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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.

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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.

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

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Tech News

Tiktok’s In-App revenue surges amid lockdown

ByteDance Ltd’s brainchild, TikTok, together with Douyin ranking tops globally on mobile apps with the highest revenue generated for the month of April.

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TikTok announces $250 million pledge to aid combat coronavirus, Does YouTube stand a chance against TikTok?

The meme-making business has proven to be worth all the fuss, with TikTok, as well as its Chinese twin app, Douyin, ranking tops globally on mobile apps with the highest revenue generated for the month of April.

Sensor Tower, notes that just in the first quarter of this year, ByteDance Ltd’s brainchild, TikTok, together with Douyin which caters to the Chinese market, generated 315 million downloads globally, from the 187 million it had just a year earlier.

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The ranking, which was based on their in-app purchases, reveal a tenfold increase, as the companies garnered a whopping $78 million in revenue. The Chinese market is said to have contributed 86.6% of Douyin’s revenue, followed by the U.S market which contributed 8.2%.

This places them ahead of older names like Netflix & YouTube. As opposed to using subscriptions like these established brands, TikTok and Douyin allow users to purchase virtual currency to spend on their favorite content creators.

(READ MORE: Does YouTube stand a chance against TikTok?)

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While ByteDance is exploring the world of online commerce, it continues to rely on advertising as its primary income source. However, Emarketer projects that more than 75 million US social network users will make at least one purchase from a social channel in the year 2020.

 

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Business News

Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office

Some of the projects to be commissioned will be done virtually, while a few will be done on-site.

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COVID-19: Lagos State to begin curfew on Sunday to disinfect metropolis, Lagos state government discharges 7 more coronavirus patients, Lagos state will reverse to full lockdown, Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office

Lagos state governor, Babajide Sanwo-Olu, will virtually inaugurate housing, education, and road projects on May 29, as part of activities to mark his first year in office.

According to a report by NAN, the projects are part of the government’s efforts to renew infrastructure in critical sectors and to make the commercial centre a smart city.

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Some of the projects to be commissioned will be done virtually, while a few will be done on-site.

The projects

Lagos state Commissioner for Information and Strategy, Mr Gbenga Omotoso, listed some of the projects in an official statement. He said:

”In the education sector, Sanwo-Olu will conduct virtual inauguration of completed classroom blocks in Maya Secondary School, Ikorodu; Eva Adelaja Junior School, Bariga; and Saviour Primary School, Ifako-Ijaiye, among others. 

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“Virtual inauguration of completed works such as the Concrete Jetty in Baiyeku, Ikorodu, Aradagun-Ajido- Epeme Road in Badagry, and the Maryland Signalisation project also form part of the itinerary to commemorate the anniversary.”

(READ MORE: Lagos increases health workers’ allowances, commissions local production of face masks)

Omotoso also stated that the Governor would inaugurate the 360-unit Lagos Homes in Ikorodu, and then visit Igbogbo Baiyeku IIB Estate, Lekki, and the Courtland Villas on Femi Okunnu Estate during the week.

Plans for celebrating Children’s Day

 In a related development, Governor Sanwo-Olu will deliver an address on Wednesday May 27 to mark the children’s day celebration, and the 53rd anniversary of Lagos state.

Omotoso, however, noted that all celebrations would be kept on the low in reflection of the current challenges and realities of the COVID-19 pandemic.

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Presenting one-year scorecards

The activities for the week are expected to begin with press briefings at J.J.T Park in Alausa on May 27, where members of the State Executive Council will present their scorecards in line with the six pillars of the state’s T.H.E.M.E.S Agenda.

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(READ MORE: Lagos Medical workers call off strike, as IG sends strong warning to security agencies)

According to the information commissioner, there will be two sessions of press briefings daily from May 27 to June 3, as the Governor considers it expedient to render a stewardship account of the last one year.

“Three special publications highlighting the achievements of the Babajide Sanwo-Olu administration and testimonies of beneficiaries of various initiatives of the government are slated for presentation to the public by the governor and his Deputy, Dr Obafemi Hamzat,” he added.

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Around the World

Central banks digital currencies pose a threat against the U.S dollar

In general, digital currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows.

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Central banks digital currencies pose a threat against the U.S dollar.

A new report by America’s biggest bank, JP Morgan Chase, said the U.S dollar is being faced with a major threat as many  central banks’ digital currencies continue to gain traction.

Analysts, including Josh Younger, the head of U.S. interest-rate derivatives strategy and Michael Feroli, the chief U.S. economist, wrote in a report saying this:

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“There is no country with more to lose from the disruptive potential of digital currency than the United States.

This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services convey immense advantages.” 

Aditi Kumar and Eric Rosenbach also recently penned an opinion piece for Foreign Affairs in which they noted that “Just recently, America’s arch-rival China became the first major economy to carry a real test of a national digital currency.”

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(READ MORE: Why the strong dollar is giving Nigeria headache)

In general, electronic currencies could weaken the power of U.S. sanctions and the ability of the U.S. Treasury to watch illicit financial flows. A digital Chinese currency (yuan) combined with China’s developed electronic payment systems may give China more future influence than it ever bargained for.  

What Nigerians should know about Digital currencies

A digital currency is a cash balance recorded electronically on a store value card or other physical devices, which could someday replace the physical notes of the naira, for instance.

Digital currencies can be decentralized, that is where the control over the cash supply can come from diverse sources. Digital  currencies can also be centralized, where there is a midway point of control over cash supply, just like the way central banks work.

Central banks digital currencies pose a threat against the U.S dollar.

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Although JP Morgan does not see the U.S dollar being overthrown as the world’s reserve currency anytime soon, experts warned that the U.S dollar dominance could weaken. This is because its processing trade settlement and the SWIFT system could make it more vulnerable.

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The American bank continued by saying:

“Offering a cross-border payment solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,

“For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.” 

Federal Reserve Chairman Jerome Powell said months ago that the Federal Reserve was taking a critical view on the issues regarding a digital currency.

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