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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This is apart from the $1.05bn which the Group Managing Director of the NNPC, Maikanti Baru, had earlier admitted was withdrawn on the presidential directive.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Akpan said the NNPC GMD had explained that the $1.05bn was withdrawn to bridge the gap of losses being suffered by the corporation on landing cost of imported fuel which is N185 compared to the pump price of N145.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of the withdrawals not supported by required approving documents as observed by the committee are $86,546,526m withdrawn from the account on November 22, 2016, allegedly being payment on Paris Club loans to the Nigerian Governors Forum, and the $1.05bn withdrawn on April 17, 2018, as National Fuel Support Fund.

Others are $650m withdrawn from the account on June 7 this year to offset the Joint Venture Cash Call by the NNPC which ordinarily supposed to be a budget item payment, and $415, 063m withdrawn from the account also in June without clear explanation on the purpose for which it was meant for.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

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

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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