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ICPC, Others Push for Accountability in 2021 Budget Implementation

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2021 Budget Implementation

By Aduragbemi Omiyale

Senior officials of the federal government in Ministries, Departments and Agencies (MDAs) have been advised to desist from the manipulation of the budget or risk being punished.

Speaking at a one-day forum in Abuja, the Director-General, Budget Office of the Federation (BOF), Mr Ben Akabueze, reminded the officials that budget is a matter of law and, therefore, infractions in this regard are punishable by law.

Business Post reports that the event, themed Transparency and Fiscal Discipline in Budget Implementation, was organised by BOF in partnership with the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for Directors of Finance & Accounts and Internal Auditors of MDAs.

In his presentation, the Auditor-General of the Federation, Mr Adolphus Aghughu, urged public office holders to cultivate a culture of accountability especially in the implementation of the 2021 budget and ensure that monies are expended according to appropriation.

He suggested that adequate measures should be put in place to block all leakages of corruption, expressing hopes that the participants will fully commit to making fiscal discipline in the discharge of fiscal responsibility.

On his part, the Chairman of ICPC, Prof. Bolaji Owasanoye, government officials to embrace transparency and fiscal discipline, emphasising that it was their duty to manage public finance and assets with high responsibility and integrity.

Speaking on the result of ICPC system study and reviews (SSRs) which aim at identifying, eliminating, preventing and obstructing opportunities for corruption, the ICPC Chairman stated that result of the 2019 exercise in 208 MDAs led to the “discovery of N31.8 billion personnel cost surpluses for 2017 and 2018, misapplication of N19.8 billion and N9.2 billion from personnel cost and capital fund respectively.”

As a result of the findings, N42 billion unspent surplus allocations from personnel cost for 2019 alone was blocked from possible abuse and pilfering mostly from health sector and some educational institution.

The focus on health and education sectors is because of the importance of their services which touch the lives of ordinary citizens and are critical to meeting any of the internationally recognized development goals.

“This implies that if we had covered the entire civil service structure of all MDAs the figures would have been staggering,” he said.

The ICPC boss revealed some of the findings from the educational institutions by the Commission which includes: padding of nominal rolls; warrant releases in excess of actual personnel cost needs; inadequate or non-budgetary allocation for outsourced services; widespread misuse of personnel cost allocation, amongst others.

Prof. Owasanoye highlighted some of the Commission’s findings in the pilot review of the Open Treasury Portal (OTP) launched in December 2019, to include: payments of advances beyond the approved limit of N200,000 to individuals’ accounts; payment to individual staff/accountants for disbursement to ad-hoc employees, and cash payments for staff DTA, transport, among others.

Arising from all these operations and findings, the Commission was able to restrain further diversion of such funds as cooperative and union dues, and these were retained within the system.

Additionally, the systems studies led to the mopping-up of about N189bn from personnel cost of MDAs through the issuing of a negative warrant from the Ministry of Finance.

He recommended that the blockage of unspent balances immediately after salaries are paid as well the prevention of unauthorized editing of payroll information data on the GIFMIS platform; and said banks should be directed to ensure that account names and numbers match before completing payment.

Earlier at the event, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who was represented by the Permanent Secretary, Special Duties, Mr Aliyu Shinkafi, assured that the recommendations reached at the meeting would be followed to further enhance fiscal responsibility, especially in budget implementation.

Aduragbemi Omiyale is a journalist with Business Post Nigeria, who has passion for news writing. In her leisure time, she loves to read.

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Economy

SEC Tasks CBN, Others on Understanding Crypto Space for Proper Guidance

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Nigerian Crypto Traders

By Aduragbemi Omiyale

The need for regulators in the financial industry in the country, including the Central Bank of Nigeria (CBN), to understand the crypto asset space for proper regulations has been stressed by the Securities and Exchange Commission (SEC).

According to the Director-General of the SEC, Mr Lamido Yuguda, if the regulators can do this, they would be better positioned to address identified risks.

Recently, the CBN ordered banks in the country to close down all accounts of individuals and companies trading cryptocurrencies.

This sparked reactions from many quarters, including the National Assembly. The Senate had to summon the Governor of the apex bank, Mr Godwin Emefiele, to explain the reason for his action.

While appearing before the joint session of the Senate Committee on Banking, Insurance and other Financial Institutions, Capital Market and ICT and Cyber Crime in Abuja last Tuesday, Mr Emefiele noted that the action was taken to protect Nigerians as trading in crypto was risky.

