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CBN advises state governments to adopt Treasury Single Account

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The Central Bank of Nigeria (CBN)on Wednesday in Abuja advised state governments to adopt the Federal Government’s system of using a single account for all its revenue deposits.

Mr Kure Abubakar, Head, Client Services at the CBN, gave the advise while presenting a paper on “Understanding Treasury Single Account (TSA)’’at the close of a two day workshop on the Fiscal Responsibility Act.

The workshop, which began on Tuesday, was organised for government revenue generating Ministries, Departments and Agencies (MDAs).

He said the TSA, if adopted by states, could help them to get maximum benefits.

Abubakar, while answering questions from participants urged them to comply with the Federal Government’s directive and adhere to the Sept. 15 deadline to avoid sanctions.

On the sidelines of the workshop, he told newsmen that some MDAs had complied and that if others failed to comply, they stood the risk of being sanctioned by the president.

“There are sanctions and the directive says all erring MDAs will be penalised and that is enough because that is the type of political will we need.

“If you don’t comply the consequence is yours. I cannot say specific penalties but I believe the president has the authority to penalise either the Managing Director or Chief Executive of such MDA.

“So those that refuse to comply are on their own or they should show reason to the government why they cannot comply’’, he said.

He also said that MDAs that require a waiver could do so by making a presentation to the president stating why such should be granted.
“The presidential directive says that you can make a presentation to the president for a waiver if necessary.

“If the justifications are quite good Mr President in his own wisdom can grant the waiver but for now all the MDAs should work towards achieving the deadline of Sept. 15,’’ he said.

Mr Khurima Nthara, World Bank Lead Economist and Programme Leader for Nigeria, while commending the Federal Government on the TSA implementation, said that it had been tested in other countries and it had been effective.

He said the concept would help government to reduce borrowing because it would enable it have a more consolidated view of the cash that it has at hand.

“I think the TSA has got a very simple concept. You want the government to have a good view of all the cash that it has in one single account.

“You don’t want the situation that one department or ministry has funds lying idle in one commercial bank when another is in need of those cash and the government has to borrow to make sure that the other ministry or department has access to funds.

“So the concept of the TSA is that all funds should be consolidated so that whichever agency is in need of cash at the moment should have access to those funds,’’ he said.

One of the participants, Mr Ibeh Benneth told NAN that the workshop had helped him to understand how the Fiscal Responsibility Act works and how to go about the TSA remittance.

He further said that the workshop gave him a better understanding of the importance of the TSA to the nation and that it would ensure transparency in governance.

“I know I have been hearing of TSA but confronting it very closely today was good.

“We have discussed it extensively in our organisation but we did not know how to go about it.

“But now we have an idea and even though we had previously gotten an exemption letter, it is obvious that letter will not work, we have to start the process afresh.

“We saw the TSA as a directive that government just wants to be seen to be doing something but now I know that it is with good intentions,’’ he said.

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BUSINESS

Nigeria loses N101bn worth of oil, says OPEC

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Nigeria’s crude oil production plunged by 2.3 million barrels in July 2022 when compared to what the country produced in the preceding month of June, data from the Organisation of Petroleum Exporting Countries showed on Thursday.

In its latest Monthly Oil Market Report for August 2022, OPEC stated that crude oil production figures based on direct communication indicated that Nigeria’s output dropped by an average of 74,000 barrels per day in July.

This implies that for the 31 days in July, the country lost about 2.3 million barrels of crude oil. The organisation further stated that the average cost of Brent crude, the global benchmark for oil, during the month under review was $105.12/barrel.

By losing 2.3 million barrels in July this year, it means Nigeria’s oil earnings fell by about $241.1m or N101.13bn (at the official exchange rate of N419.37/$) in the month under review.

Data from OPEC showed that Nigeria’s oil production in June 2022 was 1.158 million barrels per day, but this dropped to 1.084 million barrels per day in July.

The country had produced 1.024 million barrels per day in May this year, according to figures released by OPEC on Thursday.

The Federal Government, operators and experts have consistently fingered crude oil theft in the Niger Delta as the major reason for Nigeria’s poor output and its continued failure to meet the monthly oil production quota approved by OPEC.

The Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, blamed the challenges in the oil sector on the high level of insecurity across the country.

This, he said, had continued to discourage investors in the sector, leading to lower production of crude oil and lower earnings for Nigeria despite the increased cost of crude.

He said, “Investors in the oil and gas sector continue to lament the challenges posed by insecurity, oil theft, unstable policies and inappropriate fiscal regimes.

“The downstream sector has continued to be weighed down by the pricing regimes and the regulatory environments which have continued to dim the growth prospects in the sector.”

Meanwhile OPEC stated that crude oil prices dipped in July, as against their costs in June, adding that crude in OPEC Reference Basket fell by $9.17 or 7.8 per cent month-on-month in July to average $108.55/barrel.

“Oil futures prices remained highly volatile in July, amid a sharp drop in liquidity. The ICE Brent front month declined $12.38 or 10.5 per cent in July to average $105.12/barrel and NYMEX WTI declined by $14.96 or 13.1 per cent to average $99.38/barrel,” the global oil cartel stated.

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BUSINESS

Elon Musk says Twitter hiding key witnesses in bot battle

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Elon Musk got another $7 billion from friends and investors to buy Twitter

Elon Musk is accusing Twitter Inc. of hiding key witnesses in their legal battle over whether he must consummate a $44 billion buyout of the company, according to people familiar with the allegations.

Musk contends the social media company isn’t producing the names of employees specifically responsible for evaluating how much of Twitter’s customer base is made up of spam and robot accounts, said the people, who asked not to be identified because they weren’t authorized to speak publicly about the matter.

