Nigeria suffered a revenue loss of about $51 million in export sales as result of the activities of militants in August, which impacted the revenue available for sharing on Wednesday, an official said.
The Minister of Finance, Kemi Adeosun, stated this on Wednesday at the end of the Federation Account Allocation Committee, FAAC, meeting in Abuja.
Consequent to the revenue loss, about N420 billion was shared by the three tiers of government in October, with about N203.952 billion shared as statutory allocation.
Figures from the office of the Accountant General of the Federation showed that gross statutory revenue was about N238.716 billion for the month. This was lower than the N279.746 billion received in the previous month by N41.030 billion.
Mrs. Adeosun disclosed that over 900,000 barrels of oil crude were shut-in, which affected the revenue for the month. She expressed optimism that the situation would be addressed and the volume of crude oil produced would improve significantly with time.
Apart from crude oil production shut-ins and shut-down of pipelines for repairs and maintenance due to attacks on delivery pipeline, the minister said Force Majeure declared at Qua Iboe Terminal and the natural gas liquids lifting programmes at Forcados Terminal also contributed to the low revenue.
Also, there were decreases in import duty and Companies Income Tax (CIT) while petroleum profit tax, PPT, and oil royalty recorded marginal increases.
“We are beginning to see signs of improvement in revenue by reducing dependence on oil,” she said.
The sum of N 6.330 billion was refunded by the Nigerian National Petroleum Corporation, NNPC, to the federal government as part of its N450 billion debt.
There is a proposed distribution of N 109.108 billion from excess PPT account. Also, exchange gain of N 37.319 billion was proposed for distribution.
The report said crude oil export volume decreased, while the average price of crude oil dropped, resulting in revenue loss of about $51 million in export Sales.
After all deductions and paying revenue generating agencies, the federal government got N96.674 billion, state governments N49.035 billion, local governments N37.804 billion, while N13.548 billion was shared as 13 per cent derivation to oil minerals producing states.
A total of N69.621 billion was shared as Value Added Tax, amongst the three tiers of government, N37.319 billion was realized from exchange gain, and N109.108 billion from excess PPT, bringing the total to N420 billion.
FRESH TAX INCENTIVES
Also, with pressure still mounting on the manufacturing sector as a result of the scarcity of foreign exchange, the federal government says it is considering fresh tax incentives to stimulate the country’s economic growth.
Mrs. Adeosun said this was one of the ways government was considering to get the economy out of the current recession by next year.
Latest GDP report by the National Bureau of Statistics released on Monday showed that the country’s economy sunk deeper in recession in the third quarter, with the economy contracting further by 2.24 per cent, from 2.06 per cent in the second quarter.
Mrs. Adeosun, who lamented the pressure on the manufacturing sector as a result of the inconsistencies in foreign currency policies by the Central Bank of Nigeria, CBN, said the federal government would unfold a number tax incentives to boost the already challenged sector.
“Foreign exchange (Forex) is a major issue for manufacturing,” she said. “The manufacturing sector will do better if there is consistency in Forex policy. Manufacturing remains very critical to the growth of the economy and getting the country out of recession.
“However, manufacturing is challenged, because of Forex issues. We are going to roll out a lot of measures to support them, including tax incentives and investment in infrastructure.”
The minister also admitted that settling domestic debts was critical to getting the economy out of the present crisis. She said the present administration inherited hidden debts as a result of transiting from the old accounting platform to a new one which exposed all the debts owed, including joint venture cash calls in the oil and gas industry.
She said government was working with the CBN to settle domestic debts, adding that this was affecting government’s ability to grow the economy.
At the end of the Monetary Policy Committee meeting on Tuesday, CBN governor, Godwin Emefiele, had underscored the need for government to find a way to settle its domestic debt obligations to give the economy a breather.
“The Federal Government must urgently assess the extent of its indebtedness to domestic economic agents and develop a framework for securitizing the debts, with a view to settling its outstanding domestic contractual obligations in all sectors of the economy,” the CBN governor said.
“These accumulated debts have slowed business activities of economic agents; most of who are indebted to the banking system, thus compromising the integrity of the financial system,” he added.