Business News
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.
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)
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.
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.
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.
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.
Business
FG to commence construction of 4 new rail projects across the country
The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.
The Minister of Transportation, Rotimi Amaechi, has said that the Federal Government is about to commence 4 new rail line projects in various parts of the country.
The listed rail line projects include Ibadan-Kano, Port Harcourt-Maiduguri, Kano-Maradi and Lagos-Calabar rail lines.
This disclosure was made by Amaechi while speaking at the annual ministerial press briefing on programmes, projects and activities of the Federal Ministry of Transportation and its agencies on Friday in Abuja.
READ: FG to fully launch E-ticketing platform for NRC next week
What the Minister of Transportation is saying
Although the Minister announced that the Federal Government was about to start the rail lines project, he was not specific on the exact dates the projects would start.
Amaechi, in his statement, said, “We have awarded the following contracts and we are about to start and we have even tried to solve the financial problems. This is because we have the problem of having to hire consulting engineers.
READ: $2 billion Kano-Maradi rail would be completed in 36 months – FG
“The ones we are about to start include Ibadan to Kano, we are waiting for funds from China. We are about to start Port Harcourt to Maiduguri, we are waiting for the cabinet to approve consulting shares. We are also to start the Kano-Maradi and Lagos to Calabar.
“But one thing that is unique about these contracts is that the president early enough directed that all rail lines must stagnate at the seaports.
“That is why there may be a bit of adjustment in the pricing of Kano-Maradi because we have to adjust it to link up to Kano-Lagos so that it can terminate at Lagos seaport.’’
The Minister pointed out that the 185.5km Lagos-Ibadan double standard gauge line with extension to Apapa seaport was nearing completion, while the 186km Abuja-Kaduna and 302km Warri-Itakpe standard gauge lines had been completed and were functional.
READ: FG urges contractors to complete Ebute Meta–Apapa seaports railway extension by January 2021
What this means
- The various rail line projects are part of the ambitious plan by the Federal Government to create a nationwide rail network that is intended to help in the country’s diversification efforts, away from crude oil.
- Some of these rail projects will also help to decongest the Apapa ports in Lagos and serve as a route for the import and export of goods in the West African sub-region.
Business
Customs Tin-Can Island Command generates N112.7 billion in Q1 2021
This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.
The Nigerian Customs Service revealed that its Tin-Can Island Command has a first-quarter revenue of N112.7 billion in 2021. This is a N21.1 billion increase in revenue compared to a revenue of N91.6 billion in Q1 2020.
This was disclosed by Mr Mba Musa, Customs Area Controller, in a statement on Friday.
“The comparative analysis of quarter one revenue collection from 2018 to 2021 are as follows: in 2018, N76,789,721,107.42; in 2019, N78,857,106,168.27; and in 2020, N91,635,998,490.73,” the customs boss said.
READ: Customs revenue rises by N200 billion to hit N1.5 trillion in 2020
“This improvement is despite the twin threat to lives and livelihood posed by the COVID-19 pandemic. The command has inspired their officers to continue to work hard while observing all the safety measures to achieve the best of performance.
“We kept our lines of communication open and concerted effort was made to ensure that the supply chain is not disrupted,” he added.
READ MORE: Customs officers must declare their assets annually – Customs boss
What you should know: The Nigeria Customs Service (NCS) generated a revenue of N1.5 trillion for the year 2020, a rise compared to N1.3 trillion in 2019.
