Business

‘States Don’t Executed 40% Capital Expenditure In Budgets’

Published

1 month ago

December 4, 2024

Fitch, a credit ratings company, has revealed that state governments in Nigeria do not execute 40 per cent of the Capital Expenditure (CAPEX) in their various annual budgets.

In its latest Nigerian States Framework Report posted on the website, the global ratings firm, highlighted how debt servicing affects state governments’ ability to execute CAPEX.

According to the latest credit ratings report on Nigeria, the country’s Long-Term Foreign-Currency Issuer Default Rating was affirmed at ‘B-‘ with a positive outlook.

It also projected that non-performing loans of Nigerian banks will increase in 2024 on the back of high interest rates and inflation in the country.

The latest analysis framework report, also revealed that all Nigerian states rated by Fitch are on Positive Outlook, reflecting that of the sovereign (B-/Positive) and the Federal Government of Nigeria’s policies that affect states’ operating revenue, debt stock, and debt service.

“The free-floating naira exchange rate has consistently increased external debt service, eroding the share of FAAC available for autonomous spending, as external debt is serviced through direct deductions from transfers.

“Most Nigerian states rely on subsidised facilities from the federal government to finance their investments. Despite significant capital expenditure needs, states struggle to fully utilise budgeted capex due to funding and implementation constraints, with an average of only about 60 per cent of budgeted capex executed”, it stated.

The report added that Nigerian states face several challenges as Internally generated revenue growth remains subdued due to socioeconomic constraints and inefficiencies in tax collection.

It continued that Most states depend on FAAC transfers, with Lagos being an exception due to its higher IGR capabilities. Rising current spending, driven by high inflation and recent increases in the minimum wage, further pressures state finances.

“Fitch views the institutional framework for the Local and Regional government sector as evolving due to limited own-revenue-generation capacity, evolving debt and liquidity-management regulations and practices amid the devolution of a wide set of responsibilities to the states.

“States have to provide key public services, such as healthcare and education, creating vertical fiscal imbalances that can result in structural funding gaps, in turn leading to higher debt or a propensity to offload risks off-balance sheet”, it stated.

In October, a new report by civic-tech organisation, BudgIT, revealed that 32 out of Nigeria’s 36 states relied on allocations from the Federation Account Allocation Committee for at least 55 per cent of their total revenue in 2023.

The report highlighted the over-dependence of many states on federal transfers, which makes them vulnerable to external shocks particularly those linked to oil revenue and federal disbursements.

Corlins Walter

Business

USAID Re-emphasizes Agricultural Collaboration With Nigeria

Published

3 days ago

January 10, 2025

The Tide

The United States Agency for International Development (UNAID) has said its programmes operate transparently and align with the Nigeria’s laws.

A statement issued by the US Mission in Nigeria highlighted the significant achievements of its agricultural collaboration with Nigeria, within the week, saying it has supported over five million Nigerian farmers since 2019.

The agency stated that it has boosted food production and strengthened rural economies across the country through its efforts.

“Recent media coverage has presented an inaccurate picture of US agricultural initiatives in Nigeria, such as assisting local agencies’ efforts in strengthening regulatory processes for agricultural biotechnology”, the statement noted.

The US Mission stressed that its agricultural programmes are developed and implemented with Nigerian experts, farmers, and government officials.

USAID explained its initiative’s focus on practical support for farmers, including market access, agricultural training, and research collaboration.

The agency reaffirmed its commitment to ensuring all research findings and programme details remain publicly accessible through official channels.

“Our agricultural partnership represents a shared commitment to addressing Nigeria’s food security challenges through locally-driven solutions”, it stated.

The US Mission also underscored its ongoing consultations with Nigerian stakeholders, maintaining regular dialogue with farmers, experts, and government agencies.

It reiterated its respect for Nigeria’s agricultural sovereignty and traditions.

“We are proud of our record of supporting Nigerian farmers while respecting local agricultural traditions and practices”, it added.

Business

Nigeria’ll Lead In Agricultural Export This Year – Tinubu

Published

3 days ago

January 10, 2025

The Tide

President Bola Tinubu has expressed his administration’s ambition to position Nigeria as a global leader in agricultural exports as a cornerstone of his Renewed Hope Agenda.

He disclosed this recently at the Road to South-South National Convergence for the Renewed Hope Agenda at the Presidential Villa.

