Tag: revenue

  • ‘Tourism can earn more revenue than oil’

    ‘Tourism can earn more revenue than oil’

    Amid dwindling economic fortunes of the Federal Government, experts in the hospitality industry, under the aegis of Association of Hotel Owners in Kwara State, have said the tourism sector has the potential of generating more money to government’s coffers than crude oil, if properly harnessed.

    Therefore, the association canvassed a synergy between the state and the federal governments in the development of tourist sites in various parts of the country.

    The chairman of Kwara State chapter of the association, Chief Michael Oyeyipo, disclosed this to reporters in Ilorin, the state capital, while briefing them on the activities lined up by the association to mark this year’s World Tourism Day.

    “If you go to Obudu Cattle Resort, you will be surprised at what you find there. International tourists come there as a matter of cause; sport enthusiasts from all over the world come there. I believe if the Federal Government allocates enough funds for the development of the sector, huge revenue will accrue to its coffers.

    “The federal and state governments can jointly establish such a place all over the country and develop them. Dubai in the United Arabs Emirate was developed within a short time and it has become such a tourist attraction all over the world. Such feat can be achieved in Nigeria,” he said.

    He also challenged the National Assembly to advise state governments to pay more attention to tourism development, adding that state governments should make tourism one of their policy thrusts.

    He further said tourism had contributed immensely to enhanced internally-generated revenue (IGR) of many state governments. He cited Cross River’s Obudu Cattle Ranch, Bauchi’s Yankari Games Reserve and its Warm Springs, Ekiti’s Ikogosi Warm Springs and Holiday Resort and Yobe’s Argungu Fishing Festival as some of the tourists’ sites that yield huge revenues for the respective states.

    The hotelier, who said tourist sites abound in Kwara State, which he said include Esie Stone Image Museum, Patigi Regatta, Awon Festival, Owu Waterfall and Owa Kajola Warm Spring. He added that genuine effort towards developing them would boost the revenue profile of the state.

    Chief Oyeyipo, who identified inadequate infrastructural facilities such as access roads, provision of potable water and inadequate electricity supply as some of the challenges the industry is experiencing in Kwara State, called on government to address them urgently to help business growth.

    “To worsen the already very difficult operating conditions faced by the hospitality industry, the rates and tax regime in the state have not been friendly. More often than not, multiplicity of taxes has almost crippled the industry,” he said.

    He maintained that operators in the industry remained undaunted in carrying out their businesses despite the challenges, adding that they are determined to meet the aspiration of government which regards them as the engine of growth for the state’s socio-economic development.

  • Where does advert revenue go?

    Where does advert revenue go?

    Advertisers invest heavily on brands promotion but hardly get returns on their investments. How can they reap from their investments? Experts show the way out, reports ADEDEJI ADEMIGBUJI.

    For advertisers and creative agencies,the maxim “I know that half of my advertising dollars are wasted….I just don’t know which half,” is real. This maxim was popularised by John Wanamaker, regarded as the father of both modern departmental stores and advertising.

    Developing advert copies is difficult. It becomes more difficult when such adverts fail to sell the product. When that happens, the creative agency gets fired by the client, then Wanamaker’s maxim becomes apt.

    The reality of the advertising business is that many marketing programmes are usually not easily justified if weighed on the balance of return-on-investment. Such advertisement ends up being a leap of faith because it’s particularly expensive and its direct benefits particularly difficult to quantify.

    A good advert should sell a product and not just create good impression, humour or recall, especially in the current economic realities which is putting pressure on advertisers to cut down on their marketing budgets. This, perhaps, remains a major reason Cannes Lion Festival, the world’s most coveted advertising and marketing awards, decided to introduce a new award category to reward any outstandingly creative advertising piece or an innovative marketing strategy that truly drives sales.

    For Nigerian advertising agencies, the industry has witnessed great creatives that have all the element of good concept, notwithstanding that they are yet to win the Cannes Lion Festival. However, the recognition of their works by some other global rating agencies, is a testimony to the fact that they are not doing badly, except for the fact that most of the ads hardly enhance sales or influence consumers to buy the product.

    The abysmal performance of the Mobile Number Portability (MNP) campaign adverts is a case of advert investment gone awry.  The telecom sector is among the highest advert spenders in the country.

