Economy
Nigeria’s Excess Crude Account, Once Over $22bn, Depletes to $321m
By Dipo Olowookere
The balance left in the Excess Crude Account (ECA) of Nigeria as at Monday, January 20, 20120 was $321.4 million, Business Post has gathered.
Last week, the National Economic Council (NEC) held a meeting in Abuja, which was presided over by Vice President Yemi Osinbajo. The council comprises Governors of the 36 states of the federation, the FCT Minister and Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele.
At the gathering, NEC was informed of the amount left in the ECA and other special accounts of the federation, including the stabilization account, which stood at N31.8 billion as at Tuesday, January 21, 2020; the Development of Natural Resources Account, which had N97.0 billion as at January 21, 2020; and the Budget Support facility deduction which was in progress with N29 billion so far remitted to the CBN.
Business Post reports that the ECA was created by the administration of former President Olusegun Obasanjo in 2004 to keep the extra amount made from the sale of crude oil’s benchmark.
For instance, like in the 2020 budget, where the crude oil benchmark was set at $60 per barrel, anytime the commodity is sold above $60, the excess is saved in the ECA for rainy days and this helped the country during the 2008 global financial meltdown as it was not felt by Nigeria.
However, the tradition of not touching the ECA was broken under the administration of late Umaru Yar’Adua, when Governors under the aegis of the Nigerian Governors Forum led by former Senate President and then Governor of Kwara State, Mr Bukola Saraki, instituted a lawsuit at the Supreme Court in 2008 to seek an injunction to force federal government to share what is left in the account.
When Mr Obasanjo handed over power to late Mr Yar’Adua in 2007, according to the Ministry of Finance, the balance in the ECA was $9.43 billion and in 2008, he grew the amount to over $22 billion, the highest ever in Nigeria’s history. However, he passed on in 2010 and his deputy, former President Goodluck Jonathan, was sworn in as an acting President in May 2010.
Under the Jonathan administration, the ECA depleted as a result of his heeding to the demand of the Governors and it was reported that the amount decreased to about $4 billion by 2010.
In 2015, when the present administration of President Muhammadu Buhari commenced, the sum of $2 billion, according to a former Minister/Deputy Chairman of National Planning Commission, Mr Abubakar Olarenwaju Sulaiman, was left by the Jonathan government for Mr Buhari.
In 2016, when the state Governors asked the Buhari administration to share the ECA, what was then left was about $2.3 billion.
In 2018, during a briefing with newsmen in Abuja on outcome of the NEC meeting, Governor of Kano State, Mr Abdullahi Umar Ganduje, said the former Minister of Finance, Mrs Kemi Adeosun, informed the council that as at Monday, January 15, 2018, the amount left was $2.3 billion and Mrs Adeosun later said in June of same year, 2018, that the balance had declined to $1.9 billion. This was after government had removed $1 billion from the account to fight terrorism in the country despite opposition from the opposition party, the Peoples Democratic Party (PDP).
As at October 2019, the amount left in the ECA was $324 million, but according to NEC, in an update of its last meeting in Abuja, the money has now reduced to $321 million.
During the meeting, Chairman of the NEC Committee on the matter and Governor of Kaduna State, Mr Nasir El-Rufai, briefed the council on the proposed consideration of 20 percent of pension funds to be invested in infrastructural projects such as rail, roads and electricity.
On the review of the status of the ownership structure of the electricity power Distribution Companies (DISCOs), he said plans were ongoing to determine the level of investment/ownership of states and federal governments in the Discos, and requested NEC to, among other things, place media advertisements for the public to submit memoranda on the way forward for the electricity sector.
NEC approved the prayers of the Committee that stakeholders in the sector be engaged, and that submissions from the public be received for analysis.
Also briefing NEC on polio eradication and improved routine immunization in Nigeria, the Minister of Health, Mr Osagie Emmanuel Ehanire, said Nigeria was on course to attaining polio-free status by June 2020, noting that the country has not recorded any new case of polio infection in the last three and half years.
He said there are incidences of Lassa Fever in some states namely; Edo, Kano, Ondo, Ebonyi and Taraba resulting in 84 cases and 15 deaths, noting that the National Centre for Disease Control has been alerted and is on top of the situation.
Mr Ehanire reported to council that the use of paracetamol to cook meat and the consequences that comes with it as well as the use of Aspirin to purify water, are deadly practices that damages major body organs, warning that these practices should be avoided.
He also briefed council on the Coronavirus that emerged in China, which has spread to four border countries such as United States of America, Thailand, Japan and Korea.
During his presentation, the Emir of Kano, Muhammadu Sanusi II, made the presentation to the council in his capacity as the Chairman of the Board of Trustees of the Nutrition Society of Nigeria.
Mr Sanusi, who titled his presentation a Call for Action, said “over 12 million children are stunted in Nigeria, while 2.6 million are wasted annually due to malnutrition,” adding that Nigeria records the highest number of stunted children in Africa.
According to the monarch, malnutrition accounts for 53 percent of deaths among children as high child mortality and stunting are linked to deficiencies in key micronutrients (vitamin A, Iron, Zinc and Calcium), macronutrients (Carbohydrates, Protein, Fats) and associated poor feeding practices, as well as overall nutritional status of the mother.
The Emir, who stated that the burden of malnutrition which include stunting, under-weight, obesity and other diet related non-communicable diseases, can be treated, said, “65 percent of dietary energy supply is derived from cereals, roots and fibres indicating low dietary diversity.”
Continuing, he said basic causes of malnutrition are poverty, socio-cultural, economic and political environment.
At the gathering, NEC appealed to states and local governments to deal with the problem by investing more in issues relating to malnutrition, adding that states should key into the World Bank sponsored programme on nutrition.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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