- IGR: Lagos, Rivers, Ogun, Delta Generates N2.71tn IGR in 5 Years
A report showed four states generated 60.22 percent of the N4.5 trillion Internally Generated Revenue (IGR) for the country in five years.
Four states of the federation – Lagos, Rivers, Ogun and Delta – generated N2.71tn in internal revenue between 2013 and 2017, an investigation has shown.
Statistics on the performance of the 36 states of the federation obtained by our correspondent showed that the 36 states generated a total of N4.5tn within the five years under review.
This meant that the top four states in IGR generated as much as 60.22 per cent of the total IGR of the subnational governments in the country while the remaining 32 states accounted for the remaining 39.78 per cent or N1.79tn.
Expectedly, Lagos came tops on the table with a total of N1.72tn within the five-year period. With this performance, Lagos alone accounted for 38.22 per cent of the entire IGR generated by the subnational governments in the five-year period.
In 2013, Lagos generated a total of N236.2bn. The performance went up in 2014 with a total of N276.16bn. It went down slightly in 2015 to N268.2bn. In 2016, the state’s IGR went up again to N302.43bn before peaking at N333.97bn in 2017.
Rivers State came a distant second with a revenue performance of N433.9bn. Thus, the state accounted for 9.64 per cent of the total IGR collected by the states in the five-year period.
The state generated N87.91bn; N89.11bn; N82.1bn; N85.29bn and N89.48bn in 2013, 2014, 2015, 2016 and 2017 respectively.
On the third place is Ogun State, which generated a total of N286.67bn within the period of five years. Thus, the state accounted for 6.37 per cent of the total IGR that the 36 states of the federation collected within the same period of time.
The state moved steadily up in the five-year period. The state generated N13.78bn in 2013; N17.5 in 2014; N34.6bn in 2015; N72.98bn in 2016 and N74.84bn in 2017.
On the fourth position in IGR is Delta State, which generated N273.84bn in the five-year period. It, therefore, accounted for 6.09 per cent of the entire IGR collected by the subnational governments in five years.
The state generated N50.21bn; N42.82bn; N40.81bn; N44.06bn and N51.89bn in 2013, 2014, 2015, 2016 and 2017 respectively.
Four other states hit the N100bn mark in the revenues they generated within the period under review. These are Kano, Edo, Oyo and Akwa Ibom.
Kano State generated N148.75bn in the following order: N17.9bn in 2013; N13.66bn in 2014; N13.61bn in 2015; N30.96bn in 2016 and N42.42bn in 2017.
Edo State generated N126.47bn in the following order: N18.9bn in 2013; N17.02bn in 2014; N19.12bn in 2015; N23.04bn in 2016 and N25.34bn in 2017.
On the other hand, Akwa Ibom made N108.36bn spread thus in five years – N15.4bn in 2013; N15.68bn in 2014; N14.79bn in 2015; N23.27bn in 2016 and N15.96bn in 2017.
Similarly, Oyo State generated N107.43bn – N15.25bn; N16.31bn; N15.66bn; N18.88bn and N22.45bn in 2013, 2014, 2015, 2016 and 2017 respectively.
The 10 states on the bottom of the table are Yobe, Borno, Ekiti, Kebbi, Gombe, Nasarawa, Zamfara, Taraba, Katsina and Ebonyi.
Thus, no state in the South-South geopolitical zone was among the bottom of the table. Ebonyi represented the South-East in the bottom league while Ekiti represented the South-West in the bottom league.
Kebbi, Zamfara and Katsina represented the North-West on the bottom of the table. Nasarawa and Taraba represented the North-Central on the bottom of the table while the North-East was represented by Yobe, Borno and Gombe.
Yobe made a total of N18.48bn in five years. Borno generated N18.76bn in the period under review while Ekiti made N20.05bn within the five-year period.
On the other hand, Kebbi made N21.82bn; Gombe generated N21.91bn while Nasarawa generated N23bn within the period under review.
Similarly, Zamfara generated N24.51bn; Taraba generated N27.41bn; Katsina generated N30.44bn while Ebonyi made N30.91bn.
Mid-table states in terms of IGR include Kaduna which generated N95.89bn; Enugu (the first state from the South-East to show up on the radar), N93.81bn; Cross River, N88.97bn; Kwara, N87.62bn and Abia, N78.54bn.
Others are Anambara, N68.13bn; Ondo, N60.61bn; Bayelsa, N58.51bn; Benue, N55.8bn; Osun, N53.37bn; Plateau, N52.88bn; Kogi, N48.75bn; Imo, N39.76bn; Bauchi, N36.91bn; Sokoto, N35.46bn; Jigawa, N34.83bn; Niger, N34.11bn and Adamawa, N31.38bn.
