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$2.3bn NNPC funds: CBN Bars 9 Banks From Forex Market

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The Central Bank of Nigeria on Tuesday wielded the big stick as it barred nine Deposit Money Banks from the nation’s foreign exchange market for failing to remit the sum of $2.334bn belonging to the Nigerian National Petroleum Corporation to the Treasury Single Account.

President Muhammad Buhari had last September ordered all the DMBs in the country to remit all Federal Government funds to the TSA.

The banks are: First Bank of Nigeria Limited ($469m); Diamond Bank Plc ($287m); Sterling Bank Plc ($269m); Skye Bank Plc ($221m); Fidelity Bank ($209m); United Bank for Africa ($530m); Keystone Bank ($139); First City Monument Bank (FCMB) $125m; and Heritage Bank ($85m).

Officials of the CBN officials told our correspondent that the sanction would remain until the DMBs could remit the funds to the CBN.

The officials further said the further disciplinary actions awaited the errant banks after remitting the funds in full to the Federal Government’s coffers.

As of time of filing this report, it was learnt that some bank executives were meeting with the CBN Governor, Mr. Godwin Emefiele, over the development.

However, the Head, Corporate Communications, UBA, Mr. Charles Aigbe, said the bank was not among the banks sanctioned by the CBN.

In a statement issued on Tuesday, Aigbe said, “Our attention has been drawn to report of the ban of UBA from the foreign exchange market by the CBN over the non-remittance of the NNPC/NLNG dollar deposits.

“We wish to state very categorically that UBA has completely remitted all the NNPC/NLNG dollar deposits. We thank all our numerous customers, business partners and other. stakeholders who have reached out to us on account of this report.”

The spokespersons for First Bank, Mr. Babatunde Lasaki, said the lender would issue a statement on the development.

But as of the time of filing this report, he had yet to do so.

Spokesperson for FCMC, Mr. Diran Olojo, in a terse response, said, “We are working with the CBN on an amicable resolution. This is really a function of the dire macroeconomic situation and illiquidity in the FX markets, rather than concealment or wilful non-compliance by banks.”

Spokesperson for Diamond Bank, Mr. Mike Omeife, did not respond to telephone calls and text messages seeking their reaction on the development.

The Skye Bank spokesperson, Mr. Ndumechi Ezurike, could not be reached for comments.

Spokespersons for Fidelity Bank, Sterling Bank and Heritage Bank could not comment immediately.

However, sources in the banks said their managements were working with the CBN to resolve the matter.

It was learnt that Fidelity Bank had been following a payment plan agreed with the CBN on the funds.

Following the President’s directive on the TSA last September, majority of the banks had complied by remitting all the Federal Government funds including that of the NNPC to the TSA.

However, the CBN reportedly fined First Bank, UBA and Skye Bank for failing some billions of naira to the Federal Government coffers in line with the TSA directive.

Further investigations by our correspondent revealed that following the presidential directive on the TSA, most of the DMBs remitted all naira-denominated funds in their possession including that of the NLNG/NNPC to the CBN.

However, the dollar components of the NLNG/NNPC funds in the banking system, estimated at about $5bn, could not be remitted immediately due to scarcity of forex in the country.

However, the banks reached an agreement with the CBN to start remitting the funds on monthly basis.

The monthly payment plan submitted by the banks to the CBN, it was learnt, was being followed by the some banks while other defaulted.

Following the compliance of some of the banks to the payment plan, the dollar component of the NLNG/NNPC funds was reduced to $2.3bn.

The failure of some banks to comply with the payment plans and the dire need for the CBN to shore up the nation’s fast-depleting external reserves, it was learnt, forced the regulator to adopt a measure.

This, findings revealed, forced the CBN to bar the banks from the forex market.

A top bank executive close to the development, who spoke under the condition of anonymity, said, “We need to admit we have a national problem. The NLNG deposit in the banking system was about $5bn. The banks have been paying and what is remaining now is just about $2bn. The banks have submitted a payment plan and they are following it. The banks have the naira equivalent of the outstanding amount. The challenge is that they cannot get dollar to buy to settle the money.”

