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Reps Indict NNPC, NPA, Others Over Unremitted FG Revenues

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  • Reps Indict NNPC, NPA, Others Over Unremitted FG Revenues

The House of Representatives has accused Federal Government’s ministries, departments and agencies of failing to follow the Treasury Single Account policy, leading to revenue leakages.

The House said it had discovered that over $900m was still “being held” by the MDAs outside the TSA.

Adopting the report by the Ad Hoc Committee on the Need to Ascertain the Proceeds of the TSA to Enhance Transparency, Accountability and Good Governance, the House indicted the Nigerian National Petroleum Corporation, the Nigerian Ports Authority, the Federal Inland Revenue Service, the Nigeria Customs Service, ministries and banks of various infractions.

All the 20 recommendations by the panel were unanimously approved by the House, including that the Ministry of Finance, the Office of the Accountant-General of the Federation and the Central Bank of Nigeria should intensify efforts to enforce full implementation and compliance with the TSA policy by all the MDAs.

While asking that the MDAs who had violated the TSA policy be sanctioned accordingly, the lawmakers ordered that the Ministry of Finance and OAGF “should be directed to publish, sanction/prosecute with immediate effect all MDAs, private persons, private organisations as well as banks, where FGN funds are hidden based on the discoveries made in the report of the consultants engaged by the OAGF and review the compliance with the TSA.”

They said applications for exemptions/waivers must follow the guidelines on TSA implementation and duly approved and signed by the President only.

The lawmakers said the Ministry of Environment’s HYPREP Account in Stanbic IBTC Bank Plc should be immediately frozen and full investigations on the status of the account should be conducted.

They said “the issues bordering on the Nigerian Ports Authority fund totalling €6,626,429.59 seized by the Economic and Financial Crimes Commission should be resolved immediately and the funds released to the appropriate owner. The EFCC should be informed in writing to immediately refund the same amount into the TSA account with the CBN.”

The NNPC was asked to make full disclosures on the nature and status of the fund held in the NNPC Pension Fund Limited domiciled in Aso Savings and Loans Plc and Unity Bank.

It was also resolved that “the Ministry of Finance, the OAGF and the Revenue Mobilisation, Allocation and Fiscal Commission should make a definite and appropriate categorisation of the Brass LNG dividends as a federation account item or as an independent revenue of the Federal Government; that subsequent funding and expenditure of the Brass LNG project be done based on approved budgetary provisions by Appropriations Acts and the funding shall be done through the FAAC/CRF Account.

“That the revenue collection arrangement entered into by the Industrial Training Fund with Puzzle Technologies Limited be suspended and the Ministry of Finance and the OAGF should immediately conduct an investigation into the circumstance of the arrangement.

“That there should be an immediate takeover of the assets used for the asset swap for Aso Savings & Loans Plc’s debt owed various MDAs. The Federal Ministry of Finance and the OAGF should be communicated to immediately inform the affected MDAs to take advantage of the offer.”

The report presented by the Chairman of the committee, Mr Danduram Abubakar, read, “During the course of investigations with various stakeholders, overwhelming discoveries were made. It was observed (that) funds belonging to the Federal Government to the tune of billions of naira and hundreds of millions of dollars were operated outside the TSA by the MDAs in collaboration with the banks.

“After the meeting with Deposit Money Banks, the Central Bank of Nigeria, the Office of the Accountant-General of the Federation, the Office of the Auditor-General of the Federation and the Nigerian National Petroleum Corporation on August 15, 2017, the committee discovered that over $900m is still being held outside the TSA.

“While some banks fully complied with the directive of the ad hoc committee by remitting these funds into the TSA, it is worthy of note that the sum of about $995.71m was still held outside the TSA by some other banks. This sum of $995.71m includes the principal deposit and the accrued interest on the deposit. Also discovered was an amount of N1.207bn and €23,704.01.”

The House accused the NNPC of extra-budgetary spending as the committee said from the information submitted by the corporation, Brass LNG received an appropriation of $511.60m while the actual release was $461.54m during 2012-2017 fiscal years.

