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Recover $22bn, N316bn From NNPC, NEITI Tells FG



NNPC - Investors King
  • Recover $22bn, N316bn From NNPC, NEITI Tells FG

The Nigeria Extractive Industries Transparency Initiative on Tuesday called on the Federal Government to urgently recover the over $21.778bn and N316bn unremitted funds meant for the federation but allegedly held up by the Nigerian National Petroleum Corporation and its subsidiaries.

It stated that if recovered, the funds could be used to finance the country’s Economic Recovery and Growth Plan, adding that a summary of its independent reports of the extractive industry showed that outstanding remittances meant for the Federation Account running into several billions of dollars were sitting at the national oil firm.

In a policy brief, which focused on unremitted funds, economic recovery and oil sector reform, NEITI said the recovery of the unremitted funds was more than enough to jump-start the economy.

“It is not right for government agencies to withhold funds meant for everybody, no matter the excuse they provide,” the Executive Secretary of NEITI, Mr. Waziri Adio, said during a briefing at the agency’s office in Abuja.

The agency in its policy brief, stated, “Findings from a series of audits of the oil and gas sector carried out by NEITI show that the NNPC and its upstream arm, Nigerian Petroleum Development Company, have failed to remit $21.778bn and N316.074bn to the Federation Account.

“These are amounts due from three main sources: Federation assets divested to the NPDC and NPDC’s legacy liabilities; payments for domestic crude allocation to the NNPC; and dividends from investment in Nigerian Liquefied Natural Gas Company paid to but withheld by the NNPC. Recovery of these funds will significantly enhance government’s fiscal position in the short term.”

NEITI said the Federal Government should go beyond recovery of the funds to putting in place adequate measures to ensure the revaluation of the assets divested to the NPDC to determine the actual market prices, with a view to recovering the full value of the assets and securing optimal benefits from them.

It said the government should review the relationship between the NPDC, NNPC and the federation to determine and establish effective lines of accountability of the corporation’s subsidiaries, and determine optimal mode of operation in line with global best practices.

It added that the government should review the process of acquisition of Oil Mining Licences by the NNPC and NPDC to ensure that long-term net positive value was realised given the availability of alternative economic options.

A breakdown of the unremitted funds of the oil and gas industry over the years include outstanding payment of $1.7bn arising from the transfer of eight OMLs from Shell Petroleum Development Corporation and the sum of $2.2m from four OMLs by Nigeria Agip Oil Company to the NPDC.

NEITI said the NPDC had yet to pay for these major national assets that were transferred to it for its commercial operations.

Also contained in the breakdown of unremitted funds was the cash call paid on the transferred OMLs amounting to about $148.28m.

The agency stated that this was in addition to legacy liabilities amounting to $1.5bn and the sum of $15.8bn unremitted to the Federation Account from accrued NLNG dividends between 2000 and 2014.

The agency recommended a comprehensive review of the transactions to conform to EITI’s accountability principles.

It said, “NEITI’s review of transfer of the country’s oil assets to the NPDC also shows that these decisions were not underpinned by sound economic judgment. Although the NPDC was established to foster indigenous participation.” in the upstream sector, it is not really able to produce at substantial levels on its own.

“In mid-2006, total output from its wholly owned production was just 10,000 barrels per day. On the other hand, production from its service contract agreement with Agip was 65,000bpd. Reasons given for the NPDC’s disappointing performance include undue interference by the NNPC, inadequate financial structure, and inability to source project finances.”

On the NLNG dividends, NEITI stated that while there was evidence of payment of dividends from the NLNG to the NNPC, there was no similar evidence to show that the corporation remitted the dividends to the Federation Account as required by Sections 80(1) and 162(1) of the Constitution.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024




The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%



IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty



South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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