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FG Released N7.3tn for Recurrent, Capital Expenditure in 2018 – CBN

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  • FG Released N7.3tn for Recurrent, Capital Expenditure in 2018 – CBN

Between January and December last year, the Federal Government spent about N7.36tn on the implementation of the 2018 budget.

The amount was spent on three major expenditure components. They are recurrent expenditure, capital expenditure and statutory transfers.

The 2018 budget, signed by President Muhammadu Buhari on June 20 last year, had total spending of N9.1tn.

The capital expenditure was to gulp 31.5 per cent of the total expenditure at N2.87tn, while recurrent non-debt spending was put at N3.51tn in 2018.

There was also a provision of N2.01tn for debt servicing which was 21 per cent of the total budget while a provision of N177bn to retire maturing bond to local contractors was made by the government.

The Ministry of Power, Works and Housing had the highest allocation with N715bn for both recurrent and capital expenditure, Ministry of Interior was to get N577bn while Defence was allocated N576bn.

The Ministry of Education was allocated N542bn; Health, N356bn; Transportation, N267bn; and Agriculture N203bn.

Details of the fiscal operations of the Federal Government, which was obtained from the Central Bank of Nigeria economic report for the fourth quarter of 2018, showed that out of the N9.1tn, the Federal Government had released N7.36tn as of the end of last year.

A breakdown of the amount showed that the sum of N2.01tn was released in the first quarter, N1.63tn in the second quarter while the third and fourth quarter had releases of N1.89tn and N1.82tn respectively.

Further analysis of the document showed that out of the N2.01tn budget releases, N1.39tn was for recurrent expenditure, while N507.16bn and N114.11bn were for capital expenditure and statutory transfers respectively.

Out of the second quarter figure of N1.6tn, the CBN document stated that N1.28tn was spent on recurrent expenditure, N231.93bn was for capital while statutory transfers gulped the sum of N114.1bn respectively.

In the third quarter, the government released N1.58tn for recurrent while the amount released for capital and statutory transfers were N191.36bn and N114.1bn respectively.

For the fourth quarter of last year, the CBN data showed that the sum of N1.6tn was used to fund recurrent items while N108.15bn and N114.1bn were released for capital and statutory transfers respectively.

In terms of revenue, the report stated that in the first quarter of last year, the Federal Government’s retained revenue was put at N884.88bn.

In the second quarter of 2018, the Federal Government earned N1.12tn, while the sums of N1.03tn and N916.44bn were generated in the third and fourth quarter of 2018 respectively.

The Minister of Finance, Mrs Zainab Ahmed, had last month while unveiling a Strategic Revenue Growth Initiative aimed at boosting the level of revenue generation, said the government was concerned about the inability of some of its agencies to meet their revenue target.

She admitted that it had become a challenge for the government to mobilise fiscal resources to deliver on its developmental objectives, adding that President Muhammadu Buhari had directed that revenue generation needed to be enhanced.

She said while oil revenue to oil Gross Domestic Product ratio stood at about 39 per cent, non-oil revenue to non-oil GDP was about 4.2 per cent.

The finance minister explained that the country’s VAT revenue to GDP stood at less than one per cent, noting that it was low when compared to the ECOWAS average of 3.4 per cent.

In terms of excise revenue, she said at 4.1 per cent, the revenue generated from excise duty in Nigeria was low compared to Ghana at 15.3 per cent and Kenya at 19.5 per cent.

She said, “Nigeria’s low revenue generation capabilities have been an enduring challenge to past and present governments.

“Although we are celebrated as the country in Africa with the largest economy, translating this wealth into revenues remains a challenge.

“We have, therefore, faced difficulty in mobilising domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth.

“Our current revenue to Gross Domestic Product ratio of about seven per cent is unsatisfactory and we are keen on exerting all efforts in turning this around.”

Ahmed said she had tasked the ministry of finance and its agencies to identify what could be done to turn around the current revenue situation.

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

Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

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The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

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