Economy
Uzoka-Anite Warns Against Inflation Risks from Oil, Gas Earnings Surge
By Adedapo Adesanya
The Minister of State for Finance and chairman of the Federation Account Allocation Committee (FAAC), Mrs Doris Uzoka-Anite, has cautioned that a projected surge in oil and gas revenues following President Bola Tinubu’s latest executive order could trigger inflationary pressures and exchange rate volatility if not carefully managed.
She said that the recent executive order mandating the direct remittance of certain oil sector revenues to the federation account would provide regulatory clarity and significantly strengthen revenues accruing to the federation account, but warned that sudden liquidity injections into the economy may complicate monetary policy coordination with the Central Bank of Nigeria and erode the real value of allocations to federal, state and local governments.
While addressing members of FAAC in Abuja, Mrs Uzoka-Anite commended President Tinubu on the order, describing the development as a structural fiscal correction aimed at restoring constitutional discipline to petroleum revenue management and enhancing distributable income across the three tiers of government.
She said that the revenue outlook was improving due to ongoing structural reforms introduced by the Federal Government.
According to her, the newly implemented tax reform measures are broadening the tax base, improving compliance and enhancing administrative efficiency.
“Also, the executive order signed by Mr President on February 13 is reinforcing revenue discipline in the oil and gas sector and reducing leakages,” she said.
The minister said that the order suspends the 30 per cent allocation to the Frontier Exploration Fund (FEF) and suspends the 30 per cent management fee on oil and gas profit payable to NNPC Limited.
She said that the order also directed that gas flare penalties be paid into the federation account, and mandated full remittance of petroleum revenues without unconstitutional deductions.
Mrs Uzoka-Anite said that the reform marks a shift from a retention-based oil revenue model to a gross remittance, federation-first model.
“The implications for FAAC are very significant; more oil and gas profit will now flow directly into the federation account.
“Gas flare penalties will become distributable revenue, and previously retained management fees will no longer reduce remittable inflows,” she said.
She said that the reforms were expected to result in higher monthly gross inflows into the federation account, and increased allocations to federal, state and local governments.
The minister said that a retrospective audit of the FFF, the Midstream and Downstream Gas Infrastructure, was due, and NNPC management fee deductions could lead to recoveries that may provide a one-off fiscal boost.
She welcomed the improved revenue outlook and cautioned against the risks associated with sudden liquidity injections.
“Experience shows that when revenues rise sharply and are distributed fully and immediately, large liquidity injections can increase inflationary pressures, complicate monetary management and reduce the real purchasing power of allocations,” she said.
She said that excess aggregate demand, exchange rate pressure, asset price distortions and inflationary risks could arise if increased inflows were not carefully managed.
Mrs Uzoka-Anite said that to mitigate such risks, she proposed phased disbursement of one-off recoveries.
She suggested that retrospective recoveries be staggered rather than injected into the economy in bulk, with a portion temporarily warehoused in a stabilisation buffer.
She also recommended strengthening the excess crude and stabilisation buffer mechanism to channel part of incremental inflows into a fiscal stabilisation window.
“This could offset revenue shortfalls in weaker months and reduce procyclicality in spending.
According to her, enhanced coordination with the CBN would be pursued to align fiscal injections with liquidity management tools and support open market operations where necessary.
Mrs Uzoka-Anite urged states and federal Ministries, Departments and Agencies (MDAs) to prioritise capital expenditure over recurrent expenditure.
She called for investment in infrastructure, agriculture, energy and other productive sectors, and avoid unsustainable wage or consumption spikes.
“Productive spending expands supply capacity and mitigates inflation,” she said.
She also announced plans to introduce monthly revenue transparency dashboards, production-to-remittance reconciliation reporting, and clear reporting of incremental inflows arising from tax reforms and the executive order.
The junior finance minister said that the reforms presented an opportunity to deepen fiscal federalism, enhance distributable revenue, restore constitutional clarity and strengthen trust among tiers of government.
She also advised that increased revenue must not translate into fiscal complacency.
“We must resist the temptation to treat incremental inflows as permanent windfalls. We should reduce debt burdens, clear arrears responsibly, build buffers and invest in growth-enhancing sectors,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a loss of 1.13 per cent on Thursday, June 4, shrinking the market capitalisation by N30.03 billion to N2.630 trillion from N2.660 trillion on Wednesday.
Similarly, this brought down the NASD Unlisted Security Index (NSI) by 50.19 points to 4,396.08 points from the 4,446.27 points recorded a day earlier.
The loss was influenced by the overpowering of the bulls by the bears, after the bourse closed with two price gainers and three price losers, led by FrieslandCampina Wamco Nigeria Plc, which slumped by N20.03 to sell at N190.38 per unit compared with midweek’s N210.41 per unit. Food Concepts Plc declined by 25 Kobo to trade at N2.50 per share versus the previous day’s N3.00 per share, and Acorn Petroleum Plc crumbled by 2 Kobo to end at N1.32 per unit, in contrast to the preceding session’s N1.34 per unit.
