NLNG paid N188bn dividends in December 2020 – Nigerian government
The Nigeria Liquified Natural Gas Company (NLNG) paid the Federal Government a dividend of N188 billion in the fiscal year ended December 2020.
This is report is according to the information contained in the Ministry of Finance Budget implementation report for the period of January 2020 to December 2020 presented by the Minister for Finance, Dr Zainab Ahmed.
During the year, the Federal Government budgeted a sum of N80.3 billion as its share of dividends from NLNG, however, the actual sum received as its share was N188 billion, N63.2 billion more (79% higher than projected).
2020 was an overwhelming year for the government as the fall in crude oil prices and the economic shutdown that was triggered by the Covid-19 pandemic dented projections and ravaged revenues.
The dividend received from NLNG was a major bright spot in the government’s revenue performance for the year. During the year, the government projected revenue of N5.36 trillion but only received N3.9 trillion in revenues representing a shortfall of N1.4 trillion or 27% for the year.
The huge dividend windfall received is a stark contrast from 2017 when Nigeria just exited a recession triggered by falling oil prices and a sharp exchange rate devaluation. In 2017, the Federal Government’s share of dividends from Nigeria Liquefied Natural Gas (NLNG) dropped by as much as $687 million, from $1.04 billion in 2015 to $365 million in 2016, a 65% drop.
The N188 billion received in 2020 topped the amount received from signature bonuses only N78.2 billion and complimented the N192 billion received by VAT. It is the most effective form of revenue generation for the government.
Note that, NLNG is a company jointly owned by Nigerian owned NNPC(49%), Shell (25.6%), Total (15%), and ENI (10.4%).
The company is located in Bonny Island and has six trains with a total capacity to process 22 million tonnes of LNG a year and as much as 5 million tonnes of natural gas liquids. NLNG currently accounts for about 7% of the total LNG supply in the world. Nigeria is ranked as the 4th exporter of Natural Gas in the world.
In projection, the Nigerian government is targeting a revenue of N208 billion from NLNG as dividends in 2021. If this materializes, it will be a significant payout in dividend (in naira terms) competing with the N238.4 billion expected from VAT. As the government also targets N6.6 trillion in revenue for the period under review, it imperative to note that the recent devaluation of the naira will increase the naira value of dividends and other government revenue, as it did in 2020.
Suzan O
