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Nigeria Made N374.8bn From Domestic, Export Gas Sale in 2021 – NNPC

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Gas-Pipeline

Nigeria raked in about $868.5m (N361.43bn at the official exchange rate of N416.15/$) from gas export and N13.36bn from domestic gas sale in 2021, an analysis of the latest gas revenue data and other monthly reports obtained from the Nigerian National Petroleum Company Limited showed.

Data from the oil firm showed that the Federal Government through NNPC garnered the funds from the sale of Natural Gas Liquids/Liquefied Petroleum Gas, as well as Nigeria Liquefied Natural Gas feedstock.

It was learnt that the joint venture partners of NNPC in the gas business during the review period include Chevron Nigeria Limited, Mobil Producing Nigeria, Shell Petroleum Development Company and Total Exploration and Production Nigeria.

Findings showed that in January 2021, the country earned $50.19m from the export of NLNG feedstock and made N1.05bn on domestic NGL/LPG, while in February it made $26.6m and $90.38m from NGL/LPG and NLNG feedstock exports respectively.

The country earned N1.24bn from domestic NGL/LPG in February last year.

For the month of March, the NNPC stated that gas sale earnings from NGL/LPG and NLNG feedstock were $15.89m and $68.29m respectively, as the country raked in $34.32m and N1.25bn from NLNG feedstock and domestic NGL/LPG respectively in April.

Data from NNPC showed that $36.01m was earned from NLNG feedstock in May 2021, while NGL/LPG domestic was put at N1.25bn.

In June, Nigeria made $19.95m and $44.01m from the export of NGL/LPG and NLNG feedstock respectively, while its earnings from NGL/LPG domestic was N1.63bn.

No amount was recorded as earning from NGL/LPG export and NGL/LPG domestic in the month of July last year, but the country made $54.396m from NLNG feedstock in the same month.

The August 2021 export gas receipt for NLNG feedstock was $52.78m, as NGL/LPG domestic was N1.74bn, while in September, the country made $32.234m and $84.8m from NGL/LPG and NLNG feedstock exports respectively.

Nigeria’s revenue from NGL/LPG domestic in September was put at N4.1bn.

The country’s gas earnings in October from NLNG feedstock and NGL/LPG were slipped into the next month, according to information from NNPC.

In November, earnings from the exports of NGL/LPG and NLNG feedstock were $40.14m and $149.95m respectively, while NGL/LPG domestic was N4.1bn.

In the final month of last year, December, the NNPC explained that the proceeds from NGL/LPG export had yet to be reflected in the Central Bank of Nigeria/Chevron Joint Venture account at the time, as CNL was the JV partner involved in the transaction.

It, however, stated that a total receipt of $68.53m was earned from the sale of NLNG feedstock in December 2021.

The Federal Government has been making efforts to deepen the country’s gas earnings, as Nigeria has abundant gas resources than crude oil.

Last month, for instance, the Minister of State for Petroleum Resources, Chief Timipre Sylva, called on the United States Government to support Nigeria with funds to develop Nigeria’s natural gas resources so as to serve as alternative source of energy for Europe.

He made the call on the heels of the war by Russia in Ukraine, which posed a threat and disruption of gas supplies from Russia to the entire Europe.

Sylva disclosed this while speaking at a meeting with the US Secretary of Energy, Jennifer Granholm, on the side-lines of the CERA Week, in Houston Texas.

He was quoted in a statement issued by his media aide, Horatius Egua, as saying, “It is in the interest of the global community that there is alternative supply of gas to Europe.

“The challenge for us to achieve this feat has been lack of infrastructure and we need funding to develop infrastructure for our gas and we believe that the US can provide that funding.”

The minister told Granholm that Nigeria had abundant natural gas resources that could meet European gas demands, but stressed that the problem had been access to funds.

He stated that as part of efforts to boost gas supplies across the African continent, Nigeria had embarked on the construction of a 600km Ajaokuta-Kaduna-Kano gas pipeline designed to take gas to Europe via North Africa.

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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Finance

SEC and CIMA Forge Alliance to Enhance Financial Reporting Standards

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In a bid to elevate financial reporting standards within Nigeria’s public institutions, the Securities and Exchange Commission (SEC) has announced a strategic partnership with the Chartered Institute of Management Accounting (CIMA).

This collaboration aims to enforce adherence to financial reporting regulations and foster a culture of transparency and accountability across various sectors.

Emomotimi Agama, the Acting Director General of the Securities and Exchange Commission, revealed this development during a recent meeting with a delegation from CIMA in Abuja.

Agama said the SEC ensures ethical financial practices and compliance with reporting standards mandated by law.

He stressed that the commission would vigilantly monitor adherence to these standards and impose penalties for any violations.

