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Buhari Calls for Speedy Completion, Delivery of Train 7

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LNG Train-7

By Adedapo Adesanya

President Muhammadu Buhari has called on the speedy delivery of the Nigeria Liquefied Natural Gas (NLNG) Train 7 so that the Train 8 project could begin on schedule.

The President gave the charge at a virtual ground-breaking ceremony of the project in Bonny Island, Rivers State on Tuesday.

He urged the NLNG, the host communities, the Rivers State government and other agencies of the federal government to continue to collaborate to ensure the completion and eventual inauguration of the Train 7 project safely and on time.

He said, “As we flag off the Train 7 project today, I look forward to the development and execution of more gas projects by the International Oil Companies (IOCs) and indigenous operators.

“I also look forward to more Trains from NLNG to harness the over 600 trillion cubic feet of proven gas reserves we are endowed with.

“I commend shareholders of NLNG, the Federal Ministry of Petroleum, NNPC, the Nigerian Content Development and Monitoring Board and other stakeholders for very exemplary collaboration which has culminated in this great opportunity.

“I thank the foreign investors for the confidence reposed in Nigeria.

“I assure all Nigerians and potential investors in the oil and gas sector that the federal government will continue to create the enabling environment to develop the sector and bring the full benefits of gas closer to our people.”

Mr Buhari recounted that the story of Nigeria LNG was one he had been “passionately associated with during the formative years of the project.”

“As Minister of Petroleum Resources, I kicked off our first foray in LNG Business in 1978. At the time it was already apparent that Nigeria was mainly a gas-rich country with a little oil!

“It, therefore, gives me great joy to see the organisation transform from just a project in the early 1990s to a very successful company with over 20 years of responsible operations and a steady supply of Liquefied Natural Gas, Liquefied Petroleum Gas and Natural Gas Liquids into the global market.

“This is proof that Nigeria has a great capacity to deliver value to the world by harnessing our natural resources,” the President added.

He congratulated NLNG and its shareholders – the Nigerian National Petroleum Corporation (NNPC), Shell, Total and Eni for proving that a Nigerian company could operate a world-class business safely, profitably and responsibly.

He lauded the joint venture for clearly setting the stage upon which Nigeria’s vast gas resources would continue to grow well into the future.

According to the President, the focus of his administration is to boost the development of Nigeria’s abundant gas resources, strengthen the gas value chain, develop the much-needed infrastructure and enhance safe operations in the sector as outlined in the National Gas Policy of 2017.

“Through the Decade of Gas initiative, which I recently launched, we will transform Nigeria into a major gas and industrialised nation with gas playing the key role as a revenue earner, fuel for industries and necessary feed for petrochemicals and fertiliser plants,” he said.

He also expressed delight that the NLNG, as the pioneer LNG company in Nigeria, had conscientiously proven the viability of the gas sector over the years, currently contributing about one 1 per cent to Nigeria’s Gross Domestic Product (GDP).

He explained that in revenue over the years, it paid $9 billion in taxes; $18 billion in dividends to the Federal Government and $15 billion in feed gas purchase.

“These are commendable accomplishments by the company’s 100 per cent Nigerian Management Team.

“With this level of performance, I can only hope that the company continues to grow to start with this Train 7 project, but also positioning Nigeria to thrive through the energy transition,” he said.

On his part, the Minister of State for Petroleum Resources, Mr Timipre Sylva, described NLNG as a blessing to the nation.

According to him, it has positively complemented crude oil exploration by monetising flared gas and yielding huge revenue to the nation and to investors.

Mr Sylva added that since NLNG became operational in 1999, the nation had recorded a drastic reduction in operational flare status from 65 per cent to 12 per cent.

“I boldly say that the groundbreaking of Train 7 is a guarantee to every stakeholder of more dividends in terms of further reduction in gas flaring, more revenue to the nation and shareholders, more job opportunities, especially at the construction phase and more social investments for the society,” he said.

Also speaking, Mr Anthony Attah, the Managing Director and Chief Executive Officer of NLNG, said Train 7 would increase NLNG’s overall capacity to 30 million tonnes per annum (mtpa) from the current 22 million mtpa.

Mr Attah noted that the project would stimulate about $10 billion in Foreign Direct Investment (FDI) into Nigeria, creates 12,000 direct jobs in Bonny Island and additional 40,000 indirect construction jobs.

He said the project would also further the development of local capacity and businesses through the 100 per cent in-country execution of construction works, fabrications and major procurement.

‘‘Nigeria has ridden on the back of oil for over 50 years, but with this Train 7 project, Nigeria is now set and I believe it is now time to fly on the wings of gas,” he said.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

Introduction of Capital Gains Tax Could Discourage Investors—Popoola

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capital gains tax

By Aduragbemi Omiyale

As part of efforts to raise more funds for the provision of critical infrastructure in the country, the federal government recently introduced the capital gains tax.

This was embedded in the 2021 Finance Act and it required the payment of capital gains tax on transactions worth over N100 million.

The chief executive of the Nigerian Exchange (NGX) Limited, Mr Temi Popoola, applauded this initiative of the government but warned that it could discourage investors, especially the high net-worth individuals (HNIs) and institutional investors, who carried out such heavy deals.

