The Nation Newspaper

Tag: revenues

  • Boosting internally-generated revenues

    Boosting internally-generated revenues

    The Bayelsa State government, like other states, is being affected by dwindling federal allocations, once the bulwark of states. As the monthly Federation Accounts Allocation Committee (FAAC) payout continues to fall, Bayelsa is opening its doors to investors. The Bayelsa Investment and Economic Forum held in Yenegoa, the state capital, focused on building a viable productive base for the state and enhancing its revenue, writes COLLINS NWEZE.

    The sharp fall in oil prices is of major concern to many states. Forward-looking ones are rethinking their revenue drive strategies, looking inwards on how to be self-sufficient.

    Besides, states can no longer rely on the federal allocations to meet the increasing needs of their people.

    For instance, the Central Bank of Nigeria (CBN) data for 2013 revealed that internally-generated revenue (IGR) for Bayelsa State amounted to N6.2 billion, representing 2.7 per cent of its total revenue. In comparison with Lagos State, which generated N157.3 billion, this is very low.

    But Bayelsa is not resting on its oars. It is relying on private-sector investments to create jobs and boost personal income tax revenue.

    At a briefing at the conclusion of the second Bayelsa Investment and Economic Forum, the Commissioner for Trade, Industry and Tourism, Kemela Okara, said the state was serious about collaborating with the private sector to grow the productive base of the economy.

    “The nature of the conversation of the forum was not theoretical. Those who are experts in various areas, those who are actively involved in different areas, spoke on how to get viable projects in the state running,” he said.

    He said the forum was an opportunity for stakeholders to discuss financing, pricing of gas and electricity.

    “The most explosive idea is the readiness of Bayelsa and Nigeria to take advantage of opportunities presented in business to do business. It is exciting. It makes our job easier.The Bayelsa State Investment Initiative will help the people tidy up the documentations and ensure that their expectations are met,” he said.

    “We are also creating the necessary tax incentives for people to come. So, there is no doubt that we are very serious and many incentives will come. Following from this, we are going to capture a lot of things in a documentary that we will share. We are creating the necessary environment. We want to ensure that everything that investors need is provided.We will make sure that nothing is holding them back. At the Federal Government level, we are also collaborating to hasten that process,” he said.

    One of the panelists and Director, FBN Capital, Patrick Mgbewelu, said Bayelsa is one of the smallest states in Nigeria with a population of two million.

    The conference, he said, addressed seven budding sectors, such as agriculture, manufacturing and energy. The state’s agricultural base is considerable and comparative advantage exists in food and tree crops including cassava, sugar cane and rubber.

    Bayelsa has the longest coastline in the country and significant inland waterways. Local fish production is, however, low; about 30,000 tonnes yearly. This represents only six per cent of national production.

    On energy, he said the state government has placed power provision on the front burner; it owns 25 per cent of the local distribution firm. The network requires upgrading. Investors in this sector would benefit from a waiver on all import duties for power plant equipment, which the state government hoped to secure from the Federal Government.

    • Dickson
    • Dickson

    Governor Henry Seriake Dickson told delegates that 50 hectares of land had been acquired for its an industrial park. The park will be divided into four zones – commercial, industrial, office and residential.

    He said the state is serious about expanding its economical frontiers beyond oil and gas. “How do we move away and create inclusive growth and entrepreneurship among our people. It is by making remarkable moves through private sector participation in the state’s economy,” he said.

    Dickson admitted that Nigeria is living through dwindling oil  revenues and, therefore, needed the support of the private sector to grow the economy.

    He said the state is the home of oil and gas. Since 1956, when oil was discovered in Oloibiri, the state has been playing a major role in the oil and gas industry.

    “We have opened our doors to all agencies to build sustainable wealth, skills and promote entrepreneurship. This year, the team is looking at areas of comparative advantage. Power generation is not to be left to the Federal Government alone. The Federal Government has started the process of power privatisation, and needs to be supported,” he said.

    Dickson said investors in the power sector needed to know that Bayelsa has oil and gas, and the need to site their industries close to the raw materials.

