Economy

FG Recorded N977bn Expenditure Shortfall in 2017 — FRC

Published

6 years ago

March 19, 2019

FG Recorded N977bn Expenditure Shortfall in 2017 — FRC

The Federal Government suffered a shortfall of N977.57bn in appropriated expenditure in 2017, the Fiscal Responsibility Commission said.

The FRC disclosed this in a report on the performance of key components of the 2017 budget, which was obtained by our correspondent in Abuja on Monday.

According to the report, the N977.57bn represents the difference between the total expenditure appropriated in the 2017 budget and the actual amount expended by the Federal Government.

The report said, “Total expenditure in the Appropriation Act was N7.44tn compared with the actual amount of N6.46tn expended, thereby leaving an annual deficit of N977.57bn or 13.14 per cent of the projected amount.

“While the total expected revenue was N5.08tn, the projected deficit of N2.36tn was financed largely through borrowing.”

On other major components of the budget, the report said, “The total capital expenditure appropriated for 2017 was N2.17tn, representing 29.22 per cent of the aggregate expenditure, which shows an increase of N587.1bn or 36.98 per cent over the 2016 appropriation of N1.59tn or 26.19 per cent.

“With reference to the 2017 fiscal framework, there was a projected quarterly deficit of N589.19bn. This deficit was expected to be financed through privatisation proceeds of N2.5bn, foreign borrowing of N266.88bn, domestic borrowing of N313.57bn and sale of government properties of N6.25bn.

“Statutory transfers to government agencies received an appropriation of N434.41bn while N1.66tn was allocated for debt servicing, N177.46bn for sinking fund and total recurrent non-debt expenditure stood at N2.99tn.

“However, a total of N434.41bn was spent as statutory transfers in 2017. This represents 100 per cent of the appropriated amount in the budget.

“It is important to note that quarterly releases to beneficiaries under this subhead were made on request, subject to budgetary provisions and availability of funds. This explains the difference in the amounts captured in the quarterly budget implementation reports.”

The FRC said the responsibility of monitoring the budget provisions, which the FRA Act conferred on the commission, remained challenging as a result of the unwillingness of most Ministries, Departments and Agencies to comply with the provisions of the Act.

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Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

Condemnations Trail Dangote-NNPCL Fuel Price Deal As Petroleum Crisis Persists

Published

4 hours ago

September 18, 2024

Ugwoke Ogbodo

There is widespread condemnation over the fuel price deal by the Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL).

This is coming as some Nigerians have said that their hope of easing sigh of relief following the sector’s deregulation appeared to have been dashed as the price of the Premium Motor Spirit (PMS) commonly known as petrol has continued to hit the roof.

For the Minority caucus of the House of Representatives, the N980 per litre of pump price as agreed by NNPCL and Dangote Refinery is outrageous and exploitative.

Chairman of the caucus, Kingsley Chinda, said the development was a burden added to the already struggling Nigerians.

In a statement that he signed, the lawmaker expressed his outrage over the pump price that varies from N950 to N980 and above N1000 per litre depending on the parts of the country.

The statement said, “We find this pricing regime to be not only burdensome but utterly unacceptable, particularly in light of the fact that this fuel is refined locally.”

The lawmaker emphasised that locally refined fuel should be priced significantly lower than imported fuel, as it avoids costs such as landing charges and import duties, insisting that the pricing model was wrong for all intents and purposes.

“It appears Nigerians are unfairly exploited, especially at a time when many are facing severe economic challenges,” he said, urging NNPCL and Dangote Refinery to reconsider their stand in the interest of the poor masses.

The statement warned that allowing the current pricing arrangement to continue would only deepen the economic hardships of millions and erode trust in local refineries’ ability to deliver affordable fuel.

The caucus called on regulatory bodies and the government to urgently review the pricing framework to ensure Nigerians are not subjected to unsustainable fuel prices.

Also reacting, Senior Advocate of Nigeria and human rights activist, Femi Falana, condemned NNPCL for its role in setting the price of petrol, asserting that the actions of state oil companies are illegal and violate the Petroleum Industry Act (PIA).

In a statement, Falana cited Section 205 of the PIA, emphasising that the law requires petroleum prices to be determined by free market forces, not by the NNPCL.

He argued that the company’s involvement in price-setting contradicts the very deregulation process outlined in the law.

Economy

Ubeta Project to Produce 350 Million Standard Cubic Feet of Gas Per Day Once Operational – FG

Published

8 hours ago

September 18, 2024

Ugwoke Ogbodo

The Federal Government of Nigeria has said that once the Ubeta gas field is fully operational, it will produce 350 million standard cubic feet of gas per day.

