit Tucker Carlson in a rare interview earlier this year. The family moved back to Russia after the collapse of the Soviet Union, after Durov’s father received an offer to work at St. Petersburg State University.

 

Durov said he and his older brother, Nikolai, were math prodigies from an early age. The elder Durov was the bigger star when the duo were children. Durov said his brother went on Italian TV to solve cubic equations in real time as a child and won repeated gold medals at the International Math Olympiad. The younger Durov was the best student at his school and competed locally.

“We were both very passionate about coding and designing stuff,” Durov said.

He said that when the family returned to Russia, they brought back from Italy an IBM PC XT computer, meaning they were “in the early 90s, one of the few families in Russia who could actually teach ourselves how to program.”

Russia’s Zuck

Durov’s coding prowess and entrepreneurial spirit led him to build Vkontakte (VK), a social media site, in 2006, when he was a 21-year-old fresh out of university. VK quickly became known as the Facebook of Russia, and Durov the country’s answer to Mark Zuckerberg.

But Durov’s relationship with the Kremlin turned adversarial much quicker than Zuckerberg’s did with Washington.

When protesters began using VK to organize demonstrations in Kyiv against Ukraine’s pro-Russian president, Viktor Yanukovich, in 2013, Durov said the Kremlin asked the site to hand over private data of Ukrainian users.

“We decided to refuse, and that didn’t go too well with the Russian government,” Durov told Carlson.

That decision sealed Durov’s fate at the company. Durov would later resign as CEO, opening the door for people close to Russian President Vladimir Putin to take over. The entrepreneur sold all his shares for millions and then left Russia. Today, VK is under state control.

“For me, it was never about becoming rich. Everything in my life was about becoming free. To the extent that is possible, my mission in life is to allow other people to become free,” Durov said.

“I don’t want to take orders from anyone.”

‘All of them suck’

While Zuckerberg bought WhatsApp in his bid to build the social media empire now known as Meta, Durov chose to build his own messaging app despite an already crowded marketplace for such platforms.

He didn’t think anything out there was good enough.

“It doesn’t matter how many messaging apps are out there if all of them suck,” Durov told TechCrunch in 2015.

Durov said that his experience with the Kremlin was a key motivator in creating Telegram, which is now based in Dubai. He and his brother wanted to build something that would be free from the prying eyes of government.

The company’s strong end-to-end encryption and much-hyped commitment to privacy proved attractive to the hundreds of millions of users who flocked to Telegram – including, eventually, the terrorists who planned the Paris terror attacks in November 2015.

The revelation prompted the normally private Durov to go on a public relations blitz, conducting a bevy of interviews, including one with CNN, to assure a wary public that Telegram was not becoming WhatsApp for terrorists.

Telegram, according to Durov, was simply the most secure messaging platform on the market – and compromising by creating a back door for governments would undermine the app’s appeal and the company’s commitment to privacy.

“You cannot make it safe against criminals and open for governments,” Durov told CNN in 2016. “It’s either secure or not secure.”

Kremlin questions

Telegram’s refusal to budge on decryption put it at loggerheads with governments around the world – including Russia, at least initially.

Moscow in 2018 attempted to ban Telegram for refusing to supply Russian security services with decryption keys. Durov vowed to defy the ban.

Another showdown between the tech entrepreneur and the Kremlin appeared to be on the horizon, but nothing came of it. The ban was lifted in 2020.

In the years that followed, Telegram became one of the few foreign social media platforms operating in Russia without restrictions. It is now the preferred means of official communication for many officials in the Russian government.

Durov’s critics have long questioned whether Telegram could operate so freely in Russia without having made some sort of concession to the Kremlin, allegations Durov has repeatedly batted down – often pointing to his spat in the early 2010s that led him to leave Russia.

Before he was detained in Paris, Durov was in Azerbaijan at the same time as Russian President Vladimir Putin, who was in the country on an official two-day visit. Kremlin spokesman Dmitry Peskov told reporters that the two did not meet.

And though Durov has publicly turned his back on Russia, the government was quick to begin working on Durov’s behalf after his detention. Foreign Ministry spokeswoman Maria Zakharova said the Russian Embassy in Paris “immediately got down to work” after getting word of Durov’s legal troubles.

The issue of Telegram’s abuse by money launderers, drug traffickers and people spreading pedophilia has continued to unsettle Western governments. Durov’s detention in France was connected to a warrant related to Telegram’s lack of moderation, according to CNN-affiliate BFMTV.

