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Oil revenue down to $24.7b

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…As Senate confirms Buhari’s nominees for CBN deputy governors, MPC***

There was steep decline in oil revenue between 2011 and 2015, Nigerian Extractive Transparency Initiative (NEITI) Executive Secretary Waziri Adio said yesterday.

Nigeria, he said, earned about $68.4billion from oil in 2011, and a paltry $24.7billion in 2015.

He said the Nigerian National Petroleum Corporation (NNPC) was yet to remit into the Federation Account the $16, 898,725, 000 dividends which accrued to the government from its share in the Nigerian Liquefied Natural Gas (NLNG) between 2000 and 2015.

The NNPC, he said, claimed that it received instruction from former President Goodluck Jonathan to warehouse the fund and spend as directed.

NEITI has demanded for a copy of the directive from the ex-President.

But Adio noted that the level of malfeasance in the oil and gas industry has reduced under President Muhammadu Buhari.

The nation, he said, was now experiencing more accountability and transparency in the sector than before.

Adio made these known at a session tagged “Anti-Corruption Situation Room in Abuja” during a training workshop organised by the Human Environmental Agenda (HEDA) Resource Centre in conjunction with MacArthur Foundation.

His presentation focused on the highlights of the NEITI 2015 Oil and Gas Audit Report which covered 75 entities including 54 oil and gas companies;  three refineries; 10 agencies;  seven

generating companies (GENCOs),  Nigerian Gas Company and NLNG.

Nigeria, he said, had been experiencing a “steady decline in oil revenue since 2011 but all the decline had been in single digit between 0 and 9.

“But it is only in  2015 that we had a major decline that not only went into double digit but more than 50 per cent. And this was as a result of a sharp drop in oil price but also the constraints in our oil production.

A breakdown of the revenue decline is as follows:

2011—$68.4b; 2012—$62.9b; 2013—$58.01b; 2014—$54.55b; and 2015—$24.7b.

Adio said it was time the government, civil society groups and Nigerians asked questions on the whereabouts of the $16.8billion NLNG dividends.

He said: “NNPC confirmed receipt ($16.8b) but no evidence of remittance to Federation Account. NNPC said it received instruction from President to warehouse the fund and spend as directed.

“NEITI requested NNPC to provide evidence of the presidential directive and the statement of account on NLNG dividends.

“We own 49 per cent interest in NLG and the private investors about 51 per cent. Between 2000 and 2016, the total  money paid  by NLNG  as dividends to NNPC which is holding the 49%  interest on account of the the Federation  came to $16.8b in 16 years.

“There are  some issues around these dividends. The  first is that there is a paper trail, nobody denies that NLNG pays dutifully on time to NNPC and the oil corporation has records it received the money. In fact they dispute many things about what we do but not this one. And

they will tell you that NLNG Account is one of the best accounts in NNPC.

“But the money does not go into the Federation Account. They receive it, they hold it. They said there is a confusion about who holds the investment in NLNG whether it is the Federation or the Federal Government.

“A very good argument but  the counter-argument is that all the interests that NNPC holds in trust are usually held in trust for the Federation.

We believe that it is  one of the best investments we have had. It is a model.”

Adio advised Nigerians to show interest in the oil sector’s development, saying:  “No matter how much we work in NEITI, if citizens do not engage robustly, it will come to naught. If the information we generate is not used, it is useless.

“Let us try and understand what is going on in the oil sector. The resources we have do not belong to the government; they belong to the people of Nigeria. It is a sector that is very technical and the people who are benefiting from the status quo who want to keep it

secret. There is nothing in the oil and gas sector that cannot be understood. We must ask questions based on evidence.

“I know that of recent we have had more transparency and accountability in the system. Also, the level of malfeasance has reduced.”

Findings confirmed that about $7.85billion was withdrawn from the NLNG Dividend Account in March 2011 for the Brass LNG Project for which payment should spread for five years.

Former Minister of Petroleum Resources Mrs. Diezani Alison-Madueke on March 30, 2011, sent a memo to ex-President Jonathan that about $7.85billion be sourced from NLNG Dividend Account for the Brass LNG Project.

Meanwhile, the Senate has confirmed the appointments of Mrs. Aishah Ahmad and Mr. Edward Adamu as deputy governors of the Central Bank of Nigeria (CBN).

It also approved nomination of three of the four members of the Monetary Policy Committee (MPC).

The confirmed MPC members are Prof. Adeola Festus Adenikinju, Dr. Aliyu Rafindadi Sanusi and Dr. Robert Chikwendu Asogwa.

Dr. Asheikh A. Maidugu was, however, rejected.

The confirmation followed the adoption of the reports of the Senate Committee on Banking, Insurance and Other Financial Institutions, which screened the nominees on Monday.

