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US States Budgets Get Cash Relief

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Struggling states and towns got a dose of badly needed money this summer from a Cash for Clunkers program that poured hundreds of millions of dollars of tax revenue into their budgets.
Now, like the auto industry, recession-ravaged government are seeing revenue fall off as car buyers take a breather from the frenzied sales of July and August. That means less money for schools, roads, public safety and other projects that get much of their funding from states tax collections.
And while officials welcomed the shot in the arm, the extra clunkers money won’t come close to filling the gaping holes in their budgets or do much to solve the worst revenue downturn in decades.
“It is chump change,” said David Zin, an economist with the Michigan state senate’s fiscal agency.
State and city officials say their budget problems are too severe for one government programme to fix.
“Fifty-thousand is not to be sneezed at,” Dean Rich, finance director of O’Fallon, III, said of the city expected tax gain from its 16 car dealerships. But it’s not enough to prevent a job freeze and cuts to capital project for the town of 29,000 people.
“It’s not the windfall that is going to fix the $1 million shortage we have this year” he said.
Like most governments, O’Fallon suffered during the recession as people facing job losses, reduced pay, lost homes and general unease over the ecoomy snapped their wallets shut. That means big drops in sales tax, which makes up around half of many state budgets. Sales of cars and trucks, big-ticket items with high price tags, are a big component of sales tax collections.
Cash for Clunkers held some promise-customers bought nearly 700,000 new vehicles during late July and August, taking advantage of rebates of up to $4,500 on new cars in return for trading in their older vehicles. The programme ended up tripling the size of tis orginal $1 billion price tag due to its broad popularity. For government budget offices, that represented some rare good news.
The auto forecaster Edmunds.com estimated that the average clunker sales price was $26,321, meaning roughly $18 billion worth of new vehicles were sold under the programme. Multiplied by the average combined state and local sales tax of 7.5 per cent, the total tax bill amounts to a loose estimate of $1.36 billion.
But here’s some perspective – the budget shortfall of Michigan alone, the symbolic heartland of the U.S. auto industry, amounts to $2.8 billion. And it pales in comparison to the $240 billion that states collected in total general sales taxes in 2008.
“That’s more than a drop in the bucket…but not much more for state budgets,” said Robert Ward, director of fiscal studies for the Rockefeller Institute of Government in New York.
The taxes brought in by clunkers offered a summer shot of adrenaline for most states. The funds – often earmarked for school aid, highway repairs and law enforcement – came at a time when they were struggling with big shortfalls.
Kentucky reported that clunkers taxes propped up its Road Fund, which supports the state’s network of roadways. Motor vehicle usage taxes grew 11.4 per cent to $36 million in August, helping keep the fund flat for the month. The state estimates it can now afford to see receipts fall more than 4 per cent for the rest of fiscal year and still meet its budget forecasts.
Legislative estimates in Michigan show the state may have taken in $39 million from Cash for Clunkers. About a third of that money is devoted to education.
Massachusetts reported that motor vehicle sales tax revenue rose nearly 36 per cent in August from a year earlier, higher than the state’s monthly target. That gain, combined with a rise in the overall sales tax that month, pushed vehicle tax collections above the monthly goal.
The extra money may be a help, but state budget officials say it’s minor compared with their huge problems.
Kentucky officials have warned that until unemployment improves – about 11 per cent of states residents are now jobless – tax revenues will remain in the doldrums.
In Michigan, where the states sales tax is the major source of aid for schools, lawmakrers proposed cutting $218 per pupil from the aid the state government gives to local school districts. That’s despite the clunkers money and extra vehicle sales tax revnue from laid off auto workers who got vouchers for new cars as part of their severance. Sales tax collections are still down 9 per cent.
Auto sales nationally fell 41 per cent from August to September, a drop caused largely by people who would have normally waited a few months to buy a new vehicle rushing in to take advantage of the federal programme’s big rebates.
That hangover showed up in Massachusetts sales tax collections last month, which were 5 per cent below forecasts. That worries Robert Bliss, a spokesman for the state revenue department.
“Has the pool been drained as a result of this programme for the next couple of months? That is the question,” he said.

