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NPDC Owes Federation $5.531bn, N72.435bn, Says NEITI

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Crude Oil
  • NPDC Owes Federation $5.531bn, N72.435bn, Says NEITI

The Nigerian Petroleum Development Company owes the federation the sum of $5.531bn and N72.435bn, the Nigeria Extractive Industries Transparency Initiative has said.

The NPDC is the upstream arm of the Nigerian National Petroleum Corporation and has the mandate of exploration and production of crude oil.

NEITI stated that the unremitted funds from the NPDC fell under three categories, adding that the first was the full payment for the 12 Oil Mining Leases divested from the Shell and Agip joint ventures.

Explaining how the debt of the NPDC to the federation came about in its latest policy brief, which focused on unremitted funds, economic recovery and oil sector reforms, the agency stated that the NNPC’s divestment of 55 per cent of its stake in the Shell JV was valued at $1.8bn by the Department of Petroleum Resources.

“However, considering the figure from Shell’s divestment of between 30 and 45 per cent of its own share in the same joint venture, the PwC arrived at an alternative commercial valuation of these assets of $3.4bn. This means the eight OMLs were undervalued by, or valued at a discount of 47 per cent.

“Despite this, the NPDC has paid only $100m on these OMLs divested between 2010 and 2011, leaving an outstanding of $1.7bn of the discounted valuation. The four assets divested in 2012 by the NNPC to the NPDC under the Agip JV were not valued until four years later. In the third quarter of 2016, the DPR valued these four OMLs at $2.225bn. The NPDC has asked for clarification of the basis of the valuation. Therefore, the NPDC owes the federation $3.925bn for these 12 divested assets.”

NEITI said its audits also revealed that cash calls amounting to $552m were erroneously paid on these divested assets by the National Petroleum Investment Management Services, the investment arm of the NNPC.

It observed that although the NPDC refunded $424m to NAPIMS, which was not refunded to the Federation Account, the NPDC had yet to refund $148.278m and N2.42bn from the cash-calls mistakenly paid to it.

The agency further stated that the third element of unremitted revenues in this category related to arrears of liabilities of taxes, royalties and levies.

NEITI said its 2014 audits revealed that as of December 2014, the NPDC had failed to remit $1.458bn for royalty oil and royalty gas, among others.

Also, it stated that the NPDC had failed to remit N70.014bn for the pay-as-you-earn, gas flare penalty, Niger Delta Development Commission levy, and a few others.

“In summary, the NPDC owes the federation $5.531bn and N72.435bn. It should be noted that this is without factoring the interests that should have accrued, over time, on these funds,” NEITI said.

The Executive Secretary of NEITI, Mr. Waziri Adio, frowned at the situation where agencies of the Federal Government would withhold money meant for the Federation Account, instead of making the required remittances as stipulated by law.

“It is not right for government agencies to withhold funds meant for everybody no matter the excuse they provide,” he said.

On whether the NNPC was aware of this huge indebtedness to the federation, Adio responded in the affirmative, noting that the national oil firm had a member representing the corporation on the board of NEITI.

According to him, the NNPC and the NPDC signed off the audit reports published by NEITI, which contained the figures.

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.

Finance

Ecobank To Pay Customers N5 For Every Dollar Received

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ecobank

Ecobank To Pay Customers N5 For Every Dollar Received

Ecobank has implemented the CBN scheme which offers N5 for every Dollar received into domiciliary accounts or as cash over the counter. Korede Demola-Adeniyi; Head, of Consumer Banking, Ecobank Nigeria, who announced this in Lagos stated that the decision is in line with the CBN directive and fully aligns with efforts to encourage the inflow of diaspora remittances into the country.

She noted that the “CBN Naira 4 dollar scheme” is an unprecedented incentive for senders and recipients of international money transfers.

Korede Demola-Adeniyi said that the scheme takes effect from 8th March and will run till 8th May 2021. “Ecobank will pay N5 on every Dollar so beneficiaries will not only get the foreign currency sent from their family and friends abroad, but they will also get extra Naira”, she stated.

Only recently, Ecobank had a first-of-its-kind virtual Diaspora Summit to discuss opportunities for Nigerians living abroad and the various platforms available to assist them with their investment decisions and remittance needs. The event had major players in the remittance space, diaspora audience, government officials and notable stakeholders in attendance.

Further, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan has disclosed that apart from consistent engagement with Nigerians in the diaspora, Ecobank is leveraging its digital technology to make remittances to Nigeria and Africa easy, convenient and affordable.

Mr. Akinwuntan stated that growing evidence has shown a positive relationship between diaspora remittances and economic growth.

“Ecobank will continue to pursue its mandate of helping to enhance the economic development and integration of Africa, through the 33 countries where the bank operates on the continent. Ecobank’s Rapidtransfer and mobile app (Ecobank Mobile) enable Africans, wherever they are, to easily and instantly send money to bank accounts, mobile wallets and agent locations across 33 African countries”, he stated.

Ecobank Nigeria, a member of the Pan African Banking Group is committed to supporting Africans in the diaspora by providing advisory services, remittance solutions, investment options and financial planning schemes. The bank also offers mortgages, treasury bills, capital market instruments, among others.

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Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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FCMB

The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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