On an annual basis, the 36 states generated a total of N662.05bn in 2013. This increased to N707.86bn in 2014 before coming down to N682.67bn in 2015. It rose to N820.19bn in 2016 and peaked at N936.47bn in 2017.
Low IGR has been the bane of development in the states, with many of them depending virtually on what they get from the federation account. Thus, some experts have queried the viability of the many state governments, given their low IGRs.
While some experts think that true federalism will wean the states of overdependence on the federation account, others think that there is an urgent need to restructure the federation into a federation of six geopolitical zones, instead of operating 36-state structure with three arms of government in each state of the federation.
Even in 2017 when IGR of the states stood at its peak, a higher proportion of the fund available to the states came from the federation account. While IGR accounted for N936.47bn, the states received N1.73tn from the federation account.
This means that IGR accounted for only 35.21 per cent while the federation account was responsible for 64.79 per cent of the funds available to the states.
Acting Chairman of Revenue Mobilisation, Allocation and Fiscal Commission, Mr Umar Gana, told our correspondent that the states needed help to increase their IGR but only two states – Kebbi and Katsina – had accepted to host IGR workshops facilitated by the agency.
According to him, only a few states have effective IGR system. Gana said it was because of low IGR that the states were now clamouring for new revenue formula to be able to pay the new minimum wage.
A lot more needed to be done, he added.
Manufacturing Firms Borrowed N570bn from Banks in 2020 – CBN
Manufacturing firms borrowed a total of N570bn from Nigerian banks last year amid the economic fallout of the COVID-19 pandemic.
Banks’ credit to the manufacturing sector rose to N3.19tn as of December 2020 from N2.62tn at the end of 2019, according to the sectoral analysis of banks’ credit by the Central Bank of Nigeria.
The sector received the second biggest share of the credit from the banks after the oil and gas sector, which got N5.18tn as of December.
“The manufacturing sector, which is the engine of sustainable growth, is still struggling with the debilitating impact of the pandemic and is yet to recuperate,” the Director-General, Manufacturers Association of Nigeria, Mr Segun Ajayi-Kadir, said in January.
MAN, in a January report, revealed that most manufacturers said commercial banks’ lending rates were discouraging productivity in the sector.
The report said 71 per cent of Chief Executive Officers interviewed “disagreed that the rate at which commercial banks lend to manufacturers encourages productivity in the sector.”
It said the cost of borrowing in the country remained at double digits even amidst the reforms meant to culminate in lower rates to engender the country’s economic recovery process.
The report said, “Special single digit loans offered by development banks are still hard to leverage as conditionalities to assess the loans through commercial banks are often overwhelming and laden with additional charges that will eventually make the interest rate double digit.
“Seven per cent of respondents were, however, of the opinion that the rate at which commercial banks lend to manufacturers encourages productivity in the sector while the remaining 22 per cent were not sure of the impact of the rate of lending on productivity in the manufacturing sector.”
The report showed that 64 per cent of respondent disagreed that the size of commercial bank loan to manufacturing sector had encouraged manufacturing productivity.
It said the very high presence of the government in the money market, particularly through the sale of treasury bills, had been crowding out the private sector from the market.
Nigeria Earns Extra N318.4 Billion as Crude Oil Hits $67/Barrel
FG Generates Additional Income of N318.4 Billion as Crude Oil Hits $67/Barrel
The Federal Government earned an additional N318.36 billion in February following the surge in crude oil price above $60 per barrel.
Brent crude oil, against which Nigerian oil is priced, average $60 throughout the month of February.
In March, it rose to $67 per barrel.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, Nigeria’s crude oil price was retained at $40 per barrel for 2021.
However, she said the nation is presently producing below its 2.5 million barrel per day capacity at 1.7mbpd. This, she said includes 300,000bpd condensates.
“Although Nigeria’s total production capacity is 2.5mbpd, current crude production is about 1.7mbpd, including about 300,000bpd of condensates, which indicates compliance with OPEC quota,” the finance minister stated.
Going by the number, Nigeria is producing 1.4mbpd of crude oil without condensates, but with an additional $20 revenue when compared to the $40 per barrel benchmark for the year. It means the Federal Government realised an additional income of N318.360 billion or $20 X 1.4mbpd X 30days in the month of February.
Crude oil jumped to $68.54 per barrel on Friday following OPEC+’s decision to role-over production cuts.
Nigeria, Morocco sign MOUs on Hydrocarbons, Others
The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.
Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.
The statement said Nigeria would also produce ammonia and export to Morocco.
“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.
The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.
Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.
He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.
He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.
“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.
According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.
Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.
The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.
The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.
Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.
He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.
“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.
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