Tag: states

  • FAAC Shares N722.7bn February Revenue To FG, States, LGs

    FAAC Shares N722.7bn February Revenue To FG, States, LGs

    The Federation Account Allocation Committee (FAAC) has shared N722.677 billion February 2023 Federation Account Revenue to the Federal Government, States and Local Government Councils.

    This was contained in a communiqué issued at the end of the FAAC meeting for March 2023, according to a statement by its Director, Press and Public Relations, Bawa S. Mokwa.

    “The N722.677 billion total distributable revenue comprised distributable statutory revenue of N366.800 billion, distributable Value Added Tax (VAT) revenue of N224.232 billion, Electronic Money Transfer Levy(EMTL) of N11.645 billion and N120.000 billion Augmentation from Forex Equalisation Account,” the FAAC said.

    According to the statement, in February 2023, the total deductions for cost of collection was N27.449 billion and total deductions for transfers, savings, recoveries and refunds was N109.909 billion.

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    “The balance in the Excess Crude Account (ECA) was $473,754.57,” the committee added.

    “The communiqué confirmed that from the total distributable revenue of N722.677 billion; the Federal Government received N269.063 billion, the State Governments received N236.464 billion and the Local Government Councils received N173.936 billion. A total sum of N43.214 billion was shared to the relevant States as 13% derivation revenue.

    “Gross statutory revenue of N487.106 billion was received for the month of February 2023. This was lower than the sum of N653.704 billion received in the previous month by N166.598 billion.”

    See the full statement below:

    OFFICE OF THE ACCOUNTANT GENERAL OF THE FEDERATION
    Press Release
    Wednesday, March 22, 2023

    FAAC SHARES N722.677 BILLION FEBRUARY 2023 REVENUE TO FG, STATES AND LGCs

    The Federation Account Allocation Committee (FAAC) has shared a total sum of N722.677 billion February 2023 Federation Account Revenue to the Federal Government, States and Local Government Councils.

    This was contained in a communiqué issued at the end of the Federation Account Allocation Committee (FAAC) meeting for March 2023.

    The N722.677 billion total distributable revenue comprised distributable statutory revenue of N366.800 billion, distributable Value Added Tax (VAT) revenue of N224.232 billion, Electronic Money Transfer Levy(EMTL) of N11.645 billion and N120.000 billion Augmentation from Forex Equalisation Account.

    In February 2023,, the total deductions for cost of collection was N27.449 billion and total deductions for transfers, savings, recoveries and refunds was N109.909 billion.

    The balance in the Excess Crude Account (ECA) was $473,754.57

    The communiqué confirmed that from the total distributable revenue of N722.677 billion; the Federal Government received N269.063 billion, the State Governments received N236.464 billion and the Local Government Councils received N173.936 billion. A total sum of N43.214 billion was shared to the relevant States as 13% derivation revenue.

    Gross statutory revenue of N487.106 billion was received for the month of February 2023. This was lower than the sum of N653.704 billion received in the previous month by N166.598 billion.

    From the N366.800 billion distributable statutory revenue, the Federal Government received N178.683 billion, the State Governments received N90.630 billion and the Local Government Councils received N69.872 billion. The sum of N27.614 billion was shared to the relevant States as 13% derivation revenue.

    For the month of February 2023,, the gross revenue available from the Value Added Tax (VAT) was N240.799 billion This was lower than the N250.009 billion available in the month of January 2023 by N9.210 billion.

    The Federal Government received N33.635 billion, the State Governments received N112.116 billion and the Local Government Councils received N78.481 billion from the N224.232 billion distributable Value Added Tax (VAT) revenue.

    The N11.645 billion Electronic Money Transfer Levy (EMTL) was distributed as follows: the Federal Government received N1.747 billion, the State Governments received N5.822 billion, the Local Government Councils received N4.076 billion.

    From the N120.000 billion Augmentation, the Federal Government received N54.998 billion, the State Governments received N27.896 billion, the Local Government Councils received N21.506 billion and a total sum of N15.600 billion was shared to the relevant Sates as 13% mineral revenue.

    According to the communiqué, in the month of February 2023, Petroleum Profit Tax (PPT), Companies Income Tax (CIT), Oil and Gas Royalties, Import and Excise Duties all decreased significantly while Value Added Tax (VAT) and Electronic Money Transfer Levy (EMTL) decreased marginally.

