E-Financial
Expert causions Nigeria on Adherence to its Oil Cap
Lukman Otunuga, senior research analyst at FXTM, an award-winning international forex broker has described Nigeria’s 2020 revenue targets as highly optimistic if the country could maintain its projected oil production cap of 2.8 million barrels per day.
Otunuga described some of the revenue targets set by the executive arm of government as ‘quite ambitious’, while noting also that the revenue targets of the budget would expose the country to external risks.
He made these remarks while speaking with journalists in Lagos, referring to the last time Nigeria consistently produced more than two million barrels of oil per day was 2013, hence setting the budget target at 2.18 million barrels per day was ‘overly optimistic’.
In his words: “When we look at the 2020 budget, looking at the numbers, government expenditure is going to be N10.33 trillion, revenue target N8.155 trillion, that leaves a deficit of N2.18 trillion, already, that alone, Nigeria will have to finance that debt domestically or externally — that’s the first weight on the economy,” he said.
“Secondly, I feel the major talking point is oil because if you look at the numbers, Nigeria is projecting $57 oil in 2020 average and to pump 2.18million barrels a day, if you look at the oil market, you will know that it is very difficult for oil to push high due to demands side dynamics.
“Concerns of slowing global growth, rise in production from US shale, rise in crude oil inventories in the United States, you know when you put all of these together, 57 is quite ambitious for oil.
“At the same time, if you look at Nigeria’s oil production, in August, Nigeria produced about 1.86 million barrels roughly, but Nigeria pledged OPEC to keep oil production down around roughly 1.7 million barrels per day and if you look deeper, the last time Nigeria was able to produce over two million barrels a day according to OPEC was back in 2013.
“We haven’t seen over two million barrels a day for almost six years, so how are we going to get that amount in 2020. So when you look at the figures, oil revenue accounts for N2.6 trillion, already if you are unable to meet the revenue, it is going to impact the implementation of the budget.”
Otunuga spoke passionately about the diversification of the economy. This, according to him, is one sure way the government can meet up with it buoyant economic pursuit.
He said, “On diversification, it is so bad that even IMF is telling Nigeria that they need to do more with it; the fact that 90 percent of foreign exchange is still from oil and 70 percent of government’s expenditure is still from oil.
“So where is the diversification? I think when we start seeing less foreign exchange earnings coming from oil and government being less reliant on oil, then we can say diversification is kicking in.
“The budget itself on paper has the ability to elevate Nigeria’s economy but meeting those spending targets is the question. If Nigeria is able to meet the targets, the outlook is positive.
“But let me say the repeat of 2019 budget, where even recent reports have shown that government’s spending target is only about 58 percent, it is still going to be the same; we have a budget and it is not reflecting on the economy.”
The Senior Research Analyst at FXTM however, extolled the Executive and the legislative arms of Government for seeking to reset the budget cycle to run from January to December 2020, away from the irregular budget cycles of the past.
Socio-Economic Rights and Accountability Project (SERAP) has called on the Central Bank of Nigeria (CBN) to immediately revoke its recent increase in Automated Teller Machine (ATM) transaction fees, describing the move as “Patently unlawful, unfair, unreasonable, and unjust.”
In an open letter addressed to Olayemi Cardoso, governor, CBN, and dated February 15, 2025, SERAP warned that the fee hike would worsen economic hardship for millions of Nigerians, particularly those at the lower end of the financial spectrum.
The rights group gave the apex bank a 48-hour deadline to reverse the policy or face legal action.
The CBN’s new directive mandated that ATM withdrawals at off-site locations, such as shopping malls, airports, and standalone cash points, will attract an N100 charge per N20,000 withdrawal.
Additionally, a surcharge of up to N500 may apply for transactions conducted at certain locations. The new fees are set to take effect from March 1, 2025.
In its letter, signed by Kolawole Oluwadare, deputy director, SRERAP criticized the policy, arguing that it would disproportionately affect struggling Nigerians while benefiting commercial banks.
“The manifestly unfair increase in ATM transaction fees will hit hardest those at the bottom of the economy and exacerbate the growing poverty in the country,” SERAP stated.
The organization further argued that financial institutions should bear the cost of banking operations, rather than shifting the burden onto customers, particularly those with limited financial means.
SERAP accused the CBN of prioritizing the interests of banks over the welfare of ordinary Nigerians, many of whom already struggle with the high cost of living.
The group pointed out that banks continue to report record-breaking profits while imposing excessive charges on customers.
“CBN policies should not be skewed against poor Nigerians and heavily in favour of banks that continue to declare trillions of naira in profits, mostly at the expense of their customers.
“The increase in ATM transaction fees will inflict misery on Nigerians and contribute to human rights abuses,” the letter read.
