- FG, states, LGs Record N1.1tn Shortfall in Allocation
The three tiers of government received a total of N4.95tn instead of N6.1tn projected to be distributed to them in the 2016 fiscal year from the Federation Account Allocation Committee, investigation has shown.
This created a shortfall of about N1.1tn within the 12-month period based on the analysis by our correspondent.
The committee, headed by the Minister of Finance, Mrs. Kemi Adeosun, is made up of commissioners of finance from the 36 states of the federation.
Other members are representatives from the Federal Inland Revenue Service; the Nigeria Customs Service; Revenue Mobilisation, Allocation and Fiscal Commission as well as the Central Bank of Nigeria.
The federation account is currently being managed on a legal framework that allows funds to be shared under three major components – statutory allocation, Value Added Tax distribution; and allocation made under the derivation principle.
Under statutory allocation, the Federal Government gets 52.68 per cent of the revenue shared; states, 26.72 per cent; and local governments, 20.60 per cent.
The framework also provides that Value Added Tax revenue be shared thus: the Federal Government, 15 per cent; states, 50 per cent; and local governments, 35 per cent.
Similarly, extra allocation is given to the nine oil producing states based on the 13 per cent derivation principle.
Findings also revealed that the inability of the revenue generating agencies to meet up with their revenue targets owing to the challenges facing the economy was largely responsible for the dip in revenue, which impacted negatively on the allocations to the three tiers of government.
Figures of statutory allocations obtained from FAAC revealed that while the government had projected to distribute N509.1bn monthly among the three tiers of government, the shutdown of oil installation facilities, which led to a drop in crude oil production, made it difficult to generate enough revenue to achieve that target.
For instance, within the 12-month period of last year, the government could only surpass the monthly budgeted allocation to the three tiers of government thrice.
The months are August, where the highest amount of N691bn was shared; July, which had a total allocation of N559.03bn; and September, which had N510.27bn.
A further analysis showed that the sum of N387.77bn was allocated in January; February had N370.38bn; while March, April and May had N345.09bn, N299.74bn and N281. 5bn, respectively.
For the months of June, October, November and December, the committee distributed N305.12bn, N420bn, N386.87bn and N400bn in that order.
The Chairman, Forum of Finance Commissioners of FAAC, Mahmoud Yunusa, while speaking during an interview in Abuja on the sidelines of this month’s FAAC meeting, said the scarcity of resources to implement the programmes of government owing to the economic recession had made it imperative for states to be prudent and transparent in financial management.
He said, “The resources are no longer there and so whatever resources that we have must be effectively, transparently and judiciously used for the benefit of the people.
“The expectations of the people are very high and the resources are very lean day by day and so we have to add value to the people. People are clamouring for change and we have to look for a way to ensure that the lives of people are changed.”
He said the states would work with the Federal Government to address the current recession in the country.
Yunusa, who is also Commissioner for Finance in Adamawa State, said that the target of the states was to generate enough revenue internally to pay salaries.
He stressed that once this was done, whatever allocation received from the federation account would be used by the states for capital projects.
He said, “The recession is a problem but we should see it as a blessing in disguise because before now, all the states relied solely on the Federal Government but now because the money is no longer there, we are forced to look inwards for the opportunities and potential in our respective states and how to exploit them.
“We have to reduce the cost of governance and plug all the loopholes in our expenditure.”
He added that the challenge had helped the states to look at their revenues and restructure their expenditures to fit into the realities on the ground.
FG Borrows N2.36 Trillion from Capital Market in 2020
Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, said the Federal Government borrowed N2.36 trillion from the nation’s capital market in 2020.
The CEO disclosed this at the 2020 market recap/2021 outlook held on Tuesday.
He said the Federal Government issuances account for 92 percent of the total bond issued in the market in the year.
Onyema further explained that corporate organisations leveraged on low yield environment to expand and embark on debt refinancing, raising a total of N192 billion,
“Capital-raising activities in the fixed income market increased significantly in 2020. The NSE’s bond market capitalisation rose by 35.52 per cent from N12.92tn in 2019 to N17.50tn,” he said.
Onyema noted that “The year 2020 was indeed a historic one for global capital markets. Facing buffeting headwinds, world markets saw sharp swings and steep losses, but largely remained resilient and orderly amid rising uncertainty.
