Economy

FG Insists New Finance Act Will Stimulate Economy

Published

5 years ago

26/01/2020

By Adedapo Adesanya

Federal government has reiterated that the Finance Act 2020 signed earlier this month by President Muhammadu Buhari will help stimulate the country’s economy towards path to growth.

This disclosure was made by Vice President Yemi Osinbajo at the Inspiration Conference 2020 of the Redeemer’s Men Fellowship themed Galvanised for Geometric Growth in Lagos on Saturday.

Speaking about the bill, the VP said that the act was aimed at boosting revenue so that all levels of government will be able to meet up with their expenditure.

“The challenges of growing the economy border on creating an environment favourable to businesses and low revenue generation,” Mr Osinbajo said.

He said that the 2020 budget of N10.6 trillion has a deficit of N2.2 trillion, “so it is clear that we are running a fairly large deficit”.

“The sources of revenue are oil proceeds and taxes, and most states do not generate enough revenue to meet their financial expectations,” Mr Osinbajo added.

This, he said, was in addition to it supporting Small and Medium Enterprises (SME) in the country.

Mr Osinbajo cited Adamawa, Benue and Ekiti as some of the states with very low Internally Generated Revenue (IGR) which are unable to cater for their expenditure.

The VP justified the increment of the Value Added Tax (VAT) from 5 per cent to 7.5 percent, noting it to be very low when compared to other African countries.

“Ghana has 12.5 percent; Cameroon has 19.25 percent; Mexico with 16 percent; South Africa at 15 percent and Egypt at 14 percent.

“To make things easier for the common man, we have exempted 16 classes of food items, tampons, sanitary towels, and tuition fees from nursery to tertiary.

“Also, before the Finance Act, many companies operating in the country without physical presence escaped taxation.

“Most digital companies made significant revenue from e-commerce, online advertising and the likes, but were not taxed.

“But now, once you have significant economic presence in Nigeria, but reside anywhere around the world, you are eligible to pay tax,” he said.

Mr Osinbajo expressed confidence in the Nigerian economy, maintaining that the government would continue to provide the enabling environment for businesses to thrive.

He explained that in spite of the perceived low growth rate, the Nigerian economy was still relatively bigger when compared with other African economies.

“Rwanda has a Gross Domestic Product (GDP) of $8.7 billion, while FCT, Akwa Ibom, Lagos, Rivers and Delta have growth rates of $29.9billion, $14 billion, $90 billion, $14.2 billion and $11.2 billion respectively.

“Even Ghana is at $65.5 billion and is less than Lagos,” he said.

He then stated that the potential of the Nigerian economy has been boosted by agriculture, manufacturing, creative industry, technology and ICT.

“Today, we produce an estimated 7.3 million metric tonnes of rice compared to 5 million metric tonnes in 2015.

“Today, people are using technology to attract investments in agriculture through crowd funding.

“There are incredible new ways of investing in agriculture in Nigeria, where companies are raising funds for farmers and farming, and such platforms should be invested on,” he said.

Mr Osinbajo also called for more collaboration between the government and the private sector to bridge the infrastructural deficit.

“The Nigerian Liquefied Natural Gas Company (NLNG) and Dangote Group have already keyed into this, while 10 other companies have applied to execute 19 road projects of about 800km,” he said.

Economy

FAAC Disburses 1.727trn to FG, States Local Councils in December 2024

Published

19 hours ago

14/12/2024

Modupe Gbadeyanka

By Modupe Gbadeyanka

The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.

The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.

At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.

According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.

It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.

The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.

The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.

As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.

From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.

Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.

In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.

Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.

Economy

Okitipupa Plc, Two Others Lift Unlisted Securities Market by 0.65%

Published

1 day ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.

On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.

Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.

Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.

At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.

In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.

Economy

Naira Trades N1,533/$1 at Official Market, N1,650/$1 at Parallel Market

Published

1 day ago

14/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.

The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.

The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.

The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.

Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.

In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.

At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.

Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).

Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.