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FG Projects 50% Decline in Monthly Revenue Allocations

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By Tony Obiechina, Abuja


Following significant drops in the global crude oil prices, the Federal Government on Monday projected that monthly revenue allocations to the three tiers of government may decline to below N400 billion, in the next three to six months.


This is against the N888.

5 billion projected in the 2020 Appropriation Act monthly Federation Account Allocation Committee (FAAC) disbursements to the Federal and State Governments.


Minister Finance, Budget and National Planning, Mrs Zainab Ahmed made the projections at a press conference  while announcing government stimulus to ameliorate the COVID 19 pandemic.


She said based on the fiscal assumptions underpinning the 2020 Appropriation Act, monthly federation account (FAAC) disbursements to the federal and state governments were projected at N888.

5 billion.

The Minister however, explained that “due to the significant drop in international oil prices, FAAC monthly disbursements have declined in recent months to N716.3 billion in January and N647.4 billion in February and N581billion in March 2020”.


The Minister said, “Our experience shows that monthly FAAC receipts must average at least N650 billion for the federal and state governments to meet their current obligations. Unfortunately, we project that monthly receipts may decline to below N400 billion, over the next three to six months.”
According to her, “In order to address the emerging fiscal risks, Mr. President has given a number of approvals. He has approved that the sum of US$150 million be withdrawn from the Nigeria Sovereign Investment Authority (NSIA) Stabilisation Fund to support the June 2020 FAAC disbursement. The Stabilisation Fund was created for such emergencies and is to be utilised for this purpose.


“Mr. President has also approved that the Federal Ministry of Finance, Budget and National Planning should engage with the Central Bank of Nigeria (CBN) to agree on a debt and interest moratorium for states on federal government and CBN-funded loans, in order to create fiscal space for the states, given the projected shortfalls in FAAC allocations. 


“Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by states shall be suspended till monthly average FAAC receipts exceed the threshold. The details of this moratorium will be expeditiously worked out with a view to submitting the final proposals for Mr. President’s guidance and final approvals,” Ahmed stated.


In her words: “The intervention is vital to create fiscal space for the States, as they deal with the health and economic impact of the crisis. States will also be encouraged to explore similar arrangements on their outstanding debts to commercial banks”.


On ensuring adequate supplies of essential food items and critical medical supplies, as well as appropriate stewardship of donated items and funds, the Minister noted that the responses to the COVID-19 Pandemic and the impact of the 14-days’ lockdown would have a significant impact on the transportation, distribution and availability of essential food items and medical supplies. 


 According to her, the government recognises the adverse implications of these extraordinary measures for our market women, farmers, traders and smaller businesses.


Referring to the Finance Act, 2019, Ahmed said “The Finance Act, 2019 fortuitously provided significant tax relief for micro, small and medium-sized enterprises (MSMEs). Corporate tax rates for medium-sized enterprise were cut from 30 percent to 20 percent, and SMEs are completely exempt from corporate taxation. 
“This tax relief will be invaluable for businesses in the large informal sector that earn N25 million or less in a financial year.

The Finance Act, 2019 has also expanded the value added tax (VAT) exemption list for essential food, medical supplies and other basic items that are critical in our efforts to address the COVID-19 pandemic.”


Acknowledging the contributions of public-spirited Nigerians towards the fight against the pandemic, the Minister said: “We deeply appreciate the overwhelming show of solidarity by public-spirited individuals and corporate bodies towards combating the COVID-19 pandemic through financial and material contributions.


” In this regard, the government recognises its responsibility to put an adequate framework in place for the collection, management and reporting of these donations. Accordingly, the Federal Ministry of Finance, Budget and National Planning has developed a comprehensive framework for the transparent management of the contributions.” 
She said in the interim, “Mr. President has also approved the opening of five commercial bank accounts as transit accounts to the treasury single account (TSA)”.


 This, according to her, is in order to better mobilise donations from the generality of the people and corporate bodies across the nation, create flexibility and make it easy for citizens that want to donate while maintaining the sanctity of the TSA. 
She said, “Going forward, the COVID-19 donor accounts, which will form part of the existing TSA arrangement, have been opened with the following banks: Zenith bank, Access bank, Guaranty Trust bank, UBA; and First bank. “Other banks will be included in this initiative as the need arises. These accounts will be linked to the main TSA for ease of monitoring and reporting. 


“Finally, we will be issuing circulars and Ministerial Orders to ensure that charitable donations by benevolent companies to support our COVID-19 pandemic efforts are tax deductible, in line with Section 25 of the Companies Income Tax Act”.
Also considering the place of the amendment of 2020 Appropriation Act, Ahmed said: “The 2020 Appropriation Act was based on certain fiscal assumptions, which we have been compelled to revisit, given the emerging economic realities. 


