Economy

New Revenue Formula Far From Sight – Investigation

Published

5 years ago

February 1, 2019

New Revenue Formula Far From Sight – Investigation

The quest for a new revenue formula by state governments in order to meet the demands of the proposed new minimum wage may be headed for the rocks, as investigation showed that the draft of the new revenue formula may not make it to fruition.

Another stumbling block facing the quest for a new revenue formula is the composition of the Revenue Mobilisation Allocation and Fiscal Commission which has the power to draft the revenue formula before it is presented to the National Assembly through the President.

Although RMAFC had in 2014 finished work on a new revenue formula, the draft had not yet been presented to the National Assembly as the Presidency under both Dr Goodluck Jonathan and Muhammadu Buhari had tactically declined to receive the draft in order to maintain the status quo.

Inside experts who spoke to our correspondent on condition of anonymity said that the work that RMAFC finished in 2014 needed to be reviewed because the law stipulated that the revenue formula should be reviewed every five years.

A commissioner who spoke to our correspondent on condition of anonymity noted that time had eroded and rubbished the draft of the new revenue formula.

The source said, “The parameters on which that draft was based had changed with time. They are no longer tenable. In fact, there are aspects that are supposed to be reviewed every year.

“However, the law stipulates that the sharing formula for the three tiers of government should be reviewed every five years. From 2014 to 2019, there are five years. So, even the draft document is due for another review.”

Our correspondent learnt that the composition of RMAFC made it impossible for the commission to undertake to review the draft or even to take any other major policy because it could not form a quorum.

A source said, “RMAFC is a constitutional body and the law requires that a forum is formed only when there are at least one- third of the members. The commission is supposed to have 37 members and a chairman. Only seven members are left. You require at least 13 members to form a quorum.”

Each of the states of the federation as well as the Federal Capital Territory is supposed to be represented in the body but only seven states are currently represented in the commission.

The states that are still represented in the commission are Sokoto, Borno, Adamawa, Taraba, Osun, Imo and Bayelsa. This implies that 29 states and the FCT are not currently represented. Even some of the seven members are supposed to retire soon.

Similarly, the body has had no substantive chairman for about four years. The last substantive chairman, Mr. Elias Mbam, from Ebonyi State, left office when his tenure ended in November 2015. Mr Umar Gana, representing Borno State, has been Acting Chairman since then.

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Samed Olukoya

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

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Economy

Inflation and Forex Mismanagement Drive Petrol Truck Prices from N7M to N25M

Published

1 day ago

December 8, 2023

Investors King

The Chairman of the Independent Petroleum Marketers Association of Nigeria in the Satellite Depot branch, Akin Akinrinade, has raised an alarm over the rising cost of petrol trucks in Nigeria.

According to Akinrinade, the cost of a petrol truck has surged from N7 million in May to an astonishing N25 million at present, attributed to inflation induced by poorly managed foreign exchange rates.

Akinrinade pointed out that the forex mismanagement has significantly impacted the landing cost of premium motor spirit (PMS), commonly known as petrol, consequently leading to a surge in pump prices.

The unstable business environment, coupled with the astronomical rise in expenses, has created challenges for marketers in the downstream oil sector.

Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), highlighted in October 2023 that foreign exchange challenges have hindered private companies from importing petroleum products.

As a result, the NNPCL has become the exclusive importer of petrol.

The decision to limit private entities from importing fuel comes after President Bola Tinubu’s initiatives aimed at deregulating the fuel market.

Initially, the plan was to allow private companies to import fuel starting June 2023, aligning with efforts to balance the market after removing petrol subsidies.

The ripple effects of the soaring petrol costs are already evident, with commercial transporters increasing fares, and private car owners seeking fuel-saving alternatives.

As Christmas approaches, the surge in demand for interstate travel is expected to further elevate costs, posing financial challenges for many Nigerians amidst stagnant income levels.

Economy

Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption

Published

2 days ago

December 7, 2023

Investors King

The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.

The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.

The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.

The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.

This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.

Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.

The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.

Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.

Economy

Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion

Published

2 days ago

December 7, 2023

Investors King

The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.

Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.

During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.

He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.

Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.

The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.

Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.

The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.

The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.