Economy
RMAFC to Review Revenue Allocation Formula After 29 Years
By Adedapo Adesanya
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) will submit a review of the revenue allocation formula to the Presidency by the end of the year.
Chairman of the commission, Mr Elias Mbam, confirmed this in Abuja, noting that President Muhammadu Buhari would have the new sharing pattern soon.
Mr Mbam said the review was one of the major responsibilities of the agency as it was last done in 1992, which was about 29 years ago.
He said that according to the constitution, the formula, which has been accepted as an act of the National Assembly, would remain in force for a period of not less than five years.
He, however, said that several attempts to review the formula had failed.
Mr Mbam said: “Proposal for new Revenue Allocation Formula for the three tiers of government (Federal, State and Local Governments) was first made by the Commission in August 2001.
“But the recommendation was withdrawn due to the compelling verdict of the Judgment of the Supreme Court on suit No. SC 28/2001 of April 5, 2002, which recognised the beneficiaries of the federation account as Federal, State and Local Governments.
“In December 2002, another proposal for a new Revenue Allocation Formula was presented to the then President, Federal Republic of Nigeria. That Formula got to the verge of being passed, but again, the bill lapsed with the expiration of the tenure of the then National Assembly in May 2003.
“Furthermore, in 2003, attempts were made by the National Assembly to reconsider the Revenue Formula bill initially submitted, but the efforts were not successful.
“However, an addendum to the original report was prepared and resubmitted to the National assembly in September 2004.
“The proposed Revenue Allocation Formula passed through several processes both in the senate and especially at the House of Representatives, where a public hearing was conducted in 2006 on the subject. Yet, the Formula could not see the light of the day.
“Similarly, the commission in 2014, made a concerted effort to review the Formula. All necessary processes required of the commission were concluded. However, the final process was inconclusive.”
The chairman said the process of sensitisation to the review of the revenue allocation formula had begun.
“The review of the revenue allocation formula will involve the following activities: a literature review of Revenue Allocation in Nigeria dating back to the pre-independent period.
“Study of fiscal matters relating to revenue allocation; invitation to memoranda from the Public sectors, individuals and private sectors across the country to allow for wider coverage.
“Visitation to the 36 states and 774 Local Government Areas to sensitise and obtain inputs from stakeholders.
“Wide range consultations with major stakeholders including leaders and elder statesmen; public hearing in all the Geo-political zones; and administering of questionnaires,” he said.
He also explained that the commission had begun sensitisation visits to states and local governments as part of the review process.
He stressed that the objective of the sensitisation was to enlighten major stakeholders to the need to fully participate, make relevant inputs and submit memoranda to the process of the review.
He said the commission had carried out the literature review on Revenue Allocation Formula in Nigeria dating back to the pre-colonial period, adding that the commission had advertised for submission of memoranda in the national dailies.
“Wide range consultation with major stakeholders is also in progress.
“I want to reiterate that the Revenue Mobilisation Allocation and Fiscal Commission is highly determined to produce within the shortest time possible, a new revenue sharing formula that will be fair, just and equitable to the three tiers of government.
“The commission has programmed to complete its review process by the end of 2021,” he said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.
The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.
When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.
Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.
Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.
Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.
By Adedapo Adesanya
The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.
In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.
It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.
Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.
This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.
The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.
Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.
Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.
The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.
Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.
However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.
It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.
Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.
US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.
The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.
The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.
Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.
There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.
Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.
The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.
The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.
Traders are continuing to monitor developments in the Middle East.
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