- FG’s Revenue Rises by 20.4% in February
Nigeria’s gross federally-collected revenue rose by 20.4 per cent in February 2017 to N545.05 billion, as against the N433.86 billion recorded in January 2017, the Central Bank of Nigeria’s (CBN) economic report for February 2017 has shown.
The increase relative to the preceding month level was attributed to the rise in receipts from both oil and non-oil components.
But, the revenue receipt recorded in February, fell short of the 2017 provisional monthly budget estimate of N792.71 billion by 31.2 per cent, according to the report.
Gross oil receipts, at N292.82 billion or 53.7 per cent of total revenue, fell below the provisional monthly budget estimate by 0.6, but was 37.9 per cent higher than the receipts in January 2017. The increase in oil revenue relative to the preceding month reflected the significant rise in receipts from domestic crude oil/gas sales and PPT/Royalties.
According to the report, at N252.24 billion or 46.3 per cent of the total revenue, gross non-oil revenue was below the 2017 provisional monthly budget estimate of N498.14 billion by 49.4 per cent. It, however, exceeded the receipts in January 2017 by 4.9 per cent. The poor performance relative to the provisional budget reflected the shortfall in most of the components due to the low economic activities in the country during the review period. The estimated federal government retained revenue for the month of February 2017, at N194.38 billion, was below the 2017 provisional monthly budget estimate of N337.48 billion and the receipts in January 2017 by 42.4 per cent and 5.9 per cent, respectively. Of the total receipt, federation account accounted for 68.5 per cent, while Exchange Gain, FGN Independent Revenue, VAT, Excess Crude, and NNPC refund accounted for 11.6, 6.5, 5.4, 4.7, and 3.3 per cent, respectively.
Similarly, the estimated total expenditure of the federal government, at N599.30 billion, exceeded both the 2017 provisional monthly budget estimate of N522.64 billion and January 2017 level of N552.74 billion by 14.7 and 8.4 per cent, respectively. Recurrent and capital expenditure, accounted for 64.9, and 30.5 per cent, respectively, while transfers accounted for the balance of 4.6 per cent of the total expenditure. A breakdown of the recurrent expenditure showed that non- debt obligation was 79.3 per cent of the total, while debt service payments accounted for the balance of 20.7 per cent.
“Increased domestic crude oil production recorded in the last two months continued in the review month as government and other stakeholders sustained effort at curtailing vandalism in the Niger-Delta region. Consequently, Nigeria’s crude oil production, including condensates and natural gas liquids stood at an average of 1.65 mbd or 46.2 million barrels in February 2017.
“This represented an increase of 0.08 mbd or 5.10 per cent over the average of 1.57 mbd or 48.67 million barrels (mb) recorded in January 2017. Crude oil export was estimated at 1.20 mbd or 33.60 mb, representing an increase of 7.14 per cent, compared with 1.12 mbd or 34.72 mb recorded in the preceding month. Allocation of crude oil for domestic consumption remained at 0.45 mbdor 12.60 mb during the review period,” it added.
Furthermore, the report showed that the external sector marginally strengthened in February 2017 following the increase in domestic oil production and international crude oil prices as well as improved inflow through autonomous sources.
Increase in crude oil prices followed the deal reached by the Organisation of Petroleum Exporting Countries (OPEC) members to cut production. However, foreign exchange supply shortages continued to constrain import of raw materials which suppressed domestic production. Consequently, non-oil export receipts declined in the review period.
Also, Foreign exchange inflow through the CBN, at US$2.37 billion, fell by 8.9 per cent, relative to the level in the preceding month, but was 94.4 per cent above the level in the corresponding period of 2016. The development reflected the significant decline in non-oil receipts due to lack of interbank swap transactions and fall in Treasury Single Account and third party receipts during the review month.
On the other hand, aggregate outflow through the CBN, at US$0.98 billion, declined by 7.3 per cent and 4.6 per cent below the levels in the preceding month and the corresponding period of 2016, respectively. The development was attributed to the decline in drawings on Letters of Credits (L/Cs), external debt service, foreign exchange special payment (NSA), other official payments and 3rd party MDA transfers. Overall, a net inflow of US$1.40 billion was recorded, compared with US$1.55 and US$0.20 in January 2017 and the corresponding period of 2016, respectively.
