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Economy

Drop in Federal Allocation Worries Bayelsa Government

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Bayelsa drop in federal allocation

By Modupe Gbadeyanka

The decline in the federal allocation to Bayelsa State has become a source of worry for the state government, which is experiencing a rise in its expenditures.

The Commissioner for Finance in the state, Mr Maxwell Ebibai, said what is coming into the purse of the state government was more than what it spends monthly.

It stated that for instance, last month, Bayelsa State had a gross inflow of N10.2 billion comprising statutory allocation of N1.9 billion, derivation of N3.8 billion, Value Added Tax of N1.2 billion and forex equilisation fund of N1.9 billion.

He said total deductions at source stood at N1.9 billion, which included foreign loans to the state and federal government recovery while commercial agriculture credit scheme and other items gulped N939.8 million, with a net figure of N8.2 billion comprising an internally generated revenue of N839 million, a receipt of N1 billion for COVID-19 and total other receipts of N1.839 billion, adding that the net FAAC receipts in addition to other receipts amounted to N10.50 billion.

However, for the outflows, in October 2020, the Commissioner said the government made total payments of N6.452 billion out of which it made loans repayment of N870.6 million and minimum wage arrears N50 million.

Others were gratuity of N150 million, grants to higher institutions at N846.6 million, civil servants salaries at N3.9 billion, political appointees salaries at N201.7 million and salary arrears of N130.5 million, leaving a net balance of N3.9 billion.

He said further that the total recurrent and capital payments gulped N4.3 billion, leaving a deficit balance of N707 million, noting that the balance brought forward from September was N995 million out of which the state had a closing balance of N288.7 million.

A month earlier, September, Mr Ebibai said the state had a gross inflow of N10.285 billion consisting of statutory allocation of N2.981 billion, derivation of N6.030 billion and VAT of N1.27 billion.

The Commissioner disclosed that N1.952 billion was the total deductions from FAAC, noting that judging from the deductions at source from the month of August, the total deductions for September was significantly higher by N933 million.

He said the state recorded a sharp drop in its revenue from the federation account owing to two major factors, explaining that the state had been receiving federal government grants since 2012 but started making refunds on it in September 2020 coupled with deductions at source on revenues due to the state from the disputed oil well between Bayelsa and Rivers states.

He said after the total deductions of N1.952 billion from FAAC, the state was left with a net balance of N8.333 billion as against that of the month of August which was N11.8 billion.

He explained that the state government recorded total receipts of N1.49 billion in August and had to source for funds of N2 billion due to the shortfall in revenue the previous month, saying the net funds available for the state came up to N11.382 billion while the state’s total expenditure was N7.2 billion.

The Finance Commissioner noted that the expenditure among other components included civil servants salaries of N3.9 billion, a gratuity of N150 million and N173.5 million spent as salaries for political appointees.

According to him, the recurrent and capital expenditure gulped N4.140 billion, leaving a balance of N26.560 million while it recorded a closing balance of N995 million in September.

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

African Alliance Plots Strategy to Gain Substantial Market Share

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African Alliance

By Dipo Olowookere

The management of a foremost life insurer, African Alliance Insurance Plc, has said its main focus at the moment is to ensure the company attain a substantial market share.

The Managing Director/Chief Executive Officer of African Alliance Insurance, Mrs Joyce Ojemudia, speaking at the company’s hybrid 52nd Annual General Meeting (AGM) held in Lagos and streamed online, said the team has plotted a strategy to achieve this goal.

“Our main focus next year is to grow our market share substantially. This will be achieved by a massive beef-up of the sales team (field force and corporate marketers) and the provision of necessary tools to aid marketing activities.

“We will reopen branches in locations we have found promising and enhance our presence in existing locations,” the respected sales guru was quoted as saying at the event via a statement signed by the firm’s Brand, Media and Communications Manager, Mr Bankole Banjo.

“Our quest to maintain physical presence resonates with our integrity drive as insurance is a business of trust, especially amongst the retail market. This effort will be supported by digital technology as we adopt a two-prong onslaught on the market,” she added.

Mrs Ojemudia also listed as priorities the renewal of the company’s ISO certification as a business tool to enhance market confidence; staff training and retraining to aid knowledge acquisition; recruitment into key technical areas as well as massive IT upgrades to support the business goals and optimise costs.

Earlier, the company’s Chairman, Dr Anthony Okocha, highlighted the many signs of progress of the company in the 2020 financial year.

“Your Company was able to grow its asset base by 29 per cent from over N40 billion to N56.3 billion. This was as a result of substantial capital injection which gave us a boost on our bottom line to the tune of N5.67 billion from the 2019 loss position of N7.04 billion.

These profits have been immediately assigned as retained earnings to further boost our ongoing quest to revamp our books and grow the overall financial standing of your Company,” he said.

Business Post reports that during the meeting, the company announced the retirement of Mr Okocha as chairman of the board effective September 20, 2021.

A non-executive director of the company, Sylva Ogwemoh (SAN), who chaired the meeting, described the retired Chairman as a man who was passionate about the cause of African Alliance Insurance Plc.