For the gainers, Central Securities Clearing System (CSCS) Plc added N2.93 to close at N78.34 per share compared with the previous price of N75.41 per share, and Afriland Properties Plc gained 80 Kobo to settle at N16.80 per unit versus N16.00 per unit.
There was a slip in the volume of transactions yesterday by 46.8 per cent to 280,714 units from 527,221 units, as the value of trades dropped 66.5 per cent to N21.8 million from the preceding session’s N64.2 million, and the number of deals fell by 8.7 per cent to 42 deals from 46 deals.
Great Nigeria Insurance (GNI) Plc ended the session as the most traded stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also finished the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The domestic stock market crashed by 0.37 per cent on Thursday as a result of the decline in the price of shares of McNichols, Eterna, Aradel Holdings, and others.
Business Post reports that investor sentiment remained weak after the Nigerian Exchange (NGX) Limited ended the session with 25 price gainers and 31 price losers, indicating a negative market breadth index.
McNichols lost 10.00 per cent to trade at N7.74, ABC Transport slipped by 9.88 per cent to N6.20, Eterna shrank by 9.85 per cent to N29.75, Aradel Holdings depreciated by 9.51 per cent to N1,749.90, and NPF Microfinance Bank contracted by 8.45 per cent to N5.20.
On the flip side, International Energy Insurance gained 10.00 per cent to close at N6.60, Omatek improved by 9.73 per cent to N2.03, Abbey Mortgage Bank surged by 9.68 per cent to N8.50, Cutix expanded by 9.66 per cent to N3.18, and John Holt grew by 7.79 per cent to N14.90.
As for the sectorial performance, the industrial goods and banking indices chalked up 0.54 per cent and 0.31 per cent, respectively. But the energy sector depleted by 4.90 per cent, the insurance counter tumbled by 0.58 per cent, and the consumer goods index slumped by 0.03 per cent.
As a result, the All-Share Index (ASI) dipped by 905.30 points to 242,227.31 points from 243,132.61 points, and the market capitalisation stumbled by N581 billion to N155.359 trillion from N155.940 trillion.
During the session, investors traded 588.5 million equities valued at N27.9 billion in 57,352 deals compared with the 923.0 million equities worth N42.3 billion transacted in 69,332 deals on Wednesday, showing a drop in the trading volume, value, and number of deals by 36.24 per cent, 34.04 per cent, and 17.28 per cent, respectively.
The most active equity yesterday was Access Holdings with 109.7 million units sold for N2.6 billion, FCMB traded 35.6 million units valued at N384.2 million, NGX Group transacted 28.1 million units worth N3.9 billion, Zenith Bank exchanged 26.9 million units for N3.3 billion, and Sterling Holdings recorded a turnover of 22.5 million units worth N176.1 million.
By Adedapo Adesanya
A 0.1 per cent or N1,49 loss was recorded by the Nigerian Naira against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, June 4, closing at N1,358.75/$1 compared with the previous day’s N1,347.26/$1.
In the same vein, the Naira depreciated against the Pound Sterling in the official FX market during the session by N5.39 to trade at N1,828.06/£1 versus Wednesday’s closing rate of N1,822.67/£1, but gained N6.75 against the Euro to sell at N1,574.83/€1 versus the preceding session’s N1,584.39/€1.
At the black market and GTBank FX desk, the local currency traded flat against the Dollar during the session at N1,375/$1 and N1,372/$1, respectively.
Data from the Central Bank of Nigeria (CBN) showed that NFEM interbank FX turnover contracted to $128.117 million in 121 deals on Thursday from $133.731 million the previous day.
On the positive side, Nigeria’s external reserves moved closer to a 2009 high of $50 billion, enhancing analysts’ confidence about the local currency outlook in the second half of 2026.
This improvement has been helped by heightened global uncertainty, which has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.
As for the cryptocurrency market, prices extended steep weekly losses as the broader artificial-intelligence trade that has driven global risk assets since 2026 faltered.
The sell-off was led by equity and currency markets, with semiconductor stocks, Asian indexes and several regional currencies sliding in a broad risk-off shift.
Persistent outflows from US spot Bitcoin ETFs and a rare BTC sale by Strategy have removed a key source of support, leaving markets focused on Friday’s US jobs report for clues on Federal Reserve policy and the fate of the AI trade. The most valued coin slipped 3.6 per cent to $61,914.58.
Cardano (ADA) plunged by 17.6 per cent to $0.1630, Solana (SOL) declined by 7.0 per cent to $65.69, Ethereum (ETH) slipped by 6.9 per cent to $1,666.13, Dogecoin (DOGE) went down by 6.5 per cent to $0.8445, and Ripple (XRP) crashed by 6.5 per cent to $1.11.
Further, Binance Coin (BNB) slumped by 4.3 per cent to $581.45, and TRON (TRX) dropped 1.9 per cent to sell at $0.3261, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) gained 0.01 per cent each to sell at $0.9990 and $0.9998, respectively.
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