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FG Inaugurates Solid Minerals Development Fund Board

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Kayode Fayemi
  • FG Inaugurates Solid Minerals Development Fund Board

The Federal Government on Thursday inaugurated the Board of the Solid Minerals Development Fund, signifying the take-off of the fund for which President Muhammadu Buhari had in December 2016 approved N30bn.

Inaugurating the board in Abuja, the Minister of Mines and Steel Development, Dr. Kayode Fayemi, said the approval of the board by Buhari was a clear indication of the administration’s commitment to fixing the Nigerian mining sector to become a key contributor to the economy.

He said the mandate of the board of the SMDF included the restructuring and operationalisation of the fund by designing the appropriate governance structure, organisation, strategies and operations for effective management; to promote the establishment of the Special Purpose Vehicle Facilitator Fund; and work with investors to establish its governance and financial structure.

Fayemi said membership of the board was carefully drawn from active practitioners in the sector.

He stated, “We are pleased that this administration’s strategic focus on the mining sector is being justified by the very strong sectoral performance that is now being recorded.

“The first quarter 2017 Gross Domestic Product results recently released by the National Bureau of Statistics indicated that coal mining, metal ores and quarrying and other metals grew strongly by 2.03 per cent, 40.79 per cent and 52.54 per cent, respectively.”

He added, “There is, however, a lot more grounds to cover. In the Federal Government’s recently launched Economic Recovery and Growth Plan, the minerals and metals sector was duly recognised as one of those to drive Nigeria’s recovery. The document projected to grow the sector’s contribution to the GDP from N103bn in 2015 to N141bn in 2020, at an average annual growth rate of 8.54 per cent.

“Other targets for the sector include the facilitation of coal to power plants to contribute to our energy mix towards bridging our energy deficits. The strategy document, which is very much in sync with the sector’s road map, also aims to produce geological maps of the entire country by 2020 on a scale of 1:100,000; as well as integrate artisanal miners into the formal sector.”

The Chairman of the Board, Alhaji Uba Malami, gave an assurance that the members would focus their energy on pursuing speedy establishment of the SMDF to achieve Federal Government’s strategy in the sector as enshrined in the ERGP.

Other members of the board are Hajia Fatima Shinkafi (secretary and head of secretariat), Mr. Ademola Gbadegesin, Mr. Theo Iseghohi, Mr. Samuel Eze, Dr. Bassey Uwatt (representing the Central Bank of Nigeria) and Yinka Mubarak (representing the Bankers’ Committee).

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

Oil Firms Borrowed N130B From Banks in February – CBN

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Operators in the downstream, natural gas and crude oil refining sectors of the Nigerian oil and gas industry borrowed N130b from Nigerian banks in February amid the significant rise in global crude oil prices.

The debt owed by the oil and gas companies rose to N4.05tn in February from N3.92bn in January, according to the latest data obtained from the Central Bank of Nigeria on Monday.

Operators in the upstream and services subsectors owed banks N1.26tn in February, down from N1.27tn a month earlier.

The combined debt of N5.31tn owed by oil and gas operators as of February 2021 represents 25.29 percent of the N21tn loans advanced to the private sector by the banks, according to the sectoral analysis by the CBN of deposit money banks’ credit.

Oil and gas firms received the biggest share of the credit from the deposit money banks to the private sector.

The slump in oil prices in 2020 as a result of the coronavirus pandemic hit many oil and gas companies hard, forcing them to slash their capital budgets and suspend some projects.

A global credit rating agency, Moody’s Investors Service, said last month that the outlook for Nigeria’s banking system remains negative, reflecting expectations of rising asset risk and weakening government support capacity over the next 12 to 18 months.

“Nigerian banks’ loan quality will weaken in 2021 as coronavirus support measures implemented by the government and central bank last year, including the loan repayment holiday, are unwound,” said Peter Mushangwe, an analyst at Moody’s.

The rating agency estimated that between 40 percent and 45 percent of banking loans were restructured in 2020, easing pressure on borrowers following the outbreak of the pandemic.

Another global credit rating agency, Fitch Ratings, had noted in a December 8 report that Nigerian bank asset quality had historically fallen with oil prices, with the oil sector representing 28 percent of loans at the end of the first half of 2020.

It said the upstream and midstream segments (nearly seven percent of gross loans) had been particularly affected by low oil prices and production cuts.

“However, the sector has performed better than expected since the start of the crisis, limiting the rise in credit losses this year due to a combination of debt relief afforded to customers, a stabilisation in oil prices, the hedging of financial exposures and the widespread restructuring of loans to the sector following the 2015 crisis,” it said.

The rating agency predicted that Nigerian bank asset quality would weaken over the next 12 to 18 months.

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Economy

Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

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Dollar thrive in Nigeria

The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

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Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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Petrol Importation - investorsking.com

The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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