Business
Tougher times ahead as FG plans borrowing N11tn for 2023 budget
The Federal Government may borrow about N11.3 trillion to fund expenditure in the 2023 budget as the deficit is projected to be over 12.41 trillion next year.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, stated this on Monday while presenting the draft 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF&FSP) before the House Committee on Finance.
On government expenditure, the minister stated that given the constrained fiscal space, the deficit was projected to be N12.41tn in 2023, up from N7.35tn in 2022, representing 196 per cent of total Federal Government’s revenue of 5.50 per cent of the estimated GDP.
She said, “This is significantly above the three per cent threshold stipulated in the Fiscal Responsibility Act (FRA) 2007, and there will be no provision for treasury-funded MDAs capital projects in 2023.
“Scenario two, the federal government’s 2023 aggregate expenditure is estimated at N19.76trn (inclusive of GOEs). In this scenario, the budget deficit is projected to be N11.30trn in 2023 up from N7.35tn in 2022
“This represents 5.01 per cent of the estimated GDP, above the three per cent threshold stipulated in the Fiscal Responsibility Act (FRA), 2007.”
On petrol subsidy, Zainab said the government might spend N3.36tn or N6.7tn in 2023. The first scenario, tagged “Business as Usual”, assumes that the subsidy on Premium Motor Spirit (PMS), estimated at N6.72tn for the full year 2023 will remain and be fully provided for.
However, she said the second scenario, tagged “The Reform Scenario”, assumed that petrol subsidy would remain up to mid-2023 based on the 18 months extension announced early 2021.
She said, “In which case only N3.36trn will be provided for. Additionally, there will be tighter enforcement of the performance management framework for Government Owned Enterprises (GOEs) that will significantly increase operating surplus/dividend remittances in 2023. Both scenarios have implications for net accretion to the Federation Account and projected deficit levels.
“The 2023 Federal Government revenue is projected at N6.34trn, out of which only N373.17bn or 5.9 per cent comes from oil-related sources. The balance of N5.97trn is to be earned from non-oil sources.
On oil revenues this year, she said despite higher oil prices, oil revenue had been underperforming due to significant oil production shortfall adding that crude oil production challenges and PMS subsidy deductions by NNPC constitute significant threats.
Zainab also said despite pegging N3.2 billion for pipeline security, Nigeria is not getting enough value on it to address energy theft
She said, “From what has happened in 2022, clearly what we are spending is not giving us much value because production continues to decline and what this means is whatever we are doing is not working and therefore we have to do something totally different.
“Oil production in April was 1.3 million barrels per day and by July it was 1.4 million. We do hope that the increase will be very significant because it’s costing us not just N3.2 billion in terms of security cost, but the revenue we have earned.”
She said for the new MTEF, the government has removed the federation spending on pipeline security, assuming that with the transition of NNPC to NNPC Limited, they will be carrying that cost directly, not the federation.
“A lot of the expenditure the federation used to carry, will now be carried by NNPC limited. NNPC will be paying taxes and dividends and we believe in the medium term, the federation will end up earning more revenue.”
Chairman of the House Committee on Finance, James Faleke, said, given Nigeria’s current financial situation, all revenue sources must be explored as the government was short of revenue.
Aviation
Disaster averted as bird strike hits Abuja-Lagos Air Peace flight
Disaster averted as bird strike hits Abuja-Lagos Air Peace flight
An Abuja-Lagos flight was on Thursday aborted following a bird strike on the airplane belonging to Air Peace, forcing the authorities to ground the aircraft.
The bird strike experienced in the early hours reportedly prompted a ramp return to ensure the safety of passengers onboard.
All the passengers quickly disembarked and were calmed down before they were moved into another plane for the one-hour journey.
A bird strike is a collision between a bird and an aircraft, or other airborne animal, while the aircraft is in flight, taking off, or landing. And it can be a significant threat to aircraft safety.
Air Peace in a statement by its Head of Corporate Communications, Ejike Ndiulo, said the bird strike occurred at 6:30am, and all passengers disembarked normally.
The statement read, “We wish to inform our esteemed passengers that our Abuja- Lagos 06:30 flight experienced a bird strike before take-off, prompting a ramp return as a safety measure. All passengers disembarked normally.
“We have deployed a replacement aircraft for the affected flight in order to minimize disruptions, thus ensuring that passengers continue their journeys promptly.
“We appeal for the understanding of our valued passengers impacted by this development, as well as those on other flights that may experience delays.
