FAAC Shares Over N1 Trillion in Revenue to FG, States, and LGCs
Nigeria Economy 2023 shows the Federation Account Allocation Committee (FAAC) disbursed a staggering N1.088 trillion in revenue to the Federal Government, State, and Local Government Councils (LGCs).
This financial distribution, outlined in the committee’s recent communiqué, revealed a breakdown: statutory revenue of N376.306 billion, value-added tax (VAT) revenue of N335.656 billion, Electronic Money Transfer Levy (EMTL) revenue of N11.952 billion, and Exchange Difference revenue of N364.869 billion. Notably, a total revenue pool of N1.620 trillion was available during this period.
Amidst this allocation, deductions for the cost of collection amounted to N60.960 billion, with N470.592 billion allocated for transfers, interventions, and refunds. The substantial increase in gross statutory revenue from October, hitting N882.560 billion, signified a notable economic surge of N222.470 billion.
Multinationals Exiting Nigeria’s Turmoil
Nigeria Economy 2023 landscape has witnessed a seismic shift in recent times. President Bola Tinubu’s administration, while aiming to salvage the country from financial collapse, implemented critical policies, including subsidy removal and floating exchange rates.
However, these measures have had unintended ramifications, exacerbating inflation for consumers and prompting significant repercussions for businesses. This upheaval has particularly impacted multinational corporations, forcing giants like Procter & Gamble, GSK, and Unilever to curtail or entirely withdraw their operations from Nigeria.
Citing currency challenges and dwindling consumer demand, these multinational entities transitioned to import-focused models or outsourced distribution, abandoning established factories and staff. Their departure marks a substantial loss for Nigeria’s fast-moving consumer goods (FMCG) sector, where they had long been dominant players.
Corporate Exodus: A Macro View
Procter & Gamble (P&G), in its recent announcement to discontinue manufacturing care and hygiene products like Pampers and Ariel in Nigeria Economy 2023, emphasized the country’s harsh macroeconomic climate. P&G’s Chief Financial Officer highlighted the immense difficulty faced by a dollar-denominated company operating in Nigeria, especially with the doubling of the naira to dollar exchange rate under the new “floated” system.
This trend extends beyond P&G. Companies like PZ Cussons also attribute their exit to “foreign exchange challenges.” The narrative suggests that Nigeria, despite its vast population, accounts for an inconsequential percentage of global revenue for these companies, with Nigeria representing less than 3% of their overall sales.
Capital Market Dynamics: Plans and Seals
Beyond corporate shifts, Nigeria’s capital market is undergoing significant alterations. The Bureau of Public Enterprises revealed plans to divest Nigeria Machine Tools, Osogbo, in the 2024 capital market, alongside other assets like Eleme Petrochemicals Company Limited and various insurance entities. Moreover, the Securities and Exchange Commission (SEC) recently sealed the premises of Ready Finance Investors Limited for illegal investment activities resembling a Ponzi scheme, urging caution among the public.
Conclusion: Navigating Nigeria Economy 2023 Evolution
As Nigeria stands at this economic crossroads, marked by substantial FAAC allocations, multinational exodus, and capital market reconfigurations, the landscape requires a nuanced approach. Understanding the complex interplay between policy decisions, corporate responses, and market dynamics is crucial for stakeholders navigating these uncertain yet transformative times.
Source Links: NAN News, Ventures Africa, Business Post Nigeria, Leadership NG, Osun Defender
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