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Nigeria’s ETF correction deepens as STANBICETF30, VETGRIF30 see 50% decline in a week

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Nigeria directs all oil, gas revenues to federation account in sweeping reform
Nigerian President Bola Tinubu has signed an order directing that all oil and gas revenues owed to the government be paid directly into the federation account, in sweeping reforms aimed at boosting public finances, the presidency said on Wednesday.
Under the law, the Nigerian National Petroleum Corporation keeps 30% of oil and gas profits for frontier exploration in inland basins. The presidency said those funds will now be paid into the federation account and appropriated by the government.
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NNPC also retains 30% of oil and gas sales as operational costs and receives 30% of proceeds from Production Sharing Contracts. Under the new directive, all revenues under these arrangements will flow directly to the federation account, while the company will instead receive appropriated management fees.
Royalty payments, petroleum profit taxes and other statutory revenues previously collected and retained by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will also be paid directly into the Federation Account. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) will likewise remit its revenues in full, with its cost of collection to be funded through appropriation.
Tinubu’s office said deductions enabled by the law had sharply reduced net oil inflows and contributed to fiscal strain across federal, state and local governments. The president also ordered a review of the law and established an implementation committee to enforce the changes.
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BOI Introduces Business Clinic 

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The Bank of Industry (BoI) has introduced a business clinic model designed to diagnose, treat and rehabilitate the Micro, Small and Medium Enterprises (MSMEs) to ensure long-term growth and sustainability.
The Divisional Head, Business Development, BoI, Dr Obaro Osah, made this known at the bank’s Thrive Summit with the theme: “Driving Growth through Innovation and Financial Empowerment” on Tuesday in Lagos.
Osah noted that traditional banking often treated businesses as mere account opening and management relationships.
He said the BoI business clinic model was created to reimagine the essence of a bank as a specialised teaching hospital.
According to him, just as a hospital requires a thorough diagnosis before service treatment/surgery, the bank must analyse the structural health of a small business before injecting capital.
“Financial distress is often just a symptom, the disease lies in operations and adopted philosophy, strategy, or governance,” he said.
Osah noted the many MSMEs, in spite of their potential, suffer from recurring ailments: restricted cash flow, poor operational structure, lack of proper packaging and market access, poor management among others.
He said the bank’s triage and vital signs included screening SMEs by maturity stage, pulse check to assess cash flow and liquidity and market temperature to evaluate competitive landscape.
Osah said after these evaluation, advanced diagnostics, prescriptions, surgical interventions and recovery and rehabilitation would be carried out where necessary.
“Prescription without diagnosis is malpractice and the Thrive Summit ensures we treat the root cause, not just the symptoms,” he said.
The Chief Strategy and Development Officer, BoI, Dr Isa Omagu, noted that MSMEs needed more than finance to succeed.
Omagu said they needed structure, advisory, capacity building, governance, digital readiness, access to market information and the right business infrastructure to operate and scale effectively.
He said as part of the bank’s 2025-2027 Corporate Strategy, the business clinic would expand BoI’s value proposition to broaden its products and services to better reach target segments.
Omagu said by offering structured business advisory and project development support, the clinic would enable the bank deliver deeper, more holistic value to MSMEs beyond financing.
“This vision of a structured, holistic business clinic; one that strengthens MSMEs across all core business functions and makes them more bankable, competitive, digitally enabled, and sustainable, is fully aligned with our strategic initiative to develop and roll out non-financial product offerings.
“Through this initiative, BoI commits to providing business advisory for MSMEs and project lifecycle support for enterprises, and the business clinic serves as the practical platform through which this commitment comes to life,” he said.
Omagu urged MSMEs to apply the guidance received to strengthen structure, governance, and financial management.
He added that they must adopt digital tools and improve internal processes to boost competitiveness while engaging BoI as a long-term partner in building a resilient, scalable business.
Mrs Eniola Akinsete, Divisional Head, Sustainability, BoI, said adopting Environmental, Social and Governance (ESG), principles often led to business prosperity.
Akinsete, however, noted that in spite of the benefits, adoption challenges persisted.
She affirmed BoI’s support on the adoption of ESG Practices by the MSMEs.
Earlier, the Executive Director, Corporate Finance, Sustainability and Investments, BoI, Mr Rotimi Akinde, said the summit represented a shared commitment to building a stronger, more resilient business ecosystem in Nigeria.
Akinde stated that the business clinic created a platform for practical knowledge sharing where entrepreneurs and small business owners could gain actionable insights to overcome challenges and seize opportunities.
He said discussions would focus on critical areas that drive sustainable growth, including branding and marketing, financials and activities, human rights, human resources, raising capital for equity and technology.
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Dangote signs $400 mln equipment deal with China’s XCMG to speed up refinery expansion

