Economy

Governors Waste 13% Oil Derivation Fund—Enang

Published

5 years ago

24/09/2020

By Adedapo Adesanya

The Senior Special Assistant to President Muhammadu Buhari, Mr Ita Enang, has said it was time to revisit the allocation of 13 per cent oil derivation fund to state governments on claims that they are misapplying it.

He made this disclosure when members of the Host Communities of Nigeria, Producing Oil and Gas (HOSCON) visited his office to present a paper on the 13 per cent derivation fund and other issues bordering on the development of oil-bearing communities.

In Nigeria, there are nine oil-producing states including Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos.

Mr Enang accused state governors of mismanaging the fund to the detriment of oil and gas producing communities and the development of the Niger Delta, stating that the allocation to the governors of these states is fuelling under-development and destabilizing peace in the region.

The SSA stated that as a result of the long years of neglect of the Niger Delta, it was time the allocation be revisited to ensure the restoration of lasting peace and development of these oil-producing communities.

He noted that even the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had considered, examined and concluded that the 13 per cent derivation fund is exclusively for the host communities and that there are a misapplication and misdirection of the fund.

He said: “From the content of Section 162 of the 1999 constitution, it can be seen the natural resources are located in the different communities that host the resources, not in the state capitals or government houses of the respective states.

“Therefore, it would be inappropriate for the state governors to take the 13 per cent derivation money and apply it only for either building new governors’ lodge, buying private aircraft; increasing the number of vehicles in their convoys or doing any other things which are sometimes obscene, making the oil-producing communities angry and forcing them to disrupt crude oil and gas production.”

Mr Enang stated that it was necessary that concrete steps be taken at the federal level to redeem the oil-bearing communities from the challenges that they are faced with, noting that over the years, governors of the Niger Delta region had treated derivation funds the way they treated local government allocation.

In his words, “What ought to be done now is that the money is not given to the respective states. The governors should take the same allocation as other states of the Federation, which is the statutory allocation, taxes and Value Added Taxes, VAT; but the derivation should go for the development of the oil-producing communities; through special purpose, vehicles to be created.

“Since we have seen the way and manner the governors had utilized the 13 per cent Derivation Fund, I think it is time we go back and obey the provisions of the Constitution and cause that these monies be used for the development of oil and gas producing communities directly for their development so that this affliction would be arrested.

“If we do that, the monies we are spending on Operation Delta safe, spending on guarding oil and gas assets; spending on quelling unrest and ensuring security would be saved.”

In his remark, the Chairman of HOSCON, Mr Mike Emuh, lamented that oil and gas bearing communities had been consistently denied their rights in the area of the 13 per cent derivation fund, stating that payment of the money to the states was against the law.

He bemoaned the fact that over the last 15 years, about N20 trillion had been allocated to oil and gas producing states without any form of accountability from the governors and concrete development in the Niger Delta region.

He appealed to Mr Ita Enang to help escalate the demands of HOSCON in the area of the derivation fund, as well as in the area of ensuring the setting of a trust fund for the management of the gas flare penalty money and the award of pipeline surveillance and protection contracts to host communities.

Economy

Nigerian Stocks Close 1.13% Higher to Remain in Bulls’ Territory

Published

8 hours ago

20/12/2025

Dipo Olowookere

By Dipo Olowookere

The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.

Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.

Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.

But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.

Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.

As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.

A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.

Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.

Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.

Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.

Economy

FrieslandCampina, Two Others Erase N26bn from NASD OTC Bourse

Published

10 hours ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.

The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.

FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.

On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.

During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.

The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Naira Crashes to N1,464/$1 at Official Market, N1,485/$1 at Black Market

Published

12 hours ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.

In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.

In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.

In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.

The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.

President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.

The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.

President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.

Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.

Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.