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Zacch Adedeji-led FIRS fails to meet target of oil tax revenue target by N1.69T in Q1 2024

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The Federal Inland Revenue Service (FIRS) has failed to reach the approved target for the 2024 budget of N9.96 trillion, with a monthly average of N829.97 billion from oil taxes.Based on the approved 2024 budget, FIRS is meant to have collected N3.32 trillion in oil taxes between January and April this year but the agency is farther from this goal by N1.69 trillion, an amount more than what it collected.The FIRS recorded a total of N1.63 trillion as tax revenue from the oil sector between January and April 2024, which is 49% of the approved goal.Lower than the approved budgetary goal, the FIRS has an internal goal of N7.5 trillion for the entire year, with a monthly average of N625 billion.This means that the agency should have an internal four-month tax revenue goal of N2.5 trillion. However, it only recorded about 65% of its four-month goal.The amount is also 22% of the N7.5 trillion that the agency plans to collect this year, as it sets its sights on a significant revenue boost from the oil sector in 2024.Source: FIRSThe total figure raised so far this year is slightly higher than the N1.19 trillion collected within the same period last year.The data for the amount raised this year is based on figures presented by FIRS officials at the monthly meetings of the Federal Accounts Allocation Committee (FAAC).

What the Data ShowsIn the period under review, FIRS only recorded Petroleum Profits Tax (PPT) and Hydrocarbon Tax (HT) from foreign firms and zero collection from local firms in 2024. A total of N966.73 billion was recorded as foreign receipts, a substantial increase of 84% compared to the total foreign receipts collected in the same period of 2023 (N525.14 billion). This increase can be attributed to higher oil prices or naira devaluation. However, in 2023, there was a record of N664.90 billion as local receipts for PPT. A total of N1.19 trillion was collected in the first four months of 2023 from local and foreign oil firms.The data also shows that Company Income Tax (CIT) on Upstream Activities was N667.74 billion in the period under review in 2024. However, there is no record of such tax in the same period in 2023. This means a total of N1.63 trillion was collected from the oil sector’s PPT and CIT in 2024.Issues in the oil sectorNigeria’s oil sector has been bedevilled by several challenges, such as pipeline vandalism, illegal oil bunkering and theft. Also, the majority of Nigeria’s oil pipeline infrastructure was constructed around 70 years ago, and is outdated.Due to the challenges in the oil sector, the Federal Government hardly made up to 70% of its target revenue from this sector in the past two years.In 2022, the Federal Government generated only 35.4% of its targeted oil revenue, earning N776.35 billion out of N2.19 trillion.There was some improvement in 2023, as FIRS collected about 60% of its targeted oil revenue in 2023, getting N3.17 trillion out of N5.26 trillion last year.Aside from the government’s revenue taking a hit, oil firms, who have been struggling in the sector, have chosen to exit the market. They include TotalEnergies,  Shell, ExxonMobil and Norway’s Equino.TotalEnergies’ CEO, Patrick Pouyanne, stated that the company chose to invest $6 billion in Angola over Nigeria due to policy inconsistencies and other issues in the country.

What You Should KnowWhile being a leading oil producing nation, Nigeria still struggles to meet its OPEC quota as a result of so many factors such as oil theft, low investment and infrastructure inadequacy in the sector.The Federal Government targets a conservative oil price benchmark of $77.96 per barrel, coupled with a daily production estimate of 1.78mb/d for 2024.About two weeks ago, Brent crude futures traded near $84 a barrel, while West Texas Intermediate (WTI) remained above $80.Last month, Nigeria’s 1, higher than the major oil benchmark.Also, the Joint Ministerial Monitoring Committee (JMMC) of the Organisation of Petroleum Exporting Countries and its allies (OPEC+) pegged Nigeria’s crude oil production quota for 2024 at 1.5 million barrels daily.However, Nigeria’s average crude oil production for the month of April marginally rose to 1.281 million barrels daily.In the first quarter of the year, average daily production stood at 1.327 million barrels per day.The consistent inability of the country to meet its OPEC quota and budget proposal target has negative effects on revenue generation, foreign exchange stabilisation, overall budget performance and foreign reserve position.Despite the challenges, the current administration said it aimed to increase the country’s oil production to an ambitious 4 million barrels daily by the end of the decade.

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Gov AbdulRazaq Announces Minor Cabinet Reshuffle

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Kwara State Governor AbdulRahman AbdulRazaq has effected a minor cabinet reshuffle involving four commissioners.

Those affected are the Commissioner for Social Development Hon. Afolashade Justina, who moves to Women Affairs; and the Commissioner for Women Affairs Hon. Bosede Olaitan Buraimoh who switches to Social Development.

Hon. Commissioner for Youth Development Nafisat Buge moves to the Ministry of Environment, whose Commissioner Hon. Shehu Ndanusa Usman moves to the Ministry of Youth Development.

The cabinet reshuffle takes immediate effect.

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Kwara Gov excited as Nigerian Army launches CBT Centre in Igbaja

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  • Gov hails Army’s support for internal security, seeks respect for security agencies
  • Army Chief lauds Gov’s support in Kwara, North Central • Gov attends Igbaja Day, now Taiyese of Irese Land

Kwara State Governor AbdulRahman AbdulRazaq on Thursday advocated more appreciation for the sacrifices of the security agencies, including the Nigerian Army.

