Economy
House Gives Buhari Approval to Present N13.98tn Budget for 2022
By Aduragbemi Omiyale
The federal government has been given the approval to present to the National Assembly a budget of N13.98 trillion for the 2022 fiscal year.
This authorisation was given on Tuesday by the House of Representatives when it passed the 2022-2024 Medium Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) barely a week after the Senate passed the same document.
This followed the presentation of the MTEF/FSP report before members of the green chamber of the parliament yesterday by the Chairman, Committee on Finance, Mr James Faleke.
Business Post reports that in July 2021, President Muhammadu Buhari had forwarded the MTEF/FSP document to the legislative arm of government for approval. It was later handed over to the committee for action and yesterday, the report was laid by Mr Faleke.
In the report, it was said that revenue of N8.36 trillion would be retained, while the total fiscal spending plan of N13.98 trillion for next year was approved, comprising total recurrent (non-debt) of N6.21 trillion, personnel costs (MDAs) of N3.47 trillion, capital expenditure (exclusive of transfers) N3.26 trillion, special intervention (recurrent) of N350 billion, and special intervention (capital) of N10 billion.
Also, the House said it has no issue with the proposed fiscal deficit of N5.62 trillion, new borrowings of N4.89 trillion subject that the provision of the details of the borrowing plan be brought for approval by the parliament, while statutory transfers of N613.4 billion were okayed.
The lower arm of the National Assembly also put the debt service estimate at N3.12 trillion, the sinking fund at N292 billion, and pension, gratuities and retirees benefits at N567 billion.
On daily crude oil production, the House approved 1.88mbpd, 2.23mbpd, and 2.22mbpd for 2022, 2023 and 2024 respectively “in view of average 1.93mbpd over the past three (3) years and the fact that a very conservative oil output benchmark has been adopted for the medium term in order to ensure greater budget realism.”
As for the crude oil benchmark, $57 per barrel was approved for 2022, $55 for 2023 and 2024 “based on oil forecast by the World Bank and consultation with the Nigerian National Petroleum Corporation (NNPC).”
Similarly, the exchange rate of N410.15/$1 was approved for 2022-2024 as proposed by the executive arm of government, while the projected gross domestic product (GDP) growth rate of 4.20 per cent was also approved, with the projected inflation rate was put at 13.00 per cent.
In a statement issued by the reps, it was stated that, “That there should be a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the Consolidated Revenue Fund (CRF) as at when due, in order to curtail frivolous deductions and diversion of funds by the Ministries Department Agencies.”
In addition, it was said that all laws relating to mining businesses should be reviewed as a matter of urgency to ensure upward review of rates applied to royalties, ground rent and licenses renewal of all mining companies operating in Nigeria to ensure transparency in the collection of revenue by the relevant agencies of the government and also look into the issues of illegal mining activities by recommending stringent sanctions in the proposed new laws.
Furthermore, the House advised the Nigeria Customs Service to accelerate the process of installing scanners at all ports across the country to curb the issue of underpayment of customs duties on imported goods which has resulted in huge loss of revenue to the government and to further improve its activities at all borders across the country in order to curb the issues of smuggling across border areas.
“The Committee recommends urgent implementation of the Petroleum Industry Act (PIA) recently assented to by the President in order to curtail the problems of smuggling and round-tripping of petroleum products imported into the country to save the under-recovery cost,” the statement noted.
The parliament suggested that “the offices of the Accountant General (AGF), Auditor General of the Federation (AuGF) and Fiscal Responsibility Commission (FRC) be strengthened in the area of staffing and proper funding of its activities to ensure optimal performance of their duties in order to adequately monitor the remittances of all government revenues,” while the “Act establishing some MDAs be reviewed and amended as a matter of urgency to evidence a more nationalistic interest, as these amendments will assist to generate more revenue to the coffers of the government.”
In the statement, the House urged that the federal government budget should be “reviewed and be purged of some agencies that demonstrated capacity to stand on their own without any recourse to Federal Government of Nigeria Budget for example; National Agency for Food and Drug Administration and Control (NAFDAC) and Nigerian College of Aviation Technology, Zaria (NCAT).”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange dropped for the third consecutive session on Wednesday, March 18, by 0.39 per cent due to continued sell-offs.
In what would be the final trading session of the week due to public holidays on Thursday and Friday for Eid-el-Fitr, the NASD Unlisted Security Index (NSI) further dipped by 16.14 points to 4,114.75 points from 4,130.89 points, and the market capitalisation lost N9.66 billion to close at N2.461 trillion versus the previous day’s N2.471 trillion.
FrieslandCampina Wamco Nigeria Plc depreciated by N10.32 to sell at N112.00 per share versus N122.32 per share, NASD Plc dropped N4.50 to finish at N41.50 per unit compared with the previous session’s N46.00 per unit, and Geo-Fluids decreased by 9 Kobo to N3.02 per share from N3.11 per share.
On the flip side, Air Liquide Plc improved by N2.23 to N24.57 per unit from N22.34 per unit, Central Securities Clearing System (CSCS) Plc advanced by 90 Kobo to N76.33 per share from N75.43 per share, Food Concepts Plc rose by 24 Kobo to N3.30 per unit from N3.06 per unit, UBN Property Plc surged by 20 Kobo to N2.18 per share from N1.98 per share, Impresit Bakalori Plc jumped 16 Kobo to N1.83 per unit from N1.67 per unit, and First Trust Mortgage Bank Plc added 14 Kobo to trade at N1.89 per share versus N1.75 per share.