Mr Popoola, who spoke a few months ago at the Nigerian Economic Summit Group (NESG) Fiscal Policy Roundtable, called for a balance.

He admitted that the capital gains tax is in line with the government’s drive towards an increased tax bracket but was only worried about the adverse effect the laudable policy could have on the economy in the long run.

However, Mr Popoola commended the economic policy direction of the administration of President Muhammadu Buhari, noting that it was an indication of the government’s commitment to driving non-oil revenues into the country.

The NGX chief said the tenets of the 2021 Finance Act brought a lot more clarity on investment such as the Real Estate Investment Trust (REIT), Capital Gain Tax (CGT) and securities lending transactions.

According to him, investing in real estate investment brings a lot of potential gains and “if you look at our market today, all our assets class has helped to boost investors’ confidence.”

He stated that the Finance Act will boost the capital market and the economy, reiterating NGX’s commitment to adhering to government policy and driving growth in the capital market.

However, he further stressed that the introduction of excise taxes on non-alcoholic beverages and the education tax could also affect the economy.

According to him, these taxes could hamper the ability of companies affected by these developments to raise capital and pay dividends to investors because the policies are coming at a time the economy was undergoing a recovery.

Business Post reports that the event, which precisely took place in March 2022, was put together by NESG to access the impact of the 2021 Finance Act on the economy.

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Economy

Inflation in Nigeria Jumps to 16.82% in April 2022

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inflation rate Nigeria

By Aduragbemi Omiyale

The National Bureau of Statistics (NBS) on Tuesday disclosed that inflation in Nigeria increased by 16.82 per cent in April 2022 from the 15.92 per cent recorded in March 2022.

However, on a year-on-year basis, the rate moderated by 1.3 per cent as inflation was 18.12 per cent in the corresponding month of 2021.

The NBS disclosed that the percentage change in the average composite consumer price index (CPI) for the 12 months period ending April 2022 over the average of the CPI for the previous 12 months period was 16.45 per cent, 0.1 per cent lower than the 16.54 per cent recorded in March 2022.

It also stated that in the month under review, the urban inflation rate increased to 17.35 per cent (year-on-year) in April 2022 from 18.68 per cent recorded in April 2021, while the rural inflation rate increased to 16.32 per cent in April 2022 from 17.57 per cent in April 2021.

On a month-on-month basis, the urban index rose to 1.78 per cent in April 2022, up by 0.02 from the rate recorded in March 2022 at 1.76 per cent, while the rural index also rose to 1.74 per cent in April 2022, up by 0.01 from the rate that was recorded in March 2022 at 1.73 per cent.

The corresponding 12-month year-on-year average percentage change for the urban index is 17.01 per cent in April 2022, lower than 17.10 per cent reported in March 2022, while the corresponding rural inflation rate in April 2022 is 15.91 per cent compared to 16.00 per cent recorded in March 2022.

In the report, the stats agency said in April 2022, the composite food index rose by 18.37 per cent in contrast to the 22.72 per cent achieved in April 2021, attributing the increase to a hike in the prices of bread and cereals, food products n.e.c, potatoes, yam, and other tubers, wine, fish, meat, and oils.

On a month-on-month basis, the food sub-index increased to 2.00 per cent in April 2022, up by 0.01 per cent points from 1.99 per cent recorded in March 2022, the report added.

It was further stated that the average annual rate of change of the food sub-index for the 12-month period ending April 2022 over the previous 12-month average is 18.88 per cent, 0.34 per cent points from the average annual rate of change recorded in March 2022 at 19.21 per cent.

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Economy

OTC Securities Exchange Closes 0.02% Lower

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NASD OTC Securities Exchange

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed marginally lower by 0.02 per cent on Monday on the back of a price depreciation in Central Securities Clearing Systems (CSCS) Plc.

The stock, which was the only price loser yesterday, went down by 5 kobo or 0.29 per cent to sell at N16.95 per unit compared to the previous session’s N17.00 per unit.

At the close of transactions, it reduced the market capitalisation of the OTC securities exchange by N250 million to N1.05 trillion from N1.06 trillion and sliced the NASD Unlisted Securities Index (NSI) by 0.19 points to 807.56 points from 807.75 points.

Business Post observed that the level of activity during the session was low as the volume of securities recorded a decline of 99.8 per cent to 61,131 units from 7.5 million units, the value of trades also depreciated by 99.8 per cent to N4.6 million from N2.2 billion, while the number of deals remained unchanged at 11 deals.

AG Mortgage Bank Plc closed the session as the most traded stock by volume (year-to-date) with 2.3 billion units worth N1.2 billion, CSCS Plc was in second place with 661.6 million units worth N13.9 billion, while Food Concepts Plc held the third position with 94 million units worth N77.8 million.

But the most active stock by value (year-to-date) was CSCS Plc with 661.6 million units valued at N13.9 billion, VFD Group followed with 9.4 million units valued at N2.9 billion, and AG Mortgage Bank Plc with 2.3 billion units valued at N1.2 billion.

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