Some top bankers said the approach the CBN was adopting was capable of compounding the problem.

“This could affect the banks image and their ability to get foreign investors; we need to admit we have a national problem and seek for ways to resolve it,” one of the bankers said.

The NLNG was paying dividends from the investment of the government in the company (NLNG) to the NNPC.

The dividends had accumulated to about $5bn; the

NNPC was investing this dividend payment in a dedicated account as fixed deposits with commercial banks.

It was learnt that when the Federal Government raised the issue that the dividends should have been paid into the Federation Account, the CBN governor invited the CEOs of all the banks that had the funds to Abuja for a reconciliation of the amount in each bank with the records of the CBN/NNPC, and agreed to a repayment time table of the funds with the banks

As of the time the TSA Implementation commenced in September 2015 some of the banks had paid back over 50 per cent of the funds based on the repayment timetable

This repayment by the banks was the bailout of $2.1bn (N414bn) that was shared by the FGN and state governments in July/August 2015.

When the TSA commenced, the banks reported these funds as part of government deposits they had but it was not remitted like other TSA funds because of the remittance timetable that had been agreed with the CBN.

The NNPC invited banks earlier this year to submit a revised repayment plan for the balance of the funds offers.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Fuel Scarcity: Petrol Sells N220 Per Litre in Nsukka

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Premium Motor Spirit, otherwise called petrol, now sells for between N200 and N220 per liter at the independent marketers’ service stations in Nsukka, Enugu State.

The News Agency of Nigeria is reporting the hike in the price against the official pump price of N162 per liter.

It said it started about a fortnight ago due to the scarcity of the commodity in the town and its environs.

Some residents of the town expressed deep worry over the development in separate interviews with NAN on Wednesday.

A civil servant, Stephen Ozioko, said the situation had further compounded the economic difficulties in the area.

Ozioko said many private car owners had been compelled to park their vehicles at home and move around in public transport.

He said: “Since the scarcity started, I decided to park my car and take public transport to the office and back home. N220 per liter is exorbitant and I cannot afford it considering my salary as a civil servant. I shall continue to use public transport until the situation returns to normal.”

A building material dealer, Timothy Ngwu, said the development had also led to an increase in transport fare in the area.

Ngwu said: “Some people now trek from Nsukka Old Park to Odenigbo Roundabout because of the 100 percent hike in fares from N50 to N100 by tricycle.

“Before now, transport fare from Nsukka to Enugu was N500, but transporters now charge between N800 and N1000.”

Also, a commuter bus driver, Victor Ogbonna, described the scarcity and hike in the price of petrol as “unfortunate and an ugly development”.

Ogbonna added: “Today, only a few filling stations are selling the commodity in Nsukka town, while others are shut.”

He alleged that some filling stations, which claimed to be out-of-stock, were selling to black marketers at night.

He said: “This is why black marketers have sprung up everywhere in the town, selling the commodity for about N300 per liter.”

NAN reports that virtually all the major marketers in the area have stopped the sale of petrol, claiming to be out-of-stock.

The people called on the government to urgently intervene in order to bring the situation under control and also put an end to its harsh economic effects on the messes.

NAN.

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DPR Targets N3.2T Revenue by Year-End

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Nigeria’s Department of Petroleum Resources (DPR) will hit the N3.2 trillion revenue target by December 2021, according to its Director/ Chief Executive Officer, Mr Sarki Auwalu.

Auwalu made the disclosure when he led a delegation of the DPR management team to the Executive Secretary of Petroleum Technology Development Fund (PTDF), Mr Bello Gusau, in Abuja on Wednesday.

He said that 70 percent of the revenue projection had already been met. “Last year, we exceed our revenue budget. We were given N1.5 trillion but we were able to generate N2.7trillion.

“This year, our revenue budget was N3.2 trillion. By the end of August 2021, we have generated up to 70 per cent.

