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NNPC Didn’t Remit $81.2bn in Four Years – Reps’ Panel

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  • NNPC Didn’t Remit $81.2bn in Four Years – Reps’ Panel

The House of Representatives believes that the Nigerian National Petroleum Corporation did not remit a total of $81.2bn crude oil proceeds to the Federation Account in four years.

Its ad hoc committee, which is investigating the alleged export of $17bn worth of undeclared crude oil and gas resources, has demanded explanations from the corporation.

The investigation covers the year 2011 to 2014.

Our correspondent gathered on Monday that the committee, which is chaired by a member of the All Progressives Congress from Adamawa State, Mr. Abdulrazak Namdas, had analysed documents from various sources, including the Nigerian Extractive Industries Transparency Initiative, Central Bank of Nigeria, Department of Petroleum Resources and the NNPC itself before coming to the conclusion.

In its set of questions sent to the NNPC, a copy of which was obtained exclusively in Abuja, the committee noted that the total receipts from crude proceeds for the four years tallied at $123.9bn.

However, lawmakers found out that the NNPC remitted only $42.7bn to the Federation Account, “giving a frightening shortfall of $81.2bn.”

The average crude oil prices per barrel for the respective years were $111.90 (2011); $112.01 (2012); $110.12 (2013); and $101.91 (2014).

The barrels sold for the respective years were 301.7 million; 296.4 million; 267.1 million; and 270.7 million, bringing the total for the four years to 1.136 billion barrels.

According to the committee, the year-by-year breakdown of the expected earnings were $33.7bn (2011); $33.2bn (2012); $29.4bn (2013); and $27.5bn (2014), totalling $123.9bn.

But, the committee said the corporation declared only $42.7bn, a figure which was confirmed by the CBN.

This was broken down into $14.3bn (2011); $10.2bn (2012); $8.4bn (2013); and $9.8bn (2014).

“The committee’s worries are anchored on the fact that out of the expected receipt of $123.9bn, the CBN confirmed a total receipt of only $42.7bn, giving a shortfall of $81.2bn,” the document stated.

In addition, the NNPC was asked to explain the conflicting reports by the corporation and the DPR on crude lifting from Pennington in 2011.

While the NNPC claimed that 991.4 million barrels and 960.4 million barrels were lifted in May and October, respectively, the DPR reported that there was only one lifting of 960.4 million barrels in October.

“The committee wants you (NNPC) to prove how the sale of 991.4 million barrels of crude oil was consummated,” the document added.

The corporation was further directed to provide answers to the queries within one week.

The committee is investigating allegations that major government agencies colluded with International Oil Companies to short-change Nigeria in the crude and gas exports deals.

The House had by its resolution in December 2016, ordered the probe after lawmakers established evidence of fraudulent transactions and irregularities in crude and gas exports within the period under review.

Information at the disposal of the committee put the figure of undeclared crude shortfalls between 2011 and 2014 at 57,830,000 barrels.

“This translates to well over $12bn worth of crude shipped to the United States. Also, over $3bn worth was shipped to China and $839,522,600 worth of crude was taken to Norway. These figures were conclusively ascertained by buyers, bills of lading, arrival dates, destination ports, quantity of crude oil and other documented information,” the document stated.

The US was listed as the leading destination for the crude out of the 51 countries that received crude exports from Nigeria within the period.

“The report was made available to the former President; Office of the Attorney General of the Federation; Nigeria Maritime Administration and Safety Agency; and the Economic and Financial Crimes Commission, and that as of today (2016), the country has to its credit over $17bn of recoverable shortfalls from undeclared crude oil exports to global destination,” it added.

In the case of liquefied natural gas shortfalls, the document noted a loss of 727,460 metric tonnes, estimated at about $461.04bn, firmly established shortfall from shipment to seven countries.

“These have been established as undeclared cargoes,” the committee stated in the document.

The committee named many IOCs for questioning over their alleged roles in the transactions.

These include Shell (US) Trading Company; Mobil Producing Nigeria; Chevron Nigeria Limited; ESSO Exploration and Production Nigeria; ExxonMobil; Brass Oil Services Company Nigeria Limited; Consolidated Oil Limited; Star Deep Water Petroleum Limited; Supreme Jute and Kntex Limited; and Duke Oil Company Limited.

Several of the IOCs have already appeared before the committee to explain their level of involvement in the deals.

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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Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance

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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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Intra-Regional Trade Potential a Key Focus in New Report

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A new focus report, produced by Oxford Business Group (OBG) in partnership with the African Economic Zones Organisation (AEZO), shines a spotlight on the continent’s rapidly developing industrial sector, which is poised to become a key driver of broader economic growth as regional integration increases.