Represented by the Minister of Regional Development, Abubakar Momoh, he also unveiled the Earn from the Soil Initiative, which aims to transform subsistence farming into a robust, export-driven sector.

“This initiative is a powerful declaration that we are committed to turning our non-oil resources into collective prosperity. Nigeria will be a leading agricultural export nation”, he said.

The Earn from the Soil project was designed to revolutionise Nigeria’s agricultural landscape, creating export opportunities and ensuring national food security.

According to the President, the initiative will empower citizens to become agents of economic prosperity, transforming local farming practices into global economic drivers.

He also highlighted the untapped potential of the South-South region, known for its rich natural resources and talent, and called for more significant investment in non-oil sectors.

“The South-South is open for business just as the whole of Nigeria is ready for business. We are creating an ecosystem of opportunity, innovation, and sustainable growth”, he said.

Tinubu’s administration seeks strategic support from local and international partners to build a resilient economic ecosystem, moving away from reliance on traditional aid.

Tinubu also emphasised the crucial role of young people and women in driving the initiative’s success.

The President assured Nigerians that his administration remains committed to fulfilling its promise of restoring hope and confidence, with the Earn from the Soil initiative marking a significant step in achieving that vision.

On her part, the Senior Special Assistant to the President on Community Engagement (South-South), Hon Gift Johnbull, has spotlighted the South-South region as a critical hub of untapped economic potential, calling for strategic partnerships to unlock its vast resources and foster national growth.

She underscored the region’s significant contributions to Nigeria’s economy, particularly in oil and gas, while emphasising its underutilised agriculture, innovation, and entrepreneurship opportunities.

She also called on investors, policymakers, and stakeholders to see the South-South as a gateway to new opportunities, citing initiatives such as the Pitching Den, launched at the event, as a platform to attract bold entrepreneurs and visionary investors.

“This is your moment to recognise the South-South as a hub of untapped potential”, she said.

The event also featured the unveiling of the Impact Report, highlighting milestones achieved under President Bola Ahmed Tinubu’s Renewed Hope Agenda.

The report showcased how targeted initiatives have empowered communities and driven progress in the South-South.

Business

NDLEA, NIMASA Strengthen Cooperation Against Drug Trafficking

Published

3 days ago

January 10, 2025

The Tide

The Nigerian Maritime Administration and Safety Agency (NIMASA) has recommited to supporting the National Drug Law Enforcement Agency (NDLEA) in the fight against drug abuse and trafficking within Nigeria’s maritime sector.

Chairman of the NDLEA, Brig. Gen. Mohammed Buba Marwa (rtd), emphasized this during a courtesy visit by the NDLEA to the NIMASA Towers in Lagos.

Speaking during the visit, the Director General of NIMASA, Dr. Dayo Mobereola, commended the NDLEA for its remarkable achievements in combating drug-related crimes across Nigeria.

He pledged NIMASA’s commitment to collaborating with the NDLEA to secure Nigeria’s maritime domain against illicit shipment of drugs.

“We are glad to welcome the NDLEA team, led by Brig. Gen. Marwa, whose exemplary leadership has brought significant progress in the fight against illicit drugs.

“NIMASA is firmly committed to partnering with the NDLEA to tackle the menace of drug trafficking, particularly through our nation’s ports and terminals.

“Together, we can ensure that the Nigerian maritime domain is not exploited for criminal activities”, Mobereola stated.

Responding, Marwa expressed gratitude for the warm reception and emphasized the need for collaboration to address the rising threat of drug trafficking through maritime channels.

“As the agency responsible for controlling drug abuse and trafficking in Nigeria, we recognize that this task requires collaboration with critical stakeholders like NIMASA.

“The global maritime space has increasingly become a conduit for the illegal movement of drugs, and we are keen to work with NIMASA to address this challenge”, he said.

He continued that “Recent seizures of illicit drugs transported through Lagos ports underscore the need for joint efforts to secure our ports. Within the NDLEA, we have established a Marine Command to focus on this emerging threat.

“We propose close collaboration between this unit and NIMASA, particularly through the Deep Blue Project, to enhance the protection of Nigeria’s maritime space”.

The NDLEA Chairman also pledged the agency’s support in sensitizing NIMASA staff and cadets under the National Seafarers Development Program (NSDP) on the dangers of drug abuse.

Mobereola assured Marwa that NIMASA would explore avenues to integrate NDLEA personnel into the existing maritime security architecture, particularly the Deep Blue Project.