    “Investors in the power sector need to be in Bayelsa where there is abundance of gas to help in powering the power turbines. The forum is not a talk shop. Our focus is on practical steps needed to boost business. Bayelsa is also the centre of agriculture because we have fertile soil,” he said.

    He said there was no alternative to industrilisation, adding that the abundance of gas would help to solve the state’s power problems. It would also help create jobs and boost employment, he added.

    “We have been encouraging people to pay taxes. The most sustainable investment Bayelsa has made in capacity building. We are also mindful of the need to diversify to alternative sources of power,” he said.

    “When we hosted the first edition in July, last year, it was inspired by my vision to transform Bayelsa State into a model of an African economic success. The vision stands, and is now even more imperative in view of recent downturn in the oil and gas sector.

    “More than ever before, it has become necessary for Bayelsa State to diversify its economy and pursue comparative advantage in agriculture, oil and gas industrial activity , power generation and manufacturing,” he said.

    He said the forum focused on unveiling various projects and initiatives in addition to holding interactive sessions focused on the investment opportunities in power generation, agriculture and multi-sector manufacturing.

    “We are pleased that Brass has been granted a free trade zone status which will impact on over multi-million dollar transactions in Brass Island namely, Brass Fertiliser and Brass LNG. The presentation by the Oil and Gas Free Trade Zone Authority will reveal investment opportunities for project developers and financiers at the new Brass Oil and Gas City,” he said.

    Dickson said the government would despatch a letter to the Federal Government to seek support for the  Eco-Industrial Park.

    “I will send a letter to Vice-president Osinbajo, seeking FG’s collaboration in the construction of our echo-industrial park,” the governor disclosed.

    The governor, who admitted the pressure on states over revenue short fall, said the planned industrialisation was intended to attract investments and big businesses, a development, which he said would lead to higher taxes.

    At the event, the governor also unveiled the masterplan for the park,  to be based at Gbarantoru.

    According to the governor, it pays investors to go to Bayelsa, as saying it is endowed with abundant resources and that it would make a good economic sense for businesses to be sited close to their sources of raw materials.

    He highlighted the areas in which they can have collaboration, including the establishment of a world-class Eco-industrial park, power generation, Brass oil and gas free trade zone and the Agge Deep Sea port, among other key projects.

    “We are actually talking about an industrial park that has taken off. So, for those who are thinking and rightly so, how this wonderful concept can become a reality, we already have it in reality. It is on ground. We have Shell’s investment there of about $4 billion already completed. We also have a Federal Government’s NIPP’s project that has just been privatised, which is also very expensive. All we are doing is to showcase it to the rest of the investing public and to assure everybody of our preparedness to partner going forward,” Dickson stated.

    He said other notable projects in the state, when completed, have the capacity to create wealth, employment generation and boost food production as well as increase the revenue profile of the state, adding that a large expanse of land has been made available as incentive for investors in power generation at Imiringi, in Ogbia Local Government Area as well as Gbarantoru in Yenagoa.

    The Special Guest of Honour, Vice President Yemi Osinbajo said the economic well-being of the country depends on the economic wellbeing of the states.

    He said there was the need to create employment opportunities for the country and that all hands must be on deck in ensuring that the economy is diversified.

    Osinbajo, who was represented by his Chief of Staff, Ade Ipaye, said economic development requires structural growth, promising that the Federal Government would ensure that sustainable ideas and opportunities in Bayelsa materialised.

    He called for increased transparency in the running of government and that corruption is eradicated. “Corruption deters long term investors. Corruption  can kill industries before they can become viable. There is need for zero tolerance on corruption. A lot of attention should be given to law enforcement agencies even as security of lives and property is key,” he said.

    Vice President, Eastern Region,  Manufacturers Association of Nigeria, Mrs. Emelia Akpan,stressed   the need to improve the capacity of the people in the state. She said youth empowerment was key to industrialisation, adding that the youths are the future leaders.

  • CITN: FIRS, McKinsey to raise tax revenues by N460b

    CITN: FIRS, McKinsey to raise tax revenues by N460b

    The Federal Inland Revenue Service (FIRS) and McKinsey are working towards increasing tax revenues  and adding N460 billion to Federal Government revenues in the next three years, President, Chartered Institute of Taxation of Nigeria (CITN), Dr. Olateju Somorin, has said.

