.As Tompolo’s Tantita vows to help NNPCL attain 2mbpd oil production target by December
A Financial Expert, Prof. Uche Uwaleke, says N1,400 to the dollar exchange rate stipulated in the N47.9 trillion 2025 budget proposal is unrealistic.
Uwaleke, the Director, Institutes of Capital Market at the Nasarawa State University, is also the President, Capital Market Academics of Nigeria.
He said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.
According to him, such unrealistic exchange rate projection can give significant room for off-budget funds.
“I think the exchange rate of N1, 400 to the dollar is unrealistic based on a one-year outlook of FX flows.
“It introduces a slack in the 2025 budget implementation, which gives room for significant off-budget funds,” he said.
However, an economist, and a former President of the Abuja Chamber of Commerce and Industry, Dr Chijioke Ekechukwu, said that the N47.9 trillion budget was realistic.
According to Ekechukwu, N47.9 trillion may look audacious and humongous, but when converted to dollars at the current exchange rate of N1,735 per dollar, it is about 27.6 billion dollars.
“This is not up to the budget of many states in the U.S.
“The current exchange rate, the inflation rate, and the high cost of living have necessitated this huge budget figure.
“The crude oil price of 75 dollars per barrel and exchange rate of N1,400 are apt,” he said.
He commended the idea of the Gross Domestic Product (GDP) growth projection of 6.4 per cent, and the crude oil production of 2.06 million barrels per day.
“They look ambitious, but if achieved, we will be on a positive trajectory.
“When we achieve the crude oil production of 2.06 million barrels per day, we are likely going to achieve the FX rate of N1,400.
“This may not result in an increase in GDP growth automatically, as most of our GDP growths have been driven by the non oil sector,” Ekechukwu said.
A renowned economist and Executive Director of Financial Derivatives, a consultancy firm, Mr Bismarck Rewane, described the 75 dollars per barrel oil price as unrealistic in the face of global uncertainties.
Rewane said that the benchmark should be closer to 65 dollars per barrel to allow for fiscal flexibility.
The Chief Executive Officer of CFG Advisory, Tilewa Adebajo, said that there was a disconnect between the budget projections and Nigeria’s fiscal reality.
Adebajo said that N1,400 to the dollar was overly optimistic, adding that inflationary pressure and deficit financing could push rates beyond N1,800.
“The real issue is whether we can afford what we are budgeting for.
“Revenues for 2024 were projected at N17 trillion, but we consistently implemented only half the budget due to shortfalls.
“If you cannot fund your plans, you carry deficits forward, a cycle we have seen repeatedly,” he said.
According to Adebajo, the budget’s effectiveness will depend on realistic revenue projections.
“For example, the finance minister mentioned raising 2.2 billion dollars in external debt financing, 1.7 billion dollars from Eurobonds, and 500 million dollars rom the Sukuk programme.
“But domestic debt has ballooned from N50 trillion to N70 trillion in just one year. Combined with external debt nearing 45 billion dollars, debt sustainability is a concern.
“In spite of recent reforms, like fuel subsidy removal and foreign exchange liberalisation, the revenue increases expected from these measures have not materialised.
“The economy is still in stagflation. We need to address the issue of fuel pricing,” Adebajo said.
NAN reports that the Federal Executive Council (FEC) had on Thursday, approved the 2025 budget proposal of N47.9 trillion.
The FEC also approved 2.2 billion dollars new borrowing plan, and N250 billion real estate investment fund.
It pegged crude oil price at 75 dollars per barrel, exchange rate at N1,400 to dollar, and oil production of 2.06 million barrels per day.
The Minister of Budget and Economic Planning, Atiku Bagudu, said that the budget approval was part of the Medium Term Expenditure Framework (MTEF) for 2025-2027, in accordance with the Fiscal Responsibility Act 2007.
Bagudu said the executive would put necessary efforts in place to ensure that the 2025 budget estimate was passed by the National Assembly and signed into law by the president before the end of December.
He said that with the growth rate of 3.19 per cent, which came in the second quarter of 2024, the Federal Government would continue to tackle inflation and strengthen economic resilience.
Meanwhile, Tantita Security Services Nigeria Limited, a private oil pipeline surveillance firm contracted by the Federal Government, has pledged its commitment to support NNPCL’s LTD in increasing Nigeria’s crude oil production from 1.8 million barrels per day (mbpd) to 2mbpd by December.
The founder of Tantita, Government Ekpemupolo, popularly known as Tompolo, expressed his determination through his Special Adviser on Media and Public Communication, Dr Paul Bebenimibo, during a statement in Warri, Delta State.
He celebrated Nigeria’s crude oil production milestone of 1.8mbpd, attributing the achievement to the collaborative efforts of the Nigerian National Petroleum Corporation Limited, security forces, and Tantita Security Services.
Tompolo stated that reaching this production level would significantly boost government revenue and aid in running the country more effectively.
He said, “Tantita is committed to achieving 2mbpd by December, as directed by President Bola Ahmed Tinubu. This milestone was achieved in collaboration with the NNPCL, security forces, and Tantita, which has been at the forefront of oil pipeline protection in the Niger Delta.
“We are determined to hit the 2mbpd target before the year ends. All necessary machinery has been put in place to ensure this objective is met. Our efforts will continue to focus on galvanising the Nigerian economy and halting oil theft.”
Tompolo assured that advanced technologies are being deployed to monitor oil facilities and prevent disruptions or theft of Nigeria’s resources. He reaffirmed Tantita’s dedication to safeguarding oil pipelines and achieving even greater production levels.
It is noteworthy that the board and management of the NNPCL recently announced that Nigeria’s crude oil production had risen to 1.8mbpd, while gas production reached 7.4 billion standard cubic feet per day.
NNPCL’s Group Chief Executive Officer, Mele Kyari, commended the efforts of the Production War Room Team for their role in the recovery process and credited the milestone to directives from President Tinubu.
Meanwhile, findings by The PUNCH revealed that Tantita Security Services has intensified efforts to combat crude oil theft and pipeline vandalism. Operatives of Tantita have been actively pursuing oil thieves, seizing equipment used in illicit trade, and driving perpetrators out of the Niger Delta’s coastal regions.
Many oil thieves have reportedly abandoned their activities due to the sustained pressure and operations by Tantita’s personnel.
