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Business News

President Buhari presents 2020 federal budget to national assembly 

Nigeria’s President, Muhammadu Buhari, has presented the 2020 appropriation bill before a joint session of the national assembly.

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Nigeria signs African Trade Insurance Agency agreement, Xenophobia, FG returns tollgates sixteen years after Obasanjo scrapped it from federal roads

Nigeria’s President, Muhammadu Buhari, has presented the 2020 appropriation bill before a joint session of the National Assembly. According to the President, the revenue generation estimated to fund the 2020 national budget is N8.155 trillion.

The money will be sourced from oil (N2.64 trillion), Non-oil (N1.81 trillion), and others (N3.7 trillion).

In the meantime, the 2020 budget itself has been set at N9.79 trillion, indicating that there is a deficit of about N1.5 trillion. What this means, therefore, is that the Federal Government will need to borrow in order to balance up the budget.

Already, Nigeria has approached The World Bank to borrow the sum of $2.5 billion, a loan it will most likely receive once negotiations are concluded. But even with this, the government will need to borrow additional money.

How the money will be spent

The breakdown below shows how the 2020 Nigerian National Budget has been allocated:

  • Works and Housing: N262 billion
  • National Assembly: N125 billion
  • Judiciary: N110 billion
  • Power: N127 billion
  • Transportation: N123 billion
  • Universal Basic Education Commission: N112 billion
  • North East Development Commission: N37.83 billion
  • Defence: N100 billion
  • Industry, Trade & Investment: N40 billion
  • Social Investment Programmes: N30 billion
  • FCT: N28 billion
  • Health: N46 billion
  • Niger Delta Ministry: N24 billion
  • Interior: N35 billion
  • Zonal Intervention Projects: N100 billion
  • Agriculture and Rural Devt: N83 billion
  • Water Resources: N82 billion
  • Niger Delta Development Commission: 81bn Education: N48 billion
  • Capital Projects: N2.46 trillion

[READ: Buhari blames Nigerians for rising unemployment and economic woes]

President Buhari noted that he hopes the 2020 Appropriation Act will come into effect as early as January next year. But this may never happen, going by past precedents. He also stated that focus will be on the completion of already ongoing projects instead of merely starting new ones.

Other comments by the President

Meanwhile, the President used the occasion to briefly highlight the supposed economic successes recorded by his administration. According to him, the Nigerian economic has recorded consecutive GDP growth over the past nine quarters.

Between January 2017 and August 2019, the country’s inflation has reduced from 18% to 11%, he said. Similarly, Nigeria’s external reserves went up from $23 billion in October 2016 to about $42 billion in Sept 2019.

He even touted his anti-corruption agenda once more, emphasising that his administration is determined to maintain strict adherence to the Treasury Single Account which has supposedly helped to curb corruption.

[READ: See list of members of the National Economic Council]

“I have directed the stoppage of salaries for any government staff not captured in the Integrated Payroll and Personnel Information System (IPPIS) by end of October 2019.”

Lastly, he noted that it has become very essential for the government to intensify its revenue generation efforts, albeit in a way that the extremely poor people in society will be very much affected. Now, while this sounds considerate, it is rather problematic nonetheless because the people are already complaining. The government’s recent policies such as its proposed Communications Service Tax, VAT increments, and proposed re-introduction of tollgates do not exactly augur well for the poor.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Economy & Politics

FG places high profile Nigerians under security watch for terrorism financing

The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

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FG to establish a new anti-corruption agency, P&ID, FG, malami, $9bn fine is a scam - Federal Government , UPDATED: P&ID operations shut down, assets forfeited by court order

The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).

This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.

What the Attorney General of the Federation is saying

The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.

Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).

That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.

I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.

In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.

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However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.

“As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.

It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”

Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.

What you should know

It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.

ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.

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Macro-Economic News

Nigeria’s VAT collection surges to N496.4 billion in Q1 2021

Nigeria’s VAT collection surged by 52.93% (year-on-year) to stand at N496.4 billion in Q1 2021.

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VAT

Nigeria generated a sum of N496.39 billion revenue from Value Added Tax (VAT) in the first quarter of 2021, a surge of 52.93% year-on-year compared to N324.58 billion recorded in the corresponding period of 2020.

This is contained in the sectoral distribution of value added tax report, recently released by the National Bureau of Statistics (NBS).

According to the report, VAT collections in the period represents a 52.93% increase as against N324.58 billion recorded in Q1 2020; and a 9.17% increase compared to N454.7 billion recorded in the previous quarter.

The increase in VAT collections could be attributed to increased economic activity in the country, compared to the previous year, where most economic activities were put on hold as a result of the covid-19 pandemic.

Highlights

  • Highlights of the report showed that the manufacturing sector generated the highest amount of VAT with N49.41 billion generated, closely followed by Professional Services, having generated N42.50 billion, and State Ministries & Parastatals, which generated N26.96 billion.
  • Mining generated the least, closely followed by Pioneering, Textile & Garment Industry with N48.36 million, N77.01 million, and N289.41 million generated respectively.
  • Also, out of the total amount generated in Q1 2021, N224.85 billion was generated as Non-Import VAT locally while N171.66 billion was generated as Non-Import VAT for foreign.
  • The balance of N99.88 billion was generated as NCS-Import VAT.

Manufacturing sector topples professional services

The manufacturing sector toppled the professional services sector to lead the list of sectors with the highest VAT remittances in the first quarter of 2021. A total of N49.41 billion was collected as Value Added Tax from the manufacturing sector.

  • Professional services followed closely, having remitted N42.5 billion in VAT to the government, State ministries and parastatals stood in third position with N26.96 billion VAT.
  • Others on the list include; Commercial and trading sector with N22.8 billion, oil-producing (N15.8 billion), Transportation and haulage services (N14.9 billion), Breweries, bottling, and beverages (N11.9 billion).
  • Federal ministries and parastatals (N8.8 billion), banks and financial institutions (N3.3 billion), and oil-marketing (N3 billion).

Why this matters

  • The increase in VAT collection is a development in the right direction, especially given the recent positive growth recorded in global crude oil prices, indicating an increase in government revenue.
  • However, the government needs to intensify its effort in creating innovative ways of increasing revenue given growing overheads and statutory spending, coupled with increasing debt profile.

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