    Bawa S. Mokwa
    Director (Press and Public Relations)

  • 7 States Withdraws Suit Challenging Declaration Of Tinubu As President-Elect

    7 States Withdraws Suit Challenging Declaration Of Tinubu As President-Elect

    Seven states under the Peoples Democratic Party (PDP) – Adamawa, Akwa Ibom, Bayelsa, Delta, Edo, Taraba, and Sokoto – which filed a suit against the Federal Government at the Supreme Court challenging the declaration of All Progressives Congress (APC) presidential candidate Bola Ahmed Tinubu as president-elect, have discontinued the suit.

    The Notice of Discontinuance which was signed by their lawyer and Senior Advocate of Nigeria, Mike Ozekhome, says “Take notice that the plaintiffs doth hereby wholly discontinue this suit against the defendant herein”.

    In the earlier suit which had the Attorneys-General of the states as plaintiffs and the Attorney General of the Federation as a defendant, the seven states had asked the Supreme Court to intervene in the just concluded general elections as they claimed that the declaration of  Tinubu did not follow the Electoral Act and INEC’s own laid down guidelines, particularly the uploading of results to the iREV through the Bimodal Accreditation System (BVAS).

    They also expressed fear of a  probable breakdown of public order and civil disobedience.

    Below is the Notice to discontinue the suit:

    The Notice to discontinue with the suit
    The Notice to discontinue with the suit
  • $418m Paris Club Loan Refund: States Warn FG Not To Tamper With Funds

    $418m Paris Club Loan Refund: States Warn FG Not To Tamper With Funds

    The 36 states of the federation have warned the Federal Government not to tamper with funds accruing to them and the 774 local government councils under the guise of satisfying an alleged $418 million London/Paris Club Loan refund-related judgment debts.

    The states stated in a document that they were not parties to any suit on the London/Paris Club refund, and as such were not liable to any person or entity in any judgment debt being relied on by the Federal Government.

    Speaking through the body of Attorneys-General of the Federation, the states warned further that should the Federal Government proceed to make any such deduction, it would be acting illegally and in contempt of their appeal challenging the judgment.

    They gave the warning in an April 4 letter as part of their response to a November 11, 2021 letter from the Minister of Finance, Budget, and National Planning, advertising the commencement of the deduction for the liquidation of the alleged judgment debts.

    The reply of the states was signed by the body of Attorneys-General of the Federation Interim Chairman, Mr. Moyosore Onigbanjo (SAN) of Lagos State and Interim Secretary, Dr. Abdulkarim Abubakar Kana of Nasarawa State as well as the Attorneys-Generals of Rivers, Abia, Taraba, Benue, and Zamfara states, for and on behalf of all the state Attorneys-General.

    It reads in part: “Their Excellencies have drawn our attention to your letter referenced above, which the various states of the federation received at about the end of March 2022. The letter notifies the States of your intention to commence deduction from allocations due to the States from the Federation Account for the liquidation of the London/Paris Club Loan refund-related judgment debts on behalf of the 36 States of the Federation and the 774 local government councils.

    “Please note that the states of the federation were not parties to any contract or suits concerning the London/Paris Club refund, from which the said judgment debts arose.

    “Consequently, the 36 States of the federation are not liable to any person or entity in any judgment debt.”

    The letter noted that the deduction of the allocations due to the 36 states of the federation from the Federation Account to liquidate the London/Paris Club Loan refund-related judgment debts is the subject of an appeal filed by the 36 States at the Court of Appeal, Abuja.

    It explained that: “The appeal challenges the Federal High Court’s (per Honourable Justice Inyang Ekwo) judgment delivered on 25th March 2022 between A.G Abia State v. President, Federal Republic of Nigeria & 42 Ors. and, therefore, the issue is sub judice.”

    In addition, it noted that the states have also filed a Motion on Notice for an Order of Injunction pending appeal.

    The letter added that the body’s legal representatives had published a public caveat in national dailies notifying the public of the pending appeal, which also advised concerned parties “to desist from dealing with the subject matter thereof pending the hearing and determination of the Appeal and the application for Injunction pending appeal”.

    It said that given the above, “The law requires you to restrain from taking any step whatsoever that is capable of interfering with the rest of the suit, which is now a subject of an appeal.

    “Accordingly, Nigerian case law enjoins you to refrain from effecting any deduction whatsoever from the allocations due to the 36 States from the Federation Account for the liquidation of the London/Paris Club Loan refund-related judgment debts purportedly on behalf of the 36 States of the Federation and the 774 local government councils, pending the hearing and determination of the appeal by the states of the federation. Doing otherwise in the face of the pending Appeal and Motion on Notice for Injunction pending appeal shall be at your peril.”

