By Adedapo Adesanya
The Governor of Rivers State, Mr Nyesom Wike, has criticised the newly signed Petroleum Industry Act (PIA), claiming it will reduce remittances by the Nigerian National Petroleum Corporation (NNPC) to the federation account, thereby slicing the monthly allocation to states.
The Governor made this disclosure while speaking at the Government House, Port Harcourt, last week shortly after signing into law the Valued Added Tax Law No. 4 of 2021, which authorises the Rivers State Government to henceforth collect Value Added Tax (VAT) in the state.
He explained that the NNPC under the new Act, will be unbundled and this will lead to every state having to look inward to survive without waiting for the federal government’s Federation Accounts Allocation Committee (FAAC) allocations.
He said, “With the Petroleum Industry Act passed and signed into law, there shall be unbundling of NNPC, which means that NNPC remittance to the federation account will be less, requiring every state to look inwards on how to survive.”
He said that over the years, states have become weak that they could barely survive without monthly revenue received from the allocation.
Alluding to the recent drama with the Federal Inland Revenue Services (FIRS), he pointed out that when agencies of the central government are allowed to demand and collect taxes meant for states to collect, they have to resort to “begging”
“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from the federation account. States have been turned to beggars.
“Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.
“In this (Rivers) state, we awarded contracts to companies and within the last month, we paid over N30 billion to the contractors and 7.5 per cent will now be deducted from that and to be given to FIRS.
“Now, look at 7.5 per cent of N30 billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3 billion only from that source.
“Now, at the end of the month, the Rivers State government has never received more than N2 billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it?” he questioned.
Speaking further, Governor Wike said there were plans already for FIRS to introduce road tax and this was likely to take away more duties from the states and further emasculate them financially.
“Which are the roads? Are they the roads the state government is paying for or the roads the federal government has constructed? So, at the end of the day, they have taken over the functions of the state government and the state is left with nothing,” he lamented.
NEM Insurance Seeks Regulatory Approval for Share Reconstruction
By Dipo Olowookere
The board of NEM Insurance Plc is seeking regulatory approval for its proposed share reconstruction, a notice from the Nigerian Exchange (NGX) Plc has confirmed.
Ms Lilian Dako, who signed the disclosure on behalf of the Head of Listings Regulation Department at the NGX, said the underwriting firm filed its application through its stockbroker, Apel Asset Limited.
NEM Insurance intends to redenominate the nominal value of its stocks from 50 kobo to N1 and then turn every two shares of 50 kobo into one share of N1.00 each.
At the moment, the total authorised shares of the company stand at 10,400,000,000 units of 50 kobo each but this will change to 5,200,000,000 units of N1.00 after the exercise.
However, the authorized share capital will remain at N5.2 billion both before and after the share reconstruction, according to the statement.
“Following the resolutions passed at the Annual General Meeting (AGM) of NEM Insurance Plc on June 24, 2021, trading license holders are hereby notified that Nigerian Exchange Limited has received an application from Apel Asset Limited for a proposed share reconstruction of NEM Insurance Plc.
“The share reconstruction involves redenomination of the nominal value of the company’s shares from N0.50 to N1.00, resulting in the consolidation of every 2 shares of N.50 each held in NEM Insurance Plc into one share of N1.00 each.
Analysis of the Company?s share capital, pre and post share reconstruction, is provided in the table below:
Details Pre Share Reconstruction Post Share Reconstruction
Authorized share capital (N) 5,200,000,000 5,200,000,000
Issued Share Capital (N) 5,016,477,989 5,016,477,989
Nominal Value per share (N) 0.50 1.00
Total Authorized (Units) 10,400,000,000 5,200,000,000
Total Issued Issues (Units) 10,032,955,535 5,016,477,989
“Further information regarding the share reconstruction will be communicated in due course,” the notice from the exchange today stated.
OPEC Extends Compensation for Nigeria, Others to June 2022
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has extended the compensation period for defaulting countries in the ongoing oil cuts until June 2022.
This was contained in a statement by the group’s Secretariat, which noted that the extension was granted following requests by some of the underperforming countries.
Nigeria is one of the defaulters and the Vienna-based cartel had previously extended the deadline to submit their compensation plans latest by December 17.
The group reiterated the “critical” importance of adhering to full conformity and to the compensation mechanism.
For some of the countries involved in the Declaration of Cooperation, DoC had defaulted at trimming their cut quotas at some point in the agreement.
Reaffirming the decision of the 10th OPEC and non-OPEC Ministerial Meeting, ONOMM held on April 12, 2020, and July 18, 2021, the overall monthly production adjustment plan was adjusted by 400,000 barrels per day for the month of January 2022.
The group reaffirmed the continued commitment of participating countries in the DoC to ensure a stable and balanced oil market.
The biggest concerns were whether the emergence of a new variant of the coronavirus might torpedo the budding global economic recovery, and the restiveness of the United States and key Asian customers, including China, over high oil prices.
The 24th OPEC and non-OPEC Ministerial Meeting will be held on January 4, 2022.
FarmTime Gets $50,000 to Boost Organic Fertilizer Production
By Dipo Olowookere
An agric-startup based in Tanzania, FarmTime Company Limited, has become the latest beneficiary of a new revenue-linked matching fund designed to incentivize investors to back younger entrepreneurs.
The firm, which was established in 2017 to recycle and repurpose plant and animal waste to produce organic fertilizers, delivering consistent and traceable nutrients at affordable prices, has secured a $50,000 funding support to expand its operations.
FarmTime, a new entrant to the organic fertilizer market in Tanzania, obtained the fresh capital in a round led by Umsizi Fund, which triggered a guaranteed match from the Young Entrepreneurs Fund (YEF).
YEF was launched in 2019 and provides matching investments of up to $50,000 to qualifying entrepreneurs. To date, over $250,000 has been invested across Africa with a growing pipeline of opportunities.
The scheme was designed to incentivise investments into very young entrepreneurs in Africa. It is a “guaranteed follow” fund that will match investments into ventures led by graduates of African Leadership Academy (ALA) programs, including The Anzisha Prize.
Rather than take equity positions, the fund has very intentionally chosen an innovative debt model with variable repayments linked to company revenues.
The founder of the latest beneficiary, FarmTime, Mr Jubilate Lema, disclosed that the new funds would be used to develop solutions to food security that balance human prosperity and the environment at large.
“I hope more funds take the approach of Umsizi and YEF with a revenue-linked debt instrument,” says Lema, “It was easy to understand, doesn’t load our cap table, and forced us to think about cash flow as well as growth.”
Josh Adler, Executive Director of The Anzisha Prize, which manages the fund on behalf of ALA, while commenting, stated that, “YEF is part of a growing move toward more structured exits from investors with a patient capital mandate.
“As a leadership development institution, ALA is able to draw in new forms of support for exceptional young leaders like Jubilate through the fund without having to build investment capabilities internally.”
As for Ed Brakeman from the Umsizi Fund, he said, “This one of the more exciting investments for us in some time with a revenue-linked loan in partnership with YEF.
“We’re eager to support FarmTime’s growth and are confident that we as investors will see returns while ensuring support for the business through the challenging period of product launch and revenue ramp-up.”
Since its inception five years ago, FarmTime has invested in research and product development, licensing and setting up a factory. It has already processed approximately 9,000 kilograms of coconut husks, 2,600 kilograms of fish waste, and 76 kilograms of seaweed, amongst other inputs.
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