Musk’s lawyers have asked the judge in the case to force Twitter to identify the workers so the defense can get their records and question them, the people said.

A letter asking Delaware Chancery Court Judge Kathaleen St. J. McCormick to compel Twitter to hand over the names was filed Tuesday under seal. Under the court’s rules, Twitter’s attorneys have five business days to decide what should be redacted from the filing as proprietary information.

A Twitter spokesman declined to comment on the filing.

Tesla Share Sale
The letter comes as the Tesla Inc. co-founder said Tuesday he is selling $6.9 billion of Tesla shares to avoid a sudden sale in the event he is forced to go ahead with the deal to acquire Twitter. That has prompted some analysts to predict the billionaire may settle the case.

So far Twitter has handed over the names of “records custodians,” who aren’t as familiar with the data at issue, the people said. Musk wants McCormick to force Twitter to come up with the names of the employees charged with monitoring those accounts, they said.

Both sides have issued a torrent of subpoenas to banks, investors and lawyers involved in the teetering transaction as they seek ammunition for an Oct. 17 trial.

“It’s another salvo in the discovery wars that are common in this kind of litigation,” said Carl Tobias, a University of Richmond law professor who specializes in securities and merger and acquisition law. “Both sides are jockeying for position by targeting different information.”

War of the Bots

Twitter’s lawyers say they’ll need only four days in court to prove Musk is using questions about spam and bot accounts as a pretext to walk away from the deal. The company said it has turned over all its information about those accounts and that it intends to make Musk pay the $54.20 per share he originally agreed to.

Musk counters in court filings that Twitter’s handover of the that material hasn’t been robust and that the company has failed to produce evidence that spam bots account for fewer than 5% of its active users, as it has said in regulatory filings. He argues this gives him a legitimate basis for canceling the buyout.

He alleges Twitter’s disclosures show that the actual number of monetizable daily active users, or mDAU as the industry calls it, is 65 million less than the 238 million Twitter has claimed. He says Twitter also misrepresents how many of those users view advertising, the company’s main source of revenue. By his estimate, fewer than 16 million users see the majority of ads and should be counted as monetizable.

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Consumer prices rose 8.5% in July, less than expected as inflation pressures ease a bit

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Prices that consumers pay for a variety of goods and services rose 8.5% in July from a year ago, a slowing pace from the previous month due largely to a drop in gasoline prices.

On a monthly basis, prices were flat as energy prices broadly declined 4.6% and gasoline fell 7.7%. That offset a 1.1% monthly gain in food prices and a 0.5% increase in shelter costs.

Economists surveyed by Dow Jones were expecting headline CPI to increase 8.7% on an annual basis and 0.2% monthly.

Excluding volatile food and energy prices, so-called core CPI rose 5.9% annually and 0.3% monthly, compared with respective estimates of 6.1% and 0.5%.

Even with the lower-than-expected numbers, inflation pressures remained strong.

The jump in the food index put the 12-month increase to 10.9%, the fastest pace since May 1979. Butter is up 26.4% over the past year, eggs have surged 38% and coffee is up more than 20%.

Despite the monthly drop in the energy index, electricity prices rose 1.6% and were up 15.2% from a year ago. The energy index rose 32.9% from a year ago.

Used vehicle prices posted a 0.4% monthly decline, while apparel prices also fell, easing 0.1%, and transportation services were off 0.5% as airline fares fell 1.8% for the month and 7.8% from a year ago.

Markets reacted positively to the report, with futures tied to the Dow Jones Industrial Average up more than 400 points and government bond yields down sharply.

“Things are moving in the right direction,” said Aneta Markowska, chief economist at Jefferies. “This is the most encouraging report we’ve had in quite some time.”

The report was good news for workers, who saw a 0.5% monthly increase in real wages. Inflation-adjusted average hourly earnings were still down 3% from a year ago.

Shelter costs, which make up about one-third of the CPI weighting, continued to rise and are up 5.7% over the past 12 months.

The numbers indicate that inflation pressures are easing somewhat but still remain near their highest levels since the early 1980s.

Clogged supply chains, outsized demand for goods over services, and trillions of dollars in pandemic-related fiscal and monetary stimulus have combined to create an environment of high prices and slow economic growth that has bedeviled policymakers.

The July drop in gas prices has provided some hope after prices at the pump rose past $5 a gallon. But gasoline was still up 44% from a year ago and fuel oil increased 75.6% on an annual basis, despite an 11% decline in July.

Federal Reserve officials are using a recipe of interest rate increases and related monetary policy tightening in hopes of beating back inflation numbers running well ahead of their 2% long-run target. The central bank has hiked benchmark borrowing rates by 2.25 percentage points so far in 2022, and officials have provided strong indications that more increases are coming.

There was some good news earlier this week when a New York Fed survey indicated that consumers have pared back inflation expectations for the future. But for now, the soaring cost of living remains a problem.

While inflation has been accelerating, gross domestic product declined for the first two quarters of 2022. The combination of slow growth and rising prices is associated with stagflation, while the two straight quarters of negative GDP meets a widely held definition of recession.

Wednesday’s inflation numbers could take some heat off the Fed.

Recent commentary from policymakers has pointed toward a third consecutive 0.75 percentage point interest rate hike at the September meeting. Following the CPI report, market pricing reversed, with traders now anticipating a better chance of a lesser 0.5 percentage point move.

“At the very least, this report takes the pressure off the Fed at the next meeting,” Markowska said. “They’ve been saying they’re ready to deliver a 75 basis point hike if they have to. I don’t think they have to anymore.”

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