Economy
Uzoka-Anite Warns Against Inflation Risks from Oil, Gas Earnings Surge
By Adedapo Adesanya
The Minister of State for Finance and chairman of the Federation Account Allocation Committee (FAAC), Mrs Doris Uzoka-Anite, has cautioned that a projected surge in oil and gas revenues following President Bola Tinubu’s latest executive order could trigger inflationary pressures and exchange rate volatility if not carefully managed.
She said that the recent executive order mandating the direct remittance of certain oil sector revenues to the federation account would provide regulatory clarity and significantly strengthen revenues accruing to the federation account, but warned that sudden liquidity injections into the economy may complicate monetary policy coordination with the Central Bank of Nigeria and erode the real value of allocations to federal, state and local governments.
While addressing members of FAAC in Abuja, Mrs Uzoka-Anite commended President Tinubu on the order, describing the development as a structural fiscal correction aimed at restoring constitutional discipline to petroleum revenue management and enhancing distributable income across the three tiers of government.
She said that the revenue outlook was improving due to ongoing structural reforms introduced by the Federal Government.
According to her, the newly implemented tax reform measures are broadening the tax base, improving compliance and enhancing administrative efficiency.
“Also, the executive order signed by Mr President on February 13 is reinforcing revenue discipline in the oil and gas sector and reducing leakages,” she said.
The minister said that the order suspends the 30 per cent allocation to the Frontier Exploration Fund (FEF) and suspends the 30 per cent management fee on oil and gas profit payable to NNPC Limited.
She said that the order also directed that gas flare penalties be paid into the federation account, and mandated full remittance of petroleum revenues without unconstitutional deductions.
Mrs Uzoka-Anite said that the reform marks a shift from a retention-based oil revenue model to a gross remittance, federation-first model.
“The implications for FAAC are very significant; more oil and gas profit will now flow directly into the federation account.
“Gas flare penalties will become distributable revenue, and previously retained management fees will no longer reduce remittable inflows,” she said.
She said that the reforms were expected to result in higher monthly gross inflows into the federation account, and increased allocations to federal, state and local governments.
The minister said that a retrospective audit of the FFF, the Midstream and Downstream Gas Infrastructure, was due, and NNPC management fee deductions could lead to recoveries that may provide a one-off fiscal boost.
She welcomed the improved revenue outlook and cautioned against the risks associated with sudden liquidity injections.
“Experience shows that when revenues rise sharply and are distributed fully and immediately, large liquidity injections can increase inflationary pressures, complicate monetary management and reduce the real purchasing power of allocations,” she said.
She said that excess aggregate demand, exchange rate pressure, asset price distortions and inflationary risks could arise if increased inflows were not carefully managed.
Mrs Uzoka-Anite said that to mitigate such risks, she proposed phased disbursement of one-off recoveries.
She suggested that retrospective recoveries be staggered rather than injected into the economy in bulk, with a portion temporarily warehoused in a stabilisation buffer.
She also recommended strengthening the excess crude and stabilisation buffer mechanism to channel part of incremental inflows into a fiscal stabilisation window.
“This could offset revenue shortfalls in weaker months and reduce procyclicality in spending.
According to her, enhanced coordination with the CBN would be pursued to align fiscal injections with liquidity management tools and support open market operations where necessary.
Mrs Uzoka-Anite urged states and federal Ministries, Departments and Agencies (MDAs) to prioritise capital expenditure over recurrent expenditure.
She called for investment in infrastructure, agriculture, energy and other productive sectors, and avoid unsustainable wage or consumption spikes.
“Productive spending expands supply capacity and mitigates inflation,” she said.
She also announced plans to introduce monthly revenue transparency dashboards, production-to-remittance reconciliation reporting, and clear reporting of incremental inflows arising from tax reforms and the executive order.
The junior finance minister said that the reforms presented an opportunity to deepen fiscal federalism, enhance distributable revenue, restore constitutional clarity and strengthen trust among tiers of government.
She also advised that increased revenue must not translate into fiscal complacency.
“We must resist the temptation to treat incremental inflows as permanent windfalls. We should reduce debt burdens, clear arrears responsibly, build buffers and invest in growth-enhancing sectors,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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