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States’ IGR hits N1.16trn in 2018, as Lagos maintains first spot

The total Internally Generated Revenue (IGR) by all states in Nigeria hits N1.16tn in 2018. This is revealed is the full year IGR report released by NBS.

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Tinubu and Fashola owe $1.43bn foreign debt not me - Governor Ambode

The total Internally Generated Revenue (IGR) by all states in Nigeria hits N1.16tn in 2018. This is revealed in the latest full year IGR report released by the National Bureau of Statistics (NBS), covering the year 2018.

According to the NBS report, the latest IGR data indicates a positive growth of 22.79% quarter on quarter and 24.82% Year on Year. Specifically, in  2017 total IGR was 936.4bn, thereby increased to 1.16trn

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The breakdown shows that Lagos State maintained a distant top as it recorded the highest IGR of N382.1 billion in 2018, followed by Rivers State (N112.7bn) and Ogun State (N84.5bn).

Similarly, IGR for states in the fourth quarter shows that IGR figure hit N324.59bn compared to N264.34bn recorded in Q3 2018. This indicates a positive growth of 22.79% quarter on quarter and 24.82% year on year.

Top ten states with highest IGR in 2018: The top 10 states in Nigeria in term of 2018 IGR accounted for 71 percent of total IGR. The breakdown shows that the top 10 states accumulated a total of N830.2bn IGR in 2018.

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North East zone dominated 10 states with the least IGR: In the NBS report, data shows that the North East region dominated the 10 states. The North Eastern States include: Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe States.

Overall, the 10 States with least IGR recorded N62.4bn in 2018. On the top ten list are: Nassarawa, Gombe, Katsina, Borno, Ekiti, Adamawa, Ebonyi, Taraba, Kebbi and Yobe States. Five out of these states with the lowest IGR are from the North East zone of Nigeria. This further suggests the reasons behind the low level of underdevelopment in the region.

Lagos tops IGR in last quarter 2018: All states including the FCT generated a total of N324.5bn IGR in the last quarter of 2018. Some highlights are revealed below:

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  • Thirty-one (31) states and the FCT recorded growth in IGR
  • Five (5) states recorded a decline in IGR
  • Lagos recorded highest IGR in Q4, followed by Rivers and Ogun States
  • Kebbi, Adamawa, and Yobe all recorded the least IGR in Q4.

Total IGR of Lagos state in 2018 larger than all states in Q4 IGR: For the full year 2018, Lagos state also tops with N382bn. When this is compared with the N324.5bn IGR generated by all the states in Q4, shows that over one-fourth of IGR in Nigeria is generated in Lagos.  Specifically, 33 percent of total IGR in 2018 is accruable to Lagos State.

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South-West and South-South zones control 71% of IGR in 2018: Unsurprisingly, the IGR data shows that about N788bn out of 1.1trn recorded across all states excluding FCT. It indicates that 71.4% of the total IGR was from these two zones in the country. Southwest generated N533bn, while South-South recorded N225bn.

High IGR deprived of developments: The IGR data shows that two zones recorded more IGRs, and this has reflected in their levels of development as well. Specifically, South West recorded the lowest unemployment in the third quarter of 2018. What this shows is that the low level of unemployment could be traced to the high level industrialization in the zone, which pressures down unemployment. This means the economy of this zone is on a growth path.

However, South-South region ranks second in IGR, but the zone recording the highest unemployment rate in the country. This suggests that the zone may be witnessing an unbalanced growth pattern, where IGR is skewed towards the oil-related revenue which does not have high labour absorptive capacity.

Lastly, the Northern zones of Nigeria, which generated onky 28% of IGR, really need to do more to attract development across the region. Although unemployment is relatively average, underemployment remains quite high. Agriculture is the dominant sector in these regions, and the moribund state of the sector in Nigeria may be responsible for the low IGR.

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[Also Read: Delta State takes the biggest share of states FAAC allocation]

Recently, the Vice President, Yemi Osinbajo, reportedly charged States to emulate Lagos State in terms of IGR and minimum wage.

“Lagos State, the highest IGR earner, was earning N600m in IGR when the minimum wage was increased from N7,500 to N18,000 — about 140 percent increase. We are confronted again with the new increase in the minimum wage. So, as scripture says, ‘There is nothing new under the sun. We must confront the problem, not merely by hoping that the Federal Government can do more.

“Already, our deficit is close to N2trn, while debt service is somewhere in the order of 54 per cent. States must, in the next few years, earn more in IGR.

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Business News

Oando loses Chief Legal Officer

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Oando loses Chief Legal Officer

Chief Legal Officer of Oando Plc, Ngozi J Okonkwo is dead.

Adewale Tinubu, Group Chief Executive Officer of Oando Plc announced this via a tweet.

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Until her death, she was the Chief Legal Officer of Oando Plc, having joined the company as Head, Legal Services of the company in 2009.

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According to a tweet from one of her nephews, she battled cancer for a while, recovered before having a relapse during the recent COVID-19 crisis.

READ ALSO: NSE, SEC train capital market operators on legal and regulatory requirements for the derivatives market

Before joining Oando, she worked as Junior Counsel  with F.O Akinrele & Co., and also with KPMG Professional Services (previously known as Arthur Andersen) as Manager in the Tax, Regulatory and People Services unit and Head of indirect tax services.

