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Senate Alleges Fresh $1.15bn Illegal Withdrawals from NLNG Accounts

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  • Senate Alleges Fresh $1.15bn Illegal Withdrawals from NLNG Accounts

The Senate says it has uncovered illegal withdrawals of $1,151,609bn from the dividends accounts of the Nigerian Liquefied Natural Gas by the Nigeria National Petroleum Corporation.

This is apart from the $1.05bn which the Group Managing Director of the NNPC, Maikanti Baru, had earlier admitted was withdrawn on the presidential directive.

The Chairman, Senate Committee on Gas, Senator Bassey Akpan, on Wednesday, said the alleged illegal withdrawals by the NNPC through the Central Bank of Nigeria were discovered in the course of an ongoing investigation by his panel on the $1.05bn.

Akpan said the NNPC GMD had explained that the $1.05bn was withdrawn to bridge the gap of losses being suffered by the corporation on landing cost of imported fuel which is N185 compared to the pump price of N145.

The Akpan panel was mandated by the Senate, two weeks ago, to probe the $1.05bn which the NNPC withdrew from the accounts in April this year without authorisation by relevant authorities.

The committee subsequently ordered the NNPC and the CBN to submit documents relating to the withdrawals made from the NLNG dividends account within the last two years.

The committee, while going through the NLNG documents presented to it on Wednesday by the Chief Operating Officer (Finance) at the CBN, Babatunde Adeniran, observed series of cash debiting from the account from November 2016 to June this year totalling $2.201bn.

The breakdown of the withdrawals not supported by required approving documents as observed by the committee are $86,546,526m withdrawn from the account on November 22, 2016, allegedly being payment on Paris Club loans to the Nigerian Governors Forum, and the $1.05bn withdrawn on April 17, 2018, as National Fuel Support Fund.

Others are $650m withdrawn from the account on June 7 this year to offset the Joint Venture Cash Call by the NNPC which ordinarily supposed to be a budget item payment, and $415, 063m withdrawn from the account also in June without clear explanation on the purpose for which it was meant for.

Obviously not satisfied with the series of withdrawals, the Senate panel ordered officials of the CBN and the NNPC who represented their bosses on Wednesday to forward to it, latest by Tuesday next week, supporting and approving documents for the withdrawals.

Akpan said, “From the available documents before us, apart from the $1.05bn that we are mandated by the Senate to investigate, we have also discovered that several withdrawals were made from the NLNG dividends account without the required supporting documents to back them.

“This is unacceptable to us. We are also not happy that the GMD of NNPC and CBN Governor are not here personally. We are, therefore, not going to continue with the session today.

“Both the NNPC and the CBN must furnish this committee with other relevant documents on the withdrawals latest by Tuesday next week and the NNPC GMD, the Corporations Group Executive Director, Finance, Isiaka Abdulrasak, and the CBN Governor, Godwin Emefiele, must also appear before us.”

Akpan said a document tagged, “Memo NNPC GMD 49” signed by Maikanti Baru and sent through the Chief of Staff to the President, Abba Kyari, had no clear-cut language of a request for approval for the withdrawal of the $1.05bn but a mere notification.

“Approval for withdrawal from such fund was supposed to be given by the National Economic Council being an account or dividends owned by the three tiers of government.

Akpan vowed that his committee would carry out a detailed investigation into the alleged illegal withdrawal made by the President Muhammadu Buhari administration from the same account in 2015.

He said, “We are surely going to carry out a thorough investigation on the illegal withdrawals to put an end to the cycle because a whopping $5bn was withdrawn from the same account in 2015 under this same government without any convincing explanations made so far on what the money was used for.”

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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