- FG,States, LGs Share N2.27tn in Five Months
The Federation Accounts Allocation Committee shared a total sum of N2.27tn among the three tiers of government in the first five months of this year.
An analysis of the FAAC distribution by our correspondent in Abuja on Friday also showed that the N2.27tn distributed between January and May this year represented an increase of N600bn over the N1.69tn, which the committee allocated to the federal, state and local governments in the corresponding period of 2016.
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; the Accountant General of the Federation, Mr. Ahmed Idris; and representatives of the Nigerian National Petroleum Corporation.
Others are representatives of the Federal Inland Revenue Service; Nigeria Custom 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 of 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 VAT revenue be shared thus: 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 formula.
A breakdown of the N2.27tn shared in the first five months of this year showed that in January, the three tiers of government got N430.16bn, out of which the Federal Government took N168bn; states, N114.28bn; and local governments, N85.4bn.
In February, the federation generated N514bn, out of which the Federal Government’s share was N200.6bn; the states, N128.4bn; and local governments, N96.52bn.
However, in March, revenue generation dipped to N466.9bn. From this amount, the Federal Government got N180.5bn; state governments, N116.5bn; and local governments, N87.5bn.
The allocation declined further by N52.07bn from N467.8bn in March 2017 to N415.73bn in April, with the Federal Government receiving N163.89bn; states N117.59bn; while the local government councils got N87.77bn.
In the month of May, the committee shared the sum of N462.4bn among the three tiers of government as statutory allocation, with the Federal Government receiving N147.7bn; states, N74.9bn; and local government councils, N57.8bn.
Speaking on the allocations to the three tiers of government, some finance and economic experts said that while the country had been badly hit by the decline in oil production and revenue as a result of the activities of militants in the Niger Delta, there were a lot of untapped resources at the states, which could be developed for economic prosperity.
Those who spoke to our correspondent on the issue were the Head of Banking and Finance Department, Nasarawa State University, Keffi, Uche Uwaleke; a former Managing Director of Unity Bank Plc, Mr. Rislanudeen Muhammed; and a former Managing Director, Nigeria Deposit Insurance Corporation, Mr. Ganiyu Ogunleye.
Uwaleke, an Associate Professor of Finance, told our correspondent that diversification of the economy would help address the socioeconomic challenges facing the country, adding that once the federating units were given the powers to control their resources, it would help promote competition.
He said with competition, the federating units would come up with innovative ways of stimulating their respective economies.
Uwaleke said, “Restructuring is the panacea for many of the socioeconomic challenges facing the country. This much came to the fore in the last national conference put together by the previous administration.
“The seemingly endless crises in the Niger Delta region will substantially abate if the country is restructured in a way that allows greater control of resources by the federating units. The present economic recession is a direct consequence of the drastic fall in government revenue, which has been blamed in part on militancy in the Niger Delta.”
In his comments, Muhammed said there was a need to come up with initiatives that would make all the states compete for economic development.
He stated, “Nigeria has huge economic potential outside the oil sector, which are largely untapped due to the so called Dutch Disease that has for years made us lazy and always relying on mono product commodity called oil as a source of income, notwithstanding the fact that oil constitutes only 10 per cent of our Gross Domestic Product.
“Economic restructuring will make all the states compete for development and uplifting the lives of their people. There are potential for growth in non-oil export in most states, and virtually all the states have one form of economic competitive advantage or the other.”
Ogunleye, on his part, said there was a need to diversify the economy, as it held the key to the economic development of the people.
He stated, “Restructuring is a necessity and I think that is what people have been advocating over the years, but the challenge is that it is either there is no serious commitment to it or the political will to implement it is lacking.
“Otherwise, when you talk about diversification, it’s almost the same thing as restructuring the economy. Over the years, we relied on oil revenue and now we can appreciate the risks of relying on one source of revenue.
“We are not a manufacturing country and so most of the things we use in this country are imported, so certainly there is a need to restructure the country in such a way that we can develop manufacturing capacity.”
Unity Bank Posts N2.09 Billion Profit Despite N4 Billion Revaluation Loss in 2020
Unity Bank Plc, one of Nigeria’s leading financial institutions, grew profit after tax to N2.09 billion in the financial year ended December 31, 2020.
The lender profit before tax stood at N2.22 billion in the year under review while assets rose by astonishing 67.90 percent from N293.05 billion in 2019 to N492.02 billion in 2020.
In the audited financial statements released on Monday, Unity Bank grew its gross loan portfolio by 92.9 percent from N106.9 billion recorded in December 2019 to N206.2 billion in December 2020.
The almost 100 percent jumped in credit provision highlighted the bank’s strategy at deepening support for farmers, improving food security and enhancing new job creation for thousands of youths and entrepreneurs.
During the bank’s earnings call on Monday, Mr. Kolawole Ebenezer, the Executive Director and Chief Financial Officer, Unity Bank Plc, explained that the bank has been able to cut down on its Non-performing loan to near-zero percent by adopting a strategy that allows the lender to focus on farmers and at the same time implement strategy that mitigates security challenges.
Unity Bank grew its net operating income by 9.71 percent to N25.46 billion in 2020, up from N23.21 billion in the corresponding period of 2019. Similarly, net interest income rose by 7.60 percent to N17.75 billion in 2020 from N16.49 billion in 2019 while earnings per share stood at 17.85 kobo.
In spite of COVID-19 disruption, Unity Bank grew customers’ deposit portfolio by 38.4 percent to N356.62 billion, up from N257.69 billion filed in 2019. This indicates market acceptance of the bank’s product offerings and series of technological integration launched during the year under review to ease banking challenges, especially as the world struggles with the COVID-19 pandemic.