  • FG, States Won’t Be Able to Pay Salaries in 2022 If Fuel Subsidy is Retained – World Bank

    FG, States Won’t Be Able to Pay Salaries in 2022 If Fuel Subsidy is Retained – World Bank

    The World Bank yesterday sounded the alarm bells to Nigeria, saying further delay in removing the fuel subsidy which had been described as a major drain and waste on the economy could see the federal and state governments unable to pay salaries from 2022.

    The Lead Economist, Nigeria Country office of the World Bank, Marco Antonio Hernandez, painted a gloomy picture of Nigeria if the country decides to continue with the controversial fuel subsidy, while unveiling the Nigeria Development Update (NDU), a bi-annual report of the multilateral institution, at an even that held in Abuja as well as virtual.

    Also, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, during a panel session at the event, lamented the huge burden the continuous retention of the subsidy on petrol had been to the corporation, warning that going forward, “the NNPC may have to start invoicing the federation to be able to maintain subsidy.”

    This is just as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, reiterated that the government was working on introducing measures that would cushion the impact of fuel subsidy removal on vulnerable Nigerians.

    Speaking further, Hernandez, in the report, urged Nigeria to remove subsidy on petroleum motor spirit (PMS) in February 2022, as prescribed by the Petroleum Industry Act (PIA), warning that further delay could worsen the precarious revenue situation confronting the country.

    The report also warned that the present fiscal condition of the sub-national governments would take a turn for the worse in 2022 with 35 of the 36 states unable to meet their financial obligations.

    Hernandez stated that a situation where N250 billion goes into fuel subsidy monthly was unsustainable as the paucity of revenue confronts the country, especially the sub-national governments.

    Hernandez who provided insights into the NDU report, titled “Time for Business Unusual,” stated that should the current revenue challenge continue till 2022, only Lagos State would be able to meet its financial obligations.

    The report pointed to mounting fiscal pressures due to lower-than-expected revenues in 2021 and the rising cost of PMS subsidy.

    It stated: “Because most states rely heavily on inter-governmental transfers, diminished revenue inflows to the Federation Account are jeopardising fiscal sustainability at the state level.

    “For example, in the oil-producing State of Bayelsa federal transfers account for 91 per cent of revenues, and declining transfers caused a 22-percent drop in Bayelsa’s revenues per capita during the year.

    “Even in the state of Lagos, which relies the least on Federal transfers, transfers accounted for 29 per cent of revenues in 2020. Most State expenditures cover salaries and administrative expenses, and given their rigid (i.e., nondiscretionary) nature, State-level expenditures are difficult to cut.

    “Consequently, lower revenues are likely to intensify pressure on states’ debt stocks and undermine their fiscal sustainability.”

    According to the report, in contrast to past periods of high oil prices, the Nigerian government has this time not been able to fully benefit from the oil boom because oil production has fallen below Nigeria’s estimated capacity and the Organisation of Petroleum Countries (OPEC) quota due in part to rising insecurity and the higher cost of the PMS subsidy.

    It stated: “In 2022 the federal government plans to spend about 3,000 naira (US$7) per person for health, while the cost of the PMS subsidy for next year could reach 13,000 naira (US$32) per person. Not only is the PMS subsidy costly, but it mainly benefits richer households.

    “Nigeria has the opportunity to establish a “compact” with citizens that eliminates the subsidy and uses the savings to provide targeted cash transfers to lower-income-households, invest in job-creating programs, and improve its fiscal position.”

    It stated that the insufficient supply of foreign exchange (FX) issues related to the predictability of exchange rate management, the unsustainable subsidy on premium motor spirit (PMS), burdensome trade restrictions, and the sizeable fiscal deficit financing by the Central Bank of Nigeria (CBN) are undermining the business environment, compounding underlying constraints on domestic revenue mobilisation, foreign investment, human capital development, and the delivery of public services.

    The report noted that despite a strong initial recovery and resurgent global oil prices, Nigeria’s pre-crisis challenges were threatening its post-crisis recovery, highlighting the need to depart from business-as-usual policies.

    “Even though Nigeria’s economy exited a pandemic-induced recession, several challenges persist including double-digit inflation, declining incomes, and rising insecurity.

    “While the government took bold policy measures to mitigate the impacts of the COVID-19 crisis, the reform momentum has slowed which hinders Nigeria’s ability to reach its growth potential,” World Bank Country Director for Nigeria, Shubham Chaudhuri said.

