Finance
CBN gives insight into why states can’t pay salaries
LAGOS — The dwindling resources of states and local governments suffered a 30.6 per cent fall from federation account allocation in April 2015 when compared with what the states got in the same period last year.
Central Bank of Nigeria, CBN, Economic Report for the month of April said that the total statutory allocation to the state governments stood at N153.45 billion in April 2015. This was 30.6 and 22.9 per cent below the 2014 monthly budget estimate and the level in the preceding month, respectively. The dwindling revenue of federal, state and local government is as a result of falling oil prices.
Godwin Emefiele, CBN Gov
CBN Governor, Mr Godwin Emefiele Giving insight into the poor financial status of states which depends on monthly federal allocation, the CBN report for April said: “The breakdown showed that at N119.27 billion or 77.7 per cent of the total, state governments’ receipt from the Federation Account was below both the 2014 monthly budget estimate and the level in the preceding month by 29.7 and 30.3 per cent, respectively. “At N34.17 billion or 22.3 per cent of the total, receipts from the VAT Pool Account was below the monthly budget estimate by 33.4 per cent, but exceeded the level in the preceding month by 22.2 per cent. Total receipts by the local governments from the Federation Account and VAT Pool Account stood at N88.91 billion at end-April 2015.
“This was lower than both the budget estimate and the level in the preceding month by 33.8 and 19.7 per cent, respectively. Of this amount, receipts from the Federation Account were N64.99 billion (73.1 per cent of the total), while the VAT Pool Account accounted for N23.92 billion (26.9 per cent of the total). “At N735.07 billion, estimated federally-collected revenue in April 2015, was lower than the monthly budget estimate by 9.8 per cent. It was, however, higher than the receipt in the preceding month by 35.8 per cent.
The decline in estimated federally-collected revenue (gross) relative to the monthly budget estimate was attributable, largely, to the shortfall in receipts from oil revenue during the review month Fall in receipts from crude oil and gas exports “At N286.24 billion or 38.9 per cent of total revenue, gross oil receipt was lower than the monthly budget estimate and the level in the preceding month by 36.8 and 21.5 per cent, respectively. The decline in oil receipts relative to the monthly budget estimate was attributable to the fall in receipts from crude oil and gas exports, occasioned by the drop in the price of crude oil in the international oil market.”
The report further stated that “gross non-oil receipts at N448.83 billion or 61.1 per cent of the total revenue was above the monthly budget estimate and the level in the preceding month by 23.9 and 154.1 per cent, respectively. The increase in non-oil revenue relative to the monthly budget estimate reflected largely, the increased receipts from the FGN Independent Revenue. Distribution among three tiers of govt “It also said that of the gross federally-collected revenue, N307.45 billion (excluding deductions and transfers) was transferred to the Federation Account for distribution among the three tiers of government and the13.0 per cent derivation fund. “The Federal Government received N146.49 billion, while the state and local governments received N74.30 billion and N57.28 billion, respectively.
The balance of N29.38 billion was distributed to the oil-producing states as 13.0% Derivation Fund. From the VAT Pool Account, the Federal Government received N10.25 billion, while the state and local governments received N34.17 billion and N23.92 billion, respectively. In addition, N33.53 billion and N9.49 billion were distributed as Exchange Gain and NNPC Additional Revenue among the three tiers of government and the 13.0 per cent Derivation Fund as follows: “The Federal Government received (N15.37 billion and N4.35 billion), while the state and local governments received (N7.79 billion and N2.21 billion) and (N6.01 billion and N1.70 billion), respectively. The balance (N4.36 billion and N1.23 billion) was distributed to the oil-producing states as 13 per cent Derivation Fund.
“Furthermore, N6.33 billion was received by the Federal Government from the NNPC in respect of the eighth equal installment refund of indebtedness. Overall, the total allocation to the three tiers of government from the Federation Account and VAT Pool Account in the review month amounted to N425.14 billion, compared with N557.80 billion in the preceding month. “At N452.38 billion, the estimated Federal Government retained revenue for April 2015 was above the monthly budget estimate and the receipts in the preceding month by 46.0 and 77.1 per cent, respectively. Of the total amount, the Federation Account accounted for 32.3per cent, while FGN Independent Revenue, others, VAT Pool Accounts, NNPC Refund and NNPC Additional Revenue accounted for 59.6, 3.4, 2.3, 1.4 and 1.0 per cent, respectively.