“Specifically, projected oil revenues have been significantly affected in that: Dated Brent oil prices fell to as low as US$19.125/barrel (03.04.2020) as compared with the 2020 budget benchmark of US$57/barrel; and oil production in 2020 year-to-date is 1.9mbpd (before the current crises) as compared with the 2020 budget’s projection of 2.18mbpd.”


“We are therefore revising the benchmark oil price for 2020 to US$30/barrel and oil production to 1.7mbpd. We have similarly had to adjust downwards our non-oil revenue projections, including various tax and customs receipts, as well as proceeds of privatisation exercises. 


“In this regard, the Budget Office is currently working on amendments to the medium-term expenditure framework (MTEP 2020-2022) and the 2020 Appropriation Act. The proposed amended budget will provide for the COVID-19 Crisis Intervention Fund and other adjustments required, due to the decline in international oil prices. 


“We have also commenced consultations with the leadership and key Committees of the National Assembly to discuss our plans, such that once the Executive’s 2020 Amendment Budget is completed, we shall expeditiously seek presidential and legislative approvals for this revised appropriation”, she added. 

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Economy

SEC Advocates Advanced Financial Inclusion by 2030

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By Tony Obiechina, Abuja

The Securities and Exchange Commission (SEC) has stressed the need for Nigeria to harness its demographic dividend to advance financial inclusion through investments by 2030 for national survival or face deepening inequality.

The Director-General of the SEC, Dr Emomotimi Agama said this at the United Capital Asset Management Investment forum on Wednesday in Lagos.

Agama, in his keynote address titled: “Advancing Financial Inclusion through Investments: Bridging

Nigeria’s Knowledge and Wealth Gap,” said Nigeria must harness its demographic dividend to boost investment.

“Our theme, Advancing Financial Inclusion through Investments, is not aspirational; it is foundational to national survival.

“We stand at a pivotal moment. By 2030, Nigeria can either harness its demographic dividend or face deepening inequality. The knowledge-wealth gap is not merely an economic challenge; it is a moral imperative,” Agama said.

He said the term inclusion should be reframed as active financial involvement, where access meets empowerment, and capital becomes a tool for transformation.

Agama said that closing the financial inclusion gender gap could lift 700,000 Nigerians from poverty.

He said, “Nigeria has a great population yet we have a tiny drop of this number of persons involved in the capital market.

“That one reason for poverty, because we are running from money. We have to do something. Our market capitalisation is an opportunity to do something,

We all have

“We need to change the narrative and move the market forward. We must reach out to make the difference. We are committed to protecting investors and developing the market. Our goal is to do the right thing no matter whose ox is gored. We will work by the principles of fairness and equity to change the market. We will provide a fair ground for everyone to aspire.

He noted that MTN Nigeria’s share offering drew 150,000 new investors – 75 per cent women, 85 per cent under 40.

Agama recommended a four-pillar strategy for bridging the gaps.

He listed the four-pillar strategy as democratisation of financial knowledge, catalyse MSME Investment Channels, blended Finance Vehicles: Partner with Bank of Industry (BOI) to de-risk loans for women-led SMEs.

“We need to educate people about finances. As we drive this market, we do so for a purpose, I enjoin everyone to be the disciple and the apostles. Getting this market to move is a deliberate action,” he added.

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Economy

NPA Assures of Over N1.27trn Revenue in 2025

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By Ubong Ukpong, Abuja

The Nigerian Ports Authority (NPA) on Monday assured that it would take into the coffers massive revenue of over N1.27 trillion in 2025, representing a 40 percent increase from the N894.86 billion it realized in 2024.

This ambitious target, the Authority said, was anchored on sweeping modernization efforts, the full activation of the Dangote Refinery’s marine operations, and the deployment of cutting-edge technology to enhance port efficiency.

Managing Director of the NPA, Abubakar Dantsoho, disclosed this in a presentation during his agency’s budget defence session wih the House of Representatives Committee on Ports and Harbours, where he defended the agency’s 2025 budget estimates and provided insights into its 2024 performance.

“Our 2025 budget proposal is more than figures, it reflects our aspirations for a more efficient, globally competitive port system,” Dantsoho told lawmakers, adding that over 70% of the proposed expenditure will go into capital projects.

For 2024, the Authority surpassed its revenue target of N865.39 billion, posting an actual realization of N894.86 billion.

However, Dantsoho revealed that only N417.86 billion, less than half of the approved N850.92 billion expenditure, had been spent as of the time of reporting.

Despite this, NPA made a record contribution of N400.8 billion to the Consolidated Revenue Fund (CRF) in 2024, nearly double the N213.23 billion remitted in 2023. Of this amount, a staggering N344.7 billion was deducted at source.

