Data obtained from the National Bureau of Statistics (NBS) has shown that the nine (9) Oil Producing States in Nigeria shared a total N302.8 billion from the federation account through the 13% derivation formula.
According to the Federal Account Allocation Committee (FAAC) reports obtained from the bureau, the 13% derivation allocation to the oil-producing states hits 7-months low in July 2019.
Specifically, the 9 oil-producing states shared N45.5 billion in January 2019, while the sum of N38.6 billion was shared in July. This means the 13% derivation dropped by 17% within the period.
Number Breakdown: Specifically, Nigerian Oil producing states include Delta, Akwa-Ibom, Bayelsa, Rivers, Edo, Ondo, Imo, Abia and Lagos. Note that since 2016, Lagos state has been officially declared an oil-producing state in Nigeria, however, the state still earns low from the derivation fund.
- On the list, Delta State ranks first, with a total of N94.4 billion, which represents about 31% of the total 13% derivation shared so far in 2019.
- Akwa Ibom closely followed Delta having received a total of N70.8 billion as 13% derivation revenue shared. This means the state received 23% of the total disbursement during the period.
- Other states include Bayelsa (N56.2 billion), Rivers (N54.1 billion), Edo (N10.5 billion), Ondo (N7.68 billion), Imo (N5.02 billion), Abia (N3.9 billion) and Lagos (N3.8 million).
- A quick check into the Central Bank of Nigeria 2018 annual report shows that all the states received a total of N640.0 billion as the oil-producing states.
- This means, in the last 19 months, the oil-producing states shared N942 billion altogether.
Some Concerns: Despite the 13% derivation received, most of the 9 states (if not all) are among the most highly indebted states in Nigeria. For instance, in an earlier publication on Nairametrics, it was disclosed that Lagos state leads the debtors’ club with a total debt of N980 billion.
- States among the oil-producing states with the biggest debt profile as at March 2019 include Rivers (N249 billion), Akwa Ibom (N213 billion), Edo (N171.2 billion), Bayelsa (N150 billion).
- Despite the huge sum notwithstanding, the Niger Delta region is still suffering from massive infrastructure decay, environmental degradation, among many others.
- On the other hand, the 13% derivation fund has been a subject of controversy between the oil-producing communities and various state governments, with the communities asking the Federal Government to stop paying the money directly to the communities and not into the coffers of the state.
- Recently, the National Chairman of Host Communities of Nigeria Producing Oil and Gas (HOSCON), Mr. Mike Emuh, disclosed that Federal Government is currently working with oil-producing communities in the country to review the template for the payments of the 13% derivation of revenue generated from oil and gas directly to host communities.
Emuh reportedly disclosed: “President Buhari also gave us approval for pipeline surveillance, and gave approval for the review of 13% derivation template, based on the amended 1999 Constitution of Nigeria, which states that the money is the right of the host communities that produce oil and gas, and this is being extended to other minerals including solid minerals. As we are talking now, we are working on the template.”
A new call: Meanwhile, there has been renewed call by the oil-producing states for the federal government to review the 13% derivation disbursement. Essentially, the states’ government alleged that there has been an underpayment in the true value of entitled 13% derivation fund.
While the disbursement may eventually increase going by the recent development, the state governments will have to do more to develop the oil-producing local communities as development at most of these localities is at low ebb.
TikTok’s owner seeks $60 billion valuation in US deal as Oracle, Walmart take stakes
Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global.
TikTok’s parent company, ByteDance is seeking a valuation of $60 billion for its video-sharing app, as Oracle Corp and Walmart Inc take stakes in the technology firm’s US operations to address the security concerns of the Trump administration.
According to a report from Bloomberg, Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global under an agreement that has gotten the approval of President Donald Trump.
The duo US firms would be paying a combined amount of $12 billion for their stakes if they reach an agreement with TikTok for the asking price of $60 billion.
The final valuation had not been set as the parties worked out the equity and measures for data security.
It was also stated that China is yet to approve the deal, although regulators are said to have expressed support for any transaction in which BtyeDance still maintains control of its valuable recommendation algorithms and other proprietary technology.
It would be recalled that President Donald Trump, had threatened to ban the ByteDance owned TikTok, over national security concerns, but which some analysts see as part of the row between US and China. This pressured ByteDance into the deal as they looked to avoid the ban by the US government.
