NNPC loses N547bn in three years

The group monetary loss of the Nigerian National Petroleum Corporation for 2015, 2016 and 2017 is N547bn, the latest review of the oil firm’s financial and operations reports in the period has revealed.

According to the review, which was done by the Nigeria Extractive Industries Transparency Initiative and released in Abuja on Sunday, the refineries posted a cumulative performance of 12.26 per cent during the three-year period.

On refineries and domestic crude utilisation, NEITI stated that for the three years under review, the facilities recorded an average capacity utilisation of 12.26 per cent.

A further breakdown showed that the Kaduna refinery had the lowest capacity utilisation of nine per cent, while Warri and Port Harcourt recorded 9.73 per cent and 15.4 per cent, respectively.

NEITI stated that one striking feature of the NNPC financial operations report was the disclosure that the corporation lost the sum of N547bn in its operation for the three years.

“Out of this amount, the NNPC corporate headquarters recorded the highest revenue loss to the tune of N336.268bn,” the organisation stated.

It, however, noted that the Nigeria Gas Company made a profit of N141.324bn during the period under review.

NEITI applauded the monthly voluntary disclosures by the NNPC, but stressed that it was important to note that the transparency monitoring agency through its auditors under the Extractive Industries Transparency Initiative framework had not independently verified the information and data from the national oil firm’s reports.

The agency stated, “NEITI has not, except for the year 2015, independently validated the data from the NNPC. This will be done in ongoing and future reconciliation reports. What has been done here is a preliminary analysis of the data that the NNPC has made available for the three-year period.

“The figures examined here do not represent the sum total of all revenues from the sector, as other payment streams like royalties and taxes from Joint Venture signature bonuses, transportation rental fees, penalties and others are not covered by the NNPC financial and operational reports.”

NEITI also called for the urgent review of the Deep Offshore and Inland Basin Production Sharing Agreement between Nigeria and the oil companies.

It said the urgency to review the obsolete legislation without further delay was in view of the revenue losses to the federation by the use of the old agreement in the computation of revenues to be shared between the government and the oil firms.

NEITI recalled that the Deep Offshore and Inland Basin Production Sharing Contracts Act of 1993 provided for “a review of the terms when prices of oil crosses $20 in real term; and a review of the terms 15 years after operation of the agreement and five years subsequently.”

The agency, however, observed with concern that Nigeria had yet to adhere to this important provision even now that the price of oil was revolving around $70 per barrel.

In its latest Occasional Paper, which reviewed three years of the NNPC’s financial and operations reports, NEITI noted that crude oil production under the PSCs had since overtaken production under the JV arrangements.

The agency also stated that for the three-year period of 2015 to 2017, the country produced 2.126 billion barrels of crude oil and condensate.

It added that production was highest in 2015 with 775.6 million barrels and was lowest in 2016 with 661.1 million barrels, while production in 2017 was 690 million barrels.

“The year 2016 was a difficult year for oil production, because production was shut-in in a number of oil terminals,” NEITI stated.

The agency said its main concern was that now that the PSCs accounted for about 50 per cent of total oil production and major source of revenue, the delay or failure to review and renew the agreement meant that payment of royalty on oil production under the PSCs would not be made, while computation of taxes would be based on the old rates.

On lifting of crude oil, the NNPC monthly financial and operations report noted that “international oil companies lifted more crude oil than the government. Total lifting of crude oil and condensates was 2.135 billion barrels. Of this sum, the IOCs and independents lifted a total of 1.367 billion barrels, while the government’s lifting by the NNPC was 721.16 million barrels.”

NEITI noted that this implied that the operators lifted 64.01 per cent of total crude lifting, while the government, through the NNPC, lifted 33.76 per cent. When expressed in monetary terms, the total government lifting of oil amounted to $35.893bn, while the figure for the IOCs and independents was $68.591bn.

<<punch>>

Despite US Rate Hike, CBN Says No Cause for Alarm

Regardless of the United States Federal Reserve’s recent hike of its benchmark short-term interest rate by a quarter percentage point as well as its signalling of two more increases this year, the Central Bank of Nigeria (CBN) has said there is no cause for the alarm.