SERAP also noted that the policy contradicts President Bola Tinubu’s commitment to tackling poverty in Nigeria.
The rights group argued that the CBN’s action violates multiple legal provisions, including the Nigerian Constitution, the CBN Act, and the Federal Competition and Consumer Protection Act.
SERAP highlighted specific sections of these laws that prohibit unfair business practices and protect consumers from exploitative charges.
According to SERAP, the increase in ATM fees discriminates against low-income Nigerians who may struggle to afford the higher fees, creates a two-tiered financial system that favours the wealthy, contradicts the CBN’s stated mission to promote national economic well-being, and violates international human rights obligations under the United Nations Guiding Principles on Business and Human Rights,
“The CBN has responsibilities under the UNGPs to take effective steps to avoid or mitigate potential human rights harm and to consider ending any charges or transaction fees where severe negative human rights consequences cannot be avoided or mitigated,” SERAP asserted.
“We would be grateful if the recommended measures are taken within 48 hours of the receipt and/or publication of this letter.
“If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest,” the letter warned.
Federal government has engaged the World Bank for a fresh $300m loan to strengthen Nigeria’s health security infrastructure.
Information obtained from the World Bank showed that the loan, which is under consideration, will be implemented by the Nigeria Centre for Disease Control (NCDC) with the Federal Ministry of Finance acting as borrower on behalf of the Federal Government.
According to information on the World Bank website, the loan project is expected to “increase regional collaboration and health system capacities to prevent, detect, and respond to health emergencies in the Federal Republic of Nigeria.”
The project is currently in the pipeline stage, with the disclosure date scheduled for February 6, 2025.
The World Bank board is expected to give its approval on July 30, 2025, following necessary assessments. The appraisal is set for April 14, 2025, and implementation will commence in the 2026 fiscal year.
According to a document on the concept of environmental and social review, the Nigeria Health Security Programme aligns with broader government efforts to enhance disease surveillance, diagnostic capabilities, emergency response, and laboratory networks across the 36 states and the Federal Capital Territory.
The programme’s primary objective is to enhance regional collaboration and strengthen Nigeria’s health systems to deal with emergencies. It falls within the World Bank’s investment in health, nutrition, and population sectors across Western and Central Africa.
According to the Environmental and Social Review Summary of the project, HeSP will expand molecular laboratory capacity, upgrade primary healthcare centres, establish emergency operation centres, and construct warehouses.
It will also deploy mobile laboratories and install water, sanitation, and hygiene facilities alongside solar energy systems to support health infrastructure improvements.
Although the total project cost is yet to be determined, the World Bank has committed $300m to the initiative. The funds aim to bolster Nigeria’s pandemic preparedness and improve response mechanisms for public health threats.
The initiative comes as Nigeria strengthens its public health infrastructure following lessons from previous outbreaks, including COVID-19.
If approved, the loan will support the NCDC in improving disease surveillance, diagnostics, emergency response, and laboratory services.
Nigeria has previously secured funding from international financial institutions to boost healthcare resilience, including financing for vaccine procurement, emergency medical services, and infrastructure development.
However, the project, categorised as a high-priority public health intervention, carries substantial environmental and social risks due to potential health, safety, and ecological concerns associated with infrastructure expansion.
Identified risks include increased medical waste, occupational hazards, and heightened energy and water demands.
Social risks range from potential grievances from stakeholders to concerns over land acquisition and implementing health interventions in conflict-prone areas.
Multi-asset management firm CardinalStone Partners Limited has announced the successful acquisition of a majority equity stake in Radix Pension Managers Limited.
Following this acquisition, Radix Pension Managers Limited has been rebranded as CardinalStone Pensions Limited, a statement from the firm read over the weekend.
CardinalStone Partners Limited thus solidifies its position as a key player in Nigeria’s financial landscape, leveraging its expertise and resources to enhance CardinalStone Pensions’ operations and service delivery. This transition represents a significant milestone in the firm’s strategic expansion in the pension industry.
CardinalStone Partners Limited, renowned for its comprehensive financial services catering to institutional and high-net-worth clients, boasts a team of seasoned investment professionals with a proven track record of visionary leadership.
On the acquisition, the Group Managing Director of CardinalStone, Michael Nzewi, said, “Our collective strength provides us with the pivotal opportunity to strengthen our position in the pension industry and broaden our range of services for our valued clients.
“By integrating the expertise and resources of all businesses in the CardinalStone Group, we are poised to deliver even greater value and innovative solutions to our customers across the board.”
Despite the change in ownership and brand identity, there will be no disruption to the operations of CardinalStone Pensions.
The firm will continue its business operations as a Pension Fund Administrator, the statement further highlighted.
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