Finance
FG orders forensic audit on NNPC, NIMASA, NPA, FIRS, 77 other Agencies
By Gbenga KOSOKO
LAGOS-THE National Economic Council (NEC) rose from its 65th meeting on Thursday in Abuja, with an approval to engage two audit firms to conduct forensic audit on 81 government revenue generating agencies.
The approval followed submission of an interim report by the ad hoc committee of NEC, chaired by Governor Adams Oshiomhole of Edo State, to review the management of the Excess Crude Account and remittances into the Federation Account.
Governors of Jigawa, Alhaji Baderu Abubakar; Anambra, Willie Obiano; Lagos, Akinwumi Ambode; and the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said this in their joint briefing to State House Correspondents.
According to the Lagos governor, 18 core revenue generating agencies, such as NNPC, will be audited by KPMG, an international audit firm, while an indigenous firm, SIAO, will audit other non-core revenue generating agencies.
The governor said that NEC would take further action on the agencies after the firms had completed the forensic auditing.
The Jigawa governor said that the Accountant-General of the Federation reported to council that as at December 31, 2015, the Excess Crude Account stood at $2.26 billion.
The governor said that the Central Bank Governor, Mr Godwin Emefiele, informed the council of the standing of the bailout funds given to states.
He said that 23 states had benefitted from the N10 billion each, Excess Crude Account-backed soft loan, while a total of 28 states benefitted from the Presidential bail out for the payment of salaries and gratuities.
Obiano gave a report concerning some MDAs collecting revenue in foreign currency and remitting in local currency into the Federation Account.
Obiano said the permanent secretary, Finance, reported that besides NNPC, NIMASA and NPA, other agencies involved in such revenues were FIRS, Shippers Council, Airport Authority and Nigeria Immigration Service.
Obiano further said that the official reported that the introduction of the Treasury Single Account (TSA) had resolved the problem as all account was now under the CBN.
He also said that the Vice President, Prof. Yemi Osinbajo, who presided at the NEC, reiterated the Federal Government’s policy that NNPC and other agencies must present budget for approval before spending in line with the TSA.
Udoma hinted on the 2016 Budget focus of the administration, saying that plans were on to foster macro-economic stability conducive to the grow of the GDP at 4.2 per cent.
He said the budget’s objective was to deliver inclusive growth to Nigerians, create sufficient jobs and build an economy less vulnerable to oil price shocks.
According to Udoma, while government intends to ensure more revenue drive, it will not increase taxes, but strive to raise the collection of VAT from its 20 per cent level.
Business
Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
Yemie ADEOYE
INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.
Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.
Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.
This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.
Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”
Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.
However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.
Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.
In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.
He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”
“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.
“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”
Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
Banking
CBN Denies Currency Devaluation
The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.
Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.
However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.
In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.
However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.
He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.
Banking
BREAKING: CBN Increases Interest Rate By 0.5%
The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.
The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.
Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting, thereafter.
While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.
In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.
Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”
Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.