The Deputy Governor (Economic Policy Directorate), CBN, Dr. Joseph Nnanna, who said this in a chat with newsmen yesterday, however, stressed the importance of capital inflows into the Nigerian economy.

Nnanna noted that the yield on Nigeria’s treasury bills was still attractive, irrespective of the US normalisation.

The Fed about a fortnight ago, had pushed interest rate to a range of 1.75 per cent to two per cent and this had heightened concerns of capital outflows from Nigeria.

According to Nnanna, with external reserves at about $49 billion, the CBN is in a comfortable position to meet all its obligations.

“The good thing about this is that the CBN is prepared to meet every foreign portfolio investors (FPIs) at their exit. When they want to go, and they say they want their money, we would write their cheque and give to them, unlike in the past.

“In 2016, we were caught with our pants down. So, now, we are prepared for them. We have a war chest of close to $49 billion in external reserves,” he said,

Nnanna, put the total volume of transactions on the Investors’ and Exporters’ (I & E) window at about $25 billion.

Nevertheless, he pointed out that emerging markets are currently experiencing capital reversal.

“From Argentina to Malaysia, South Africa, Ghana, Egypt, and Nigeria is not excluded. But the reversal in Nigeria is not much.

“So, the point here is that if the share of FPIs in the system is less than one quarter of that, why do we have to worry?

“The point of the matter is that the exchange rate has remained stable and that makes the yield curve to be still attractive, no matter what the US does with its normalisation.

“But for sure, the US normalisation is a very big threat to emerging markets and there is no question about that,” he added.

He, however, disclosed that the CBN has been meeting with the FPIs with a view to letting them know that the Nigerian economy remains strong.

“They (FPIs) have been coming to us, we have been holding bilateral and multilateral meetings. They come virtually every day.

“As I speak, the CBN Governor is in Switzerland and it is also an opportunity to meet with some of the investors.

“The important thing is that the economists in the third world countries should be ready to attract FPIs and also be ready to tell them goodbye if they want to go.

“If they (FPIs) want to go and you put a road block, then you will be in trouble and when they go, they won’t come back,” he explained.

Analysts at Moody’s Investors Service recently stated that Nigeria’s continued dependence on oil and gas means the country may face a range of challenges in the coming years.

Nigeria has struggled to reform its oil sector, improve the regulatory environment and increase transparency.

But Moody’s noted that increasing non-oil tax intake remains one of the biggest challenges facing Nigeria, saying the Nigerian authorities’ efforts to increase non-oil revenue since late 2015 had “been largely unsuccessful.”

“By contrast, the increase in Nigeria’s debt burden was much slower in recent years and Moody’s expects it to stabilise at around 20 per cent of Gross Domestic Product by the end of 2018,” it stated.

<<Thisday>>

NEITI Raises the Alarm over Nigeria’s Revenue Losses to Obsolete PSC Terms

The Nigeria Extractive Industries Transparency Initiative (NEITI) has saidNigeria is losing a lot of oil revenue from its continuous use of the deep offshore and inland basin production sharing agreement it signed with oil companies operating in the country.

NEITI  also called for an urgent review of the agreements it said was obsolete without further delay, adding that the country was losing revenue by the use of the old agreement.

In a statement from its Director of Communications, Dr. Orji Ogbonnaya Orji, which was sent to THISDAY yesterday in Abuja, NEITI recalled that the deep offshore and inland basin Production Sharing Contracts (PSC) Act of 1993 provided for a review of the terms when prices of oil crossed $20 in real term as well as a review of the terms 15 years after operation of the agreement and five years subsequently.

NEITI, however, observed that Nigeria was yet to adhere to the provisions of the terms even now that the price of oil is revolving around $70 per barrel.

It equally explained that its paper on three years of NNPC’s financial and operations reports, indicated that crude oil production under the PSCs has since overtaken production under the Joint Venture (JV) arrangements.

According to NEITI, PSCs accounted for 44.8 per cent of total oil production within the reviewed period, while JV contributed 31.35 per cent.

