- After Recession, Focus on Non-oil Sector, Utomi, Others Advise FG
A professor of Political Economics, Pat Utomi, has advised the Federal Government to come up with specific and deliberate policies that will enhance the growth of the non-oil sector in order to enable the country to sustain its exit from recession.
In its second quarter Gross Domestic Product report released on Tuesday, the National Bureau of Statistics data showed that the Nigerian economy recorded the first positive growth in the last six quarters in the second quarter of this year, and consequently exited recession.
Utomi, who noted that the 0.55 per cent GDP growth rate recorded in the second quarter was low and tepid relative to population growth, stressed that policymakers must seek to grow the economy through the non-oil sector.
“There is no full consciousness that we are approaching the end of the oil economy. For some, all they have known in the last 40 years is the oil economy. This is the time to look away from oil and grow our economy,” he added.
Outlining ways to enhance economic growth, the former presidential aspirant said there must be deliberate efforts to cut down the size of government, while policymakers must also make significant efforts to stimulate the private sector to pay taxes that would be used to boost growth.
Utomi emphasised the need to promote policies that would support the private sector to grow, adding that policymakers often make certain policies that were structured to prevent the private sector from making profit.
He added, “I have spoken with a lot of investors in the oil and gas sector. They said the problems policymakers have created are 10 times more than the decline in the price and output of oil.
“This means what we all need education, rather than see things that they are attacking us.”
The founder of the Centre for Values in Leadership said there was a need for the government to unleash entrepreneurship in sectors of the economy that could create jobs and enhance economic growth.
He stated that the agriculture, manufacturing and services sectors were significant and that the government needed to support players in these sectors and give them certain deliverables with specific timelines.
Utomi said, “I don’t want to talk about what I am doing in this sector, but I need to say that we need to adopt the principle of latent comparative advantage in these sectors. Take agriculture for example, we need to look at how we can combine agriculture with technology and manufacturing. For example, we can pick an agriculture produce where we have comparative advantage as a country, and see how we can produce it to meet local demand and then begin to export.
“The same thing we do in agriculture, we can do in manufacturing and services sector. Look at our airports in the services sector, we can make Nigeria a tourist destination. For example, what does The Gambia has that Nigeria does not in order to attract tourists?”
A professor of Economics at the University of Uyo, Leo Ukpong, while describing the economic recovery as weak, maintained that policymakers must seek to make manufacturing and agriculture to drive economic growth.
“We cannot expect any growth that is based on the oil sector to be sustainable. We need to seek to make the manufacturing and agricultural sectors to drive our growth,” he added.
A professor of Economics at the Olabisi Onabanjo University, Sherriffdeen Tella, said the Federal Government must ensure stability in oil production in the Niger Delta, noting that any disruption would affect the economy.
He advised the Central Bank of Nigeria to ensure that the naira would not depreciate, while efforts must be made to bring down interest rate in order to free up capital for the manufacturing and other sectors to grow.
Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020
Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.
In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.
Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.
This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).
Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.
Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.
The energy company made another payment of US$17.935 million in fee for 2020.
While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.
Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.
Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.
FIRS Sets N5.9 Trillion Revenue Target for 2021
FIRS to Generate N5.9 Trillion Revenue in 2021
Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.
Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.
According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.
However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.
He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.”
Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.
“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.
Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom
The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.
Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.
The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.
The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).
Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.
Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.
“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.
The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.
The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.
This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.
The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.
Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.
Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.
OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.
The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.
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