CAPITALDIGEST DAILY NEWS, 26/6/2023

SUBSIDY REMOVAL: NEITI PROBES PETROL CONSUMPTION FIGURE poor, who were spread across the working and non-working class. “We just need the impact of this subsidy removal to The Federal Government should not go back on its decision to halt subsidy on Premium Motor Spirit, popularly called petrol, despite the opposition against the move, the Nigeria Extractive Industries Transparency Initiative stated on Tuesday. NEITI also announced that it had commenced a study to determine the actual consumption of petrol in Nigeria, stressing that the high PMS consumption figures being released by some agencies of government were not correct. The Executive Secretary, NEITI, Ogbonnaya Orji, disclosed this in Abuja while speaking to journalists on the sidelines of the Stakeholders Validation Workshop on the 2022 Annual Progress Report for Nigeria’s Extractive Industries. “For a very long time, my disposition has been for the removal of subsidy. And this government, right from day one has taken that bold step. There shouldn’t be any going back. “We should move forward from there and then put in place a robust arrangement that will show a clear departure from the way and manner we have operated under subsidy. Nigerians want to see what will change when the subsidy is no more. “And we have highlighted this because we know that subsidies put a lot of impediments on transparency and accountability in the management of revenues from the oil and gas industry over the years,” he stated. Orji stated that NEITI knew that subsidy removal would throw up a lot of other issues, adding that “one of those issues that we know will happen is the actual consumption figure (of petrol).” He said, “We believe that the figures that are being thrown up as daily consumption of PMS in Nigeria are not very correct. We think we need to have an empirical figure and that is why NEITI is commissioning a study on the actual PMS consumption in Nigeria. “We have every reason to believe that the figure may be less than what is being projected and the removal of subsidy has also removed all the incentives for hiking this figure in a manner that lacks empirical and logical reason. NAIRA DEVALUATION PUSHES NIGERIA’S EXPORT TO N42TN The value of Nigeria’s export may rise to at least N41.99tn per year following the Central Bank of Nigeria float of the naira. The apex bank had last Wednesday directed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters’ Window of the foreign exchange market, to bridge the gap between the official and parallel market rates of the naira. It said, “The Central Bank of Nigeria wishes to inform all authorised dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window.” Following the move, the naira fell from its 471/dollar to 664.04/dollar and closed the week later at N663.04/dollar. The weakening of the naira against the dollar means exporters, especially the Federal Government, will make more revenue (in naira terms) from exports’ dollar proceeds. According to the International Trade Center, Nigeria’s total export in 2022 was $63.34bn. At N448.55/dollar (the central price of the dollar as of December 30, 2022, on the CBN’s website), its naira equivalent was N28.41tn. But now (using Friday’s rate of N663.04/dollar), its naira equivalent would translate to N41.99tn. If Nigeria exports the same quantity it did in 2022, it will make about N41.99tn. And with the government’s plan to ramp up oil production, which is a major component of the country’s export, Nigeria’s export value is expected to increase. Data from the multilateral agency, which has a joint mandate with the World Trade Organisation and the United Nations, which gets its data from the National Bureau of Statistics and the United Nations COMTRADE, showed that Nigeria made N25.78tn ($57.47bn) from its largest exported commodity, oil and mineral fuel. This was despite a slump in oil production due to pipeline vandalism and crude oil theft. A recent report by The PUNCH estimated that between January and July 2022, Nigeria’s oil production slumped by 28 million barrels. CBN URGES TERTIARY INSTITUTIONS TO EMBRACE E-NAIRA FOR FEES, SALARIES The Central Bank of Nigeria on Thursday admonished students and management of tertiary institutions in the country to adopt the e-Naira for payment of tuition fees, salaries, and other transactions in view of its benefits. The Assistant Director, CBN Ekiti State Branch, Mr Ayodeji Adeboboye, said that e-Naira remained “a viable alternative payment platform to physical cash transaction and should be utilised by all Nigerians for hitch-free and cost-effective transactions.” Adeboboye, who spoke during a sensitisation drive on e-Naira wallet by CBN at Bamidele Olumilua University of Education, Science and Technology, Ikere-Ekiti, said the exercise was to sensitise the students and other stakeholders on the need to embrace the platform. He said, “Every financial transaction such as payment of school fees by students, payment of staff salaries, and buying and selling within the school community can be done seamlessly through the e-Naira wallet. “The time has come for all Nigerians to key into the e-Naira wallet