It explained that in 1998, JV operations accounted for over 97 per cent of oil production, while PSCs contributed only 0.50 per cent.

The trend, it noted, continued until 2012 when PSCs accounted for 37.58 per cent, while JVs contributed 36.91 per cent.

“In 2013, PSCs contributed 39.22 per cent while JVs contributed 36.65 per cent; 2014 – PSCs – 40.10 per cent and JVs, 32.10 per cent; 2015 – PSCs – 41.45 per cent and JVs, 31.99 per cent; while in 2017 the contributions stood at 44.32 per cent and 30.85 per cent respectively. NEITI’s major concern is that now that the PSCs account for about 50 per cent of total oil production and major source of revenues, the delay or failure to review and renew the agreement means that payment of royalty on oil production under PSCs would not be made while computation of taxes would be based on the old rates,” Orji explained.

The statement added that the NNPC report showed that international oil companies (IOCs) lifted more crude oil than the government.

“Total lifting of crude oil and condensates was 2.135 billion barrels. Of this sum, IOCs and Independents lifted a total of 1.367 billion barrels, while government’s lifting by NNPC was 721.16 million barrels. This means that the operators lifted 64.01 per cent of total crude lifting’s, while government through NNPC lifted 33.76 per cent. When expressed in monetary terms, total government lifting of oil amounted to $35.893 billion while the figure for IOCs and Independents was $68.591 billion,”  NEITI added.

According to the agency, one striking feature of the NNPC financial operations report was the disclosure that the NNPC lost the sum of N547 billion in its operation between 2015 and 2017.

“Out of this amount, the NNPC corporate headquarters recorded the highest revenue loss to the tune of N336.268 billion,” NEITI explained, adding that the Nigeria Gas Company (NGC) on the contrary, made a huge profit of N141.324 billion within the period.

NEITI applauded the NNPC for the monthly voluntary disclosures, but noted that its auditors under the EITI framework, have not independently verified the information and data from the reports.

“NEITI has not, except for the year 2015, independently validated the data from NNPC. This will be done in ongoing and future reconciliation reports. What has been done here is a preliminary analysis of the data that NNPC has made available for the three-year period. The figures examined here do not represent the sum total of all revenues from the sector, as other payment streams like royalties and taxes from JVs, signature bonuses, transportation rental fees, NESS fees, penalties and others are not covered by the NNPC financial and operational reports,” NEITI added.

 <<Thisday>>

Between Fiscal Incentives for Quoted Companies and Outright Loss

n recent times, the Nigerian Stock Exchange has witnessed an exodus of companies whose shares were listed on it. In a space of 16 years, the number of companies listed on the NSE dropped by 93. This comes to an average of about six per year as at April 2018.

Obviously worried by the rate of exit, Nigeria’s chief capital market regulator, the Securities and Exchange Commission, believes something urgent must be done to stop the worrisome trend. Acting Director General of SEC, Mary Uduk, a few months ago, transferred the responsibility of seeking solution to the problem to the Capital Market Committee of SEC. The committee is to seek out the real reasons why quoted companies are delisting from the NSE.

Uduk has now made a call to government to intervene by offering incentives good enough to keep the companies at the Exchange.

Incentive

The SEC boss argued that the creation of some form of fiscal incentives for listed entities would add mileage to on-going efforts to improve corporate governance in the country. Uduk spoke through the Director, Zonal Offices Coordinating Department of the commission, Mr. Edward Okolo, at a recent event in Lagos. She said the incentives could equally position the quoted companies to contribute more to national development through improved capacities and job creation potentials.

SEC warned that if companies failed to list their stocks on the stock exchange, it might be out of business with no one to regulate, adding that apart from the reduction of costs, the incentives could translate to huge investment benefits to shareholders.

Besides considering the possibility of further reducing the existing tax incentives for companies to be listed on the capital market, SEC is calling on government at all levels to create a level playing field for both local and foreign companies operating in the country. It said the local firms had always complained about preferential treatment of their foreign counterparts.