READ ALSO: Common legal and general mistakes made by new businesses (Part 1)

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She obtained LLB (Hons) from University of Nigeria, Nsukka in 1997 and BL from the Nigerian Law School, Lagos in 1999. She was a member of the Nigerian Bar Association, honorary fellow of the Association of Fellows and Legal scholars of the centre for International Legal Studies, Austria, Associate Member of the Chartered Institute of Arbitrators, United Kingdom and Associate Member of the Chartered Institute of Taxation, Nigeria.

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Economy & Politics

NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

The Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.  

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To cushion against the volatility in the global crude market and strengthen profitability, the Nigerian National Petroleum Corporation (NNPC) has announced that it is building up business portfolios in the housing, power, and medical sectors.

This is one of several measures the corporation is taking to sustain revenue generation for Nigeria, and cope with the boom and bust cycles which are gradually becoming a feature of the global crude oil market.

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NAN reports that this was contained in a statement from the Corporation Chief Operating Officer, Ventures and Business Development, Mr. Roland Ewubare, and signed by NNPC Spokesman, Kennie Obateru.

According to Ewubare, the NNPC will establish Independent Power Plants using the Ajaokuta-Kaduna-Kano (AKK) pipeline network, and consolidate its presence in the power sector.

(READ MORE: COVID-19: Nigerians react as CBN partners NNPC to feed, accommodate Nigerian returnees)

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The statement reads in part; “NNPC is creating an energy company that would have portfolios in renewable energy; we have initiatives on solar that is ongoing.

“We have got biofuels agreements with some state governments that would soon be activated. We do have a lot of non-core businesses that are aggregated under the Ventures and Business Development Autonomous Business Unit of the NNPC. 

“This would be expanded through effective collaboration and partnership with the private sectors,” 

NNPC diversifies into housing, power; plans to beat crude production cost to $10 per barrel

Lower costs, more profits

As part of moves to improve profitability, the NNPC also announced plans to drive crude oil production cost down to 10 dollar per barrel by Q4 2021,

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This according to the statement would be done by systematically and gradually beating down logistics costs.

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The Corporation’s revenue took a major hit in 2020 due to the slump in global oil prices, and this in turn affected the Nigerian budget given that oil proceeds account for a significant fraction of her income.

“When you have a low commodity price regime, as the case now, the only way we are able to squeeze out some reasonable cash and financial gain to the nation is by curtailing and constraining our costs in line with the GMD’s aspiration to push for a 10 dollar per barrel cost of production,” Ebuware said.

(READ MORE: NNPC pipeline vandalism up by 50% in January, may suspend crude oil production)

There is also an ongoing collaboration with selected partners to commercialise flared gas in order to preserve the flora and fauna of the country.

This would be done by converting it to Compressed Natural Gas (CNG) and Liquefied Natural Gas, for sale to consumers.

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The NNPC is partnering with private developers to reduce the housing deficit in the country and also partnering with medical centres to provide innovative healthcare for Nigeria.

 

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Business News

Microsoft Teams’ rival, Slack shares drop on withdrawal of full-year billings guidance

Slack reported steady revenue growth 50% in Q1 2020, compared with 49% recorded in Q1 2019 on an annualized basis this brought in more customers

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 Slack shares dropped as much as 17% yesterday after the company’s reported first-quarter earnings.

Investors and stock traders were not happy with Slack’s annual revenue forecast of $855 million to $870 million, up just slightly from Slack’s projection in March stock analysts, on the average, estimated $856.5 million, according to data obtained from Bloomberg.

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“Slack’s withdrawal of full-year billings guidance looks conservative to us and likely suggests a pull-forward of revenue amid faster new-customer additions due to remote work,” Mandeep Singh, a Bloomberg Intelligence analyst, wrote in a note yesterday.

Slack grew revenue 50% in Q1 2020, compared with 49% recorded in Q1 2019 on an annualized basis.

However, Slack reported steady revenue growth during  Q1 2020 brought in more customers, as organizations sought to keep communications going with their newly remote workforces during coronavirus pandemic. It had earnings per share of 2 cents loss per share, adjusted and adjusted revenue of $201.7 million

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(READ MORE: How to Profit from Directors’ Share Dealing Notifications)

Slack, in a statement, yesterday reported that it added a record 12,000 paid customers Q1 2020 as against two prior quarters when it added about 5,000 new customers. Slack’s top competitor, Microsoft’s Teams, has also experienced growth in recent months.

“What you saw with Zoom, what you saw with Teams is a great indication that this is not apples-to-apples and that the products are not truly competitive with one another,” Butterfield the Chief Executive Officer of Slack told Investment analysts on a conference call yesterday.

READ ALSO: Jumia is optimistic of COVID-19 boost, despite poor Q1 2020 earnings report

Paid users spent over 120 minutes per day in Slack at the end of the quarter, up from below 90 minutes one quarter earlier. 

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“I can’t care about the stock price on the level of individual days,” Butterfield said when asked about the reaction to earnings. “I just wouldn’t be able to do my job. I care about where the share price is five years from now and 10 years from now. This is just a very volatile time.” 

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