“For a man to have led the board for 9 years is testament to his resilience despite all odds. We wish him a happy retirement and on behalf of the board, management, staff and shareholders of the company, we thank him for his contributions to the growth of the company,” the legal practitioner said.

Recall that under Mr Okocha’s watch, the company successfully conducted the first rebranding exercise in its 61-year history firmly making it attractive to younger professionals and repositioning it for future success.

In the year under review, African Alliance declared a profit before tax of N5.67 billion compared to a loss of N7.04 billion in the preceding year, representing over 1300 per cent year-on-year increase.

Further analysis of the books showed that the company paid N8.16 billion in claims, a 21 per cent reduction year-on-year on the previous year’s figure of N10.4 billion.

This, according to the Chairman, was a “result of shrewd underwriting/ vibrant risk selection process which saw us cede strategically to reinsurers.”

The firm’s income from investments dropped also by 19 per cent from N3.02 billion to N2.46 billion, a direct outcome of the decline in market rates, however, the company’s operating expenses were also reduced by 14 per cent as a precautionary counterbalance to the reduced earnings.

Incorporated in 1960, African Alliance is widely regarded as the strongest life specialist in the industry. With a policyholder base of over 50,000 policies, spanning more than three generations, the company is adequately positioned to provide innovative and customized plans for the Nigerian market.

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Economy

FIRS Advocates Partnerships for Better Tax Administration

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FIRS Rivers State Maintain Status Quo

By Adedapo Adesanya

For a better tax administration, there must be stronger relationships between Nigeria and development partners, the Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr Mohammed Nami, has submitted.

Mr Nami, who is also the President of the Commonwealth Association of Tax Administrators (CATA), was quoted as saying this in a statement issued by Mr Johannes Wojuola, Special Assistant to the Executive Chairman on Media and Communication.

The FIRS boss, during a visit to the Capital Area Transportation Authority (CATA) Secretariat at the United Kingdom’s Treasury House for a meeting on tax administration on Friday, was briefed on the governance structure of CATA and the current efforts by the association to serve the common interest of member nations.

He promised to achieve the short and long term goals and objectives of the association before his three-year tenure ends in 2024.

Mr Nami also held a bilateral meeting with Miss Antonia Strachey of the Public Finance and Tax Department, UK Foreign, Commonwealth and Development Office (FCDO), on issues of mutual benefit to the revenue authorities of both countries.

The FIRS boss was unanimously elected on October 12 by the 47 member countries of CATA at the association’s General Meeting as its 15th President.

CATA is an accredited associate of the Commonwealth, established in 1978 in London to promote the improvement of tax administration in all its aspects within the Commonwealth with particular emphasis on developing countries like Nigeria.

Mr Nami was accompanied by Mr Olufemi Olarinde, Nigeria’s CATA Country Correspondent, Mr Johannes Wojuola, and Mr Jibrin Salihu, Personal Assistant to the Executive Chairman.

The meeting was attended by UK Government Tax Authority representatives, including Ms Fiona Hay, Head, Capacity Building and International Relations, Mr Mahtab Hashim, Capacity Building Unit, and Ms Jasmine Taylor, Director, Senior Leadership Programme.

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Economy

Airtel Africa, 17 Others Lift Stock Exchange by 0.46%

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Local Stock Exchange

By Dipo Olowookere

Nigeria’s stock exchange closed positive on Friday by 0.46 per cent following a renewed bargain hunting in Airtel Africa, Guinness Nigeria, Sterling Bank, Ardova and 14 others.

This pushed the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited by 199.52 points to 43,308.29 points from the previous day’s 43,108.77 points and jerked the market capitalisation higher by N104billion to N22.598 trillion from N22.494 trillion.

Royal Exchange and ABC Transport grew by 10.00 per cent each at the trading session to finish at 55 kobo and 33 kobo respectively.

AIICO Insurance gained 9.38 per cent to close at 70 kobo, University Press appreciated by 8.89 per cent to N2.94, while Regency Assurance jumped 7.69 per cent to 42 kobo.

On the other hand, UPDC REIT topped the losers’ table of 24 members with a price depreciation of 9.82 per cent to settle for the day at N5.05.

Champion Breweries retreated by 5.90 per cent to N2.55, UPDC moderated by 5.07 per cent to N1.31, FTN Cocoa eased by 4.76 per cent to 40 kobo, while Veritas Kapital contracted by 4.55 per cent to 21 kobo.

Unlike the preceding day, the level of activity was mixed yesterday with the trading value declining by 15.15 per cent to N3.6 billion from N4.2 billion, while the trading volume rose by 14.73 per cent to 305.3 million units from 266.1 million, with the number of deals rising by 13.96 per cent 4,450 deals from 3,905 deals.

FCMB finished the day as the most active stock with 81.1 million units worth N247.9 million, trailed by GTCO with 29.5 million units valued at N738.3 million.

Further, Access Bank transacted 28.1 million units valued at N253.9 million, Honeywell Flour sold 16.8 million units worth N70.2 million, while Zenith Bank exchanged 13.2 million units for N320.2 million.

At the market on Friday, the insurance sector gained 1.98 per cent, while the quartet of the consumer goods, banking, energy and industrial goods counter lost 0.89 per cent, 0.33 per cent, 0.03 per cent and 0.01 per cent respectively.

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