Economy
NNPC spends N1.1trn on subsidy, FAAC remittance, oil Exploration in 7 Months
The Nigerian National Petroleum Corporation (NNPC)has spent N1.165 trillion on petroleum subsidy, oil exploration and remittance to the Federation Account Allocation Committee (FAAC) in seven months of this year.
According to NNPC monthly FAAC report for September, the three expenditure items gulped 57 per cent of the total revenue distribution of N2.043 trillion done by the national oil company in the first eight months of 2021. The balance of N878bn was distributed for other expenditures, including crude oil lifting inspection expenses.
On subsidy which NNPC describes as under-recovery of Premium Motor Spirit (PMS) value shortfall, the corporation spent N714.791bn within seven months, from February to August.
While there was no subsidy spent in January, NNPC spent N25.37bn in February and that figure rose by nearly three times in March to N60.396bn. The corporation then spent N61.966bn in April which more than doubled to N126.298bn in May, following a reported a higher rise in the landing cost of imported petrol.
The national oil company further incurred a higher cost in petrol subsidy of N164.337bn in June but declined to N103.286bn by July; however, by August, the gain was reversed when subsidy cost rose to N173.132bn, the highest figure published so far.
The Minister of State, Petroleum Resources, Timipre Sylva, has continually reiterated that the government was committed to total removal of subsidy from next year, especially with the implementation of the Petroleum Industry Act (PIA) as Nigerians await the impact of the decision.
FAAC Gets N429bn In 7 Months
The corporation also remitted N429.284bn oil proceeds to the FAAC for seven months during the period as it skipped remittance in April.
The breakdown of the remittance shows that NNPC remitted N90.860bn in January, but that dropped to N64.161bn in February, and further depleted to N41.184bn in March 2021.
There was no remittance in April which was said to have gone for subsidizing petrol pump price per litre to keep it at the 162 to N165 price band.
By May, the remittance to FAAC dropped to N38.608bn but rose significantly to N47.162bn in June and higher to N67.280bn in July before climaxing at N80.030bn in August.
Frontier Exploration Gulps N20bn
NNPC also spent N20.681bn on frontier oil exploration in seven months with the highest expenditure done in August. While it spent N1.964bn on exploration activities in January, the bill slightly dropped to N1.920 in February but rose to N2.250bn in March. There was no expenditure on oil exploration in April but the figure rose to N3.216bn in May, and dropped to N2.715bn in June. While oil exploration expenses dropped to N2.443bn in July, they rose by three times in August to N6.167bn.
This expenditure on oil exploration is being made at a time when global leaders are shifting from the use of fossil fuel to renewable and clean energy. However, Sylva recently said Nigeria will gradually lead its energy transition by focusing on gas exploration towards reaching a cleaner energy goal.
More so, in the recently signed PIA, 30 per cent of oil proceeds has been pegged for oil exploration activities at the frontier basins with concerns that these activities are concentrated in the north.
However, the Governor of Nasarawa State, Engr. Abdullahi Sule, at an oil and gas union gathering last week in Abuja, clarified this misconception, saying what refers to as frontier encompasses all new exploration areas including the Niger Delta, with the Benue Trough exploration reaching Calabar, the Cross River State capital. He also said it includes the Benin Basin and some undeveloped offshore areas in the South-South.
Economy
CBN succumbs to pressure, extends use of old naira notes to February 10
Up till Saturday, CBN had insisted on the 31st January deadline for the validity of the old N200, N500 and N1,000 despite overwhelming complaints that the notes are either not available or in short supply in the banks or their Automated Teller Machines.
Last October, Emefiele announced the Naira redesign policy which entails the issuance of new notes to replace the existing N200, N500 and N1,000 series.
Economy
CBN reverses itself on cash withdrawal limits as Emefiele succumbs to pressure
—now pegs weekly withdrawal for individual to N500,000, Corporate N5million
The Eyewitness Reporter
The Central Bank of Nigeria(CBN) may have succumbed to pressure from the National Assembly and other rich Nigerians as it has reversed itself on its earlier cash withdrawal limits for individuals and corporate organisations.
In a circular number BSD/DIR/PUB/LAB/015/073 dated December 21st, 2022 and addressed to all Deposit Money Banks(DMBS) and other financial institutions, the apex bank disclosed that the new weekly cash withdrawal limits for both the individuals and corporate organisations have now been reviewed to N500,000 and N5million respectively.
The new weekly cash withdrawal limits now superseded the earlier one released on December 6th, 2022 which were put at N100,000 for individuals and N500,000 for corporate organisations.
In the new revised cash withdrawal limits, the CBN claimed the revision of the policy was in response to feedback from the stakeholders.
The new revised policy also slashed the processing fees for amounts above the approved threshold from an initial 5 percent for individuals to 3 percent and for corporate organisations from 10 percent to 5 percent.
The circular, which was signed by Haruna Mustafa, the Director of Banking supervision, the CBN said the new revised cash withdrawal policy takes effect from January, 9th,2022.
”Following our circular BSD/DIR/PUB/LAB/015/069 dated December 6, 2022, on the above subject and based on feedback received from stakeholders, the Central Bank Of Nigeria(CBN) hereby makes the following reviews;
–the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000 and N5 million respectively.
–In compelling circumstances where cash withdrawal above the limits in (1) above is required for legitimate purposes, such requests shall be subject to a processing fee of 3 percent and 5 percent for individuals and corporate organisations respectively.
–Futrher to (2) above, the financial institution shall obtain the following information from the Customer, at the minimum,and upload same on the CBN portal created for the purpose
a. Valid means of identification of the payee(National ID, International passport, or driver’s license)
b.Bank Verification Number(BVN) of the payee.
c.Tax Identification Number(TIN) of both the payee and the payer.
d. Approval in writing by the MD/CEO of the financial institution authorising the withdrawal.
–Third-party cheques above N100,000 shall not be eligible for payment over the counter, while the extant limit of N10 million on clearing cheques still subsists.
—Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the banking supervision, Other financial institution supervision and Payment System Management Departments as applicable
—Compliance with extant AML/CFT regulations relating to KYC, ongoing customer due diligence, currency and suspicious transaction reporting, etc is mandatory in all circumstances.
—Customers should be encouraged to use alternative channels(internet banking, mobile banking apps, USSD, cards/POS, eNaira,gets) to conduct their banking transactions”, the circular reads.
The CBN however warned all the banks and OFIS that aiding and abetting the circumvention of this policy will attract severe sanctions.
It could be recalled that the policy, which was first announced on December 6th, 2022, generated mixed reactions, especially from the members of the National Assembly who invited the CBN Governor. Godwin Emefiele to come and explain the rationale behind the cash withdrawal limits.
Twice, the National Assembly invited Mr. Emefiele, but twice, he did not appear, citing national assignment engagement as the reason for his non-appearance.
The review may, however, be as a result of the intense pressure that the CBN governor has lately been subjected to as a result of this policy which analysts believed does not favour the elites, the politicians and the rich Nigerians, especially giving the forthcoming elections.
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