But the DG of SEC crypto-assets can be regulated for the benefits of the citizens, noting that his agency was committed to enhancing financial inclusion in the country through technology.

According to him, SEC recognises the disruption of fintech in the financial industry and aims to create an enabling regulatory environment that would ensure a balance between investor protection and technological advancement.

“We believe that fintech would not only bring about efficiency to the capital market but would also serve as a veritable tool for advancing Nigeria’s financial inclusion agenda.

“However, there is a need to develop an appropriate regulatory framework to ensure the safety of innovation to investors and preserve market integrity,” he submitted.

He said the SEC will advance efforts towards developing a comprehensive regulatory framework that ensures that operators in the crypto asset space conduct their activities in a manner that protects investors and maintains financial system stability.

“The SEC will continue to monitor developments in the digital asset space and further engage/collaborate with all critical stakeholders, including the CBN, to create a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market,” he added.

According to Mr Yuguda, the SEC’s approach is consistent with the approaches of several securities regulators around the world as in the United States of America, the US SEC requires platforms that offer trading in digital asset securities and operate as exchanges to register or seek to be exempted from registration.

“In the United Kingdom, the Financial Conduct Authority (FCA) requires firms that carry on specified activities, by way of business, involving a crypto asset, to be authorised. Crypto assets are viewed as financial products in South Africa and the Financial Sector Conduct Authority (FSCA) requires persons carrying out associated activities to be regulated.

“In Malaysia, operators of digital asset platforms are required to be approved by the Securities Commission (SC) as recognized market operators. Several other securities regulators have taken similar positions,” he informed the lawmakers.

Speaking earlier, the Chairman of the Joint Committee, Mr Uba Sani, said the team was on a fact-finding mission in the interest of Nigerians and the nation’s economy.

“We shall look at the position of the CBN who have said cryptocurrencies are very volatile and support insurgency. The Senate will always support innovation and the effective use of ICT for economic empowerment.

“We are aware of the damage it has done and we are poised to protecting our economy and ensure that our people benefit where necessary,” he said.

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Economy

Shell to Assist Nigeria Boost Gas Usage to 5bcf/d

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Gas Flaring

By Adedapo Adesanya

Shell Petroleum Development Company of Nigeria Limited (SPDC) has restated its commitment to help grow gas usage in Nigeria to 5 billion cubic feet of gas per day (bcf/d) from its current 1.7 bcf/d by 2022.

This was disclosed by Mr Osagie Okunbor, the Managing SPDC Director and Country Chair of Shell Companies in Nigeria, while speaking at the Nigerian Gas Association’s 12th International Conference and Awards, held virtually under the theme Powering Forward: Enabling Nigeria’s Industrialization via Gas.

Mr Okunbor pledged support to the federal government’s goal of using the country’s proven gas reserves to trigger economic activities for gas-based industrialisation.

He said the multinational’s support is shown in the company’s multi-billion dollars investment in four of Nigerian National Petroleum Corporation (NNPC) aptly named Seven Critical Gas Development Projects.

According to him, Shell has invested in the Assa North gas project; four unitised gas fields; Brass Fertilizer Company; and the cluster development of Okpokunou/Tuomo West (OML 35/62) to support the government’s drive for national development.

He said, “I am very happy that NNPC and the Nigerian Content Development and Monitoring Board (NCDMB) have taken key roles in these projects. These are positive steps.”

He commended the government’s recent progress in gas development and stated support for NNPC’s aspiration to grow domestic gas usage in Nigeria to 5 billion cubic feet of gas per day from its current 1.7 billion cubic feet of gas per day by 2022.

Mr Okunbor said, “Nigeria has launched out on a few audacious and, frankly, great projects to essentially drive our ambition as a country in this regard. Let’s find a way to make sure that we stay the course and begin to put our efforts in a consistent manner towards downstream where our country can get an ultimate benefit for gas.”

He counselled for robust engagement in discussions for an agreeable price framework in order to attract investments in the country’s rich gas sector.

“A robust pricing framework would be very helpful to unlock Nigeria’s proven gas reserves, especially for Power, Agriculture and Industrial sectors,” he added.

Mr Okunbor said the current pricing regime does not quite fit the wider framework of what the gas industry does.

“We want to incentivise methanol and fertilizer production, which is extremely important, to gear up our agricultural sector but the price regime now in that sector is lower than the kind of prices that you have for supply to the power sector and industrial establishments.

