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FG Introduces N250bn Intervention Fund for Gas Value Chain

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Gas Development

By Adedapo Adesanya

The federal government has introduced a N250 billion intervention facility to stimulate finance and motivate investors in the gas value chain for sustainable business development in the country.

This was disclosed by the Permanent Secretary, Ministry of Petroleum Resources, Mr Bitrus Nabasu, on Sunday in  Abuja.

“Therefore, in an effort to stimulate finance to this critical sector, the Ministry of Petroleum Resources in partnership with the Central Bank of Nigeria (CBN), introduced a N250 billion intervention facility to help motivate investment in the gas value chain.

“A description of the intervention facility can be found on the CBN website www.cbn.gov.ng and the ministry’s website at www.petroleumresources.gov.ng,” the senior government official said.

Mr Nabasu disclosed further that the large scale projects under the intervention would be financed under the Power and Airlines Intervention Fund (PAIF) in line with existing guidelines and regulations of the Fund.

According to him, the small scale projects and retail distributions will be financed by NIRSAL Micro Finance Bank and other participating institutions under the Agribusiness Small and Medium Enterprises Investment Schemes (AGSMEIS).

The facility, he said, was designed to improve access to financing for private sector investment in the gas value chain, stimulate investment in the development of infrastructure to optimise the domestic gas resources for economic development

He listed other objectives of the facility to include the provision of a platform to fast track the adoption of Compressed Natural Gas (CNG) as the fuel of choice for transportation and power generation as well as Liquefied Natural Gas (LPG) for domestic cooking, transportation and captive power.

“It will also fast track the development of gas-based industries particularly petrol chemicals (Fertiliser, Methanol, etc), to support large industries such as agriculture, textile and related industries.

“Provide leverage for additional private sector investment in the domestic gas market and boost employment across the country,” he stated.

The Permanent Secretary said the facility would also finance gas processing, small scale petrochemical and gas cylinder manufacturing plants as well as LCNG regasification modular systems.

Mr Nabasu said it would equally finance AutoGas conversion kits or component manufacturing plants; CNG primary and secondary compression station, micro-distribution outlets and service centres for LPG.

“In addition, the facility will service the development and enhancement of autogas transportation system conversion and distribution infrastructure, enhancement of domestic cylinder production and distribution by manufacturing plants.

“Also, LPG wholesale outlet and many other mid to downstream gas value chain related activity recommended by the ministry,’’ he said, adding that parties with the capacity to develop and operate any of the fore listed projects are expected to demonstrate project development experience,” he disclosed.

According to him, interested parties will need to demonstrate technical and commercial capacity as well as show evidence of experience and capacities to engage in their proposed businesses to enable them to access the fund.

“At a minimum, interested parties shall provide general information of interested parties, past experience and evidence of technical capabilities and organisational structure,” he said.

Mr Nabasu added that interested parties shall be responsible for planning, preparations, engineering and execution  of the project, including CNG compression and storage facilities for on line stations, virtual pipeline networks among others

He said the ministry had invited proposals from interested parties such as manufacturers, processors, wholesale distribution, SMEs and retail distributors in the gas value chain business.

“Details of submission criteria could be found at the ministry’s website.

“All proposals shall be submitted to the ministry for endorsement and evaluation into the confidential box provided on the 10th floor, Room 3, Block D, NNPC Towers, Abuja,” 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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