Economy
Dependence on Federal Allocation by States, LGs no Longer Sustainable—FG
By Dipo Olowookere
States and local governments in Nigeria have been informed by the Federal Government that their dependence on federal allocation was no longer sustainable because of dwindling revenues from crude oil sales.
In view of this, they have been challenged to consider looking for alternative sources of revenue for sustainable development in their areas.
Minister of Budget and National Planning Minister, Mr Udoma Udo Udoma, speaking on Monday at a two-day workshop organized by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), noted that commitment in the pursuit of the objectives of the economic diversification initiatives of the Federal Government will help in increasing the revenue generating activities of states and Local Governments.
The Minister explained that it was for the purpose of shoring up liquidity levels and ensuring the continuous provision of critical services and obligations pending improvement in revenue flows that in 2016, the Federal Government initiated a series of programmes with the states.
Represented at the workshop by his Special Adviser, Mr Bassey Akpanyung, the Minister said he was glad about the relative fiscal stability that the interventions have so far brought to the states; noting however that a lot still needs to be done, which was why the workshop became imperative.
In order to gain further traction on the achievements made so far, the Minister said states and Local Governments must exploit areas of their comparative advantage to promote economic diversification for enhanced revenue generation, job creation and improved livelihood for the teaming populace.
He was convinced that all the states and local governments have diverse but untapped opportunities to generate significant internal revenues through economic diversification. agriculture, solid minerals, tourism, entertainment, arts and culture, and ICT are all emerging sectors that hold the potentials in the states and local governments, he pointed out.
Beyond ramping up internal revenue generation capacity, the Minister said states and Local Government must equally pay attention to efficiency in its utilization.
“The ideals of fiscal sustainability, accountability and transparency demands that we avoid wasteful spending of our scare resources, plug all identified leakages from our system, and channel the funds properly towards delivering the common goods to the people,” he said.
Consequently, he said it is logical to argue that the citizens will be more willing and committed to pay their taxes when public resources are seen to be better managed than otherwise; and if government expects the people to pay their taxes, it must also deliver on expectations.
Mr Udoma drew attention to the fact that the circumstances leading to the current hash economic conditions resulted from the abandonment of the non-oil revenue generating sources and surrendering to the fortunes of crude oil revenue earnings.
“Today, sadly, we are paying heavily for the many years of neglect and failure to diversify the country’s revenue sources away from crude oil,” he added.
Pointing out that the path to change usually comes through tough choices and decisions, the Minister said Nigeria has come to that point where making such choices with regard to the country’s economic survival has become imperative.
“Indeed, the time has come for us to embrace the various opportunities outside the oil sector in response to the current changing realities, to achieve sustainable growth and development,” Mr Udoma said.
Business Post reports that the workshop was organized to discuss alternative sources of revenue generation to foster sustainable growth and development of the country.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