Telegram responded in a statement that “it is absurd to claim that a platform or its owner are responsible for abuse of that platform.” The statement added that Telegram abides by EU laws and that Durov had nothing to hide.

 

CNN

In 1853, under orders from President Millard Fillmore, US Navy Commodore Matthew Perry led four warships on a mission to persuade Japan to end its 200-year-old isolationist policy. When he arrived at what is now Tokyo Bay, Perry delivered an ultimatum to the Tokugawa shogunate: open up to trade with the United States or face the consequences.

The arrival of these “black ships” (so named for the dark smoke emitted by their coal-fueled steam engines) was a pivotal moment. Confronted with this impressive display of technological prowess – which exemplified the industrial power that had already enabled the British Empire to dominate much of the world – the shogunate reluctantly agreed to Perry’s demands, leading to the signing of the Treaty of Kanagawa in 1854. One year later, the shogunate received its first steam-engine-powered warship from the Dutch as a token of appreciation.

While technology can pose a threat, it also powers critical infrastructure like schools and hospitals. Over the past century, in particular, the sovereign individual has become inextricably linked to a vast array of technologies, including interconnected systems like energy grids, the internet, mobile phones, and now artificial-intelligence chatbots.

As the Perry expedition showed, technology is also the backbone of state military sovereignty. Thanks to its technological dominance, the US has become the world’s leading military power, with more than 750 bases in 80 countries – three times as many as all other countries combined.

But this picture of state sovereignty is rapidly changing. While America’s financial sovereignty, underpinned by the dollar’s status as a global reserve currency, remains intact, its economic sovereignty is increasingly challenged by a rising China. In purchasing-power-parity terms, China surpassed the US to become the world’s largest economy in 2014. With manufacturing output roughly equal to the US and the European Union combined, China is the top trading partner of more than 120 countries.

Both superpowers are currently competing to control the design, development, and production of critical technologies such as semiconductors, AI, synthetic biology, quantum computing, and blockchain. A 2023 study commissioned by the US State Department, which tracksresearch contributions across 64 emerging technologies, showed that China is leading the US in more than 80% of these areas, with the US a close second.

As the US-China rivalry escalates in the technological arena, countries around the world will be forced to pick a side and adopt their chosen ally’s distinct technologies, standards, values, and supply chains. This could usher in a new era of technological colonialism, undermining global stability.

Curiously, however, neither the US nor China have been able to dominate the semiconductor industry, since Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung in South Korea are the only manufacturers capable of producing semiconductors smaller than five nanometers. To change this, both superpowers are constructing what we call “technology sovereignty circles” – spheres of influence that other countries must join to access these critical technologies.

Unlike the colonialism of old, techno-colonialism is not about seizing territory but about controlling the technologies that underpin the world economy and our daily lives. To achieve this, the US and China are increasingly onshoring the most innovative and complex segments of global supply chains, thereby creating strategic chokepoints.

China, for example, has gained control of supply chains for critical raw materials, enabling it to become the world’s leading producer of electric vehicles. Meanwhile, the US leads in chip-design software thanks to companies like Cadence Design Systems and Synopsys.

Europe, too, is keen to establish itself as a key player in this rapidly evolving sector. Beyond hosting the Dutch company ASML, which produces extreme ultraviolet lithography systems crucial for advanced-chip manufacturing, the European Union is a net importer of AI research talent. It is also home to more STEM students and computer scientists and creates more startupsthan the US.

When onshoring proves impossible, technology sovereignty circles act as another, subtler form of coercion. By cultivating deeply entrenched asymmetric dependencies, they effectively push countries into techno-economic servitude.

The United Kingdom is a prime example. In 2020, the US forced the UK to exclude Chinese technology firm Huawei from its 5G network, threatening to cut off access to America’s intelligence apparatus and chip-design software. Similarly, the Netherlands was pressured to stop supplying China with ASML machinery in early January. In response, China has tightened its grip on critical materials by restricting exports of gallium and germanium, key inputs for microchips and solar panels.

Every country could soon face its own black-ship moment. Those without the protection provided by ownership of critical technologies risk becoming techno-colonies, serving the needs of their technological sovereigns by manufacturing simple electronics, refining rare metals, labeling data sets, or hosting cloud services – from physical mines to data mines. Countries that fail to align with either the US or China will find themselves relegated to the status of impoverished technological backwaters.