He said the military has played important roles to support civilian authorities at all times, including at a time when the country was under intense pressure from hostile non-state actors.

The Governor spoke in Igbaja, Ifelodun LG of the state, at the commissioning of a Computer Based Testing (CBT) center, a special intervention project of the Chief of Army Staff (CoAS), Lieutenant General T. A. Lagbaja.

The project was executed by Major General Adelokun Eyitayo, a serving military officer and native of Igbaja Land, who also launched his three books, titled: ‘Life of Prince Daud and Spirituality; Tears for Suni and Titi; and The Boy on the Highland’.

“This Computer Centre means a lot for the socioeconomic growth of this community. Not only does it nudge members of the community towards acquisition of necessary skills for this age; it opens up new frontiers of socioeconomic benefits for Igbaja and communities around it,” the Governor said.

“I am also fascinated by the spirit behind this project. It is timely and necessary. The need for better military-civil relations cannot be over-emphasized. Recent developments in our country again suggest a need to deepen citizens’ appreciation of the sacrifices that our security forces make to keep us safe, stabilise the fabric of our society, and ward off every threat against the Nigerian state.

“Over the last two decades, the military has played very important roles to support civilian authorities at all times, including at a time when our country came under intense pressure from hostile non-state actors.”

AbdulRazaq commended the Federal Government and the Chief of Army Staff for establishing the CBT centre that he said will aid skill acquisition and boost socioeconomic growth of the area.

“We therefore cannot thank the federal government and our military enough. We must appreciate and honour members of our security forces, including military personnel deployed in internal operations and during emergencies, and cease all attacks on them,” he added.

The commissioning attracted various dignitaries, including the CoAS Lieutenant General T. A. Lagbaja, who was represented by Maj Gen Obinna Onubogu; the Elese of Igbajaland Oba Ahmed Awuni Arepo III; and Igbaja CBT Project Executor Major General Adelokun Eyitayo; among others.

Lagbaja, for his part, said the execution of the project further affirms the transformational drive of the Nigerian Army towards achieving its constitutional responsibility through a non-kinetic line of operations.

The Army Chief thanked Governor AbdulRazaq and the people of the state for their continued support for the operations of the Nigerian Army.

“The Nigerian Army has received tremendous support from your government. It is also gladdening to note that we have enjoyed cordial working relationships with you over the years, and your support has contributed immensely to our operational success within the state and the entire North Central region,” he said.

Maj Gen. Eyitayo thanked CoAS for the approval of the project and his unwavering support for its delivery.

He also appreciated the Governor for directing the purchase and supply of his three books for the use of students of public secondary schools in the state.

The Governor, meanwhile, attended the 2024 Igbaja Day celebration, where he urged the people of Igbaja to continue to recognise the rich cultural heritage and diversity that makes the community to be unique.

He congratulated the Elese of Igbaja, the Jagunmolu of Igbaja and founder of Al-hikmah University Chief Oladimeji Igbaja, and all sons and daughters of Igbaja community on the celebration, requesting them to continue to unite for accelerated growth.

“Let us embrace and celebrate our diversity, and continue to build bridges of understanding and empathy,” the Governor said.

“As you are aware, our administration has embarked on various projects that touched the lives of everyone across the state, including Igbajaland. We will continue to do more to improve the lives of our people.”

Chief Oladimeji, who was excited by the Governor’s culture of arriving early for events, praised AbdulRazaq for time management, and how the administration has executed many laudable programmes and projects in the town and elsewhere.

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Africa needs to be competitive, says Chike-Obi, Fidelity Bank’s Chairman

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Africa needs to be competitive and efficient in its area of strength, according to Mustafa Chike-Obi, the Chairman of Fidelity Bank, who spoke with CNBC Africa’s Kenneth Igbomor on the sidelines of the AFREXIMBANK Annual meetings in Nassau, the Bahamas.

Chike-Obi emphasized the importance of focused and sharp leadership in harnessing the continent’s strengths to achieve prosperity. He highlighted the need for Africa to identify areas of competitive advantage in producing goods and services efficiently to unlock its full potential.

He pointed out that success stories in areas like sports demonstrate Africa’s potential when leveraging advantages. However, he stressed the crucial role of collaboration and seamless interaction among African nations and regions for sustainable development.

The chairman urged for enhanced integration to facilitate the movement of goods and services across the continent, emphasizing the necessity to work collectively towards common goals.

Chike-Obi also addressed the importance of prioritizing Africa’s strengths, such as power supply, through cohesive policies and agreements to drive economic growth. He emphasized the need for coordinated banking policies to promote financial integration within Africa and with external partners, emphasizing the significance of streamlined banking services and transactions.

The Chairman highlighted the African Continental Free Trade Area (AfCFTA) as a significant opportunity for economic advancement but called for more practical implementation to ensure its effectiveness. He underscored the importance of execution in translating policies into tangible outcomes for the African people.

Reflecting on the annual meetings and the discussions on trade and investment, Chike-Obi reiterated the critical importance of collaboration for Africa’s progress, emphasizing that unity and concerted efforts are essential for realizing the continent’s potential.

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