Banking
FG Will Use Oil Savings to Protect Economy…… Okonjo-Iweala
WASHINGTON: The federal government on Thursday allayed fears that the economy is in danger in view of falling revenue, Nigeria’s major source of foreign exchange earnings, caused by drop in production.
Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said at a press briefing in Washington, the United States, on the sideline of the ongoing 2013 Spring Meeting of the World Bank Group/International Monetary Fund, that the government would resort to withdrawals from the Excess Crude Account (ECA) as an interim measure to ward off any threat to the economy. Nigeria has a balance of $7 billion in ECA.
Giving an insight into the state of the nation’s economy, she explained that Nigeria is losing a total of about 300,000 barrels per day arising from recent shut-in of Shell Nembe operations, shut-in owing to force majeure declared at Qua Iboe Terminal, which has led to a loss of 65,000 pbd and other losses , including those by Agip, and at Okono, Brass and Amenam Terminals due to repair work on equipment.
In addition, the economy has suffered great loss due to the activities of oil thieves and pipeline vandals, all which has led oil production to fall to between 2.1 and 2.2 mbpd as against the 2013 budget projection of 2.528mbpd.
The loss, she added, translated to a drop of $1 billion in revenue per month.
“In dealing with the impact of this on revenue, the government has had to draw on the Excess Crude Account (ECA), which was set up precisely for this purpose; that is to deal with unanticipated losses due to output and price variation.
“The president has been briefed on these developments and action is presently being taken on different fronts. He (president) has ordered the navy to increase its patrols around the hotspots for oil theft and illegal bunkering,” she said.
She said government has been aware of the ominous threat to the budget and that was why it has taken proactive steps to stem the losses.
According to her, the Minister of State for Finance, Dr. Yerima Ngama, had at the last session of the Federation Account Allocation Committee (FAAC) meeting alerted the nation to the fact that government was feeling some pressure on its finance arising from the volatility in the oil sector.
Asked the fate of the 2013 budget in view of threats to its fundamentals, Okonjo-Iweala said the savings in ECA were enough to stabilise the economy for now pending when the results of steps the government has been taking to redress the situation would start bearing fruits.
She explained that although there has been a general drop on collectible revenues from all fronts, she was not worried because Nigeria has saved for the rainy days, adding that that was why she has not bothered to approach any multilateral institution for help on the Nigerian economy.
Reminded that the withdrawals from ECA could only be a short-term measure in tackling an impending budget crisis in view of the threats to the fundamentals of the 2013 Appropriation Act, she added that government was taking other long-term steps to diversify the economy and to close the fiscal gap.
She said: “Customs revenue for the month of April sharing is also down because import of rice is substantially down since we moved for self-sufficiency in rice, tariffs went up in January. We think that people probably imported a great deal last year and stored them and the import is what is being drawn on and our production is going up. It is our own policy but we have to recognise that some of our policy measures would lead to reduction in revenue in this sector.
“By far the largest impact that as you know is on the oil sector. However, the ECA is not meant to be a permanent feature; it is something that is both an instrument of fiscal policy in a country, not just Nigeria, that has a natural resource base that experiences a lot of volatility. It is very useful in cushioning the impact. But in the longer time, Nigeria simply has to diversify its revenue base. This administration has been very crystal clear and that is why the president focuses so much on agriculture and why we are supporting reforms that are being carried out in the agriculture sector not only to create jobs, but also to diversify revenue base.
“We are going into a drive to increase our overall collection of taxes. We have large gaps also in our tax collection, especially from the corporate sector. We have been working closely with FIRS and some consulting companies to look out at the gaps. FIRS has improved over time and it can improve better. So we set ourselves targets to increase our revenue, especially from the non-oil sector. Within the next 12 months, we are going on a drive. Both the diversification of the economy and efforts to improve tax collection and administration are on stream for the longer time.
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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