    According to figures from a recent Mediafact, a publication of MediaReach OMD, last year, the sector spent N14.7 billion on advertising to emerge as the biggest spender. During the period under review, all the telecoms operators reportedly invested a larger part of their media investment on MNP a scheme introduced by Nigerian Communication Commission (NCC), to increase quality of service and deepen competition among the players. Surprisingly, the NCC reported few months ago that only a dismal 80, 424 subscribers ported out over 129 million subscribers within 10 months (July 2013 to February 2014).

    Further statistics from the telecom industry regulator revealed that between May last year and February this year, MTN, the biggest telecoms company in the country, recorded 36,819 cases of subscribers porting out of the network. This was followed by Airtel, Globacom and Etisalat with 22,595; 12,357; and 8,653 respectively. The figure also showed that within the period under review, MTN recorded monthly out-porting figures of 3,409; 2,719; 3,142; 3,925; 4,266; 4,453; 4,491; 3,052; 3,667; and 3,695. Also, Airtel recorded monthly out-porting figures of 1,190; 1,315; 1,327; 5,826; 6,520; 1,447; 1,004; 1,199; 1,429; and 1,338. Globacom also recorded monthly out-porting figures of 1,646; 1,122; 1,367; 1,354; 1,267; 1,204; 1,206; 973; 978; and 1,240 for the period. Etisalat had the lowest number of subscribers who left its network with a monthly figure of 768; 646; 917; 934; 1,019; 1,001; 1,129; 626; 806 and 807 for the period. In the report, MTN reportedly accounted for about 45.78 per cent of out-porters; Airtel, 28.09 per cent; Globacom, 15.36 per cent; and Etisalat, 10.75 per cent.

    While the CEO of TPT, Mr. Charles Igbinidu, is of the opinion that the MNP campaign created a high level of awareness, but to the telcos, such advertising investment has remained a waste, at least, going by the number of people that the portability ads called to action.

    In Igbinidu’s assessment, the campaign is not totally a flop as being suggested in some quarters. This is because the portability campaigns have, at least, achieved one goal, which is awareness. “I am sure many Nigerians are now aware that they can change their operator and still retain their numbers. So in the area of awareness creation, it has been a success. I also believe that MTN’s ‘I don port’ campaign is a classic. It is a very creative campaign and the media relations leveraging has also been superb,” said Igbinidu.

    The Managing Director of Milward Brown Nigeria, a global marketing research firm, Mrs. Geri Roberts, recalled that one of the campaigns (MTN’s Saka I Don Port) generated high level of appeal with great humour but she wondered that the ad failed to influence people to switch from their network despite the comic model explored to sell the MTN MNP product. She explained that the advert failed as reflected in NCC report because the advertisers and their agencies failed to audit the creative before going to town. She explained that an effort should have been made to understand how the consumers feel about the telecom services and take critical steps to address them before flagging off such campaign which she described as appealing and humorous. “These are four people. All of them same of same. Even when we are talking about MNP, it is not enough to bring Saka dancing. There are issues. Call drops. It’s raining season now, you can hardly have smooth network and so switch from what to what? When these adverts were being aired, if anyone of them had checked the consumer’s opinion, they will know the true picture. In Saka advert, we laughed and enjoyed it but we refused to follow Saka. The advert was just about following Saka (a model who dumped Etisalat for MTN) and no benefit offered,” she said.

    Why advert fail to sell the product

    The Managing Director, Millward Brown Sub Saharan Africa, Mr. Soumya Saklani, told The Nation that sometimes, an advert can be creative but may not impact on sales of the product being advertised. While most of these ads are memorable, he regrets that they are often classified during gain analysis as waste of investment. “Creative, but can it sell? There are ads that are very engaging, very appealing, people remember them, they enjoy them but there are two things that are equally important beyond just remembering advert,” he said.

    Saklani explained further: “One of it is do remembering what brand it was for. After time, we found out that people remember what was shown last night. Very good ad. We asked them what brand was it for and they answer it well. So, one of the challengers advertising agency face is not only about coming out with a creative ad that is very strong, they have to make sure that the branding is very good. The brand must be integrated in the advert so that people will not forget which brand it was for. For instance, if you see an MTN ad, you will see Yellow everywhere and they have every other ways to make the advertising more branded. Another is Call to Action. So, yes, I like it, I enjoyed it but what am I supposed to do?  Am I supposed to buy it, recommend it was for or am I supposed to find out more? So, there are the issues that must be considered to make an ad succeed.”

