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FG Records N2.3tn Shortfall From Revenue-earning Agencies

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  • FG Records N2.3tn Shortfall From Revenue-earning Agencies

Between January 2015 and August 2018, the Federal Government recorded a total shortfall of N2.38tn in independent revenue from its agencies captured under the Fiscal Responsibility Act.

The Act stipulates that any government agency that generates revenue must remit 80 per cent of their operating surplus to the Consolidated Revenue Fund account.

Some of the agencies are the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation, Securities and Exchange Commission, Nigerian Shippers Council, Nigerian Export Promotion Council, National Health Insurance Scheme, Nigerian Civil Aviation Authority, and Nigerian Communications Commission.

Over the years, many of the agencies have been underpaying revenue into the coffers of the government.

The development made the Director-General, Budget Office of the Federation, Ben Akabueze, to summon a meeting of the heads of the affected agencies to discuss how to address the revenue shortfall.

Speaking at the event on Tuesday in Abuja, Akabueze described the revenue performance of some of the agencies as “mostly insignificant.”

For instance, he said that between 2015 and August 2018, out of the cumulative budgeted revenue of N3.65tn, the actual revenue received during the period was just N1.27tn.

Giving a breakdown of the revenue for the period, the DG said that in 2015, the budgeted independent revenue of the government was N489.25bn, out of which N354.03bn was generated.

For 2016, he said the government was more ambitious by setting a target of N1.5tn only for the agencies to realise just N398.19bn.

He said the poor revenue performance made the Federal Government reduce the 2017 target to N807.57bn.

However, he said the actual collection was worse than what was earned in the previous years as only N216.66bn was the actual amount generated.

For the 2018 fiscal period, he said the revenue target was pegged at N847.95bn noting that about N302.66bn had been generated as revenue.

About 50 government-owned enterprises that generate independent revenue have yet to remit their operating surpluses running into over N2tn.

Some of the agencies, according to the presentation made by the Akabueze, are the Petroleum Products Pricing Regulatory Agency, N1.34tn; Central Bank of Nigeria, N801.18bn; Nigeria Ports Authority, N192.1bn; Nigerian Maritime Administration and Safety Agency, N66.08bn; and the Federal Airport Authority of Nigeria, N51.99bn.

The Nigerian Postal Service has yet to remit its operating surplus of N37.74bn; Nigerian Communications Commission, N30.85bn; National Inland Water Ways Authority, N30.83bn; National Information Technology and Development Agency, N30.7bn; and Nigerian Airspace Management Agency, N22.79bn.

Similarly, the National Examination Council has yet to remit its operating surplus of N16.3bn; Nigerian Television Authority, N15.64bn; Nigerian Shippers Council, N11.99bn; National Health Insurance Scheme, N8.81bn; National Pension Commission, N8.68bn; Corporate Affairs Commission, N7.71bn; and Standards Organisation of Nigeria, N5.5bn, among others.

Akabueze said, “The continuous underperformance of the government -owned enterprises has made it difficult to achieve enhanced domestic revenue mobilisation from operating surpluses of the GOEs.

“The President has mandated that urgent corrective action should be taken and for this reason, we have gathered here today.

“Despite the over N40tn the Federal Government has invested in the agencies, what is usually remitted to the treasury in terms of dividends or surplus at the end of each operating year is mostly insignificant.

“The record shows that few of the GOEs declare surpluses. In effect, the Nigerian taxpayers have not benefitted much from these investments.

“Out of the total projected sum of N807.57bn independent revenues in 2017, only N216.66bn, representing 26.8 per cent performance, was remitted by GOEs and revenue-generating Ministries, Departments and Agencies.”

He said, going forward, the Federal Government would strengthen its control mechanism to make the revenue process more transparent and inclusive.

To achieve this, Akabueze said reforms would be implemented with increased vigour to improve revenue collection and expenditure management.

He said achieving fiscal sustainability required bold, decisive and urgent action, adding that the budget performance between January and September had shown clearly that the country had a “serious revenue challenge.”

He gave some of the initiatives being taken to address the problems to include the deployment of new technology to improve the collection, upward review of tariffs and tax rates, stronger enforcement action against tax defaulters and tighter performance management framework.

He also said the government would be implementing tight expenditure control through the issuance of circulars to limit allowable expenses, the frequency of board meetings and other wasteful practices.

“Annual GOE capital budget may be mainstreamed into the Federal Government capital budget in order to ensure that they are subjected to the same level of scrutiny, procurement and monitoring processes.

“It shall be mandated for all GOEs to use the Treasury Single Account for all financial transactions. The accounts of GOEs shall henceforth be audited within five months after the end of each financial year,” he added.

Akabueze explained that the government would be amending relevant sections of the Acts establishing some of the agencies to reflect the economic realities and policy thrust of the government.

He said the need to amend the Act became imperative as some establishing Acts empowered the boards of agencies to serve as final approving authority over their spending plans.

