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How State Governments will become richer without FAAC allocation

Kebbi State announced in August that the state generated a revenue of N150 billion from the sale of its local cultivated rice in 2017.



Agricaulture, Kebbi, FAAC, IGR

If the Nigerian agricultural sector is to be properly developed, then, the Federal Government may need to halt the monthly Federation Account Allocation Committee (FAAC) disbursements distributed to the 36 state governments and Abuja.

This is the view expressed by the Vice President of Nigeria Agribusiness Group (NABG), Mr Emmanuel Ijewewe, in an exclusive chat with Nairametrics, during an agro stakeholders’ conference, Meet the Farmers Conference, held at the Intercontinental Hotel, in Lagos. The event was organised by Crenov8 Consulting and tagged “The Future of Agribusiness”.

Allocations made State Governments lazy

According to him, the development of the Nigerian agricultural sector depends not on the Federal Government (who has no land for farmers), but on the State Governments. However, most of the 36 states are not ready to develop their agricultural sector, due to the monthly revenue allocation they receive from the federation account. The ‘cheap’ revenue has made them complacent because the monthly allocation seems like a windfall to the states since it is not generated by them.

However, if the Federal Government decides to halt the distribution of revenue allocation, the second-tier governments will have no choice than to focus on how to improve their Internal Generated Revenue (IGR), in order to survive. This drive will force them to support farmers to boost their produce and generate revenue, in order to make the farmers taxable.

He explained

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“Many of the state governments are still getting too much from the Federal Government, if you wipe that out, when they go in for their IGR, they will help farmers to put themselves in a position where they will be making profits and, therefore, able to pay tax.”

How the Government can improve agriculture

Meanwhile, governments can help farmers in several ways, in order to boost their produce and make them profitable for taxation.

  • Little knowledge or information to the farmers can make a whole lot of difference in their production outputs.
  • Governments can invest in the construction of greenhouses to protect agricultural produce and multiplies them.
  • The government should make agricultural funds accessible to farmers easily through agencies like Nigerian Export-Import Bank (NEXIM Bank), Bank of Agriculture (BoA), etc.
  • Agricultural and farm inputs like fertilizers, tractors etc can be subsidised by governments at various levels, so as to assist peasant farmers, who may not be able to afford these necessary inputs, at the beginning of planting season.
  • Governments should make available technology-improved seedlings, hybrid breeding, hybrid seeds etc.

Kebbi State as an example

There is a popular saying that, “if you give too much money to your children, they may not go far in life.” That seems to be the situation with many State Governments, who despite the availability of arable lands suitable for several agricultural products in their domains, still prefer to look away and focus on their meagre monthly allocation from Abuja.

No one could have believed that Kebbi State has the potential to generate N150 billion from rice cultivation alone. The Kebbi State Governor announced in August that the state generated a revenue of N150 billion from the sale of its local cultivated rice in 2017. Meanwhile, data from the National Bureau of Statistics reveals that Kebbi received FAAC allocation was only N40.08 billion from January to December 2017.

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Land is the true wealth

The above research has shown that, the true wealth of each state in Nigeria is the farmers. State Governments need to realise this fact, in order to harness the huge potentials in the agricultural sector and subsequently increase their IGR.

If Kebbi State can generate N150 billion from the sale of locally cultivated rice in one year, then, states like Benue and Plateau regarded as the food baskets of the nation with more fertile lands can generate more; only if their governments can focus on the development of the agricultural sector.

According to NBS, agriculture contributed 22.86% to Nigeria’s real Gross Domestic Product (GDP) in the second quarter of 2018. If states want to fully harness the huge wealth deposited on their lands, they need to return to the era where agriculture was the mainstay of each region’s economy, contributing over 50% to their GDP.

As at now, there are about 14 million cows in Nigeria, but we still import 96% of the milk we drink. With 14 million cows, Nigeria has no excuse for not having enough milk processing factories, to process milk for local consumption and exportation. Agricultural opportunities should be maximised to create wealth.

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Hospitality & Travel

COVID-19: Over 70% of jobs lost in aviation, tourism industries in 2020 – AfDB

The AfDB has stated that about 5 million jobs have been lost in the aviation and tourism industries in Africa due to the COVID-19 pandemic.



Aviation in Africa

About 5 million out of Africa’s 7 million aviation and tourism industry-related jobs have been lost in 2020. Also, as much as $15 billion in revenue, half of this to African airlines.

This was disclosed by the African Development Bank (AfDB) in a statement issued and seen by Nairametrics on Friday.

Vice President for Infrastructure, Industrialization and Private Sector, AfDB, Solomon Quaynor explained that the pandemic’s effect was felt more in Africa, a claim that was backed up by numerous panelists at the just concluded AfDB’s webinar themed ‘African Aviation Recovery Conference: coordinating an efficient response to the COVID-19 crisis’s effects on the Aviation sector in Africa.’