Amid heightened geopolitical tensions, emerging technologies such as quantum computing, AI, blockchain, and synthetic biology promise to push the boundaries of human discovery. As we explain in our forthcoming book, The Team of 8 Billion, the key question is whether these technological innovations will be controlled by a select few as instruments of subjugation or democratized to foster shared prosperity. Instead of ushering in an era of destructive techno-colonialism, these new technologies could help revitalize our rules-based international order and upgrade collective governance.

But to achieve this, we must replace today’s black ships with something humanity has yet to invent: a framework for planetary cooperation based on a unified substrate of human interests. Such a framework must reflect our growing interconnectedness and technological dependencies, as well as the ever-global challenges we face, from war and nuclear proliferation to pandemics and climate change.

Techno-colonialism represents the latest iteration of the age-old struggle for global dominance. Will we become the architects of our own doom, or the champions of a brighter future? For better or worse, the answer is in our hands.

 

Project Syndicate

Emery Wells put himself on the path to a dream career by recklessly buying a $17,500 camera that he definitely couldn’t afford.

Wells, 42, is the CEO of Frame.io, a video collaboration software business he co-founded in 2014 and sold to Adobe for $1.275 billion in 2021.

Nearly two decades ago, he was a 25-year-old freelance video editor who’d recently quit bartending in New York to pursue a full-time film career. At an industry trade show in 2006, he watched a startup called Red Digital Cinema announce its intention to build a digital camera high-quality enough for big-budget Hollywood productions.

Without hesitating, a colleague put down a $1,000 deposit to get on the product’s waitlist. “I was shocked,” Wells tells CNBC Make It. “And out of, really, just jealousy, I said: ‘Well, I’m signing up [too].’”

The deposit nearly maxed out his credit card’s $1,200 limit, he recalls: “I was already in debt ... and I think I may have had a few hundred dollars in my bank account at the time.” When his Red One camera shipped a couple years later, he found a way to scrounge up the rest of its cost.

Being among the few people in New York to own one altered the trajectory of Wells’ career, he says. Suddenly, he was in high demand. By 2014, his post-production company Katabatic Digital brought in more than $1 million in annual revenue from clients like Coca-Cola and Pfizer.

But the real money, it turns out, was in a piece of software built by Wells and Katabatic engineer John Traver — a platform for people to collaboratively give feedback on videos throughout the post-production process. When they launched Frame.io as a standalone tool, more than 15,000 clients signed up.

Wells faced a decision: Focus on the established, stable business or dedicate himself to a hot, but unproven, startup? He opted for the latter, shuttering Katabatic to focus on Frame.io full-time.

The startup raised more than $80 millionin funding over the next five years, and as Wells and Traver weighed an IPO, Adobe made them a billion-dollar offer they couldn’t refuse.

Here, Wells discusses the risks of giving up a sure thing to take a chance on a bigger opportunity and the reckless purchase that made it all possible.

CNBC Make It: You built Katabatic Digital into a successful business. What made you start thinking about sacrificing it for something bigger?

Wells: Post-production is client service work. Sometimes you have clients. Sometimes you don’t, and there’s nothing to do.

I hired John Traver to do post-production stuff, but he had a minor in computer science. We started tinkering on software ideas over the course of several months. I don’t think there was a super serious goal of creating a software company, because we didn’t know that we could.

We said, “Why don’t we spend some time building something that we know really, really well, that we know there’s a market for, we know we can solve the problem better, and we know we could make some money doing it?”

When did you realize Frame.io might be big enough that you’d have to shift your focus away from Katabatic? How did you make that decision?

In 2014, we were trying to raise money for Frame.io. One serial entrepreneur told us, “I would never give you $1, and nor would any other investor, until you’re all in. Not 99%. You cannot have this other thing. I’m not giving you money to do a side project.”

It really resonated with me. I was like, “Oh, gosh. Do I have to shut down? What do I do?”

As we got closer to the launch, where people could pay for Frame.io and use it, my time naturally shifted towards it. I started turning down work from clients, because we were spending all of our time trying to get this thing ready.

I think it was starting to form in my mind: If we’re going to really go for this, we have to really go for it.

Did it feel like a major risk to abandon Katabatic for something much less certain?

I’d spent almost a decade building this post-production company from scratch. I probably had a few hundred thousand dollars in savings, and I spent a lot of that money on Frame.io. So, yeah, it was definitely a huge risk.

But it was a calculated one, and I was getting signals on the success of Frame.io along the way [from customers and investors] that encouraged me to take more risk and more risk and more risk. In the first 90 days after we publicly launched, we were doing $30,000 of monthly recurring revenue. We raised a $2 million seed round from Accel.

