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Hope Rises for New Revenue Formula as Buhari Inaugurates RMAFC Board

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  • Hope Rises for New Revenue Formula as Buhari Inaugurates RMAFC Board

The quest of the 36 state governments for a new revenue formula may soon become a reality as President Muhammadu Buhari is set to inaugurate the board of the Revenue Mobilisation, Allocation and Fiscal Commission, on Thursday (today).

The RMAFC is the body responsible for preparing the formula for sharing revenues among the three tiers of government in the country.

The body is also responsible for fixing the remuneration of political office holders as well as monitoring the revenues accruing to the federation account from revenue-generating agencies.

Our correspondent learnt that 30 new members of the commission would be inaugurated at the State House, Abuja. The commission is made up of 37 members with each state of the federation and the Federal Capital Territory represented by one commissioner.

The inauguration will end more than three years of the revenue body without substantive leadership. It will also end the inability of the body to make policy decisions for lack of quorum given that the commission had progressively diminished in the number of commissioners.

Although Buhari had in July 2016 announced the reappointment of Mr Elias Mbam as the Chairman of the commission, his name was not sent to the National Assembly until recently when it became necessary to fill the depleted body.

Mbam left the commission in November 2015 after the end of his first five-year tenure.

Some of the major tasks facing the commission as it is inaugurated include giving the nation a new revenue formula which constitutionally is supposed to be reviewed every five years.

The commission may also feel the pressure to review the remunerations of political office holders in the country which many Nigerians think are outsized and do not reflect the reality in an economy that has been facing declining revenues.

Although the commission had completed work on both new revenue formula and remuneration package for political office holders, the processes were not concluded because the documents were not presented to the National Assembly by the President.

It is not clear whether the commission would press for completion of the processes or opt for fresh reviews. However, opting for fresh reviews may be more logical given the passage of three years since the works were completed as well as the preponderance of new membership of the commission.

State governors had recently hinged the payment of N30, 000 minimum wage on the review of the revenue formula in a way that would give the states more substantial resources.

Revenue sharing formula which has remained a controversial subject in Nigeria even before independence in 1960 refers to the proportion of resources accruing to the federation that goes to each component of the federation.

It also defines the proportion of resources that must be retained in the territories where they are generated as well as what goes to the agencies of government that collect the revenues on behalf of the federation.

Currently, 13 per cent of mineral resources known as derivation go to oil and solid minerals producing states. Four per cent of the money collected by Nigeria Customs Services is given to the organisation as the cost of collection.

Similarly, the Federal Inland Revenue Services receives seven per cent of the money it collected to cater for the cost of collection.

After these deductions, both mineral and non-mineral revenues are pulled together into the federation account and shared among the three tiers of government.

At present, the Federal Government gets 52.68 per cent. The state governments get 26.72 per cent while the Local Government Councils get 20.6 per cent.

From Value Added Tax, four per cent cost of collection is assigned to FIRS.

After these deductions, the net revenue is shared among the three tiers of government in the proportion of the Federal Government, 15 per cent; state governments, 50 per cent, and Local Government Councils, 35 per cent.

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.

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Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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Petrol Importation - investorsking.com

The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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Gas-Pipeline

The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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food storage

Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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