“So, we with September, October, November and December, it is only the 30 per cent that we will work over,’’ he said

He noted that the government took advantage of fiscal terms within the old and new legislation, thereby creating a level of increased signature bonuses.

“We reorganise the work programme that is normally being done in the DPR to key into the new operational structure as we see it in the bill, now an act.

“That programme is being handled by the planning and strategic business unit as against what we use to have because the entire work programme is supposed to show not only technical but also commercial and viability of oil fields and to guarantee the return on investment for investors.

“We have also created an economic value and benchmarking unit to key into the new fiscal provisions of the PIA,’’ he said.

Commenting on capacity, Auwalu said the country stands at the advantage of exporting skills to emerging oil and gas countries across Africa with proper implementation of the newly passed Petroleum Industry Act.

This, he said, the DPR was ready to partner with the Fund to continue to build capacity in the oil and gas sector

He noted that the Federal Government was determined to create leeway that would encourage investors and drastically improve the nation’s petroleum industry.

He further noted that no fewer than 300 legal battles in the oil and gas industry in Nigeria, which had been stalled for the past 20 years in courts, had been resolved through alternative dispute resolution.

According to Auwalu, the DPR is strategising well to ensure effective implementation of the PIA.

Responding, Gusau commended the DPR for enabling the industry and enhancing business activities in the oil and gas sector.

He said that DPR remained the head of the oil and gas industry in Nigeria adding that the Fund was grateful to benefit from the wealth of ideas from DPR.

“The last time we visited, we had a good discussion and issues raised are being implemented like tracking the inflow of funds in signature bonus accounts.

“We extended the meeting and involved ministry of Finance, Accountant General office and even the Central Bank of Nigeria (CBN).

“Sitting at field development plans and attending significant meetings, helped us to know where and what the industry is trying to do and it also helps to inform our decisions in training and capacity plans,’’ he said

He urged the DPR to continue on its effort to ensure an efficient and productive petroleum industry in Nigeria

He assured collaboration with all as the head of the implementation committee of the Petroleum Industry Act. (NAN)

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Lagos Signs MoU With Energy Firms On Power Supply

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Lagos State Government, through its Ministry of Energy and Mineral Resources, on Tuesday signed a Memoranda of Agreement (MOA) with Ikeja Electric and Sahara Power Group to increase power supply and provide uninterrupted power to residents of the State.

The agreement between Lagos State Government and the energy firms signed will also include the distribution of free prepaid meters to low-income areas, with the pilot phase of 20,000 meters to be distributed in the Alimosho Local Government Area of the State.

Speaking during the signing of the agreement at the Lagos State Secretariat, Alausa, the Commissioner for Energy and Mineral Resources, Mr. Olalere Odusote, said the aim of the agreement is to increase power supply to at least 22 hours daily, from about eight to 12 hours daily.

The Commissioner said the implementation would start immediately, adding that Lagos State Government has identified a number of feeders that can provide power in 20,000 low-income areas with plans to replicate the initiative across the state.

He said: “This Memoranda of Agreement is to ensure the provision of uninterrupted power to residents, especially the low-income areas. It is also part of efforts to solve the problem of metering and infrastructure deficit to ensure these areas get power supply which is also measurable.

“The 20,000 meters have been procured by the state government and would be distributed free to low-income areas in Alimosho Local Government Area as the pilot phase. Our intention is to replicate this gesture in other areas of the state once the pilot phase is successfully executed.

“We have identified a number of feeders that can provide power in these communities and implementation would start immediately.”

Also speaking, the Managing Director of Ikeja Electricity Distribution Company (IKEDC), Folake Soetan expressed the firm’s readiness to support Lagos State Government in ensuring uninterrupted power supply to residents of the State.

In his address, the Managing Director of Sahara Power Group, Anthony Youdeowei, said his company will be transparent in its dealings with the Lagos State Government and Ikeja Electric to provide power supply for Lagosians.

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