The Federal Government has presented a revised 2018 to 2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the Senate for consideration.
The government specifically adjusted the Gross Domestic Product (GDP) growth rate from 4.5 per cent to 3.5 per cent.
Minister of State for Budget and National Planning, Zainab Ahmed made the disclosure at an interactive session with the Senate Joint Committee on Finance, Appropriations and National Planning in Abuja, Tuesday.
She, however, explained that other key parameters and assumptions like oil benchmark, daily oil production estimates and exchange rate were retained.
The minister allayed fears that the adjustments would affect the 2018 budget proposal of N8.61 trillion.
She added that the adjustments had already been reflected in the 2018 budget estimates submitted by President Muhammadu Buhari to a joint session of the National Assembly on November 7.
Zainab listed some of the adjustments made on the 2018 to 2020 MTEF submitted by the Executive to the National Assembly in October to include: “N710 billion to be generated from the restructuring of government’s equity in all the Joint Venture oil assets.
“N320 billion additional revenues from revision of terms to improve government take in the Production Sharing Contracts; additional N60 billion from Excise Duties on cigarettes and alcohol, among others.
“The key assumptions on the macro framework is as defined in our MTEF and the only difference in the key assumptions is that we have adjusted the GDP growth from 4.5 per cent.
“And this is as a result of a meeting we had with you while discussing the last MTEF down to 3.5 per cent.
“But all the other assumptions at 2.3 million barrels per day, oil price of $45 per barrel, exchange rate of N305/$1 are the same.
“The fiscal deficit is now N2.05 trillion, down by over N940billion, also pushing the debt/GDP ratio downwards from 2.61 per cent to 1.77 per cent,” she said.
The minister said the adjustments were the fallout of the recommendations of a committee chaired by Finance Minister Kemi Adeosun, which identified additional revenue sources of about N1trillion to cut the 2018 budget deficit.
She added:”When the FEC approved the MTEF/FSP, it constituted a Committee, chaired by the Minister of Finance, which was tasked with identifying additional sources of about N1 trillion revenues to cut the 2018 budget deficit and New borrowings.
“The outcome of the work of the committee necessitated a revision of the Medium Term Fiscal Framework (MTFF), which also formed the basis of the 2018 budget proposal.
“This briefing note and accompanying submissions relate to the revised MTEF/FSP and MTFF, which are in alignment with the 2018 Executive Budget proposal, and were part of the documents that accompanied the 2018 Budget laid before NASS”.
Lawmakers who spoke at the session, insisted that the non-oil revenue were unrealistic.
Specifically, they cited the FGN Independent Revenue projection of N807billion for 2017, where only N155.14billion (representing 74 per cent failure) was achieved as of September this year.
The Chairman, Senate Committee on Finance, Sen. John Enoh and a member of the joint committee, Sen. Ibrahim Danbaba (APC-Sokoto), wondered why the same projection was used in 2018.
“Why don’t we have anything on interest rate as part of the MTEF document? That will be the best way to talk about aligning the monetary and the fiscal.
“Why are we putting more than N800 billion as independent revenue when the president admitted in his address to the National Assembly that it had suffered about 74 per cent variance?
“And yet in 2018, we are still putting more than N800 billion for independent revenue. Are we just balancing the figures?
“How do you expect to get the revenue from the beginning even what you are projecting you know that you can’t make it?” Enoh queried.
In his contribution, Adamu Aliero (APC, Kebbi), said: “I find it difficult to understand why the budget for 2017 should be truncated by 31st December when less than 20 per cent of the capital budget has been released.
“By withholding capital releases, you are more or less contracting the economy.”
The development comes as the Senate had revealed that it would approve the 2018 to 2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) this week.
To this end, the debate on general principles of the N8.61 trillion 2018 Appropriation Bill, earlier scheduled for Wednesday and Thursday this week, has been shifted to November 28 and November 29.
MTEF/FSP provides the parameters upon which the budget is prepared.
According to the Fiscal Responsibility Act, the fiscal documents must be approved before the budget is considered.
NNPC, IOCs Sign Pact To Generate $500bn Revenue …To Produce 10bn Barrels Oil From Five OMLs
The Nigerian National Petroleum Company (NNPC) Limited and International Oil Companies (IOCs) operating in Nigeria, on Friday, signed various agreements that would ensure the production of about 10 billion barrels of crude oil and generate over $500bn revenue to all parties involved.
NNPC officials and their counterparts from the IOCs including Shell, Chevron, Texaco, Sinopec, Sapetro, Esso Exploration and Production Nigeria Limited, among others, renewed their agreements in five Oil Mining Leases (OMLs) that included OMLs 128, 130,132, 133, and 138.
The agreements renewed by the parties were Production Sharing Contracts (PSC) as well as Dispute Resolution Agreements (DRA) among others, at a signing ceremony held at the Abuja headquarters of NNPC.
Speaking at the event, the Group General Manager, National Petroleum Investment Management Services, Bala Wunti, said, “Cumulatively we hope to produce and monetise over 10 billion barrels of oil with these signatures that we had today.
“And this by no means will give significant revenue for all the parties. We expect over $500bn of revenue for all the stakeholders.”
