Economy

Nigeria’s Excess Crude Account Falls to $71.8m from $321m in Four Weeks

Published

5 years ago

20/02/2020

By Adedapo Adesanya

About four weeks ago, Business Post raised an alarm over the declining rate of the amount in Nigeria’s Excess Crude Account (ECA), which stood at $321.4 million as at January 20, 2020.

However, a month after, what is left on the account will leave many asking several government they hope the government of the day will provide answers to. As you read this piece, what is left in the ECA is just $71.814 million, yes, $71.814 million.

At the end of a Federation Account Allocation Committee (FAAC) retreat held in Lagos on Wednesday, the Permanent Secretary in the Federal Ministry of Finance, Budget and National Planning, Mr Mahmoud Isa-Dutse, confirmed this development, but did not disclose the reasons why the ECA has shed over 78 percent in just about 20 working days.

While briefing newsmen on outcome of the event, he said the three tiers of government, comprising federal, states and 774 local government councils, shared a total of N647.353 billion as their allocation from the federation purse for the month of January. The amount shared from FAAC this month was lower than what was disbursed last month from the revenue generated in December 2019. This is totally different from the ECA.

The ECA is meant to keep the excess amount made from the sale of crude oil above the budget benchmark for the year. This year, the cap was put at $57 per barrel, but weak performance of oil at the global market caused by the coronavirus has kept prices below the benchmark, but there have been few times this year prices have gone above $58 per barrel at the market.

When Business Post published its report last month on the ECA, it was stated that amount in the account once rose above $20 billion, but the hunger for the money by state governors resulted in the money being shared. They went to court to force the federal government to allow them have access to the funds meant to be saved for the rainy days.

The ECA created by former President Olusegun Obasanjo in 2004 for saving revenue realised from crude oil sales above the budgeted benchmark price and had once peaked at $22 billion during the administration of the late President Umaru Musa Yar’Adua in 2008.

There are serious concerns over the constant drop in the ECA, with observers warning that if not properly checked by government, the devaluation of Naira will ultimately happen. But the Central Bank of Nigeria (CBN) has maintained that the Naira will not be devalued and to allay fears, it has constantly released forex into the market almost on a weekly basis to defend the local currency, which is stable around N360/$1.

Last month, the Monetary Policy Committee (MPC) of the CBN urged the fiscal authorities to strongly consider building buffers by not sharing all proceeds from the federation account at the monthly FAAC meetings to avert the macroeconomic downturn in the event of an oil price shock.

In the eventuality of a price shock, coupled with shortage in foreign reserves, and decline in the excess crude account, Nigeria could be heading towards another recession in four year.

Economy

Onne Area 11 Customs Command Surpasses 2024 Revenue Target by N16bn

Published

6 hours ago

05/01/2025

Business Post Contributor

By Bon Peter

The Area 11 Command of the Nigeria Customs Service (NCS) in Onne, Rivers State surpassed its 2024 annual revenue target by N16 billion.

This information was revealed to newsmen by the Customs Area Controller of the Command, Mr Mohammed Babandede, at a news conference last week.

He also disclosed that the command recently intercepted 12 containers of illicit drugs worth over N20.30 billion concealed in various items.

According to him, the content of the seized container included 1,721,100 bottles of 100ml cough syrup codeine, 510,000 tablets of 50mg Really Extra Diclofenac, 7,100,000 tablets of 225mg Royal apple Tramadol and Tramaking, 3,461 pieces of sanitary ware fittings used for concealment, 840 pieces of Chilly cutter used for concealment, and 153 cartons of TVS rubber.

“Our vigilant officers and men have successfully intercepted and seized an additional 12 containers (40 feet) of illicit medicine.

“This is a testament to our unwavering commitment to safeguarding public health, ensuring security of our nation and compliance with Nigeria’s import regulations. This also justifies our commitment to trade facilitation, transparency, effective and efficient service,” he said.

He said last year, the command received the support of different stakeholders, thanking them for working with the agency to achieve success.

“We appreciate the continued support and collaboration of all stakeholders, including the media, in amplifying our message and efforts to combat smuggling,” he said.

Mr Babandede stated that, “It is worth noting that the morale and dedication of our officers have been significantly bolstered by the Comptroller-General of Customs’ award, recognizing Area 2 Command as the Best Command in Anti-Smuggling Operations.

