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Senate: NNPC Reported Deficit of N3.1tn between 2012 and 2016

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  • Senate: NNPC Reported Deficit of N3.1tn between 2012 and 2016

Despite generating N15.5 trillion between 2012 and 2016, the Nigerian National Petroleum Corporation (NNPC) recorded a deficit of N3.1 trillion, with its expenditure put at N18.6 trillion in the period under review.

This was revealed in the interim report of the Senate Ad hoc Committee on alleged misuse and under-remittances of Internally Generated Revenue (IGR), by revenue generating agencies of the federal government. The report, which was laid before the Senate last week, would be considered this week.

The committee, headed by Senator Adeola Olamilekan (Lagos APC) also found that the 93 agencies refused to remit at least N1.7 trillion, to the coffers of the Federal Government in the same period. This is out of the total sum of N21.5 trillion which they generated.

The 32-paged report accused the Nigerian Ports Authority (NPA) of under-remitting N86.6 billion into the Consolidated Revenue Fund (CRF) despite generating N789.1 billion, while the Nigerian Customs Service (NCS) failed to remit the stipulated 25 per cent of its generated N335.6 billion amounting to N83.9 billion.

The Federal Inland Revenue Service (FIRS), was found to have shortchanged the federal government of N33.8 billion after it had generated N455.5 billion in the period under review, while the Nigeria Television Authority (NTA) under remitted N5.6 billion, out of the N56.8 billion it generated.

The Nigeria Maritime Administration and Safety Agency (NIMASA) was found to have shortchanged the government of N184 billion.

The committee discovered that most of the agencies withheld their financial records from the officials of the Office of the Auditor General of the Federation, in contravention of section 125, subsection (3) a (i and ii), subsection (4) of the 1999 Constitution (as amended).

The agencies, the committed observed, however complied with a directive contained in a memo with Ref. No. BO/RVE/12235/259/VII/201 by the former Minister of Finance, Dr. Ngozi Okonjo Iweala, “to remit 25% only from the revenue generated and use the remaining 75 per cent as part of its expenditure.”

The directive, the committee said, is violation of the constitution and the Fiscal Responsibility Act.

Its recommendations include that “the Senate should amend the laws where necessary to make it mandatory for all revenue generating agencies to accommodate resident Auditors to be posted by the Auditor General of the Federation that will have access to all financial records and books, and to ensure compliance with section 120(i) of the 1999 Constitution (as amended).

“The Fiscal Responsibility Act should be amended in a way to compel all agencies and institutions of government on compliances with financial regulations regarding income generation, accounting and remittances.

“The Senate should also amend the laws where necessary to make it mandatory for all revenue generating agencies to accommodate resident Treasury Officers to be posted by the Accountant General of The Federation that will have access to all financial records and books.

“The National Assembly should direct the immediate stoppage of the implementation of the contents of the Memo by the former Minister of Finance and Agencies and institutions should adopt the new mode of remittances as approved by the Senate.

“The Fiscal Responsibility Act (2007) should further be amended to make all revenue generating agencies to pay 30 per cent of their income generated monthly to the Consolidated Revenue Account before any expenditure etc.”

It should be recalled that the committee which was constituted in November 2016 submitted the interim report last week, after its Chairman, Olamilekan was publicly queried by Senate President Bukola Saraki on two different occasions at plenary, regarding the delay in conclusion of the investigations.

Saraki, had stated that the outcome of the investigation is necessary as it would provide a leeway into the workings of the 2018 national budget.

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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