“This shows our unwavering commitment to national revenue generation, even when our own operational liquidity is affected,” the NPA boss stressed.

Dantsoho said the projected revenue increase is premised on several key assumptions and developments, including: The full operation of the Dangote Refinery, which alone is expected to draw in over 600 vessels annually through its Single Point Mooring (SPM) system; the commissioning of upgraded terminals at WACT and OMT, which will enhance container traffic; the implementation of automation tools such as the National Single Window, Port Community System (PCS), and Vessel Traffic Management System (VTMS); and increased cargo volumes stemming from global disruptions, including the Russia-Ukraine conflict, which has affected global trade routes.

He said the 2025 revenue is expected to come from the following key sources: Ship Dues, N544.06 billion; Cargo Dues, N413.06 billion; Concession Fees, N249.69 billion; and Administrative Revenue, N73.07 billion

Of the proposed N1.14 trillion total expenditure for 2025, N778.46 billion is earmarked for capital projects.

This investment, he said, will target the revitalization of critical infrastructure, including the Calabar, Warri, and Burutu ports and channels, and enhance towage services, channel depth, and compliance with international security conventions.

“Investments in infrastructure and technology are non-negotiable if we are to stay competitive regionally and globally,” Dantsoho emphasized.

He cited increasing competition from neighboring ports and aging assets across Nigeria’s coastal corridors.

The NPA also intends to address technology gaps by upgrading legacy systems and bolstering cybersecurity, ensuring Nigerian ports meet global standards for digital operations.

“We can say that with timely access to internally generated revenue and capital funds NPA would deliver the kind of impact Nigeria expects,” he said.

Chairman of the Committee, Hon. Nnolim Nnaji, urged the NPA to ramp up performance, improve port infrastructure, and play a greater role in addressing Nigeria’s revenue and unemployment challenges.

Nnaji said the ports remain a critical pillar of Nigeria’s economy, and urged the agency to meet rising expectations despite operational challenges.

“No country can thrive economically without high-performing ports. They are the economic heartbeat of every nation, determining how buoyant a country is through the flow of imports and exports,” Hon Nnaji said.

The committee praised NPA for its performance.

Nnaji stressed that the NPA’s performance has implications beyond maritime activity, noting that increased port output can significantly boost job creation across several sectors.

“The Nigerian Ports Authority is not just a revenue-generating agency, it is a national asset in terms of employment and economic impact.

“We expect to see detailed strategies on how to improve revenue generation and expand employment opportunities through your 2025 budget,” he said.

The lawmaker also pointed to growing interest in the development of new ports across the country but cautioned against neglecting existing port infrastructure.

“As we welcome investment in new ports, we must not abandon the old ones. Maintaining and upgrading our existing ports, both in the Eastern Corridor and the Western axis, is essential to long-term sustainability,” he added.

The Committee called for a clear outline from the NPA on how its 2025 financial plan will address pressing national concerns and reaffirm Nigeria’s competitiveness in regional and global maritime trade.

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Economy

Senate Sets N10trn Revenue Target for NCS, Urges Agency to Curb Smuggling, Illicit Drugs

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By Eze Okechukwu, Abuja

The Senate, through its Committee on Customs has set a revenue target of N10 trillion for the Nigeria Customs Service for the 2025 fiscal year, instead of the initial N6.584 trillion given to her earlier on while urging the agency to clamp down on smuggling and Illicit drugs.

The Chairman of the Committee, Senator Isah Jibrin (Kogi East), who gave the agency the marching order yesterday in Abuja during the budget defence of the revenue driving agency however commended her for exceeding its 2024 revenue target of N5.

079 trillion.

The NCS team led by Deputy Comptroller General, Jibo Bello who represented the Comptroller General presented the 2024 budget performance with a revenue target of N5.

079 trillion, stressing that the proposal was exceeded by over a trillion naira.

The Committee, obviously impressed by the performance commended NCS before asking them to go ahead and present the 2025 budget proposal, which the agency tied at N6.584 trillion revenue target with an expenditure of N1.132 trillion.

Following their presentation, members of the Senate Committee on Customs unanimously approved the recommendation of the revenue target of N6.584 trillion and the expenditure of N1.132 trillion for the 2025 financial year.

The Committee will subsequently present the budget proposal to the Senate at plenary most likely this week as the red chamber resumes today after a long recess tied to Eid celebration.

In his final remarks, Senator Jibrin emphasised the need for the NCS to rise up in terms of its surveillance with respect to illicit drugs and smuggling “to ensure that, as much as possible, you should be on top of your game”.

He said there are so many illicit drugs flowing all over the place, which according to him “is contributing to the issue of banditry in Nigeria because most of these guys are on drugs. What I’m saying is that, in addition to your revenue drives, you should also be mindful of some of these other functions.

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