    The report prescribed policy options for Nigeria, including addressing fiscal pressures.

    “Urgent priorities for the next three to six months include reducing inflation, improving exchange-rate management, mobilising additional oil and nonoil revenues, eliminating the PMS subsidy and redirecting expenditures towards targeted cash transfers and other priority investments, fostering competitive markets, and improving infrastructure.

    “While Nigeria’s macroeconomic projections have been updated since the previous edition of the NDU, the government’s fundamental policy challenges remain unchanged,” it added.

    In his contribution, Kyari, pointed out that while all over the world, subsidies are introduced to bring cost control and less pains to citizens, in Nigeria, fuel subsidy has become a major fiscal burden that must be eliminated.

    The NNPC boss explained: “Today, we are evacuating about 60 million litres of gasoline from all the depots in the country. It is not national consumption and it is very understandable because of issues such as cross-border smuggling.

    “As long as you have arbitrage, traders don’t see it as a crime, they just take advantage of that and exploit it. What we are dealing with is about N243 billion of fuel subsidy monthly. So, there is no magic around that.

    “This is the reality that we are facing. Going forward in 2022, we simply cannot afford this, we just don’t have the resources. As a matter of fact, the NNPC may have to start invoicing the federation to be able to maintain subsidy.

    “When you take out N243 billion from your total income every month, you are not able to fund your operations and so you can’t meet your other fiscal obligations. Clearly, there is a challenge in the ability to pay. So, there is a reform going on, particular in the energy sector and no one can stop.”

    Also, the Governor of Kaduna State, Mallam Nasir El-Rufai wondered why the country would continue to allocate more monies to fuel subsidy compared with the allocations to education, roads and the health sectors.

    “Is subsidising petrol more important than our health as even in a year we spent significant amount on health due to the pandemic, the budget for subsidy was still higher? Does it make sense?

    “Is subsidising petrol about thrice as educating our children and preparing them for the future more important? The capital budget for roads is five times less than our budget for subsidy. We have to ask ourselves as Nigerians whether this makes sense at all,” he added.

    According to El-Rufai, “this is the first time in Nigeria that oil prices are rising globally, yet, there is no windfall. In fact, we are getting less. Why? Because according to Kyari, subsidy is taking N250 billion per month.”

    He disclosed that this month, what the NNPC paid to the federation account, as part of its contribution to the amount to be shared by the Federation Account Allocation Committee (FAAC), was only N14 billion as against the N120 billion stipulated in the budget, and, “with the threat that next month they would ask the federation account to give them a cheque to cover subsidy.”

    “So, we have to ask ourselves if this subsidy still makes sense. Who is benefiting from it other than the smugglers and neighbouring African countries and some rich people? We have to stop this thing that will bring Nigeria to its knees,” the state governor added.

    Earlier, in her opening remarks, Ahmed expressed optimism that recent developments in the oil sector, such as the Petroleum PIA 2021, the full reactivation of the four public refineries in the country, and the completion and coming on stream of the three private refineries under construction in 2022, would significantly boost contribution from the sector to economic growth.

    According to her, subsidies’ regime in the sector remained unsustainable and economically disingenuous.

    She disclosed that ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, the government was working with its partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom, which she estimated to be 40 per cent of the population.

    “One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.

    “As a government, we remain committed to our broad objectives of stimulating broad-based growth through diversification and the active participation of the private sector to ensure that our growth is inclusive.

    “We will continue to prioritise investment in critical infrastructure needed to unlock production and supply constraints, to create adequate productive employment and preserve jobs, and to ensure macroeconomic stability and promote poverty reduction and equity.

    “I agree with the Report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilising cash transfers to safeguard the welfare of poor and middle-class households.

    “Towards this end, we intend to accelerate our structural reforms, particularly in the power sector, in governance, in business environment to unlock the huge potentials of the economy, scale up social safety net and deepen financial inclusion to reduce poverty and inequality gaps. We will carefully calibrate the sequencing of these reforms to manage their attendant political fallouts,” she added.

    Ahmed pointed out that digital revolution was looming in Nigeria and waiting to happen spontaneously.

    “I agree that Nigeria’s digital economy can transform economic activities by unleashing new productivity gains, offering new services, and improving the government’s efficiency. We see enormous opportunity for our theming youth population in this sector which has largely remained unharnessed with isolated progress and possibilities.

    “We need greater investments in newer and competitive technologies to be made for the provision of critical infrastructure in the telecoms sector to unleash potentials.