“We have had experiences with some investors in the manufacturing sector who claimed that despite fulfilling their fiscal obligations, Nigeria’s public procurement and contractual processes had continued to favour foreign companies to their disadvantage,” the SEC boss alleged. “Our case for fiscal incentives for listed companies on the NSE is actually based on experience. What we are saying is that Nigerian companies doing the same business these foreign companies are doing, if they are listed, should be encouraged in terms of public procurement or whatever government is doing.”

She added, “We don’t want to keep taking from them because they incur a lot of costs and you cannot reduce the costs more than a limited amount of percentage. The best is to begin to give them some incentives and with that you have more companies coming to the market, you have more jobs and then people will have dividends of investing. You must have companies to regulate and if people are not coming to the market, then who are you going to regulate?”

 Other Climes

A number of countries have created actual tax incentives for listed companies. Vietnam applied in 2004- 2006 a 50 per cent reduction on the normal Corporate Income Tax rate (at that time 28 per cent). The effective tax rate of a listed company was, thus, 14 per cent. The tax incentive scheme was introduced when the stock exchange was setup, but it was not continued. In case a listed company also had a reduced tax rate or tax holiday because of its investment project, the 50 per cent reduction would only apply after the other tax holiday.

Thailand applies lower CIT rates for companies that are listed on Thailand’s SET (25 per cent) or the MAI (20 per cent). The normal Thai CIT rate is 30 per cent, but lower rates exist for profits below a certain threshold. The reduced rate for the listed companies applies only for a period of three years. In addition, Thailand provides in an investment tax credit up to 25 per cent of the total qualifying cost of new projects of listed companies (machinery, vehicles, equipment and software).

In Tanzania, withholding tax on interest earned on long term debt securities listed in the Dar-es-Salaam stock exchange during the 2002/2003 fiscal years was abolished.

In Kenya, newly listed companies have been given an incentive to be taxed at a lower rate of 27 per cent, as compared to the standard rate of 30 per cent, for a period of three years following the date of listing. This is also dependent on such companies offering at least 20 per cent of the share capital to the public according to Capital Markets Authority (CMA, 2001). Companies that were to apply and get listed got a tax amnesty on their past omitted income, provided they made a full disclosure of their assets and liabilities and undertook to pay all their future due taxes (CMA, 2001).

Foreign investors in Kenya have been enabled to acquire shares freely in the stock market, subject to a minimum reserved ratio of 25 per cent for domestic investors in each listed company (CMA, 2002). Effective 1 January 2003, newly listed companies were given incentives to pay a lower corporation tax of 25 per cent (i.e. five per cent lower than the standard corporation tax of 30 per cent) for a period of five years following their listing. The new legislation applies to companies that float at least 30 per cent of their issued share capital to the public (CMA, 2002).

Nigeria’s Situation

“The underlying basis for tax incentive to companies operating in Nigeria is to ensure overall growth of the Nigerian economy and even development of all sectors,” Nigeria’s Federal Inland Revenue Service explained.

It added, “Tax incentives are special arrangements in the tax laws to attract, retain or increase investment in a particular sector. It stimulates growth in specific areas, assists companies or individuals carrying on identified activities.”

Meanwhile, under the Industrial Development Act, Pioneer Status is granted to qualifying companies and/or products and services resulting in 3-5 year tax holidays.

FIRS said, “Under the Companies Income Tax Act, loans granted to Nigerian companies may be exempt from tax, where they meet prescribed criteria. Dividends received from Nigeria are exempt from tax, other than withholding tax deducted at source. Profits of shipping and airline companies subject to tax in Nigeria is restricted to activity carried out in Nigeria, dividends interest, rent or royalty earned by companies outside Nigeria and brought in through specified channels are exempt from tax too.”

FIRS added that interest earned by a foreign company on its bank deposits in Nigeria were exempt from tax, while Nigerian companies with a minimum of 25 per cent foreign equity and within their first four years of operation are exempt from payment of minimum tax.

In Nigeria, the president has broad powers to grant tax incentives to any company or individual.

Industries that qualify to enjoy incentives include those engaged in mining, manufacture of cement, glass and glassware, lime from limestone, ceramic products, rubber, leather, and textile.

