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FG Records N398bn Revenue Deficit in Q1

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naira
  • FG Records N398bn Revenue Deficit in Q1

The gross federally-collected revenue of N2.309tn recorded in the first quarter of 2019 fell short of the proportionate quarterly budget estimate of N3.321tn by 30.5 per cent.

It fell below the receipts in the preceding quarter by 4.2 per cent.

The decline, relative to the proportionate quarterly budget estimate, was attributed to the shortfall in receipts from both oil and non-oil revenue components during the review period, according to the Central Bank of Nigeria.

The CBN stated in its Federation Account Operations that “federally-collected revenue, at N2.309tn, in the first quarter of 2019, was 30.5 per cent and 4.2 per cent lower than the proportionate quarterly budget estimate and the receipts in the preceding quarter, respectively.

“The development relative to the budget estimate was due to the shortfall in receipts from both oil and non-oil revenue components in the review quarter.

“The Federal Government estimated retained revenue and total expenditure were N798.82bn and N1.197tn, respectively, resulting in an estimated deficit of N398.22bn in the first quarter of 2019.”

Gross oil receipt, at N1.413tn or 61.2 per cent of the total revenue, was below both the proportionate quarterly budget estimate and the receipts in the preceding quarter by 26.4 per cent and 3.5 per cent, respectively.

The decline in oil revenue relative to the proportionate budget estimate was due to shortfalls in crude oil production and exports, arising from maintenance operations at the various NNPC terminals.

Non-oil revenue, at N896.04bn or 38.8 per cent of the total, fell below the proportionate quarterly budget estimate of N1.4tn by 36.0 per cent.

It fell below the level in the preceding quarter by 5.4 per cent.

The lower non-oil revenue relative to the proportionate quarterly budget estimate was due to shortfalls in a receipt from Federal Government Independent Revenue and Corporate Tax

After the statutory deductions and transfers of N435.51bn and N395.81bn respectively, a net sum of N1.478bn was retained in the Federation Account.

Of this amount, the Federal Government received N709.03bn, state and local governments received N359.63bn and N277.26bn, respectively, while the balance of N132.54bn was transferred to the 13.0 per cent Derivation Fund for distribution among the oil-producing states.

In addition, the Federal Government received N43.43bn, while the state and local governments received N144.78bn and N101.34bn, respectively, from the VAT Pool Account.

The sum of N12.14bn was shared as non-oil excess revenue from which the Federal Government received N6.40bn, while the state and Local governments received N3.24bn and N2.50bn, respectively.

After the exchange gain amounting to N2.49bn was shared, the Federal Government received N1.16bn, state governments got N0.59bn, and local governments got N0.46bn.

The balance of N0.28bn was transferred to the 13.0 per cent Derivation Fund for distribution among the oil-producing states.

The total statutory and VAT revenue allocation to the three tiers of government in the first quarter of 2019 amounted to N1.782tn, compared with the proportionate quarterly budget estimate of N2.829tn.

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

Illegal Withdrawals: Rep To Investigate NNPC, NLNG Over $1.05bn

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House of representatives

Rep To Investigate NNPC, NLNG Over Illegal Withdrawal of $1.05bn from NLNG Account

The Nigerian House of Representatives has concluded plans to investigate illegal withdrawal of $1.05 billion from the account of the Nigerian Liquefied Natural Gas Limited (NLNG) by the Nigerian National Petroleum Corporation (NNPC).

The decision followed the adoption of a motion titled ‘Need to Investigate the Illegal Withdrawals from the NLNG Dividends Account by the Management of NNPC’ moved by the Minority Leader, Ndudi Elumelu, on Tuesday.

The House adopted the motion and mandated its Committee on Public Accounts to “invite the management of the NNPC as well as that of the NLNG, to conduct a thorough investigation on activities that have taken place on the dividends account and report back to the House in four weeks.”

Elumelu said, “The House is aware that the dividends from the NLNG are supposed to be paid into the Consolidated Revenue Funds account of the Federal Government and to be shared amongst the three tiers of government.