    Speaking at a budget seminar in Lagos, she said the FIRS and McKinsey initiative is one of the measures being taken to close tax gaps.

    She said Messrs. McKinsey & Co. an international firm was engaged in 2014 to work with the FIRS to strengthen the tax body in tax collection in non-oil sector and provide technical assistance in the implementation of its capacity enhancement programme.

    She said the global growth performance has been weak and there has been volatility in oil prices. Nigeria is part of the global economy and therefore susceptible to development in the rest of the world economy.

    She said the 2015 budget is aimed at boosting the non-oil sectors of the economy and also to raise tax revenues.

    “The introduction of a luxury tax regime buttresses the fact that oil revenue is expected to play a less significant role in 2015 and future years. We hope that government will implement the National Tax Policy and be consistent in its fiscal and monetary policies designed to diversify the economy and increase the country’s tax base,” he said.

    Somorin noted that there are still leakages and incidences of non-remittance of requisite funds to Treasury by some agencies and that is why government issued an unequivocal directive to all revenue agencies to ensure remittances of their obligations to Treasury.

    “In the short term, Government is determined to improve tax revenues not by increasing tax rates but rather by first, strengthening our tax administration. It is worthy of note to observe that Government aims to plug leakages, increase the tax base and improve tax collection efficiency,” she said.

  • Fed Govt revenues fall by 38% to N560.84b

    Fed Govt revenues fall by 38% to N560.84b

    Federal Government revenue dropped by 38.1 per cent to N560.84 billion in February, a Central Bank of Nigeria (CBN) economic report for the month released yesterday said.

    The figure, the apex bank said, also showed a decline of 21.1 per cent below the receipts in the corresponding period of last year.

    It said at N359.73 billion, oil receipts (gross), which constituted 64.1 per cent of the total revenue, were lower than the receipts in the preceding month and the corresponding period of 2014, by 39.8 and 26 per cent.

    The fall in oil receipts relative to the level in the preceding month, it said, was attributed to the decline in revenue from crude oil and gas exports, occasioned by the drop in the price of crude oil in the international market.

    “Non-oil receipts (gross), at N201.12 billion or 35.9 per cent of the total, was 35.0 and 10.4 per cent lower than the receipts in the preceding month and the corresponding month of 2014, respectively.  The development reflected, largely, the fall in receipts from National Information Technology Development Fund (NITDEF) and independent revenue of the Federal Government. Federal Government estimated retained revenue in February 2015 was N224.89 billion, while total estimated expenditure was N363.68 billion. Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N138.79 billion,” it said.

    It said the dominant agricultural activities in February, this year included: harvesting of tree crops, irrigation-fed vegetable and cereal production as well as clearing of land for the 2015 cropping season.

    Crude oil production, including condensates and natural gas liquids last February, was estimated at 1.90 million barrels per day (mbd) or 53.2 million barrels for the month.

  • Crude fuels spike in port revenues

    Crude oil continues to sail through the Port of Corpus Christi at a record pace, but at least one economist believes the area’s fortunes can get even better once America’s 40-year ban on crude exports is lifted.

    A total of 63.3 million tons of petroleum and chemicals made their way through the port in the first nine months of the year, according to a recently released audit report. That represents a 12.4 percent increase over last year’s third-quarter haul, which totaled 56.3 million tons.

    Much of those materials likely came from Eagle Ford Shale, the energy play that spans 3,000 square miles and has created massive economic growth for South Texas.

    Operating revenues: The port received $59.7 million, compared with $58.1 million for the same period in 2013, a 2.8 per cent increase. It budgeted $56.4 million.

    Strong investments: As of September 30, the port had $145.5 million invested in local government investment pools, money market accounts, agencies, certificates of deposit and securities.

    More bulk: Total cargo tonnage moving through the port so far in 2014 has been 72.9 million tons, up 11.3 per cent from 65.5 million for the same period in 2013.

    The audit, written by Dennis J. DeVries, the port’s director of finance, covers the nine months of the year that ended September 30. The port commission’s audit committee discussed at the weekend.

