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Tag: FAAC

  • FAAC ruckus

    If the newshounds barely paid attention to the boycott of the monthly Federal Accounts Allocation Committee meeting in Abuja Thursday last week by commissioners of finance in the 36 states of the federation, the aftermath of the drama has since become impossible to ignore.

    To be sure, this would not be the first time that the finance commissioners will openly voice their disagreement with the federal government on the computation of the distributable revenue. Whereas such disagreement has since become the norm – flowing as it were from the bizarre federal practice in which federating parts would routinely gather to share funds, the difference this time is the context and the setting of the disagreement.

    Clearly, short of an attempt to play the ostrich, nothing of the ruckus at the Abuja meeting can be said to be entirely unexpected. After the May 24, election of the Nigeria Governors Forum (NGF), the losing and the winning side have since thrown everything into the fray in what is supposed to be their mission to gain advantage. Of course, with the Presidency sworn to play the spoiler in the project to rip the forum apart, it was a matter of waiting for the next opportunity to launch into the next phase of battle.

    Well, that opportunity presented itself at the meeting convened to share the federally collectible revenue for the month of May. On the appointed day, the members gathered; however, the meeting was not to be as members walked out with a resolve to report back to their principals that things are not exactly what they seem.

    If the honourable commissioners had meant to stir the heart of the conscienceless federal behemoth to act justly, they were to be mistaken. Rather, they merely provided ammunition for the behemoth.

    I guess it was inevitable that FAAC will be sucked into the battle. By its composition, the body is made up of the commissioners of finance in the 36 states with the minister of state for finance representing the federal government. More out of reason of protocol than anything, the minister also doubles as chair of the body. Of course, with the principals of the two sides still locked in combat and even more so at a time the parties are still seething with rage over claims and counter-claims of ‘victory’, it seems understandable that the agents of the two parties would take their cue.

    It seems, unfortunately one instance when the politics of the forum will trump not only common sense, but also the cherished principles of our federalism. At the heart of the dispute is the interest of the states which is obviously diametrically in opposition to that of the federal government. The issues of course revolve around claims of observed discrepancies in the accounting of the distributable revenue, a claim, though hardly new, has remained a thorny issue in the relation between the federal government and the states. Unfortunately, the federal government prefers to see itself as principal while treating the states as its vassals. Now, to this claim was added an alleged non-implementation of decisions and resolutions of the forum. Specifically cited was the non-payment of arrears of February and that of the augmentation passed in May.

    The issues were such that the commissioners needed the input of their principals to resolve hence their boycott and subsequent resolve to take the message to them “so that they will put heads together to meet with the President and every other well-meaning entities of the federation so that these problems will be resolved once and for all”.

    As must be obvious now, that expectation is thoroughly misplaced. First, aside providing opportunity for the meddlesome federal government to further sow seeds of division into the governors’ body, it affords Governor David Jang and his losing party in the NGF an avenue to play for relevance.

    The issues are very clear. The call by the finance commissioners on a federal government alleged to be cheating to judge its own cause is clearly a ludicrous one. The federal government has no such records of fiscal sense or that of equity. In the last 14 years of civil democratic rule, the evidence on ground is one of a federal government most resistant to all entreaties by stakeholders to open the books of the national oil corporation turned collecting agency – the Nigerian National Petroleum Corporation – in line with the requirement for transparency.

    Surely, could the commissioners have chosen to be blind to the politics of revenue sharing? After all, the evidence is clear: 14 years after the revenue formula inherited from the military, the same federal government has practically frustrated every attempt to divest it of the ‘excess baggage’ revenue. Through its collecting agency, it solely determines what gets paid into the distributable pool. Again, much against reason and common sense, it has held on to a disproportionate 52 percent share from the pool- funds it has neither been able to use wisely nor indeed any productively for the benefit of the Nigerian people.

    Why are these issues relevant at this time? It is precisely because the issues underlie the many battles between the federal government and the states. They are at the heart of why the Jonathan administration seeks to decapitate the NGF. Whether it is the battle over the Sovereign Wealth Fund (SWF) which although the federal government jointly owns with the states and local government, the former insists on running almost exclusively or the management of the piggy bank called crude account, they are the reason the NGF, and by extension, its obdurate leader – Governor Rotimi Amaechi of Rivers State have become the enemy that must be crushed.

