Economy Politics

SWEET SEPT: FG, States, LG share N637.7bn – FAAC

Written by Maritime First
  • As DMO says FG planning to float $2.5bn Eurobond for capital projects

The  Federal Government, States and Local Governments shared N637.704 billion in September, the Accountant-General of the Federation, Mr Ahmed Idris, has indicated.

Idris made this known at the end of the monthly Federal Accounts Allocation Committee (FAAC) meeting on Thursday in Abuja.

He said that the sum indicated a rise in the revenue shared by the three-tiers of government of N169 billion for September compared to about N467.8 billion shared in August.

According to him, the sum is inclusive of Value Added Tax (VAT).

“Total revenue statutory gross is N550.992 billion, there is also an element of VAT of N86.712 billion, making it a total of N637.704 billion.

“And this figure is distributed among the three-tiers of government after deduction of relevant cost of collection due to the revenue generating agencies.

“On the whole, the Federal Government out of the gross statutory revenue got N263.609 billion, States received N132.184 billion and Local Government received N101.908 billion.

“On the whole, it is evident from the records and from what we have distributed today that the figure distributed this month is by far greater than the distribution for the previous month by N169,852 billion.”

According to Idris, there is derivation to the oil producing states of N41.977 billion.

He said there was also an element of value added tax that was generated to the tune of N86.712 billion which was distributed among the three-tiers of government.

He said the Federal Government got N12.87 billion; State government got N41.622 billion while the Local Government got N29.135 billion, “making a total of N83.244 billion; that is after deduction of cost of collection’’.

Idris said that the balance in Excess Crude Account (ECA) stood at 2.309 billion dollars as at Sept. 27, 2017, adding that,“there is also the excess Petroleum Pofit Tax (PPT) of 68 million dollars”.

He said that during the period under review, there was a decrease in the average price of crude oil from 51.05 to 50.44 dollars per barrel.

He said that there was a significant increase in export volume by 0.85 million barrels and an export sales revenue for the federation increased by 41 million dollars.

“The perennial challenges of shut-ins and shot downs at terminals caused minimal negative impact on crude oil operations during the period.

“There were significant increases in revenue from companies income and petroleum profit taxes. Also import and excise duties and VAT recorded marginal increases,’’ he also said.

In the meantime, the Debt Management Office (DMO) on Thursday said the Federal Government would float an Eurobond to raise 2.5 billion dollars before the end of 2017.

Ms Patience Oniha, the Director-General, Debt Management Office (DMO)

The DMO Director-General, Ms Patience Oniha made this known at the 2017 Nigerian Debt Capital Markets Conference and Awards, organised by the FMDQ OTC Securities Exchange in Lagos.

Oniha said that the borrowing would enable the country to bridge the gap in the 2017 budget currently facing liquidity problem to finance some capital projects.

She said that the proposed Eurobond issuance would complement the 1.5 billion dollars raised from the international market in March 2017.

Oniha said the nation’s Treasury Bills portfolio presently stood at N3.7 trillion, adding that DMO planned to refinance it with foreign borrowing to reduce pressure on the domestic market.

She said that Nigeria needed to build stronger and responsive institutions that could support infrastructure agenda of the government.

Oniha said that government had proposed to channel new borrowings into the capital investments instead of consumption.

“The debt ratio is not tangible and adequate components of borrowing, because it is not going into funding others than capital investment.

“Let us channel new borrowings into capital investment instead of consumption,” Oniha said.

On the N100 billion Sukuk Bond, the director-general said that the Federal Government had identified 25 road projects to be funded with the proceeds.

She said that among the roads listed were Ore-Sagamu Road, Kaduna Bypass, Enugu- Port-Harcourt Road, Kano-Maiduguri and Benin-Lokoja Road, among others.

According to her, government has also decided to finance other trunk A roads which will provide the needed support to accelerate the nation’s developmental goals.

She said that Nigeria should build stronger and responsive institutions that could support infrastructure agenda of the government.

“We need to build the business in terms of products that meet specific needs of investors,” she said.

Oniha said that the acceptance of the offer was an indication of the viability of the instrument as an investment option, as well as a demonstration of utmost faith in the economy.

She also commended the Federal Government for the policy support that led to the success of the initial offer.

The director-general said that it had been encouraged to introduce new instruments to aid government’s funding.

She said investment experts were optimistic that with the issuance, a new instrument has been introduced to the Nigeria’s capital market.

Oniha said that the new instrument would add to the variety of products available for domestic issuers and investors.

Investors in the offer, which closed on Sept. 22, with a seven-year tenor, included pension funds, banks, fund managers and retail investors.

The N100 billion Sukuk Bond issued by the Federal Government was oversubscribed by about N6 billion.

The seven-year Sukuk attracted a subscription of N105.88 billion according to the DMO.

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Maritime First