Earlier, the Group Chief Executive Officer, NNPC, Mele Kyari, had explained that the Petroleum Industry Act 2021 gave NNPC the legal backing to renegotiate all its existing PSCs in conformance to the provisions of the new Act within a one-year period.
The PIA became law on August 16, 2021 after it was signed into law the same day by the President, Muhammadu Buhari.
The PIA in Section 311(2) stipulates that new PSC agreements under new heads of terms will be signed between NNPC Ltd as concessionaire and its contracting parties within one year of signing the PIA into law, giving a deadline of August 15, 2022.
Kyari noted that this provision paved the way for the resolution of lingering disputes which created investment uncertainty and stifled new investments in the nation’s deep offshore assets.
To achieve this, he said NNPC leveraged the near end-term of the PSCs and the parties’ interest to renew the PSCs as a negotiation currency in bringing the contractors to work towards trading the past for the future.
“These renewed PSCs would provide several benefits such as improved long-term relationships with contractors, elimination of contractual ambiguities especially in relation to gas terms, enablement of early contract renewal, among others,” he stated.
Kyari added, “The signing of the new PSCs is a key milestone achievement by NNPC Ltd which would ultimately unlock opportunities within the Nigeria upstream sector.
“The execution of the PSCs will deepen investment and development of Nigeria’s rich petroleum resources and ensure that the trifold mandate of the NNPC Ltd to ensure energy availability, sustainability, and accessibility is achieved.
“Ultimately, the new PSCs will provide an inflow of Foreign Direct Investment, expanded access to affordable energy, job creation and socio-economic development.”
Nigeria’s Crude Production Plunges By Over 2m Barrels
The Organisation of Petroleum Exporting Countries (OPEC) has said Nigeria’s crude oil production plunged by 2.3 million barrels in July 2022 when compared to what was produced in the preceding month of June.
Data obtained from the latest Monthly Oil Market Report for August 2022, of OPEC, revealed that crude oil production figures, based on direct communication, indicated that Nigeria’s output dropped by an average of 74,000 barrels per day in July.
It indicated that for the 31 days in July, the country lost about 2.3 million barrels of crude oil, whereas the average cost of Brent crude, the global benchmark for oil, during the month under review was $105.12/barrel.
Going by the 2.3 million barrels loss in July this year, it means Nigeria’s oil earnings fell by about $241.1m or N101.13bn (at the official exchange rate of N419.37/$) in the month under review.
The data from OPEC also showed that Nigeria’s oil production in June 2022 was 1.158 million barrels per day, but this dropped to 1.084 million barrels per day in July.
The country had produced 1.024 million barrels per day in May this year, according to figures released by the OPEC on Friday.
The Federal Government, operators and experts have consistently fingered crude oil theft in the Niger Delta as the major reason for Nigeria’s poor output and its continued failure to meet the monthly oil production quota approved by OPEC.
The downstream sector has continued to be weighed down by the pricing regimes and the regulatory environments which have continued to dim the growth prospects in the sector.
OPEC has also stated that crude oil prices dipped in July, as against their costs in June, adding that crude in OPEC Reference Basket fell by $9.17 or 7.8 per cent month-on-month in July, to the average of $108.55/barrel.
“Oil futures prices remained highly volatile in July, amid a sharp drop in liquidity. The ICE Brent front month declined $12.38 or 10.5 per cent in July to average $105.12/barrel and NYMEX WTI declined by $14.96 or 13.1 per cent to average $99.38/barrel,” the international oil cartel stated.
By: Corlins Walter
PH Airport Passengers Kick As Touts Increase
Business activities at the Port Harcourt International Airport, Omagwa, seem to be taking a new twist, particularly at the arrival terminal area, as touts and touting activities have increased tremendously at that arrival arena.
Many arrival passengers have not been having it easy with the influx of these new touts, who claim to be hustling at the airport for their daily bread.
Some of the passengers not only argue with them, but brazenly argue or shout at them for forcing themselves on them (passengers).
The Tide had severally observed that the number of these hustlers has increased in recent times and their modus of operation is to approach arrival passenger, whether known or unknown to ask for assistance.
“Anything for the boys? Your boys are here-o”; or “welcome-ooo, your boys are hungry, we are loyal-ooo”, are usually their opening gambit.
Several times, fracases had broken forth among them on how to share money given to them by some benevolent arrival persons with large heart, which usually constitute public nuisance.
Nevertheless, few of them have engaged themselves in helping passengers to load or offload luggages, and were being appreciated by some passengers, while others shun them, because they did not engage them.
Several questions have been asked by The Tide, on why this situation seems to be persisting, as the airport management appears to be indifferent to the issue, even when some passengers had been complaining.
Even the security operatives, particularly the airport security personnel, appear to be overwhelmed by the situation.
Meanwhile, a senior security officer at airport, who The Tide interacted with on the matter, said the unemployment situation had aggravated the increase in touting at the airport.
He expressed regret that many of the youths are unemployed, and that hustling at the airport, will be better than taking arms and rubbing people, noting that it was for that reason they are not coming hard on their touting activities.
By: Corlins Walter
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