Economy
N4.9trn Unsubstantiated Balances Unaccounted in 2019—Auditor-General
By Adedapo Adesanya
The Auditor-General of the Federation (AuGF), Mr Adolphus Aghughu, has disclosed that the sum of N4.9 trillion cannot be accounted for in the audited accounts of federal Ministries, Departments and Agencies (MDAs) in 2019.
He said this followed the audit carried out by the office on the consolidated financial statement for the fiscal year.
Mr Aghughu made the disclosure when submitting the 2019 audit report to the Clerk of the National Assembly (CNA), Mr Ojo Amos Olatunde, on Wednesday.
The Auditor-General revealed that “from the audit carried out on the 2019 Federal Government Consolidated Financial Statement, unsubstantiated balances amounting to N4.973 trillion were observed.”
“The N4.973 trillion unsubstantiated balances are above the materiality level of N89.34 billion set for the audit,” he further explained.
In auditing, materiality means not just a quantified amount, but the effect that amount would have in various contexts and it is left to the auditor to decide what the level of materiality will be, taking into account, the entirety of the financial statements to be audited.
According to the AuGF, auditing of consolidated financial statements of the federal government on yearly basis would be expeditiously carried out once made available to his office.
He said: “You will recall that on March 25th this year, Audit of Consolidated Financial Statement of the federal government for 2018 was submitted to this office for the required investigation of queries raised in it by the National Assembly. Just five months after, we are here again to make submission of the 2019 Audit Report”.
Speaking further, Mr Aghughu lamented that his office was not performing optimally due to myriad factors crippling its operations and invariably giving room for all forms of financial infractions across the various MDAs.
He explained that, “One of such problems is the absence of Federal Audit Service Law, which is a big challenge as far as effective and efficient public sector auditing is concerned. This is a law that is needed as the basis of fiscal sustainability.
“Absence of it at the federal level is very worrisome going by the fact that some of the states of the federation have the required law in place.”
He also lamented that his office had been incapacitated in so many ways from functioning effectively and efficiently as far as the detection of mismanagement of public funds by the various MDAs was concerned.
“Another problem incapacitating optimal functionality of our mandate as far as thorough and appropriate auditing of financial statements of the MDAs are concerned is gross underfunding, which is telling much on our efficiency.
“For example, the office is understaffed but there is no money for recruitment. Imagine many of our state offices having just two or three staff. Auditing is done by a team not by an individual.
“Accommodation is also part of the problem as our staff in Lagos are about to be evicted from their office due to litigations. These are aside from the problem of insecurity seriously affecting our scope of coverage,” he added.
In his remarks, after receiving the audit report, Deputy Clerk to the National Assembly, Mr Bala Yabani, who stood in for the Clerk, said the report would be submitted to the Clerk for onward submission to both the President of the Senate, Mr Ahmad Lawan and Speaker of the House of Representatives, Mr Femi Gbajabiamila, for the required legislative consideration.
According to him, all the complaints made by the AuGF would be tabled before the leadership of the parliament for required actions and solutions.
By Aduragbemi Omiyale
In a bid to help investors recover about N270 billion in unclaimed dividends in the capital market, a nationwide enlightenment campaign has been launched by the Securities and Exchange Commission (SEC).
This initiative involves town hall meetings that would go around the country to sensitise Nigerians on the need to claim these fallow funds.
The Director General of SEC, Mr Emomotimi Agama, speaking at a town hall meeting in Lagos, said the regulator is not happy that investors, who worked hard to purchase shares in the stock market, have not claimed their profits for many years, making unclaimed dividends pile up.
“The commission considers this situation unacceptable. Funds belonging to investors should ultimately find their way back to their rightful owners,” the SEC chief, represented at the event by the Director of Registration and Exchanges, Market Infrastructure Department, Ms Hafsat Rufai, stated.
He said during this campaign Nigerians would be informed of the unclaimed monies, the role of the National Investor Protection Fund (NIPF), and the procedures for verifying and recovering legitimate claims, stressing that SEC is committed to ensuring that investors’ funds are returned to their rightful owners.
The DG stated that unclaimed monies administered by the NIPF include return funds from public offers, scheme consideration arising from mergers, acquisitions and corporate restructuring transactions, as well as other capital market-related funds that have remained dormant.
He disclosed that the town hall meetings would be held in the six geopolitical zones and the Federal Capital Territory.
In addition, electronic and social media platforms would be used to broaden public awareness on this issue, with efforts to be made to address the transmission of securities following the death of an investor, noting that many families were either unaware that their deceased relatives owned shares or lacked knowledge of the legal and administrative procedures required to transfer such investments to rightful beneficiaries.
