- NLNG’s Revenue Crashes by N646.6bn
The Nigeria Liquefied Natural Gas Limited posted a revenue decline of N646.6bn ($2.12bn at N305/$ official exchange rate) in its 2016 financial year.
It was gathered that the fall in the gas company’s revenue was largely due to the crash in crude oil prices globally in the year under review.
Crude prices crashed from over $100 per barrel in 2014 to as low as $23 in 2016, a development that threw many oil dependent countries into economic crisis.
The NLNG’s revenue had continued to fall since 2014. It plunged from $10.79bn in 2014 to $6.84bn in 2015 and further dropped to $4.72bn in 2016.
The NLNG was incorporated in 1989 to harness Nigeria’s vast natural gas resources and produce liquefied natural gas as well as natural gas liquids for export.
The firm is owned by four shareholders and they include the Federal Government, represented by the Nigerian National Petroleum Corporation with 49 per cent stake; Shell, 25.6 per cent, Total LNG Nigeria Limited, 15 per cent; and Eni, 10.4 per cent.
Data from the firm’s financials from 1999 to 2016 showed that the decline in its revenue since 2014 resulted in corresponding reduction in the dividend to the NNPC, pay-as-you-earn, withholding tax, local contracts for goods and services, as well as dividend to Shell, Total and Eni.
The firm, however, increased its capital investment in 2015 and 2016 despite the successive plunges in its revenue in the stated periods.
Specifically, after spending $24.76m on capital investments in 2014, the NLNG increased the amount it invested oin capital projects to $864.76m in 2015.
It further increased its capital investment to $881.84m in 2016, notwithstanding the $2.12bn drop in revenue recorded in that financial year.
Speaking on the performance of the gas company, its Chief Executive Officer, Mr. Tony Attah, admitted that the 2016 financial year was tough.
He said the market was down but there was hope that there would be a better performance this year.
Attah said, “People will think it was only oil price that was down. Gas price was down as well; but we are very excited at the recent development with the improvement in the market. We are also seeing some improvement upwards. We are seeing improving demands in India, China and some Asians are beginning to take the centre stage again.
“So last year was a tough year, which forced a lot of tightening; but I see more hope in 2017.”
Commenting on the recent pipeline explosion that hit a section of the right of way housing two gas transmission lines, located three kilometres from Rumuji in Rivers State, Attah stated that company’s facility was not affected in the incident.
He said, “Let me first correct the impression that the explosion was on the NLNG line. I read a few things saying that the NLNG pipeline exploded. No, the pipeline does not belong to us; it is true that we also have a line in the same corridor but in this instance, it was not our line. We are partnering the company whose line was impacted to ensure that we restore operations.
“We are not receiving gas from them at the moment because of the situation. But we are working to have them come back because if they are back, we are sure to receive more supply to fill our trains 1-6.”
World Bank Lauds Kogi’s 2020 Financial Statement
The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.
In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.
As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.
SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.
The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.
The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.
Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.
The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.
Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank
The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.
The bank disclosed in its November report, Nigeria Development Update.
Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.
This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.
The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.
“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”
The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.
It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.
“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”
The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.
Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance
Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.
Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.
According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.
Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.
The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.
She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.
“Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”
“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.
Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.
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