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Economy & Politics

FAAN denies allegation of stolen N750 million, admits breach of procurement process

FAAN says that the accusation of the theft was just a low and unsubstantiated blow.

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FAAN reacts to release of guideline for resumption of flight operations post covid-19, FAAN releases new guidelines for post covid-19 flight operations

The Federal Airport Authority of Nigeria (FAAN), has denied allegations of stolen N750 million from its coffers, as alleged by an online medium. The aviation agency, while describing the allegations as entirely false, said that no funds to the tune of N750 million were approved or even went missing due to fraudulent contracts, as alleged.

This was disclosed in a series of tweet posts by FAAN, through its official Twitter handle on Thursday, July 30, 2020.

An online medium had reported a stolen N750 million, following a fraudulent contract scheme that may have indicted top staff of FAAN. However, while speaking under conditions of anonymity, a highly-placed source within FAAN stated that the only procurement issue that was identified happened in February 2020.

According to tweet posts from FAAN, “Allegations of a stolen N750 million from the coffers of the Federal Airports Authority of Nigeria (FAAN) is entirely wrong, as no funds to the tune of any amount were approved or ever went missing due to a fraudulent contract.

READ MORE: FAAN now manages Murtala Muhammed International Airport’s toll gate 

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‘’The Managing Director himself, discovered and queried some procurement documents in February 2020. When the answers to the queries were found unsatisfactory, an investigation was launched, the staff involved were suspended, and later replaced in their official capacities.

‘’The recommendations of the management investigation were forwarded to the Federal Ministry of Aviation in June 2020. All this is fully documented and in line with federal civil service procedures.’

The statement also pointed out that some of the names being bandied around had no role in the failed procurement process. It encouraged investigative reporters to cross-check their stories and get factual information instead of smearing innocent people and settling personal scores.

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READ MORE: FG pays doctors’ N15.8 billion hazard allowance

The statement from FAAN says that the accusation of theft was just a ‘low and unsubstantiated blow’ that could have been better clarified instead of going all the way to run the organization down. It also reiterated that a failed attempt to undermine the integrity of the procurement process, is not a theft, just as there was never any theft.

Also speaking on the issue of half salary to members of staff as was also reported by the online medium, a source in FAAN said due to paucity of funds, management decided to ease the burden of expenditure for all staff in view of the big Sallah on Friday by paying half salary to all senior staff only, with the balance to be paid next week.

All FAAN junior staff were paid their full 100% salaries (that is GLs 1-7). It also stated that a notice to this effect was on all FAAN staff platforms since yesterday and the unions later got to know of it.

READ ALSO: UPDATED: Nigeria Inflation rate hits 12.2% as food index rises

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An online media report had alleged that some top officials of FAAN and some of their children had conspired to steal N750 million from the aviation agency by re-awarding old contracts that had earlier been awarded by the Aviation Minister, Hadi Sirika.

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They alleged that the fraud was carried out by staff of the procurement department with the help of officials of the account and audit departments.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Economy & Politics

Emefiele tells economists to stop “overdramatizing” analysis that can create Panic

CBN has assured that the nation’s economy will emerge out of recession in the first quarter of 2021.

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CBN health intervention fund gets new interest rate by March 2012, Nigerian banks’ non-performing loans drop significantly by 41% in 2019, External reserves decline by over 8% in 3 months, Nigeria’s external reserves increase by $1.36 billion in 13 days

The Central Bank of Nigeria (CBN) has assured that the nation’s economy will grow by 2% in 2021. The apex bank is optimistic that its various intervention will make Nigeria emerge out of recession in the first quarter of 2021.

This was disclosed by the Governor, CBN, Godwin Emefiele while delivering his keynote address at the 55th Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos on Friday.

READ: Total credit to the economy rose to N19.54trillion – CBN Governor

What he is saying

He said, “We expect that growth in 2021 would attain 2.0 percent. It is important to insulate the economy from shocks that may undermine the attainment of the projected 2.0 percent economic growth.

However, downside risks remain, as restoration of full economic activities, particularly in service-related sectors, remains uncertain until a COVID vaccine is produced and made available to millions of people across the world.

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READ: Dark Clouds loom for investors as stocks fall 8% in first half of 2020

“Second, with the significant rise in cases in advanced markets and the imposition of lockdowns in parts of Europe, concerns remain on the impact this could have on growth in advanced economies, commodity prices and the financial markets.”

He emphasized on the need to find ways to insulate the economy from the impact of these shocks through diversification efforts, while also working to ensure that the nation adheres to safety protocols in order to prevent a surge in COVID-19 related cases, as this could further cripple economic activities.

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READ: CBN discloses how much has been disbursed from N50 billion COVID-19 intervention fund

Stop overdramatizing analysis

Emefiele appealed to economic analysts to stay clear from analysis that can create panic and thus hamper the economic recovery process. “When you overdramatized you create panic in the system and that slows down the process of recovery.

“Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices,” he added.

Mr. Emefiele has often accused “armchair” economists of making exaggerated comments when expressing their views on the economy.