Bismarck J. Rewane, the Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, who spoke during the earnings call on Monday, said Unity Bank is operating like a tier I bank despite its obvious limitations and highlighted the broad-based growth the bank has recorded in recent years.
The economic think tank further explained that if the bank’s N4 billion revaluation loss is added to profit after tax declared, the bank would have declared N6 billion. This does not include the adjustments made by the Central Bank of Nigeria to the interest rate charged on agric loans that eroded interest income on loans by over 30 percent.
Nasdaq Set To Launch Options Trading For Coinbase Global
Less than a week after the largest crypto exchange in the U.S. Coinbase was listed, Nasdaq is set to start trading options for Coinbase Global.
According to Reuters, a representative for Coinbase stated that the COIN.O options will start trading on Nasdaq on Tuesday, April 20.
The launch of equity options will offer a new way for investors to bet on the fortunes of Coinbase. Equity options represent the right, but not the obligation, to buy or sell a stock at a certain price, known as the strike price, on or before an expiration date.
The news follows Coinbase’s direct listing, which saw the firm’s stock fluctuate between a valuation of $429.54 and $310 on its first day of trading.
It was reported that the Chief Executive Officer of Coinbase, Brian Armstrong sold less than 2% of his holdings which worth about $292 million in shares on COIN’s first day of trading. According to filings made with the U.S. Securities and Exchange Commission, Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per share for total proceeds of $291.8 million.
It was also reported that insiders dumped nearly $5 billion in COIN stock shortly after it was listed. Filings on the Coinbase Investor Relations website showed a total of 12,965,079 shares were sold by insiders, worth over $4.6 billion at COIN’s $344 share price at close on Friday.
Yahoo Finance reported the stock has slumped 22.5% from a high of $429.54 on April 14 to a current after-hours trading price of $332.75 where it appears to have settled after Monday’s trading session.
On April 20, Coinbase Pro announced that will add support for new trading pairs for Basic Attention Token (BAT), Cardano (ADA), Decentraland (MANA), and USDC from April 20. The four assets will be paired with three fiat currencies (USD, EUR, GBP), BTC, and ETH, with limited trading functionality to be made available while market liquidity is assessed at launch.
Unity Bank Grows Asset by 67.90% to N492.02 Billion, As Gross Earnings Hit N42.71 Billion in FY 2020
Unity Bank Plc grew its assets base to N492.02billion representing a significant increase of 67.90% from the N293.05 billion of total assets value recorded in 2019. This is even as the agric-focused lender declared gross earnings of N42.71 billion within the period under review.
A review of the Bank’s audited results for full-year ended 31 December 2020, released to the Nigerian Stock Exchange, showed that the Bank improved its bottom line marginally as Profit After Tax, PAT stood at N2.09 billion. Profit Before Tax, PBT closed at N2.22 billion, in a year that was defined by the unmitigated impact of global pandemic characterized by disruptions in business activities and the general downturn that resulted in revenue/returns dip in major leading sectors globally.
The lender substantially grew its customers’ deposit portfolio to N356.62 billion, up from N257.69 billion in the corresponding period of 2019, representing a 38.4% growth. This affirms positive market uptake of the Bank’s product offerings, as well as the lender’s growing customer base to its recent aggressive push with agile customer-centric products, which has played a role in deepening financial services penetration, especially to a wider world, an underserved spectrum of the retail market.
Other major highlight of the audited financial statement relates to growth in its net operating income which rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71% increase. This is even as the net interest income recorded a significant jump, as it rose by 7.60% to N17.75 billion from N16.49 billion in the corresponding period of 2019. Earnings per Share closed at 17.85 Kobo.
The Bank’s gross loans portfolio increased by 92.9% to N206.2 billion in December 2020 from N106.9 billion in December 2019. The Bank’s lending strategy was specially tailored to support the nation’s food agenda. This had the added advantage of improving food security across the country, providing employment to thousands of youths and entrepreneurs, contributing to the conservation of FX stocks and mitigating security challenges by ensuring adequate empowerment of citizens and deepening skills acquisition across the value chain.
Commenting on the result, Unity Bank’s Managing Director/Chief Executive Officer, Mrs. Tomi Somefun stated that the results showed the resilience of the Bank during unprecedented times of uncertainties and our ability to innovate and focus on key balance sheet items that will enable us to maintain the growth trajectory.
She further opined that: “Consequently, for the year under review, the opportunities to significantly create more quality assets for the business, thought to have a sustainable impact, informed part of choices made and we have seen some encouraging market uptake in this regard, apart from the benefits to the enterprise bottom-line that have also started trickling in. Other key performance indicators especially on the liability side of the business were equally not left out. The Bank deployed new product features and augmentation supported by omni-channel, USSD promotions and other channels to enhance services delivery efficiency, drive income generation capacities and enhance steady balance sheet growth for the year”.
Looking ahead, Somefun stated: “we will latch on targeted strategies to deploy significant investment in technology in order to ride the waves of the COVID-19 pandemic. On the back of this, the Bank focuses on achieving major efficiency gains, deepening its retail footprints and penetrating identified cluster market segments, as bulwarks to tapping into various youth markets platforms, in addition to the mass market would get a further boost”.
While laying an outlook for the future, the Unity Bank’s Chief further stated: “The Bank is also looking to consolidate on the gains from its core business areas and niche in the agribusiness sector. The Bank has solidly financed over one million farmers over the past three years. These farmers cut across several primary crop production such as rice, maize, cotton, wheat, sorghum, etc coupled with their rich value chains, and we hope to continue to expand on this as we play our part in driving the country’s quest for self-sufficiency in food production.”
Analysts are of the view that has made an appreciable impact in the agribusiness and its value chains consistently, the market is excited that the current year performance and different initiatives of the Bank show that the agribusiness is bankable not only as a differential positioning but also for sustainable business performance and profitability.
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