By Adedapo Adesanya
The House of Representatives has commenced an investigative hearing into an alleged $30 billion annual revenue leakages arising from payments on account of foreign currency-denominated contracts by companies.
This was disclosed by the Chairman, House Committee on Finance, Mr James Faleke, and the Chairman, House Committee on Banking and Currency, Mr Victor Nwokolo.
The probe into the matter commenced on Monday in Abuja and Mr Falake said that the committee would also look into foreign exchange allocation to companies from sources such as the Central Bank of Nigeria (CBN) autonomous, interbank domiciliary and over the counter purchase.
The purchases, according to the Chairman, are for the importation and payment of foreign services vendors, dividend repatriation, foreign loans and interest payments.
“We are all akin to Nigeria’s recurring and growing fiscal deficit, and that to sufficiently finance the Federation’s annual fiscal expenditures, the government is left with no choice but to borrow billions of dollars every year.
“We have also seen the real value of the Naira to the US Dollar drop drastically, the dire consequences of which the Nigerian people are experiencing today,” he stated.
This, he added, was in spite of the enormous inflows of capital importation and foreign direct investment over the years in numbers that one would expect to translate into revenue generation for the country.
He queried the skyrocketing amounts of foreign direct investments and capital importations not reflecting in the economic progress of the country.
He stated that it was for this reason that the House of Representatives through its Joint Committees of Finance, and Banking and Currency launched the investigation.
The lawmakers, however, expressed dissatisfaction with the billions lost to tax evasion and diversion of foreign exchange allocations annually.
Appearing before the investigative hearing was relevant financial institutions to explain their role in the alleged mismanagement of $30 billion revenue leakages.
The lawmaker accused Citibank of withholding tax on Value Added Tax (TAX) aggregating to five billion dollars and other foreign exchange revenue leakages of N93 billion were not remitted by Citibank.
Mrs Ngozi Omoke-Enyi, Citi Bank Director of Operation while appearing before the committee said that the bank was guided by the foreign exchange monitoring and miscellaneous provision act.
She said that the CBN from time to time issued guidelines to regulate transactions on foreign exchange, adding that Citibank was not in contravention of any of the guidelines in the act in the foreign exchange manual.
Another bank that appeared before the committee was Fidelity Bank, which explained its role while more financial entities are expected to appear before the joint committee rounds off the investigation.
Senate Pass Bill to Establish National Rice Development Council
By Adedapo Adesanya
The Senate has passed a bill seeking to establish the National Rice Development Council as part of the federal government’s effort to cut down on rice importation and improve the country’s foreign exchange earnings.
The passage of the bill followed the consideration of a report by the Committee on Agriculture and Rural Development.
Speaking at the presentation, the Chairman of the Committee, Mr Abdullahi Adamu, said the council will support the comprehensive development of the rice sector and the organisation of rice stakeholders to enhance local production of rice in Nigeria.
He explained that the organisation will transform the activities of rice farmers, rice processors, millers, researchers, marketers and other important stakeholders across the entire rice value chain, particularly the clusters of smallholder rice farmers and small scale millers spread all over the country.
“Mr President and distinguished colleagues, with our natural comparative advantage in the area of rice production as a country, Nigeria should consider the need to put in place a National Rice Development Council and a fail-safe comprehensive national rice development roadmap that will guide us not only into a regime of self-sufficiency in production but also for export purposes, employment generation for our teaming youth and growth of our economy.
“The Nigerian rice industry exists in the abstract as there appears to be no form of coordination in the absence of a properly structured rallying point.
“Today, we have Paddy Rice Dealers Association of Nigeria (PRIDAN), Rice Farmers Association of Nigeria (RIFAN), Rice Processors Association of Nigeria (RIPAN), Rice Millers Association of Nigeria (RIMAN) and many more.
“This Bill seeks to establish that rallying point and a comprehensive national operational and governance structure for a complete rice value chain process.
“Mr President and distinguished colleagues, this Bill on its own merit will improve government efforts for efficient policy and regulatory framework for the Nigerian rice industry; promote enabling business and investment environments for rice stakeholders; support the growth of the rice industry in Nigeria and in the sub-region as well as promote the sustainability of foreign exchange earnings put at about $2 billion annually for Rice related importation to the country.
“The framework created by thịs Bill will pull investment into rice production, provide the missing link between rice production and industrialization, provide employment, reduce migration from rural to urban cities and enhance socio-economic activities all over the country.
“Few countries having Rice Council include Rice Council of Tanzania, USA Rice Council, Directorate of Rice Development (India), Rice Association of Thailand, among others,” he said.
SEC Praises Market Development Initiatives of NGX, CSCS, Others
By Aduragbemi Omiyale
The Nigerian Exchange (NGX) Limited, the Central Securities Clearing System and other capital market stakeholders have been praised by the Securities and Exchange Commission (SEC) for their market development initiatives, helping the capital market scale through the COVID-19 crisis.
According to the Director-General of SEC, Mr Lamido Yuguda, NGX plays a very significant role in the Nigerian capital market, and as such, the commission remains supportive of the exchange in the key role it plays towards developing the market.
While speaking at a meeting with capital market stakeholders in Abuja on Wednesday, the SEC chief further said the agency was aware that the advancement of new-generation information technologies, the rapid innovation of financial instruments and the impact of the COVID-19 pandemic are gradually transforming the operations of capital markets through the introduction of sound initiatives in the financial industry eco-system.