    In addition, Roberts noted that most advert fail to sell because they make consumers look as if they are silly. “What moves me when I watch an advert is that it must be grounded in reality and have a bit of humour. An advert shouldn’t talk to me as if I am silly. Some advert come with someone with a dark complexion and after using a product he becomes white the following day. Many of these advert talk to you as if you are silly. They talk to consumers as if they are silly but the consumers are not silly at all,” said Robert.

    Who should be blamed: Client or Agency?

    Over the years, Nigerian advertising agencies have complained that clients obstruct their creative concept. In the same vein, advertisers too believe that after developing a good brand, getting a good agency to communicate the value proposition is always a critical task for brand managers.

    The former Managing Director of Rosabel Advertising Limited, Mr. Kayode Oluwalana lamented agency experience: “Sometimes you wonder if the client is a copy writer or art director. If he is one, then why does he need an agency? Some clients get in the way so much that by the time the communication material is ready for exposure, it has become completely bastardised and useless, but all the same the client is happy! It’s his work after all. A particular client is known to have shot down an otherwise great concept with ‘my daughter doesn’t like it’. And here, the daughter is way far off from the audience targeted with the campaign.”

    Contrary to this position, the General Manager, Marketing for MTN and President, Advertisers Association of Nigeria (ADVAN), Mr. Kola Oyeyemi, in his recent book, “Kill or Get Killed: The Killer Marketing Instinct” wrote: “Once the brand management team has successfully developed a compelling and relevant value proposition base on sound insight, communicating this proposition to the trade and the consumers is the next critical job. The best of propositions can fail if wrongly communicated. Thus, the choice of the right advertising agency as a partner is very important. If you get the hiring decision wrong, you can compromise the fortune of the brand.”

    To Robert, neither advertisers nor their agencies should be shielded from the blame of creating a communication that fails to enhance return on investment. She said most communication managers at both end fail to carry the consumers along from the first stage of their brand messaging before it get to the public. “I will blame it on no one but the most important link missing in most adverts is the consumers. I won’t say it is either the client or the agency is to be blamed. It is good for the creative agency to package for the client to approve but remember that the kind of people we are packaging advert for are quite different from clients and the agency. So, for me, I will say that right from the beginning, we should bring in the consumers so that they can give us objective feedback from the creative idea. Though I know that consumers tend to kill the creative ideas because they don’t understand the rationale but we can use them as critique and we don’t have to take everything hook, line and sinker and throw away the ads. The reality still is that they know what make them take purchasing decision, what makes them happy. So, we take the creative from there,” she said.

    Making the advert money count

    Globally, advertisers are demanding result-oriented advertising copies. One of the recent innovations that are helping them gauge the effectiveness is through software or a method called “Link-Testing” and help stop the waste of investment on advertisement. The proprietor of the software, Milward Brown, said before advertisement is produced and exposed it must go through Link-Testing which accordingly helps predicts the sales response to advertising. “With volumetric predictions included as part of Link, Millward Brown can help you prove the value of strong creative by predicting the sales response, and can also provide insights to help you adjust the broader marketing mix in order to increase ROI from your advertising,” Roberts explained.

    According to her, the Link volumetric is a new analytical service that marries Link results with sales (or results from sales response modeling) and other relevant client data to create a more direct measure of the contribution that advertising quality will make to sales.

    Link has been extensively validated and evidence shows that ads which perform well in Link are more likely to generate a significant sales uplift than poor performers. This means that marketers can focus on the issues and opportunities identified in Link, safe in the knowledge that addressing those issues will make the advertising more effective.

    “In Link, we measure an ad in all these parameters or measure its ability to succeed, it can measure that the branding is good but the call to action is weak. Link started in the 80s and it helps advertising agencies understands how best to make an advert sell a product. Link measure where the problems and correct to make the advert attracts the consumers. It focuses on the quality of the advertising creative,” she explained.

    Narrating his experience about the Nigerian advertising creative landscape, Saklani complained that most advert in Nigeria fail because they are not grounded on good research and production values. “The audio and video don’t follow some quality measures. Link offers an opportunity for advertisers and marketers who are spending millions of millions on the advertising budget to maximise the impact of their investment and stop the wastages,” he said.

