COVER
FG Targets N24.5trn into Federation Account in 2024
By Tony Obiechina, Abuja
Federal Government’s revenue accruals to Federation Account is projected to rise to N24.54 trillion in 2024 from N11.86 trillion estimated in 2023, as revenue from the main pool is projected to be N20.70 trillion while Value Added Tax (VAT) pool and Electronic Money Transfer Levy (EMTL) are projected at N3.
66 trillion, and N174. 26 billion respectively.This was even as the Federation Account Allocation Committee (FAAC) shared a whopping N903.
480 billion to the three tiers (FG, States and LGAs) for the month of Sept.Director General of Budget Office of the Federation, Mr. Ben Akabueze who disclosed this on the sidelines of the 29th Nigerian Economic Summit in Abuja; gave a breakdown into the 2024-2026 Medium Term Framework and Fiscal Strategy document (MTEF).
Akabueze said the draft 2024-2026 paper was prepared against the backdrop of democratic transition to reflect current realities and new direction of President Bola Tinubu’s administration in addressing key policy and fiscal challenges.
The document showed key parameters to drive the medium-term revenue and expenditure framework for Nigeria in 2014 include: Oil benchmark:2024- $73.96; 2025- $73.76; 2026- $69.90. Oil Production (Mbps): 1.78; 1.80; 1.81. Exchange rate N/$: 700/$; 665.61/$; 669.79/$. Inflation: 21.40 per cent 20.30 percent; 18.60
Other parameters are: Non-oil GDP: Non-Oil GDP (N’bn): N223,989.2; N249,188.0; N278,251.7. Oil GDP (N’bn): 2024-N12,316.0; 2025- N13,225.7; 2026-N14,272.0. Nominal GDP (N’bn): N236,305.2; N262,413.7; N292,523.7. GDP Growth Rate (%): 3.76; 4.22; 4.78. Imports: 32,453.5; 33,401.3; 34,515.4 and Nominal Consumption (N’bn): N163,227.8; N189,992.8; N218,594.2
The projected exchange rates for the Nigerian Naira (N) against the U.S. Dollar ($) are 700 Naira to 1 Dollar in 2024, 665.61 Naira to 1 Dollar in 2025, and 669.79 Naira to 1 Dollar in 2026. These rates reflect the assumed values used for currency conversion in economic calculations.
The oil benchmark reflects the expected price of oil in the years 2024, 2025, and 2026, which increases slightly in 2025 before decreasing in 2026. Oil production is expected to increase slightly over the three-year period.
The exchange rate is expected to fluctuate, decreasing significantly in 2025 before increasing slightly in 2026 while inflation is expected to decrease over the three-year period.
Non-oil GDP is expected to increase steadily, while oil GDP is expected to increase slightly. Nominal GDP which represents the estimated total value of goods and services consumed in the Nigerian economy is expected to increase steadily, with a growth rate of around 4% each year.
Imports which are the estimated total value of goods and services imported into Nigeria are expected to increase over the three-year period, while nominal consumption which represents the estimated total value of goods and services consumed in the Nigerian economy is expected to increase steadily.
These figures indicate that Nigeria’s economy is expected to maintain steady growth over the next few years, with some fluctuations in key parameters such as the exchange rate and oil benchmark. However, there may be continued challenges with inflation and a heavy reliance on oil as a primary source of revenue.
“Accordingly, economic growth is projected to increase to 3.76 per cent, 4.22per cent and 4.78 per centin 2024, 2025 and 2026, respectively, mainly due to strong political will to take tough decisions and implement necessary reforms”, it stated.
The document added that “most of the growth in real GDP during the period will be driven by the anticipated increase in domestic oil refining capacity, telecommunications, crop production, slight growth in investment and employment, with the bulk of projected growth coming from the non-oil sector”
It noted that “the Renewed Hope Agenda (RHA) of the Tinubu Administration has significantly higher growth targets than the National Development Plan (NDP) 2021-25. The NDP is therefore undergoing a review to align its growth aspirations with the RHA”.
