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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.”

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

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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