With this dream realised, the Federal Government said the anticipated achievement would enhance energy security, attract investments, and strengthen collaboration with key partners.

This was made known by the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, at the inaugural US-Nigeria Strategic Energy Dialogue, hosted by the US State Department in Washington, DC.

Recall that the Nigerian National Petroleum Corporation (NNPC) Limited, in partnership with French energy giant TotalEnergies, had in July planned to invest a significant $550 million to develop gas facilities in oil-rich Rivers State.

Verheijen had announced the kickoff of a $550 million upstream gas project between Nigerian National Petroleum Corporation Ltd. (NNPCL) and TotalEnergies for the development of the Ubeta field.

At a luncheon during the dialogue, Verheijen mentioned that the upstream gas project would produce 350 million standard cubic feet of gas per day once operational.

A statement from Morenike Adewunmi, Stakeholder Manager, Office of the Special Adviser to the President on Energy, quoted Ms. Verheijen as informing the gathering that President Bola Tinubu’s major energy reforms since June 2023 have been aimed at enhancing energy security, attracting investments, and strengthening collaboration with key partners, including the US government.

According to her, the reforms have significantly improved the viability of Nigeria’s gas-to-power value chain.

She explained that in support of the reform efforts, the President issued five new executive orders designed to offer fiscal incentives for investment and reduce the cost and time required to finalize and implement contracts for developing and expanding gas infrastructure.

Verheijen said that the directives aim to immediately unlock up to $2.5 billion in new oil and gas investments in the country.

She acknowledged the valuable support of financing and technical partners, including the US government, the World Bank, and the African Development Bank, in efforts to expand electricity access and reliability through both grid and off-grid solutions.

Economy

Nigeria’s Trade Surplus Hits N6.95 Trillion in Q2 2024, Marking a 33.63% Increase

Published

6 days ago

September 13, 2024

Investors King

Nigeria’s trade surplus, the difference between exports and imports, rose to N6.95 trillion in the second quarter of 2024, according to the latest foreign trade statistics report released by the National Bureau of Statistics (NBS) on Wednesday.

This marks a 33.63 percent increase from the N5.19 trillion recorded between January to March 2024, bringing the total value at N12.14 trillion in the first half of 2024.

This is however higher than N154.12 billion recorded in the first six months of 2023, the NBS data revealed.

The report showed that the country recorded a positive trade balance for the sixth straight quarter in Q2, signifying key economic development.

A trade surplus occurs when a country’s exports exceed its imports.

Total merchandise trade in Africa’s most populous nation stood at N31.8 trillion in Q2, a decline of 3.76 percent compared to the preceding quarter and a 150.39 percent jump compared to a year ago.

“Exports accounted for 60.89% of total trade with a value of N19,418.93 trillion, showing a marginal increase of 1.31% compared to the value recorded in Q1 2024 (N19,167.36) and a 201.76% rise over the value recorded in the second quarter of 2023 (N6,435.13),” NBS said.

Analysts attributed the surge in exports to the exchange rate depreciation caused by the foreign exchange reform implemented last June.

Tobi Ehinmosan, a fixed income and macroeconomic analyst at Lagos-based FBNQuest Capital, said the major factor for this significant trade surplus numbers is the decline in import trade.

“No doubt, our export performance has been on the rise but then the main driver is the drop in import trade, especially from June 2023 when the exchange rate was floated,” he said.

“A reasonable explanation for the lower import figure is the challenges traders face in sourcing for FX,” Ehinmosan noted, adding that the scarcity of FX has led to lower import of commodities into the country.

Echoing the same sentiment, Michael Adeyemi, an economics lecturer said the surplus suggests a reduction in imports, caused by such factors like currency devaluation or high import costs.

“A trade surplus strengthens the balance of payments, which can help stabilize Nigeria’s currency, the naira,” Adeyemi said.

“It also allows the country to build foreign reserves and pay off international debt obligations more comfortably,” the university lecturer explained.

The naira has tumbled by over 70 percent this year following a two-time devaluation last year. The official exchange rate increased from N463.38/$ on June 9, 2023, to N1.558.7/$ as of September 12, 2024.

At the parallel market, the naira depreciated to over N1,600/$ from 762/$.

Recent data from the International Monetary Fund highlighted that Nigeria’s current account balance, a measure of its net trade in goods, services, and transfers with the rest of the world, rose to $1.43 billion this year from $1.21 billion surplus in 2023.

“A growing current account surplus can be a sign of economic strength, indicating that the country’s industries are competitive internationally and that its exports are in demand,” Ibrahim Bakare, a professor of Economics said.

“It may also lead to an appreciation of the country’s currency, as increased demand for its goods and services boosts the value of its currency relative to others,” he added.