Consumption in nominal terms is projected to increase to N163.23 trillion in 2024 and N218.59 trillion in 2026 substantially due to expected increase in wages and cash transfers to households to mitigate the negative impact on their real income of petrol subsidy removal.
Import of goods is projected to increase to N32.45 trillion in 2024 and gradually to N34.51 billion in 2026 due mainly to the effects of depreciation of the domestic currency and imported inflation.
“Inflationary pressure is projected to continue at 21.4% in 2024. A slight reduction in inflation pressure is anticipated from 2025 and 2026 due to the lag effect of tight monetary policy on demand for goods and services, expected lower deficit financing and reduction in supply-side constraints occasioned by a drastic reduction in domestic insecurity, improved infrastructure, and generally better operating environment for businesses’”
The Federation Account Allocation Committee (FAAC) which shared N903.480 billion to the Federal Government, States and Local Government Areas (LGAs) for the month of Sept was chaired by the Minister of Finance and Coordinating minister of the Economy, Mr. Wale Edun on Tuesday at the Ministry of Finance in Abuja.
From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL) and Exchange Difference, the Federal Government received N320.543 billion, the States got N287.071 billion while the Local Government Councils collected N210.900 billion.
The Oil Producing States received N84.966 billion as Derivation being the 13% of Mineral Revenue allocated every month.
Also, the sum of N54.426 billion was given as cost of collection, N347,857 billion allocated to Transfers and Refunds, while the sum of N289.000 billion was transferred to Non-Oil Revenue (Savings) for the month of September 2023.
According to the communique, the Gross Revenue available from the Value Added Tax (VAT) for September 2023, was N303.550 billion, which was a decrease from the N345.727 billion distributed in the preceding month, resulting in a decrease of N42.177 billion.
From that amount, the sum of N12.142 billion was allocated for Costs of Collection and the sum of N8.742 billion given for Transfers and Refunds. The remaining sum of N282.666 billion was distributed to the three tiers of government of which the Federal Government got N42.400 billion, the States received N141.333 billion, Local Government Councils got N98.933 billion.
Accordingly, the Gross Statutory Revenue of N1014.953 billion received for the month was higher than the sum of N891.934 billion received in the previous month of August, 2023 by N123.019 billion. From that amount, the sum of N41.826 billion was allocated to Costs of Collection, a total sum of N339.115 billion for Transfers and Refunds and the sum of N211.000 was transferred to Non-Oil Revenue (Savings).
The remaining balance of N423.012 billion was distributed as follows to the three tiers of government: Federal Government was allocated the sum of N190.849 billion, States got N96.801 billion, LGCs got N74.629 billion, and Oil Derivation (13% Mineral Revenue) got N60.733 billion.
Also, the sum of N11.447 billion from Electronic Money Transfer Levy (EMTL) was distributed to the three (3) tiers of government as follows: The Federal Government received N1.648 billion, States got N5.495 billion, Local Government Councils received N3.846 billion and N0.458 billion was allocated to Costs of Collection.
The Communique disclosed that N264.813 billion from Exchange Difference, which was shared as follows: FG received N85.647 billion, the States got N43.442 billion, the sum of N33.491 billion allocated to the LGCs, and N24.233 billion given to Derivation (13% of Mineral Revenue) while the sum of N78.000 billion was transferred to Non-Oil Revenue (Savings).
Petroleum Profit Tax (PPT) and Oil and Gas Royalties increased considerably, while Value Added Tax (VAT), Import and Excise Duties, Electronic Money Transfer Levy (EMTL), Companies Income Tax (CIT) and Custom External Tariff (CET) levies recorded significant decreases.
According to the FAAC, the total revenue distributable for the current month of September 2023, was drawn from Statutory Revenue of N423.012 billion, Value Added Tax (VAT) of N282.666 billion, N10.989 billion from Electronic Money Transfer Levy (EMTL) and N186.813 billion from Exchange Difference, bringing the total distributable amount for the month to N903.480 billion.
