Daily Watch – Eni/Shell officials mull prison time in Italy, Budget deficit to rise in 2021

Suspected Boko Haram members have shot dead five humanitarian workers, the terrorist group said in a viral video published on social media Wednesday. According to the gunmen who carried out the killing, their victims were aid workers working for nongovernmental organisations. In the video, which lasted for 35 seconds, five hooded armed men standing behind five abductees who were kneeling before them, said in Hausa that “this is a message to the infidels who are using you to cheat and turn our people into unbelievers. You should know that your employers are just using you to achieve their aims, but they don’t care about you. That’s why whenever we abduct you, they don’t care about you. At the end of the speech, one of the gunmen ordered them to fire the abducted aid workers. The gunmen summarily shot at the five men whose faces were all blinded. The Nigerian government is yet to comment on the development. It is unclear when the victims were killed but the video was released Wednesday day after the senate had asked the service chiefs to step down because of widespread insecurity in the country. The terrorist group has continued to wreak havoc in the north-east despite the claim of the government that the sect has been defeated.

The 2021-2023 medium-term expenditure framework and fiscal strategy paper submitted to the national assembly has shown that the FG intends to borrow ₦4.28 trillion in 2021 to fund its budget deficit. The total budget deficit of the proposed ₦12.66 trillion 2021 budget is ₦5.16 trillion, up from ₦4.98 trillion in the revised 2020 budget. The figure represents 3.62 percent of estimated GDP. This is above the threshold of three percent stipulated in the Fiscal Responsibility Act, according to the document. The FG said the deficit will be financed by new foreign and domestic borrowings of ₦4.28 trillion, ₦205.15 billion from privatisation proceeds, and ₦674.11 billion in draw-downs on existing project-tied loans. The projected debt service to revenue ratio, the document said, will be 47 percent which the government said: “raises some concern about debt sustainability.” It is, however, indicative that the country is faced with a serious revenue challenge rather than a classic debt problem, the document said.

Nigeria’s gross revenue fell by 36 percent or ₦1.46 trillion below the quarterly budget estimate in the first quarter of 2020, the Central Bank of Nigeria said, in its quarterly report titled “Federation account operations. At ₦2.53 trillion, federally-collected revenue, in the first quarter of 2020, according to the report, was lower than the quarterly budget estimate of ₦3.95 trillion by 36 percent. It also fell below the receipt in the preceding quarter by 4.8 percent. The decline in the revenue was attributed to shortfalls in receipts from both oil and non-oil revenue components during the review period. Gross oil receipt, at ₦1.52 trillion or 60.3 percent of the total revenue, was below the quarterly budget estimate and the receipt in the preceding quarter by 31.2 percent and 2.6 percent respectively. Non-oil revenue (gross), at ₦1 trillion or 39.7 percent of total revenue, fell below the quarterly budget estimate of ₦1.73 trillion by 42.1 percent. It also fell below the level in the preceding quarter by eight percent. The report said that the lower non-oil revenue, relative to the quarterly budget estimate, was due to the decline in receipts from VAT and corporate tax.

Italian prosecutors have asked for oil majors Eni and Shell to be fined 900,000 euros ($1.04 million) each and some of their present and former executives, including Eni CEO Claudio Descalzi, to be jailed in a long-running trial over alleged corruption in Nigeria. The Italian prosecutors, in one of the oil industry’s biggest alleged scandals, alleged that Eni and Shell acquired a Nigerian oilfield in 2011, knowing most of the $1.3 billion purchase price would go to politicians and middlemen in bribes. Prosecutors in Milan Court on Tuesday asked for eight years in prison for Descalzi and seven years and four months for Shell’s former head of upstream Malcolm Brinded. The prosecutors also asked the court to confiscate a total of $1.092 billion from all the defendants in the case, the equivalent of the bribes alleged to have been paid. However, all the defendants have denied any wrongdoing, saying the purchase price was paid into an official Nigerian government account with all subsequent transfers being beyond their control. According to Eni, the prosecutors’ request was unfounded and it would show the company and managers had acted completely correctly. “Eni is confident that the truth will ultimately be established” when the defence presents its arguments in September, the firm said. Shell also said that it did not believe there was a basis to convict the company or any of its former employees. “There is no place for bribery or corruption in our company,” Shell’s statement read. Shell has said the 2011 agreement was a settlement of long-standing litigation, following the previous allocation of the block by the Nigerian government to Shell and Malabu, a company owned by former Nigerian oil minister Dan Etete. Another 11 people are involved in the case, including former Eni Chief Executive Paolo Scaroni, for whom prosecutors also sought an eight-year sentence.