Titled ”Economic Zones in Africa – Focus Report”, the report was launched at the AEZO’s 6th Annual Meeting II, which took place on November 25 at the African Continental Free Trade Area (AfCFTA) Secretariat office in Ghana, with participants also able to attend remotely. The meeting was held under the banner “Connecting African Special Economic Zones (SEZs) to Global Value Chains at the era of the AfCFTA” and explored a range of topical issues relating to SEZs, from their potential to boost trade to the impact of Covid-19 on the continent’s supply chains.

The focus report examines the wealth of benefits that the AfCFTA is expected to deliver to both Africa’s economic zones and the businesses located in them, which range from greater market access to a reduction in trade barriers and lower production costs.

The disruption that the pandemic brought to supply chains and the opportunities emerging from the health crisis for businesses to become part of nascent regional value chains across a more closely connected continent are a key focus.

The report also charts the digital transformation taking place in many of Africa’s economic zones, as businesses make the move away from traditional segments to high-tech processes and digital services, adding value to their offerings in the process.

In addition, it provides in-depth analysis of the drive evident among many SEZs to put environmental, social and governance principles and sustainable business practices at the heart of their strategies, at a time when ethical investment and alignment with the UN Sustainable Development Goals are high on the global agenda.

The report includes in-depth case studies and viewpoints by representatives from key industry players namely: Tanger Med; Polaris Parks; Lagos Free Zones; Ghana Free Zones Authority; Misurata Free Zone; and Sebore Farms.

It also includes a contribution from Ahmed Bennis, Secretary General, AEZO, in which he highlights the role that SEZs are playing in the continent’s industrial transformation and the importance of supporting their development.

“Economic zones can play a game-changing role in Africa’s diversification and inclusion by providing end-to-end solutions and services that support industrial upgrades and increase countries’ attractiveness for investment,” he said. “With the implementation of AfCFTA and the post-Covid-19 recovery that the world is beginning to experience, we believe that real investment opportunities exist in Africa at this moment, which can translate into job creation and social and economic development. Africa has resources that need to be developed and economic zones can play a key role in this.”

Bernardo Bruzzone, OBG’s Regional Editor for Africa, added that while African economic zones had experienced production problems during the pandemic due to global supply chain disruptions, ongoing remedial action, including new infrastructure and human capital development, would help provide resilience against future external shocks.

“Africa’s real GDP growth is forecast to reach 3.4% in 2021, with an increase in intra-regional trade and improved connectivity among the facilitators of economic recovery,” Bruzzone said. “Looking ahead, we see economic zones as having a key role to play in helping the AfCFTA achieve its potential through the development of new strategies that will lead to a more diverse, higher-value range of exports.”

The study forms part of a series of tailored reports that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.

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Lagos Budget N1.4 Trillion for 2022, Budget Surpasses Five Other Southwest States Combined

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Lagos state government has proposed N1.388 trillion budget for the year 2022. The proposed budget was presented to the House of Assembly on Wednesday.

While presenting the proposed budget, Governor Babajide Sanwo-Olu said the State would be spending N325 billion on vital infrastructure projects in key sectors to energise and expand the growth of the State’s economy.

The key areas of growth identified by the Governor include Works and Infrastructure, Waterfront Infrastructure Development, Agriculture, Transportation, Energy and Mineral Resources, Tourism, Entertainment and Creative Industry, Commerce and Industry, Wealth Creation and Employment.

The proposed budget, christened “Budget of Consolidation”, will be the last full-year fiscal plan of the State before the next general election.

About N823.4 billion, representing 59 per cent of the 2022 budget, is earmarked for capital expenditure. Recurrent expenditure, representing 41 per cent, is N565 billion, which includes personnel cost, overhead and debt services.

Of the total proposed expenditure, N1.135 trillion would accrue from Internally Generated Revenues (IGRs) and federal transfers, while deficit financing of N253 billion would be sourced from external and domestic loans, and bonds projected to be within the State’s fiscal sustainability parameters.

The State would be earmarking an aggregate of N137.64 billion, representing 9.92 per cent of the 2022 budget, for the funding of green investment in Environment, Social Protection, Housing and Community Amenities.

This financial proposal is presented with a sense of duty and absolute commitment to the transformation of Lagos to a preferred global destination for residence, commerce, and investment. The budget projects to see a continuing but gradual recovery to growth in economic activity as the global economy cautiously recovers from the impact of the Coronavirus pandemic,” the governor said while presenting the budget to the house.

Meanwhile, the 1.388 trillion budgeted for 2022 is higher than the budget of the five other southwest states combined. For 2022, Ekiti State’s budget is 100.7 billion, Osun 129.7 billion, Ondo 191billion, Oyo 294 billion. Ogun’s budget for 2022 is not yet finalised, but going by their 2021 budget of 339 billion, the combined budget of the five South-West states then amount to 1.053 trillion. With this, Lagos state budget is higher than the five states budget with a difference of 335 billion.

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