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INTELS Determines Revenue Sharing Formula With FG – NPA

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The House of Representatives heard last Wednesday that the revenue collection contract between the Nigerian Ports Authority (NPA) and Integrated Logistics Services Limited (INTELs) hugely favoured the latter such that the firm determined the Federal Government’s share.
The NPA and INTELS signed a two-legged agreement in 2010 allowing the firm to collect revenue on behalf of the Federal Government on some port operations.
The Managing Director, NPA, Hadiza Bala-Usman told an adhoc Committee of the House in Abuja that the agreement was silent on the sharing formula of the revenue generated by the firm.
She stated that this left INTELS with the power to decide how much it would remit to the Federal Government from any available balance after it had taken a percentage for its services.
The committee, which is chaired by the Deputy Whip of the House, Mr. Pally Iriase, is investigating the circumstances leading to the termination of the contract last year.
Bala-Usman told the committee that the agreement she met on assuming duties at the NPA in 2016 allowed Intels to take 28 per cent of the generated revenue for its services.
She added that the balance of 72 per cent would later be shared between the NPA and Intels.
However, she explained that it was INTELs that decided how much should go to the NPA from the 72 per cent, as the contract was silent on that.
She stated, “The agreement was silent on this aspect. There was nothing suggesting how the balance would be shared.
“So, this gave Intels the power to decide what share to leave for the government and so on.”
The NPA MD recalled that up to 2013, the average monthly remittance by INTELs was $3m.
She added that the remittance rose to $5.6m in 2014 after some negotiations and later dropped to $4m in subsequent years.
However, Bala-Usman informed the committee that a dispute arose between the NPA and INTELs in June 2016 after the firm declined to comply with the Treasury Single Account policy of the government.
She said the NPA communicated the government’s decision to have all public revenues paid into a central account following which invoices would be issued for INTELs to be reimbursed.
She added, “But, INTELs declined and chose to continue to keep the revenue. In May 2017, we sought the advice of the Attorney General of the Federation (Abubakar Malami), who appropriately advised that Intels must comply with the TSA policy or the contract should be terminated.
“Based on the advice of the AGF, a notice of termination was issued to Intels.”
However, she admitted that following the face-off, Intels later apologised to the NPA and agreed to comply with the TSA policy.
“So, since September 2017, Intels started complying with the policy, though we have not received the advice of the AGF on the withdrawal of the termination. But, they have been complying since September 2017. Between 2016 and 2017, Intels had collected $48m,” she added.
Out of the money, Bala-Usman said the NPA confirmed the remittance of $28.1m into the TSA, while another payment of $14.5m reported by Intels had yet to be confirmed.
According to the MD, both the NPA and INTELs would have to do some reconciliation to clarify whether the two payments came from the $48m or from other sources.
Commenting on the unfavourable nature of the agreement, Iriase noted, “Nigeria is worse off with this type of arrangement.”

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Oil Slumps To $88/Barrel, OPEC Considers 1mbpd Cut

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The global benchmark for crude, Brent, appreciated in price on Monday, a situation the Organisation of Petroleum Exporting Countries (OPEC) and its allies consider an oil output cut of more than a million barrels per day when they meet today (October 5, 2022).
Industry figures seen on Monday showed that the cost of Brent moved up by 3.7 per cent or $3.15 to close at $88.3/barrel as at 6.03pm Nigerian time.
Another oil grade, the WTI, also increased in price on Monday, gaining $3.36 or 4.23 per cent to close at $82.83/barrel around the same time.
However, oil grades in the OPEC Basket dipped in price, shedding $0.42 or 0.45 per cent to trade at $92.34/barrel around 6.06pm on Monday.
OPEC sources told Reuters that the oil cartel and its allies were considering an output cut of over one million barrels per day at their meeting coming up today (Wednesday).
The latest figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1mbpd.
The meeting to consider a reduction in global oil supply is happening at a time when governments around the world are struggling to control runaway inflation.
A cut in supply leads to a rise in petroleum prices for consumers.
Today’s face-to-face meeting of the 13 OPEC members led by Saudi Arabia and its 10 allied members headed by Russia will be the first in the Austrian capital since the spring of 2020.
“It is a meeting that is taking place at a very interesting global time,” one of the sources told Reuters.
Saudi Arabia, OPEC’s de facto leader, first flagged the possibility of cuts to correct the market in August.
The cartel had agreed to huge cuts in output in 2020 when the pandemic sent oil prices crashing but began to increase production last year as the market improved.
Now, the output cuts are being considered on the back of a slide in oil prices from multi-year highs reached in March and market volatility.
Oil prices soared to almost $140/barrel in March after the start of Russia’s war in Ukraine, but have since fallen to around $80/barrel amid recession fears.

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‘Blue Economy Can Contribute $1.5trn To Economy’

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Secretary-General, International Seabed Authority, Michael Lodge, has said the sustainable development of deep seabed resources located in Africa’s continental shelves, and in the international seabed area can be a key driver for the development of Africa’s Blue Economy.
He stated this, Monday, in Abuja, during a pre-event press briefing on the imperative of supporting Africa’s Blue Economy.
The event is jointly organised by the International Seabed Authority in collaboration with National Boundary Commission, Federal Ministry of Transportation, Nigerian Maritime Administration and Safety Agency, and other relevant Ministries, Departments and Agencies, and aimed to support the  strategy of Africa’s Blue economy.
Quoting the United Nations statisics, Lodge said Blue economy could also contribute up to $1.5tn to the global economy if effectively and sustainably managed.
“The sustainable development of deep seabed resources located in Africa’s continental shelves and in the international seabed area could be a key driver for the development of Africa’s Blue Economy.
“According to the United Nations, Blue Economy could contribute up to $1.5tn to the global economy if effectively and sustainably managed.
“This is a huge opportunity for Africa and each African state. The oceans and seas surrounding the African continent include a wealth of natural living and non-living marine resources. This inspired a growing interest in the sustainable development of the African Blue Economy”, he said.

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FG, States, LGs Share N2.429trn In Three Months

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The three tiers of government comprising Federal, State, and Local, have shared N2.429 trillion from the Federation Account from June to August, 2022.
The amount is made up of statutory distributions, Value Added Tax (VAT), and others that goes to collecting agencies such as the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS).
Data available to The Tide’s source stated that the Federal, State and Local governments got N673.137 billion in August, N954.085 billion in July and N802.407 billion in June.
Under statutory disbursements, which is derived after VAT and cost of collection are deducted from the total distributable revenue that accrues to the Federation Account at the end of every month, N1.823,369 trillion was shared among the Federal, State and Local Government councils.
In the three months, the Federal Government received N437.871 billion; State governments received N776.918 billion, while Local governments got N608.580 billion, thus bringing the total statutory disbursements between June and August to N1.823,369 trillion.
Under the proceeds from VAT, a total allocation of N586.26 billion was made to the benefiting governments in the three months reviewed. In August, the three governments got N215.266 billion, in July, N177.167 billion, and in June, N193.827 billion.
From June to August, the FIRS, Customs and other revenue-generating agencies that are entitled to the cost of collection received and shared N35.487 billion in August, N47.254 billion in July and N44.606 billion in June, 2022, bringing the total for the three months to N127.347billion.
After making all the deductions, the remainder known as the ‘total distributable’ was shared as follows: Federal Government in August received, N259.641 billion, in July N406.610 billion and in June, N321.859 billion. So, in the three months, the Federal Government got N988.11 billion.
Within the same months, the state governments received N222.949 billion in August; N281.342 billion in July and N245.418 billion in June – all amounting to N749.709 billion.

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