Indications emerged at the weekend that the current banking sector reforms and the relative stability in the prices of crude oil may have returned Nigeria to the path of economic stability with the remarkable reduction in inflation and interest rates.
The nation’s annual interest rates fell from 11 per cent in August to 10.4 per cent in September, thus raising the prospect of stability in the nation’s economy.
Data released by the National Bureau of Statistics at the weekend showed that the nation’s annual inflation dropped to 10.4 per cent on a 12-month basis in September from 11 per cent in August.
“The composite consumer price index or CPI rose 10.4 per cent year-on-year in September 2009 and it is slower than the 11 per cent increase recorded in the previous month,” the agency said in a report, giving no reason for the decrease.
“The monthly change of the CPI was 0.5 per cent increase in September 2009,” it added.
According to the bureau, the urban All Items Index rose by 0.2 per cent while the corresponding Rural Index increased by 0.7 per cent in September, when compared with the preceding month.
The bureau stated that the year-on-year average consumer price level as at September 2009 for urban and rural dwellers rose by 8.1 per cent and 11.5 per cent respectively.
Nigerian inflation had risen steadily since the second quarter of last year, standing at 9.7 per cent in May before soaring to 14 per cent in July owing to the effects of the global food crisis.
The Federal Government had managed to slow inflation for most of 2006 and 2007 through belt-tightening measures to achieve a single-digit rate.
Such measures included a stable exchange rate for the national currency, as well as fiscal discipline.
Checks also showed that the CBN intervention has also forced down interest rates which was pegged at 21 per cent earlier in the year. Interest rate now hovers between 18.85 and 19.89 per cent.
According to the latest figures posted on the Money Market Association site, Prime Lending rate stood at 18.85 while Normal lending was put at 19.85 per cent respectively.
In specific terms, the Nigerian Interbank Offer Rate (NIBOR) for call fell to 4.75 per cent by the end of last week from 10.37 per cent at which it closed the previous week ended October 9, 2009.
The 7-day NIBOR closed the week at 7.41 per cent from 12.50 per cent. The 90-day paper closed the week at 13 per cent from 16 per cent, while 180 day instrument dropped to 14.50 per cent as against 17.58 per cent the previous week.
Explaining the trading for last week, Head, Treasury Sales, Fidelity Bank Plc, Mr. Uvic Ogban said that the N200 billion bailout funds released to the second batch of troubled banks hit the system last week Thursday, thereby dragging down the rates.
“The market responded to the bailout fund. The other influence on the rates was the anticipation by dealers that the market will be awash with funds up till this week. The meeting of the Federation Account and Allocation Committee (FAAC) was held last week. It is expected that the fund will hit the system in the current week. In addition to the inflow expected from the economic stimulus package. Since the market respond to information, the foregoing will help sustain the low rates in the current week,” he said.
During an interactive session with journalists at the recently concluded World Bank/ International Monetary Fund (IMF) meetings in Istanbul, Turkey, CBN Governor, Lamido Sanusi, said the banking watchdog has been able to achieve macroeconomic stability, especially with both the exchange and interest rates.
He noted that when he became the CBN governor last June, inflation rate was 15 per cent but as at end of August, it had fallen to 11 per cent.
Sanusi said inflation was likely to go to nine per cent by the end of the year.
“When I became governor of Central Bank, inflation rate was 15 per cent. End of August, it was 11 per cent. The gap between the official rate and parallel rate was 25 per cent: as at today, it is 2.98 per cent. All short term money market rates today are lower than they were in December 2008.
“We’ve delivered macroeconomic stability. We’ve checked stable exchange rate-in fact, in the last one week; I have been fighting against the rapid appreciation of the naira because of return in confidence. It’s just that in the management of the macro economy, the CBN has been so successful and we’ve done all of these in the middle of all those financial turmoil.
“There’s been no spike on inter-bank rates. There’s been no spike on exchange rates. There’s been no capital flight and inflation has not gone up. Those are the facts the president mentioned in his Independence Day speech: Those achievements of his administration nobody talks about. Inflation is likely to go to nine per cent by the end of the year. Look at our exchange reserves, the foreign reserves- we stemmed the outflow: we were losing foreign reserves at the rate of $2 billion per month. In the last two months we have lost nothing,” he said.
FG, States, LGAs Share N736.782bn In Oct
The Federation Account Allocation Committee (FAAC) has disbursed N736.782 billion from October 2022 Federation Account Revenue to the Federal Government, States and Local Government Councils.
This amount was augmented by an additional N70 billion distributed to the three tiers of government.
Federal Government received N36.876 billion, States got N18.704 billion, Local Government Councils received N14.420 billion.
An extra N30 billion Augmentation was made from non-oil revenue and distributed, with Federal Government getting N15.804 billion, States getting N8.016 billion, and Local Government Councils getting N6.180 billion.
According to the communiqué at the end of the FAAC, at the meeting for November 2022, the N736.782 billion total distributable revenue was made up of N417.724 billion distributable statutory revenue; N213.283 billion Value Added Tax (VAT) revenue; N5.775 billion Exchange Gain revenue.
