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FAAC disburses N650.8 billion in December 2019, South-South states receive highest share

FAAC disbursed a sum of N650.83 billion to the three tiers of government in December 2019 from the revenue generated in November 2019.

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The latest report from the Federation Account Allocation Committee (FAAC) released by the National Bureau of Statistics (NBS) stated that the sum of  N650.83 billion was shared among the three tiers of government in December 2019.

The report shows that Nigeria’s revenue allocation decreased by 7.29% in December 2019 compared to N702.02 billion disbursed in November and decreased by 6.16% compared to 693.53 billion disbursed in October 2019.

The amount disbursed comprised of N491.88 billion from Statutory Account; N53 billion from FOREX Equalization Account; N15 billion from Good and Valuable Consideration Account; N784.83 Exchange Gain Allocation and N90.17 billion from Valued Added Tax (VAT).

Details

The breakdown showed that the Federal Government received the giant share of N274.76 billion; States received a total of N176.1 billion; Local Governments received N132.66 billion while N51.07 billion was shared among oil-producing states as 13% derivation fund.

  • N208.68 billion was disbursed to the Federal Government Consolidated (CRF) account.
  • Also, N8.35 billion was allocated for the development of Natural resources.
  • Share of Derivation and Ecology was stated at N4.97 billion.
  • Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.42 billion, N6.86 billion and N3.9 billion respectively as cost of revenue collections.
  • N5.8 billion was allocated to FCT, Abuja.

READ MORE: FAAC disburses N327.68 billion to States and LGAs in September, as allocation drops again)

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South-South States received N57.81 billion

Out of the six geo-political zones in the country, South-South states scooped the largest share followed by North West, which received a total of N26.06 billion and North East (22.95 billion).

South West received N20.02 billion, South East received N16.43 billion while North received the least allocation of N15.65 billion.

FAAC disburses N650.8 billion as South-South states receive highest share

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States with highest allocation 

Delta State received the highest allocation in December 2019, as it scooped N15.89 billion, indicating 9.02% of the total states’ allocation followed by Akwa Ibom’s N12.58 billion (7.14%) and Rivers State which received N11.13 billion gross allocation.

Bayelsa, Kano, Edo and Lagos States received N10.87 billion (6.18%), N4.88 billion (2.77%), N4.25 billion (2.42%) and N4.13 billion (2.34% respectively.

Meanwhile, Kwara State received the least gross allocation in the month of December 2019, as it received N2.74 billion (1.56%) and Ekiti State took away N2.75 billion (1.56%).

READ ALSO: FIRS records lopsided tax base as Lagos contributes 70% of Nigeria’s tax revenue

Drop in revenue

It is important to stress that government revenue has dropped in recent times due to the development in the global oil market as the oil price war between Russia and Saudi Arabia intensifies, forcing the price of the commodity down in the global market. As at the time of writing this article, oil was sold for $36.23 per barrel which is below the $57 per barrel 2020 budget benchmark.

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The Federal Inland Revenue Service (FIRS) did not meet up to its set revenue target of N8.8 trillion. According to data from FIRS, the agency generated N5.26 trillion in 2019, which is just 59.8% of the target.

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Upshot

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. Meanwhile, this should serve as a challenge to state governors to seriously consider and put in place strategy to increase their internally generated fund to aid self-sustainability.

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Financial Services

CBN grants Mortgage Refinancing Companies approval to refinance Non-member banks

The CBN has expanded access to mortgage financing by removing restrictions on refinancing mortgages earlier imposed.

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P&ID dispute: UK Court orders $200 million guarantee to FG, Leaked letter by Poultry Farmers Association triggered CBN emergency approval to import maize, nImplications of CBN's latest devaluation and FX unification, current account deficit, IMF, COVID-19, CBN OMO ban could give stocks a much-needed boost , CBN’s N132.56 billion T-bills auction records oversubscription by 327% , Nigeria pays $1.09 billion to service external debt in 9 months , Implications of the new CBN stance on treasury bill sale to individuals, Digital technology and blockchain altering conventional banking models - Emefiele  , Increasing food prices might erase chances of CBN cutting interest rate   , Customer complaint against excess/unauthorized charges hits 1, 612 - CBN , CBN moves to reduce cassava derivatives import worth $600 million  , Invest in infrastructural development - CBN Governor admonishes investors , Credit to government declines, as Credit to private sector hits N25.8 trillion, CBN sets N10 billion minimum capital for Mortgage firms, CBN sets N10 billion minimum capital for Mortgage firms , Why you should be worried about the latest drop in external reserves, CBN, Alert: CBN issues N847.4 billion treasury bills for Q1 2020 , PMI: Nigeria’s manufacturing sector gains momentum in November, CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty, MPC Member, BVN, Fitch, Foreign excchange (Forex), Overnight rates crash after CBN’s N1.4 trillion deduction, Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira, CBN to support maize farmers, projects 12.5 million metric tons in 18 months, BREAKING: CBN Upscales Greenwich Trust Limited, grants it's operational license for merchant banking, AGSMEIS: CBN expand beneficiaries to 14,638., CBN expands access to mortgage financing

The Central Bank of Nigeria (CBN), has granted approval to Mortgage Refinancing Companies (MRC), to re-finance non-member banks.

