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Nigeria LNG Pays $5.5 Billion in Taxes

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Train 7 Project
  • Nigeria LNG Pays $5.5 Billion in Taxes

The Managing Director and Chief Executive Officer of Nigeria LNG Limited (NLNG), Mr. Tony Attah, has stated that the company has paid $5.5billion as taxes since the 10 years tax holidays granted by the NLNG Act for Company Income Tax expired.

This is coming as the price of liquefied gas in 2016 was the lowest in seven years with the company generating $4.723 billion in 2016, against the all-time peak of $11.592 billion generated in 2012.

Presenting the company’s Facts and Figures contained in NLNG 2017 publication, a compendium of the NLNG business in Lagos recently in the presence of the company’s Deputy Managing Director, Sadeeq Mai-Bornu; General Manager, External Relations, Kudo Eresia-Eke and Finance General Manager, Solomon Folaranmi, the CEO said the company paid $5.5 billion in taxes during the period, while cumulative revenues since inception was $90 billion.

Attah said the company also generated $13 billion for the federal government through feedgas purchases and $15 billion in dividends, adding that while monetising the country’s gas resources, the company contributed to reducing gas flaring from 65 per cent to less than 20 per cent.

“In addition, NLNG has contributed significantly to the domestic LPG industry, supplying some 40 per cent of cooking gas to Nigerian homes and businesses. This intervention continues as part of strategies and initiatives aimed at deepening the availability and usage of cooking gas in the country. In the Niger Delta, NLNG committed more than $200 million to corporate social responsibility projects in the Niger Delta especially in the areas of capacity building and infrastructure development. We are also ready to commit some N60 billion to see the Bonny-Bodo road come into reality and commit N3 billion annually for the next 25 years to transform Bonny into a Dubai of sorts. All these are achieved with a management staff entirely made up of Nigerians and a workforce which is 95 per cent indigenous. But all of these achievements are in jeopardy with the proposed amendment by the House,” he explained.

“If the amendment is passed, the NLNG expansion project will be jeopardised and Nigeria will lose investments of $1-3 billion annually in the Upstream to enable NLNG maintain current production capacity and gas developments. It means an immediate loss of foreign investment totalling $25 billion in respect of Train 7 and 8 investments. Another impact will be the potential loss of about 18,000 jobs required for the construction activities of the Trains. An amendment or change in the NLNG Act portrays Nigeria as a promise-breaker and untrustworthy, damaging the country’s reputation and hamstringing its ability to attract foreign investment,” he added.

Citing the Qatari example, Attah said: “Qatar started to ship LNG in 1997, two years before Nigeria. But you have to be awed by what the country has achieved since then. Today, oil and gas, and principally LNG is the foundation of Qatar’s economy; and account for more than 70 per cent of total government revenue, and more than 60 per cent of GDP, as well as roughly 85 per cent of export earnings. Qatar has LNG capacity of about 77MTPA, and generates revenues of about $91 billion per year. Gas was the catalyst for transformation of a small emirate to a global economic powerhouse. This will give you a feeling of what can happen when you focus on gas.”

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.

Economy

Senate Goes After Agencies That Failed To Remit Into Federation Account

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2018 budget

The Senate has disclosed that no fewer than 60 federal government agencies failed to remit over N3 trillion generated revenue into the Federation Account from 2014 to 2020.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said that some of the affected parastatals have started crediting government coffers with the outstanding revenues they generated in the last six years.

The Senate Committee on Finance headed by Senator Olamilekan Adeola made the allegation in the course of investigating revenue remittances by MDAs between 2014-2020 and payment of one percent Stamp Duty on all contract awards by the MDAs within the same period.

Although the committee did not categorically mention the agencies involved but the media gathered that almost all the revenue-generating agencies of the government failed to remit generated funds into the coffers of the government.

The Minister of Finance, Mrs. Zainab Ahmed, Director-General of Budget Office, Mr. Ben Akabueze, Auditor General of the Federation, Mr. Idris Ahmed, and other heads of agencies appeared before the committee over the ongoing investigation into revenue remittances by MDAs between 2014 and 2020.

According to senator Adeola, calculations from the Fiscal Responsibility Commission revealed that about 60 Government Owned Enterprises (GOEs), may have about N3trillion of government revenue still unremitted in their coffers or already spent on frivolous expenditure contrary to the Constitution and Fiscal Responsibility Act, 2007.

He said: “The reconciliation done so far by the Office of Accountant General of the Federation is in excess of over a trillion naira going to like two, three trillion Naira or thereabouts and these monies are still hanging in the hands of these agencies and we have asked the office of Accountant General to get the money into the government coffers and we discovered that they are giving them a payment notice without necessarily following up this process.

“We have noticed that in the so-called 80 percent of operational surplus the agencies refer to, many of these agencies proved frivolous expenditure and they have taken advantage of the current system and refuse to remit this amount as at when due. We tried to audit the account of these agencies year in year out for the past five years and some of the revelations are scary. How do we explain that an agency of government that has a provision in the budget for Capital, Overhead, and Personel, in their audited account, they have gross revenue of N500 million and they are asking for N200 million?”.

He added that since the commencement of the investigations some agencies have complied with the committee’s directive with some of them paying back tens of millions of Naira with receipts to show from the Office of the Accountant General of the Federation.

“There is no gainsaying the fact that if these revenues are paid to the Consolidated Revenue Fund (CRF) for proper appropriation by the parliament during budget considerations, we are going to reduce dramatically the size of our deficit and hopefully, minimise our borrowing.

“We cannot continue to run government business as we used to do in this time when there are huge demands for the government to fund needed infrastructure and other socio-economic programs”.