    Clearly, President Goodluck Jonathan’s desire to carve the NGF in his very image and likeness is perhaps only hidden to the extent that his desire to run in 2015 remains disguised to those in the villa. More than an ordinary tool, a FAAC in the hand of a desperate President is both a weapon of defence and offence – a veritable scourge to whip dissent into line. Forget the so-called commonality of interest among the governors: reining in the fiscally obdurate federal behemoth would come later. Jang and his co-traveller in infamy, Olusegun Mimiko will ensure just that. At this time, the name of the game is power – and as for President Jonathan, the March towards 2015 is unstoppable!

    Where do these lead? Your guess is as good as mine.

  • FAAC allocations, T-Bills’ sales reduce inter-bank rate

    FAAC allocations, T-Bills’ sales reduce inter-bank rate

    Inter-bank rate declined by 104 basis points last week due to increased market liquidity from the monthly Federation Accounts and Allocation Committee (FAAC) injection and treasury bills (T-Bills) repayment. About N217.98 billion treasury bills were repaid last Thursday, in addition to over N200 billion monthly statutory funds injected the previous day, bringing total inflow to the market to N417 billion.

    Olakunle Ezun, Currencies Analyst, Ecobank Nigeria, said the call and overnight and seven -day money market rates fell to 10.3 per cent and 10.7 per cent. The three-month Nigeria Inter-Bank Offered Rate (NIBOR) fell to 11.5 per cent, though less activities were done on the tenor. The interbank secured lending (Open Buy Back) also fell to 10.25 per cent for banks and discount houses.

    Meanwhile, the Central Bank of Nigeria (CBN) liquidity management remained active and supported by the circular issued last August reviewing its guidelines for how banks access its Standing Lending Facility window and Wholesale Dutch Auction System (WDAS) foreign exchange auction and CBN’s Monetary Policy Committee (MPC) decision to hold the rate unchanged at 12 per cent on March 19, 2013. With market liquidity of about N191 billion last Friday, CBN might continue its liquidity management to ensure price stability.

     

    NDIC

     

    The Nigeria Deposit Insurance Corporation (NDIC) has called for the establishment of an investor protection scheme to protect the interest of small investors in the capital market and to boost public confidence among the investing public.

    NDIC Managing Director, Umaru Ibrahim, spoke when he hosted the Executive Council of Chartered Institute of Stockbrokers (CIS) in his office in Abuja.

    He said the scheme is imperative to the development of a stable capital market, adding that the corporation has been advocating a framework for the Investor and Small Insurance Policy Holder Protection Schemes in collaboration with the International Association of Deposit Insurers (IADI) study group.

    The NDIC Chief Executive also lamented the over-concentration of stock-broking firms in certain parts of the country, saying this does not augur well for financial inclusion. He therefore advised the institute to mobilise resources for securing licences to spread such opportunities to other parts of the country. He further suggested that in line with Agent Banking model by the CBN, the institute could engage the services of some agents in various parts of the country to reach out to small investors.

    He also reiterated the need for partnership with the Institute in capacity building, particularly with the corporation’s bank examiners to acquire more skills in capital market operations which would assist them in conducting consolidated risk-based supervision.

     

    FBN Fund

     

    The FBN Money Market Fund, managed by FBN Capital Asset Management, has been assigned “Aa(f)” rating by Nigeria’s foremost research, credit rating and risk management company, Agusto & Co in its first quarter rating result.

    In the report published on its website, rating firm said the evaluation comes less than a year after the Fund was launched. It said the Fund is deemed to have “minimal to low risk of investment loss due to net asset value volatility”. According to the report, the rating is supported by good credit quality of underlying assets. All investments must have a minimum ‘A’ rating and at least 25 per cent of net assets are invested in short term Federal Government Securities.

    “The Fund has conservative investment guidelines with respect to interest rate risk. All investments mature within 365 days, with a maximum weighted average maturity of 90 days. The portfolio manager is well qualified, with over 13 years of liquidity and investment management experience,” it said.