Sectors of industry that are of economic benefit to the country are given priority.

Incentives are sector-based and not granted arbitrarily and Incentives are reviewed regularly as a way of confirming if they are serving the expected purpose.

Research

A research conducted on the effects of tax incentives on the performance of listed firms in Kenya by Jomo Kenyatta University of Agriculture and Technology, Nairobi, revealed that tax reductions and exemptions influenced stock market performance but did not necessarily influence listing.

According to the research result, “A total of 58 per cent of the respondents argued that tax incentives did not motivate their firms to list at NSE. Many respondents disagreed with this illusion that their firms enjoyed tax incentives before listing at NSE. 54.2 per cent of respondents argued that predictable, clear tax laws and transparent tax administration are also important than low tax rates when making listing in NSE.”

<<Thisday>>

US cuts Nigerian crude oil imports by 62%

The United States cut its crude oil imports from Nigeria by 62.08 per cent to 3.92 million barrels in March, the lowest monthly level since February 2016.

The latest data from the US Energy Information Administration seen by our correspondent on Friday showed that the country imported 10.03 million barrels and 10.34 million barrels in January and February, respectively. It bought as much as 13.34 million barrels in October last year.

The US purchased a total of 24.28 million barrels of Nigerian crude in the first three months of this year, down from 25.97 million barrels in the same period last year.

The import of Nigerian crude by the US rose by 48 per cent to 112.92 million barrels last year, the highest annual level in five years, up from 75.81 million barrels in 2016 and 19.86 million barrels in 2015.

US import of Nigerian crude fell from 148.48 million barrels in 2012 to 87.40 million barrels in 2013 on the back of shale oil boom, the data showed.

In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in the US imports of its crude to 21.2 million barrels.

For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 and June 2015, according to the EIA data.

In 2010, the US bought as much as 358.9 million barrels from Nigeria, but slashed its imports to 280.1 million barrels in 2011.

In April this year, The PUNCH reported that the US crude oil exports had surpassed that of Nigeria as shale oil production surged.

The EIA, the statistical arm of the US Energy Department, said the US crude oil exports rose by 582,000 barrels per day in the third week of April to an all-time record high of 2.331 million bpd.

An analysis of data obtained by our correspondent from the EIA showed that the US crude oil exports averaged 1.12 million bpd last year, with the highest daily export of 1.73 million bpd recorded in October.

Light sweet Nigerian crude is very similar to the light oil produced in the US shale.

The US exports will continue to rise in the medium term, and by 2022, the country will be the fourth biggest oil exporter in the world behind Saudi Arabia, Russia and Iraq, energy consultancy, Wood Mackenzie, said at the end of January.

The US will export four million bpd of light sweet crude of API gravity of between 38 and 45 by 2022, Wood Mackenzie has estimated.

The US removed the 40-year-old restrictions on its crude exports in December 2015 following the rapid growth of its shale oil production. In 2016, the US exported an average of 520,000 bpd.

<<Punch>>

CBN’s I&E Boosts Foreign Investment in Equities Market by 116%

One year after the introduction of the Investors’ & Exporters’ (I&E) Window by the Central Bank of Nigeria (CBN), Foreign Portfolio Investment (FPI) in the Nigerian equities market recorded a 116 per cent growth year-on-year (YoY) as at end of April, 2018.

Total foreign portfolio investment between January and April this year, rose to N504.35billion compared to N233.51billion recorded in the same period in 2017, representing an increase of 116 per cent.

Investments by foreign investors in the market witnessed a sharp decline in the same base period in 2016 when the figure dropped to N148.87billion as against N439.57billion recorded in April 2015 Year-to-Date (YTD).

FPI in Africa’s largest economy returned to the path of growth in 2017, rising to N233.51billion in April YTD compared to N148.87billion YTD in April 2016, representing 56.9 per cent increase.

FPI in 2018 (April YTD) compared to the same period in 2017 recorded 116 per cent growth from N233.51billion in 2017 to N504.35billion in April (YTD).