    When agencies can use link to test an advert

    “If a building foundation is going on and you wait till it gets to 16 storeys before calling an architect, and he tells you this is bad and you begin to correct it floor to floor. That will spell doom at the end of the completion. But in Link-testing an advert, you start from the beginning of the creative concept. It is a software and methodology designed by Milward Brown to create solution. For instance, it will determine if you will have to reduce a 45 seconds advert to 10 seconds and safe money yet impact on the sales. It will guide advertising agencies and advertisers on quality control of the advert,” Roberts explained.

    MNP failed pre-campaign gain loss test?

    “In the case of waste in MNP advert, if the advertisers had linked-test the copies, using animation, we would have told you that yes I am laughing and as a consumer I will have been able to tell you that there is nothing to gain in the advert but Link will tell you about the gain losses analysis. Link will tell you that this advert is very funny, very engaging but call to action is very weak. “ she said.

    With the Link-Testing software, expert believes consumers will trust most advertisement while advertisers too will experience increase patronage through their promises on their advertisement.

     

  • We’ll focus on tax payers, says Yero

    Kaduna State Governor Mukhtar Yero has said the government will focus its projects on tax payers.

    Yero spoke yesterday in Kaduna while inaugurating Point of Sales (PoS) terminals for revenue collection, powered by Skye Bank.

    He said the low Internally-Generated Revenue (IGR) and the dwindling federal allocation were not enough to develop the state.

    Yero lamented that the state had been receiving about N1 billion monthly as federal allocation for the last five years, hence the need to boost the IGR.

    He regretted that residents who evade tax criticise the government most, adding: “Only civil servants are up-to-date in tax payment and I know it is not because many of them want to pay, but because taxes are deducted from source.

    “Politicians don’t pay tax until they need to get tax clearance from the Board of Internal Revenue for elections. Therefore, subsequently, if residents of Ungwar Rimi pay their taxes regularly and residents of Sabo don’t pay theirs, we will be forced to concentrate development on Ungwar Rimi.”

    Skye Bank Regional Manager Kawu Mohammed said the PoS terminals would ensure accountability in revenue collection.

  • CWG’s revenue slumps on competition, others

    CWG’s revenue slumps on competition, others

    • Refocuses business

    Indigenous tech firm, Computer Warehouse Group (CWG Plc), has blamed the decline in its revenue on continued decline in margins on traditional information technology (IT) infrastructure business due to commoditisation, competitive pressures, as well as viable alternatives in the cloud computing frontier.

    The firm has, therefore, mapped out strategies to change the focus of the business to return it to profitability for the benefit of its shareholders.

    Its Financial Controller, Remi Adeloye, lamented that the firm’s half year revenue of N3.3billion is 16 per cent below N9.9billion of its corresponding previous year while its gross profit of N1.6billion is 23 per cent below the N2.1billion achieved within the corresponding year under review.

    He said:  “CWG’s 2014 first half of the year revenue of N8.3billion is 16 per cent below 2013 N9.9billion, while gross profit N1.6billion is 23 per cent below 2013 N2.1billion. The lower (first half) H1 revenue is a reflection of the continued decline in margins on traditional IT infrastructure business due to commoditisation and competitive pressures, as well as viable alternatives in the cloud computing frontier.

    He, however, said in spite of these challenges, the Group’s financial position remained firm buoyed by adequate liquidity as its leverage and efficiency ratio improved to 1.5 as against 1.4 of the corresponding period under review last year.

    “The financial position of the Group remains strong with adequate liquidity, leverage and efficiency ratios. H1 2014 current ratio improved to 1.5 as against H1 2013 which was 1.4 signifying strong liquidity and adequacy of working capital to meet transactional needs. Also, CWG’s leverage debt to equity ratio remains low at nine per cent as against 10 per cent in 2013,” Adeloye said.

    Its Group Chief Executive Officer, Austin Okere, said a shift in strategy has become imperative in view of the development.

    He said:  “We crafted the plan code named CWG2.0 in 2010, realising back then the pervasiveness of cloud computing, and the major enablement for this in our region following the increase in broadband access from 0.65terabytes (Tb) to a combined capacity of 9Tbits per second. We were very clear that while our tremendous growth over the years had been propelled by our traditional businesses in hardware and software sales and support, and VSAT bandwidth vending, these represented mature and declining margin businesses, the import of which have been evident in our recent financial statements.”