“For The Exchange, renewed investor optimism coupled with improved economic conditions and low fixed income yields, propelled a year end bull run. Of 93 global equity indices tracked by Bloomberg, the NSE All Share Index emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent.”
Speaking on product results for the year, the CEO said, “The Nigerian equities market got off to a strong start in 2020, returning 10.4 per cent by the eighth trading session. By October, the equities market entered a much-awaited bull run.
“Buoyed by the formal declaration of the US president-elect, unattractive fixed income yields and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of -14.90 per cent recorded in 2019.
“During its remarkable year end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility.
“At the close of the year, the NSE’s equity market capitalisation was up by 62.42 per cent, from N12.97tn in 2019 to N21.06tn in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96tn in 2019 to N1.03Tn in 2020.
“Although Initial Public Offering activity was mute, the value of supplementary issues increased dramatically from 2019, rising by 851.37 per cent to N1.42tn, from N148.77bn.
“Also noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (retail: 44.98 per cent; institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent.”
Airtel to Announce Financial Results for Nine Months Ended December 31, 2020 on 29 January 2021
Airtel Africa, one of the leading telecommunications companies in Africa, on Wednesday announced it will report its financial statements for the nine months ended December 31, 2020 on January 29, 2021.
The telecom giant disclosed in a statement signed by Simon O’Hara, Group Company Secretary.
The statement reads “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, will announce its results for the nine months to 31 December 2020 on 29 January 2021.
“Management will host a conference call on the day of results for analysts and investors at 2:00pm GMT.
“Participants are requested to pre-register for the call by navigating to:
“Once registered, participants will receive a calendar invitation with the dial in details for the call.”
Global Credit Rating Affirms Sovereign Trust Insurance A Rating
Global Credit Rating, an international rating agency based in South Africa, has affirmed Sovereign Trust Insurance Plc A rating in its latest report released for the month of December 2020.
In a statement released through the Nigerian Stock Exchange (NSE), Global Credit Rating noted “that the Company has shown a great deal of consistency in her claims paying obligations to her numerous customers spread all over the country.
The Report further stated that “the listing of the Rights Issue in 2019 helped in increasing the Shareholders’ funds of the Company by 33.8%, to N7.8b by the end of the Financial year in 2019 as against the figure of N5.8b in 2018.
“Subsequently, by the third quarter of 2020, the Shareholders’ funds had increased to N8.2b which also translated to a 31% increase in the corresponding period of 2019 with a figure of N6.3b. In the Rating Agency’s opinion, Sovereign Trust Insurance Plc is strong in liquidity with more than adequate claims coverage that compares well to industry averages.
“The capital adequacy of the Underwriting Firm is considered strong according to the rating report and this is underpinned by the sizeable capital base catering for the quantum of insurance and market risks assumed. In this regard, the ratio of Shareholders’ funds to NEP, (Net Earned Premium) improved to 189.2% in the Q3 of 2020 as against 130.9% in the corresponding quarter of 2019.
In terms of peer-to-peer performance comparison, “Sovereign Trust Insurance Plc did very well when compared with other selected insurers in terms of Capital, Total Assets, Gross Premium Income (GPI) and Net Premium Income (NPI).”
COVID-19: Nigeria Record Highest New Cases on Thursday as Continent Death Nears 83,000
Bitcoin Price Drops to be Used as Buying Opportunity: deVere CEO
The 46th President of the USA, Joe Biden Reversed EX-President Donald Trump Immigrant Visa Ban on Nigeria
Cryptocurrency4 weeks ago
US Securities and Exchange Commission Goes After Ripple(XRP)
News3 weeks ago
Heartbroken American Mistress Displays Dangote’s Buttocks in a Viral Video
News3 weeks ago
FCMB Group MD Links to Death of Tunde Thomas, Husband of Married Staff He Fathered Her Kids
Crude Oil4 weeks ago
Crude Oil Rose to Almost $52 Per Barrel After Trump Signs Stimulus Package
Finance3 weeks ago
President Buhari Increases Npower Budget by N365 Billion
Technology4 weeks ago
Facebook, Apple Privacy War Deepens as Facebook Removes Apple’s Verification
News3 weeks ago
Tunde Thomas: FCMB Commences Review Into Allegations of Unethical Behavior Against MD Nuru
Investment2 weeks ago
London Real Estate Company for African Investors Announces its Launch