“To make domestic gas work, we do need the right price regime. It might just mean that some sectors are supported more than others that can naturally carry themselves, the Petroleum Industry Bill (PIB) provides that framework.” Mr Okunbor further said.

He urged policymakers to strike a careful balance between trying to raise funds – in terms of the kind of taxes and royalties that are put on gas – and understanding that this is actually much more of a resource that drives national development.

“Gas is by far more important as a catalyst for development,” he added.

Nigeria has over 200 trillion cubic feet of gas proven and is the world’s 9th largest proven gas reserves.

Mr Okunbor added that the country can satisfy both domestic and export markets of gas if the right policies and processes are put in place and the country continues to drive those policies, processes and gas infrastructure.

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Economy

NNPC Rules Out Hike in Petrol Pump Price in March

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petrol pump price

By Modupe Gbadeyanka

Nigerians have been assured that the pump price of Premium Motor Spirit (PMS), commonly called petrol, will not be increased this month.

This assurance was given by the Nigerian National Petroleum Corporation (NNPC) via a statement signed by its Group General Manager in charge of the Group Public Affairs Division, Mr Kennie Obateru.

In the statement issued on Sunday, Mr Obateru appealed to motorists and consumers of the commodity not to panic buy or hoard the product.

There had been reports that oil marketers will increase the price of the fuel at their retail stations on the back of the recent rise in the price of crude oil in the global market.

When the downstream petroleum sector was to be partially deregulated by the federal government last year, citizens were told that prices of petrol would be determined by the international price of black gold.

As of then, the Brent crude, which Nigeria’s oil is priced, was sold around $40 per barrel, but last week, it traded at $67 per barrel, fuelling speculations that the retail price of petrol may likely go for N180.

Last week, most NNPC retail stations in Lagos, according to findings by Business Post, were selling the product at N162 per litre. A few filling stations reportedly sold for N180 per litre at the weekend in Lagos.

But NNPC, in the statement, has ruled out any increment in the ex-depot price of petrol in March 2021 because it does not want to “jeopardize ongoing engagements with organised labour and other stakeholders on an acceptable framework that will not expose the ordinary Nigerian to any hardship.”

As a result, the state-owned oil agency has warned “petroleum products marketers not to engage in an arbitrary price increase or hoarding of petrol in order not to create artificial scarcity and unnecessary hardship for Nigerians.”

According to the NNPC, it has “enough stock of petrol to keep the nation well supplied for over 40 days and urged motorists to avoid panic buying.”

The corporation also called on relevant regulatory authorities to “step up monitoring of the activities of marketers with a view to sanctioning those involved in products hoarding or arbitrary increase of pump price.”

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Economy

MTN Nigeria Makes N205bn Profit, to Pay Investors N5.90 Dividend

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MTN Nigeria AGM

By Dipo Olowookere

Africa’s leading telecommunication company, MTN Nigeria Plc, had a good year in 2020 despite the disruption caused to businesses across the globe.

In the year, according to the financial statements of the firm released to the Nigerian Stock Exchange (NSE) and analysed by Business Post, the sum of N1.4 trillion was generated in the year, higher than the N1.2 trillion achieved in 2019.

A significant part of the revenue was contributed by voice revenue, N766.4 billion versus N725.5 billion, while data revenue contributed N332.4 billion in contrast to N219.4 billion in 2019.

However, the direct network operating costs increased to N310.3 billion from N246.6 billion as a result of a rise in BTS leases to N225.6 billion from N170.1 billion, a jump in the regulatory fees to N34.8 billion from N30.3 billion and a rise in the network maintenance to N48.6 billion from N45.2 billion.

In the period under review, the telco reduced its roaming costs to N3.0 billion from N4.0 billion. It also cut is advertisements, sponsorships and sales promotions to N15.1 billion from N19.9 billion, while the other operating expenses moved higher to N66.6 billion from N51.0 billion due to the N2.0 billion expended on COVID-19, including the N1 billion donation to the Coalition Against COVID-19 (CACOVID) in April 2020 and costs of Personal Protective Equipment (PPE).

As of December 31, 2020, MTN Nigeria was left with an operating profit of N426.7 billion, higher than N393.2 billion a year earlier.

With a finance income of N15.9 billion versus N20.1 billion and N143.7 billion finance costs in contrast to N122.1 billion a year earlier, the GSM network provider was left with a profit before tax of N298.9 billion compared with N291.3 billion in 2019, while the profit after tax stood at N205.2 billion, slightly higher than N203.3 billion as at December 31, 2019, with the earnings per share closing at N10.08 as against N9.99 in 2019.