During the trading day, the volume of securities went up by 43,404.4 per cent to 400.8 million units from 921,265 units, the value of securities grew by 2,108.7 per cent to N1.2 billion from N54.7 million, and the number of deals soared by 23.7 per cent to 47 deals from 38 deals.
CSCS Plc ended the day as the most traded stock by value (year-to-date) with 38.7 million units valued at N2.4 billion, followed by Infrastructure Guarantee Credit Plc with 400 million units exchanged for N1.2 billion, and Okitipupa Plc with 6.4 million units traded for N1.2 billion.
Resourcery Plc finished the session as the most traded stock by volume (year-to-date) with 1.1 billion units worth N415.7 million, trailed by Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion, and Geo-Fluids Plc with 131.1 million units valued at N505.6 million.
By Dipo Olowookere
The Nigerian Exchange (NGX) experienced a pullback of 0.69 per cent as a result of profit-taking by investors, with shares in the banking and energy sectors mostly affected.
Data harvested by Business Post showed that the energy index was down by 4.58 per cent during the session, and the banking space lost 2.14 per cent.
They brought down the All-Share Index (ASI) by 1,402.56 points to 201,156.85 points from 202,559.41 points and shrank the market capitalisation by N900 billion to N129.126 trillion from N130.026 trillion.
Customs Street ended in red at midweek despite three of the five key sectors finishing in green. The consumer goods counter expanded by 1.19 per cent, the industrial goods index improved by 0.46 per cent, and the insurance sector grew by 0.43 per cent.
Red Star Express declined by 9.98 per cent to N25.70, Aradel Holdings went down by 9.68 per cent to N1,210.30, Presco lost 9.30 per cent to trade at N1,701.10, Living Trust Mortgage Bank crashed by 8.40 per cent to N4.80, and DAAR Communications dropped 7.50 per cent to end at N1.85.
On the flip side, Secure Electronic Technology gained 10.00 per cent to settle at N1.32, Guinness Nigeria rose by 9.92 per cent to N423.20, John Holt increased by 9.72 per cent to N11.85, Sovereign Trust Insurance surged by 9.57 per cent to N2.06, and Linkage Assurance chalked up 9.33 per cent to trade at N1.64.
Investor sentiment was weak yesterday after the bourse registered 33 price gainers and 38 price losers, indicating a negative market breadth index.
Market participants bought and sold 6.1 billion stocks valued at N130.1 billion in 58,562 deals compared with the 1.8 billion stocks worth N88.1 billion traded in 62,654 deals on Tuesday, representing a shortfall in the number of deals by 6.53 per cent, and a spike in the trading volume and value by 238.89 per cent and 47.67 per cent apiece.
The most active equity on Wednesday was eTranzact with 5.2 billion units sold for N24.3 billion, Wema Bank exchanged 111.4 million units worth N3.1 billion, Coronation Insurance transacted 96.4 million units valued at N303.9 million, Dangote Cement traded 75.2 million units for N56.5 billion, and Access Holdings exchanged 61.5 million units valued at N1.6 billion.
By Adedapo Adesanya
The Naira stumbled against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, March 18, by N8.96 or 0.67 per cent to trade at N1,353.00/$1, in contrast to the previous day’s rate of N1,344.04/$1.
Also, the local currency weakened against the Pound Sterling in the spot market at midweek by N6.06 to sell for N1,801.93/£1 compared with Tuesday’s value of N1,795.87/£1, and lost N4.75 against the Euro to quote at N1,556.22/€1 versus the preceding day’s N1,551.46/€1.
However, the Nigerian currency gained N2 against the greenback yesterday at the GTBank forex desk to close at N1,363/$1 versus the N1,365/$1 it was exchanged for a day earlier, and traded flat in the parallel market at N1,395/$1.
Nigeria’s external reserves fell by $178 million over three consecutive international payments recorded by the Central Bank of Nigeria (CBN), settling at $49.83 billion from $50.008 billion, indicating that there have been some interventions in the FX market for stability and liquidity.
While the wider outlook for the Naira is positive, potential disruptions to global oil supply have increased volatility in energy markets and could spike inflation with higher oil prices.
In the cryptocurrency market, Bitcoin (BTC) slipped below $71,000 on Wednesday as Federal Reserve Chair Jerome Powell flagged rising oil prices amid the war in Iran as a new inflation risk. It sold at $70,538.58.
The US central bank held interest rates steady as expected, but during his post-meeting press conference, Mr Powell acknowledged that the recent surge in energy prices is already feeding into the central bank’s outlook.
He said rising oil prices “for sure showed up” in policymakers’ higher inflation outlook for this year, lifting their forecast to 2.7 per cent from 2.4 per cent.
Further, Ethereum (ETH) lost 6.3 per cent to trade at $2,178.56, Cardano (ADA) fell by 6.1 per cent to $0.2714, Dogecoin (DOGE) dropped 5.7 per cent to close at $0.0096, Solana (SOL) dipped 4.8 per cent to $89.83, Ripple (XRP) slumped by 3.8 per cent to $1.46, and Binance Coin (BNB) declined by 3.7 per cent to $648.61.
However, TRON (TRX) appreciated by 0.4 per cent to $0.3037, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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