Total expenditure “At N155.52 billion, total estimated expenditure for April 2015 was lower than both the monthly budget estimate and the level in the preceding month by 60.2 and 26.3 per cent, respectively. A breakdown of total expenditure showed that the recurrent expenditure accounted for 88.8 per cent, while the capital expenditure and transfer components accounted for the balance of 2.8 and 8.4per cent, respectively. Non-debt obligations accounted for 43.7per cent of the total recurrent expenditure, while debt service payments accounted for the balance of 56.3 per cent. Thus, the fiscal operations of the Federal Government resulted in an estimated surplus of N296.86 billion.” According to the CBN “Nigeria’s crude oil production, including condensates and natural gas liquids, was estimated at an average of 1.91million barrels per day (mbd) or 57.30 million barrels for the month. This represented an increase of 5.0 per cent above the level of 1.82 mbd or 56.42 mb recorded in the preceding month. Crude oil export was estimated at 1.46mbd or 43.80 million barrels. This represented an increase of 6.6 per cent above the level recorded in the preceding month.
“Deliveries to the refineries for domestic consumption remained at 0.45 mbd or 13.50 million barrels during the review month. At an estimated average of $59.55per barrel, the price of Nigeria’s reference crude, the Bonny Light (37º API), rose further by 3.7per cent above the level in the preceding month.
“The average prices of other competing crudes, namely the U.K Brent at US$58.18 per barrel; the West Texas Intermediate at $52.82 per barrel; and the Forcados at US$59.88per barrel, also showed similar trends as the Bonny Light. The average price of OPEC’s basket of eleven crude streams, at $55.61per barrel, indicated an increase of 5.7 per cent, but indicated a decline of 46.7 per cent, compared with the average of $52.61and $104.27per barrel recorded in the preceding month and the corresponding period of 2014, respectively “
Vanguard-
Nigerisa’s Vice President Kashim Shettima
By Modupe Asudo
The 2026 edition of the African Continental Free Trade Agreement (AfCFTA) Summit got underway in Lagos on Monday with regulatory agencies, project promoters, and financial institutions focused on deepening intra-Africa trade, a unified code of standards for professional qualifications and manufactured goods, and expansion of the frontiers of technological development and innovation.
Critical questions addressed include how AfCFTA’s 1.4 billion population and $3.4 trillion economy could achieve “a strategic shift from fragmented economies towards a globally competitive supply chain system”; how Africa could leverage its vast mineral resources, including copper, iron ore, petrochemical, for domestic production of hardware such as Christmas tree (an assembly of valves, fittings on top of a wellhead to control oil production), and how, hypothetically, Tema Shipyard in Ghana could be designated the vessel construction, assembly and repairs hub for Africa.
Related questions were how cables manufactured in Nigeria, hypothetically, could benefit from favourable trade terms in Angola; what compliance requirements a sacrificial anode producer in Nigeria would have to meet in regard to the rule of origin requirement to export anodes to Algeria for protection and longevity of pipelines, storage tanks, offshore platforms, etc., and what other support levers would be required to achieve energy security for Africa besides expanded refining capabilities in Dangote Refinery, laying of continental gas transmission pipelines, and establishment of industrial parks and other support infrastructure.
In a keynote address at the event, the Executive Secretary of the NCDMB, Engr. Felix Omatsola Ogbe, represented by the Director, Corporate Services, Dr. Abdulmalik Halilu, disclosed that Nigeria’s oil and gas industry embraced AfCFTA and developed a framework for domesticating the policy in 2022.
According to him, implementing AfCFTA in the industry was anchored on three broad pillars, namely, Opportunities Identification, Capacity Development, and Capacity Exportation. In regard to opportunities, he said Nigeria’s strength lies in formidable supply chain in oil field services, refining capacity, oil field logistics base, gas supply pipelines, and a pool of qualified oil field technical workforce.
