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Customs Revenue Fell by N216.5bn in 2016 – Ali

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  • Customs Revenue Fell by N216.5bn in 2016

The revenue target of the Nigeria Customs Service for 2016 fell by N216.5bn, the Comptroller-General of Customs, Col. Hameed Ali (retd), told the House of Representatives on Wednesday in Abuja.

This was a dip of 23.11 per cent as against the original target of N937.3bn set for the year.

The agency only succeeded in collecting N720.7bn or 76.89 per cent of the target revenue between January and December last year.

The NCS collected N177.9bn as Value Added Tax on imports, bringing the total revenue collection to N898.6bn.

Ali had appeared before the House Committee on Customs to defend the Customs 2017 budget estimates.

The committee is chaired by a member of the All Progressives Congress from Lagos State, Mr. James Faleke.

The Federal Government had started efforts to diversify the economy in 2016 by focusing on non-oil revenue resources, particularly through the NCS.

But, Ali told the lawmakers that certain factors led to the drop in revenue collection.

For example, he stated that while there was a proposed policy to collect levies on luxury items consumed by the super-rich, there was no legal backing to enforce it.

This implies that luxury goods were imported all through 2016 without the payment of levies.

“There was no legal backing to enforce the collection of the proposed levy on luxury items. There was no importation of polished rice in the period under review,” he added.

When asked by the committee to mention the luxury items to be covered by the proposed policy, the CG listed them as luxury cars, champagne and furniture.

He added, “Some of our emirs and other traditional rulers love to import Royce Rolls and very expensive cars. You have costly wines and so on for some of the super-rich. The government is saying that if you have decided to buy something out of the ordinary, you should pay a levy.

“But, we need a legal framework and policy pronouncement by the Ministry of Finance for the Customs to enforce the levy. We have to be able to determine what to collect on the various categories of items.”

Another factor Ali mentioned was the decision of the government to place 41 items on the restriction list from accessing forex at the official window.

He added that the drop in the value of the naira, collapsed scanners at border points and the porous nature of the country’s borders also affected the revenue target.

Out of the budgeted N81.2bn for its operations in 2016, Ali stated that only N45bn was eventually accessed by the agency.

He claimed that to be able to continue to pay salaries, the NCS had to fall back to the N6.1bn savings it accrued over time for the purpose of such interventions.

Lawmakers grilled the CG on the insistence of the service to execute the ban it had placed on the importation of vehicles through land borders.

Ali said the policy was justifiable to grow the Nigerian economy.

According to him, Benin Republic enjoys the revenue for cars driven in Nigeria.

He argued that 99.9 per cent of cars imported into Benin always ended up in Nigeria through smuggling and other illegal activities on the land borders.

“Why should we be growing the economy of another country when our own is facing challenges? That is the point that we have been making. That Benin cars will come to Nigeria after they have collected their import duties over there,” Ali added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Once Again The National Grid Collapsed

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Nigeria’s electricity transmission system, also known as the National grid, has suffered another system collapse, plunging Lagos, the country’s commercial capital, Kano and other major cities into a blackout.

The collapse, which occurred about 11.00 am on Tuesday, was confirmed by two of the country’s electricity distribution companies in separate messages to their customers.

“We regret to inform you that the power outage being experienced across our franchise – Kaduna, Sokoto, Kebbi and Zamfara states – is as a result of the collapse of the national grid,” Kaduna Electric said on Twitter.

Eko Electricity Distribution Company Plc, in a text message to its customers, said: “Dear customer, there is a partial system collapse on the national grid. Our TCN partners are working to restore supply immediately. Please bear with us.”

The grid, which is being managed by the government-owned Transmission Company of Nigeria, has continued to suffer system collapse over the years amid a lack of spinning reserve that is meant to forestall such occurrences.

Spinning reserve is the generation capacity that is online but unloaded and that can respond within 10 minutes to compensate for generation or transmission outages.

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Economy

FG Consider Diversification To Generate Revenue

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As revenue from oil nosedives following incessant global price fluctuations, the Federal Government is now channeling efforts to the development of minerals in the mines and steel industry to shore up foreign exchange earnings.

