Nigeria: Rise in non-oil revenue boosts May allocation to N305bn

*Kemi-Adeosun, Nigeria's finance minister.

*Kemi-Adeosun, Nigeria’s finance minister.

23 June 2016, Abuja — The three tiers of government yesterday shared the sum of N305.128 billion as allocation from the federation account for the month of May 2016, indicating an increase of N23.628 billion, compared to the N281.5 billion shared in the previous month.

The increase in the May allocation was attributed to minimal improvement in revenue from non-oil and mineral revenue sources during the month.

This is just as the naira closed firmer at both the interbank and parallel markets yesterday, as the Central Bank of Nigeria, CBN, sold dollars for the third day running after it allowed the free floating of the currency.

For the first time since it was floated, the naira recorded a daily gain of 0.88 percent selling at N281.5 to the dollar as against N284 which it closed on Tuesday, indicating a rise of N2.50k/$.

Minister for Finance, Mrs. Kemi Adeosun, who confirmed the May allocation figure yesterday, in Abuja, while briefing the media after the Federation Account Allocation Committee (FAAC) meeting, also disclosed that statutory allocation and Value Added Tax (VAT) recorded slight improvement during the month under review.

She said the sum of N237.466 billion was available for statutory allocation compared to N213.817 billion realised last month, while VAT improved slightly to N62.511 billion compared to a figure of N62.649 billion shared last month.

Adeosun announced that a gross statutory revenue of N237.566 billion was received for the month, N23.649 billion higher than the N213.817 billion received in the previous month.

“Companies Income Tax (CIT) recorded a marginal increase even as the time for companies to file their returns is yet to fall due,” the minister stated.

Of the net statutory allocation of N230.9 billion approved for sharing, the federal government got the highest allocation of N122.830 billion, states got N57.229 billion and local government councils got N44.121 billion, while oil producing states got N16.738 billion, representing the 13 per cent derivation. The balance in the Excess Crude Account remained unchanged at $2.261 billion.

At the parallel market yesterday, the naira closed stronger, appreciating by 2.9 percent to sell at N335 to the dollar as against N345 at which it was sold on Tuesday.

In the non-deliverable forwards market, the naira rose against the dollar on Wednesday, with the one-month contract quoting the currency as firm as N288, after hitting N317 on Monday.

Traders said the apex bank sold dollars onto the interbank forex market for a third day to try to ease dollar shortages as liquidity issues persisted. Having opened at N282 to the dollar, indicative rates on Wednesday showed that banks were quoting to buy the dollar at between N281 and N295.

The CBN is still the main liquidity provider at the interbank market while traders noted that the interbank will become more active once dollar liquidity increases as only $360,000 had exchanged hands as at yesterday morning.

Head of Africa strategy at Standard Chartered Plc in London, Samir Gadio, noted that the CBN will “remain the main provider of dollar liquidity in the spot market for the time being” as the pressure on foreign-exchange reserves is only likely to be deferred in the forward market.

Meanwhile, protesting staff of the finance ministry yesterday gave the minister a seven-day ultimatum to meet their demand for improved welfare or face another protest.

LEADERSHIP learnt from a source privy to discussions at the meeting that the staff gave the notice at a brief meeting convened yesterday morning by the minister.

“The minister, having listened to their complaints, told the staff that there was no money to implement their demand and she urged them to be patient for the economy to improve but they would have none of that. They told her they would resume their protest after seven days,” the source who craved anonymity said.

Attempts to get the minister to comment on the strike later were turned down as she limited journalists to questions pertaining to yesterday’s FAAC meeting.
*Bukola Idowu, Nse Anthony-Uko, Suzan Nwachukwu – Leadership

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