because of its numerous advantages. Other countries have gone beyond cash payment and are now using electronic payments”, Adeboboye said. CBN e-Naira Consultant, Izuchukwu Nwankpa, said that “e-Naira offers financial inclusion and helps tackle corruption and money laundering as well as improve the efficiency of the financial system. Nwankpa encouraged the university community and other stakeholders to embrace the alternative platform, which he said “is cost-effective, safe, secure, user-friendly and effective”The Deputy Vice-Chancellor, BOUESTI, Dr Veronica Makinde, lauded the CBN for the initiative and assured of the institution’s support in promoting the use of the e-Naira. Makinde said, “We will be ready to key into the e-Naira initiative as it will assist in saving our students the risk of carrying cash and help reduce students’ complaints of bank bottlenecks, theft, and loss of tuition and other sundry fees” STOCK MARKET SUSTAINS POSITIVE TREND, UP BY N52BN Extending gains for the second consecutive day trading session, the stock market of the Nigerian Exchange Limited (NGX) yesterday closed higher as the overall capitalisation gained N52 billion due to bargain-hunting activities in Seplat Energy Plc and 49 others. The NGX All Share Index (ASI) rose by 95.17 basis points or 0.16 per cent to close at 59,110.02 basis points. Consequently, the year-to-date (YTD) return rose to 15.33per cent while the market capitalization gained N51.82billion to close at N32.19trillion. On sectors, the NGX Insurance rose 1.9 per cent, NGX Oil & Gas appreciates by 1.4 per cent, and NGX Industrial Goods increases by 0.1per cent, while the NGX Banking index was unchanged. As measured by market breadth, market sentiment was positive as 50 stocks gained relative to 19 losers. Academy Press, Chams, Guinea Insurance and Skyway Aviation Company recorded the highest price gain of 10 per cent each to close at N1.98, 44 kobo, 22 kobo and N7.70 respectively, per share. Learn Africa followed with a gain of 9.92 per cent to close at N2.26, while Unity Bank appreciated by 9.82 per cent to close at N1.23, per share. On the other hand, C&I Leasing led the losers’ chart by 10 per cent, to close at N4.05, while Cornerstone Insurance followed with a decline of 9.82 per cent to close at N1.01, per share. Secure Electronic Technology and Veritas Kapital Assurance depreciated by 8.70 per cent each to close at 42 kobo and 21 kobo respectively, while RT Briscoe Nigeria declined by 8.11 per cent to close at 34 kobo, per share. The total volume traded declined by 34.06 per cent to 588.854 million units, valued at N8.961 billion, and exchanged in 8,272 deals. Transactions in the shares of United Bank for Africa (UBA) topped the activity chart with 78.512 million shares valued at N907.474 million. Guaranty Trust Holding Company (GTCO) followed with 65.4 million shares worth N2.107 billion, while Transnational Corporation (Transcorp) traded 33.706 million shares valued at N112.041 million. Access Holdings traded 31.379 million shares valued at N466.627 million, while Veritas Kapital Assurance sold 27.759 million shares worth N6.089 million. FG, STATES, LGAS SHARE N786BN MAY REVENUE The Federation Account Allocation Committee says it shared N786.16bn among the three tiers of government in May 2023. The figure represents an increase of N130.23bn compared to the N655.93bn shared in April 2023, and it is the highest this year and the first increase following a constant decline since January. FAAC disclosed this in a communiqué issued at the end of its latest meeting in Abuja on Thursday. The meeting was chaired by the new Accountant General of the Federation, Dr Oluwatoyin Madein. The total amount includes gross statutory revenue, Value Added Tax, Augmentations from Forex and Non-oil Mineral Revenue, and electronic money transfer levies. The communique read, “The N786.16bn total distributable revenue comprised distributable statutory revenue of N519.55bn, distributable Value Added Tax revenue of N251.61bn, Electronic Money Transfer Levy of N14.37bn, and Exchange Difference revenue of N0.64 bn.”The Federal Government received N301.89bn, the states received N265.88bn, and the local government councils got N195.54bn, while the oil-producing states received N22.86bn as derivation (13 per cent of mineral revenue). A breakdown showed that “Gross statutory revenue of N701.79bn was received for the month of May 2023. This was higher than the sum of N497.46bn received in the previous month by N204.324bn.” It was noted that from the N519.55bn distributable statutory revenue, the Federal Government got N261.69bn, the State Governments received N132.73bn, and the Local Government Councils received N102.33bn. The sum of N22.8bn was shared to the relevant States as 13 per cent derivation revenue. Also, “For the month of May 2023, the gross revenue available from the Value Added Tax was N270.2bn. This was higher than the N217.74bn available in the month of April 2023 by N52.45bn. “The Federal Government received N37.74bn, the State Governments received N125.80bn and the Local Government Councils received N88.06bn from the N251.61bn distributable Value Added Tax revenue