The Federal Government of Nigeria received N3.211 trillion as Petroleum Profits Tax (PPT) and Royalties from the third quarter of 2015 to third quarter of 2017, according to the Economic Report of the Central Bank of Nigeria (CBN).
Breakdown of the revenue to the government showed that the country received N495.39 billion as PPT/royalties in third quarter of 2015; N388.66 billion, in fourth quarter of 2015; and N314.04 billion during first quarter of 2016.The revenue from PPT/royalties declined in second quarter of 2016 to N212.78 billion; later increased to N392.38 billion in third quarter of 2016; and decreased to N273.13 billion in fourth quarters of 2016.
There was a rebound of revenue to N325.38 billion in first quarter of 2017; N320.49 billion in second quarter and N489.41 billion during the third quarter of 2017. The CBN report for the third quarter of 2017 released recently, revealed that N103.46 billion was allocated to the 13 per cent Derivation Fund for distribution among the oil producing states.
analysing the report, CBN disclosed that oil receipt at N1.27 trillion during the quarter under review was lower than the proportionate quarterly budget estimate by 6.2 per cent, but was above the receipts in the preceding quarter by 59.7 per cent. According to the CBN, the decline in oil revenue relative to the proportionate quarterly budget estimate was due to the shortfall in receipts from crude oil/gas exports, owing to the decline in crude oil production, arising from leakages and shut-ins/shut-downs at some NNPC terminals.
It disclosed that Nigeria’s crude oil production, including condensates and natural gas liquids, averaged 1.83 million barrels per day (mbd) or 168.36 million barrels (mb) in the review quarter.This, it noted, represented an increase of 0.17 mbd or 10.2 per cent, compared with 1.66 mbd or 151.06 mb recorded in the preceding quarter. The development was due to sustained peace in the oil production region.CBN said that crude oil export stood at 1.38 mbd or 126.96 mb, representing 14.0 per cent increase over 1.21 mbd or 110.11 mb in the preceding quarter.
The development, it hinted, was due, mainly, to reduced activities of vandals in the Niger Delta region.Allocation of crude oil for domestic consumption was maintained at 0.45 mbd or 41.40 million barrels in the review quarter.
Nigerian National Petroleum Corporation (NNPC) Chief Operating Officer, Upstream, Malam Bello Rabiu, proposed some key amendments to the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act to enable the Federal Government optimize the collection of royalties and other revenue in deep water oil production activities.He noted that it was imperative to effect increment in royalties across all categories to increase government take.
“It is our opinion that the proposal to increase the royalty rate for terrains beyond 1000 metres, from zero per cent to three per cent, is commendable but it is necessary to also make corresponding adjustments in other categories,’’ he said.He argued that in the alternative, the graduated royalty scale as provided in the Act should be removed while the Minister of Petroleum Resources should be empowered to intermittently set royalties payable for acreages located in deep offshore and inland basin production sharing contracts through regulations based on established economic parameters.
“It is our opinion that these incentives have outlived their usefulness and are now impediments to the Federal Government’s revenue collection efforts. The use of such incentives can be terminated by an amendment of section 4 of the Act,’’ the Corporation noted.He called on the National Assembly to seek relevant input from the Federal Inland Revenue Service, to resolve the divergent opinions regarding the methodology for the computation of the taxes which would arise as a result of the proposed royalty regime.
Source: The Guardian
I&E Window transacts $900m, as reserves stagnate at $47.6 billion
There was near excess in the quantity of money in circulation last week, save for the increased mop up exercise by the Central Bank of Nigeria (CBN), following the repayments of N66.7 billion and N377.6 billion worth of Treasury Bills (T-Bills) and Open Market Operations.
The movement in system liquidity during the week had risen in two of the four trading days, resulting to 3.7 per cent rise in the quantity of money in circulation to N842 billion compared to N812.1 billion in the preceding week.Consequently, the two most popular traded instruments among banks- Open Buy Back and the Overnight rates, trended southwards by 0.7 percentage points (ppts) and 0.5ppts to 2.8 per cent and 3.6 per cent respectively.
During the rollover of the instruments, investors showed apathy for short tenored bills, as they asked for higher rates, causing an under-allotment to reduce cost for government, which subsequently left a sizable quantity of money in circulation till the weekend.Analysts at Afrinvest Securities Limited said this week, despite the absence of maturing bills, except N183.3 billion worth of OMO maturities, the apex bank will sustain its trend of liquidity mop ups and money market rates could trend higher.
Similarly, at the foreign exchange market, the naira remained stable, defying the influence of speculations ahead of the biannual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, at the weekend, which increased oil production by one million barrels per day.
The decision, which is expected to influence global oil price, would further affect Nigeria’s external reserves that have remained stagnant in weeks at $47.6 billion, as crude oil accounts for a large proportion of the nation’s foreign exchange earnings.
