States Jerk up Deficit Spending by 90% to N800bn
The 36 state governments are set to incur about N800 billion budget deficit in 2021, representing a 90 per cent increase from the N420 billion recorded in 2020.
Analysis of the approved budgets for the 36 states show total proposed revenue of N7.05 trillion as against total proposed expenditure of N7.85 trillion, translating to a budget deficit of N800 billion.
In 2020, the states had N5.02 trillion as budgeted expenditure with N4.6 trillion as budgeted revenue, thus deficit of N420 billion.
Consequently, the N800 billion proposed budget deficit for 2021 represents a 90 per cent increase when compared with the N420 billion proposed budget deficit of the states in 2020.
Budget 2021 Breakdown
Further analysis of the states proposed budget showed dominance of capital expenditure which accounted for 54.8 percent of the total proposed budget while recurrent expenditure accounted for 44.6 per cent or N3.5 trillion.
Further analysis also showed that the proposed 2021 budget of N7.85 trillion is dominated by five states which accounted for 20 percent of the total states’ budget.
The five states are: Lagos (N1.15 trillion), Rivers (N448 billion), Akwa Ibom (N435 billion), Imo (N346 billion) and Ogun (N339 billion).
On the other side are the five states with the lowest budget, which accounted for 7.1 percent or N562.2 billion of the total proposed budget.
The states are Yobe (N106.9 billion), Ekiti (N109.6 billion), Osun (N109.8 billion), Nassarawa (N112.9 billion) and Ebonyi (N123 billion).
Analysis also showed that 52 percent or N3.39 trillion of the proposed revenue of N7.05 trillion will come from Internally Generated Revenue (IGR) and Federation Account Allocation Committee (FAAC).
According to their approved budgets, the 36 states hope to raise N1.82 trillion from IGR, to complement FAAC receipts of N1.87 trillion.
Five states dominated the proposed revnue of N7.05 trillion for 2021 with 33.6 percent or N2.37 trillion. The states are: Lagos (N962.52 billion), Rivers (N448.6 billion), Delta (N384 billion), Ogun (N320 billion) and Akwa Ibom (N255.03 billion).
On the other hand, the five states at the bottom of the revenue chart accounted for 6.5 per cent or N464.46 billion. The five states are Ebonyi (N64 billion), Enugu (N79.76 billion), Oyo (N102.8 billion), Yobe (N106.9 billion) and Gombe (N111 billion).
In terms of FAAC revenue, Lagos and four other states dominated the chart accounting for 20.8 per cent or N389.88 billion. Lagos state led with N116.78 billion, followed by Katsina (N74 billion), Niger (N71.8 billion) , Bauchi (N68.3 billion) and Ogun (N59 billion).
At the bottom of the FAAC revenue chart are five states which accounted for 9.3 per cent or N174.1 billion. These are Ekiti with N29.4 billion, Ondo (N34.4 billion), Yobe (N35.3 billion) , Akwa Ibom (N36 billion) and Gombe (N39 billion).
States with the highest projected IGR are Lagos (N732.6 billion), Ogun (N119 billion), Jigawa (N51.6 billion), Kaduna (N50.6 billion) and Anambra (N36.6 billion).
States with the lowest 2021 projected IGR are Adamawa (N12 billion), Ebonyi (N12 billion), Kebbi (N12.2 billion), Katsina (N15.6 billion) and Benue (N19.7 billion).
States Deficit Funding Plans
Lagos State said it will finance the proposed deficit of N192.49 billion through external loans of N37.26 billion, internal loans of N55.24 billion and bond issuance of N100 billion this year.
On its part, the Kaduna State government intends to finance its budget deficit through internal grants of N39.99 billion, external grants of N9.2 billion, external loans of N46.9 billion while N1 billion will be generated through sale of government assets worth N1 billion.
On the other hand, Kano State is targeting N6 billion from internal and external loans as well as N33.29 billion from general grants.
Benue State said it will finance its N23.8 billion deficit through a combination of domestic loans and bond issuance.
Akwa Ibom on its part said it will finance its N180.6 billion deficit through internal loans of N40.04 billion, grants of N34 billion. Others are Ecological Fund – N2 billion, Reimbursement from Federal Government on Road and other Infrastructure – N 15 billion, N500 million from Investment Income; Exceptional Income of N 61.105 billion and N1 billion from Stabilization Account.
Anambra State plans to fund its N11 billion deficit through domestic loans at concessionary interest rates. Kogi State however noted that its estimated Capital Receipt is N48.08 comprising internal and external loans, aids and grants.
Abia State also indicated it will finance its N29.68 billion through domestic loans.
US Senate Passes $1.9 Trillion Stimulus Package
US Senate Passes $1.9 Trillion Stimulus Package
President Biden’s $1.9 trillion economic stimulus plan would have far-reaching effects on society as the country tries to turn the corner on a pandemic that has killed more than half a million people in the United States.
