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FG’s Revenue Rises by 20.4% in February

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  • FG’s Revenue Rises by 20.4% in February

Nigeria’s gross federally-collected revenue rose by 20.4 per cent in February 2017 to N545.05 billion, as against the N433.86 billion recorded in January 2017, the Central Bank of Nigeria’s (CBN) economic report for February 2017 has shown.

The increase relative to the preceding month level was attributed to the rise in receipts from both oil and non-oil components.

But, the revenue receipt recorded in February, fell short of the 2017 provisional monthly budget estimate of N792.71 billion by 31.2 per cent, according to the report.

Gross oil receipts, at N292.82 billion or 53.7 per cent of total revenue, fell below the provisional monthly budget estimate by 0.6, but was 37.9 per cent higher than the receipts in January 2017. The increase in oil revenue relative to the preceding month reflected the significant rise in receipts from domestic crude oil/gas sales and PPT/Royalties.

According to the report, at N252.24 billion or 46.3 per cent of the total revenue, gross non-oil revenue was below the 2017 provisional monthly budget estimate of N498.14 billion by 49.4 per cent. It, however, exceeded the receipts in January 2017 by 4.9 per cent. The poor performance relative to the provisional budget reflected the shortfall in most of the components due to the low economic activities in the country during the review period. The estimated federal government retained revenue for the month of February 2017, at N194.38 billion, was below the 2017 provisional monthly budget estimate of N337.48 billion and the receipts in January 2017 by 42.4 per cent and 5.9 per cent, respectively. Of the total receipt, federation account accounted for 68.5 per cent, while Exchange Gain, FGN Independent Revenue, VAT, Excess Crude, and NNPC refund accounted for 11.6, 6.5, 5.4, 4.7, and 3.3 per cent, respectively.

Similarly, the estimated total expenditure of the federal government, at N599.30 billion, exceeded both the 2017 provisional monthly budget estimate of N522.64 billion and January 2017 level of N552.74 billion by 14.7 and 8.4 per cent, respectively. Recurrent and capital expenditure, accounted for 64.9, and 30.5 per cent, respectively, while transfers accounted for the balance of 4.6 per cent of the total expenditure. A breakdown of the recurrent expenditure showed that non- debt obligation was 79.3 per cent of the total, while debt service payments accounted for the balance of 20.7 per cent.

“Increased domestic crude oil production recorded in the last two months continued in the review month as government and other stakeholders sustained effort at curtailing vandalism in the Niger-Delta region. Consequently, Nigeria’s crude oil production, including condensates and natural gas liquids stood at an average of 1.65 mbd or 46.2 million barrels in February 2017.

“This represented an increase of 0.08 mbd or 5.10 per cent over the average of 1.57 mbd or 48.67 million barrels (mb) recorded in January 2017. Crude oil export was estimated at 1.20 mbd or 33.60 mb, representing an increase of 7.14 per cent, compared with 1.12 mbd or 34.72 mb recorded in the preceding month. Allocation of crude oil for domestic consumption remained at 0.45 mbdor 12.60 mb during the review period,” it added.

Furthermore, the report showed that the external sector marginally strengthened in February 2017 following the increase in domestic oil production and international crude oil prices as well as improved inflow through autonomous sources.

Increase in crude oil prices followed the deal reached by the Organisation of Petroleum Exporting Countries (OPEC) members to cut production. However, foreign exchange supply shortages continued to constrain import of raw materials which suppressed domestic production. Consequently, non-oil export receipts declined in the review period.

Also, Foreign exchange inflow through the CBN, at US$2.37 billion, fell by 8.9 per cent, relative to the level in the preceding month, but was 94.4 per cent above the level in the corresponding period of 2016. The development reflected the significant decline in non-oil receipts due to lack of interbank swap transactions and fall in Treasury Single Account and third party receipts during the review month.

On the other hand, aggregate outflow through the CBN, at US$0.98 billion, declined by 7.3 per cent and 4.6 per cent below the levels in the preceding month and the corresponding period of 2016, respectively. The development was attributed to the decline in drawings on Letters of Credits (L/Cs), external debt service, foreign exchange special payment (NSA), other official payments and 3rd party MDA transfers. Overall, a net inflow of US$1.40 billion was recorded, compared with US$1.55 and US$0.20 in January 2017 and the corresponding period of 2016, respectively.

“Total non-oil export earnings, at US$0.31 billion, fell by 7.0 per cent, below the level in January 2017. This resulted from the 50.0 per cent, 41.6 per cent, 36.4 per cent and 32.3 per cent decline in receipts from transport, food products, agricultural and industrial subsectors, respectively. The manufactured product and minerals sub-sector, however, grew by 209.8 per cent and 5.0 per cent, respectively, above the levels in the preceding month to US$60.28 million and US$135.13 million,” it added.

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

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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