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Budget: Low Revenue Generation Threatens Funds Release



  • Budget: Low Revenue Generation Threatens Funds Release

The Federal Government on Tuesday said that the low revenue generation by its Ministries, Departments and Agencies was affecting the implementation of the 2017 budget.

It lamented that with about four months to the end of the year, only 25 per cent or N120bn out of the target of N807bn set for agencies generating revenue only for the Federal Government under the Fiscal Responsibility Act had been realised.

Speaking in Abuja on Tuesday at a workshop on compliance with the Fiscal Responsibility Act, which was organised for senior officers of the MDAs, the Accountant-General of the Federation, Mr. Ahmed Idris, said there was a need for improvement in revenue generation in order to meet the targets set for this year.

Some of the agencies generating revenue for the Federal Government alone under the FRA are the Central Bank of Nigeria, Joint Admissions and Matriculation Board and the Nigerian Maritime Administration and Safety Agency.

Idris lamented that in 2016, the government fixed a revenue target of N1.3tn for the agencies, adding that only 35 per cent of the target was realised.

He said the development made the government to reduce this year’s target to N807bn, with only about 25 per cent so far generated.

Idris stated that the inability of the agencies to meet the expected revenue target had taken its toll on disbursements to the MDAs.

He said, “We only realised 35 per cent of the N1.3tn revenue estimated for 2016. For 2017, it has been lowered to about N807bn and we are now in the third quarter of the year. But what we have been able to realise to date is about N120bn.

“We are now in September, which means we have not even gone half way; we are just hovering around 25 per cent of the estimated revenue for this year as far as Internally Generated Revenue for this year is concerned.”

He added, “We must go back and see what we can use to enhance our revenue generation, otherwise the budget will not be funded and that is why we have gaps in terms of releases. Agencies wonder why certain components of the releases are not made 100 per cent, but this is partly the reason.

“The estimated revenue is not really achieved as expected and therefore the releases could not be made as expected.”

Idris, however, urged the heads of the government agencies to be more creative in revenue generation efforts so that they could meet their individual targets and collectively meet the targeted revenue to fund the budget.

The Minister of Finance, Mrs. Kemi Adeosun, urged government agencies to recognise the current financial priorities of the nation and therefore cut their costs, eliminate wastage and block revenue leakages.

She warned heads of the agencies that under the President Muhammadu Buhari-led administration, the issue of transparency and accountability in the management of government resources would not be compromised.

Adeosun explained that many agencies were engaged in quasi-commercial activities on behalf of the government and were therefore expected to manage those organisations in a manner that would maximise the operating surplus.

She noted that in other countries like the United Kingdom and the United States, government functions such as visa processing, passport issuance, company registration and regulation were major revenue earners.

However, the minister lamented that in Nigeria, many agencies were operating in such a manner that returned minimal funds to the government.

Adeosun said the cause of the dwindling revenue included wastage, illegal recruitments, bloated expenses, loans to employees and use of expensive consultants.

The minister reminded the agencies that a circular had been issued restricting allowable expenses in line with reforms occurring across government business.

She informed the agencies that compliance checks would be undertaken regularly to ensure that all agencies adhered to the new requirements.

Adeosun also commended a number of the agencies that had improved considerably in their revenue remittance to the Consolidated Revenue Fund.

These agencies, according to her, include JAMB, which has remitted over N5bn, and NIMASA, which has significantly improved its remittances.

Adeosun encouraged other agencies to urgently review their operational costs and revenues with a view to increasing remittances to government coffers.

She informed the participants that the Ministry of Finance planned to publish the performance of the agencies.

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


Electricity Consumers Get 611,231 Meters Under MAP Scheme



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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed



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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN



petrol Oil

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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