Officials of the Federal Ministry of Mines and Steel Development said on Wednesday that while there had been concerted efforts to develop various minerals in the sector, much emphasis had been placed recently on the development of bitumen, barite and gold.

They told our correspondent in Abuja that the government through the mines and steel ministry was striving to diversify the Nigerian economy away from oil as the major foreign exchange earner for Nigeria.

They also confirmed that large quantities of gold had been discovered in various locations in Zamfara and Osun states.

Asked if the government had initiated programmes to explore the minerals and boost revenues now that the country’s income had plunged, the Special Assistant on Media to the Minister of Mines and Steel Development, Ayodeji Adeyemi, replied in the affirmative.

He said, “Indeed, the ministry has the mandate to generate revenue and diversify the economy through the mines sector.

“And bitumen is one of the key resources which the nation is abundantly endowed with, that has been identified for strategic development.”

To buttress his position, Adeyemi shared some recent presentations of the Minister of Mines and Steel Development, Olamilekan Adegbite, where the minister said his ministry was gathering data on some bitumen fields across the country to attract investors.

“A lot of people are interested in bitumen, which is coming from both local and foreign investors. However, we are still acquiring data in some of the fields,” the minister stated.

On barite, the minister said the mines and steel ministry was working on raising the quality of barite produced in Nigeria to an internationally acceptable standard, as certified by the American Petroleum Institute.

Adegbite said his ministry had contracted a consultant to help raise the standard in the local production of barite to ensure that oil industry players make use of barite produced in Nigeria as against importing the commodity from other countries.

He said, “Barite is a critical weighting material in drilling fluids used in the oil industry. We have a lot of barites but the issue is that it is not produced to API standards. However, we are putting a system in place which would be ready to launch in about July.

“We have got the millers who can produce barite to API standard. Hence we will be able to compete with foreigners and it would save Nigeria a lot of foreign exchange in import substitution.”

On the development of gold, officials at the ministry further stated that the commodity had been aggregated for the production of bullion bars and that this was the first time that such aggregation was happening in Nigeria.

They stated that the gold was sourced from artisanal miners, while the final refining to bullion was done in Turkey.

The sources stated that the ministry had registered two refineries that would now refine to LBMA standard when they come on stream. LBMA is the de facto standard, trusted around the world.

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Economy

Nigeria Sovereign Investment Authority Generates N160.06 Billion in 2020

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Naira Exchange Rates - Investors King

The Nigeria Sovereign Investment Authority (NSIA) generated revenue of N160.06 billion in 2020, according to the latest audited financial reports announced by the Managing Director of NSIA Mr. Uche Orji.

The NSIA income came from devaluation gain of N51 billion, and core income of N109 billion compared to N33.07 billion in 2019.

But Orji lamented: “Covid-19 adversely affected logistics around infrastructure projects, especially the toll road projects and the presidential fertiliser initiative.

Despite the pandemic, the Authority achieved 33 percent growth in Net Assets to N772.75 billion compared to the previous year’s performance of N579.54 billion.

Orji said the NSIA “received additional contribution of $250 million; and provided first stabilisation support to the Federal Government of $150 million withdrawn from Stabilisation Fund last year.”

The same year, the NSIA received $311 million from funds recovered from the late General Abacha from the United States Department of Justice and Island of Jersey for deployment towards the Presidential Infrastructure Development Fund (PIDF) projects of Abuja-Kaduna-Kano Highway, Lagos Ibadan Expressway and Second Niger Bridge.

In response to COVID-19, Orji said: “NSIA partnered the global Citizen, a not-for profit group, to form the Nigeria Solidarity Support Fund. Separately NSIA acquired and distributed oxygen concentrators to the 21-teaching hospital as part of corporate social responsibility; in addition to staffing support to the Presidential taskforce on COVID-19.”

In 2020, the NSIA “invested additional capital into NG Clearing, the first derivative clearing house in Nigeria to maintain NSIA’s shareholding at 16.5 per cent following the company’s rights issue of 2020″ Orji said.

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