    Wharfage and dockage fees also are strong revenue streams for the port. Together, they generated $42 million from January to September, compared with the $40.9 million budgeted for the same period and the $34.5 million actually collected during those months in 2013.

    Jim Lee, the chief economist at Texas A&M University-Corpus Christi, said the prospect of eventually exporting oil and natural gas to other countries widens the port’s potential.

    Recent downward trends in oil and gasoline prices is a reflection of Congress’ oil export ban that went into effect after the Arab oil embargo of the 1970s. With the Nov. 4 elections now over, many analysts have speculated Washington may consider relaxing the restrictions this year or next.

    One company, BHP Billiton, a mining and energy company with its headquarters in London and Melbourne, Australia, has gone so far as to announce last week it plans to sell Eagle Ford Shale to foreign buyers without getting permission from the U.S. government.

    “If that … ban is lifted, then U.S. oil and gasoline prices will rise modestly as oil producers will be able to ship the excess supplies to countries at higher prices,” Lee said.

  • Fed Govt’s revenues drop six per cent to N674b in January

    Cross federally-collected revenue delined six per cent in January to N674.67 billion, an Economic Report from the Central Bank of Nigeria (CBN), has said.

    The report further said January revenue figure represented about 12.8 per cent below the receipts in the corresponding period of 2013. It explained that at N474.40 billion, oil receipts (gross), which constituted 70.3 per cent of the total revenue, was lower than the receipts in the preceding month and the corresponding period of 2013, by 3.3 and 19.8 per cent, respectively.

    The fall in oil receipts relative to receipts in the preceding month, the report said, was attributed to the decline in receipts from Petroleum Profit Tax (PPT) and Royalties.

    Non-oil receipts (gross), which stood at N200.27 billion or 29.7 per cent of the total revenues, was 11.7 per cent lower than the receipts in the preceding month.

    Also, relative to the corresponding month of 2013, non-oil receipts, however, rose by 10.1 per cent. The decline reflected, largely, the fall in receipts from Corporate Tax and Value Added Tax during the review period.

    Federal Government estimated retained revenue in January 2014 was N262.88 billion, while total estimated expenditure was N368.35 billion. Therefore, the fiscal operations resulted in an estimated deficit of N105.47 billion, compared with the estimated monthly budget deficit of N73.92 billion.

    The report said crude oil production, including condensates and natural gas liquids was estimated at 1.92 million barrels per day (mbd) or 59.5 million barrels for the month. Crude oil export was estimated at 1.47 million barrels per day (mbd) or 45.6 million barrels during the month. The average price of Nigeria’s reference crude, the Bonny Light (370 API), was estimated at $110.19 per barrel, indicating a decline of 2.6 per cent below the level in the preceding month.

    The end-period headline inflation rate (year-on-year), was eight per cent, same as in the preceding month. Inflation rate on a 12-month moving average basis fell by 0.1 percentage point to 8.4 per cent from the level in the preceding month.

    Foreign exchange inflow and outflow through the CBN in January 2014 were $2.54 billion and $4.65 billion, respectively, and resulted in a net outflow of $2.11 billion. Foreign exchange sales by the CBN to the authorised dealers amounted to $4.04 billion, showing an increase of 42.9 per cent above the level in the preceding month.

  • African Mobile Money revenues to hit $3b

    African Mobile Money revenues to hit $3b

    Mobile Money operators’ revenue will rise to $3 billion by 2015, a study by Pyramid Research has shown. Although Safaricom’s M-Pesa in Kenya has long been the lone success story in the mobile money universe, successes are being recorded in Nigeria, Uganda and Tanzania with similar mobile money offerings.

    MTN Uganda’s Mobile Money service accounts for three per cent of all airtime sold on its networ­k, and Vodacom’s M-Pesa service in Tanzania currently has six million subscribers with exponential growth of 600 per cent experienced in the past year alone.

    Currently, mobile money offerings remain limited and are concentrated in just 22 of the more than 50 African countries.

    Analysts said the African mobile money market has the potential to grow to a money-making market, but operators, banks and regulators need to work toward developing an enabling environment for business models that meet service providers’ revenue demands.