-Tops Kaduna, Enugu in Annual States Viability Index
The Economic Confidential has released the Annual States Viability Index ( ASVI) which shows that seven (7) States are insolvent as their Internally Generated Revenues (IGR) in 2019 were far below 10% of their receipts from the Federation Account Allocations (FAA) in the same year.
The index carefully and painstakingly computed proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable, and cannot survive without the federally collected revenue, mostly from the oil sector.
The IGR are generated by states through Pay-As-You-Earn Tax (PAYE), Direct Assessment, Road Taxes and revenues from Ministries, Departments and Agencies (MDA)s.
The IGR of the 36 states of the federation totalled N1.3 trillion in 2019 as compared to N1.1 trillion in 2018, an increase of about N200 billion. The report by the Economic Confidential, an intelligence magazine further indicates that the IGR of Lagos State of N398bn is higher than that of 20 other States put together whose Internally Generated Revenues are extremely low, and poor compared to their allocations from the Federation Account.
Meanwhile, the Federal Capital Territory (FCT) Abuja which is not a state but the nation’s capital generated N74bn IGR against N30bn from the Federation Account in the same period.
Lagos State remained steadfast in its number one position in IGR with a total revenue generation of N398bn compared to FAA of N270bn which translate to 147% in the twelve months of 2019. It is followed by Ogun State which generated IGR of N70.92bn compared to FAA of N92bn representing 77%; Rivers with N140bn compared to FAA of N219bn representing 64% and Kwara State with a low receipt from the Federation Account has maintained its impressive IGR by generating N30bn compared to FAA of N80bn representing 38%.
Others with impressive IGR include Kaduna with IGR of N44bn compared to FAA of N129bn representing 35%; Enugu generated N31bn compared to FAA of N103bn representing 29%; Ondo with IGR of N30bn compared to FAA of N103bn representing 29%; Edo with IGR of N29bn compared to FAA of N108bn representing 27%; Anambra with IGR of N26bn compared to FAA of N98bn representing 27% while Cross River State earned N22bn IGR against FAA of N99bn representing 25%.
The ten states with impressive IGR generated N894bn in total, while the remaining 26 states merely generated a total of N440bn in 2019.
The report provides an amazing discovery, as most states have improved their IGR compared to previous years. In 2019 only seven states generated less than 10% IGR compared to 17 states in 2018.
There are seven states that may not survive without the Federation Account due to their extremely poor internal revenue generation of less than 10% compared to their federal allocations. Top on the
Katsina, the home state of President Muhammadu Buhari generated the poorest and lowest IGR compared to its federal allocation in 2019. It realized a meagre N8bn compared to a total of N136bn ‘free money’ received from the Federation Account Allocation (FAA) in 2019 representing 6%. It is followed by Kebbi with IGR of N7.3bn compared to FAA of N100bn representing 7%; Borno N8bn compared to FAA of N121bn representing 7% and Taraba with IGR of N6.5bn compared to N86bn of FAA representing 8%.
Others include Bayelsa, the home state of former President Goodluck Jonathan with IGR of N16bn compared to N176bn of FAA representing 9%; Yobe with IGR of N8.4bn compared to N88bn of FAA representing 9% and Gombe with IGR of N6.8bn compared to N75bn of FAA representing 75% within the period under review.
The poor states with lower IGR may not stay afloat outside the monthly allocations from Federation Account due to lack of initiatives for revenue generation drive coupled with arm-chair governance. Some of the states cannot attract investors due to socio-political and economic crises including insurgency, kidnapping, armed-banditry and herdsmen-farmers clashes.
The Economic Confidential ASVI further showed that only three states in the entire Northern region have IGR above 20% in comparison to their respective allocations from the Federation Account. They are Kwara, Kaduna and Kano States in that order.
Meanwhile, ten states in the South recorded over 20% IGR in 2019. They are Lagos, Ogun, Rivers, Enugu, Ondo, Edo, Delta, Anambra, Cross River and Delta States.
Only Bayelsa is a state with the poorest Internally Generated Revenue of less than 10% compared to their FAA in the South in 2019. The other poorest IGR states are in North-East Yobe, Gombe, Borno and Taraba State and two states from North-West, namely Katsina and Kebbi.
Meanwhile, the IGR of the respective states can improve through aggressive diversification of the economy to productive sectors rather than relying on the monthly Federation Account revenues that largely come from the oil sector.
Source: Economic Confidential
100,000 SMEs To Get N50,000 Each As Stimulus Grant -Presidency
The Special Assistant to the President on Micro Small and Medium and Medium Enterprises (MSMEs), Mr Tola Johnson, says 100,000 small businesses will get N50,000 each as part of COVID-19 economic stimulus.
The Fidelinfo understands that He spoke at the inauguration of the Implementation of Survival Fund and Guaranteed Off-Take Stimulus Schemes for MSMEs yesterday in Abuja.
“The schemes will be starting with the Payroll Support; the Payroll Support targets 100,000 businesses; however the number of individuals who will benefit from this is 500,000.
“The next will be the 100,000 MSMEs grants; what the government has done is to say that there a lot of MSMEs that have been affected by the COVID-19 pandemic lockdown; so, what we are trying to do is to very quickly inject N50,000 each to 100,000 micro businesses.
