Economy

14 Nigerian States Bankrupt—Report

Published

8 years ago

30/05/2017

By Modupe Gbadeyanka

Out of the 36 states of the federation, 14 of them are insolvent as their Internally Generated Revenues (IGR) in 2016 were far below 10 percent of their Federation Account Allocations (FAA) in the same year, a new report has disclosed.

The report, released by the Economic Confidential, the award winning Economic Intelligence Magazine, noted that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states in the country would find it very difficult to survive.

Economic Confidential, in its Annual States Viability Index (ASVI), pointed out that the index was carefully and painstakingly computed.

According to the magazine, the IGR are generated by states through Pay-As-You-Earn Tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDA)s. The report by this economic intelligence magazine further indicates that the IGR of Lagos State of N302 billion is higher than that of 30 States put together excluding Lagos, Ogun, Rivers, Edo, Kwara and Delta States, whose IGRs are very impressive at more than 30 percent each. The 30 other states merely generated a total of N258 billion in 2016.

Recently the magazine published the total allocation received by each state in Nigeria from the Federation Account Allocation (FAA) between January to December 2016. The latest report on IGR reveals that only Lagos and Ogun States generated more revenue than their allocations from the Federation Account by 169 percent and 127 percent respectively and no any other state has up to 100 percent of IGR to the federal largesse.

The IGR of the 36 states of the federation totalled N801.95 billion in 2016 as compared to N682.67 billion in 2015, an increase of N119.28 billion.

While the report provides shocking discoveries to the effect that 14 states which have less than 10 percent IGR may not stay afloat outside the Federation Account Allocation due to socio-political crises including insurgency, militancy and herdsmen attacks, others lack foresight in revenue generation drive coupled with arm-chair governance.

The states that may not survive without the Federation Account due to poor internal revenue generation include Borno which realized a meagre N2.6 billion compared to a total of N73.8 billion it received from the Federation Account Allocation (FAA) in 2016 representing about 4 percent.

Others are: Ebonyi with IGR of N2.3 billion compared to FAA of N46.6 billion representing 5 percent; Kebbi N3.1 billion compared to FAA of N60.88 billion representing 5.14 percent; Jigawa with N3.5 billion compared to N68.52 billion of FAA representing 5.15 percent and Yobe with IGR of N3.24 billion compared to N53.93 billion of FAA representing 6.0 percent within the period under review. Other poor internal revenue earners are Gombe which generated N2.94 billion compared to FAA of N46 billion representing 6.26 percent; Ekiti N2.99 billion compared to FAA of N47.56 billion representing 6.28 percent; Katsina N5.54 billion compared to FAA of N83 billion representing 6.65 percent and Sokoto N4.54 billion compared to FAA of N65.97 billion representing 6.88 percent.

Meanwhile Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N302 billion compared to FAA of N178 billion which translate to 169 percent in the twelve months of 2016.

It is followed by Ogun State which generated IGR of N72.98 billion compared to FAA of N57 billion representing 127 percent. Others with impressive IGR include Rivers with N85 billion compared to FAA of N134 billion representing 63 percent; Edo with IGR of N23 billion compared to FAA of N59 billion representing 38 percent. Kwara State however with low receipt from the Federation Account has greatly improved in its IGR of N17bn compared to FAA of N49 billion representing 35 percent while Delta with IGR of N44 billion compared to FAA of N126 billion representing 6.88 percent.

The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20 percent. They are Kwara, Kano, and Kaduna States.

Meanwhile eight states in the South recorded over 20 percent IGR in 2016. They are Lagos, Ogun, Rivers, Edo, Delta, Cross River, Enugu, and Oyo States State. The states with the poorest Internally Generated Revenue of less than 10 percent in the South are Imo, Bayelsa, Ekiti, and Ebonyi States while in the North we have Niger, Nasarawa, Sokoto, Katsina, Gombe, Yobe, Jigawa, Kebbi and Borno States.

Meanwhile the IGR of the respective states can improve through aggressive diversification of the economy to productive sectors rather than relying on the monthly Federation Account revenue that largely come from the oil sector.

Source: Economic Confidential

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Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Economy

Food Concepts, Acorn Petroleum Weaken Alternative Stock Market by 0.33%

Published

18 hours ago

30/11/2024

Adedapo Adesanya

By Adedapo Adesanya

Food Concepts Plc and Acorn Petroleum Plc were the catalysts that brought down the NASD Over-the-Counter (OTC) Securities Exchange by 0.33 per cent on Friday, November 29.

The NASD Unlisted Security Index (NSI) dropped 9.94 points to wrap the session at 3,016.66 points compared with 3,026.60 points recorded in the previous session, and the OTC market capitalisation lost N3.48 billion to settle at N1.057 trillion, in contrast to the previous day’s N1.060 trillion.

Food Concepts, which is the parent company of fast food chains – Chicken Republic and PieXpress, lost 17 Kobo to settle at N1.58 per share versus the previous session’s N1.75 per share, and Acorn Petroleum Plc recorded a 15 Kobo depreciation to quote at N1.54 per unit, in contrast to Thursday’s closing rate of N1.69 per unit.