“As a result, valuable investments and returns on investments sometimes remain inaccessible for many years, thereby denying beneficiaries the financial benefits intended for them,” he said, urging investors to maintain proper records of their investments and encouraging families to take proactive steps to preserve inherited wealth.
By Dipo Olowookere
The decision of investors to book profit after the previous session’s gains pulled back Customs Street by 0.09 per cent on Thursday.
The selling pressure was mainly on BUA Cement, which put the Nigerian Exchange (NGX) Limited off-balance during the session.
Analysis of the trading data showed that the industrial goods sector was the sole decliner, losing 2.85 per cent, as a result of the poor performance of BUA Cement at the market yesterday.
The other key sectors of the bourse were bullish, with the banking space up by 2.87 per cent. The consumer goods index appreciated by 0.30 per cent, the insurance counter improved by 0.16 per cent, and the energy segment rose by 0.08 per cent.
At the close of business, the All-Share Index (ASI) went down by 221.14 points to 242,145.61 points from 242,366.75 points, and the market capitalisation decreased by N32 billion to N156.207 trillion from N156.239 trillion.
Eunisell crashed by 10.00 per cent to N189.00, BUA Cement lost 9.99 per cent to quote at N275.60, CAP declined by 9.61 per cent to N142.45, Royal Exchange slipped by 9.55 per cent to N1.42, and Guinea Insurance tumbled by 5.38 per cent to 88 Kobo.
Conversely, First Holdco soared by 9.96 per cent to N87.25, McNichols gained 8.00 per cent to trade at N5.40, UBA appreciated by 7.93 per cent to N44.25, Veritas Kapital jumped by 6.85 per cent to N1.56, and Jaiz Bank chalked up 4.07 per cent to settle at N8.95.
It was observed that the market breadth index was positive after the exchange closed the session with 22 price losers and 27 price gainers, representing strong investor sentiment.
A total of 498.5 million shares valued at N34.9 billion were traded in 39,484 deals on Thursday, in contrast to the 476.3 million shares worth N29.6 billion transacted in 40,992 deals on Wednesday. This indicated that the trading volume grew by 4.66 per cent, the trading value increased by 17.91 per cent, and the number of deals depreciated by 3.68 per cent.
Japaul ended the day as the busiest equity after trading 77.7 million units for N231.5 million, Access Holdings sold 41.2 million units valued at N1.0 billion, First Holdco exchanged 38.8 million units worth N3.4 billion, UBA transacted 31.5 million units for N1.4 billion, and Fidelity Bank traded 23.8 million units worth N495.0 million.
By Adedapo Adesanya
Oil prices settled about 1 per cent lower on Thursday even as the Iran war escalated, with the Middle East oil producer asking Yemen’s Houthi movement to be prepared to close the Red Sea oil export route.
Brent crude futures fell by 72 cents or about 0.9 per cent to trade at $84.23 a barrel, while the US West Texas Intermediate (WTI) futures depreciated by 65 cents or 0.8 per cent to close at $78.95 a barrel.
Iran has instructed Yemen’s Houthi movement to stand ready to close the Bab el-Mandeb strait, the vital gateway to the Red Sea, if the US follows through on threats to strike Iranian power infrastructure.
Market analysts warned that with the Strait of Hormuz already closed, the latest threat raises the serious risk of both of the Middle East’s primary oil export routes being disrupted at the same time.
About 7.4 million barrels of petroleum transited Bab el-Mandeb per day in June, about 7 per cent of global oil output, according to Kpler data, up from 4.2 million barrels per day last year.
This week, US President Donald Trump repeated oft-stated threats to strike Iranian power plants and bridges.
According to senior Iranian sources, the Islamic Republic’s leadership has discussed the idea with Iran’s Houthi allies, with the rebel forces now awaiting definitive orders to begin targeting maritime traffic.
In a sign of escalating tensions in the region, the Houthis fired missiles at Saudi Arabia after accusing the kingdom of bombing an airport under their control on Monday, breaking a four-year truce in the conflict between the kingdom and the group.
This comes as Saudi Arabia is currently evaluating a massive infrastructure expansion to permanently upgrade the capacity of its western pipeline and terminal networks.
Any additional disruptions could force international shipping firms to redirect vessels around Africa, inflating transit costs and worsening the global energy crisis.
On Wednesday, the US struck Iran’s coastal defences and missile sites after reimposing a naval blockade of its ports, while the two countries exchanged intensified fire on Thursday, which kept pressure on prices upward.
However, weighing on prices was Iran’s release of a US citizen, which could point toward a path to avert the resumption of all-out war.
