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Govt Revenue Declined by N183.2bn in July

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  • Govt Revenue Declined by N183.2bn in July

The revenue accruing to the federation account from oil and non-oil sources recorded a decline of N183.26bn from N570.58bn received in the month of June to N387.31bn in July.

The figures were revealed in a communiqué issued on Tuesday by the Federation Account Allocation Committee at the end of its meeting.

The Permanent Secretary, Federal Ministry of Finance, Mahmoud Dutse, read the communiqué, which was signed by the Accountant General of the Federation, Mr. Ahmed Idris.

The meeting, which was held at the headquarters of the Ministry of Finance, started at about 4pm and lasted up until about 8:09pm.

Dutse said the decline in revenue was caused by a drastic fall in revenue from Companies Income Tax due to the expiration of the deadline for filing tax returns.

He said while oil revenue recorded increases due to the rise in export sales for the federation by $62m, such could not be said of non-oil revenues.

The communiqué read in part, “The gross statutory revenue of N387.31bn received for the month was lower than the N570.58bn received in the previous month by N183.26bn.

“The increase in the average price of crude oil from $50.27 to $51.05 per barrel and a significant increase in export volume by 1.2 million barrels resulted in increased revenue from export sales for the federation by $62m.

“Despite the increases, there were issues of leaking flow lines, shut-ins and shutdowns at terminals for maintenance.

“There was a drastic fall in revenue from Companies Income Tax due to the expiration of deadline for filing returns.”

As a result of the drop in revenue, the allocation to the three tiers of government dropped by N184.35bn from N652.2bn in June to N467.85bn in July.

A breakdown of the allocation showed that the Federal Government received N193.04bn; states N130.69bn; local governments N98.01bn; while N31.59bn was given to the nine oil-producing states based on 13 per cent derivation principle.

Dutse put the balance in the Excess Crude Account at $2.3bn.

Reacting to the drop in allocation, the Chairman, Forum of Finance Commissioners, FAAC, Mahmud Yunusa, decried the drop in revenue, but added that the time had come for states to begin to look inwards to shore up revenue.

He said, “States will explore other options of revenue to depend less on revenue from the centre. We need to block leakages in revenue and come up with reforms to shore up revenue.

“We are also working on cost of running governance and any cost that is not necessary in running government needs to be reduced.”

He said reforms were currently being implemented in states to optimise the collection processes for revenue.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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