Economy
Senate Orders NNPC to Refund Unaccounted N210trn to Federation Account
By Adedapo Adesanya
The Senate has told the Nigerian National Petroleum Company (NNPC) Limited to return N210 trillion in outstanding payments to the Federation Account, as it rejected the explanations provided by the state oil firm.
The conclusion was reached on Wednesday as a committee investigating the issue noted that the money, which had not been accounted for, must be refunded to the Federation Account by the company.
The Senate Committee on Public Accounts chaired by Mr Aliyu Wadada, which has been on the probe for months, took the decision on Tuesday after the Group Chief Executive Officer (GCEO) of the NNPC, Mr Bashir Bayo Ojulari, failed to turn up at its resumed sitting at the National Assembly.
The session was called to give the NNPC Limited the opportunity to make clarifications on the answers the company provided to the 19 questions the panel asked the firm about the N210 trillion.
Following a review of the operations of the state owned oil firm from 2017-2023, the committee sighted the unexplained transaction, totaling N103 trillion (accrued expenses) and N107 trillion (receivables) in the audited financial statements of the firm, totalling N210 trillion thereby prompting it to raise the queries.
After weeks of back-and-forth between the committee and the NNPC, the NNPC eventually responded to the 19 questions.
However, at a resumed session, Mr Wadada frowned at the absence of Mr Ojulari, whom the committee said gave no reasons for staying away, consequently rejected the explanations.
The Chairman of the committee while speaking on the panel’s findings, said the responses were not only unsatisfactory, but were also contradictory.
“NNPC claimed N103 trillion as accrued expenses and N107 trillion as receivables -amounting to N210 trillion. On question eight, NNPC’s explanation on the N107 trillion receivables -equivalent to about $117 billion -contradicts available facts and evidence provided by NNPC itself. The committee is duty-bound to reject this,” he stated.
Mr Wadada further questioned how the firm could pay N103 trillion in Cash Calls to Joint Venture (JV) partners in 2023 alone, despite generating only N24 trillion in crude revenue between 2017 and 2022.
“Cash Call arrangements were abolished in 2016 under the President Muhammadu Buhari administration. How can NNPC claim to have paid N103 trillion in one year, when it only generated N24 trillion in revenue over five years? Where did NNPC get that money?
“As far as this committee is concerned, that figure is unjustifiable and unacceptable. The N103 trillion must be returned to the Treasury. This will be concluded when the NNPC appears before us,” he stated.
The committee said it would have been better for the current management of the NNPC to admit that it encountered challenges in explaining what happened to the funds than giving contradictory answers to the questions.
“If the present management of NNPC is finding it difficult to provide acceptable answers, it is better they say so. The committee will not hesitate to subpoena former officials of NNPC and NAPIMS,” Mr Wadada added.
By Adedapo Adesanya
The duo of FrieslandCampina Wamco Nigeria Plc and the Central Securities Clearing System (CSCS) Plc boosted the NASD Over-the-Counter (OTC) Securities Exchange by 1.05 per cent on Monday, May 11.
FrieslandCampina Wamco added N13.07 to sell N146.00 per share versus the previous price of N132.98 per share, and CSCS Plc rose by 10 Kobo to close at N76.00 per unit compared with last Friday’s N75.90 per unit.
As a result, the market capitalisation increased by N26.20 billion to N2.514 trillion from N2.488 trillion, and the NASD Unlisted Security Index (NSI) went up by 48.80 points to 4,202.57 points from 4,158.77 points.
The volume of securities bought and sold by market participants decreased by 55.2 per cent yesterday to 236,921 units from 528,891 units, the value of securities slid by 51.5 per cent to N16.5 million from N34.0 million, and the number of deals contracted by 20 per cent to 20 deals from 25 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, followed by CSCS Plc with 60.5 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.8 million units transacted for N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
The Naira opened the week on a negative note on Monday after it depreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by 0.86 per cent or N11.77 to sell for N1,373.16/$1 compared with the preceding session’s value of N1,361.39/$1.
