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Nigeria loses $41.9 billion to crude oil theft in 10 years

Nigeria lost $41.9 billion to crude oil and refined products theft between 2009 and 2019, a report obtained by Nairametrics disclosed.  

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crude oil theft

Nigeria lost $41.9 billion to crude oil and refined products theft between 2009 and 2019, a report obtained by Nairametrics from Nigeria Extractive Industries Initiative disclosed 

Details

According to the policy brief of the agency, which was released on Wednesday, the nation lost $38.5 billion on crude theft alone$1.56 billion on domestic crude and another $1.8 billion on refined petroleum products 

  • In 10 years, Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products valued at $40.06 billion and $1.84 billion respectively.
  • Cumulatively, total crude and product losses for the period amount to $41.9 billion. This is the size of Nigeria’s entire foreign reserves.  
  • On average, Nigeria lost $11.47 million daily, $349 million monthly, and $4.2 billion dollars every year for the past 10 years.
  • Pipeline repairs, a direct consequence of vandalism, is a major index of losses in the oil industry.
  • Between 2014-2016, total expenditure on pipeline repairs was N363 billion. This is excluded from the data in this paper as only losses of crude and products are considered. 

Impact of menace

In the face of current dwindling revenues, paying priority attention to curb oil theft in the country’s oil and gas industry had become both necessary and urgent to expand revenue generation. 

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Proffered solution

NEITI urged the government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities and other creative strategies to combat the growing menace of theft of Nigeria’s crude oil and refined petroleum products. 

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It disclosed that Nigeria lost an average of $11 million daily, which translated to $349 million in a month and about $4.2 billion annually to crude and product losses arising from stealing, process lapses and pipeline vandalism. 

“While figures from government put the loss at between 150,000 and 250,000 barrels per day, data from private studies estimated the figure to be between 200,000 and 400,000bpd.” 

What it means

This implies that Nigeria may be losing up to a fifth of its daily crude oil production to oil thieves and pipeline vandals. 

On comparative analysis of the size and implication of the losses to the country’s current dwindling revenue profile, NEITI renewed its appeal to the government to curb oil theft to reduce budget deficits and external borrowing.  

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The transparency agency stated that the value of crude oil and allied products so far lost was equal to the size of Nigeria’s entire foreign reserves. 

It stated“Stemming this hemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs. What the country lost in 20 months in fiscal terms was enough to finance the proposed budget deficit for 2020. 

“In terms of volume, 138.000 barrels of crude oil was lost every day for the past 10 years, representing seven per cent of average production of two million bpd. Nigeria lost more than 505 million barrels of crude oil and 4.2 billion litres of petroleum products between 2009 and 2018. What is stolen, spilled or shut-in represents lost revenue, which ultimately translates to services that government cannot provide for citizens already in dire need of critical public goods.” 

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Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Economy & Politics

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.

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Ngozi Okonjo Iweala, World Bank, Davos, World Economic Forum, WTO accepts nomination of Okonjo-Iweala as DG despite opposition from Egypt,WTO:  Happy to be in final rounds of DG Campaign- Okonjo Iweala

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.

Okonjo-Iweala stated;

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  • “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

Okonjo-Iweala said;

  • “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.”

Flash back:

  • 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.

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Economy & Politics

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.

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Sanwo-Olu presents N1.1 trillion 2020 budget

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).”

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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.

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This month, the Lagos State Government projected a monthly target of N60.318 billion Internally Generated Revenue (IGR) for the 2021 fiscal year.

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Economy & Politics

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.

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Lagos State doesn’t have money – Commissioner for Economic Planning and Budget Samuel Egube 

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.

This was disclosed by the Lagos State Commissioner for Budget and Economic Planning, Sam Egube, in a briefing with newsmen, on Thursday.
He stated that:
“The projects would be aimed at massive infrastructure renewal and development. While we were recovering from the pandemic, the EndSARS protests and the aftermath of its hijack took us back economically and socially.”
The Commissioner added that the state wanted to rise above the challenges that had been a roadblock to development in 2020, as the state would allocate to its expenditure plans through its projected IGR of N971 billion and debt finance of N192 billion for its budget servicing.
The Commissioner said N24 billion would be used to develop the Lagos Smart City project which would see the Lagos Government build 3,000KM of internet fiber network and 2,000 CCTV across the state, while healthcare is 9% of budget spending at N106 billion.

What you should know 

  • Nairametrics reported last month that the Lagos State House of Assembly approved the sum of N1.163 trillion, as the total budgetary allocation for 2021.
  • This month, the Lagos State Government projected a monthly target of N60.318 billion Internally Generated Revenue (IGR) for the 2021 fiscal year.

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