Disbursements to the three tiers of government jumped to N510.270 billion for August.
At the end of the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja yesterday, the Federal Government received N149.310 billion, the states got N75.732 billion, local governments pocketed N58.386 billion while N20.293 billion was shared as 13 per cent mineral revenue derivation.
Also shared were proceeds from the Value Added Tax (VAT) from which the Federal Government received N10.939 billion, states N36.462 billion and local governments N25.523 billion. An additional N84.263 billion was shared as exchange gains, N35 billion as excess petroleum profit tax (PPT) while N6.330 billion was refunded to the government by the Nigeria National Petroleum Corporation (NNPC).
The balance to make up the N510.270 billion was what was given to the collecting agencies as cost of collection. Nigeria Customs Service (NCS) got N4.033 billion, FIRS N4.663 billion, Department of Petroleum Resources (DPR) N2.627 billion.
Addressing reporters at the end of the meeting, Finance Minister, Mrs Kemi Adeosun, said the gross statutory revenue of N315.045 billion received for the month was higher than the N287.819 billion received in the previous month by N27.226 billion.
She added that crude oil export volume increased by 2.2 million barrels in May, despite the brief force majeure declared at Qua Iboe and Bonny terminals and a subsisting force majeure at Forcados Termibal.
Other terminals also experienced problem of shut-in and shut-down of pipelines for repairs and maintenance. However, revenue was boosted with the $109.40 million accruals in export sales as a result of the increase in average price of crude oil from $42.21 in April to $46.06 per barrel in May.
A rise in the volume of dutiable imports contributed significantly to the increase recorded by import duty and VAT while the increase in PPT collections was attributed to receipts from National Petroleum Development Company (NPDC) and Joint Venture operators. The exchange rate regime, the minister said, “helped boost revenue for the current revenue including oil and gas royalty’’.
She also announced that he Excess Crude Account (ECA) stands at $2.9 billion.
Nigerian Banks’ Borrowings from CBN Surge 835% in a Month, Raising Liquidity Concerns
The Nigerian banking sector has witnessed an unprecedented 835% surge in borrowings from the Central Bank of Nigeria (CBN) in the span of just one month, igniting concerns over the nation’s liquidity stability.
Data reveals that banks’ dependence on the CBN has reached new heights, with their borrowings skyrocketing from a relatively modest N323.97 billion in August to N3.03 trillion in September. This remarkable increase underscores a growing reliance on the CBN’s support in times of financial stress.
This surge in borrowing activity has primarily been attributed to the CBN’s stringent monetary policies aimed at curbing inflation and managing the demand for foreign exchange. These policies have, in turn, squeezed commercial banks, compelling them to tap into the CBN’s Standing Lending Facility (SLF) for immediate liquidity needs.
Despite the escalating dependence on CBN funds, the Monetary Policy Committee (MPC) of the apex bank insists that the Nigerian banking sector remains fundamentally robust. MPC member Adenikinju Festus highlighted key indicators, including Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) ratios, which still align with prudential standards. Furthermore, liquidity ratios have improved, and returns on equity and assets have risen.
However, the banking industry’s persistently high operating costs are raising alarms. In comparison to international standards, Nigerian banks are grappling with substantially higher operating expenses, prompting concerns about their long-term sustainability.
In a parallel development, the CBN’s Development Finance Department has disbursed a total of N9.714 trillion to various sectors of the economy over the past three years, with manufacturing and industries receiving the largest share at 32.6%.
Other sectors, including energy, agriculture, services, micro, small, and medium enterprises (MSMEs), export, and health, have also benefited significantly from these disbursements.
While the CBN remains committed to fostering sustainable economic growth, the surging dependence of Nigerian banks on short-term borrowings from the central bank is casting shadows on the sector’s long-term stability.
As Nigeria grapples with these liquidity concerns, the financial industry and regulators face the challenging task of charting a course towards a more resilient and sustainable banking environment.
Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting
The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.
Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.
In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”
While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.
President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.
The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.
The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.
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