The mammoth bill approved by the Senate on Saturday would provide direct payments to Americans, extend jobless benefits and provide a huge financial infusion to states and local governments as well as to schools to help them reopen. It provides funding for priorities like coronavirus testing and vaccine distribution. And it amounts to an ambitious antipoverty program, offering significant benefits for low-income people.
Here’s a guide to what’s included in the plan, which is scheduled to go before the House for final approval on Tuesday and then would head to Mr. Biden for his signature.
The bill would give out $1,400 stimulus checks.
Individuals making under $75,000 and married couples making under $150,000 would receive direct payments of $1,400 per person. The bill would also provide $1,400 per dependent.
The payments would gradually decrease above those income levels and disappear entirely above an income cap: $80,000 for individuals and $160,000 for married couples.
Those caps were lowered from the thresholds in the House’s version of the stimulus plan, which set the cutoffs at $100,000 for individuals and $200,000 for married couples.
The current $300-per-week boost to unemployment benefits would continue.
The Senate bill extends unemployment programs through early September, including the $300-per-week federal supplement provided in the last stimulus plan passed in December.
Mr. Biden had proposed bumping up that supplemental benefit to $400 per week, which the House agreed to, but the Senate kept it at $300 weekly.
The Senate bill also includes a provision intended to avert surprise tax bills for people who lost jobs, waiving federal income taxes for the first $10,200 of unemployment benefits received in 2020 for households earning under $150,000.
The child tax credit would become more generous, among other benefits.
For 2021, the bill would temporarily expand the child tax credit, which is currently worth up to $2,000 per child under 17. Under the legislation, the tax credit would be as much as $3,600 for children up to age 5 and as much as $3,000 for children 6 to 17.
The bill would make the full value of the credit available to low-income people who are currently ineligible or receive only a portion. And for the second half of this year, it would have the federal government send advance payments of the credit to Americans in periodic installments, akin to a guaranteed income for families with children.
The legislation would also expand the child and dependent care tax credit for 2021, and it would expand the earned-income tax credit for workers without children for this year as well. Through 2025, it would exempt student loan forgiveness from income taxes.
Money would go to fight the pandemic and to help states, local governments and schools.
The bill would provide funding for vaccine distribution as well as coronavirus testing, contact tracing and genomic sequencing. It would give money to the Federal Emergency Management Agency as well.
It would provide $350 billion for states, local governments, territories and tribal governments, and it contains about $130 billion for schools. It also includes funding for colleges and universities, transit agencies, housing aid, child care providers and food assistance.
In addition, the bill contains funding to help businesses, including restaurants and live venues, and it includes a bailout for multiemployer pension plans that are financially troubled.
The Affordable Care Act would get a boost.
The bill would temporarily increase subsidies for people purchasing health insurance through the Affordable Care Act’s marketplaces. It includes billions of dollars for public health programs and veterans’ health care.
It also seeks to help those who have lost jobs keep the health insurance coverage they had through their employer, covering the full cost of premiums through a federal program called COBRA through September.
One thing missing: a minimum wage hike.
As part of the stimulus plan, Mr. Biden wanted to raise the federal minimum wage, which is now $7.25 per hour, to $15 per hour.
The stimulus bill passed by the House would increase the wage to $15 per hour by 2025, but the Senate parliamentarian said the provision violated the strict rules that Senate Democrats had to follow to pass the bill through a special process that shielded it from a filibuster and allowed for its approval with only Democratic support. A vote in the Senate on Friday to add the wage increase back to the bill failed.
The Senate bill also dropped funding for a rail project in Silicon Valley in Northern California and a bridge between upstate New York and Canada, two provisions that were included in the House bill and drew criticism from Republicans.
Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020
Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.
In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.
Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.
This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).
Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.
Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.
The energy company made another payment of US$17.935 million in fee for 2020.
While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.
Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.
Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.
FIRS Sets N5.9 Trillion Revenue Target for 2021
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.
News3 weeks ago
Doctors Warn Covid Will Become Endemic and People Need to Learn to Live With it
Bitcoin2 weeks ago
Bitcoin Rebounds To $50,881 Per Coin on Wednesday
Bitcoin3 weeks ago
Bitcoin Surges Above $50,000 Per Coin on Tuesday, Sets a New All-Time High
News2 weeks ago
U.S. COVID-19 Deaths Hit 500,000
Economy3 weeks ago
Petrol Subsidy May Hit N11.2bn Per Week
Economy4 weeks ago
Petrol Landing Cost Rises to N180, Oil Crosses $60
Stock Market3 weeks ago
Jeff Bezos Topples Elon Musk as Experts Predict Tesla’s Doom
News3 weeks ago
WAEC Releases 2020 Result, Just 39.8 Percent Passed