“Afterward, there is a CAC (Corporate Affairs Commission) free registration; it is free for the MSMEs but the government is paying the CAC for this.
“So, what the government has done is to say to the CAC, you do this regularly to the MSMEs at about N12,000 or thereabout; give it to us at half price, we will give it to the MSMEs free.’’
He said under the National MSMEs Clinic, the vice president and the Minister of Industry, Trade and Investment have been to no fewer than 26 states.
Johnson said in the course of the clinics, it was discovered that very creative businesses were not registered.
“They will tell you they don’t have N10,000 to N12,000 to register their businesses.
“So, the government had promised that at some point, we will do and I think the opportunity has come now; the opportunity cannot be better than now.’’
He said under the Survival Fund, the last strap would be the Transport and Artisans Support. According to him, no fewer than 333,000 beneficiaries will get a one-off N30,000 grant, adding that the government will be working with associations, individuals and the Ministry of Transportation to implement the scheme.
“After that, we move to the Guaranteed Off-take.We will be rolling out the schemes weekly; we plan to, for four weeks in a row, if we can and God permits put a smile in the face of MSMEs across all board. That is our plan; if things change, we will let you know.”
“We are working with states because we do not want to get to a stage where the states will say how come 35,000 people are benefitting from our state and we do not know.
FLASH: We Generate ₦3bn From Stamp Duty Weekly – FIRS
The Federal Inland Revenue Service (FIRS) says it generates N3 billion revenue weekly from stamp duty collection.
This stamp duty revenue is generated weekly from May 2020 to date from Deposit Money Banks (DMBs).
Executive Chairman of the FIRS, Muhammad Nami told the House of Representatives Committee on finance on Tuesday in Abuja.
The purpose of the meeting with the legislators was to resolve the face-off between the FIRS and the Nigeria Postal Service (NIPOST) over stamp duty collection, and the fate of the N58 billion revenue generated from February 2016 to April, 2020.
The Session which was chaired by the Chairman Finance Committee of the House of Representatives, Hon. James Abiodun Faleke include other members of the committee, Post- Master General of the Federation Dr. Ismail Adebanjo Adewusi, NIPOST board Chairman Barr. Maimuna Yaya Abubarkar and other top officials of the postal agency and FIRS officials.
Nami said the FIRS was able to generate this much revenue from a single stream of stamp duty collection from DMBs because the Service had deployed a new technology to track and capture such revenue straight into the federation account.
The technology deployed by the FIRS Nami said is the Application Programming Interface (API) technology solution, an – online real time technology that makes collection of Stamp Duties easier.
Nami said when he assumed office in December 2019, the FIRS discovered over N30 billion in the NIPOST Stamp duty Account with the Central Bank of Nigeria (CBN). The account was opened in 2016 specifically to warehouse revenue from stamp duty collection.
However, by April 2020, the balance in the account had grown to N58 billion because of the deployment of the API by the FIRS. Money in the stamp duty account by May 2020 was transferred to the federation account following instructions given to the CBN by the FIRS to do so.
Since then, both the FIRS and the NIPOST have been at daggers drawn over who controls stamp duty collection and invariably the money which accrues from the collection.
Nami said payment of Stamp Duties collection in Nigeria dates back 94 years ago, stressing that stamp duty had always been part of the revenue schedule of tax authority.
He regretted that the differences in who controls stamp duty collection between both NIPOST and FIRS had degenerated a public spat to between the two agencies describing the development as “unnecessary and unhelpful”.
According to him, “the FIRS regrets that as agency of the government, FIRS and NIPOST allow a simple situation to degenerate to media exposure”.
FRESH: Wema Bank Launches Upto 10 Million Collateral-Free SMEs’ Loans
Wema Bank has launched collateral-free SMEs’ loans to assist businesses negatively affected by the Coronavirus pandemic to grow their operations.
In a statement, the bank said the product is in line zthe bank’s continued raesponsibility to support fight against the ongoing global health crisis.
The SME loan products support businesses in need of working capital finance can get up to N10 million without collateral to meet their short-term business needs.
This facility is available for business owners who are in segments such as trade /general commerce, schools, pharmacies, hospitals, clinics and diagnostic centres. Also, in the bank’s quest to enhance reach and accessibility of these facilities, it has made it available to both new and existing customers of the bank (including those doing business with their personal names).
“The bank is also offering up to N5 million without collateral and up to 12 months repayment period to businesses that are doing trading or general commerce while school owners can get up to N10 million without collateral with also 12 months repayment period.
“Health sector businesses like pharmacies, hospitals, clinics and diagnostic centres can also get up to N5million without collateral with up to 12 months repayment period to meet working capital needs. In an earlier communication, the bank had stressed how critical it is to support players in the health sector, especially with the realities of the time.
“For us, we will continue to put the health of Nigerians and the safety of our communities first,” said the Managing Director/CEO Wema Bank, Ademola Adebise.
“It is our joy to see players in the health sector grow during this difficult time and we encourage them to take advantage of all our support programmes to keep their businesses afloat.”
Recall that the bank earlier suspended loan repayments for SMEs for 3 months with effect from April 1st, 2020, to mitigate the crippling effects of the COVID-19 pandemic on small and medium scale business across the nation.
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