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17 NNPC Subsidiaries To Appear Before Reps’ Committee Over Alleged Mismanagement Of Public Funds

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NNPC - Investors King

About 17 subsidiaries of the of the defunct Nigerian National Petroleum Corporation, now Nigerian National Petroleum Company Limited and their accounting officers have been summoned to appear before the House of Representatives’ Committee on Public Accounts.

This is following a query written to these subsidiaries over an allegation of mismanagement of public funds running into several trillions of naira over the years.

Chairman of the committee, Oluwole Oke, issued the summons in a letter to Kyari, dated March 16, 2022, and titled, ‘Consideration of the Auditor General for the Federation’s Annual Report on Federation Account 2014-2019 Financial Year and Non-Rendition of Audited Account by the NNPC Subsidiaries Covering the Period 2014-2019 to the Auditor General Office.’

The subsidiaries include: the Nigerian Petroleum Development Company Limited, Kaduna Refining and Petrochemical Company Limited, Pipeline and Products Marketing Company Limited, Duke Oil Company Inc, West Africa Gas Limited, and Nidas Marine Limited, who have been summoned to appear on March 23, 2022.

Others are: Hyson (Nigeria) Limited,  Nigeria Gas Company, National Engineering and Technical Company, National Petroleum Exchange, NNPC Pensions Limited, and Warri Refining and Petrochemical Company are to appear on Thursday, March 24, 2022.

Also, Port Harcourt Refining Company, the NNPC Retail Limited, Integrated Data Service Limited, National Petroleum Investment & Management Services, and Petroleum Products Pricing Regulatory Agency are expected to appear to appear on Friday, March 25th.

Those summoned are expected to provide copies of their audited accounts from 2015 to 2021, in compliance with Financial Regulation No, 3210(v), and evidence of submission of copies to the Office of the Auditor-General Office for the Federation (OAuFG).

The query read in part: “‘Four hundred and twenty-three payments totalling ₦210,921,849.66 were made without payment vouchers and internal audit checks, contrary to Financial Regulations 601 and 1705, which stipulate that all payments must be vouched for, and the head of internal audit unit in all ministries/extra-ministerial offices and other arms of government shall ensure that 100% pre-payment audit of all checked and passed vouchers is carried out and the vouchers forwarded under security schedule directly to the appropriate central pay office for payment.”

Investors King recalls that official documents from the OAuGF had earlier revealed how the NNPC spent over N1,925,388,991.70 on 17 charter hire contracts in 2019 without adequate supporting documents.

The OAuGF 2019 annual report also indicated that the Company had no supporting documents like evidence of vessels transhipment of products, clearance certificate from appropriate inspection agency, among others to show that the payments made for the contracts were valid charges against public funds.

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Economy

Inflation Rate Increases to 16.82% in April in Nigeria

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Nigeria's Inflation Rate - Investors King

Prices of goods and services in Africa’s largest economy Nigeria rose high in the month of April, according to the latest report from the National Bureau of Statistics (NBS).

The Consumer Price Index, which measures inflation rate, grew at 16.82% rate in the month under review from 15.92% in March 2022. The inflation rate has been on a steady rise since Novermber 2021 when it drops to 15.40%.

On a month basis, inflation increased to 1.76 percent in April 2022, representing an increase of 0.02% from 1.74% recorded in March. The persistent increase in prices reflect the changes in Nigeria’s economic fundamentals. One of the key challenges impacting prices is foreign exchange scarcity.

Naira to Dollar exchange rate jumped to N600/US$1 at the parallel market popularly known as the black market despite the Central Bank of Nigeria discouraging patronage at that section of forex. However, inability to access forex at central bank designated deposit money banks forced most Nigerians to the unregulated black market.

Similarly, the drop in the nation’s external reserves due to the lower crude oil production from the year to date dragged on foreign revenue that eventually hurt central bank ability to service the economy with enough forex in an economy that imported over 90% of its consumption.

Again, rising insecurities in key food producing regions contributed to the jump in prices of food items as noted in the report. The composite food index grew at 18.37% rate in April 2022, slower than  the 22.72% filed in April 2021.

According to NBS, the increase in the value of the index was due to rise in prices of Bread and cereals, Food
products n.e.c, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.  On a monthly basis, food sub-index grew 0.01% to 2% in April from 1.99% in March.

However, the more accurate 12 month index reflect decline in food index from 19.21% filed in March 2022 to 18.88% in April 2022.