Explore Data on the Nairametrics Research Website

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READ: Finance Minister gives reason FG approached China for $17 billion loan

What you need to know

On November 23, 2020, Nairametrics reported that the Minister for Finance, Budget and National Planning, Mrs. Zainab Ahmed, said the country will exit recession by the first quarter of 2021 as the government is working towards reversing the declining economic trend in the country.

  • The Finance Minister said the COVID-19-induced recession followed the pattern across the world, where many countries had entered an economic recession.

READ: Nigerian economy going into recession, might contract by -8.9% – Finance Minister

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Economy & Politics

Nigeria edges closer to getting World Bank loan, in the final stages of talk

The Finance Minister has disclosed that Nigeria has fulfilled the conditions and is in the last stages of securing a World Bank loan.

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FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion,IMF, International monetary fund, Zainab Ahmed, Nigeria's Minister of Finance, Budget and National Planning

Nigeria is set to achieve its plans of getting the $1.5 billion World Bank loan package as it is in the closing stages of the deal following its fulfilment of the conditions set by the international multilateral organization.

This disclosure was made by the Minister for Finance, Budget and National Planning, Zainab Ahmed, during an interview on Friday, November 27, 2020, with Bloomberg Television.

While pointing out that Nigeria’s senate approved the borrowing plan from the World Bank in June, Ahmed said the board of the multilateral institution will discuss the loan package at their next meeting.

What you should know

It can be recalled that the World Bank loan which had been sought by Nigeria in the wake of the devastating impact of the coronavirus pandemic, was being delayed by the Brettonwood institution due to concerns over reforms as it feels that Nigeria has not shown enough commitment towards achieving them.

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Some of the reforms include the unification and flexibility of the exchange rate, removal of fuel subsidy, increase in electricity tariffs amongst others.

However, it seems that with the recent deregulation of the downstream sector of the oil industry with the attendant removal of fuel subsidy and increase in electricity tariff, some of those concerns of the World Bank are gradually being sorted out.

Ahmed also said that Nigeria is considering joining the G-20 debt-relief initiative and is talking to commercial lenders to secure their backing.

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She said, “We will consider joining as long as it is safe for us to do so. Nigeria couldn’t participate initially because some of the conditions were unfavourable for existing loan commitments with bilateral lenders and other international borrowings.”

On the increased gap between the official rate and parallel market rate, the minister said the government is concerned about the widening gap in the naira’s exchange rate on the official and parallel markets.

She said, “We have been taking measures to close the gap. We hope to get to an even level very soon so the impact of the exchange rate will become moderated.”

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Economy & Politics

Nigeria generates N416.01 billion from Company Income Tax in Q3 2020

Total company income tax generated increased by 3.48% in Q3 2020, compared to N402.03 billion recorded in Q2 2020.

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Avoid paying taxes, Nigeria generates N416.01 billion from Company Income Tax in Q3 2020

Nigeria generated the sum of N416.01 billion from Company Income Tax (CIT) in the third quarter of 2020. This was revealed in the Company Income Tax by Sectors report, recently released by the National Bureau of Statistics (NBS).

According to the report, the total CIT generated increased by 3.48% in Q3 2020, compared to N402.03 billion recorded in the previous quarter (Q2 2020). It reduced by 20.13% compared to N520.89 billion recorded in the corresponding quarter (Q3) of 2019.

READ: Nigeria’s Value Added Tax collection dips slightly in Q1 2019

READ: VAT revenue may have hit 4 year high in 2018

Highlights

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  • Company income tax generated year-to-date sums up to N1.11 trillion as against N1.26 trillion in the comparable period of 2019.
  • Professional Services including Telecoms generated the highest amount of CIT with N55.52 billion generated, closely followed by Other Manufacturing with N42.03 billion.
  • Banks & Financial Institutions generated a sum of N24.05 billion.
  • Mining generated the least, closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million, and N321.72 million generated respectively.

READ: FBN Holdings Plc posts Profit of N21.9 billion in Q3 2020

Out of the total amount generated in Q3 2020, N244.70 billion was generated as CIT locally, while N70.34 billion was generated as foreign CIT payment. The balance of N100.97 billion was generated as income taxes from other payments.

Automobiles and Assemblies grows CIT by 994%

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In terms of sectors with the highest increase in company income tax remittances, the Automobiles and Assemblies sector grew its CIT by 994%, from N81.6 million in Q2 2020 to N892.7 million. It was closely followed by the Gas sector, which grew its CIT by 626% to stand at N4.76 billion from N655.5 million.

READ: FG rejects calls for tax reduction, offers tax relief for donors to intervention funds

On the flip side, transport and haulage services recorded the highest decline in company income tax, as it reduced by 76% to stand at N7.35 billion from N31.1 billion. This is closely followed by Banks and financial institutions, which declined by 51% to stand at N24.1 billion.

READ: Unity Bank Plc posts gross earnings of N11.04 billion in Q3 2020

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Bottom line

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The rise in company income tax is an indication of the Nigerian government’s move to improve the generation of revenue from the fiscal side as against oil exportation. However, the halt in economic activities due to the COVID-19 pandemic contributed to the year-on-year decline in company income tax.

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