    He said the uptake of firm’s new cloud products not only in Nigeria, Ghana, Cameroon and Uganda proved that its emerging business model of providing cloud services on a subscription basis is scalable, repeatable, transferable, relatively more sustainable and profitable.

    Okere added: “We consider the refocusing of our business into a subscription based model as a dual advantage play. In addition to being a more sustaining strategy, it maximises our social impact investing on the economy of Africa and helps to create jobs by empowering entrepreneurs in the countries of our operation.”

  • Revenue falls again by N28.67bn says FAAC

    Revenue falls again by N28.67bn says FAAC

    …N611.77bn with others Shared for August, 2014
    For the second month in a row, the total revenue expected to have accrued into the Federation Account in the month of August fell short by N28.67 billion from the N630.325 billion shared for July.
    For the month of August as a result of the short fall, only N601.648 billion, was available for the three tiers of government to share for the month.
     
    Briefing journalists at the end of the August FAAC meeting, in Abuja on Tuesday, the the Minister of State for Finance, Ambassador Bashir Yuguda, attributed the revenue shortfall significantly to the Force Majeure declared by Shell and a series of shutdown of Trunklines and Pipelines and various terminals.
     
    He stated that tax payments and returns by some bluechip companies and increase in the receipt from foreign Companies Income Tax, (CIT) boosted non-oil revenue for the month of August.
     
    The minister however assured the state and local government representatives that government would do its best to shore up tax revenue profiles in the face of dwindling earnings from the oil and gas sector to meet increasing funding needs of all the tiers of government.
     
    He explained that the various revenue agencies have been mandated to intensify their tax revenue drives, adding that the immediate results of the various capacity building for all the agencies was to facilitate their improvement in increasing tax collections into the Federation Account. 
     
    The minister also clarified that the incidence of pipelines vandalism which remained one of the biggest sources of revenue lose to government was already being addressed by the Presidential Committee set up to tackle the challenge and assured that with the cooperation of all stakeholders, the country would overcome the challenge.
    For the month of August, the minister disclosed that the Federal, State and Local Governments shared a total of N504.705 billion from statutory distributions, N61.513 billion from VAT and N35.549 billion from the SURE-P programme.
     

     

  • ‘Akwa Ibom not the highest revenue earner’

    ‘Akwa Ibom not the highest revenue earner’

    The Akwa Ibom State government has debunked the assertion that it is the highest revenue earner in Nigeria.

    The Commissioner for Information and Communications, Aniekan Umanah, said no state earns up to one per cent of the revenue.

    Umanah spoke with reporters yesterday in Uyo, the state capital.

    He said: “I will like to say that Akwa Ibom State is not the highest revenue earner in Nigeria. And like the governor would say, no state earns up to one per cent of the revenue. It is only the Federal Capital Territory (FCT) that earns up to one per cent.

    “I want to say that we earn little or nothing compared to what we should ordinarily earn. But having said that, Akwa Ibom is doing big things; Akwa Ibom is putting its money into big projects.”

    Umanah, who also reacted to last week’s report  by a Federal Government agency showing N135.84billion allocation accrued to Akwa Ibom between January and June, said the state is running at a deficit.

    He said the N135billion was grossly inadequate compared to the gargantuan projects embarked upon by the Godswill Akpabio-led administration.

    Umanah said the greatest challenge faced by the administration is how to source for money to finance its key projects.

    “When you are talking about allocation-N135.84billion-it sounds big to you but it is not a lot of money when you are doing key projects. When you look at projects like the new international stadium, these are not bread and butter projects. These are quality projects that cost money.

    “You don’t build flyovers with N1 or N2. You don’t build underground tunnels with N2; you don’t dualise federal roads with N2; you build them with billions, so you put these monies into big projects. So the states you are mentioning, are they able to do these types of projects?”

    The commissioner said the much-touted N135.84billion was a “drop in the ocean” when juxtaposed with the over N400billion budget estimates which provides for 80 per cent capital expenditure and 20 per cent recurrent expenditure.