On the flip side, Okitipupa Plc improved its value by N2.23 to trade at N24.58 per share compared with the preceding day’s N22.35 per share, and Geo-Fluids Plc appreciated by 5 Kobo to close at N3.95 per unit, in contrast to Thursday’s closing price of N3.90 per unit.

There was a decline in the volume of securities traded by investors by 85.3 per cent to 433,854 units from the 2.9 million units recorded a day earlier, the value of shares recorded during the session slid by 88.9 per cent to N876,364.63 from N7.9 million, and the number of deals increased by 25 per cent to 15 deals from the 12 deals posted a day earlier.

Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units sold for N7.8 billion, and Afriland Properties Plc with 297.3 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 billion.

Economy

Naira Falls to N1,672/$1 Ahead of CBN FX Matching System Launch

Published

18 hours ago

30/11/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated against the US Dollar by 1.7 per cent or N27.83 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, November 29 as supply weakened ahead of the official unveiling of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN) next week.

The exchange rate of the Naira to the Dollar in the official market ended yesterday at N1,672.69/$1, in contrast to the N1,644.86/$1 it closed on Thursday.

Data from the FMDQ Securities Exchange showed that the value of forex transactions went down by 56.7 per cent or $306.24 million to $254.10 million from the $560.34 million achieved the previous day.

However, the local currency appreciated against the Pound Sterling in the spot market during the trading session by N13.38 to settle at N2,111.48/£1 compared with the preceding day’s N2,124.86/£1 and against the Euro, it gained N15.61 to finish at N1,757.57/€1 versus Thursday’s closing price of N1,773.18/€1.

The CBN EFEMS initiative designed to ensure transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations will go live on Monday, December 2.

The apex bank has pegged the minimum tradable amount at $100,000, with incremental clip sizes of $50,000 to promote transparency and efficiency in the FX market.

In the parallel market, the Nigerian currency appreciated against the US Dollar yesterday by N15 to settle at N1,735/$1 compared with Thursday’s closing price of N1,750/$1.

In the cryptocurrency market, Ripple (XRP) surged by 18.9 per cent the past 24 hours to finish at $1.92, extending a month-long run that has seen the price rise 200 per cent to make the token the best-performing major token alongside Dogecoin (DOGE).

Further, Litecoin (LTC) added 6.6 per cent to close at $101.96, Cardano (ADA) rose by 5.9 per cent to $1.13, Dogecoin (DOGE) grew by 5.4 per cent to $0.4265, Ethereum (ETH) jumped by 4.2 per cent to sell at $3,697.06, Binance Coin (BNB) went up by 3.7 per cent to trade at $674.85, Solana (SOL) gained 1.9 per cent to settle at $244.08, and Bitcoin (BTC) expanded by 0.9 per cent to $96,811.57, while the US Dollar Tether (USDT) fell by 0.03 per cent to $0.9999, and the US Dollar Coin (USDC) closed flat at $1.00.

Economy

Nigerian Stocks Fall 0.28% as Investor Sentiment Turns Bearish

Published

19 hours ago

30/11/2024

Dipo Olowookere

By Dipo Olowookere

A 0.28 per cent loss was suffered by the Nigerian Exchange (NGX) Limited on Friday to reverse the growth achieved in the preceding session.

This was caused by profit-taking, especially in the energy sector, as its index weakened by 2.56 per cent, and the insurance counter depreciated by 1.83 per cent, while the industrial goods space slumped by 0.15 per cent.

However, the banking sector appreciated by 0.67 per cent, and the consumer goods counter improved by a marginal 0.01 per cent.

At the close of transactions, the All-Share Index (ASI) decreased by 276.94 points to settle at 97,506.87 points compared with the preceding day’s 97,783.81 points and the market capitalisation declined by N168 billion to finish at N59.107 trillion versus Thursday’s N59.275 trillion.

Regency Alliance lost 9.80 per cent to trade at 46 Kobo, Lasaco Assurance fell by 9.75 per cent to N2.13, Academy Press waned by 9.71 per cent to N2.79, Austin Laz declined by 9.68 per cent to N1.96, and Cornerstone Insurance depleted by 6.91 per cent to N2.56.

Conversely, Haldane McCall gained 9.54 per cent to quote at N6.20, Royal Exchange jumped by 8.77 per cent to 62 Kobo, Sovereign Trust Insurance improved by 7.35 per cent to 73 Kobo, Tantalizers rose by 5.50 per cent to N1.15, and NPF Microfinance Bank appreciated by 4.67 per cent to N1.57.

Business Post reports that FBN Holdings ended the session as the most active stock with 126.0 million units valued at N3.3 billion, Haldane McCall transacted 91.3 million units worth N521.8 million, Japaul sold 61.4 million units for N138.9 million, Tantalizers exchanged 35.7 million units valued at N40.5 million, and Sterling Holdings traded 23.8 million worth N114.5 million.

When trading activities closed for the session, the market participants bought and sold 515.5 million units of Nigerian stocks worth N15.1 billion in 7,554 deals compared with the 632.7 million units valued at N10.8 billion traded on Thursday in 8,404 deals, implying a rise in the trading value by 39.82 per cent and a decline in the trading volume and number of deals by 18.52 per cent and 10.11 per cent, respectively.