In October 2022, the total deductions for cost of collection amounted to N33.555 billion and total deductions for transfers, savings and refunds was N186.749 billion.
The balance in the Excess Crude Account (ECA) still remains at $472,513.64.
The communiqué confirmed that from the total distributable revenue of N736.782 billion, the Federal Government received N293.955 billion, the State Governments received N239.512 billion and the Local Government Councils received N177.086 billion.
The total sum of N26.228 billion was shared to the relevant States as 13 percent derivation revenue.
Gross statutory revenue of N622.270 billion was received for the month of October 2022. This was lower than the sum of N825.710 billion received in the previous month by N203.440 billion.
From the N417.724 billion distributable statutory revenue, the Federal Government received N206.576 billion, the State Governments received N104.778 billion and the Local Government Councils received N80.779 billion. The sum of N25.591 billion was shared to the relevant States as 13 percent derivation revenue.
For the month of October 2022, the gross revenue available from the Value Added Tax (VAT) was N229.041 billion. This was higher than the N203.960 billion available in the month of September 2022 by N25.081billion.
The Federal Government received N31.992 billion, the State Governments received N106.642 billion and the Local Government Councils received N74.649 billion from the N213.283 billion distributable Value Added Tax (VAT) revenue.
The N5.775 billion from the Exchange Gain revenue was distributed as follows: the Federal Government received N2.707 billion, the State Governments received N1.373 billion, the Local Government Councils received N1.058 billion and the relevant States received N0.637 billion as 13 percent derivation revenue.
According to the Communiqué, in the month of October 2022, Value Added Tax (VAT) and Companies Income Tax (CIT) increased significantly while oil and gas royalties, Petroleum Profit Tax (PPT) and Import Duty recorded considerable decreases.
$1bn Looted Funds Recovered Since 2015 – Malami
Nigeria’s Attorney-General and Minister of Justice, Abubakar Malami, has revealed that the current administration has so far recovered about $1 billion looted funds till date.
Malami disclosed this while briefing State House Correspondents after the week’s Federal Executive Council (FEC) meeting presided over by President Buhari at the Presidential Villa, Abuja.
He also disclosed that Council has approved a new Anti-corruption Strategy Document to strengthen anti-graft campaigns in the country.
He said the recovered assets had been deployed to various sectors of the economy, including poverty alleviation.
Malami also expressed government’s concern over cases of budget padding, which he described as worrisome, noting that every necessary measure would be explored to address it.
Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq, had blamed the Minister of Finance, Budget and National Planning, Zainab Ahmed, for adding N206bn to the Humanitarian Affairs Ministry’s budget.
Nigeria Loses $2bn To Oil Theft In Eight Months
The ad-hoc committee set up by the Senate to investigate oil theft and consequent damage on the nation’s economy has said Nigeria lost $2 billion (an equivalent of N1.3trillion) to oil theft between January and August this year.
The committee’s report, which was adopted by the Senate in plenary on Tuesday, made far-reaching recommendations for stemming the tide.
It, however, failed to name a single person or corporate entity carrying out the oil theft.
In one of its findings, the committee said, “Nigeria lost over $2bn to oil theft between January and August 2022, with consequent loss of revenue that would support the country’s fiscal deficits and budget implementation.”
The report indicated concerted efforts being made against the crime by all stakeholders, saying that they had started yielding results, with Forcados Terminal now producing 500,000 barrels per day as against zero production in the first six months of the year.
“Bonny Terminals was also producing 87,000 barrels of oil per day now as against zero production a couple of months ago due to activities of economic saboteurs”, the report stated.
The 16-point recommendations of the committee as adopted by the Senate stated in part: “ the Nigerian National Petroleum Company Limited should stop undermining Nigerian Upstream Petroleum Regulatory Commission and Nigerian Midstream and Downstream Petroleum Regulatory Authority from performing their functions.
“The provisions of the Petroleum Industry Act should be adhered to by NNPCL as regards functions of the established agencies.”
The report called for an immediate streamlining of agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions.
According to the report, the NUPRC should fast-track the upgrade of the National Production Monitoring Systems to enable real-time monitoring of flow station and terminal activities.
The NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal movement of vessels to ensure adequate revenue generation and optimal crude oil production, it stated further.
It continued that the Bureau of Public Procurement should expedite all processes of procurement for NUPRC to ensure immediate deployment of an online real-time monitoring system by the commission across all upstream oil and gas production platforms for accuracy in measuring production volume by producers.
The report further said the NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria, including integrated ones, crude oil pipelines, issuance of loading clearance, and processing of export permits in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.
It also faulted what it called undue interference of the Minister of State in the operations of NUPRC as shown with letters made available to it by the agency, stressing that both the minister and NNPCL should allow PIA to function.
“The PIA as signed into law by the President, must be allowed to function by all stakeholders in the sector as an amendment on it now, will send wrong signals to the International community”, it stated.
Recall that the Senate on April 14, 2022, constituted a 13- member Ad – Hoc Committee on Oil Lifting, Theft, and the impact on Petroleum Production and Oil Revenues under the chairmanship of Senator Akpan Bassey, who is also the chairman, of the Senate Committee on Petroleum ( Upstream).
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