    The Managing Director of FBN Capital Asset Management, Michael Oyebola expressed satisfaction with the rating saying his firm has created a balanced suite of mutual fund products which are accessible to varying levels of investors.

     

    ICAN

     

    The Institute of Chartered Accountants of Nigeria (ICAN) has given 795 members its Fellowship award. Speaking at the weekend after the conferment of the award on the recipients, ICAN President, Adedoyin Owolabi, said the accountants attained the status between January 1, 2003 and March 31, 2013.

    “As a professional Institute, we have every reason today to celebrate the attainment of this special status by these award recipients. This conferment is the highest professional status that can be attained by any member of the prestigious accountancy profession worldwide,” he said.

    He said the conferment is in line with global practice and means that recipient has demonstrated professional knowledge, skills and excellence in the discharge of their duties.

    He added that the recipients were expected to continue to exhibit an unwavering commitment to ethical values of accountability, transparency, honesty and integrity as espoused by the profession and the institute.

     

    Forex demand

     

    Foreign Exchange (Forex) demand by authorised dealers consisting of the Wholesale Dutch Auction System (WDAS) and Bureau De Change (BDC) operators dropped to $4.29 billion in the fourth quarter of last year, CBN External Sector Development Report, has said.

    The report said the 34.2 per cent decline, when compared with third quarter performance and 59.4 per cent when compared with the levels recorded in the corresponding quarter of 2011.

    The report also showed that dollar has continued to dominate external reserves as the currency constituted 84.3 per cent of the $43.83 billion reserves as at December 31, 2012. The figure represents an increase of $3.15 billion compared with its level of $33.81 billion in third quarter.

    Other currencies in the basket included; Euro (5.9 per cent), Chinese Yuan (1.9 per cent), GB Pounds (1.9 per cent) and SDR (5.9 per cent). A review of the management of external reserves revealed that the portfolio was composed of fixed deposits (48.6 per cent), funds under Asset Management (20.1 per cent), Joint Venture Company cash call (0.1 per cent) and current account (6.3 per cent) as well as Sovereign Wealth Fund (SWF) (2.3 per cent).

     

    Taxation

     

    The stability and growth of world economies will depend on their adaptation of efficient and effective tax policies, President Chartered Institute of Taxation of Nigeria (CITN) Sunday Femi Jegede has said.

    Speaking ahead of the 15th Annual Tax conference holding from May 7 to 11 at the Tinapa Lakeside Hotel, Calabar, Cross River State, the CITN boss explained that how tax revenues are generated and spent by different levels of government should be of utmost concern to civil society groups, local communities and entire population. He said such awareness would help put the needed checks that will bring lasting development to the people.

    He explained that the conference with theme: Global stability, revenue generation and economic growth, will serve as unique opportunity for participants to interact with tax administrators and policy makers that will be attending from different parts of the continent and globally.

    He said the conference is being organised by CITN. The lead paper will be presented by Niger State Governor, Dr Muazu Babangida Aliyu while Acting Chairman, Federal Inland Revenue Service (FIRS), Alhaji Kabir Mohammed Mashi will be Chairman of one of the sessions.

    Also expected at the event is Akwa Ibom State Governor, Godswill Akpabio as Special guest at the Gala Nite and his Cross River State counterpart, Liyel Imoke, as Special guest at the opening ceremony.

    Also to attend is the immediate past President of West African Union of Tax Institutes (WAUTI), Prince Kunle ‘Quadri and other stakeholders in Nigeria’s tax administration as well as representatives from the academic community. Professor Akin Oyebode of the University of Lagos will be one of the discussants.

     

    Corruption

     

    Forensic expert, Mr Steven Powell, has urged accountants to work toward getting Nigeria out of the list of corrupt nations. Powell, who is the Managing Director of ENS Forensics Limited, South Africa, spoke at the Fifth Convocation Lecture of the Nigerian College of Accountancy (NCA), Jos, a Postgraduate Accountancy College owned by the Association of National Accountants of Nigeria (ANAN). “My challenge to you is to get Nigeria away from the list adding that accountants have practical roles to play in the future of the country as Nigeria being perceived as a highly-corrupt nation,” he said.

