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TSA: $21.3m Trapped in Heritage Bank, NPA Tells Reps

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  • TSA: $21.3m Trapped in Heritage Bank, NPA Tells Reps

About $21.3m of Federal Government’s funds held for the Nigerian Ports Authority by Heritage Bank had been trapped in the vault of the lender since 2016, the NPA told the House of Representatives in Abuja on Wednesday.

The Managing Director, NPA, Hadiza Usman, who made the disclosure, said efforts to get the bank to remit the money into the Treasury Single Account had so far met a brick wall.

She appeared before an ad hoc committee of the House investigating compliance with the TSA policy by government agencies.

The committee is chaired by a member of the All Progressives Congress from Kano State, Mr. Danburam Abubakar-Nuhu.

The NPA boss stated that a series of interventions by the Central Bank of Nigeria to retrieve the money had failed.

According to Usman, Heritage Bank’s reason for not remitting the money is that “if such a huge withdrawal is allowed, it will have stress on the bank.”

“We wrote the CBN a number of letters and they promised to provide a guarantee. Up till date, they have not given us the guarantee,” she stated.

The MD further informed the committee that another sum of €6m kept by First City Monument Bank for the NPA was suddenly seized by the Economic and Financial Crimes Commission.

Usman said the bank was operating the account for the NPA on its cargo tracking services operations before the seizure by the EFCC.

“The EFCC suddenly moved the €6m from FCMB to their own account; they just unilaterally swept the money,” she added.

When the committee asked why the anti-graft agency seized the money, the NPA MD replied that no clear reasons were given.

However, she said it might be connected to investigations being conducted by the EFCC, but which the NPA did not have the details of.

The committee subsequently summoned the Acting Chairman of the EFCC, Mr. Ibrahim Magu, to appear before it to explain why the money was confiscated.

Usman, who also answered questions on the relationship between the NPA and Intels, said the parties resolved their differences after Intels agreed to comply with the TSA policy.

She stated that effective from November 1, this year, Intels had started remitting all revenues collected on behalf of the NPA into the TSA.

However, she disclosed that Intels had not remitted an outstanding revenue of over $130m, which it collected for 10 months prior to November 1, 2017.

“They collected $13m monthly and for over 10 months, out which NPA gets 30 per cent,” she informed the committee.

Usman also admitted before the committee that the NPA owed Intels up to $700m for services the firm had rendered.

However, she explained that by the TSA policy, Intels must first remit all money outstanding against it into the TSA, while the NPA would later reimburse the firm.

Meanwhile, SystemSpecs, which provides the Remita platform for operating the TSA, told the committee that so far, it had not been directed to capture foreign transactions done by government agencies.

The Managing Director, SystemSpecs, Mr. John Obaro, while responding to a question by Abubakar-Nuhu, said, “As of today, we are not aware that the accountant-general gave a directive for the activation of the foreign component of the TSA.

“It’s only the local component that is done on our platform. What we are aware of is that in February this year, there was a circular that the MDAs will be notified when it (capturing of foreign transactions) will be done.”

The committee commended SystemSpecs for its innovations, but warned against abuses that could defeat the aim of the TSA.

The committee grilled officials of the United Bank for Africa Plc over the Nigerian National Petroleum Corporation’s $80m, which it had held since 2005.

The bank claimed that the money was a guarantee for a court case filed by a client of the NNPC overseas.

When asked whether it paid interest on the money, UBA said it paid full interest.

The bank was said to have paid 2.2 per cent interest annually till 2007 when it suddenly reduced it to 0.5 per cent.

When the committee sought to know why the percentage was cut to 0.5, UBA blamed it on “market forces.”

But, not satisfied with the explanations, the committee summoned the NNPC to produce all the documents relating to the account.

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

Nigeria, Morocco sign MOUs on Hydrocarbons, Others

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The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.

Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.

The statement said Nigeria would also produce ammonia and export to Morocco.

“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.

The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.

Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.

He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.

He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.

“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.

According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.

Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.

The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.

The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.

Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.

He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.

“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.

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Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

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Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

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Economy

UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?

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Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.

Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.

“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.

“He is raising taxes under the radar.

“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”

Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”

Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.

Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.

“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses.  This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”

He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”

The deVere CEO concludes: “The Chancellor had to perform a tough juggling act.  But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”

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