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Economy

ICT Changing The Face of Nigeria’s Economy

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Paris - Investors King

While many thought the oil sector would save the Nigerian economy, the drift is gradually shifting away from the oil sector into the non-oil sector – the Information and Communications Technology (ICT).

A recent data revealed by the National Bureau of Statistics, sighted by Investors King, shows that the ICT has contributed 16 per cent to the growth of Nigeria’s Gross Domestic Product (GDP). 

On a year-on-year basis, compared to the previous year in the same quarter, ICT contributed 14.9 per cent to the GDP – a growth of 1.3 per cent. 

According to the data released by NBS, “In nominal terms, in the first quarter of 2022 the sector growth was recorded at 20.54 per cent (year-on-year), 12.68 per cent points increase from the rate of 7.86 per cent recorded in the same quarter of 2021, and 14.84 per cent points higher than the rate recorded in the preceding quarter. The Quarter-on- Quarter growth rate recorded in the first quarter of 2022 was -1.87 per cent.  

“The Information and Communications sector contributed 10.55 per cent to the total Nominal GDP in the 2022 first quarter, higher than the rate of 9.91 per cent recorded in the same quarter of 2021 and higher than the 9.88 cent it contributed in the preceding quarter”.   

The report added that the sector, in the first quarter of 2022, recorded a growth rate of 12.07 per cent in real terms, year-on-year.

From the rate recorded in the corresponding period of 2021, there was an increase of 5.60 per cent points. Quarter-on-Quarter, the sector exhibited a growth of -9.09 per cent in real terms.  

“Therefore, of total real GDP, the sector contributed 16.20 per cent in 2022 first quarter, higher than in the same quarter of the previous year in which it represented 14.91 per cent and higher than the preceding quarter in which it represented 15.21 per cent,” the data revealed. 

The Information and Communications sector in Nigeria comprises of Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording and Music Production and Broadcasting. 

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Economy

Nigeria’s Economy Moderates in Q1 2022 as Oil Sector Contracts by 23.89%

Nigeria’s GDP moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022

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Lagos Nigeria - Investors King

Despite the surge in global oil prices due to the ongoing war in Ukraine, the Gross Domestic Product (GDP) of the largest exporter of the commodity in Africa, Nigeria moderated to 3.11% year-on-year in real terms in the first quarter (Q1) of 2022, the National Bureau of Statistics (NBS) stated in its latest report.

Nigeria’s GDP was 2.60% higher than the 0.51% recorded in Q1 2021 when COVID-19 disrupted business activity and dragged on economic productivity. However, this was 0.88% lower than the 3.98% filed in the fourth quarter of 2021.

On quarterly basis, the nation’s real GDP grew at -14.66% in the quarter under review when compared to the fourth quarter of 2021.

Aggregate GDP increased by 13.25% year-on-year from N40,014,482.74 million in nominal terms in the first quarter of 2021 to N45,317,823.33 million in Q1 2022. According to the NBS, “the nominal GDP growth rate in Q1 2022 was higher relative to the 12.25% growth recorded in the first quarter of 2021 and higher compared to the 13.11% growth recorded in the preceding quarter.”

Nigeria’s Oil Sector

In the first quarter, Nigeria’s crude oil production dropped to 1.49 million barrels per day (mbpd), down from 1.72mbp achieved in the same quarter of 2021. This was also lower than the 1.50mbpd recorded in the fourth quarter of 2021. Suggesting that despite the increase in global oil prices in the quarter, Nigeria’s inability to up crude oil production impeded investment in the sector and subsequently dragged on revenue generation.

As expected, the real growth of the oil sector contracted by 26.04% year-on-year in Q1 2022, representing a decline of 23.83% when compared to the same quarter of 2021. Also, growth decreased by 17.99% when compared to -8.06% filed for Q4 2021.

On a quarterly basis, the oil sector grew by 9.11% in the quarter under review. The sector contributed 6.63% to Nigeria’s total real GDP in Q1 2022, own from 9.25% contributed in the corresponding quarter of 2021 and slightly higher than the 5.19% achieved in Q4 2021.

Nigeria’s Non-Oil Sector

As usual, the non-oil sector grew by 6.08% in real terms in the first quarter. This was better than the 5.28% recorded in the first quarter of 2021 and 1.34% higher than the fourth quarter of 2021.

The report attributed the growth in the non-oil sector to the increase in activities in the following sectors; Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial Institutions); Agriculture (Crop Production); and Manufacturing (Food, Beverage & Tobacco).

Nigeria’s non-oil sector contributed the most to total economic growth. The sector contributed 93.37% to the nation’s GDP in the quarter under review.

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