Following last week’s reports that Nigeria is asking international oil companies to pay up about $62 billion accrued interests from years of non-compliance to a 1993 contract law, the country’s Justice Minister, Abubakar Malami, disclosed over the weekend that negotiations have begun towards a possible resolution.
Nairametrics reported that the likes of ExxonMobil Corp, Chevron Corp, Total SA, Royal Dutch Shell, and Eni SpA were asked to pay up $62 billion which they had allegedly failed to pay overtime. These companies are responsible for pumping most of the country’s crude oil output.
In 1993, when Nigeria entered into the contracts with these IOCs to develop the country’s oil fields, the revenue sharing model was set at 20% for the government and 80% for the companies. However, a key clause specified that Nigeria would receive more share from oil revenues generated by them should global oil prices ever exceed $20 per barrel.
Between then and now, oil prices have risen and fallen and currently stands above $20 per barrel. Yet, Nigeria claims the oil companies have persistently refused to adhere to the specifics of the contract law.
Last year, the Supreme Court ruled in favour of Nigeria’s demand for more share from oil proceeds. However, the oil companies kicked against the demand with counter lawsuits, arguing that the government does not have the right to ask them to pay for accrued interests. They also argued that they “weren’t party to the 2018 case, they shouldn’t be subject to the ruling.”
It appears IOCs’ protests worked, seeing as Nigeria is now willing to negotiate. However, as the Justice Minister clarified, the outcome of these negotiations is yet to be seen.
“We have opened up a process of engagement between the parties. Whether those discussions will eventually translate to settlement, whether it will translate to opening up of a full-blown negotiation process, is what we wait to see.”
Nigeria is desperate to raise revenue from anywhere possible in order to facilitate economic activities in the country. One of such attempts is to demand $62 billion from IOCs. Now, while the government obviously has the right to make such demand based on the contract, it is also making sure to do it wisely in order not to scare away foreign investors.
Okonjo-Iweala speaks on Twitter’s suspension of Donald Trump
Dr Ngozi Okonjo-Iweala has given her opinion on Twitter’s suspension of US President, Donald Trump.
Twitter board member and candidate for the DG of the WTO, Ngozi Okonjo-Iweala, has said Twitter has rules under which it operates and CEO Jack Dorsey’s statement contains all that needs to be known concerning the suspension of US President, Donald Trump from its platform.
Okonjo-Iweala disclosed this in an interview with Arise TV on Friday evening.
- “Twitter tries to help the public conversation in the world and gives people a means to engage on important issues,” she said.
On the decision to censor Donald Trump
She said the Board agreed as a team to have one voice on the decision to suspend Donald Trump from the service and that CEO Jack Dorsey gave all that needed to be known.
- “Being on the Twitter board, I have to respect our rules for communications on what is happening. I have to be very honest that we as a board agreed that we have a team that will deal with this, to make sure that we have one voice. But, I can tell you that if you want to know why the decisions were taken, please look at the statement by the CEO, Jack Dorsey, I think it tells you all you want to know.
- “Twitter is an organization that has rules under which it operates, and if you read what it puts out, you will see that things are being implemented according to the rules.
On welcoming rules and regulations for the social media giant
- “Let’s wait and see, I don’t want to pre-judge or comment on anything. I don’t want to go beyond what I am willing to say, but let’s wait and see. These are very difficult times in the world. We all saw what happened in the United States. We have to be very careful. We would see what the future would be for the tech companies.”
- Nairametrics reported that social media network, Twitter, permanently suspended U.S President, Donald Trump, citing the risk of further incitement of violence.
- Jack Dorsey, the CEO and founder of Twitter, said that the decision to ban Donald Trump from the social network was the right decision, but one that sets a dangerous precedent.
2021 budget: Lagos to fund deficit of N192.49 billion with internal, external loans
Lagos to fund 2021 budget deficit of N192.494 billion by a combination of internal and external loans.
The Lagos state government has disclosed that it will fund its 2021 budget deficit of N192.494 billion by a combination of internal and external loans.
This was disclosed by the State’s Commissioner for Economic Planning and Budget, Samuel Egube, while presenting the state’s budget for 2021 at a media round table session.
According to him, the total revenue estimate is N971.02 billion, consisting of internal generated revenue (IGR) of N723.81 billion; capital receipts (N71.81 billion); and federal transfer of N175.40 billion.
He said, “The Lagos 2021 budget is made up of N702.93 billion for capital expenditure and N460.49 billion for recurrent expenditure, implying 60:40 capital to recurrent ratio against 2020 budget which was at 55:45 capital to recurrent ratio.
“The breakdown of Lagos recurrent expenditure shows that total personnel cost (N168.72 billion); total overhead costs (N260.07 billion); and debt charges (N31.87 billion).”
Also at the event, Commissioner for Finance, Rabiu Onalapo, stated that the state will local debt instrument through domestic bond issuance to fund the deficit in its 2021 budget.
He said, “The debts are totally tied to capital projects adding that the state’s 19.8% debt to revenue ratio is projected to rise to 22% in 2021.
“This remains below the World Bank and federal government’s benchmarks of 40% and 30% respectively.”
Key Highlights and Projects under the Budget
- Roads and other infrastructure: A provision of N166.579 billion is provided for the construction and maintenance of roads and other infrastructure within the state.
- Traffic Management/Transportation: A total of N93.745 billion was budgeted under the transportation family for Blue and Red rail lines, Junction improvement all around the state, Completion of trailer parks in the state and development of quality bus corridors amongst others.
- Education: The sum of N146.935 billion was budgeted for the education sector. The figure is N10.835 billion higher than the 2020 provision of N136.100 billion.
- Science and Technology: Sum of N23.50 billion is provided for the building and upgrading of IT infrastructure statewide. This consists of N17.131 billion for the Smart City Project. The balance of N6.371 billion is earmarked for the e-GIS Land automation system, single billing system and ease of tax payment/levels among others.
What you should know
Babajide Sanwo-Olu, governor of Lagos, signed the 2021 Appropriation Bill into law on December 31, 2020.
This month, the Lagos State Government projected a monthly target of N60.318 billion Internally Generated Revenue (IGR) for the 2021 fiscal year.
Lagos to spend 60% of N1.16 trillion budget on capital projects
60% of Lagos State’s 2021 budget will go into capital projects, says the state’s Commissioner for Budget and Economic Planning.
Lagos State announced that it will increase infrastructure spending in 2021 to 60% of its budget, in a bid to repair damages inflicted by hoodlums in October following the EndSARS protests.
What you should know