NNPC Remittance to Federation Account Hits N1.87trn in One Year

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•Zainab Ahmed Named African Finance Minister of the Year

Tobi Soniyi in Lagos and Emmanuel Addeh in Abuja

The Nigerian National Petroleum Corporation (NNPC) remitted a total of N1.87 trillion to the Federation Account Allocation Committee (FAAC) between June 2019 and June 2020, the latest report from the national oil company has indicated. The full financial report for June also showed that compared to May, NNPC’s operating revenue increased by 32 per cent, but that was wiped out by the corporation’s cumulative expenditure, which equally went up by 32.8 per cent.

Payments are made to the Federation Account by NNPC after the adjustment of crude and product losses as well as pipeline repairs and management cost incurred during the period.
According to the corporation, for the month under consideration, all its Strategic Business Units (SBUs) suffered various levels of losses, except four, with operating deficit on the non-functional refineries standing at over N10 billion.

The corporation disclosed, “In June 2020, NNPC remitted the sum of N68.42 billion to the Federation Account Allocation Committee (FAAC). From June 2019 to June 2020, total NNPC remittances to FAAC is N1.870.13 trillion. Out of this, Federation and JV (Joint Venture) with government priority projects received the sum of N845.42 billion and N1.024 trillion, respectively.
“June 2020, group operating revenue as compared to May 2020, increased by 32.05 per cent or N76.39 billion to stand at N314.72 billion.

“In the same trend, expenditure for the month increased by 32.80 per cent or N77.30 billion, at N312.95 billion. This month (June) expenditure as a proportion of revenue is marginally below par at 0.99; just as was recorded in the previous month.”
NNPC further said it experienced a lower trading surplus of N2.12 billion compared to the N2.68 billion surplus in May 2020, when the world began a fragile recovery from the impact of the COVID-19 pandemic.

However, it noted that there was a 21 per cent net increase in performance, which it attributed primarily to the 166 per cent rise in surplus posted by the Nigerian Petroleum Development Company (NPDC), one of its subsidiaries. The corporation noted that this was a reflection of the on-going global rise in market fundamentals for the second consecutive month, explaining that in addition, the Pipelines and Products Marketing Company (PPMC) continued to enjoy a drop in average product landing cost as profit increased by 22 per cent.

According to the corporation, takings from the Nigerian Gas Company (NGC), Nigerian Gas Marketing Company (NGMC), and Duke Oil Incorporated grew by 16 per cent, one per cent, and 127 per cent, respectively.
Besides NPDC, PPMC, NGC, and NGMC, which it said recorded relatively commendable performances, all other SBUs, NNPC said, recorded further loss positions with the headquarters’ deficit increasing by 71 per cent compared to May, due to increased terminal benefits made to retired staff that reduced the group surplus for the month.

Still following the trend in the last couple of months, there was no sale of special products in the month, but 767.42 million litres of petrol were supplied into the country through a Direct Sale Direct Purchase (DSDP) arrangement.
The combined value of output by the three refineries (at import parity price) for June 2020 amounted to just about N0.04 billion, with no associated freight cost since there was no production, but operational expenses amounted to N10.27 billion, resulting in an operating deficit of N10.23 billion by the refineries for the month.

While the average crude oil price for the month further increased by $10.04 or 34.7 per cent month-on-month, NNPC projected that the world economic growth will remain unchanged in 2020 at 3.4 per cent.

The corporation said it expected the global economy to grow by 4.1 per cent in 2021 based on the assumptions that COVID-19 will largely be contained on the global level by the fourth quarter of 2020. NNPC said it also expected that no further significant issues will derail economic developments. It stressed that national gas production in June decreased by 0.26 per cent at 231.28BCF compared to output in May 2020, translating to an average daily production of 7,709.38mmscfd.

Meanwhile, Minister of Finance, Dr (Mrs) Zainab Ahmed has been named the African Finance Minister of the Year.
In choosing Zainab as the finance minister of the year, the organisers noted that despite difficult circumstances she was able to push through a set of difficult reforms as well as successfully engaging international partners to help the country navigate an extremely challenging economic environment.

Similarly, the Managing Director of Access Bank, Herbert Wigwe was named African Banker of the year.
Nigeria’s Bank of Industry was awarded the Small and Medium Enterprises Bank of the Year.
Ecobank also won the Innovation in Banking Award.

The awards, were held virtually held under the high patronage of the African Development Bank.
It was sponsored by the African Guarantee Fund as Platinum Sponsor, the Bank of Industry as Gold Sponsor and Moza Banco as Associate Sponsor.

The organisers said the awards were pushed back to August to coincide with the African Development Bank Annual Meetings which took place this week, with the election of the new president of the bank expected tomorrow.

Following on from what was seen as a lack of inclusion last year, the organisers put an emphasis to reward institutions that ensured that women and financial inclusion at the forefront of their agenda.
The awards are considered the Oscars of the African banking community and given the impartial selection and judging process are the most respected in the field.

The Central Bank Governor of the year went to Caroline Abel, from the Seychelles.
African Banker Icon was given to Vivien Shobo, who was the CEO of ratings and advisory firm, Agusto & Co up until last December. She was recognised for playing an instrumental role in developing Nigeria’s credit markets and also for helping grow a truly world class organisation that is competing against much better resourced international players.
Tunisian pioneer Ahmed Abdelkefi won the Lifetime Achievement Award.