Adeola stressed that the minister and other top officials were invited to get their full buy-in and also brief them on the revelations unearthed by the over four-week-long investigations with many agencies committing all manner of illegalities relating to the expenditure of government funds that should rightly be paid into the Consolidated Revenue Fund (CRF).

The minister, in her contribution, confirmed that in recent times a good number of agencies have been directed to pay back revenues collected on behalf of the federal government as required by the law.

Ahmed added that the executive arm of government is also scrutinising the application of the template of calculating and deducting operating surpluses by agencies of government to ensure that the right amount is paid to the government.

On his part, the DG, Budget Office, Akabueze clarified that the issue of operating surpluses does not apply to any government agencies that are fully funded by the government, stressing that all revenue generated by such agencies must be paid in full into the CRF as it is illegal to spend out of such money without appropriation by the National Assembly.

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Economy

COVID-19: CBN Has Disbursed N83B Loans to Healthcare Sector

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CACOVID

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday, said the central bank had disbursed over N83.9 billion to pharmaceutical and healthcare practitioners in the country since the outbreak of the COVID-19 pandemic in the country.

Also, Lagos State Governor, Mr. Babajide Sanwo-Olu, has stressed the need for a slash in the cost of governance in the country, saying a lot more resources could be dedicated towards healthcare and critical infrastructure.

They both said this yesterday, at the premiere of ‘Unmasked’, a documentary on Nigeria’s response to the pandemic held in Lagos.

Emefiele, who was represented by the CBN’s Director of Corporate Communications, Osita Nwasinobi, explained: “Building a robust healthcare infrastructure was also vital from a security perspective, as some nations had imposed restrictions on the exports of vital medical drugs as well as the use of drug patents that could aid in containing the spread of the pandemic.

“As a result, we focused our interventions in the healthcare sector on three areas. Building the capacity of our healthcare institutions supporting the domestic manufacturing of drugs by businesses, and providing grants to researchers in the medical field, in order to encourage them to develop breakthrough innovations that would address health challenges faced by Nigerians.

“In this regard, we disbursed over N83.9 billion in loans to pharmaceutical companies and healthcare practitioners, which is supporting 26 pharmaceutical and 56 medical projects across the country. We were also able to mobilise key stakeholders in the Nigerian economy through the CACOVID alliance, which led to the provision of over N25 billion in relief materials to affected households, and the set-up of 39 isolation centres across the country. These measures helped to expand and strengthen the capacity of our healthcare institutions to respond to the COVID-19 pandemic.”

According to the CBN Governor, the banking sector regulator also initiated the Healthcare Sector Research and Development Intervention Grant Scheme, which was to aid research on solutions that could address diseases such as COVID-19, and other communicable/non-communicable diseases.

He said so far, five major healthcare-related research projects were being financed under the initiative.

Speaking further on the call to increase access to health insurance, Emefiele said: “One key aspect which we would have to address is improving access to healthcare for all Nigerians. A key factor that has impeded access to healthcare for Nigerians is the prevailing cost of healthcare services.

“According to a study by World Health Organisation (WHO), only four percent of Nigerians have access to health insurance. Besides food, healthcare expenses are a significant component of average Nigeria’s personal expenditure.

“Out of pocket expenses on healthcare amount to close to 76 percent of total healthcare expenditure. At such levels of health spending, individuals particularly those in rural communities may be denied access to healthcare services.

“Expanding the insurance net to capture the pool of Nigerians not covered by existing health insurance schemes, could help to reduce the high out of pocket expenses on healthcare services by Nigerians. It will also help to increase the pool of funds that could be invested in building our healthcare infrastructure and in improving the existing welfare package of our healthcare workers.”

“The private sector has a significant role to play in this regard given the decline in government revenues as occasioned by the drop in commodity prices. Leveraging innovative solutions that can provide insurance services at relatively cheap prices could significantly help to improve access to healthcare for a large proportion of Nigerians particularly those in our rural communities.”

According to Emefiele, the CBN remains committed to working with all stakeholders in improving access to finance and credit that would support the development of viable healthcare infrastructure in our country.

On his part, Sanwo-Olu said: “What are the lessons that we have learned with the Covid-19? Looking at all the things that Covid-19 has cost us, how are we preparing ourselves?

“The truth be told the structure of our governance system needs to change particularly the cost of governance. We need to speak up and ask ourselves are we ready to change.”

“When it gets to the election it is the same set of people that will come up and people don’t come out to vote and we end up having 20 percent out of 100 percent that will elect those that will govern. So, the change has to be about all of us. That is how the real change that will help us will come,” he added.

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Economy

Emefiele Says CBN Will Resist All Attempts to Continue Maize Importation

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Farm input

The Central Bank of Nigeria (CBN) has vowed to resist all attempts to continue the importation of maize into the country.

Godwin Emefiele, the governor, CBN, in a statement titled ‘Emefiele woos youths to embrace agriculture’, said: “the CBN would resist attempts by those who seek to continually import maize into the country.”

Emefiele, who spoke in Katsina during the unveiling of the first maize pyramid and inauguration of the 2021 maize wet season farming under the CBN-Maize Association of Nigeria Anchor Borrowers’ Programme, said maize farmers in the country had what it takes to meet the maize demand gap of over 4.5 million metric tonnes in the country.

With over 50,000 bags of maize available on this ground, and others aggregated across the country, maize farmers are sending a resounding message that we can grow enough maize to meet the country’s demand,” Emefiele said.

He explained that the maize unveiled at the ceremony would be sold to reputable feed processors.

He added that this would in turn impact positively on current poultry feed prices, as over 60 per cent of maize produced in the country were used for producing poultry feed.

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