“At Air Peace, we are committed to providing safe, comfortable, and reliable air travel for all our passengers.”
Business
NNPC achieves 1.8mbpd crude oil production
NNPC achieves 1.8mbpd crude oil production
The Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners have revved up crude oil and gas production to 1.8million barrels per day (mbpd) and 7.4standard cubic feet per day (scfd).
The company which announced this at a press briefing said the feat was achieved in compliance with the mandate of President Bola Ahmed Tinubu.
Speaking on the development, the Group Chief Executive Officer, Mr. Mele Kyari, congratulated the Production War Room Team that anchored the production recovery process.
“The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long terms acceptable to our shareholders based on the mandates that we
have from the President, the Honourable Minister, and the Board,” Kyari explained.
Giving details of the efforts of the Production War Room, the Chief War Room Coordinator and Senior Business Adviser to the Group Chief Executive Officer, Mr. Lawal Musa, disclosed that the feat was achieved through the collaborative efforts of Joint Venture and Production Sharing Contract partners, the Office of the National Security Adviser, as well as government and private security agencies.
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He said the interventions that led to the recovery of production cut across every segment of the production chain with security agencies closely monitoring the pipelines.
He stressed that when the Production War Room team was inaugurated on 25th June 2024, production was at 1.430mbpd, but the team swung into action, culminating into sustaining the production recovery to 1.7mbpd in August and hitting the current 1.808mbpd in November.
“We are confident that with this same momentum and with the active collaboration of all stakeholders, especially on the security front, we can see the possibility of getting to 2mbpd by the end of the year,” he stated.
Also speaking on the development, Chairman of the NNPC Ltd Board of Directors, Chief Pius Akinyelure, who also congratulated the team, said he was happy to be part of the production recovery process, adding: “today, I will leave this place with my heart full of joy”.
He charged the Company’s Management to come up with a cashflow projection based on the new production figures to facilitate planning, stressing that he was looking forward to further production increase to 3mbpd.
On his part, the Honourable Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, expressed satisfaction with the performance of the team and pledged the Federal Government’s support for the company to do more.
NNPC achieves 1.8mbpd crude oil production
Business
FG gets fresh $134m loan from AfDB for agric projects
FG gets fresh $134m loan from AfDB for agric projects
The Federal Government has secured a loan facility of $134million from the African Development Bank (AfDB) to help farmers boost seeds and grain production in the country.
This is contained in a statement issued by Anthonia Eremah, Chief Information Officer, Ministry of Agriculture and Food Security, on Thursday, in Abuja.
Minister of Agriculture and Food Security, Sen. Abubakar Kyari, made his know at the unveiling of the 2024/2025 National Dry Season Farming in Calabar, Cross River State capital.
Kyari explained that with the re-introduction of the national dry season farming to boost year-round agricultural production, the loan would be handy and guarantee national food security in the country.
The minister said the initiative is under the National Agricultural Growth Support Scheme-Agro Pocket (NAGS-AP) Project.
He said the federal government had declared an emergency on food production to enable all Nigerians to get easy access to quality and nutritional food at affordable rates.
Kyari also said government wants to use the agricultural sector for national economic revival through increase in production of some staple food crops such as wheat, rice, maize, sorghum, soybean, and cassava during both dry and wet season farming.
He added that 107,429 wheat farmers were supported under phase 1 of the 2023/2024 dry season, and 43,997 rice farmers under the second phase of the 2023/2024 dry season.
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The minister said recently, government supported 192,095 rice, maize, sorghum/millet, soyabean and cassava farmers under the 2024 wet season across the 37 States including the FCT.
He said Cross River was leading 16 other states in wheat production, adding that over 3000 wheat farmers have been listed to benefit from the support to grow the grain.
Kyari noted the Cross River government’s commitment to wheat production.
He said it informed why the federal government is partnering with the state to kick start the maiden wheat production and enlisting them among states commencing the current 2024/2025 dry season farming.
“The 2024/2025 dry season farming, the project is targeted to support 250,000 wheat farmers across the wheat-producing states with subsidised agricultural inputs.
“This is to cultivate about 250,000 hectares with an expected output of about 750,000 metric tonnes of wheat to be added to the food reserve to reduce dependence on importation of the product and also increase domestic consumption.
“Equally the programme will provide support to 150,000 rice farmers under the second phase to cover all the 37 states, including FCT, with an expected output of about 450,000 metric tonnes,” he said.
FG gets fresh $134m loan from AfDB for agric projects
(NAN)
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