In the report on the MPC nominees presented by Chairman of the committee, Senator Rafiu Ibrahim, the panel said Maidugu was considered not qualified to occupy the position for which he was nominated.

“The nominee was interviewed by the committee and he responded to the questions asked by the members, but the committee was dissatisfied with his response to the independence required for each member of the MPC and concerned that a regular civil servant burdened with bureaucracy and red-tape may not be independent in his judgment on each crucial decision of the MPC that affects directly the whole economy,” the report stated.

In his remarks on the nominees, President of the Senate, Bukola Saraki, said, “At this point, let me congratulate the two nominees, particularly Mr. Edward Lamatek Adamu, whose uplifting to a deputy governor will be a great encouragement to the staff of the CBN, who will see one of their own in this position. I am sure it will boost the morale within the institution.

“Let me also commend and congratulate Mrs. Aishah Ahmad for her nomination to this very competitive role. The two new deputy governors of the CBN are coming at a time when the economy is a major issue. We have just come out of a recession and we need to continue with our economic growth and see the sustainability of the foreign exchange and other related challenges.

“We hope that the two new deputy governors will work with the governor to move the country and our economy in the right direction. We hope also, that you all will continue to work closely with the National Assembly to update us on the progress that is achieved by the CBN.”

The Majority Leader, Senator Ahmad Lawan, however, urged Buhari to nominate a replacement for the rejected nominee.

He also urged the lawmakers to consider the President’s request for confirmation of CBN’s governing board nominees.

Buhari had in March 2017 sought the Senate’s approval for the appointment of Prof. Ummu Ahmed Jalingo (North-East), Prof. Justitia Odinakachukwu Nnabuko (South-East), Prof. Mike Obadan (South-South), Dr. Abdu Abubakar (North-West) and Adeola Adetunji (South-West) to the board of the CBN.

Lawan said, “I will advise the Senate that we expedite action to consider the governing board where we expect two more members of the MPC to emerge from. This will make complete the MPC as an individual institution under the CBN.

“I will also take this opportunity to advise the President to present another nominee in the place of Dr. Maidugu, who has been rejected.”

Saraki, however, stated that the issue of the CBN board would be discussed when there were more lawmakers in the chamber.

He said, “Your point is noted. The executive should, because of the urgency of the matter, expedite action and bring a replacement for the MPC member that we rejected.

“On the issue of the board, as you rightly observed, may be when we can do it when we have fuller participation. We can do that based on the valid point you made as far as ensuring that the MPC is fully constituted. It is a matter we will discuss when we come next week, making sure that the MPC is fully constituted.”

Nation with additional report from Citizen

Banking & Finance

Revocation Of Heritage Bank’s Licence Will Stabilise Financial System – Experts

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Revocation Of Heritage Bank’s Licence Will Stabilise Financial System – Experts

 ….Uwaleke, Ekechukwu opine it’s a step in the right direction 

 Some finance experts have commended the Central Bank of Nigeria (CBN) for revocating the operating licence of Heritage Bank Plc, describing it as a proactive gesture, made to save depositors’ funds.

The CBN announced on Monday, the revocation of the licence of the bank with immediate effect.

The experts, who spoke on Monday in Abuja, said the action was in the overall interest of the financial system.

According to Uche Uwaleke, a Professor of Finance and Capital Market, and the president of Capital Market Academics of Nigeria, the revocation is a step in the right direction.

Uwaleke said that the proactive step taken by the CBN was in the overall interest of financial system stability.

He, however, said that efforts should be made to protect the depositors and employees of the liquidated bank.

“With the Nigeria Deposit Insurance Corporation (NDIC) taking over the liquidation process, efforts should be made to protect the depositors as well as the interests of employees using liquidation dividends,” he said.

An economist, Dr Chijioke Ekechukwu, said that Heritage Bank had been struggling over the years to remain afloat, adding that the situation must have become irredeemable for the apex bank to revoke its licence.

According to Ekechukwu, a past president of the  Abuja  Chamber of  Commerce and  Industry, some years ago, some of us in the finance sector knew that the bank was struggling to remain afloat.

“For the CBN to revoke its licence, it means that it was irredeemable and probably not marketable to investors,” he said.

He said that there would be an initial setback to all the bank’s customers because it would take a while to verify them for the purpose of compensation and refund of their monies by the NDIC.

“It is, however, better to sanitise the financial system than to allow a sick and weak bank to continue to open its doors to customers,” he said.

Mr Gregory Mmaduakolam, also an economist, said that the action by the CBN was rash and capable of eroding the much-needed confidence in the banking system.

Mmaduakolam said that the action would also result in avoidable job loss of staff of the bank, thereby, further exacerbating the country’s unemployment challenge.

“I would have preferred a situation where the CBN supports ailing banks and prevents them from failing than simply withdrawing their licences.