Data supplied by the Nigerian Stock Exchange (NSE) showed that transactions at the nation’s bourse decreased by 22.11 per cent from N272.48 billion recorded in March 2018 to N212.23 billion (about $0.70 billion) in April 2018. The cumulative transactions from January to April increased by 114.22 per cent from N509.38 billion recorded in 2017 to N1.091 trillion in 2018.

Foreign investors outperformed domestic investors by 15.48 per cent in April 2018. Total domestic transactions reduced by 36.0 per cent from N140.27 billion in March to N89.70 billion in April 2018. Foreign transactions also reduced by 7.32 per cent from N132.21 billion to N122.53 billion within the same period.

There was a 7.79 per cent decrease in foreign inflows from N69.71 billion in March 2018 to N64.28 billion in April 2018. Besides, foreign outflows reduced by 6.8 percent from N62.50 billion to N58.25 billion within the same period.

Meanwhile, financial experts have attributed the renewed interest of foreign investors in the Nigerian equities market to the smooth operations of the I&E window introduced by CBN in April 2017.

According to the apex bank, “The purpose of I&E Window was to boost liquidity in the FX Market and ensure timely settlement of eligible transactions.”

Afrinvest Research noted that weak sentiment in the Nigerian capital market was upturned in April 2017, following the launch of the I&E FX.  “Market returned 42.3 per cent in 2017 following a 3-year losing streak. The performance was due largely to renewed interest by foreign and domestic investors because of stability in macroeconomic fundamentals”.

Specifically, analysts at Afrinvest Research confirmed that the I&E FX window operations has had a material effect on the attraction of FPI into the Nigerian economy through the equities market since its introduction about a year ago.  According to them, “Foreign Portfolio Inflow (FPI) into Nigeria through the NSE, more than doubled from N256.5billion in 2016 to N596.8 billion in November 2017. Average monthly inflow of FPI into the equities market in the review period rose 153.8 percent to N54.3billion from N21.4billion.”

Governor of Central Bank of Nigeria, Mr. Godwin Emefiele, in his review of the performance of the nation’s economy in January 2018, said the introduction of the I & E FX window has boosted the confidence of investors in the Nigerian economy.

Emefiele, in a signed statement, had said the condition of the economy in January reflects strong investor confidence in Nigeria. “We have recorded inflows of almost US$13billion since our introduction of the Investors’ and Exporters’ (I&E) Window about nine months ago.”

According to the apex bank, the inflows from foreign investors into the economy of Nigeria, have boosted FX supply and helped stabilise the exchange rate.

His words: “We have also seen the market capitalisation of our Stock Exchange improve by 22.3 per cent from N13.21trillion on 30 November 2017 to N16.15trillion as of 19 January 2018”.

Furthermore, Emefiele disclosed that the All-Share Index (ASI) of the Nigerian bourse, which was rated second best performing exchange in Africa and 11th best performing stock exchange globally in 2017, had recorded a favourable growth in the very first month of the year 2018 at 18.8 percent as the Index moved from 37,944.60 points in November 2017 to 45,092.83 points on January 19, 2018.

Other areas, where Nigeria has enjoyed gains from the I&E window, according to analysts at Afrinvest Research, are favourable movement on the World Bank Ease of Doing Business Ranking for 2018, where Nigeria ranked among the 10 most improved countries of the world. According a statement attributed to the office of the Vice President of Nigeria, “Nigeria moved up 24 places (relative to a target of 20) to 145th in the World Bank Ease of Doing Business Ranking and ranked in the top most improved countries”.

Emefiele has assured that the CBN will do everything at its disposal to ascertain that the gains from I &E FX window on the economy is sustained.  “The management of the CBN is determined to sustain these gains and will continue our vigilance and pro-activity to ensure macroeconomic stability through 2018,” he said.

NSE reviews equities market structure to boost liquidity

The Nigerian Stock Exchange has reviewed its equities market structure, which will become effective on Monday, July 2, 2018.

The new market structure will create a level playing field for all market participants and enable investors deploy broader trading strategies, enjoy best execution and benefit from enhanced market depth, the Exchange said in a statement on Friday.