It also weakened against the Pound Sterling in the official market during the session by N17.39 to quote at N1,871.07/£1 versus last Friday’s rate of N1,853.68/£1, and against the Euro, it slumped by N15.78 to close at N1,618.41/€1 versus N1,602.63/€1.
At the black market, the Nigerian currency lost N5 against the Dollar yesterday, settling at N1,385/$1 compared with the previous rate of N1,380/$1. At the GTBank forex desk, it depreciated by N3 to sell at N1,375/$1 compared with the previous value of N1,372/$1.
Nigeria’s external reserves have fallen below $48.4 billion as of May 8, driven by interventions and external obligations by the Central Bank of Nigeria (CBN). In the first three weeks of April, the country’s FX reserves lost about $731 million.
Softer liquidity conditions have also dampened foreign investors’ appetite, with data from the FMDQ Securities Exchange showing that total foreign exchange inflows declined by 30.1 per cent month-on-month to $2.86 billion in April from $4.09 billion in March. Out of this, foreign inflows weakened by 21.9 per cent to $1.63 billion from $2.09 billion in March.
As for the cryptocurrency market, prices were largely up as global equity markets and other risk assets came under pressure. Rising oil prices, higher treasury yields and renewed US-Iran tensions, along with a key inflation report from the world’s largest economy due on Tuesday, applied pressure.
Binance Coin (BNB) jumped 1.5 per cent to $662.80, Solana (SOL) appreciated by 0.9 per cent to $96.63, Dogecoin (DOGE) added 0.7 per cent to close at $0.1104, Bitcoin (BTC) improved by 0.5 per cent to $81,221.78, and Ripple (XRP) gained 0.5 per cent to sell at $1.46.
On the flip side, Ethereum (ETH) went down by 0.9 per cent to $2,310.49, Cardano (ADA) weakened by 0.4 per cent to $0.2776, and TRON (TRX) slid by 0.3 per cent to $0.3487, the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
Crude oil prices rose more than 2 per cent on Monday after US President Donald Trump said the ceasefire with Iran was “on life support,” leaving the Strait of Hormuz largely closed with no clear end in sight to the war.
Brent crude futures went up by $2.92 or 2.88 per cent to $104.21 a barrel, while the US West Texas Intermediate (WTI) crude futures increased by $2.65 or 2.78 per cent to settle at $98.07 a barrel.
President Trump on Monday said the ceasefire with Iran was “on life support,” after dismissing Iran’s response to a US peace proposal as “stupid.”
This came after the US floated a proposal aimed at reopening negotiations with Iran. The Middle East country on Sunday released a response focused on ending the war on all fronts, including one where America’s top ally, Israel, is fighting Iran-backed Hezbollah militants.
Iran also demanded compensation for war damage, emphasised its sovereignty over the strait, and called on the US to end its naval blockade, guarantee no further attacks, lift sanctions and remove a ban on Iranian oil sales.
After this, President Trump dismissed the offer in a social media post as “totally unacceptable.”
He also emphasised that the US continues to monitor Iran’s enriched uranium stockpiles via Space Force surveillance and warned of further strikes if a real end to the nuclear issue is not reached.
The war has impacted oil output by the Organisation of the Petroleum Exporting Countries (OPEC) as it declined to its lowest level since 2000, with production falling by 830,000 barrels per day to an average of 20.04 million barrels per day in April, according to a Reuters survey published Monday.
Kuwait, Saudi Arabia, and Iraq all saw significant output decreases as they were forced to shut in production due to the war, which started in late February.
The United Arab Emirates (UAE) was the only Gulf member that was able to increase production in April. The UAE was able to leverage the Fujairah terminal on the Gulf of Oman to bypass the bottleneck, allowing it to export more crude than its peers. The Emirate is targeting a production capacity of 5 million barrels per day by 2027 after it exited OPEC and OPEC+ this month.
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