    Powell said the association is happy about the upcoming whistle blowing legislation in Nigeria. “In Nigeria, people are so scared to come forward and blow the whistle. Staff should be courageous to come forward with information without fear. When dealing with organised crime syndicates, if the whistle blower’s identity is disclosed, his life is in danger. But if the identity is not disclosed, is hard to get the whistle blower and his life is safer,” the forensic expert said.

    He urged accountants to report fraudulent practices to the law enforcement agencies, adding that accountants should also be vigilant. “Make sure your organisation adopts the necessary control measures as an auditor. Do not look the other way, act with honesty and integrity. Powell suggested that there was need to change people’s lifestyles. He urged the post-graduate students to pursue careers in Forensics which he described as rewarding,” he advised.

     

    DMO

     

    The Debt Management Office (DMO) last week at its monthly auction of bonds raised N104.8 billion ($670 million).

    Based on FBN Capital report, the DMO tentatively offered Nigeria’s long bond in February to raise just N15 billion and may have been surprised by the bid of N79 billion for the paper.

    It said the total sales target is higher than its projection given that the agency had raised N285 billion (gross) in just three months and that the approved 2013 budget sets domestic borrowing (net) at N577 billion.

    “The auctions in the past year have generated demand comfortably above projected sales, a rare exception being September. Many offshore investors may favour the longer dated treasury bills but few, if any liquid government bond markets match the yields available in Nigeria. Also, the shift by domestic institutional investors from bonds to equities has not been dramatic,” it said.

    It said the market rally since last August is driven by tight monetary policy is not exhausted, and that yields on the more liquid bonds may narrow by 100 basis points in the first half of the year.

     

    MasterCard

     

    MasterCard Inc., which is under pressure from France to cut card payment fees, said European consumers are increasingly using credit and debit cards for purchases, dismissing the region’s sovereign debt crisis, Bloomberg report has said.

    “Our business in Europe has been growing really well. The sovereign debt issue isn’t affecting consumer confidence in the way that it might,” Ann Cairns, president of international markets at the company, said in an interview in Dubai.

    MasterCard Inc said it is expanding even as Europe’s financial crisis enters unprecedented territory after Euro-area finance ministers agreed to a tax on Cypriot bank deposits at the weekend.

     

    IFC

     

    The International Finance Corporation (IFC) has said it is working with Corporate Affairs Commission (CAC) to build a collateral registry system that will make it easier for banks to lend to Small and Medium Scale Enterprises (SMEs).

    Speaking at the SME Toolkit Global Partner conference held in Lagos, IFC, Nigeria Country Manager, Solomon Quaynor, said the corporation has realised that banks do not want high risk transactions, synonymous with lending to SMEs.

    He said the corporation is also partnering with 10 local banks to de-risk lending to the subsector. He said the SME Toolkit launched in the country by IFC, IBM and EDC Pan African University, will enable the entrepreneurs to effectively manage their businesses. He, therefore, said the IFC has stepped in to de-risk such loans by providing financial infrastructure and developing collateral registry that will assist banks in lending to the subsector.

    Quaynor said since a lot of the SMEs do not have landed assets, except receivables, IFC is working with Corporate Affairs Commission (CAC), Ministry of Trade and Investment to build a registry system that should include the ability of SMEs to borrow from banks.

     

  • FAAC inflows, matured OMO slash interbank rate

    FAAC inflows, matured OMO slash interbank rate

    The inter-bank rate last week fell by 187 basis points over injections of the monthly Federal Accounts Allocation Committee (FAAC) funds and matured Open Market Operation (OMO) bills. From N567 billion appropriated among the three tiers of government on January 14, N283.65 billion hit the market, in addition to matured OMO bills, to douse rising money market rates.

    Also, the Central Bank of Nigeria (CBN’s) liquidity management remained active and supported by the Monetary Policy Committee’s decision to leave the Monetary Policy Rate (MPR) unchanged at 12 per cent on November 20.

