Economy
FEDERAL GOVERNMENT TO ESTABLISH AN INFRASTRUCTURE DEVELOPMENT COMPANY, SAYS CBN GOVERNOR
The Central Bank of Nigeria (CBN) is to establish an Infrastructure Development Company, according to its governor, Godwin Emefiele.
Emefiele, who spoke during the online media briefing at the end of the 274th meeting of the Monetary Policy Committee MPC) in Abuja, said the company would leverage on local and international funds to rebuild critical infrastructure across the country.
Briefing the media, the CBN governor said the committee resolved to retain all monetary policy parameters, including monetary policy rate (MPR), also known as the lending rate, at 12.5 per cent.
The other parameters that were retained during the meeting by the committee included the cash reserve requirement (CRR) at 27.5 per cent, Liquidity Ratio at 30 per cent and the Asymmetric Corridor at +200/-500 basis points around the MPR.
The CRR is the funds kept with the CBN as a minimum deposit a commercial bank must hold as reserves, rather than lend out to customers.
CBN Governor Godwin Emefiele
According to him, the Federal Government has already given approval for the establishment of the special purpose company, which would be wholly focused on Nigeria and Nigerians alone.
The company, he said, would be co-owned by the CBN, the Africa Finance Corporation (AFC) and the Nigeria Sovereign Investment Authority (NSIA).
He however said the management of the company would be exclusively run by an Independent Infrastructure Fund Manager (IIFM).
“The fund manager would mobilise local and foreign capital to support the Federal Government in building the transport infrastructure required to move agriculture and other products to processors, raw materials to factories, and finished goods to markets” he said.
Emefiele also told reporters that about N15 trillion is projected over 5 years for the initial running of the company, adding that the MPC expressed satisfaction with the work on the updates and timelines for the establishment of the company.
Speaking on the Committee’s decision,Emefiele said members reviewed the policy options before them and argued that the option of tightening the policy rates at this time would contradict the noble initiative of expansion of affordable credit to the real sector of the economy.
Tightening the policy rates, according to the MPC, would heighten the cost of production, which would, in turn, translate to higher prices of goods and services and harder economic conditions for the Nigerian people.
On the other hand, he said the committee noted that loosening the CBN monetary stance would provide the desired succour for stimulating output growth and rapid recovery, with implications for domestic private investment and capital mobilisation to support the huge domestic financing gap.
However, a further cut in the monetary policy rate may not necessarily lead to a corresponding decrease in market interest rate, considering the current economic challenges, he said.
Besides, he said the Committee was also mindful of the cut in policy rate at the last MPC meeting and the need to allow time for the transmission of effect of that decision to permeate the economy.
Given several monetary and fiscal measures recently introduced by the CBN to address the impending economic crisis, following the outbreak of the COVID-19 pandemic, the CBN governor said the MPC decided to be cautious by opting to hold the policy parameters.
This, the committee argued, would allow the CBN to evaluate the effectiveness of these tools at addressing the current economic challenges, particularly with the mounting uncertainties within the domestic economy, as well as the external vulnerabilities.
“After reviewing the three options, the MPC considered the imperative for monetary policy at the May 2020 meeting, which was to strike a balance between supporting the recovery of output growth and reducing such while maintaining stable prices”.
He said the Committee also took into consideration the marginal improvement in the economic fundamentals by the end of June 2020, following the gradual pick-up of economic activities as a result of the various interventions by the CBN in the economy.
“Also, the Committee noted the significant positive impact on credit growth in the economy as a result of the downward adjustment of the MPR last May by 100 basis points to 12.5 per cent to signal the loosening of the CBN monetary policy stance”.
“In addition, the MPC noted the positive impact of the various fiscal and monetary interventions on households, SMEs and manufacturing sectors. It noted that increasing MPR at this stage would be counter-productive, resulting in upward pressure on market rates and cost of production”.
The Committee also reviewed the impact of the various interventions by the CBN towards addressing some of the structural issues thrown up by the COVID-19 pandemic in the economy.
The MPC specifically expressed optimism on the future impact of the N50 billion ‘Household and SME’ facility, out of which N49.2 billion has been disbursed, to over 92,000 beneficiaries.
Also noted was the N100 billion healthcare and N1 trillion manufacturing and agricultural interventions to support the rebound in growth from the impacts of the pandemic on the economy.
The Committee further commended the CBN coordinated CA-COVID – Private sector intervention scheme – which mobilised over N32 billion to support the economy.
The Committee noted that the CBN disbursed over N152.9 billion to the manufacturing sector to finance 61 manufacturing projects and another N93.6 billion to the healthcare sector, amongst many other sector-specific facilities.
By Sule Musa
. . .
A total sum of N 1.203 trillion August 2024 Federation Accounts Revenue has been shared to the Federal Government, States and Local Government Councils in the country.
The revenue distribution was announced at the September 2024 meeting of the Federation Accounts Allocation Committee (FAAC), in Abuja.
The N1.203 trillion total distributable revenue comprised distributable statutory revenue of N186.636 billion, distributable Value Added Tax (VAT) revenue of N533.895 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.017 billion and Exchange Difference revenue of N468.245 billion.
Sakirat Oluwatoyin Madein
Accountants-General of the Federation
A communiqué issued by the Federation Accounts Allocation Committee (FAAC) indicated that total revenue of N2.278 trillion was available in the month of August 2024. Total deduction for cost of collection was N81.975 billion while total transfers, interventions and refunds was N992.617 billion.
According to the communiqué, gross statutory revenue of N1.221 trillion was received for the month of August 2024. This was lower than the sum of N1.387 trillion received in the month of July 2024 by N165.994 billion
Gross revenue of N573.341 billion was available from the Value Added Tax (VAT) in August 2024. This was lower than the N625.329 billion available in the month of July 2024 by N51.988 billion.
The communiqué stated that from the N1.203 trillion total distributable revenue, the Federal Government received total sum of N374.925 billion and the State Governments received total sum of N422.861 billion. The Local Government Councils received total sum of N306.533 billion and a total sum of N99.474 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
On the N186.636 billion distributable statutory revenue, the communiqué stated that the Federal Government received N71.624 billion and the State Governments received N36.329 billion. The Local Government Councils received N28.008 billion and the sum of N50.675 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
From the N533.895 billion distributable Value Added Tax (VAT) revenue, the Federal Government received N80.084 billion, the State Governments received N266.948 billion and the Local Government Councils received N186.863 billio
A total sum of N2.252 billion was received by the Federal Government from the N15.017 billion Electronic Money Transfer Levy (EMTL). The State Governments received N7.509 billion and the Local Government Councils received N5.256 billion.
From the N468.245 billion Exchange Difference revenue, the communiqué stated that the Federal Government received N220.964 billion and the State Governments received N112.076 billion. The Local Government Councils received N86.406 billion, while the sum of N48.799 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.
In August 2024, Oil and Gas Royalty, Petroleum Profit Tax (PPT), Value Added Tax (VAT), Import and Excise Duties, Electronic Money Transfer Levy (EMTL), CET Levies and Companies Income Tax (CIT) all recorded decreases.
The balance in the ECA was $473,754.57
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