“This honour has further strengthened our resolve, and I assure you that we will not relent in performing our duties to protect the lives and well-being of Nigerians.”

The customs chief said earlier last year, the command was given a revenue target of N618 billion but as of December 31, 2024, it generated N634 billion, higher than the N321 billion recorded in 2023, promising to do more in 2025.

Economy

Stock Market Gains N248bn to Close at N63.166trn

Published

2 days ago

04/01/2025

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited appreciated by 0.39 per cent on Friday as the demand for local equities continued to increase.

During the final trading session of the week, the insurance maintained its upward trend with a growth of 7.81 per cent as the banking index appreciated by 1.08 per cent, the consumer goods sector rose by 0.52 per cent, and the industrial goods counter expanded by 0.33 per cent, while the energy space went down by 0.49 per cent.

At the close of business, the All-Share Index (ASI) jumped by 406.19 points to 103,586.33 points from 103,180.14 points, and the market capitalisation increased by N248 billion to N63.166 trillion from N62.918 trillion.

The bourse recorded 67 appreciating shares and 11 depreciating shares, implying a positive market breadth index and strong investor sentiment.

Chams, Omatek, NCR Nigeria, Learn Africa, and Regency Alliance topped the gainers’ table after they gained 10.00 per cent each to finish at N2.31, 88 Kobo, N6.05, N4.95, and 88 Kobo, respectively.

On the flip side, TotalEnergies lost 9.74 per cent to trade at N630.00, CWG depreciated by 6.04 per cent to close at N7.00, Thomas Wyatt went down by 5.26 per cent to N1.80, ABC Transport crumbled by 4.07 per cent to N1.18, and UAC Nigeria shed 3.19 per cent to N31.90.

Yesterday, investors traded 709.3 million stocks valued at N8.2 billion in 13,593 deals compared with the 829.8 million stocks worth N5.7 billion transacted in 11,752 deals on Thursday, representing a slowdown in the trading volume by 14.52 per cent and a rise in the trading value and number of deals by 43.86 per cent and 15.67 per cent, respectively.

At the close of business, Chams topped the activity log with 58.1 million equities sold for N133.8 million, Veritas Kapital traded 55.1 million shares valued at N89.2 million, Abbey Mortgage Bank exchanged 50.1 million stocks for N165.5 million, AIICO Insurance transacted 39.7 million equities worth N68.3 million, and NPF Microfinance Bank sold 34.3 million stocks valued at N64.0 million.

Economy

NASD OTC Exchange Extends Good Start to New Trading Year

Published

2 days ago

04/01/2025

Adedapo Adesanya

Nigeria's Unlisted Securities Market Sheds 0.78%, NASD Shares up 8.31%

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange extended its positive start to the year with a 0.08 per cent rise on Friday, January 3.

The market saw a gain of N840 million, with the value of the alternative bourse growing to N1.046 trillion from the N1.045 trillion it closed a day earlier as the NASD Unlisted Security Index (NSI) made an addition of 2.43 points to wrap the session at 3,052.34 points compared with 3,049.91 points recorded at the previous session.

The appreciation posted yesterday at the NASD OTC exchange was caused by two price gainers led by Industrial and General Insurance (IGI) Plc which jumped by 2 Kobo to end at 20 Kobo per share compared with the preceding session’s 18 Kobo per share and UBN Property Plc, which improved its value by 16 Kobo to close at N1.98 per unit, in contrast to Thursday’s closing price f N1.82 per unit.

The market posted a price loser, which was FrieslandCampina Wamco Nigeria Plc as it dropped 18 Kobo to finish at N39.76 share versus the previous day’s N39.94 per share.

There was an 856.6 per cent surge in the volume of securities traded in the session to 11.3 million units from the 1.2 million units traded in the preceding session.

Equally, there was a jump in the value of shares traded yesterday by 1,078.4 per cent to N56.8 million from the N4.8 million made previously, and the number of deals increased by 22.7 per cent to 27 deals from 22 deals.

FrieslandCampina Wamco Nigeria Plc was the most active stock by value (year-to-date) with 1.4 units worth N55.8 million, IGI Plc came next with 10.6 million units valued at N2.1 million, and 11 Plc was in third with 6,45 units sold for N1.4 million.

IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, FrieslandCampina Wamco Nigeria Plc came next with 1.4 million units valued at N55.8 million, and UBN Property Plc followed with 275,740 units worth N545,965.