    Fixed Income & Currencies Analyst AT Ecobank Nigeria, Olukunle Ezun said the policy has manifested in the frequency of CBN’s market interventions as seen in the mop up of over N110 billion on January 15 to reinforce its liquidity management efforts, in addition to over N956.8 billion treasury bills and OMO bills sold year to date to ensure price stability.

    Also, call and seven-day money market rates fell 12.7 per cent and 12.9 per cent on January 17 while the three-month Nigeria Interbank Offered Rate (NIBOR) also fell 14 per cent, though fewer activities are done on the tenor. The secured lending (Open Buy Back) fell 12.3 per cent for commercial banks. Mr Ezun explained that with market liquidity of about N450 billion, the CBN is expected to mop up to ensure price stability.

     

    Naira

    The naira fell, extending its worst week against the dollar in nine, on speculation the government spending will rise and as corporate demand for foreign exchange increased after the central bank reduced supply.

    The currency weakened less than 0.1 per cent to N157.1 a dollar and had retreated 0.5 per cent last week, the worst five-day performance since November 16, according to data compiled by Bloomberg.

    “Given the intended liquidity injections and assumption of dollar-naira at N160 in the 2013 budget, the naira might come under pressure due to increased government spending,” analysts said.

    The CBN sold $120.30 million last week at auction, a 38 per cent decline from the previous week, according to data on its website. The regulator sells foreign exchange at auctions on Mondays and Wednesdays to stabilise the naira.

    Also, yields on naira debt due 2022 fell 10 basis points to 11.27 per cent while borrowing costs on the nation’s $500 million of Eurobonds due January 2021 declined two basis points to 3.716 per cent last Friday. Nigeria’s inflation rate eased to 12 per cent in December, from 12.3 per cent a month earlier, the first decline in three months as the effects of flooding that damaged agricultural output began to recede.

     

    Banks’ deposits

    Five out of the 21 banks operating in the country control 53.14 and 51.64 per cent deposits and assets within the sector, CBN Financial Stability Report for June 2012 released last week indicated.

    The report showed that the figure was an improvement from 52.06 and 53.01 per cent deposits and assets respectively recorded at the end of second half, 2011.

    The report endorsed by CBN Deputy Governor, Financial System Stability, Dr Kingsley Moghalu said the market share of the largest bank with respect to assets and deposits, stood at 14.05 and 15.60 per cent respectively. This he said, is also an improvement when compared with 13.84 and 15.15 per cent respectively recorded a year ago.

    “The average market share of assets and deposits of five largest banks stood at 51.64 and 53.14 per cent respectively compared with 53.01 and 52.06 per cent at the end of second half, 2011. The market share of the largest bank with respect to assets and deposits, stood at 14.05 and 15.60 per cent respectively. This compared with 13.84 and 15.15 per cent in 2011,” the report said.

     

    AMCON

    The Asset Management Corporation of Nigeria (AMCON) also recovered 10 landed properties, a vessel and other assets from a firm.

    A statement from AMCON, said the recovery followed a court order granted on October 19, 2012 by Justice Idris of the Federal High Court and executed last Wednesday.

    It explained that counsel to AMCON, Olisa Agbakoba & Associates, secured the court order to take over the movable and immovable properties as well as freeze bank accounts of the debtors, pursuant to provisions of the AMCON Act 2010. The firm and its Managing Director reportedly have an outstanding of about N27 billion in AMCON’s books.

    “The Act empowers AMCON to undertake recovery measures against debtors who have refused to pay up their debts that have become non-performing and inimical to the financial system. The non-performing loan was acquired by AMCON under its mandate to clean up non-performing loans from the Nigerian financial system,” it said.

     

    Banks’ credit

    Credit by Nigerian banks is expected to rise by 20 per cent within the year, Renaissance Capital (RenCap), an investment and research firm has said.

    In an emailed report obtained by The Nation, RenCap said that Nigerian banks excite it most within the Europe, Middle East and Africa (EMEA) banks context in 2013. According to the firm, with its growth expectations for Gross Domestic Product (GDP) of 6.7 per cent, the Nigeria market should benefit from accelerating top-down trends.