“Such an action does not encourage confidence in the banking system, ” he said.

The CBN had on Monday, announced the revocation of the licence of the bank with immediate effect.

It said that the action was in accordance with the apex bank’s mandate to promote a sound financial system in Nigeria and in the exercise of its powers under Section 12 of the Banks and Other Financial Act (BOFIA).

It said that the board and management of the bank had not been able to improve the bank’s financial performance, a situation which constituted a threat to financial stability.

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Banking & Finance

NDIC Begins Liquidation Of Heritage Bank

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Revocation Of Heritage Bank’s Licence Will Stabilise Financial System – Experts

The Nigeria Deposit Insurance Corporation (NDIC) says it has started the liquidation process of Heritage Bank with immediate verification and payment of insured deposits to bank depositors.

The CBN revoked Heritage Bank’s license on Monday.

Mr Bashir Nuhu, Director of Communications and Public Affairs, NDIC, in a statement, said that relevant laws necessitated immediate actions to safeguard depositors’ funds.

“Following the revocation of the banking license of Heritage Bank Plc by the Central Bank of Nigeria (CBN) today, June 3, 2024, and the appointment of the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator, under Section 12(2) of BOFIA, 2020,

“The corporation wishes to announce to depositors of the bank in particular and the banking public in general, as follows:

“The NDIC has commenced the Liquidation of Heritage Bank Plc under Section 55 sub-section 1 & 2 of the NDIC Act 2023

“The corporation has also commenced the liquidation process of the failed bank with immediate verification and payment of insured deposits to the bank depositors.”

He explained the payment options to various categories of the bank’s depositors.

“Depositors of the bank that have alternate accounts within the industry will be paid up to the insured amount of N5 million per depositor using their Bank Verification Number (BVN) to locate their alternate account.

“While depositors with funds over N5 million will be paid liquidation dividend upon realisation of the bank’s assets and recovery of debts owed to the bank,” he said.

Nuhu advised all depositors of the defunct bank without alternate bank accounts in the industry to visit the nearest branch of the bank with proof of account ownership, and verifiable means of identification.

He listed the required documents to include a driver’s license, permanent voter’s card, and National Identity Card, together with an alternate account and BVN for the verification of deposits and subsequent payment of insured sums.

He added that depositors could also file online claims by visiting the NDIC website claims page at www.ndic.gov.ng/claims/claims, download and fill the claims forms and upload the required documentation.

He advised creditors to visit the nearest branch of the bank to file their claims or via the online platform.

“Please note that the process of payment of creditors will commence immediately after all depositors have been paid,” Nuhu said.

He advised debtors who had not completed repayment of loans to contact the Corporation’s Asset Management Department (AMD).

“Visit the NDIC website for more details. The NDIC wishes to assure the entire banking public of its commitment to the continued safety of depositors’ funds in all licensed banks.

“As such, depositors are urged to continue their banking businesses without fear as banks whose licenses have not been revoked remain safe and sound,” he said.

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NGX: Foreign Investor Transactions Increase To $90.83m In April

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NGX: Foreign Investor Transactions Increase To $90.83m In April

 The total transactions by foreign investors on the Nigerian Exchange Ltd. (NGX) increased by 28.19 per cent between March and April.

The NGX revealed this in its Domestic and Foreign Portfolio Investment Report, which was made available to newsmen in Lagos.

The Exchange polls trading figures from market operators on their domestic and foreign portfolio investment (FPI) flows monthly.

NGX said that the figure rose from N94.26 billion, which is about 70.83 million dollars in March to N120.83 billion, which is about 90.83 million dollars in April.

The Exchange stated that the total domestic and foreign portfolio transactions in Nigeria’s equity market amounted to N346.23 billion in April.

However, as of April 30, 2024, the NGX said the total transactions at the nation’s bourse decreased by 35.71 per cent.

The figure dropped from N538.54 billion, which was about 404.69 million dollars in March to N346.23 billion, which was about 260.24 million dollars in April.

The regulator said the performance in April of the current year when compared to April 2023 which stood at N191.21billion, revealed that the total transactions increased significantly by 81.07 per cent year-on-year.

NGX mentioned that in April, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 30 per cent.

“A further analysis of the total transactions executed between March and April revealed that total domestic transactions decreased by 49.27 per cent from N444.28 billion in March to N225.40 billion in April.

“Also, Institutional Investors outperformed Retail Investors by 10 per cent.

“A comparison of domestic transactions in March and April revealed that retail transactions decreased by 54.89 per cent from N223.37 billion in March to N100.77 billion in April 2024,” it said.

According to the Exchange, the institutional composition of the domestic market decreased by 43.58 per cent from N220.91 billion in March to N124.63 billion in April.

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