That was the moment I was like, “OK.” I don’t think I ever personally took another post-production job at that point.

Did you always think Frame.io could become a billion-dollar company? Was it a big, “swing for the fences” idea?

Frame.io is the idea that became bigger and bigger and bigger the more time we spent thinking about it. When we launched, I wouldn’t say I had conviction that it was going to be a billion-dollar business.

I think that’s true for a lot of founders. Not to compare myself to Mark Zuckerberg, but there’s these fun interviews of Mark from the early daystalking about how big Facebook was going to get. He’s like, “I don’t think we’re ever going to [grow beyond college students].”

It just happens. You go from $1 million in revenue to $3 million to $6 million. Then you’re pitching how you’re going to get to $10 million, $20 million and beyond. And I’m like, “Are we? I don’t know if we’re really going to get there.”

Every single fundraising round, you have to sell that pitch to every investor you talk to — but if I’m being honest, I [didn’t] know.

 

CNBC

The Federal Government has declared that the Nigerian National Petroleum Company Limited does not have the funds required to rebuild old pipelines.

The Minister of State for Petroleum Resources, (Oil), Heineken Lokpobiri, stated this at the just concluded Energy and Labour Summit 2024 organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja.

Lokpobiri, while speaking about the divestment of international oil companies and the need to ramp up production, emphasised that Nigeria also needs to repair its pipelines, which he said are old, corroded, and expired.

He noted that even if the country can produce more than 1.7 million barrels of crude oil, the problem is how to evacuate it to the terminal.

“Part of our problem is that pipelines that were traditionally transporting our crude were built in the 1960s and the 1970s and the lifespan is since over. We have identified that even when we can produce, evacuation is a big problem.

“The reason why pipeline vandalism is very easy to do is because the pipelines have all expired they completely corroded and so, anybody can just go and tap it and the thing is busted; but there are better technologies which are more expensive, there are better pipelines that other people are using in other countries, but they are not cheap, We also need to change our model.

“Now, the NNPC that is our joint venture partner, do they have the money to be able to replace these pipelines? I think NNPC will speak for themselves whether they have the money to be able to do that, and I don’t think they have,” Lokpobiri declared.

Consequently, he called for public-private partnerships to fix the old pipelines, saying, “That is why we have to go for the global model – PPP. We have to get the private sector to come in.

For the private sector to come into any country to invest, he said they must have confidence in such a country, stressing that this was lacking in the past 12 years when there was no foreign investment in the nation’s oil company.

“When this government, came we tried to rebuild the confidence and investors are coming,” Lokpobiri added.

The oil minister maintained that the smuggling of fuel from Nigeria to other neighbouring countries is because the NNPC imports and sells below the landing cost.

“Nigeria plays a very critical role in the energy security in Africa. That is why whatever PMS we import into Nigeria finds its way to the whole of West Africa. That is why smuggling cannot stop. If NNPC Imports PMS and sells to marketers at perhaps N600 or below, there’s no way that smuggling can stop,’ saying the security agents at the borders are also involved.

“When smugglers are taking the products outside the country, even if you put all the policemen on the road, they are Nigerians; you and I know the answer. If you put all the customs men on the road, they are Nigerians, you and I know what the problem is, and that is why I’m saying that for Africa to attain energy

security, Nigeria has to play a very strategic role,” he remarked.

On the supply of crude to Dangote and other local refineries, he expressed fear that this may suffer a setback except production is ramped up.

“Our ambition is to ramp up production. It is only when we ramp on production that the midstream and the downstream can also be successful. You know we resolve at the Federal Executive Council to sell crude to local refineries – Dangote and the other refineries that are refining products for local consumption.

“But the bigger challenge is whether we have enough quantity to be able to supply them because of certain things that happened before we came. You will agree with me that when I became minister one year ago, we were doing barely about a million barrels, but today we’re doing 1.7mbpd approximately, inclusive of condensate,” Lokpobiri said.

He added, “Supporting local refining is the way to go. We can look for investors to explore and ring out this crude, so I will be able to meet both our domestic obligation and also export some to be able to raise more dollars and meet our obligations.

“We are committed to ensuring we support local refineries with all the feed-stock. If you must supply refineries in Nigeria and you don’t have the crude to supply, it remains something that is written beautifully in a law.”

He said the Federal Government would ensure there is healthy competition by being fair to both the small and the big refiners.

 

Punch