44yrs after establishment, Buhari announces N287bn as NNPC net profit

*Says Q2 GDP growth reflects Nigeria’s economic rebound

In fulfillment of an earlier pledge by the Federal Government to publicly announce the financial position of the Nigerian National Petroleum Corporation (NNPC), President Muhammadu Buhari has disclosed a Net Profit of N287 billion, first time in the 44-year history of the establishment.

The President, who doubles as Minister for Petroleum Resources, said: “I am pleased to announce the declaration of Profit after Tax of Two Hundred and Eighty Seven Billion Naira (N287 Billion) in Year 2020 by the Nigerian National Petroleum Corporation.

This is sequel to the completion of the statutory Annual Audit exercise for Year 2020.

“The NNPC losses were reduced from N803 Billion in 2018 to N1.7 Billion in 2019 and the eventual declaration of Net Profit in Year 2020 for the first time in its 44-year history.

“This development is consistent with this administration’s commitment to ensuring prudent management of resources and maximization of value for the Nigerian people from their natural resources.

“I have further directed the Nigerian National Petroleum Corporation to timely publish the Audited Financial statements in line with the requirements of the law and as follow up to our commitment to ensuring transparency and accountability by public institutions.

“I congratulate the Board, Management and Staff of the Corporation and look forward to greater value creation for the Nigerian people.”

In another development, President Buhari has said that the 5.01% GDP growth in Q2 2021 is a reflection of Nigeria’s economic rebound following the COVID-19-induced contractions seen in Q1 and Q2 2020.

The President’s commendation followed Thursday’s Q2 2021 report by the Nigerian Bureau of Statistics, showing a third consecutive quarter of positive growth of Nigeria’s economy, as well as the highest quarterly growth in GDP since 2014.

The Gross Domestic Product (GDP) grew by 5.01% in Q2 2021 following 0.51% growth in Q1 2021.

The report noted the non-oil sector as a significant contributor to the economic performance in Q2 2021 with growth of 6.74% in real terms, the fastest growth in the sector since the third quarter of 2014.

Also, the contribution of the non-oil sector to GDP increased from 91.07% in Q2 2020 to 92.58% in Q2 2021.

While commending the managers of the economy for hard work and commitment, President Buhari urged them to keep at it till the positive development “touches the lives and pockets of the average Nigerian.”

The main drivers of the Q2 2021 economic growth include Trade, Information and Communication (mainly Telecommunications), Transportation, Electricity, Agriculture (Crop Production) and Manufacturing.

The service sector, specifically, recorded its strongest performance in more than a decade, growing at 9.27%.

Furthermore, he said that the main growth drivers of the second quarter performance are the reflection of the gains from easing restriction of movement locally and internationally, and the improvement in the business and economic environment compared to the same period in 2020.

The President also noted the decline in real growth in the oil sector in Q2 2021, compared to a year ago.

Oil production levels were at 1.62 million barrels per day, compared to 1.67 million barrels per day in Q2 2020.

The lower production output as well as the volatility in oil prices since the beginning of the COVID-19 pandemic, is responsible for the decline in performance of the oil sector.

President Buhari assured that recent reforms and efforts like the conclusion of the Marginal Fields Bid Round, the renewed focus on gas development (including the NLNG Train 7 project, and various pipeline construction projects) as well as the passage and assent to the Petroleum Industry Bill (PIB), are certain to attract new investment to the oil and gas sector, and create conditions for more robust levels of growth in the future.

“It is gratifying to note that the various policies of the administration, aimed at boosting agricultural production, improving the business environment, and investing massively in infrastructure, are beginning to yield fruit.

Equally gratifying is the complementary news of the steady decline in the rate of inflation, over the last few months.

“The positive effects of the Economic Sustainability Plan (ESP), which helped fasttrack the country’s exit from the COVID induced recession of 2020, continue to be evident, as some of the sectors driving the Q2 2021 growth have benefited or are benefiting from government-led interventions.

“The successful roll-out of vaccines and COVID-19 protocols has also helped to reduce pressures on the healthcare system and the need for a lockdown,” he said.

Looking to the future, the President assured Nigerians that there is much to be optimistic about, adding that the investments in agriculture and infrastructure will continue, as will ongoing efforts to achieve a significant improvement in the security situation across the country.

“There is no doubt that a more secure environment – which the security agencies are working hard to achieve – will spur and energize the shoots of economic progress being seen and felt in the country,” the President said.