This is contained in a circular referenced FPR/DIR/GEN/CIR/07/056 and signed by Ibrahim Tukur, the Director of Financial Policy and Regulation Department, CBN.

The circular improved on the earlier provisions contained in section 7.3.1.5 which states that “A mortgage refinance company (MRC) shall not, without the prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than twenty times the value of the borrower’s shares with the MRC or 25 percent of its shareholders’ funds unimpaired by losses.”

(READ MORE: Unity bank wants to be seen, but time is running low)

What this means

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Based on the provisions contained in the latest circular, MRCs are now free and legally permitted to refinance the qualifying mortgages of banks and all other non-members ( that do not hold equity), subject to meeting all other relevant requirements specified in the framework.

In a nutshell, the restriction on non-member mortgage lenders from refinancing their mortgages with MRCs has been removed.

Why this matters

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Prior to the provisions contained in the latest circular, CBN had expressed fears that provisions of section 7.3.1.5 negatively impacts the mortgages sub-sector, as it constrains the MRCS from refinancing the mortgages of non-shareholder banks. Therefore, the new order will help to remove the restrictions already highlighted.

In lieu of this, the latest circular stated that the provision of section 7.3.1 5 is hereby revised to “the MRC shall not, without prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than 25 percent of its shareholders’ funds unimpaired by losses,” the circular reads.

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Business News

Nascon Allied Industries Plc: Increase in sale of goods boosts revenues

Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating unit

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Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating units, as total revenues increased slightly. The company reported revenues of N21.87 billion in 2020 (9months) – 4.01% increase compared to N21.03 billion in the corresponding period of 2019.

What you should know

Key highlights from 2020 (9months) results

  • Revenues increased by 4.01% from N21.03 billion to N21.87 billion YoY.
  • Revenues from sale of edible, refined, bulk grade salt; seasoning and vegetable oil, increased to N21.87 billion, +22.53% YoY.
  • Other income increased to N12.81 million, +27.43% YoY.
  • No revenue was recorded for freight income on the deliveries of salt and seasoning income-generating unit.
  • Gross profit increased to N8.96 billion, +74.56% YoY.
  • Operating profit increased to N3.64 billion +18.60% YoY.
  • Pre-tax profits increased to N3.47 billion, +16.63% YoY.
  • Post-tax profits increased to N2.29 billion, +13.27% YoY.
  • Earnings Per Share increased to 115 kobo, +12.75% YoY
  • Total assets increased to N44.36 billion, +45.79% YoY.
  • Total liabilities increased to N32.04 billion, +67.21% YoY.
  • Total equity increased to N12.32 billion, +9.35% YoY.

(READ MORE:Dangote’s NASCON Allied Industries Plc moves operation from Apapa)

Bottomline

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Nascon Allied Industries Plc recorded a boost from increase in sale of goods revenue-generating unit, but no revenue was recorded for its freight income on the deliveries of salt and seasoning revenue generating-unit.

Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19; Nascon Allied Industries Plc was able to increase its total revenues and pre-tax profits in the period under consideration.

 

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Tech News

Instagram disables its “Recent” feature

Instagram recently announced it had removed the “recent” tab from hashtag pages on a temporary basis

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COVID-19: Instagram cracks down on coronavirus AR effects, Instagram Tenders apology for fagging #EndSARS fake, Instagram has disabled the “Recent” feature for the forthcoming U.S election,

Instagram disclosed that it would remove the “Recent” tab from its hashtag pages for people in the United States of America.

The social networking and video sharing service stated this on its official Twitter handle. It said it is “doing this to reduce the real-time spread of potentially harmful content that could pop up around the election.”

What you should know

Nairametrics had reported on Instagram’s apology for its algorithm malfunction that led to the flagging of #EndSARS posts as fake.

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Instagram has also taken the following measures to ensure a successful November election.

  • The registration of 4.4 million votes this year through its flagship platform – Instagram and Messenger.
  • Serving as a means of information and tool to people in the US on the electoral process
  • The ban of any content that can thwart the success of the election.

(READ MORE:U.S dollar stable amid U.S holiday)

Mark Zuckerberg, the CEO of Facebook, said he was perturbed about the high risks for civil unrest in the US due to the upcoming presidential election.

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“I’m worried that with our nation so divided and election results potentially taking days or weeks to be finalized, there is a risk of civil unrest across the country.”

Furthermore, he disclosed on a call while discussing Facebook’s Q3 earnings, that “given this, companies like ours need to go well beyond what we’ve done before.”

Why this matters

The aim of the short-term decision is to decrease the spread of misinformation in the forthcoming US election.

 

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