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 Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange was depleted by 0.86 per cent on Friday, November 14, after the price of six securities on the platform closed lower.
This reduced the NASD Unlisted Security Index (NSI) by 31.38 points to 3,613.23 points from the 3,644.61 points recorded a day earlier, as the market capitalisation lost N18.77 billion to end the week at N2.161 trillion compared with the N2.180 trillion it finished a day earlier.
During the session, NASD Plc fell by N4.00 to close at N55.00 per share compared with the preceding session’s N59.00 per share, FrieslandCampina Wamco Plc crashed by N3.00 to end at N51.00 per unit versus the previous day’s N54.00 per unit, Central Securities Clearing System (CSCS) Plc depreciated by N1.60 to close at N40.40 per share versus N42.00 per share, Lagos Building Investment Company (LBIC) Plc went down by 35 Kobo to settle at N3.13 per unit compared with the N3.48 per unit it ended on Thursday, UBN Property Plc decreased by 26 Kobo to quote at N2.33 per share versus the preceding day’s N2.59 per share and Industrial and General Insurance (IGI) Plc crumbled by 1 Kobo to close at 41 Kobo per unit versus 42 Kobo per unit.
Yesterday, the volume of securities traded by market participants increased by 99.5 per cent to 2.2 million units from the previous day’s 119,329 units, the value of securities ballooned by 4,185.1 per cent to N82.9 million from N1.9 million, and the number of deals expanded by 50 per cent to 21 deals, from 14 deals.
When the market ended for the session, Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, trailed by Okitipupa Plc with 170.3 million units traded for N8.0 billion, and Air Liquide Plc with 507.4 million units sold for N4.2 billion.
InfraCredit Plc also ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by IGI Plc with 1.2 billion units transacted for N419.7 million, and Impresit Bakolori Plc with 536.9 million units valued at N524.9 million.
By Adedapo Adesanya
The Naira weakened against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, November 14 on fresh forex demand pressure associated with this period.
During the session, the domestic currency depreciated against the greenback by 99 Kobo or 0.07 per cent to trade at N1,442.43/$1, in contrast to the N1,441.44/$1 it traded on Thursday.
In the same official market window, the local currency closed flat against the Pound Sterling at N1,898.96/£1, but further declined against the Euro by N3.60 to close at N1,678.56/€1 versus the previous day’s N1,674.96/€1.
However, at the GTBank FX counter, the Naira appreciated against the Dollar yesterday by N2 to settle at N1,448/$1 versus the preceding session’s rate of N1,448/$1, and in the parallel market, it maintained stability at N1,455/$1.
Increased demand for Dollars above the supply level has impacted price swing, but in the last two sessions, the pressure have been minimal.
In recent weeks, the apex bank FX injection has been minimal and erratic due to increasing FX inflows from foreign portfolio investors and exporters. FX inflow into currency market has fallen from peaked of $1.37 billion to $899 million.
While the Naira came under renewed strain, Nigeria’s foreign reserves continued their upward trajectory, climbing to $43.5 billion, up from $43.32 billion the week before.
This steady improvement in external reserves may be attributed to stronger crude oil receipts, improved non-oil inflows, and tightened FX management policies by the Central Bank of Nigeria (CBN).
As for the cryptocurrency market, investors tried to claw back some gains after many liquidated positions in the recent sessions largely driven by a lack of clarity on key US economic conditions and subsequent monetary policy direction.
That data blackout was due to the longest US government shutdown that lasted from October 1 until Thursday, that suspended government inflation and jobs data releases, with Litecoin (LTC) growing by 8.5 per cent to $104.14.
Further, Binance Coin (BNB) rose by 2.3 per cent to sell for $932.27, Solana (SOL) went up by 0.9 per cent to $142.71, Ethereum (ETH) jumped by 0.3 per cent to $3,175.02, and Dogecoin (DOGE) also appreciated by 0.3 per cent to $0.1633.
But Cardano (ADA) depreciated by 0.8 per cent to $0.5130, Ripple (XRP) fell by 0.3 per cent to $2.28, and Bitcoin (BTC) dropped 0.2 per cent to finish at $96,193.83, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market was up by more than 2 per cent on Friday as a key Russian port suspended oil exports after Ukraine attacked the facility, raising concerns about supply.
Brent crude futures increased by $1.38 or 2.19 per cent to trade at $64.39 a barrel and the US West Texas Intermediate (WTI) crude futures grew by $1.40 or 2.39 per cent to close at $60.09 a barrel. Brent rose 1.2 per cent on the week, and WTI posted a weekly gain of 0.6 per cent.
Russia’s port of Novorossiisk halted oil exports following a Ukrainian drone attack that hit an oil depot in the Russian energy hub, stoking supply concerns.
The port, a key export outlet of crude from Russia and Kazakhstan, and a major wheat export hub, paused oil exports, equivalent to 2.2 million barrels per day, or 2 per cent of global supply.
According to reports, the attacks damaged a ship, nearby apartment buildings, and an oil depot, injuring three crew members aboard the vessel. This comes as Ukrainian forces have increasingly targeted Russian oil-refining, storage, and export infrastructure using drones and missiles.
In addition, Russia’s pipeline company Transneft suspended crude oil supply to the facilities at the port.
Ukraine on Friday said it separately struck an oil refinery in Russia’s Saratov region and a fuel storage facility in nearby Engels overnight.
Market analysts noted that in recent month, Ukraine has made a shift in strategy from smaller-scale strikes on storage tanks to targeting hard-to-replace refinery equipment, like cracking units, much of it western-made and subject to sanctions.
Britain on Friday issued a special licence allowing businesses to continue working with two Bulgarian subsidiaries of sanctioned Russian oil firm Lukoil, as the Bulgarian government seized control of the assets.
The US imposed sanctions banning deals with Russian oil companies Lukoil and Rosneft after November 21 as part of efforts to stop the war which commenced with Russia attacking Ukraine in February 2022.
While geopolitical tensions and the end of the US government shutdown offered fleeting support this week, the market remained focused on rising global inventories, shifting supply-demand expectations from the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) and a broader sense that supply continues to outpace demand.
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