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NNPC closes 2017 with N82b deficit

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NNPC Group closed the 2017 full year operations with a budget deficit of N82 billion against its budgeted surplus of N601.16 billion for the year.

The corporation’s oil and gas report for December 2017, which contained the figures, shows that the group’s operations in December ended in a deficit of N6.37 billion, which is slightly lower than the monthly deficit of N6.79 billion incurred in November.

The group generated a total revenue of N3,711.8 billion in the 2017 full year, which is a clear N701 billion short of the targeted revenue figure of N4,412.8 billion for the year. Total expenses were however on target at N3,793.8 billion for the year, showing a slight deviation of under N18 billion from the expense budget provision.

The report, as analysed by TheCable Petrobarometer, shows that budget numbers could not be delivered across a number of subsidiaries and units of the NNPC group in 2017. The upstream operators were the only sub group of the corporation that delivered a budget surplus, which amounted to N198.6 billion for the year. That was however just a fraction of a budget surplus of N688.5 billion expected from the operators within the sub group for the year.

The upstream sub group generated a total revenue of N980 billion for the 2017 fiscal year, about 82% of the targeted figure of N1,199 billion. Its expenditure went far off target at N781.5 billion or 150% of the budgeted figure of N510.5 billion. NPDC led the expenditure budget deviation with its spending of N556.6 billion standing at 191% of budget provision.

The refineries generated combined revenue of N571.3 billion at the end of 2017, which is 65% of the revenue budget for the year. Port Harcourt refinery accounted for over 65% of the total revenue and delivered the only budget surplus of N20.7 billion from the sub group in the year.

Total expenditure for all the refineries amounted to over N604 billion at the end of 2017, resulting in a combined deficit of N32.8 billion. The report shows that Kaduna and Port Harcourt refineries, which were out of production in November, were back on stream in December with major improvements in revenue contribution.

NNPC’s retail operations, led by PPMC, posted an overall deficit of close to N100 billion at the end of 2017. That was more than nine times the provided deficit figure of N11 billion for the sub group for the year. The subsidiaries here operated within their expenditure budget of N2,328 billion but combined revenues failed to meet the targeted figure of N2,214.6 billion for the year.

Corporate headquarters was targeted to produce a budget deficit of over N188 billion for the year but it actually produced N131.9 billion. It operated well below its cost budget with actual expenditure of N132.86 billion amounting to 68.5% of the vote for the year. A deficit of N15.8 billion from ventures swelled the total deficit for the sub group to N147.8 billion.

The deficit recorded in December is one of the biggest monthly deficits for the NNPC group in 2017. This continued to reflect inability to grow revenue significantly ahead of expenses and this cuts across a number of subsidiaries and units of the corporation.

NPDC’s revenue continues to decline, even by a wider margin of 4% in December against 2.6% in November.

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ECONOMY

NNPC: Funding plan for AKK gas pipeline project near conclusion

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The Nigerian National Petroleum Corporation (NNPC) says funding plans for the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project are almost complete.

Maikanti Baru, NNPC group managing director, made the disclosure at the 30th edition of Gas Technology Conference in Barcelona, Spain on Tuesday.

The AKK gas pipeline is designed to enable gas connectivity between the east, west and north, which is currently inadequate.

It would also enable gas supply and utilisation to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.

Represented by Saidu Mohammed, NNPC chief operating officer, gas & power, Baru said tremendous progress had been made towards securing funding for the project during President Muhammadu Buhari’s last visit to Beijing, China.

According to a statement by Ndu Ughamadu, NNPC spokesperson, Baru said there is a viable payback structure for the facility, noting that the financial partners are willing to cooperate with the state oil firm.

“Once you have the whole nation covered with a gas grid, industries will naturally spring up along the way and litter the entire country. That is our target in the long run,” the statement quoted Baru as saying.

Speaking on the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, Baru said the nation’s abundant gas reserves portend positive developments in the sector.

“We cannot consume out our gas resources in the next 50 years, even if we generate as high as 40,000mw for power,” he said.

“We are happy that in the NLNG is a credible company capable of competing in the international arena.”

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ECONOMY

BREAKING: Nigeria’s inflation rises for the first time after 18-month decline

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Nigeria’s inflation has risen for the first since it started its decline in January 2017.

This is according to the latest inflation report published by the National Bureau of Statistics on Friday.

According to the report, the rate at which prices of goods and services increased in August rose to 11.23% from 11.14%.

“The consumer price index, (CPI) which measures inflation increased by 11.23 percent (year-on-year) in August 2018. This is 0.09 percent points higher than the rate recorded in July 2018 (11.14) percent and represents the first year on year rise in headline inflation following eighteenth consecutive disinflation in headline inflation,” the report read.

“Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.05 percent in August 2018, down by 0.08 percent points from the rate recorded in July 2018 (1.13) percent).”

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Nigeria, other West African countries fail to meet criteria for single currency

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Nigeria and five other West African countries have been unable to meet the criteria for the proposed single currency for countries in the zone.

Ngozi Egbuna, West African Monetary Institute (WAMI) director general made this known on Thursday in Abuja at the 37th meeting of the Committee of Governors of the Central Banks of the West African Monetary Zone.

The West African Monetary Zone (WAMZ) consists of The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

The Economic Community of West African States (ECOWAS) had approved the reduction of the convergence criteria from 11 to six.

At present, the three primary criteria are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long-term goal of not more than five per cent by 2019; and gross reserves that could finance at least three months of imports.

The three secondary criteria are public debt/gross domestic product of not more than 70 percent; central bank financing of budget deficit should not be more than 10 percent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 percent.

Egbuna said a lot of work needs to be done if the 2020 deadline will be met.

She said three countries, The Gambia, Guinea and Nigeria, attained three criteria; while Ghana and Liberia achieved two criteria, and Sierra Leone met one criterion.

Godwin Emefiele, governor of the Central Bank of Nigeria, was elected chairman of WAMZ at the meeting.

Addressing delegates, Emefiele said member countries should not be blinded by the desire of a common currency to the adverse factors associated with a unified monetary environment.

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