  • Mansard grows revenue by 27% to N9.61b

    Mansard grows revenue by 27% to N9.61b

    Mansard Insurance Plc has announced its audited half year results for the period ended June 30, 2014 which showed it reported a 27 per cent growth in both gross premium written (GPW) and net premium income (NPI).

    The recorded GPW of N9.61 billion up 27 per cent from N7.55 billion it earned in June last year. The growth it said, was driven by increased patronage from both institutional and retail clients.

    The firm’s NPI also rose by 27 per cent to N4.47 billion as against N3.51 billion in 2013. The feat, it said was based on high retention rate based on due to improved retail per formance.

    Investment Income & Other Income stood at N1.55 billion, down 33 per cent from N2.3 billion recorded last year. The result, it said, was due to a one-off profit on disposal of an unquoted equity and unrealised gain on investment property in 2013. Equally, profit before tax stood at N993 million from N2.06 billion in 2013, a 52 per cent decline while profit after tax dropped by 56 per cent to N814 million, from previous N1.84 billion.

    Its Chief Client Officer, Tosin Runsewe said: “This year, revenue growth has been driven by deepening relationships through superior customer service delivery and our growing accessibility to customers. Our medium term focus is to rapidly grow our distribution channels such that our accessibility to all customers will be with ease and convenience. We expect the first half of 2014 growth pattern to continue during the second half of the year.”

    Its Chief Financial Officer, Mrs. Rashidat Adebisi said that the 52 per cent drop in profitability was expected.

    Commenting further on the performance, she said “Also putting a drag on profitability was the 53 per cent growth in Net Claims over last year. This growth was driven by lower recoveries from reinsurance as most of the claims were within our retention limits”.

    She added that overall, the firm’s March 2014 performance is very much in line with its projections for the period. “We look forward to a better June as this would deliver better underwriting performance as experience has shown,” she said.

  • FIRS introduces new audit tools to boost revenue

    FIRS introduces new audit tools to boost revenue

    The Federal Inland Revenue Service (FIRS) said it has introduced new techniques and audit tools as part of efforts to increase tax revenue collection across its field offices.

    Its Acting Executive Chairman, Alhaji Kabir Mashi, who spoke yesterday at an interactive session with Heads of Audit and their supervisors across the country in Abuja, said framework and template have been designed to monitor audit activities.

    A statement by its Head, Communications and Liaison Department, Wahab Gbadamosi, said Mashi told the auditors that a framework and template is already in place to help monitor audit activities the  drive to increase tax revenue collection.

    “The intention is to extend the new audit techniques currently being deployed through the Capacity Enhancement Programme (CEP) at the Large Tax Offices to all other offices across the country and I hope this will complement the audit model contained in our Integrated Tax Administration System (ITAS).

    “Our plan also includes intensifying our monitoring of audit activities and to this end, we have developed a monitoring framework and template for your tax audit assignments. This would easily check and determine compliance level, check your risk profiling systems, your audit time reporting system and the targets against actual collections at the various levels.”

  • In the cooler

    In the cooler

    •Is the Presidency seeking to wish away the revised revenue formula?

    Why has the Presidency hedged so blatantly in receiving the report of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) on the proposed revised national revenue formula? For a report which has been ready since the beginning of the year, it is either that President Goodluck Jonathan has no interest in it or that he does not understand the import of activating such a crucial national document.

    According to media reports, after two years of gruelling work which included touring all the zones of the federation and parleying with stakeholders across the country, the RMAFC had concluded work on the revised national revenue allocation since last December and has since conveyed the report to the Federal Executive Council (FEC).

    However, the commission has not been able to formally present it to the president even though it is an agency under the Presidency. Unlike the just concluded National Conference which was able to hand in its report to the president almost immediately, RMAFC has been unable to be scheduled for a presentation. A formal presentation is necessary in this part of the world because, without it, a report is practically non-existent.

    This has set observers worrying that something must be amiss. The reason is that it is a well known fact that at the heart of Nigeria’s structural and fiscal imbalance is the subsisting lopsided and inequitable federal revenue sharing formula.  Though Nigeria supposedly practises federalism in which the federating units are deemed to be equal partners, over the years, the reality has been an aberration in which the centre has become a much too dominant member.

