- 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.
Federal Government Clears $120m Debt to Gas Companies Amid Nigeria’s Power Crisis
Amidst Nigeria’s persistent power crisis, the Federal Government has taken a pivotal step forward by clearing a significant portion of its debt to gas companies.
A sum of $120 million has been paid out of the country’s $1.3 billion indebtedness to gas suppliers, offering a glimmer of hope for improved energy stability across the nation.
The Minister of Power, Chief Adebayo Adelabu, underscored the critical role of gas in power generation and highlighted how the mounting debts had severely hampered gas supply to electricity-generating companies, exacerbating the country’s electricity shortfall.
Nigeria heavily relies on thermal power plants fueled by gas for over 70% of its electricity needs, making the timely settlement of gas debts paramount for enhancing power generation capacity and addressing the nation’s energy deficit.
Addressing delegates at the 7th Nigeria International Energy Summit in Abuja, the Director of the Decade of Gas Secretariat, Ed Ubong, expressed optimism about the government’s progress in offsetting its financial obligations to gas producers.
He emphasized the importance of aligning gas and power sectors to foster sustainable energy solutions.
As Nigeria grapples with the multifaceted challenges plaguing its energy landscape, the government’s commitment to settling outstanding gas debts marks a pivotal stride towards revitalizing the country’s power infrastructure and ensuring reliable electricity access for its citizens.
Nigeria Insurance Corporation Reimburses Depositors of 179 Closed Microfinance and Four Mortgage Banks
The Nigeria Insurance Corporation (NDIC) has announced the successful reimbursement of depositors affected by the closure of 179 microfinance banks and four mortgage banks across the country.
The reassuring news came during the 45th Kaduna International Trade Fair, where NDIC’s Managing Director, Dr. Bello Hassan, explained the corporation’s unwavering commitment to safeguarding depositors’ funds amidst financial uncertainties.
Dr. Hassan, represented by Hauwa Gambo, the NDIC’s Deputy Director of Communication, highlighted the corporation’s proactive measures in protecting the interests of depositors.
The introduction of the Single Customer View framework has expedited the process of reimbursing depositors of liquidated banks, ensuring swift and transparent transactions.
The corporation’s collaboration with the judiciary has yielded positive results, facilitating the speedy prosecution of failed insured banks and resolving long-standing cases of bank liquidations like Fortune and Triumph Banks.
This concerted effort has significantly enhanced the debt recovery rate, enabling NDIC to declare full liquidation dividends to uninsured depositors of over 20 deposit money banks.
Furthermore, NDIC has embraced digital remote payment strategies, streamlining electronic funds transfers to verified depositors’ alternate bank accounts.
The introduction of the ‘Deposit Tracer’ initiative in partnership with mobile operators aims to address apathy among depositors with small balances, providing accessible avenues for claiming funds trapped in closed banks.
The initiatives underscore NDIC’s proactive stance in safeguarding depositors’ interests and ensuring financial stability in Nigeria’s banking sector.
85.51 Million Nigerian Bank Customers Face Withdrawal Freeze Over NIN, BVN Deadline
As the March 1 deadline looms, an estimated 85.51 million Nigerian bank customers are facing the possibility of frozen accounts due to their failure to link their National Identification Numbers (NINs) and/or Bank Verification Numbers (BVNs) to their accounts.
Recent findings reveal the potential scale of the impending banking crisis.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) indicates that Nigeria had approximately 146 million active individual bank customers as of December 2022.
However, by January 26, 2024, only 60.49 million BVNs were recorded on the NIBSS portal, leaving a significant portion unlinked.
Meanwhile, about 104 million NINs had been issued by December 2023, highlighting the disparity between NIN issuance and BVN linkage.
The Central Bank of Nigeria (CBN) had earlier issued directives to banks, mandating them to restrict transactions on accounts lacking linked NINs and BVNs, with effect from March 1, 2024.
Any accounts found non-compliant risk being designated as ‘Post no Debit,’ rendering them unable to process further transactions.
Responding to the impending crisis, the Director-General of the National Identification Management Commission (NIMC), Abisoye Coker-Odusote, emphasized the need for the revalidation of Front-End Partners (FEPs) to ensure the integrity of the identity database.
She underscored the importance of NIN registration and urged collaboration with various stakeholders to expedite the process.
The Executive Vice Chairman/CEO of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, reiterated the significance of linking NINs to SIM cards to enhance national security.
Telecom subscribers were urged to comply with the NIN-SIM linkage directive to avoid service disruptions.
Meanwhile, financial service providers like Opay have issued reminders of the impending restrictions, urging customers to comply with the linkage requirements.
Amidst concerns, some customers contemplate transferring funds to compliant accounts to avoid potential financial setbacks.
As the deadline approaches, stakeholders are intensifying efforts to mitigate the impact of the impending banking crisis on millions of Nigerians.
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