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NNPC’s Payment Of N2.1tn Dividend, N2.6tn Tax will reduce Nigeria’s financial burden– Chukwu

According to him, the total amount shared by the three tiers of government in the first seven months of this year was only N8.3tn while NNPC paid tax of N2.6tn which is almost 30 per cent of the total amount that had been shared.

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3 weeks ago

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THE Chief Executive Officer of Cowry Assets Management Ltd, Jonhson Chukwu has said that the dividend and taxes paid by the Nigerian National Petroleum Company Ltd will reduce the financial burden of the federal government.
Chukwu said this in response to the record performance of the state-owned company after it released its financial accounts for 2023.
It has been reported that the company made N3.297tn net profit for 2023 which surged significantly by 28 per cent compared to the N2.54tn recorded in the previous year.
The books showed that the company recorded a historic profit before tax of N5.98tn while it paid taxes of N2.6tn to the Federal Inland Revenue Service.
NNPC also recorded a dividend of N2.6tn payable to the Nigerian government. The company had declared a loss of N803bn in 2018, and it was reduced to N1.7bn loss in 2019.
But the company led by the Group Chief Executive Officer, Mele Kyari returned to profitability in 2020 with N287bn profit and N674.1bn profit in 2021. It went further to post N2.55bn profit in 2022.
Chukwu said in an interview on Arise TV that the dividend and taxes declared by the company will reduce the financial stress of the federal government.
He said, “The federal government has made a supplementary budget of about N6tn. And then NNPC’s N2.1tn final dividend is more than 35 per cent of the supplementary budget.
“That will show you the impact this is going to have when that money comes to the foundation account.
“Bear in mind that whatever dividend they pay goes through two organs of government. One, Federal Minister of Finance, Incorporated, and Ministry of Petroleum, Incorporated and they own NNPC limited 50-50 per cent.
“So, it all goes back to the entire national treasury. And that simply means it will go into the federation account, which will be shared through the three tiers of government. And that will cushion the kind of financial stress that the governments at different levels are going through.”
He said in the past, the concern of Nigerians has always been on the issue of accountability on the part of the former Nigerian National Petroleum Corporation now NNPC.
Chukwu, while responding to the performance, likened the NNPC Ltd to Saudi Aramco, which is the biggest listed oil firm with $1.8tn market capitalisation.
Chukwu said, “I was quite impressed. You know why? Everything we’ve heard in recent past, we are all negatives about the general industry, what is going on and that. And then today we’re looking at how NNPC had turned the corner.
“If you cast your mind back just a few years ago, 2018, that company made a loss of N803bn. In 2018, you can see it virtually broke even by making a loss of only N1.7bn.
“But today we’re talking about N3.3tn profit and that is after tax payment of N2.6tn. And we need to put it in context. The NNPC is going to pay to the federation account to Federal Inland Revenue Service N2.6tn as tax before it arrived at the N3.3tn.”
The economist said the results showed that the NNPC has created value for the nation in the region of N5.3tn.
According to him, the total amount shared by the three tiers of government in the first seven months of this year was only N8.3tn while NNPC paid tax of N2.6tn which is almost 30 per cent of the total amount that had been shared.
The Cowry Assets boss explained that the NNPC could record the performance because the management possibly reduced or eliminated the loss-making arms of the organisation.
“They would have instilled some level of performance-based in different arms of an NNPC. And they have also escalated their level of reporting, and now do you have a detailed financial statement from an NNPC. For years, we did not have a detailed financial statement from an NNPC.
“So, I think NNPC being an incorporated company, like what we have in NNPC Limited, unlike what you have in Nigerian National Petroleum Corporation, when it was a corporation, and then there was no level of accountability.
“What has been brought to bear are the standards that are applicable to private sector enterprises, in terms of performance-based, board of oversight functions, budgeting, and then appraisals that actually measure performance against targets.
“And I think those things have been institutionalized and which is why we are seeing consistency in terms of their profitability and we’re seeing a steady growth in their profitability over these past few years since they turned the corner.
“And I believe those are the factors that were brought to bear that made the company turn the corner.”
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Naira Recovers Against Dollar, Gains N81 In 24hrs

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15 hours ago

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September 11, 2024

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In a dramatic turnaround, the Naira significantly appreciated against the dollar at the foreign exchange market on Wednesday, just 24 hours after experiencing a decline.

According to data from FMDQ, the Naira surged to N1,555.75 per dollar, representing an impressive N81 gain from the previous day’s rate of N1,637.59.

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This remarkable recovery not only erased the N57.13 depreciation recorded on Tuesday but also surpassed it, indicating a strong rebound for the Nigerian currency.

Confirming the development, Dayyabu Ashiru, a Bureau De Change operator in Wuse Zone 4, revealed that the Naira traded at N1,650 per dollar on Wednesday, up from N1,660 on Tuesday.

The foreign exchange market also witnessed increased activity, with transaction turnover rising to $221.24 million on Wednesday, a significant jump from $197.37 million on Monday.

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Ex-CBN Deputy Gov, Moghalu Breaks Silence On Nigeria’s Economic Troubles

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2 days ago

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September 10, 2024

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Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, has announced that he will no longer engage with the media on Nigeria’s economic crisis.

Moghalu cited the government’s lack of interest in his expertise as the reason for his decision.

The former CBN chief’s announcement comes as Nigeria grapples with severe economic hardship and hunger, exacerbated by the government’s policies, including the floating of the Naira and removal of fuel subsidies.

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Moghalu’s decision has sparked concerns about the government’s willingness to listen to expert advice on economic matters.

Financial analyst Kalu Aja has also criticized the administration’s handling of palliatives, noting that it took them a year to address food imports and that promised CNG buses have yet to materialize.

Moghalu explained his absence from media interviews, stating that he has already shared his insights on reviving Nigeria’s economy and sees no value in repeating himself.

He said, “I’ve declined virtually all requests for interviews on the Nigerian economy from Nigerian media over the past several months. Why? There is no point in a dialogue of the deaf. I’ve already spoken a lot about how to fix Nigeria’s economy. Anyone interested can find what I’ve said.

“It’s ironic that people like us who actually do not need Nigeria and its economy for our personal survival are so concerned simply out of passion for our country, but after a while, we must recognize the harsh truth and act accordingly.”

 

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Naira’s Value Drops Sharply Against Dollar: Is CBN Losing Control?

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2 days ago

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September 10, 2024

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The Naira plunged dramatically against the United States dollar on Tuesday, sparking concerns that the Central Bank of Nigeria (CBN) may be losing its grip on the currency’s stability.

With the Naira depreciating by N57.13 at the official foreign exchange market and weakening further in the parallel market, doubts are mounting over the effectiveness of the CBN’s recent measures to support the nation’s currency.

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According to data from FMDQ, the Naira fell to N1637.59 per dollar, down from N1580.46 on Monday.

This represents a substantial drop in value, coming after two days of appreciation against the dollar.

In the parallel market, also known as the black market, the Naira weakened by N5, trading at N1660 per dollar, compared to N1655 on Monday.

The decline comes on the heels of the Central Bank of Nigeria’s sale of $20,000 to Bureau De Change operators at N1580 per dollar last week Friday.

The sudden drop in the value of the Naira raises concerns about the country’s economic stability and the impact on foreign exchange rates.

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