Finance Minister, Mrs Kemi Adeosun rose from the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja yesterday, with the unpleasant news that fluctuations in foreign exchange policy was jolting the economy, especially manufacturers with an assurance that government was marshaling plans to arrest the situation.
This was as federal, states and local governments again shared N420 billion as allocation for October, same amount they distributed in September.
According to the Minister, the country suffered a revenue loss of about $51 million in crude export sales as result of the activities of militants in August.
She noted that government in its efforts to reflate the economy and take the nation out of recession in 2017, will roll out tax incentives to boost the strained manufacturing sector.
The Minister, while addressing journalists after the meeting said: “Forex is a major issue for manufacturing and they 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 and we are going to roll out a lot of measures to support them including tax incentives and investment in infrastructure”, she assured.
She admitted that settling domestic debts was critical to getting the economy out of the current crisis, adding that the Buhari administration inherited crippling but hidden debts as a result of transiting from the old accounting platform to a new one which brought to the fore all debts owed including Joint Venture Cash Calls.
The Minister also disclosed that government was working with the Central Bank of Nigeria (CBN) to totally deal with domestic debts.
“This debts are affecting the ability to grow the economy, they have to be settled for the economy to move forward”, she noted.
Of the total of N420 billion shared in October 2016, N203.952 billion was for statutory allocation among the three tiers.
After deductions and paying revenue generating agencies, the Federal Government got N96.674 billion, state governments got N49.035 billion, local governments N37.804 billion while N13.548 billion was shared as 13 per cent derivation to oil minerals producing states.
From Value Added Tax, a total of N69.621 billion was shared amongst the three tiers as well as N37.319 billion from exchange gain, N109.108 billion from excess Petroleum Profit Tax (PPT) bringing the grand total to N420 billion.
The Minister revealed that over 900,000 barrels oil crude were shut-in which affected the revenue for the month but she was optimistic that the situation would be addressed and the volume of crude production will improve with time.
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