    It tipped United Bank for Africa, Access Bank, Zenith Bank and Skye Bank as lenders that could achieve a double-digit Earnings Per Share growth across the board. It also said West to East African banks are also viable performers within the year, with the Kenyan elections a potential headwind.

    RenCap said Equity Bank remains its pick of the bunch on a relative basis. “Within the liquid space, this could be Russian banks’ year. Although we are more conservative with our outlook for the sector at the start of 2013 then we were throughout 2012, market appetite has begun to rise for risk assets,” it said.

    Inflation

    Ahead of today’s meeting of the MPC, analysts have forecast that CBN will leave both the MPR and Cash Reserve Ratio (CRR) unchanged at 12 per cent, until broad-based macroeconomic stability has been achieved.

    MPR is the benchmark rate by which the CBN determines interest rate while CRR is a portion of banks’ deposits kept by banks with the CBN.

    Head African Markets, Standard Chartered, Razia Khan, explained that with the threat of a higher benchmark crude price being adopted in the 2013 budget, there is likelihood that the CBN will today, leave the rates unchanged.

    She said there are a number of interesting points to note about the December inflation figure, which decelerated to 12 per cent year to year from 12.3 per cent earlier. According to her, the key driver of Consumer Price Index appears to have been a rise in core inflation – up to 13.7 per cent year to year in December.

     

    BDCs

    The CBN has warned authorised dealers against patronising 236 Bureau De Change (BDC) operators whose licences were revoked a week ago. In circular to all authorised dealers, BDCs and general public, CBN Director, Trade and Exchange Batari Musa advised that any foreign exchange transaction, including sale to and purchase from the affected BDCs is illegal.

    He also said transfer of funds through the affected BDCs and or on their behalf is no longer allowed. Some of the affected BDCs include A.F.A. BDC, A.I.A. BDC, Acclaim BDC, African Shelter BDC, Afrinvest BDC and All States BDC. Others are AMD BDC, AMX BDC, BTC BDC, Kano Agency BDC and IAS BDC.

    The CBN had on October 2, 2012 published the list of BDCs that were in contravention of 3.5 of the CBN BDC Guidelines, which stipulates that every BDC shall maintain a mandatory caution deposit of $20,000 with the apex bank.

     

    MPR

    An economist, Henry Boyo, has called for a policy shift in the monetary policy stance of the CBN to enable the economy and real sector to experience desired growth.

    He spoke at a roundtable organised by Save Nigeria Group (SNG) with theme, Fiscal and monetary policy crises – Way out. The said the economy is not growing because the apex bank policy has failed to bring inflation and interest rate within a single digit, thereby stifling operations of the productive sector of the economy.

    He said faulty monetary policy stance promotes corruption and weakens the naira because stakeholders involved in the exchange of the dollar allegedly benefit from it.

    However, CBN Director of Research, Charles Mordi, faulted Boyo’s position, saying he is misinforming the public, adding that such economic propositions are not correct.

    He said the CBN agrees there is need for a single interest rate, but it is difficult to have a strong naira, low interest rate and low inflation at once especially in a developing economy like Nigeria.

    According to him, low interest rate is desirable, but so many factors have to be in place to achieve that.

    He said the monetary policy direction of the CBN is in order and has assisted the country in improving its growth trajectory.

     

    GDP

    The Federal Government plans to change its Gross Domestic Product (GDP) base year to 2008 from 1990 will add N400 billion to its nominal GDP, Managing Director, Financial Derivatives Company (FDC), Bismarck Rewane, has said.

    Speaking during the Finance Correspondents Association of Nigeria (FCAN) Roundtable on the Economy in Lagos, he explained that nominal Gross Domestic Product (GDP) is estimated at $273.8 billion.

    According to him, by carrying out the exercise, Nigeria will be emulating Malaysia and South Africa, which rebased their GDPs from 2000 to 2005 each and Ghana from 1993 to 2006.

    He said rebasing the GDP would make the rich richer and the poor poorer while the country’s growth trajectory will nosedive.

     

    Bank to bank report

    Standard Chartered Private Equity and Ashmore has announced that they have invested in GZI, an aluminium can manufacturer based in the country.