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Nigeria’s Dangote Group has signed a $400 million equipment deal with China’s Xuzhou Construction Machinery Group to speed up the expansion of its oil refinery toward a planned 1.4 million barrels per day, the company said on Tuesday.
The additional equipment is expected to support major projects under construction across refining, petrochemicals, agriculture and infrastructure.
Dangote said the XCMG agreement would allow it to acquire a wide range of new heavy-duty machinery to complement existing assets deployed for the refinery build?out, which the company expects to complete within three years.
As part of the expansion, polypropylene capacity will rise to 2.4 million tons per year from 900,000 tons. Urea production in Nigeria will triple to 9 million tons per year, alongside an existing 3 million-ton plant in Ethiopia, positioning the conglomerate as the world’s largest urea producer, the company said.
The output of linear alkyl benzene – a key raw material for detergents – will increase to 400,000 tons annually, making Dangote the biggest supplier in Africa. Additional base-oil capacity is also planned in the programme.
Dangote Group described the equipment deal as a strategic investment aligned with its ambition to become a $100 billion enterprise by 2030.
“The additional equipment we are acquiring under this partnership will significantly enhance execution across our projects,” it said in a statement.
Owned by Nigerian billionaire Aliko Dangote, the $20 billion refinery began operations in 2024 after years of delays. Once fully operational, it is expected to reduce Nigeria’s heavy dependence on imported refined fuel and reshape fuel supply across West and Central Africa.
Reporting by Isaac Anyaogu; Editing by Anil D’Silva
The Nigeria-Slovenia Chamber of Commerce on Thursday urged the Nigerian business community to explore business opportunities in Slovenia to widen their horizons.
The Tide source reports that the chamber made the call at its 2025 Last Quarter Business Forum held in Lagos State.
The forum is the chamber’s routine session aimed at informing businesses about the latest opportunities of mutual benefit between both countries, encouraging people to explore them to improve their livelihoods.
Speaking at the event, which was attended by businessmen and trade regulatory agencies, the Director-General of the Nigeria-Slovenia Chamber of Commerce, Mr Uche Udungwor, described the relationship between the two countries as a bilateral economy.
Udungwor said the body, established to build, promote and facilitate trade and investment activities between Nigeria and Slovenia, had positively impacted both nations.
He said the mandates of the chamber include: “To provide a forum representative of Nigeria and Slovenia’s interests for the development and improvement of commerce and industry between the two countries.
“Also, to create, promote and sustain broad exchanges and interactions in commercial, industrial and economic fields between the countries.
“To promote cooperation on technical and scientific innovations between institutions of the countries through the exchange of regular information on trade and investment opportunities.
“To advise members on opportunities, challenges, legislation or otherwise arising from the pursuit of trade between Nigeria and Slovenia, and to encourage the exchange of ideas and views on trade matters within the context of trade promotion between both countries.”
According to him, Slovenia’s major imports include organic chemicals, agro products such as cocoa beans, iron and steel/metal scraps, wood, and mineral fuels/petroleum products.
He said the trade balance between Slovenia and Nigeria is “not quite encouraging”, citing United Nations COMTRADE data indicating that Slovenia’s imports from Nigeria in 2022 amounted to $5.7 million.
Udungwor described the Republic of Slovenia, located in Central Europe with about 2.1 million inhabitants, as a promising business frontier for Nigerians.
He noted that the country features Alpine mountains, thick forests and a short Adriatic coastline.
“Slovenia, which borders Italy to the west, Austria to the north, Croatia to the south and southeast, and Hungary to the northeast, has a 2024 GDP of 72.49 billion dollars, a sound economy and a low-risk business environment.
“Slovenia has been a member of the European Union since 2004 and of the Schengen Group since 2007. It is also a member of the Organisation for Economic Co-operation and Development (OECD).
“Slovenia today is a stable, vibrant democracy that offers a stimulating business environment and represents a bridge between the Balkan, Central European and Western European countries.
“The Nigeria-Slovenia Chamber of Commerce is at your service to provide up-to-date information and advice about Slovenia’s economy, business opportunities, companies, products and services for the mutual benefit of all,” he said.
A participant, Mr Muyiwa Ajose, said his partnership with the chamber had bolstered his agro exports to Slovenia.
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