“It is a great time that you have come to Nigeria. SEC is saddled with the responsibility of making the initial decision of ensuring that what is right is done and transparency in reporting financial statements by public companies is ensured. It is now law to do so and there are consequences for breaking the law,” Agama remarked.

Sarah Ghosh, the President of CIMA, echoed Agama’s sentiments, emphasizing inclusivity, sustainability, and innovation as the association’s core priorities.

Ghosh highlighted CIMA’s commitment to engaging with regulatory authorities to promote awareness of the association’s values and its potential to enhance financial reporting practices among public firms.

“CIMA is approaching more regulatory bodies to ensure that everyone is allowed to understand what the association stands for and its contribution to enhancing reporting on financial statements of public companies,” Ghosh declared.

The collaboration between SEC and CIMA signifies a proactive approach towards strengthening financial governance and fostering investor confidence in Nigeria’s capital market.

By leveraging CIMA’s expertise and SEC’s regulatory authority, the partnership aims to instill a culture of integrity and accountability in financial reporting processes, ultimately contributing to the country’s economic development.

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Banking Sector

Financial Institutions Racked Up N678m in Fines Last Year

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Retail banking

Financial institutions in Nigeria paid a total of N678 million in fines in the 2023 financial year, according to analysis of their various financial statements.

The analysis examined the annual reports of nine prominent financial groups, including FBN Holdings, Access Holdings, Guaranty Trust Holding Company, Zenith Bank Plc, United Bank for Africa Plc, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group.

These reports provided insights into the fines imposed by various regulatory authorities, including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission, and others.

Compared to the previous year, the total amount of fines paid by these institutions decreased significantly by 89.25% from N6.31 billion in 2022 to N678 million in 2023.

This decline reflects improved regulatory compliance among financial institutions and signals a positive trend toward greater adherence to established guidelines and standards.

Among the financial groups analyzed, Zenith Bank stood out for its increase in penalties compared to the previous year. While the bank had incurred no fines in 2022, it paid N21 million in penalties in 2023.

The penalties levied against Zenith Bank included fines for late rendition of CBN returns, unauthorized employment practices, outstanding auditor recommendations, and compliance checks on politically exposed persons.

Similarly, FBN Holdings reported a decrease in fines paid during the period, totaling N17.26 million compared to N26 million in the previous year.

The fines imposed on FBN Holdings were related to late submission of audited financial statements and non-compliance with regulatory reporting requirements.

Access Holdings also experienced a significant reduction in penalties, with fines decreasing from approximately N604 million in 2022 to N81.60 million in 2023.

Despite the decrease, Access Holdings incurred fines from various regulatory bodies, including the CBN, PenCom, and NGX RegCo, for infractions such as unauthorized advertising, data recapture sanctions, and late filing of financial statements.

Other financial institutions, such as GTCO, UBA Group, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group, also reported fines for various regulatory violations, including breaches of transaction rules, late submission of reports, and non-compliance with industry regulations.

The significant decrease in fines paid by financial institutions in 2023 reflects the industry’s commitment to improving regulatory compliance and upholding best practices.

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Finance

Presidential Committee to Exempt 95% of Informal Sector from Taxes

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tax relief

The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) has unveiled plans to exempt a significant portion of the informal sector from taxation.

Chaired by Taiwo Oyedele, the committee aims to alleviate the burden of multiple taxation on small businesses and low-income individuals while fostering economic growth.

The announcement came following the close-out retreat of the PFPTRC in Abuja, where Oyedele addressed reporters over the weekend.

He said the committee is committed to easing the tax burden, particularly for those operating within the informal sector that constitutes a substantial portion of Nigeria’s economy.

Under the proposed reforms, approximately 95% of the informal sector would be granted tax exemptions, sparing them from obligations such as income tax and value-added tax (VAT).

Oyedele stressed the importance of supporting individuals in the informal sector and recognizing their efforts to earn a legitimate living and their contribution to economic development.

The decision was informed by extensive deliberations and data analysis with the committee advocating for a fairer and more equitable tax system.

Oyedele highlighted that individuals earning up to N25 million annually would be exempted from various taxes, aligning with the committee’s commitment to relieving financial pressure on small businesses and low-income earners.

Moreover, the committee emphasized the need for tax reforms to address the prevailing issue of multiple taxation, which disproportionately affects small businesses and the vulnerable population.

By exempting the majority of the informal sector from taxation, the committee aims to stimulate economic growth and promote entrepreneurship.

The proposal for tax reforms is expected to be submitted to the National Assembly by the third quarter of this year, following consultations with the private sector and internal approvals.

The reforms encompass a broad range of measures, including executive orders, regulations, and constitutional amendments, aimed at creating a more conducive environment for business and investment.

In addition to tax exemptions, the committee plans to introduce executive orders and regulations to streamline tax processes and enhance compliance. This includes a new withholding tax regulation exempting small businesses from certain tax obligations, pending ministerial approval.

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