    “To protect such investments, government has been mobilising national security outfits, and even local ‘vigilantes’ to provide added layers of security for the infrastructure, while at same time engaging local communities towards addressing the likely root causes of cases of infrastructure vandalisation,” she added.

  • FG, States, LGs Share N696.965bn As VAT Revenue Hits N166.228bn

    FG, States, LGs Share N696.965bn As VAT Revenue Hits N166.228bn

    The Federation Accounts Allocation Committee (FAAC) has shared a total of N696.965 billion as federation allocation for the month of August.

    Oshundun Olajide, a Deputy Director of Information at the Office of Accountant General of the Federation (OAGF), disclosed this in a statement on Thursday.

    This comes as the nation records a significant increase in the collection of Value Added Tax (VAT) and import duty, amid the lingering controversy over whose responsibility it is to collect VAT.

    A series of court cases and rulings emerged recently as the Rivers State government, backed by Lagos and some other states, challenge the legality of the Federal Inland Revenue Service (FIRS) to collect VAT.

    Olajide stated that FAAC held a virtual conference on Wednesday where it shared the sum to the three tiers of government.

    “From this amount, inclusive of Value Added Tax (VAT), Exchange Gain, Excess Bank Charges and Revenue from non-oil, the Federal Government received N289.257 billion, the states received N217.183 billion, the local government councils got N161.541 billion, while the oil-producing states received N41.376 billion as derivation (13 per cent of mineral revenue),” the statement read.

    The communique issued at the end of the meeting indicated that the gross revenue available from the Value Added Tax (VAT) for August was N166.228 billion.

    According to it, the Federal Government got N24.934 billion of the revenue generated from VAT, while the states and local government councils (LGCs) received N83.114 billion and N58.180 billion respectively.

    “The sum of N50 billion from non-oil revenue was equally distributed accordingly to the three tiers of government as follow – the Federal Government received N26.340 billion; the states got N13.360 while the LGCs received N10.3 billion.

    “The distributed statutory revenue of N477.504 billion was received for the month from which the Federal Government received N236.437 billion, states got N119.924 billion, LGCs got N92.4456 billion, and derivation (13 per cent mineral revenue) got N28.687 billion,” the statement added.

    It revealed that Companies Income Tax (CIT), Petroleum Profit Tax (PPT), oil and gas royalties, and excise duty recorded decreases, while import duty and VAT increased significantly.

    The communique indicated that total revenue distributable for the month included gross statutory revenue of N477.504 billion, VAT of N166.228 billion, exchange gain of N2.830 billion, excess bank charges recovered of N0.403 billion, and N50 billion from non-oil revenue.

    This brings the total distributable revenue to N696.965 billion for the month of August.

  • Six states of the North Central accepts community policing.

    Six states of the North Central accepts community policing.

    The six states making the North Central zone have accepted and adopted the community policing strategy as an effective tool to taking policing to the grass root.

    This was contained in a communique issued at the end of the North-Central security summit held in Lafia, on Wednesday.

    Nasarawa State Governor, Engineer Abdullahi Sule read the communique on behalf of governors from the geopolitical zone.

    The zone equally agreed that traditional rulers and community leaders will assist the police in the selection process of community policing officers to be recruited to work within the communities.

    Governors of states within the region also agreed to re-enforce and provide improved capacity for the various security apparatus in their respective states in support of community policing strategy of the Federal Government.

    As part of the 11-point communique, each state within the North-Central agreed to individually and periodically undertake operations against crimes and criminality, in synergy with the police and other security agencies.

    Part of the communique reads: “The states to individually, develop modalities for sharing intelligence with other states in the zone on the movement and activities of criminal within the zone.

    “Each state within the zone to increase its investment in social intervention programs aimed at providing legitimate and alternative source of livelihood for the teeming youths, especially the repentant criminals.

    “The state governments within the geopolitical zone to have joint security meetings on quarterly basis to assess the security situation within the zone.

    “State governments to provide all necessary logistics services to enable the return of Internally Displaced Persons (IDPs) to their ancestral homes.”

    The security summit, organized by the office of the Inspector-General of Police, has the Governors of Benue, Nasarawa, Plateau, Kogi, Niger and Kwara all in attendance.

    According to IGP Mohammed A. Adamu, the summit provided an avenue for stakeholders from the region to interact and exchange ideas on security issues concerning the region.

    The theme for the meeting was “Strategic Partnership for Effective Community Policing in the North-Central Zone/FCT