Among others, the changes to the market structure will see the opening and closing auctions to be followed by imbalance sessions, where bids exceed offers, and vice versa. The imbalance sessions will allow market participants to enter imbalance orders to address imbalances from the auction sessions.

The new structure will also see the expansion of participants in the auction period to enhance fairness and competitiveness of the price setting mechanism.

It will also lead to the introduction of the size test condition in price determination during the auction period, as it currently applies during the continuous trading session.

It will also bring about changes to the market price volatility mechanism such that daily Limit Up Limit Down price band will now be based on a single reference price (i.e., the previous day’s close) to allow for a symmetric up and down limit of 10 per cent throughout the trading day.

Commenting on the new equities market structure, the Chief Executive Officer, NSE, Mr. Oscar Onyema, said, “The review of the equities market structure was carried out to support our hybrid market model, which offers the benefits of best execution and tighter spreads to investors.

“Moreover, it provides potential for cheaper cost of capital to issuers in our market. This market structure is in line with our 2018 to 2021 corporate strategy aimed at boosting retail investor participation.”

<<Punch>>

Buhari Appoints Four Non-Executive Directors for CBN

President   Muhammadu Buhari,  has appointed four new Non- Executive Directors of the  Central Bank of Nigeria (CBN).

The new CBN non- executive directors are Adeola Adetunji, Prof. Mike I. Obadan, Prof. Justitia Odinakachukwu Nnabuko and Prof. Ummu Ahmed Jalingo.

They were all appointed for an initial period of four years with effect from June 7, 2018.

The appointments were conveyed in a statement signed yesterday by Olusegun A. Adekunle, the Permanent Secretary (General Services Office) Office of the Secretary to the Government of the Federation (OSGF).

The statement also said Buhari approved the renewal of the tenure of three Chief Executive Officers and two other appointments for some federal agencies.

Those whose appointments were renewed included Dr.  Ogbonnia Ibe-Enwo, Rector Federal Polytechnic, Unwana Afikpo, Ebonyi State; Olusegun Olarenwaju Aluko, Rector Federal Polytechnic, IIaro, Ogun State and Prof Sunday Ohousi Onohaebi as Rector, National Institute of Construction Technology, Uromi, Edo State.

Ibe – Enwo is on a second and final term of four years with effect from August 7, 2018; Aluko on second term of four years with effect from September 25, 2018 and Ohousi Onohaebi, whose second final term of four years will take effect from July 25, 2018.

The other appointees are Prof. Abdullahi Dasilva Yusuf as Chief Medical Director,  University of Ilorin Teaching Hospital and Dr.  Pauline N. Ikwugbu, Provost, Federal College of Education, Eha-Amufu, Enugu State.

The statement said Dasilva’s appointment was for an initial period of four years from June 19, 2018 while Ikwugbu’s initial four years appointment begins from March 19, 2018.

The president asked the new appointees to regard their appointments as a call to national service and to carry out their responsibilities with uprightness, diligence and prompt response to the yearnings of the public.

<<Thisday>>

BPE asks NERC for 14 Days to Resolve Ibadan Distribution Company Issues

The Bureau of Public Enterprises has appealed to the Nigerian Electricity Regulatory Commission (NERC) not to go ahead with an order cancelling and revoking Ibadan Electricity Distribution Company (IBEDC), as doing so would trigger off certain provisions in the performance agreement with grave consequences to the federal government.

Instead, the Bureau suggested that it be given two weeks to resolve the matter amicably and urged NERC to reconsider its stand and order so as to accommodate their concerns.

In a letter dated June 20, 2018 with reference number BPE/LSCS/NERC/2018/26 addressed to the Chairman of NERC, the Bureau acknowledged receipt of the order but pleaded for time to peacefully resolve the issues.

The letter titled, “Re: Order No: NERC/181/2018: In the Matter of an Application  of the Enforcement Regulation for the Nigerian Electricity Supply Industry Pursuant to the Electric Power Sector Reform Act”, and signed by Director General of the Bureau, Alex. O Okoh, the Bureau said it was well seized of the matter leading to the order on IBEDC, which was the findings  of NERC on the Open book review of the financial records of the  distribution company that culminated in the Notice of Intention  to Commence Enforcement (NICE) issued by NERC expecting responses to the allegations.