“The House is worried that the NNPC, which represents the government of Nigeria on the board of the NLNG, had unilaterally, without the required consultations with states and the mandatory appropriation from the National Assembly, illegally tampered with the funds at the NLNG dividends account to the tune of $1.05bn, thereby violating the nation’s appropriation law.

“The House is disturbed that there was no transparency in this extra-budgetary spending, as only the Group Managing Director and the corporation’s Chief Financial Officer had the knowledge of how the $1.05bn was spent.

“The House is concerned that there are no records showing the audit and recovery of accrued funds from the NLNG by the Office of the Auditor-General of the Federation, hence the need for a thorough investigation of the activities on the NLNG dividends account.”

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Economy

FG Gives Radio, Tv Stations Debt Relief, Writes Off 60 Percent Debt

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TSTV

FG Reduces Tv, Radio Stations Licence Fee by 30%, Writes Off 60% Debt

The Federal Government has reduced the existing licence fee paid by all open terrestrial radio and television stations by 30 percent.

The Minister of Information and Culture, Lai Mohammed, disclosed this at a press conference in Abuja on Monday.

He said the Federal Government has also decided to write off 60 percent of the N7 billion loan owed the government by television and radio stations.

He explained that the N7 billion is the total outstanding from television and radio stations on the renewal of their operating licences.

Mohammed, however, said for any station to benefit from the 60 percent debt relief, such a station must be ready and willing to pay the remaining 40 percent within the next three months.

According to him, the debt relief offer would open on July 10th and close on the 6th of October.

Mohammed said, “According to the NBC, many Nigerian radio and television stations remain indebted to the Federal Government to the tune of N7bn.

“Also, many of the stations are faced with the reality that their licences will not be renewed, in view of their indebtedness.

“Against this background, the management of the NBC has therefore recommended, and the Federal Government has accepted, the following measures to revamp the broadcast industry and to help reposition it for the challenges of business, post-COVID-19:

“(a) 60 per cent debt forgiveness for all debtor broadcast stations in the country; (b) the criterion for enjoying the debt forgiveness is for debtor stations to pay 40 per cent of their existing debt within the next three months.

“(c) Any station that is unable to pay the balance of 40 per cent indebtedness within the three-month window shall forfeit the opportunity to enjoy the stated debt forgiveness.

“(d) The existing license fee is further discounted by 30 per cent for all open terrestrial radio and television services effective July 10, 2020.

“(e) The debt forgiveness shall apply to functional licensed terrestrial radio and television stations only. (f) The debt forgiveness and discount shall not apply to pay TV service operators in Nigeria.”

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Economy

Nigeria’s Inflation to Average 12.2 Percent in 2020 Says PwC

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Inflation

PwC Says Inflation Will Average 12.2% in 2020

PricewaterhouseCoopers (PwC) has predicted that the nation’s inflation rate will average 12.2 percent in 2020.

In the report titled ‘Demand and supply shocks from COVID-19 keep inflation higher for longer’, the company based its projection on the rising cost of goods and services due to the supply shocks to commodity and the COVID-19 negative impacts on the economy.

The report explained that the supply disruption brought about by lockdown measures put in place to mitigate COVID-19 spread pushed headline inflation to its highest in 23 months in the month of May 2020.

Nigeria’s headline inflation rose by 12.4 percent year-on-year in the month of May. Its fastest pace of increase in 26 months, according to the National Bureau of Statistics (NBS).

However, PwC said because of the growing global uncertainty due to the projected second wave of COVID-19 and declining household incomes, headline inflation will increase from the average of 11.4 percent recorded in 2019 to average 12.2 percent in 2020.

“Barring a second wave of the pandemic, which could further threaten outlook for global economic growth, coupled with the absence of major shocks to food supply in Nigeria, inflation outlook for rest of the year could be influenced by two factors. Firstly, the elevated base effect, and secondly, waning household incomes. The first factor is likely to have a greater impact.”

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