“Total non-oil export earnings, at US$0.31 billion, fell by 7.0 per cent, below the level in January 2017. This resulted from the 50.0 per cent, 41.6 per cent, 36.4 per cent and 32.3 per cent decline in receipts from transport, food products, agricultural and industrial subsectors, respectively. The manufactured product and minerals sub-sector, however, grew by 209.8 per cent and 5.0 per cent, respectively, above the levels in the preceding month to US$60.28 million and US$135.13 million,” it added.
ECOWAS@46: Commission Seeks Trade Partnership With OPS To Deepen Intra-African Trade
The Economic Community of West African States (ECOWAS) in commemoration of its 46th anniversary has sought partnership with the Organised Private Sector (OPS) to deepen intra-African trade and lift millions out of poverty.
This was revealed yesterday by the president of the ECOWAS Commission, Mr. Jean-Claude Brou, at a webinar organised in collaboration with the Lagos Chamber of Commerce and Industry (LCCI) yesterday.
The theme of the webinar is “Optimising Sustainable Trade, Investment and Regional Economic Integration through Effective Partnership between ECOWAS Institutions and the Organised Private Sector”.
Jean-Claude, represented by Mr. Kolawole Sopola, Acting Director, Trade, ECOWAS, said the commission, in recognition of the private sector’s role, created a stronger framework to boost the sector’s capacity for enhanced trade.
He said that the commission had also adopted more than 100 regional standards with 70 others under development on some products.
Brou listed mango, cassava, textile and garments as well as information and communication technology among such products.
“The growing importance of informal trade compels the ECOWAS to create a framework expected to engender more availability and reliability of up to date information on informal trade.
“The framework also seeks to implement reform that is essential to eliminate obstacles to informal trade among others.
“It is important to improve investment, particularly, private investment, in all sectors and I stress that digitalization must be at the center of activities for economic recovery.
“Infrastructural deficit must be addressed as well as sustainable and cheaper energy for the competitiveness of products.”
“The commission is developing projects on roads, renewable energy and education, needed for private sector development; all these to lift millions in the sub-region out of poverty,” he said.
Dr. George Donkor, President of, ECOWAS Bank for Investment and Development (EBID) said that many western states showed numerous hurdles to overcome as countries continue to export raw materials, therefore maintaining low levels of development.
Donkor, however, said that reforms were already underway to accelerate the capacities of the Micro, Small and Medium Enterprises (MSME) to spur private sector development for intra-African trade.
He noted that the EBID 2025 strategy was aimed at ensuring that the private sector benefitted up to 65 percent of the $1.6 billion available facilities.
“A vibrant private sector is key in driving regional integration and securing its active participation and has the potential to create a win-win situation for all participants.
“Increasing credit to the private sector will enhance capacity and the EBID is ready with strategies to ensure that the sector’s capacity is boosted,” he said.
Also, Otunba Niyi Adebayo, Minister of Industry, Trade and Investment, said that collaboration across societal sectors had emerged as one of the defining concepts of international development in the 21st century.
He stressed the need for ECOWAS member states to work together as a bloc to take advantage of the opportunities in the African Continental Free Trade Area.
“Since the establishment of ECOWAS in 1975, various protocols and supplementary protocols regulating member countries conduct have been signed.
“Our world has limited resources — whether financial, natural, or human — and as a society we must optimize their use.
“The fundamental of a good partnership is the ability to bring together diverse resources in ways that we can together achieve more impact, greater sustainability and increased value for all.
“This is so because it emphasises the need to work together as a bloc to leverage and take advantage of the opportunities offered by the African Continental Free Trade Area.
“My Ministry will do everything possible to ensure that the vision of the commission is taken to the next level,” he said.
IMF Retains 2.5 Percent Economic Growth Estimate For Nigeria
The International Monetary Fund (IMF) has retained Nigeria’s 2.5 percent economic growth forecast for 2021.
The institution said this in its World Economic Outlook (WEO) for July titled “Fault Lines Widen in the Global Recovery” released on Tuesday in Washington DC.
According to it, the slow rollout of vaccines is the main factor weighing on the recovery for Low-Income Developing Countries (LIDCs) which Nigeria is part of.