“However as a sister agency of government, the Bureau is particularly concerned  about certain provisions  in the said order, which directly impacts  on the activities of the Bureau; first as the statutory holder  of federal government equity investment  in the IBEDC which is 40 per cent and second also the shareholders agreement  entered into by and between BPE, MOFI, Integrated Energy Distribution and Marketing  Limited  and IBEDC, in particular we refer to the following  provisions in the said order.

“Order 1 – the suspension of all executive and non-executive directors from the IBEDC board;

Order 3 – An order directing the board to call an extraordinary general meeting with 21 days to give effect to the order;

Order 4 –  The shareholders  of the company shall do the following the extraordinary general meeting  -{a} Appoint a new board comprising of executive, non-executive and independent directors; and

Order 10 – The commission shall commence the process of cancelling IBEDC‘s distribution license in accordance with section 74 of the ESPRA where the company fails to comply with any of its orders stated above,” the letter recalled.

Okoh in the letter said the Bureau was particularly worried about the cumulative effect of the orders  on the entire transaction, especially the shareholders agreement, share sales agreement and performance agreement.

“We wish to bring to the notice of the Commission that the BPE had on behalf of the FGN entered into certain covenants with the investors; and as such, the threatened cancellation or sudden revocation of the distribution license might trigger off certain provisions in the performance agreement which will be of grave consequences to the FGN.

“We request that the Commission gives the Bureau two weeks to resolve the matter amicably.

“Accordingly, we urge the Chairman to reconsider the Commission’s order as to accommodate the Bureau’s concerns”, he concluded.

There had been orders for the alleged dissolution of the board of the said distribution company and eventual revocation of the distribution license over concerns related to the financial books of the distribution company.

<<Thisday>>

NACCIMA Faults NASS’ Alteration Of 2018 Budget

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture has faulted the alteration of the 2018 budget by the National Assembly.

While speaking shortly after he signed the budget on Wednesday, President Muhammadu Buhari accused the federal lawmakers of, among others, increasing the National Assembly budget from N125bn to N139.5bn, without any discussion with the executive.

Buhari also accused the lawmakers of making cuts amounting to N347bn in the allocations to 4,700 projects submitted to them for consideration while introducing 6,403 projects of their own amounting to N578bn.

“Many of the projects cut are critical and may be difficult, if not impossible, to implement with the reduced allocation.  Some of the new projects inserted by the National Assembly have not been properly conceptualised, designed and costed and will, therefore, be difficult to execute,” the President said on Wednesday,

Reacting to the alterations, NACCIMA observed that the President identified and highlighted some key projects which had been earmarked for implementation, in the area of health, security and infrastructure but have either been dropped or the allocations for their implementation reduced.

“This is of serious concern to the organised private sector,” the National President, NACCIMA, Chief Alaba Lawson, said in a statement on Wednesday.

She added, “While we acknowledge the statutory role of the legislature in reviewing the budget presented by the executive, we counsel that these projects be reconsidered for approval as soon as Mr. President presents the supplementary budget to the legislature as promised in his speech.”

Earlier, while applauding the passage of the budget into law, the association’s president reiterated that the late passage of annual budgets was bad for the economy and country’s developmental aspirations for inclusive growth and sustainable development.

She said, “It is particularly not helpful to the private sector, which government has acknowledged as the engine of growth and development of the economy.

“The budget is a fundamental framework for strategic planning and decision-making by both the public and private sector; as such, delays have far-reaching implications on the nation’s economy and the wellbeing of the people.

“We wish to use this opportunity to reaffirm the need for the legislature and executive to devise consultative mechanisms that will ensure quick passage and accent of the yearly budget, which is a veritable guide to business operators to plan their yearly activities.”

She urged all ministries, departments and agencies of government to swing into action and implement  the budget to make up for time already lost in the 2018 budget year.

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