On capacity development, he pointed out that Nigeria’s oil and gas industry, through the local content law, has developed capabilities in the oil and gas value chain spanning marine vessel asset ownership, fabrication, assembly and installation of production systems, including Christmas trees, pressure vessels, and pumps.
What remains unresolved, described by the Executive Secretary as “the next frontier and the reason for convening the Summit,” is capacity exportation. He posited for consideration a unified work permit and visa that would enable, say, “a welder in Senegal to be engaged in Arlec Engineering Works, Johannesburg, South Africa, for fabrication of heat exchangers, storage tanks, pressure tanks, pressure vessels, etc.”
In examining the importance of achieving continental economic integration, Engr. Ogbe explained that strong regional supply chains would shift Africa from exporting raw materials to producing high-value goods. For pathways to integration, he listed regional value chains, infrastructure connectivity, regulatory harmonization, industrial clusters, and small and medium scale enterprises (SME) inclusion.
He assured industry stakeholders and participants maximum support by the NCDMB.
By Modupe Asudo
The Nigerian Content Development and Monitoring Board has outlined a practical framework for positioning Nigeria’s energy sector to access the African Continental Free Trade Area, following a strategic webinar focused on meeting rules-of-origin requirements for continental trade.
The Board held a pre-conference webinar on Wednesday ahead of the Nigeria Local Content AfCFTA Energy Summit scheduled for Monday, February 9, 2026.
The engagement was attended by stakeholders from the oil and gas, power and renewable energy sectors, and they addressed how Nigerian products and services can qualify for preferential market access across 54 African countries with a combined gross domestic product of $3.4tn and a population of about 1.4 billion people.
Entitled ‘Meeting AfCFTA Origin Requirements in Energy Trade’, the webinar focussed on one of the major barriers facing Nigerian exporters under AfCFTA — structuring production and operations to meet origin requirements that determine eligibility for duty-free and preferential trade.
The initiative was supported by the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, and the Acting Director of Planning, Research and Statistics, Mr. Ene Ette, as part of preparations for the forthcoming Nigeria Local Content AfCFTA Energy Summit, with the theme ‘Unlocking Africa’s Energy Future through AfCFTA: Trade, Innovation and Regional Integration’.
Speaking during the session, a communications analyst, Joseph Nwokedi, representing the Acting National Coordinator of Nigeria’s AfCFTA Coordination Office, Mrs Patience Okala, stressed the central role of energy in Africa’s economic integration under AfCFTA.
He urged Nigerian companies to shift their focus from Nigeria’s domestic market of about 200m people to the wider continental market of 1.4bn consumers.
“Without energy, there’s no industrialisation. Without energy, regional value chains remain aspirational,” Nwokedi said. “With AfCFTA, energy transforms from a domestic infrastructure issue into a tradable, investable and exportable sector within an integrated African market.”
He noted that even one per cent penetration of the African market translates to about 14m consumers, underscoring the scale of opportunity available to Nigerian energy firms.
The webinar identified four key pathways through which Nigeria’s energy sector can participate in AfCFTA-enabled trade. First, Nigeria’s Electricity Act of 2023 allows independent power producers to supply electricity directly to industrial clusters and export processing zones, positioning power generation as a foundation for trade-ready manufacturing.
Second, the country has submitted commitments under AfCFTA that enable professionals such as engineers, electricians, geophysicists and energy auditors to export services across Africa, subject to mutual recognition of qualifications.
Third, refined petroleum products, gas derivatives, electricity and renewable energy components can be traded across borders under preferential tariffs, provided they meet AfCFTA rules of origin.
Fourth, AfCFTA’s investment protocol, combined with recent domestic reforms, including the Presidential Directives on Investment Incentives for 2024–2025, strengthens Nigeria’s credibility for attracting cross-border investments in power generation, transmission, renewable energy and storage infrastructure.