    In a statement, Head of Standard Chartered Private Equity in West Africa,Yemi Osindero, said: “We are excited to have invested in a long-term Standard Chartered client that is building a world-class can manufacturing company. From its initial production plant in Nigeria, GZI has followed a very profitable growth path, and established itself as an integral member of Nigeria’s beverage sector.”

    He said the investment will assist in growing GZI into a market-leading, pan-African beverage-packaging firm.

    Ecobank Nigeria has given out cars to star winners in its Win Big promo. The winners include Green James Rose (King Jaja branch), who won the star a Nissan SUV and Margaret Omisakin (Ile-Ife branch), who also won a Nissan Salon car. The winners emerged from 1,519,340 qualified entries for the grand prize.

     

     

  • FG, states, councils share N572.9b in November

    FG, states, councils share N572.9b in November

    The Federation Account Allocation Committee (FAAC) has approved revenue distributions to the three tiers of government in November totaling N572.9 billion, about N2.0 billion lower than what was shared in the preceding month.

    However, accruals to the Excess Crude Account rose slightly to about $9.66 billion, up from about $9.5 billion recorded in October.

    Total accruals from the statutory revenue source during the month under review was N569.459 billion as against the N640.766 billion grossed in the preceding month.

    This indicated a deficit variance of N71.307, a development that necessitated the augmentation of the distributions with N59.138 billion.

    The budgeted distribution for the month, inclusive of cost of collection to revenue agencies stood at N574.402 billion, an amount higher than the distributions by about N1.51 billion.

    The federal government got N 190.3 billion from the statutory allocation which represents 52 per cent, states N96.5 billion (26 per cent) and the local governments got N74.4billion (20 per cent). The oil producing states shared N41.8billion as the 13 per cent derivation.

    Disclosing this to journalists at the end of the meeting which ended in Abuja on Thursday, the Accountant General of the Federation, Mr. Jonah Otunla, said the shortfall in revenue during the month was occasioned by several disruptions in crude oil production and lifting operations during the period.

    A breakdown of the shared revenues showed that distribution from statutory revenue stood at N407.86 billion while VAT accounted for N62.73 billion. Others are SURE-P N35.55 billion and refund by the Nigerian National Petroleum Corporation – N7.62 billion.

     

  • ‘Nigeria earned N5.5tr in eight months’

    ‘Nigeria earned N5.5tr in eight months’

    Nigeria earned N5.5 trillion from mineral and non-mineral resources revenue between January and August this year, a data from the Federation Accounts Allocations Committee showed on Monday.

    The figures obtained by the News Agency of Nigeria in Abuja revealed that the country recorded the highest revenue of N825.39 billion in July.

    Out of the total amount generated so far in 2012, a total of N1.5 trillion was recorded to have been lodged into the Excess Crude Account (ECA) between January and August.

    A portion of the revenues above the benchmark oil price are saved while the remaining revenue is distributed among the federal, state, and local governments based on a set formula.

    NAN reports that records from the FAAC during the months under review however contained only information on lodgments into the excess crude account and not withdrawals made from it.

    NAN recalls that on September 14, the accountant-general had announced that the balance in the ECA was $8.03 billion, following lodgment of N124 billion into the account in August.

    Similarly on August 15, the Minister of State for Finance, Dr. Yerima Ngama told reporters that one billion dollars was withdrawn from the account for distribution among the federal, states and local governments “to execute some on-going projects.’’

    A breakdown of the country’s revenue in the month of July showed that mineral revenue accounted for N646.47 billion while the non-mineral revenue amounted to N178.92 billion.

    In other months, FAAC recorded N666.32 for January, N766.77 in February, N726.77 in March and N626.17 for the month of April.

    Also, a total of N586.91billion was credited to the national treasury in May, N763.55 billion in June and N564.88 billion for the month of August.

    Notably, the country recorded its least revenue of N564.88billion in the month of August, compared with figures recorded in the months of May, April and January, respectively.

    The Office of the Accountant-General of the Federation, headed by Mr. Jonah Otunla, computes the figures and also distributes monthly revenue from the Federation Accounts to the three tiers of government.

    The office attributed the shortfall in oil revenue to decline in production, poor sales and strikes embarked on by Labour unions in January.