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 long experience in the global financial market.

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Economy

Lagos Lowers Land Use Charges, Waives N5.75bn in Penal Fees

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Lagos Reduces Land Use Charges to Pre-2018 Fees

In a bid to ease economic burden and support growth across Lagos State, the commercial hub of Nigeria, the state government has reduced land use charges and other penal fees.

Dr. Rabiu Olowo, the Commissioner for Finance, disclosed this on Wednesday in a statement titled ‘Speech delivered by the honourable commissioner for finance at a press briefing on the 2020 new land use charge law.’

Lagos State Government said land use charges and other fees are revised down to pre-2018, adding that the state will henceforth uphold the 2018 method of valuation.

Accordingly, the state waived the penal fees for 2017, 2018 and 2019. Translating to N5.75 billion in potential revenue.

“In addition to this, there is also a 48 per cent reduction in the annual charge rates,” Olowo stated.

He further stated that owner-occupied residential property was lowered from 0.076 per cent to 0.0394 per cent; industrial premises of manufacturing concerns, from 0.256 per cent to 0.132 per cent; and residential property/private school (owner and third party, from 0.256 per cent to 0.132 per cent.

Olowo added that commercial property — used by the occupier for business purposes — was reduced from 0.76 per cent to 0.394 per cent; and vacant properties and open empty land, from 0.076 per cent to 0.0394 per cent.

While the annual charge rate for agricultural land was revised down by 87 per cent from 0.076 per cent to 0.01 per cent.

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Economy

FG Spends N2.37 Trillion on Petrol Importation in 13 Months, Says NNPC

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NNPC Sells 950.67m Litres of Petrol In May

The Federal Government imported petrol valued at N2.37 trillion into the country in thirteen months, according to the Nigerian National Petroleum Corporation (NNPC).

On Wednesday, the corporation said revenue from the sales of white products stood at N2.39 trillion between May 2019 and May 2020.

It, therefore, stated that petrol contributed about 98.84 percent or N2.37 trillion of the total sales generated during the period.

In May, the corporation said it realised N92.58 billion from the sale of petrol. NNPC said the product was sold through its subsidiary, the Petroleum Products Marketing Company (PPMC).

According to the May 2020 version of the corporation’s Monthly Financial and Operations Report quoted by Kennie Obateru, the Group General Manager, Public Affairs Division, NNPC, 950.67 million litres of white products (only petrol) was sold by PPMC in the month.

This, he said “comprised 950.67 million litres of Premium Motor Spirit, popularly called petrol, only, with no Automotive Gas Oil or Dual Purpose Kerosene.”

“There was also no sale of special product in the month.”

Nigeria continues to depend on importation for its petrol supplies due to local dilapidated refineries that have failed to operate at optimal level despite billions of dollars budgeted for maintenance yearly.

Experts have said petrol importation is one of the main reasons the nation’s foreign reserves continues to struggle, especially at a period when oil prices are trading at a record low with broadly low demand for the commodity.

Nigeria’s foreign reserves is presently hovering around $36 billion, down from its record high of $45 billion attained in June 2019. The decline has also impacted the ability of the Central Bank of Nigeria to support the Nigerian Naira.

The Naira has been devalued by 15 per cent in the last four months and was recently adjusted from N361 a US dollar to N381 per US dollar on the Investors and Exporters forex window to ease the pressure on the reserves.

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Amaechi Urges National Assembly to be Careful Probing Chinese Loans

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Amaechi Says China is Becoming a Bit Apprehensive About Giving Money to Nigeria

The Minister of Transportation, Chibuike Amaechi, on Tuesday said he specifically urged the National Assembly to be careful about the ongoing probe of Chinese loan agreements.

The minister who appeared in a live television programme with the Minister of Justice/Attorney-General of the Federation, Abubakar Malami, said China is becoming a bit apprehensive about releasing additional loans to the country.

He said, “You know, I specifically urged the National Assembly to please be careful about this probe on the loan agreements. It is because we are trying to make an application for the Port Harcourt Maiduguri rail.

“If nothing else is happening, you know that our brothers are already saying that we don’t want to do any rail project in the South-East.

He added, “Now that we are planning to say that they should give us some loan for us to construct Port Harcourt to Maiduguri, and we are about to go to cabinet for approval, you are now shouting these terms are bad, Chinese people are wicked.

“How will they give you the money? I have documents to the effect that we are getting signals that they are becoming a bit apprehensive on whether we are doing this because we don’t want to pay them back.

Amaechi said the nation must learn to pay back procured loans, saying the $500 million loan obtained for the Abuja-Kaduna railway was presently being serviced.

He said, “Nobody has signed out anything. A sovereign nation is a sovereign nation; nobody can recolonise us. We must learn to pay our debts and we are paying, and once you are paying, nobody will come and take any of your assets.”

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