The US officials had expressed concern that the personal data of as many as 100 million Americans that use the app were being passed on to the Chinese government.
ByteDance turned down the proposal of a full buyout from Microsoft Corp but rather agreed to Oracle’s offer in which the Chinese parent company will still maintain a majority stake in the technology firm.
Trump told reporters on Saturday, ‘’I approve the deal in concept. If they get it done, that’s great. If they don’t, that’s ok too.’’
Trump’s new stance appears to conflict with his earlier executive order for China’s ByteDance to divest from the video-sharing app’s operations in the United States.
ByteDance is in a race to avoid a ban on TikTok after the US Commerce Department said on Friday that it would block new downloads and updates to the app from Sunday.
According to market researcher, CB Insights, ByteDance is the most valued private start-up in the world at $140 billion. Under the proposed deal, ByteDance may end up owning as much as 80% of TikTok Global, which include the app’s operations in the US and the rest of the world excluding China. Venture firms like Sequoia Capital and General Atlantic may also acquire equity in the new business.
Lagos to shut Ojota’s axis of main carriage way of Ikorodu road for 3 months
The Commissioner advised all motorists to utilize alternative routes suggested during the stipulated time.
The Lagos State Government has announced the shutdown of the entire length of the main carriageway of Ikorodu Road from Ojota interchange to Ojota Second Pedestrian Bridge from Monday, September 21, 2020, for a duration of 3 months.
This is development is part of the next phase ongoing rehabilitation work on Ikorodu Road which is set to commence from the Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos.
While making the disclosure, the Lagos State Commissioner for Transportation, Dr Frederick Oladeinde, advised all motorists to utilize alternative routes suggested during the stipulated time for the repairs following the closure of the entire length of the main carriageway for reconstruction work.
Oladeinde in his statement said, “Vehicles coming from Maryland will be diverted at Odoyalaro into the Service lane and the BRT Corridor to link back the main carriageway at Ketu bus stop and Demurin junction respectively.’’
The commissioner gave an assurance that the Lagos State Traffic Management Authority (LASTMA) and other law enforcement agencies will be available to direct traffic for free vehicular movement during the entire period of construction work.
While soliciting for the cooperation and support of residents and motorists that ply the axis, the Commissioner stated that the project is aimed at finding a lasting solution to the ever-busy road as well as to achieve the present administration’s traffic management and transportation policy objectives.
The Lagos State Government is set to commence the next phase of repairs from Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos, from Monday 21st of September, 2020 for a duration of three months.@jidesanwoolu @dr_oladeinde#ForAGreaterLagos pic.twitter.com/8mzYGauqpi
— The Lagos State Govt (@followlasg) September 18, 2020
Petrol supply drops by over 23% due to decline in consumption
Consumption of petroleum products to decline to 27.2 billion litres in 2020.
The total volume of petrol supplied in Nigeria declined by 23.88% in July, when it fell from 1.34 billion litres in June 2020 to 1.02 billion litres.
This was disclosed by the Nigerian National Petroleum Corporation (NNPC), in its monthly performance data for July.
According to the report, the 1.02 billion litres translated to 32.95 million litres per day, down from 44.62 million litres per day in June, when 1.34 billion litres were supplied.
The performance data also stated that 0.95 billion litres (30.67 million litres/day) were supplied in May, and 0.94 billion litres (31.37 million litres/day) in April.
In March and February, the volume of petrol supplied stood at 1.73 billion (59.72 million litres/day), up from 1.20 billion litres in January (38.68 million litres/day)
It stated, “The corporation has continued to diligently monitor the daily stock of Premium Motor Spirit, to achieve smooth distribution of petroleum products and zero fuel queue across the nation.”
Agusto projects further decline
Experts in Agusto & Co, in a report, have noted that the impact of the COVID-19 pandemic on economic activities in the country resulted in a decline in the consumption of petroleum products.
The report said, “Agusto & Co. expects the consumption of petroleum products, particularly PMS and Aviation Turbine Kerosene, to decline to 27.2 billion litres in 2020, given the severely restricted travel and transportation activities during the second and third quarters of the year.
“This is expected to translate to a decline in revenue to N4.3tn in 2020.”
NNPC has, until recently, been the sole importer of petrol into the country for more than two years, after private oil marketers stopped importing the commodity, due to crude price fluctuations, among other issues.
The refineries, located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day, but have continued to operate far below the installed capacity.