Specifically, the reserves have stagnated in the last three weeks, with an earlier back and forth movement, as reports showed that Nigerian crude oil cargoes from the June programme took long before they were cleared, as demand was not strong enough and differentials were too high to spark much buying of July barrels.During the week, the Central Bank of Nigeria (CBN) continued its weekly intervention, offering $210 million through the Wholesale SMIS window to maintain stability, as well as sustain liquidity in the foreign exchange market.
Consequently, the CBN spot rate appreciated five kobo when measured week-on-week to N305.80 per dollar from N305.85 per dollar in the previous week, while at the parallel market, the naira traded flat for the second consecutive week at N362 per dollar.
In the same vein, the local unit, at the Investors and Exporters’ (I&E) forex Window, appreciated seven kobo week-on-week to N361/$ from N361.07/$ in the previous week.On the activity level, transactions improved by 15.1 per cent at the autonomous window, as investors exchanged about $900 million against $800 million recorded the previous week.
Source: The Guardian
The Central Bank of Nigeria (CBN) is working toward the eventual replacement of the ATM PIN code with biometric identification.
The announcement was made at a recent Nigeria Electronic Fraud Forum, where Dipo Fatokan, of CBN, stressed the need to step up to the more secure biometric standard.
“Your [ATM] PIN and account details are not supposed to be disclosed to a third person,” he said, but added that cardholders who are illiterate or incapacitated often must share this information in order to use an ATM.
Biometric ID is the logical solution to this problem because, “There is no way you can give your finger to a third party.” No firm date was given for the shift to biometric ID, which CBN views as an essential element in the bank’s efforts to stop banking fraud.
Fatokan acknowledged that the high cost of biometric hardware means that migration will take time, “but I am sure we shall get there soon.”
THE Nigerian Government has taken steps to take over bank accounts without Bank Verification Number (BVN) as a Federal High Court sitting in Abuja has frozen all such accounts by stopping all outward payments, operations or transactions.
The court order may affect over 15 million bank accounts with deposits running into billions of naira as, according to the Nigeria Inter Bank Settlement System Plc (NIBSS), the organisation saddled with registering bank customers for BVN, out of the 45.85million bank accounts in the country, only 30,511,506 had been issued with BVN numbers as of October 8, 2017.
The Attorney-General of the Federation, Mr Abubakar Malami (SAN), had instituted an application seeking for an interim order directing all commercial banks in the country to disclose all individual and corporate accounts in their custody not covered by BVN.
The court, presided over by Justice Nnamdi O. Dimgba, gave the interim order in Suit no: FHC/ABJ/CS/911/2017 to all money deposit banks to disclose all bank accounts that are not linked with a BVN, declare the account numbers of such acounts, the branch in which the accounts are domiciled as well as the outstanding balances and advertise same in a widely circulated newspaper within seven days while giving owners of the account 14 days to identify themselves, failing which the funds in such accounts would be forfeited to the Federal Government.
The court, in an ex parte motion, said it gave the order because running a bank account without a BVN is “contrary to Section 3 of the Money laundering Act 2011 and Central Bank of Nigeria (CBN) guidelines.”
The government has been concerned that its move to unveil those hiding stolen funds in the banks was being frustrated by bank officials colluding with them by allowing them to run accounts without BVN.
Recently, the Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, raised the alarm that some banks were helping corrupt government officials to operate secret accounts without BVN.
While delivering a lecture at a workshop organised by the Chartered Institute of Bankers of Nigeria in Lagos, on September 26, 2017, he said some bank officials were in the habit of “opening accounts for government officials even after the introduction of the Treasury Single Account, thereby allowing government funds to be diverted.”
According to him, “There are several bank accounts that are not linked to BVN and are still active.”
Similarly, the CBN had last week, in a memo signed by Mr Dipo Fatokun, Director Banking and Payment System, directed all banks to properly capture customers’ BVN data and ensure that a customer’s names on the BVN database are the same in all of his/her accounts, across all banks.
In the memo entitled the ‘‘Regulatory Framework for BVN and Watch-list Operations in Nigeria,’ the CBN said this became necessary to forestall fraudulent activities of bank customers.
The framework stated that “change of customer records shall be allowed as follows: Name change with supporting documents, subject to a maximum of twice a year; change of date of birth shall be allowed only once with supporting documents; minor correction due to errors supported with valid means of identification.”
According to the CBN framework, a watch-listed individual shall not be allowed to enter into new relationship with any bank.
The court also ordered that the banks “should disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and other relevant information related to the transactions made on the accounts.”
The CBN, had in conjunction with the Bankers Committee, embarked upon the deployment of a centralised BVN system and launched the project in February 2014 as part of the overall strategy to ensure effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system. The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks.
Credit: Nigerian Tribune