The panel said, “The Appropriation Acts 2012-2017 depicted $550.33m for the Brass LNG project. But it is very important to note some key observations on the table above: The total appropriation is $511.60m, according to the NNPC. The actual funding for the Brass LNG project from 2012 to 2017 stood at $461.54m. The unutilised portion is $331.72m. The NNPC stated unrealised balance with the DMBs being $708.29m.”

The committee observed that some MDAS claimed to have obtained a presidential exemption to operate certain accounts outside the TSA policy.

It said, “In the case of NNPC, the committee insisted to sight the purported exemption letter. However, to the dismay of committee, the letter was only conveying the approval of the President signed by an assistant director. As for the former, the letter could not be produced as of now, May 9, 2019.”

The lawmakers also accused NNPC of financial operations outside the TSA, saying, “The balance in this (CBN Joint Venture) account as reported by the NNPC, dated 30th October, 2017, stood at $188,900,383.49. These are the various accounts classified as accounts still not being moved to TSA by CBN, DMBs account.

“The committee discovered three accounts held by the NNPC in Aso Savings and Loans PLC and Unity Bank PLC. The accounts include two placement accounts called NNPC PFL Placement Deposit and the third account called NNPC Pension Fund account. The total balance in these accounts as of August 27, 2017, stood at N1, 079,444,746.49.

“The committee also made another startling discovery of a fund held in another DMB by the Federal Ministry of Environment; Hydrocarbon Pollution Remediation Programme called FME HYPREP Account. The balance in this account as of September, 2018, stood at N1.1bn and $4.9m domiciled in Stanbic IBTC Bank.

“However, the committee had written to the Minister of Environment for a status report on this account and also for the minister to appear before the committee to make clarifications in respect of the account in contention. To the dismay of the committee, the minister neither made any submission nor made any appearance.”

The NPA was also indicted by the panel, which said the authority’s funds were trapped by Intels.

“Further investigations revealed to the committee (that) a whopping value of $569,162,083.80 as Intels’ obligation to the NPA. On the other hand, Intels’ submitted to the ad hoc committee in 2017 an outstanding obligation to the NPA as $862.2m. The difference from the two submissions might have been after Intels have made additional payment to the NPA after the NPA submission to the committee,” the report read.

The lawmakers said the documents submitted by the OAGF and the CBN showed that between January and September 2016, the FIRS collected N32, 689,825,757.91 while Customs collected N975, 923,050.49.

The panel said, “The figures above clearly cannot include the Federal Government’s share of Federal Account Allocation Committee revenue collected by these core revenue generating agencies and may just be their independent revenue component.

“Projected FGN share of Company Income Tax alone for Fiscal 2016 is N867.46bn, which implies a projected collection of about N650.59bn as of 30th September 2016. Projected FGN share of Customs’ collections is N326.44bn, which implies a projected collection of about N244.83bn as of 30th September 2016. These figures are clearly much more than what was submitted by the CBN and OAGF.

“As a further illustration, official Customs’ revenue as of 30th September 2016, as published by the Nigeria Customs Service, shows a total collection of N647, 295,101,275.51. It is clear, therefore, to the committee that the submissions made by the executives to the committee did not include the FGN share of FAAC collections from these two revenue generating agencies.”

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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South Africa’s Inflation Rate Holds Steady in May

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South Africa's economy - Investors King

South Africa’s inflation rate remained unchanged in May, increasing the likelihood that the central bank will maintain current borrowing costs.

According to a statement released by Statistics South Africa on Wednesday, consumer prices rose by 5.2% year-on-year, the same rate as in April.

The consistent inflation rate is expected to influence the decision of the six-member monetary policy committee (MPC), which is set to meet in mid-July. The current benchmark rate stands at 8.25%, a 15-year high, and has been held steady for six consecutive meetings.

Central Bank Governor Lesetja Kganyago has repeatedly emphasized the need for inflation to fall firmly within the 3% to 6% target range before considering any reduction in borrowing costs.