The balance in the Excess Crude Account (ECA) as at October 24, 2023 stands at $473,754.57.ade
By David Torough, Abuja
Business tycoon Aminu Alhassan Dantata yesterday donated N1.5 billion to those affected flood in Maiduguri, Borno State.Dantata who was accompanied friends and associates in Kano was received in Maiduguri by the Borno State Governor, Babagana Zulum.The businessman extended his heartfelt condolences to the government and the people of the state especially those who lost their beloved ones to the flood.
Dantata, 96 lamented the bad economy and prayed for the peace and harmony of Borno State and Nigeria. The Borno State governor expressed heartfelt gratitude for the visit.He acknowledged that its serves as a powerful beacon of hope and solidarity during the trying times.Zulum said, “The people of Borno deeply appreciate this show of humanity by a 96-year-old to visit us.“Let me say it, Our Baba has donated the sum of N1.5 billion to support the flood victims. May Allah bless and reward you with Aljannah.”This donation comes after Dantata’s nephew, Aliko Dangote also donated N1 billion to the flood victims.Meanwhile, Borno State government has raised the alarm, saying the people are at the risk of health crisis.Government has warned residents against eating vegetables from flooded areas because they are contaminated.A statement posted by the Ministry of Information and Internal Security on Facebook yesterday advised the public to abide by the warning for their wellbeing.The statement read, “Due to the recent flood disaster, vegetables from flooded areas are seriously contaminated with harmful substances, including sewage, dead bodies, chemicals and bacteria.“Consuming these contaminated vegetables can lead to serious health risks, including waterborne diseases, food poisoning, and other health complications. “To protect your health and safety, we urge you to avoid buying vegetables from flooded areas; only purchase vegetables from trusted sources and reputable markets; ensure that all vegetables are properly washed and cleaned before consumption.”Nearly 500,000 people have been displaced and more than 1 million affected by flood that recently submerged several parts of Maiduguri, the Borno State capital.The flood, described as the worst in the state in 30 years, resulted from the collapse of Alau Dam due to high rainfalls. The disaster also killed about 80 percent of animals in a zoo in the city as some ran away.
From Dan Amasingha, Minna
Niger State Government has signed a $2billion Memorandum of Understanding (MoU) with a Turkish company, Direkci Group for the off-taking of Soya Beans in the State.The agreement signed at the Niger State Government House, Minna was witnessed by Governor Mohammed Umaru Bago, officials of Direkci Group led by their MD/CEO Mr Nurullah Mahmet and other top government functionaries.
The 10-year partnership, which will cost $200 million per year and $2 billion for the 10 years period, is under the Niger Foods, and is expected to boost agriculture in the State, create job opportunities and improve the economic status of local farmers. Bago appreciated the Turkish Government for the willingness to invest in Niger State.According to him, “This collaboration is a game-changer for Niger State and we are confident it will significantly reduce unemployment and boost food security.”He said going forward, the state government was equally willing to partner with Turkey in other areas beyond agriculture.The Managing Director and Chief Executive Officer of the Turkish company, Mr Nurullah Mahmet said they have been in agric business for decades and have established their presence in Nigeria for 17 years.He said they were attracted by the agricultural programmes of the state and partnering with the state would be mutually beneficial for both parties.He commended Bago for providing the needed impetus for agric investment in the state.The MD said they were willing to put in $10 billion in agriculture investment for the next 10 years and would work with the government of their country to provide security for their investment in the state.The Chairman, Niger Foods, Sammy Adigun disclosed that the Turkish firm will buy 500,000 tonnes of soya beans each year for 10 years.He said the agreement would empower local farmers by providing them with seeds and fertilizers, ensuring a guaranteed market for their produce.Adigun revealed that the Turkish firm was also investing in a 100,000 hectare Green House project with cold chain facility at the agro processing zone with an annual output of about 160,000 tonnes of fruits and vegetables such as tomato and pepper among others.He added that the group will also establish a total of 2.5 million chicken production facility including eggs and feed mills production in two phases.Adigun said the partnership would establish 30,000 hectares of soya beans farms with irrigation systems in Adunu, Paikoro Local Government Area of the state.He announced that already, the group had ordered the first chicken house for 500,000 chickens and would be functional in six months time, while 2000 green houses were already being shipped as the group was also to provide $50 million as direct support to farmers.The agreement, according to Adigun will include the company providing security for their investment in areas prone to insecurity in the state.