He said, “The air transport system is really at the forefront of all our collective objectives to realize Africa as a single economic bloc. The centrality of the aviation sector to Africa’s long-term goals by referencing three flagship projects of the AU’s Agenda 2063 that aim to advance open skies and closer connectivity: SAATM, The African Continental Free Trade Area, and the African Passport-Free movement of people.

“The air transport system is really at the forefront of all our collective objectives to realize Africa as a single economic bloc of 1.3 billion people with a GDP of almost 3 trillion dollars, for which we want to begin to really focus and increase trade among ourselves, as well as investment.”

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Also at the event, Minister of Aviation, Hadi Sirika called on African governments to embrace full liberalisation of the aviation sector, invoking the Yamoussoukro Decision, which established an arrangement for the gradual liberalization of intra-Africa air transport services.

He said, “Nigeria today has all its bilateral air service agreements with the YD and was also among the first ten countries that signed a commitment to implement the Single African Air Transport Market.”

Dr. Amani Abou Zeid, African Union Commission for Infrastructure and Energy, explained that Africa’s aviation industry represents a huge market that the continent’s airlines need to exploit more fully, with technology and AI offering the way forward for expansion, regional development experts.

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“Technology and smart technologies are offering this fantastic opportunity, so let’s make use of AI, let’s make use of the Internet of Things, let’s capacitate our people to revamp and to rethink our industry, to make sure that both our airports and our airlines cater for the very near future,” said Zeid.

What they are saying

A key takeaway was the urgent need for coordinated action among the sector’s actors, including governments, aviation authorities and multilateral stakeholders such as the Bank.

“The time is now. All of us who have really been working on upstream issues such as SAATM, the World Bank, ourselves, the AU and others, now is the time to really pool our advocacy and resources to make this happen once and for all because if we continue to operate as a federation of 54 states as opposed to an integrated market, our economies will continue to be sub-optimal,” said Quaynor

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Autogas: Nigerians will not pay N250,000 for conversion, it is free – FG

The FG has clarified an earlier statement about Nigerians having to pay N250,000 to have their vehicles converted from diesel/fuel use to autogas.



FG says vehicle owners to pay N250,000 to convert from petrol to autogas

The Federal Government has said that news reports of Nigerians having to pay N250,000 to convert their cars from diesel/petrol engines to gas is false and incorrect.

This was disclosed by Justice Derefaka, the Technical Adviser on Gas Business and Policy Implementation to Minister of State for Petroleum, Timipre Sylva, to newsmen on Friday.

On Friday, Derefaka clarified his position as wrong and said the FG plans make the conversion for free. He added that the FG plans to convert 1 million vehicles for free by the end of 2021.

“I granted an interview on Channels Television, where I stated the auto conversion of vehicles to gas will amount to N250k and Nigerians will need to pay for that. That statement is not correct, it is wrong.

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“On that note, I will like to state the position that has been made by my boss, Timipre Sylva, that FG will convert those vehicles for free for Nigerians, and we are looking at 1 million vehicles by the end of 2021,” he said.

What you should know 

  • Nairametrics reported earlier this week that  Justice Derefaka had said vehicle owners in the country would have to pay N250,000 to have their cars converted to autogas from petrol.

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COVID-19: Moderna says it will produce 500 million vaccines by 2021

Moderna Inc, has said that the company has the capacity to produce up to 500 million coronavirus vaccines by 2021.



Moderna COVID-19 vaccine passes safety test on animals

Stéphane Bancel, CEO of pharmaceutical company and Covid-19 vaccine maker, Moderna Inc, has said that the company has the capacity to produce up to 500 million coronavirus vaccines by 2021.

The CEO disclosed this at the Nasdaq Investor Conference, as reported by Reuters.

What you should know 

  • Nairametrics reported last month that the pharmaceutical company had stated that its Covid-19 vaccine was 94.5% effective in treating coronavirus, after preliminary analysis of a large late-stage clinical trial.
  • UK Health Secretary, Matt Hancock announced in November that the UK had secured 5 million doses of the vaccine.

The company disclosed that they had applied for emergency use of the vaccine in the United States and EU after finalizing clinical trials which showed 94.1% efficacy, and would hold a December 17 meeting with the American Food and Drug Administration to discuss emergency use.

For 500 million, I am very comfortable we are gonna get there (2021),” Bancel said at the Nasdaq Investor Conference.

The CEO added that the price for its vaccine would remain at $37 per dose, but expected it to fall to $25 as purchase volumes rose.

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Moderna says up to 125 million doses of its Covid-19 vaccine will be supplied globally by the first quarter of 2021.

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