Q3: FG, states, LGs get FAAC’s N2tn, highest in 2020 – Newstrends
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Q3: FG, states, LGs get FAAC’s N2tn, highest in 2020

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The federation accounts allocation committee (FAAC) has disbursed a total of N2.054 trillion to the three tiers of government in the third quarter of 2020.

This is contained in the quarterly review report released by the Nigeria Extractive Industries Transparency Initiative (NEITI) on Tuesday.

A breakdown showed that the Federal Government received N812.22 billion; N676.5 billion to state governments; and N429.16 billion to local governments.

This is the first FAAC allocation in 2020 to hit the N2 trillion mark.

It is also 5.6 per cent and 6.2 per cent higher than the disbursements made in the first and second quarter respectively.

In the first quarter of the year, a total disbursement of N1.945 trillion was made while N1.934 trillion was shared in Q2 2020.

The report noted that the increased allocation is as a result of exchange rate adjustment by the Central Bank of Nigeria.

“The total amount disbursed in the third quarter of 2020 was the first time that total disbursements exceeded N2 trillion in 2020,” the report read.

“Important to note here is that the Central Bank of Nigeria adjusted the official exchange rate from N360/$1 to N380/$1 in early August. Since the revenue from FAAC is disbursed in naira, this necessarily means that more funds will be disbursed in months after the adjustment.”

The CBN has had to devalue the naira twice in 2020; first from N306/$ to N360/$ and from N360/$ to N380/$.

This development sustains a trend that third-quarter disbursements are always higher than disbursements in either the first or second quarter of the year.

With the exception of 2018, FAAC disbursements between 2015 and 2019 were highest in the third quarter

This is attributed to “increased demand for oil during the summer season, and the attendant surge in oil prices”.

Despite the increase in allocations within the year, the Q3 2020 disbursement is lower when compared to Q3 2018 and 2019.

The N2.054 trillion disbursed in Q3 2020 was 9.6 percent lower than the N2.273 trillion disbursed in the third quarter of 2019 and 9.8 percent lower than the N2.278 trillion disbursed in the third quarter of 2018.

NEITI explained that the dip in disbursements “was largely on account of the impact of COVID-19 and its associated effects on demand for oil, oil prices, economic activities and other sources of revenues”.

On total net FAAC disbursement, Osun received the lowest net disbursement (N9.39 billion), while Delta received the highest disbursement (N43.08 billion).

For deductions, Yobe had the lowest deduction of N81.98 million, while Lagos had the highest deduction of N17.35 billion.

The deductions of Lagos state were higher than the combined total deductions of 20 states: Yobe, Sokoto, Borno, Jigawa, Kebbi, Katsina, Anambra, Enugu, Ebonyi, Adamawa, Kano, Nasarawa, Kwara, Taraba, Niger, Edo, Abia, Kogi, Kaduna, and Rivers which totalled N15.72 billion.

The report also projected that actual oil revenue will outperform projected oil revenue for the fourth quarter although all tiers of government may struggle to meet their revenue projections.

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Tinubu orders creation of single-digit tax system

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Tinubu orders creation of single-digit tax system

President Bola Tinubu has directed a creation of a single-digit tax system with a maximum of nine taxes for a company or an individual.

Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, disclosed this in Abuja while speaking with the management team of Guinness Nigeria who paid him a visit.

A statement on Wednesday by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman, quoted Adedeji as saying, “The President gave a directive that he wants a single-digit tax in the country, meaning that the maximum number of taxes we will have after the work of the Presidential Committee on Fiscal Policy and Tax Reforms will be nine taxes.”

The statement added that the plan was aimed at having a conducive environment “created for businesses to flourish and grow the economy.”

 

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Naira gains further against dollar

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Naira gains further against dollar

The Naira rose further in the official market on Tuesday, trading at N1,382.95 to the dollar.

According to data from the FMDQ’s official trading portal, the Naira rose by N25.09, or 1.78 percent, from the previous day’s rate of N1,408 versus the dollar.

On Tuesday, total turnover was $245.58 million, up from $222.15 million on Monday.

Meanwhile, at the Investor’s and Exporters (I&E) window, the Naira traded between N1,486 and N1,300 against the dollar.

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The News Agency of Nigeria (NAN) reports that the Central Bank of Nigeria (CBN) had, earlier on Tuesday at its 294th Monetary Policy Committee (MPC), raised Monetary Policy Rate (MPR) by 200 basis points from 22.75 per cent to 24.75 per cent.

CBN governor Yemi Cardoso said that was meant to tackle the nation’s rising inflation.

Naira gains further against dollar

(NAN)

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CBN jacks up interest rate amid soaring inflation

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CBN jacks up interest rate amid soaring inflation

The Central Bank of Nigeria (CBN) on Tuesday raised the interest rate from 22.75 per cent to 24.75 per cent amid soaring inflation.

Governor of the central bank, Olayemi Cardoso, made this known after the two-day Monetary Policy Committee (MPC) meeting held on Monday and Tuesday.

The country’s latest annual inflation rate jumped to 31.70 per cent from 29.90 per cent for last month, fueled by a continuous rise in food prices.

Cardoso disclosed that the MPC voted to adjust the asymmetric corridor around the MPR at +100 to -300 basis points.

He said the committee voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and adjust the CRR of merchant banks from 10 per cent to 14 per cent.

The committee also voted to retain the liquidity at 30 per cent.

He said, “Members noted the continued rise in headline inflation driven largely by food prices, because of supply shortages, and high cost of Logistics and Distribution.

“The committee, therefore, was of the view that addressing food insecurity is key to containing current inflationary pressures.”

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