    Though the constitution stipulates at least a five-yearly review of the revenue formula, the last exercise was 22 years ago, while two modifications were effected in 2002 and 2004 to align relevant sections of the Federation Account Act to the 1999 constitution. But the constitution, having envisaged the need for justice, equity and fairness in the distribution of the resources accruing from the federation,  entrenched the need for periodic review in order to capture any emerging economic and socio-political dynamics that may be thrown up from time to time.

    However, it is only understandable that since RMAFC is under the ambit of the Federal Government and the current formula seems quite favourable to it, it would be convenient to keep it so. This must explain why for more than two decades, what ought to be a routine constitutional obligation enshrined to keep the system fit and healthy was jettisoned by successive administrations. The Federal Government being the first tier and wielding some administrative influence over the commission had ensured that this unsavoury status-quo remained.

    There is no doubt that the current sharing formula is not sustainable. It allows 52.68 per cent of revenue for the Federal Government; 26.72 per cent to be shared by the 36 states and 20.60 for the 774 local government areas. The Federal Government, with more than half of national revenue – a hefty chunk by all standards – must have grown used to spending big and living large, thus would naturally loath to be pruned down. But the obvious result of this current state of affairs is stunted growth and warped development. One example is the fact that the Federal Government has in the last decade, consistently devoted three quarters of its annual budget to recurrent expenditure whereas the reverse is the case for most states which spend at least 60 per cent of their budget on capital expenditure.

    Though we acknowledge that the states control the local governments and this third tier has gotten the short end of the stick, all these only lend credence to the call for urgent review of the current formula. We urge the president to hasten to receive the report of the review of the revenue sharing formula and set all necessary machinery in motion for its speedy implementation in the national interest.

     

  • NBA opens new complex to boost revenue

    The Nigerian Bar Association (NBA) has opened a six-storey building  on Victoria Island, Lagos.

    The building, which was erected through a Build, Operate and Transfer (BOT), is  behind the NBA House and was built by Dr. Wale Babalakin (SAN) through one of his firms, Stabilini Visinoni Limited.

    Outgoing President Okey Wali (SAN) praised Babalakin, describing him as ‘a pride to the legal profession in Nigeria’.

    He said the land, which was given to NBA by the Law School, had remained unutilised despite being located at a prime place.

    Wali said the property was developed in order to boost NBA status as well as shore up its revenue base, just as he emphasised the need for continuity in governance.

    Wali said: ‘I must thank our colleague, Dr. Wale Babalakin (SAN), for what he has done in putting this up in collaboration with the NBA. The terms are clear. It is a Build, Operate and Transfer. I thank Wale for the industry he has put into this.

    ‘Also, it is the grace of God to start from foundation and see the completion. We have to put on record the gratitude to all past presidents of NBA. It is a testimony to the continuity of governance at the Bar that leadership or government of NBA continues.

    ‘Leaders come and go but the continuity of NBA project persists. Just like you know, by His grace, within the next two years in the life of the next administration, we will be in Abuja to inaugurate the NBA House, which this administration has started.’

    Wali expressed gratitude to the Director- General, Nigerian Law School, Lanre Onadeko, as well as the Chairman, Council of Legal Education,  O.C.J. Okocha (SAN), among others, for granting access to the new building through the Law S

    chool premises.

    Babalakin explained the difficulty in creating access to the property, noting that the area was landlocked.

    “The only way we could go in was if we were able to create that access you see now. With his (Wali’s) determination as well as that of the Director General of the Law School and the Chairman of Council of Legal Education; it happen.”

    Babalakin acknowledged Wali’s “thorough dedication” to the project, adding: “He came to Lagos specifically for this project on a number of occasions, and I recollect with great appreciation and sometimes nostalgia how we walked round this premises, not once, not twice, when we were trying to identify the entry into the building.

    “In the same vein, I want to thank our incoming President, Augustine Alegeh (SAN), who is here today and who has just won a very convincing victory. I have no doubt he has the capacity, the mental fortitude and determination to push the NBA to the next level.”

    Babalakin also expressed gratitude to the former Director-General of the Nigerian Law School, Dr. Tahir Mamman, for his invaluable role in making the project possible.

    At the ceremony were the incoming NBA’s General Secretary,  Afam Osigwe; National Treasurer, Joyce Oduah; a former General Secretary, Obi Okwusogu (SAN); and Executive Committee Member,  Osita Okoro.