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FG Generates N1.4tn from Operating Surplus in 11 Years

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Naira Exchange Rates - Investors King
  • FG Generates N1.4tn from Operating Surplus in 11 Years

More than N1.4tn has accrued to the Federal Government through the payment of operating surplus by Ministries, Departments and Agencies since the enactment of the Fiscal Responsibility Act in 2007, the Fiscal Responsibility Commission has said.

The Acting Chairman, FRC, Mr Victor Murako, said this in Abuja on Thursday at a press briefing to announce a technical workshop on the implementation of the operating surplus template for scheduled corporations.

The Fiscal Responsibility Act, 2007 requires listed agencies to pay 80 per cent of their operating surpluses into the Consolidated Revenue Fund, while retaining 20 per cent.

The operating surplus is made up of revenues accruing to government agencies above what they are approved to spend at the beginning of the budget year.

Murako also stated that some of the 122 agencies that the Federal Government had listed as qualifying for the payment of operating surplus had started to avoid the payment by indulging in creative accounting.

The FRC boss said before the law came into effect, more than 90 per cent of the MDAs did not make any payment into the Consolidated Revenue Fund of the Federal Government.

He added that the implementation of the new template for calculating operating surplus by the 122 organisations would turn around the finances of the Federal Government and make borrowing needless.

Murako said, “The Fiscal Responsibility Act, 2007 has placed the responsibility of monitoring the determination and remittance of operating surplus for the corporations listed in the schedule to the Act establishing the commission.

“Presently, there are 122 scheduled corporations listed under the Act. We have observed that most scheduled corporations were avoiding declaring surplus on their audited financial statements by indulging in creative accounting and incurring expenditures not included or above their annual appropriation.

“The activities of the commission in these areas are in line with the policy of the present administration to block all loopholes endangering revenue collection and to further improve on the over N1.4tn so far caused to be remitted into the Consolidated Revenue Fund.”

He added, “The template has been approved for use vide the Federal Treasury Circular Ref: No. TRY A10 and B10/2016 dated 22nd of November, 2016, but a workshop to explain the technical details has not been held.

“The programme, scheduled for Wednesday, is a formal launch and a technical workshop on its implementation. The commission has been inundated with letters and personal visits requesting for the copies of the approved template and training on its implementation by the MDAs.”

Thirty agencies were originally listed in the Act. However, the addition of 92 more by the Ministry of Finance in an effort to shore up the revenues accruing to the government has brought the number of organisations required to pay operating surpluses to 122.

Among the 92 new agencies are the National Drug Law Enforcement Agency, the Nigerian Investment Promotion Council, the Nigerian Railway Corporation, the Small and Medium Enterprise Development Agency of Nigeria and the Federal Radio Corporation of Nigeria.

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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