The IMF has urged Nigeria’s government to boost revenue and discard the system of multiple exchange rates noting the slow growth in the country’s economy. The growth, the IMF said, is not enough to reduce poverty nor create jobs. IMF mission chief for Nigeria, Amine Mati, said that the organisation’s number-one recommendation to Nigeria is to get the revenue ratio up, which is expected to increase the government’s resources and ability to spend on infrastructure as the total spending in the economy is not high enough. The IMF forecast that economic growth will accelerate to 2.1 percent this year from 1.9 percent in 2018 as it recovers from the 2014 crash in crude prices. The would still leave Nigeria as one of Africa’s least buoyant economies, and will be below the rate of population growth, which is about 3 percent.
Numerous sources have reported that Nigeria’s government has increased the proposed 2019 budget to ₦10.3 trillion from ₦8 trillion, and projected a ₦6.97 trillion as revenue for the period. The 2019 budget, according to the FG is expected to run at nominal GDP of ₦139.65 trillion and 3.01 percent of GDP growth. The capital expenditure constitutes 23 percent of the total expenditure in the 2019 budget compared to the actual capital spending in the 2017 fiscal year, which hits a marked high of 22.8 percent performance. The analysis of the FG recurrent obligation shows that it increases on a year-to-year basis. Projected recurrent expenditure for the 2019 fiscal year is put at ₦6.18 trillion. The government’s budget for debt servicing is following the debt trajectory, a steep increase. From ₦1.6 trillion in 2017 and ₦1.7 trillion in 2018, the government would be spending ₦2.14 trillion on debt service in 2019, according to the review by BudgIT Nigeria. A breakdown of the 2019 budget shows that the Ministry of Power, Work and Housing has the largest share of N408 billion from the budget as Education and Health grapple with ₦50 billion and ₦47.2 billion respectively. The FG has, however, projected VAT revenue collection for the 2019 fiscal year at ₦229.3 billion even as 2017 actual figure showed a performance of about 53.7 percent while January to September of 2018 shows a performance of 52.7 percent. ₦799 billion is expected as Company Income Tax while a total revenue uptake of ₦302.5 billion from Customs and Excise duties for 2019 are projected. Total actual uptake for the first 9 months of 2018 was ₦214.7 billion. Meanwhile, the Senate Tuesday gave its Appropriation Committee a marching order to get the 2019 budget ready within one week for consideration by the upper legislative chamber and passage by April 16.
ExxonMobil is weighing the sale of some of its oil and gas fields in Nigeria more than two after exiting the country’s downstream oil sector. The US-based oil major recently held talks on the sale as the company focuses on new developments in US shale and Guyana, according to Reuters quoting industry and banking source. Some of the assets listed in the planned sale include OML 66, 68, 70 and 104, where the company runs a JV operations with the NNPC through its subsidiaries, Mobil Producing Nigeria and Esso Exploration and Production Nigeria. The potential disposals, which are expected to include stakes in onshore and offshore fields, could raise up to $3 billion, the sources said. The company is one of the largest oil and gas producers in Nigeria, with 106 operated platforms. Its oil output in the country reached 225,000 barrels per day in 2017, its website said. Exxon officials were said to have held talks in recent weeks with several Nigerian companies to gauge their interest in the fields. In October 2016, the firm divested its 60 percent stake in Mobil Oil Nigeria to Nipco, an indigenous Nigerian downstream oil and gas company. The Nigerian government has in the last decade supporting drive-by domestic firms such as Oando, Seplat and Aiteo to expand their operations in the country as international companies including Royal Dutch Shell sought to lower their presence due to oil spills resulting from pipeline sabotage.
The Shell Petroleum Development Company and Shell Nigeria Exploration and Production Company have paid the NNPC, FIRS, DPR and others $6.397 billion as production entitlement and tax in 2018 compared to $4.322 billion in 2017 and $3.638 billion in 2016. In the Sustainability Report, titled, ‘Industry Associations Climate Review; Nigeria Briefing Notes; and Payments to Government Report’, Royal Dutch Shell noted that the payment represent a 48 percent increase over payments by the subsidiaries compared to the preceding month. A breakdown of the 2018 payments showed that the Shell companies paid $3.776 billion to NNPC as production entitlement while $1.286 billion was paid in taxes to the FIRS, adding that another $1.253 went to the DPR for royalties and fees, while $81.5 million was remitted to the NDDC. “The payments formed part of the four documents released, to signal Shell’s renewed commitment to greater transparency,” according to Shell engineer Group Chief Executive Officer, Ben Van Beurden.