It also retained its 6.0 percent growth forecast for the global economy for 2021 and 4.9 percent in 2022, adding that though the global forecast was unchanged from the April 2021 WEO, there were offsetting revisions.
The IMF had at its 2021 Virtual Spring Meetings in April, projected a 2.5 percent growth for Nigeria’s economy in 2021, up from 1.5 percent it projected in January.
It said that in LIDCs, the overall fiscal deficit in 2021 was revised up by 0.3 percentage points from the April 2021 WEO, mainly because of the re-emergence of fuel subsidies as well as the additional COVID-19 and security related support in Nigeria.
“Still, at 5.2 percent of Gross Domestic Product (GDP), the overall fiscal deficit remains well below that of advanced and emerging market economies, reflecting financing constraints, about 60 percent of LIDCs are assessed to be at high risk of or in debt distress.
“The public debt-to-GDP ratio for 2021 is projected at 48.5 percent.
“Several LIDCs have announced an intention to restructure their debts and some have sought debt relief under the G20 Common Framework (Chad, Ethiopia, and Zambia),” it said.
On the global scene, the IMF said that uncertainty surrounding the global baseline remain high, primarily related to the prospects of emerging market and developing economies.
It added that although growth could turn out to be stronger than projected, downside risks dominated in the near term.
“On the upside, better global cooperation on vaccines could help prevent renewed waves of infection and the emergence of new variants, end the health crisis sooner than assumed, and allow for faster normalisation of activity, particularly among emerging market and developing economies.
“Moreover, a sooner-than-anticipated end to the health crisis could lead to a faster-than-expected release of excess savings by households, higher confidence and more front-loaded investment spending by firms.”
On the downside, it said growth would be weaker than projected if logistical hurdles in procuring and distributing vaccines in emerging markets and developing economies led to an even slower pace of vaccination than assumed.
The report added that such delays would allow new variants to spread, with possibly higher risks of breakthrough infections among vaccinated populations.
“Emerging market and developing economies, in particular, could face a double hit from tighter external financial conditions and the worsening health crisis, further widening the fault lines in the global recovery.
“Weaker growth would, in turn, further adversely affect debt dynamics and compound fiscal risks.
“Finally, social unrest, geopolitical tensions, cyber-attacks on critical infrastructure, or weather-related natural disasters, which have increased in frequency and intensity due to climate change could further weigh on the recovery.”
On ensuring a fast-paced recovery, the IMF said the highest priority was to ensure rapid, worldwide access to vaccines and substantially hasten the timeline of rollout relative to the assumed baseline pace.
According to it, the global community needs to vastly step up efforts to vaccinate adequate numbers of people and ensure global herd immunity.
This, it said, would save lives, prevent new variants from emerging and add trillions to the global economic recovery.
FG to Put an End to N360 Billion Annual Electricity Subsidy Payments in 2022 – Osinbajo
Vice President Yemi Osinbajo on Monday said the Federal Government will end an estimated N360 billion annual subsidy payments in the electricity sector in 2022. This represents a monthly subsidy payment of N30 billion.
Osinbajo disclosed this while speaking at the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja on Monday.
At the conference titled “Strategic responses of energy sector to COVID-19 impacts on African economies“, the vice president, who was represented by Engr. Ahmad Zakari, the Special Assistant to the President on Infrastructure, said the federal government would be investing over $3 billion in the sector to strengthen distribution and transmission infrastructure across the nation.
He stated that the numerous efforts of President Muhammadu Buhari at ensuring the power sector plays a critical role in the growth of the nation’s social and economic well-being will materialise fully once the ongoing reform in the energy sector is complete.
He said: “Electricity tariff reforms with service-based tariff has led to collections from the electricity sector by 63 per cent, increasing revenue assurance for gas producers and stabilizing the value chain.
“It is anticipated that all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DISCOs continue to improve.
“Accelerated investment in transmission and distribution, over $3 billion will be out into this sub-segment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others.”
He said as the electricity sector continued to be stabilized, more power was needed for the country’s large population.
“That is why this administration continues to invest in generation to cater for our current and future needs,” he said.
Osinbajo charged the participants to come up with solutions to key energy challenges facing the country, especially with the COVID-19 pandemic and energy transition.
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