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FAAC disburses N617 billion as South-South scoops highest allocation

The Federation Account Allocation Committee (FAAC) disbursed the sum of N617.57 billion to the three tiers of government in April 2019, according to the FAAC report released by @nigerianstat

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taxes, tax, IMF, business, FAAC disbursed N617billions in April, as South-South scoop N72billions, VAT, Finance Minister, Zainab Ahmed says Nigeria VAT collection rate is low, NBC, Rite Foods, others to pay new tax as FG identifies new revenue streams ,,Finance Minister reveals how World Bank, AfDB pushed FG into requesting Chinese loan 

The Federation Account Allocation Committee (FAAC) disbursed the sum of N617.57 billion to the three tiers of government in April 2019. This is according to the latest FAAC report released by the National Bureau of Statistics (NBS).

The report shows that Nigeria’s revenue allocation dropped by 4.8% in April 2019 after the sum of N617.57 billion was disbursed, compared to N649.19 billions that was disbursed in March.

The Details: The amount disbursed comprised of N446.65 billions from the Statutory Account, N92.18 billions from Valued Added Tax (VAT), N55 billion as Good and Value Consideration, N10 billion as Additional Funds From NNPC, N13.09 billion distributed as FOREX Equalisation Fund, and N652.55 millions exchange gain differences.

FG received the lion share: Just like in the previous months, the Federal Government (FG) received the highest share of the entire allocation in April 2019. Specifically, the Federal Government received a total of N257.76 billion from the N617.57 billion, states received N168.25 billions, and Local Governments received N126.58 billions. The sum of N49.82 billions was shared among the oil-producing states as 13% derivation fund.

More Details: Also, revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.12 billions, N6.15 billions and N3.87 billions respectively as cost of revenue collections.

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Delta received the most: Despite the drop in revenue allocation to States, Delta State still maintained the top spot among the list of states with the highest gross revenue allocation. The State received N20.4 billion in April 2019.

Akwa Ibom also maintained its second position with N15.8 billion and Rivers ranked third highest recipient with N13.7 billions. Lagos State ranked 4th with N12.8 billions allocation for the review period.

Meanwhile, Bayelsa and Kano ranked five 5th and 6th highest recipients with N12.6 billions and N6 billions respectively. Further analysis shows that the top 5 states scooped 35% of the total revenue allocation for the month.

On the other hand, Osun (N3.9 billion), Gombe (N3.9 billion), Nassarawa (N3.8b billion), Ebonyi (N3.8 billion), Ekiti (N3.79 billion), and Kwara (N3.77 billion) all received the lowest share of April allocation respectively.

South-South States scooped N72 billions: Out of the six geopolitical zones, the South-South zone received the biggest of N72.7 billions, representing 33.3% of the total allocation.  Both Northwest and Southwest both scoop N35 billions each for the period under review.

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Also, the North East received N31 billions, while South East and North Central scooped the lowest share of allocation with N22.2 billions and N21.2 billions respectively.

Upshots: Seeing as many states are struggling to meet their financial obligations, a reduction in revenue allocation from the Federal Government could further compound their financial difficulties. On the flip side, this should serve as a challenge to state governors to seriously consider increasing their internally generated fund.

In just a few days, the newly elected governors will be sworn into power across States in Nigeria. They should brace-up for the task ahead. For instance, there is the N30,000 minimum wage increment which they must implement. Since many states depend mainly on federal allocation to keep the States running, it is not out of place to point out that there could be trouble between state governors and the organised labour; especially if state governors are eventually unable to pay the minimum wage.

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

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Energy

NNPC opens bid for repairs of pipelines and depots on a finance and operate basis

The project is expected to be operated on a public-private partnership basis.

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Pipeline Vandalism: Stakeholder collaboration, critical to tame menace - Kyari, Nigeria explains when it will fully comply with OPEC+ output cut

The Nigerian National Petroleum Corporation (NNPC) declared open on Tuesday, August 11, bids by interested private investors to repair the pipelines and depots that are serving the refineries.

These pipelines, built almost 4 decades ago, are very critical in the successful movement of crude oil to the country’s 3 refinery complexes located in Port Harcourt, Kaduna and Warri, and the subsequent movement of the finished petroleum products to the consumers.

The pipelines, which according to NNPC are in dire need of comprehensive repairs, have experienced years of incessant theft and vandalism as well as ageing.

This project is expected to be operated on a public-private partnership basis as the bidders are expected to finance and execute the project, then operate for an agreed number of years before transferring back to the NNPC. In other words, the bidders for the extensive repairs of these pipelines would have to finance them independently and operate for a defined period in order to recover their investment costs with throughput tariffs.

It must be noted that this model is similar to the one that had been in place by the state oil giant for the refineries. The NNPC had also announced plans to get private investors to invest in the repair of the 3 refineries on a repair and operate basis, as they do not want to be involved in the management of these refineries.

