Davido: Cost implication of importing a Rolls Royce car in Nigeria

Nigeria has two lanes for revenue sharing. The Vertical formula describes how revenues are shared among the federating units of the Federal Government, the State, and Local Governments. The most recent review of this formula was in March 2004 via an Executive Order and subsequent letter from the then Minister of Finance Ngozi Okonjo Iweala.

The horizontal sharing formula indicates how the revenues in the Consolidated Revenue Fund are shared according to the States and LGA, according to the principles of Equality, Population, Internal Revenue, Landmass, Rural roads, Inland Water Way, Education, Health and portable water.

Using this infographic from the Statisencet, the Federal Government will get the bulk of the import duties paid by Mr. Davido.

royce 4

The federating units meet monthly under the auspices of the Federation Accounts Allocation Committee Meetings. The exact amount disbursed among the federating units from the import duties and VAT collected will look.

royce 5

States in the Federation will get N55.18 million to share amongst themselves. How much will Mr. Davido’s home State of Osun get? Hard to tell; Nigeria’s gross allocation metrics are a mystery to me. Osun State, with 30 Local Government Areas, gets less in Gross Statutory Allocations than Zamfara State with 14 local governments, even though Osun State has a higher population than Zamfara. by VAT, however, Osun, gets more than Zamfara in gross allocation.

Perhaps Mr Davido would be better advised to do a gofundme campaign and set up a Rolls Royce assembly plant in the proposed FTZ in Dagbolu, Ifelodun LGA of Osun State. An inland port is planned for the free trade zone as well. Mr. Davido can then import Completely Knocked Down (CKD) Rolls Royce at only 10% of the import duties to the inland port, assemble, and sell. Perhaps that is a bridge too far, but for now. Hey! It’s a plan.

Source: NairaMetrics

Leave a comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More