Delivering a technical presentation, Assistant Comptroller of Customs, Burhan Sulaiman, explained that AfCFTA would eliminate tariffs on 90 per cent of goods traded within the bloc over five to 10 years, with an additional seven per cent liberalised over 13 years. However, he stressed that these benefits were conditional on meeting origin requirements.
“Companies lose benefits because origin was treated as an afterthought,” Sulaiman said. “You must build in origin compliance from the beginning, not while already running your project. Origin determines whether you export duty-free or pay full tariffs.”
He clarified that origin is determined by where economic production takes place, not by company ownership or registration. Foreign-owned companies producing in Nigeria can export as Nigerian origin, while Nigerian companies importing finished goods cannot claim AfCFTA preferences.
Sulaiman explained that products qualify for preferential access through two routes. “Wholly obtained” goods are entirely produced within AfCFTA member states, such as crude oil and natural gas extracted in Nigeria, as well as locally generated electricity regardless of fuel source.
The second route, “substantial transformation”, applies where foreign inputs are used and requires compliance with one of three tests: a change in tariff classification; a value-addition threshold limiting foreign content to between 30 and 60 per cent of ex-works price; or completion of specific prescribed processes such as distillation, cracking or reforming for petroleum products.
He provided sector-specific guidance, noting that in oil and gas, locally extracted crude and gas qualify, just as refined petroleum products that meet processing requirements. However, simple blending, basic distillation operations and modular refineries using imported crude without substantial transformation do not qualify.
In the power sector, he explained, locally generated electricity and regionally manufactured equipment with deep component transformation qualify, while installation-only activities, imported turbines, transformers and switchgear mounting do not.
“For renewables, regional solar cell and battery cell manufacturing with deep component processing qualify,” he said, adding that panel installation alone, simple module assembly and packaging imported batteries do not meet the thresholds.
Sulaiman warned that without regional manufacturing accumulation, power equipment exports fail origin tests.
According to him, the Nigeria Customs Service applies a five-step verification process for origin claims, including confirming accurate HS codes, reviewing production records, testing for minimal operations, verifying African input origins and ensuring consistency across certificates, production records and cost documentation.
“Weak documentation kills origin claims. Even genuinely originating products can be denied if documentation is incomplete or inaccurate,” he noted.
Both speakers emphasised that origin compliance should be treated as a core business strategy rather than a regulatory formality.
“Origin is not paperwork; it is strategy,” Sulaiman said. “It shapes where you locate facilities, how you source inputs, and where you sign regional contracts. Treat it as strategic from day one.”
Nwokedi urged Nigerian firms to act early. “AfCFTA is happening now. Early movers will shape supply chains, standards and partnerships. Are you going to lead, or simply follow?”
Officials also provided updates on AfCFTA implementation, noting that 92 per cent of rules of origin had been agreed, with negotiations ongoing in the textiles and automotive sectors.
An online dispute resolution mechanism has been established to coordinate Customs authorities, standards bodies and complainants.
Nigeria has deployed a fully operational electronic certification system for paperless trade, while Nigerian Customs is introducing risk-management frameworks that could allow exporter self-certification on commercial invoices.
Following a five-year implementation review led by the Minister of Industry and Investment, Dr Jumoke Oduwole, government sensitisation efforts have intensified through partnerships with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture; Women’s Chambers of Commerce; zonal outreach programmes and ‘P3 engagements’ involving the press, private sector and public institutions.
“The government will not trade under AfCFTA — our exporters will,” officials said. “If they win, we win.”
Nigerian Customs also reiterated its open-door policy for pre-export origin verification to help businesses avoid delays and additional costs at the border.
The webinar highlighted Nigeria’s potential as a regional energy and transition-fuel hub, building on frameworks such as the West African Power Pool to support cross-border electricity trade.
Key recommendations included structuring projects for origin compliance from inception, forming regional joint ventures, aligning with continental standards and leveraging AfCFTA service commitments to export Nigerian energy expertise.
The session ended with confirmation that the webinar was a technical precursor to the Nigeria Local Content AfCFTA Energy Summit, which will convene policymakers, industry leaders and trade experts to develop strategies for maximising Africa’s energy potential under the AfCFTA framework.
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