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FG, States, LGs Share N2tn in Three Months



  • FG, States, LGs Share N2tn in Three Months

Increase in crude oil price as well as domestic oil production raised the nation’s revenues from oil, which made the three tiers of government to share N2tn in the second quarter of this year, the Nigerian Extractive Industry Transparency Initiative has said.

The Director, Communications and Advocacy, NEITI, Dr Ogbonnaya Orji, said in a statement made available to our correspondent on Monday that the disclosure was contained in agency’s Quarterly Review.

According to the statement, the federal, state and local governments shared N3.95tn from the Federation Account in the first six months of the year.

Featuring data sourced from the National Bureau of Statistics, the statement also showed that within the first half of the year, Osun State received N10.24bn from the Federation Account, while its account was debited with N14.52bn.

This means that the total deductions from the state’s account was N4.28bn more than it received from the Federation Account. States accounts are debited due to local and foreign debts they have contracted.

In contrast, Delta State received the highest amount of N101.19bn in the first half of the year. Total deductions for the state amounted to N13.81bn or 13.65 per cent of the money received from the Federation Account within the period.

The Quarterly Review, according to Orji, further showed that the total Federation Accounts Allocation Committee disbursements in the second quarter of the year were 46 per cent higher than the figure for the same period in 2017 and 127 per cent higher than for the same period in 2016.

The report noted that while N2tn was shared in the second quarter of the year, N1.38tn was disbursed during the same period last year and only N886.38bn was shared in the second quarter of 2016.

“In fact, quarter two 2018 was the first time an amount of N2tn was disbursed since the quarter three of 2014. This is a run of 14 consecutive quarters of disbursements below N2tn,” the report stated.

NEITI hinged the increase in revenue earned and shared by the three tiers of government on the rebound in oil prices in the international crude oil market as well as increase in domestic crude oil production.

The rise in disbursement recorded in the second quarter of 2018, the report noted, was the highest to the federation since the third quarter of 2014.

The report attributed the positive development to the rise in crude oil prices and similar increase in oil production.

The Quarterly Review was quoted as stating, “Average oil price in 2016 was $43.5 per barrel, while in 2017 oil price averaged $54.2 per barrel. However, in the first six months of 2018, average oil price was $70.6 per barrel. Thus, on the average, oil price increased by 62.2 per cent between 2016 and the first half of 2018.

“Total oil production in 2016 was 661.1 million barrels, while the figure was 690 million barrels in 2017. In 2016, average monthly oil production was 55.1 million barrels, while it was 57.5 million barrels in 2017. For the first two months of 2018 for which data is available, average production was 59 million barrels.”

The disbursements made by FAAC represented an increase of 41 per cent when compared to the N2.79tn disbursed in the first half of 2017 and 95 per cent increase on the N2tn disbursed in the first half of 2016.

A breakdown of the disbursements showed that the Federal Government received N1.65tn; states received N1.38tn; while the local governments got N795bn.

The disparity in the revenues received by each of the three tiers of government was based on the revenue sharing formula of the federation as stipulated in the Constitution, the statement added.

The NEITI Quarterly Review showed that the lowest monthly figure of N635.6bn disbursed in the first half of 2018 was N121.4bn higher than the highest monthly figure of N514.2bn disbursed in the first half of 2017 and N218bn higher than the N417bn for 2016.

“These figures clearly indicate that revenue accruing to the federation in the first half of 2018 completely outstripped revenues in the previous two years,” the report stated.

Another feature of the NEITI report was the significant increase in Value Added Tax disbursements during the period under review. VAT disbursements increased by 35 per cent between the first quarter of 2015 and the second quarter of 2018.

“It is interesting that VAT has been generally increasing over time. This bodes well for the government’s efforts at increasing revenue from non-oil sources,” it added.

NEITI expressed hope about increased revenues to the government from both oil and non-oil sectors, but cautioned that the volatile and unpredictable nature of government revenues would continue to make planning difficult for all tiers of government, increasing difficulties in implementing their budgets.

It said that there was a need to place priority attention on internally generated revenues.

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


ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs



ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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United Capital Plc Reports Stellar Growth with 65% Profit Increase, Announces Dividends



United Capital - Investors King

United Capital Plc (NGX: UCAP) has unveiled its unaudited financial results for the period ending June 30, 2024.

The company reported a 38% increase in gross earnings year-on-year to N15.15 billion. Profit before tax soared by 63% to N9.06 billion while profit after tax surged by 65% to N7.74 billion.

Total assets rose by 27% in the first half to N1.19 trillion, and shareholders’ funds increased by 33% to N120.34 billion.

These robust results have prompted United Capital to declare an interim dividend of N0.90 per 50 kobo ordinary share, alongside a generous bonus share offering of “2 for 1.”

Peter Ashade, Group CEO, expressed satisfaction with the strong financial outcomes, highlighting the company’s commitment to creating wealth and delivering superior value to shareholders.

“This marks a historic moment with our first-ever interim dividend and bonus share announcement, demonstrating our dedication to stakeholder value,” Ashade stated.

The company remains confident about sustaining its growth trajectory throughout 2024, bolstered by nearly N1.3 trillion in funds under management.

United Capital continues to prioritize activities that enhance and preserve value for stakeholders, maintaining its competitive edge and profitability.

With a focus on trusts, mutual funds, and professionally managed investments, the group is strategically positioned to achieve its growth objectives, ensuring sustainable returns for all involved.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits



Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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