Meanwhile, the board of directors of MTN Nigeria has recommended the payment of a final dividend of N5.90 per ordinary share of 2 kobo each subject to shareholders’ approval at the forthcoming Annual General Meeting (AGM).

If the proposed final dividend is approved, the total dividend for the financial year ended December 31, 2020, will be N9.40 per share of 2 kobo each.

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Economy

CBN, NAICOM to Determine Dividend, Bonus Shares for FCMB, AIICO Shareholders

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FCMB Shareholders AGM

By Dipo Olowookere

It is almost certain that shareholders of First City Monument Bank (FCMB) and AIICO Insurance will get cash reward and bonus shares from the respective company this year for the 2020 financial year.

However, the Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM) will have to first authorise this.

Already, the boards of FCMB and AIICO Insurance have done their parts by recommending the payment of the dividend and issuance of bonus shares, but their respective regulator will have to check their performance to see if what is being recommended is reasonable.

Last Friday, the board of FCMB held a meeting to look into the audited results of the group and after being satisfied, the payment of the dividend was recommended.

“At the board of directors meeting of FCMB group Plc held on Friday, February 26, 2021, the board approved the group’s audited financial statements for the year ended December 31, 2020, as well as payment of dividend, subject to the approval of the CBN.

“The board also considered and approved the appointment of an independent non-executive director, subject to the CBN approval.

“The retirement of Mr Peter Obaseki from the board of the company effective March 1, 2021, was also accepted by the board.

“Details of the results and the dividend payments, as well as related corporate actions, shall be made to the exchange upon obtaining approval of the CBN,” a notice signed by the company’s scribe, Mrs Olufunmilayo Adedibu, said.

On its part, AIICO Insurance said its board met on Thursday, February 25, 2021, to look into the results and the issuance of bonus stocks was recommended.

“We refer to our February 8, 2021, announcement wherein we informed the investing public and the NSE of the board meeting scheduled for February 25, 2021.

“We are pleased to inform the investing public and the exchange that the board of directors of AIICO Insurance Plc met as announced and considered and approved the group’s audited consolidated financial statements for the year ended December 31, 2020, and bonus issue subject to the approval of NAICOM and the company’s shareholders.

“The company will release the audited results to the investing public upon the approval of NAICOM.

“In view of the above, all directors, persons discharging managerial responsibility, adviser(s) of the company, or their connected persons are reminded that as announced on February 8, 2021, the closed period declared by the company is still on until 24 hours after the accounts are filed with the exchange,” its disclosure said.

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Economy

Unilever Nigeria to Conclude Unbundling of Tea Business Soon

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lipton tea unilever

By Dipo Olowookere

The unbundling of the tea business of Unilever Nigeria Plc is expected to be completed before the end of this year, the board has confirmed.

Unilever Nigeria produces the popular Lipton Tea and a few others, but this arm of the company is being proposed to operate as a standalone organisation.

In a notice to the Nigerian Stock Exchange (NSE) last week, Unilever Nigeria said the process was ongoing and at the end of it, the tea firm will operate as a separate legal entity.

Business Post recalls that in 2020, the global parent company of Unilever Nigeria announced its intention to restructure its tea arm, which is believed to generate over €3 billion annually.

It had also hinted that the new entity could be listed separately on the stock exchange, partially or totally sold to a new investor.

“You could easily see the Unilever Tea Co becoming a standalone business on a listed stock exchange with its own IPO, that is a highly likely outcome, which would have been very difficult under our old structure,” the CEO of Unilever, Mr Alan Jope, had informed Bloomberg in an interview.

In the latest update, the Nigerian subsidiary of the organisation disclosed that steps were already being taken to complete the divorce very soon.

“Further to the announcement made on August 5, 2020, about Unilever’s global announcement on the strategic review and planned separation of its tea business, this is to notify the Nigerian Stock Exchange and our esteemed shareholders of the plan to separate the Unilever Nigeria Plc tea business into a separate legal entity.

“The planned separation will go through the normal approval process and is expected to be concluded by the end of 2021.

“We shall keep the Nigerian Stock Exchange and stakeholders informed of subsequent developments on this matter,” the notice disclosed.

Share of Unilever Nigeria closed flat last Friday at the local stock exchange at N13.60 per unit. The equities dropped to that level last Monday and remained at that rate throughout the week.

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