“We will continue to deliver on our mandate, irrespective of how our post-election politics plays out,” Kganyago stated earlier this month in Soweto. “The only impact is what kind of policies any coalition will propose. If the policies are not sustainable, we might not have investment.”

While money markets are assigning a slim chance of a 25-basis point rate cut in July, they are fully pricing in a reduction by November.

Bloomberg Africa economist Yvonne Mhango anticipates the rate-cutting cycle to begin in the fourth quarter, supported by a sharp drop in gasoline prices in June and a rally in the rand.

The rand has appreciated more than 3% since Friday, following the ANC’s agreement to a power-sharing deal with business-friendly opposition parties and the re-election of President Cyril Ramaphosa.

In May, the annual inflation rates for four of the twelve product groups remained stable, including food and non-alcoholic beverages.

However, transport, alcoholic beverages and tobacco, and recreation and culture saw higher rates. Food prices increased by 4.3% in May, slightly down from 4.4% in April, while transport costs rose by 6.3%, up from 5.7% and marking the highest rate for this category since October 2023.

The central bank’s cautious stance on monetary policy reflects its ongoing concerns about inflation.

Governor Kganyago has consistently voiced worries that the inflation rate is not decreasing as quickly as desired. The MPC’s upcoming decision will hinge on sustained inflationary pressures and the need to balance economic stability with fostering growth.

As South Africa navigates its economic challenges, the steady inflation rate in May provides a measure of predictability for policymakers and investors alike.

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Ghana Reports Strong 4.7% GDP Growth in First Quarter of 2024

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Ghana one cedi - Investors King

Ghana’s economy showed impressive growth in the first quarter of 2024 with the Gross Domestic Product (GDP) expanding by 4.7% compared to the same period last year, according to Government Statistician Samuel Kobina Annim.

This represents an increase from the 3.8% growth recorded in the previous quarter and should provide a much-needed boost to the ruling New Patriotic Party (NPP) as the nation approaches the presidential elections scheduled for December 7.

The positive economic data comes amidst a challenging backdrop of fiscal consolidation efforts under a $3 billion International Monetary Fund (IMF) rescue program.

The government has been working to control debt through reduced spending and restructuring nearly all of its $44 billion debt.

This includes ongoing negotiations with private creditors to reorganize $13 billion worth of bonds.

The latest GDP figures are seen as a vindication of the NPP’s economic policies, which have been under fire from the main opposition party, the National Democratic Congress (NDC).

The opposition has criticized the government’s handling of the economy, particularly its fiscal policies and the terms of the IMF program, arguing that they have imposed undue hardship on ordinary Ghanaians.

However, the 4.7% growth rate suggests that the measures taken to stabilize the economy are beginning to yield positive results.

Analysts believe that the stronger-than-expected economic performance will bolster the NPP’s position as the country gears up for the presidential elections.

“The growth we are seeing is a testament to the resilience of the Ghanaian economy and the effectiveness of the government’s policies,” Annim stated at a press briefing in Accra. “Despite the constraints imposed by the debt restructuring and IMF program, we are seeing significant progress.”

The IMF program, which is designed to restore macroeconomic stability, has necessitated tough fiscal adjustments.

These include cutting government expenditure and implementing structural reforms aimed at boosting economic efficiency and growth.

The government’s commitment to these reforms has been crucial in securing the confidence of international lenders and investors.

In addition to the IMF support, the government has also been focused on diversifying the economy, reducing its reliance on commodities, and fostering sectors such as manufacturing, services, and technology.

These efforts have contributed to the robust growth figures reported for the first quarter.

Economic growth in Ghana has been uneven in recent years, with periods of rapid expansion often followed by slowdowns.

The current administration has emphasized sustainable and inclusive growth, seeking to ensure that the benefits of economic progress are widely shared across all segments of the population.

The next few months will be critical as the government continues its efforts to stabilize the economy while preparing for the upcoming elections.

The positive GDP growth figures provide a strong foundation, but challenges remain, including managing inflation, creating jobs, and ensuring the stability of the financial sector.

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World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

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world bank - Investors King

The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

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