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The NNPC Group Managing Director, Mele Kyari, had said that the ultimate plan for these refineries was to allow it to run on the LNG model, where the shareholders would be free to decide on the fate of these refineries going forward.

The refineries, which have only run sporadically, were shut down by NNPC earlier this year while awaiting repairs and upgrade. These 2 projects are expected to be handled separately according to information made available on Tuesday.

In addition, the new pipelines would need intrusion detection systems, as well as deep burial, to stop theft or vandalism. The deadline for the submission of these bids is due by September 18.

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Economy & Politics

WTO Job: Okonjo-Iweala reveals how to resolve the rift between US and China

Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China.

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WTO, Okonjo-Iweala joins South Africa's presidential economic advisory council as nation struggles with recession

As the jostle for the top job at the World Trade Organization (WTO) becomes more intense, the Nigerian candidate, Ngozi Okonjo-Iweala, has disclosed some of her plans for the institution. The former Nigerian Finance Minister recently had an exclusive interview with CNBC Africa.

Speaking during the interview, Mrs Iweala revealed how she hopes to resolve the rift between the United States of America and China, the 2 biggest economies in the world, especially as regards trade issues. She also noted that part of her vision is to build a trade institution where there is greater trust among its members. She also stressed that the WTO, at this critical time, is needed to ensure that trade and global markets remain open.

READ MORE: Gold price up as COVID-19 cases rise, U.S-China tensions heighten 

On healing the rift between the US and China, Okonjo-Iweala admitted that it is going to be challenging and not be easy. She said:

Well this is not going to be easy, if it was easy, it could have been done a long time since. So it would be very challenging but it is not an impossible job. It is very clear that both the US and China have been helped and benefitted from the multilateral trading system in the past. Hundreds of millions have been lifted out of poverty. They have experienced shared prosperity in the economies and their countries.’

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The Nigerian candidate pointed out that it is important to remind the US and China of this shared prosperity. She then disclosed that she would listen to both countries to find out what really are the issues causing distrust among them. She said that she will not want to be involved in the larger political problems, but will rather separate the trade issues and focus on them and build this trust.

READ MORE: Dangote fertilizer plant to begin production this year

Going further on how to settle their rift, Okonjo-Iweala said, “You need to begin to find areas where there can be confidence-building and trade. Building trust is not talking about it, you have to have areas where both can work together and agree and we have a golden opportunity in the fisheries subsidies negotiations that are going on now because the US is a party to it, China is a party, the EU, all other members.’’

“It is a multilateral negotiation, so if they can sit around the table with others to negotiate this and have a successful outcome, that is one thing that will be shared in common between the 2. So that will begin to build confidence. Then reaching out both in the US and in China to talk to the policymakers, go where the decisions are made, talk to congress also in the US and begin to show the benefits of the system again.’’

READ ALSO: FG inks $3.9 billion deal with Chinese firm for construction projects 

She also said they will look at reasons why they need to work together because their rift may be causing negative externalities for other members. She is of the opinion that exposing all of these, working with them, and listening carefully will begin to build confidence.

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She believes that while achieving this will be difficult, focusing seriously on trade issues can create room for a breakthrough.

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Coronavirus

US hands over 200 ventilators to Nigeria

The US Ambassador to Nigeria said USAID and  Nigeria will work very closely over the next couple of weeks.

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US hands over 200 ventilators to Nigeria

The United States of America, on Tuesday, August 11th, handed over some 200 ventilators to the Federal Government of Nigeria. This was disclosed by the Federal Ministry of Health via its Twitter handle, following the handover ceremony in Abuja.

The US Ambassador to Nigeria, Ambassador Mary Beth Leonard, at the handover event, explained that the ventilators are compact & portable & can be easily mobilized to reach those patients with the most severe symptoms of COVID-19.

Speaking during the handover ceremony, the Ambassador said, “Their arrival fulfills the commitment discussed between US and President Muhammadu Buhari earlier this year. Our support includes; training on the use & maintenance of this equipment, ensuring that the ventilators can address other respiratory illnesses in the years beyond.”

According to her, the United States Agency for International Development (USAID) and  Nigeria will work very closely and energetically over the next couple of weeks, with the Presidential Taskforce on COVID-19, to bring these ventilators across each of Nigeria’s states & the Federal Capital Territory.

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“The United States has been pivotal in supporting Nigeria’s membership in the ‘Every Breath Counts’ Coalition. Nigeria is now one of 2 countries in Africa to have an “oxygen roadmap” that seeks to fight against pneumonia, hypoxemia, & now COVID-19,” she stated. She then added that as the U.S. Ambassador to Nigeria, she remains proud of the strong friendship between the two countries.

The Backstory: Last April, Nairametrics had reported when the Minister of Information, Lai Mohammed, said that “President Donald Trump assured that the United States stands in solidarity with Nigeria in this difficult time and promised to send ventilators to support the country in its fight against the pandemic.”

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