“The past two years have been challenging for the Nigerian capital market, which is largely a reflection of the Pandemic-related unexpected challenges in global markets. However, the NGX has continued to deploy capable resources to tackle elements militating against the market’s growth.
“You will agree with me that the efforts made and gains achieved in this regard are as a result of the collective efforts of various stakeholders in the Nigerian capital market, including the commission and the NGX Ltd. This emphasises the importance of collaboration on the growth of our market,” he said.
Mr Yuguda said specifically, the launching of the Smart Surveillance System and X-Mobile App for retail trading; upgrading of the X-Issuer Platform to further enhance market integrity; and the X-Public Offer initiatives are highly commendable achievements that support our common goal of building a world-class capital market.
While applauding their efforts, the SEC boss, however, reminded them of the challenging task ahead and new threats brought forth by Fintech and what is expected from stakeholders to consolidate on the achieved gains while making necessary adjustments to improve market practices and remain vigilant against potential risks.
“We all have a common interest in developing a healthy, viable and world-class capital market. At the bottom of the work we do at the SEC, is investor protection. While trying to look at the rules we should not forget that the ultimate goal of the commission is to have a fair and transparent market that is fair to investors,” Mr Yuguda said.
He reiterated that as the apex regulator of the capital market with a mandate to develop the market, SEC will continue to support all efforts aimed at making the markets fairer, more efficient and more transparent.
In his opening remarks, Chief Executive Officer of NGX Limited, Mr Temi Popoola, said there have been strong growth and market interactions in recent times which he attributed to the collaborative efforts of stakeholders.
Mr Popoola emphasised the need for education in the technology sector in the country, adding that as a market it is time to put all hands on deck to tap the potential in that sector.
“A lot of opportunities exist for the capital market. Technology can be used to address the capital formations in the market and we are making progress in tapping that.
“We are on a digitalisation drive and we have started with the MTN offer which was done electronically, we need to improve on that going forward. That is the only way to unlock the demography of young Nigerians that are technology savvy.
“We are collaborating with relevant stakeholders to ensure what’s best for the ecosystem. We are exploring ways to strengthen the entire market infrastructure,” he stated.
Also speaking, the Managing Director/CEO of CSCS, Mr Haruna Jalo-Waziri, welcomed the collaboration between markets, regulators and tiger stakeholders saying that the aim is to simplify the marker and give investors the experience they deserve to ensure they keep coming back.
“The market is changing, and with technology, a lot of the ways we were operating is also changing and we look forward to better market and operations,” he added.
Nigeria Lost 2.418 million Barrels of Crude in December 2021—OPEC
By Adedapo Adesanya
Nigeria lost as much as 2.418 million barrels of crude in the last month of 2021, the latest data released by the Organisation of Petroleum Exporting Countries (OPEC) showed on Tuesday.
The report noted that there was a daily underperformance figure of 78,000 barrels per day in December.
The month of December, according to the OPEC report, also saw Nigeria slump lower than other previous production performances, compared to, for instance, October, in which 1.228 barrels were pumped per day and November during which 1.275 million barrels were produced per day.
The data, according to OPEC, which uses both primary and secondary sources to obtain information on production levels, was received from direct communication with Nigeria.
Among members of the cartel, the OPEC Monthly Oil Market Report (MOMR) for January showed only crisis-torn Libya lost more oil than Nigeria, with a production deficit of roughly 119, 000 barrels per day.
For proper context, Nigeria’s quota for February remained at 1.7 million barrels per day, but the country’s effort to produce more in the last few months had not yielded any progress.
While the target was to produce about 1.86 million barrels daily by the Nigerian National Petroleum Company (NNPC) Limited, poor upstream infrastructure, long term waning investment and the impact of the OPEC-induced shutdowns last year, have combined to hobble the number of barrels pumped by Nigeria.
On the Nigerian economy, OPEC stated that although the country recorded a surplus of $3.6 billion, consumer prices have continued to pose a serious challenge.
“According to recently released statistics from the Central Bank of Nigeria (CBN), the country’s current account registered its highest surplus since early 2018, amid a strong trade position.
“In 3Q21, the current account posted a surplus of $3.6 billion compared with $348 million in 2Q21 and a shortfall of $3.6 billion in 3Q20.
“In 3Q21, exports exceeded imports by about $1.8 billion, recording the largest excess since late 2019. Additionally, improving oil prices continued to support the economic recovery, coupled with easing of the inflation rate, which marginally fell for the second month in a row to 15.4 per cent from 15.9 per cent, marking the lowest rate since November 2020, largely due to sustained moderation in food prices.
“However, on a monthly basis, consumer prices increased by 1.08 per cent, following a 0.98 per cent increase the previous month,” it stated.
On a global level, OPEC stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron coronavirus variant and expected interest rate hikes, predicting the oil market would remain well supported through the year.
Tight supply has given impetus to the current oil rally, and OPEC’s report also showed the group undershot a pledged oil-output rise in December.
The producers’ group said it expects world oil demand in 2022 to rise by 4.15 million barrels per day, unchanged from last month while oil consumption will surpass the 100 million barrels per day mark in the third quarter, also in line with last month’s forecast.
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