From Sylvia Udegbunam EnuguEnugu State Government and Jelfah Nigeria Ltd yesterday signed N40 billion deal for the revitalisation of the long-moribund state-owned Sunrise Flour Mills, Enugu.The deal signed at the Government House, Enugu saw Jelfah acquire 60 percent equity stake in Sunrise Flour Mills and is expected to invest N24 billion in the iconic mills, which went moribund since 1985 just two years after it was commissioned in 1983.
The state government keeps 40 percent based on the existing assets of the company. Speaking at the brief signing ceremony and public announcement of the transaction, the Enugu State governor, Peter Mbah said this milestone, coming on the heels of the N100 billion deal to resuscitate the hitherto dying Enugu United Palm Products Limited (UPPL) is clear demonstration of his administration’s determination to grow the state’s economy from $4.4 billion to $30 billion through private sector investment.“Just a few months ago, we secured an investment size of N100 billion with a company known as Pragmatic Palms Limited, and today we have just witnessed Enugu State, again securing another investment size of N40 billion.“This investment will see Jelfah Group investing N24 billion into the existing Enugu Sunrise Flour Mills. N22bn will be directed into revamping and resuscitation of the Sunrise Flower Mill, and N2 billion is going to come to the State by way of cash.“The Special Purpose Vehicle (SPV) is also going to own 10,000 hectares of farmland, where we are going to cultivate the inputs for the flour mills such as cassava and grain.“This is a testament that when we say Enugu State is open for business, we are truly committed to it. We understand how to make a win-win deal, both for the investors and for the people of Enugu State,” Mbah stated.He assured Jelfah group of continued support, enjoining other prospective investors to come over to invest in the state.“We hope that this signals to other investors, who may still be on the fence that Enugu is actually ready for business. We are committed to not just creating the enabling environment, but also working with investors to help them derisk investments and grow their businesses,” the governor concluded.Speaking, the Chairman of Jelfah Group, Moses Saromi, said they were attracted by Governor Mbah’s vision, dynamic leadership, and speedily increasing ease of doing business in Enugu State under his leadership, saying that Jelfah was in a hurry to transform Sunrise Mills to a centre of excellence.“Your policies have unlocked new opportunities for private sector participation, and Jelfah is proud to be part of this progressive movement.“This acquisition of 60 percent equity not only aligns with Jelfah’s long-term vision, but also furthers the governor’s ambition of empowering the people, revitalising moribund assets, and ensuring sustainable development. And together with our consortium partners, our goal is to transform Sunrise Flour Mills into a centre of excellence, harnessing our collective expertise to drive growth and value creation.“So, we firmly believe that this partnership will catalyse positive change, spark job creation, elevate local production capacities, and contribute significantly to the socio-economic advancement of Enugu State,” he said.“We have worked hard in the last months to get to this point. We have a short term, medium term, and a long term plan for the flour mills. Activities will start in earnest. In another 90 days, you are going to experience a lot of movements and activities with regards to the revitalisation of the flour mills.“Our activities will include recruitment of people, who will run the plant, indigenes of the state, obviously. And as the governor rightly said, we are creating a model that will provide the inputs for the mills, such as the 10,000 hectres of farmlands to cultivate all the inputs for the mills,” he said.
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