NewsclickNG

Category: Business

  • Minister inaugurates FIRS board, announces date of commencement of new VAT regime

    Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning said the implementation of the new regime of 7.5 per cent Value Added Tax (VAT) will take effect from Feb. 1.

    Ahmed said this during the inauguration of the Chairman and Board members of the Federal Inland Revenue Service (FIRS) in Abuja on Thursday.

    “We planned that going forward, the annual budget will always be accompanied by Finance Bills to enable the realisation of revenue projections.

    “Future Finance Bills will therefore, provide us with additional opportunities to incrementally improve the fiscal policy and regulatory and legal environment.

    “This is in order to further strengthen our domestic capital market, and ultimately ensure sustained and inclusive growth and development,” she said.

    The minister recalled that the Finance Act had also taken care of essential palliatives to support Micro, Small and Medium Enterprises (MSMEs) and mitigate the impact of VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.

    While inaugurating the board, the minister urged the new board to ensure steadfastness of the service in meeting non-oil revenue targets to accelerate the nation’s development.

    Ahmed said the board was saddled with various responsibilities, including the supervision of the FIRS.

    The FIRS Executive Chairman, Mr Muhammad Nami, said the new board had dedicated itself to the task at hand as the nation was looking up to the service, to provide a leeway out of the present economic crunch.

    “As a tax administrator and custodian of the Nigerian tax system, we have the responsibility to the nation to implement all tax policies and laws in a manner that would ensure optimal benefits to the nation.”

    Nami said FIRS had a duty to strengthen, withstand and overcome the challenges that was ahead of it.

    He pledged to rebuild FIRS institutional framework, robust collaboration with stakeholders, build a customer taxpayer centric institution and data centric institution.

    He also said the board intended to achieve this through building staff capacity for service delivery and close all lien cases in order to build new enforcement strategies.

    Members of the board are Mr Muhammad Nami, the Executive Chairman of the FIRS, Mr James Ayuba (North-Central), and Mr Ado Danjuma (North-West).

    Others are Mr Adam Mohammed (North-East), Mr Ikeme Osakwe (South-East), Mr Adewale Ogunyomade (South-West) and Mr Ehile Aibangbee (South-South).

    Also inaugurated were members of boards of Ministries, Departments and Agencies (MDAs) of the Federal Government.

    They are Ladidi Mohammed, Attorney-General of the Federation Office and Mr Folashodun Shonubi, Central Bank of Nigeria (CBN).

    The membership also includes Hajiya Fatima Hayatu (Ministry of Finance), Mr Samuel Maagebe (Revenue Mobilisation Allocation and Fiscal Commission), and Mr Umar Ajiya (Nigerian National Petroleum Corporation).

    Others include DCG Mairo Isah of the Nigeria Customs Servic (NCS) and Mr Garba Abubakar, Registrar-General of the Corporate Affairs Commission (CAC)

  • Buhari nominates new CBN Deputy Governor

    Buhari nominates new CBN Deputy Governor

    President Muhammadu Buhari has sent the name of Dr Kingsley Isitua Obiora to the Senate for confirmation as Deputy Governor of the Central Bank of Nigeria.

    In a letter to President of the Senate, Ahmad Ibrahim Lawan, President Buhari said the nomination was in accordance with the provision of Section 8(1) (2) of the Central Bank of Nigeria (Establishment) Act 2007.

    Dr Obiora, upon confirmation by the Senate, replaces Dr Joseph Nnanna, who retires on February 2, 2020.

    Dr Obiora holds a Bachelor’s degree in Economics and Statistics from the University of Benin, a Masters in Economics from the University of Ibadan, and a Doctorate in Monetary and International Economics, also from the University of Ibadan.

    He is currently an Alternate Executive Director in the International Monetary Fund (IMF) In Washington DC, United States of America

  • Nigeria Secures fresh funds to Restore Ajaokuta Steel Plant

    A new set of funds amounting to N1.46 billion will come into the country for the reinstatement of the Ajaokuta Steel Plant, which has been laying fallow for over three decades.

    Minister of Mines and Steel Development, Mr Olamilekan Adegbite, confirmed this in Lagos on Tuesday. He noted that the funds will come from two sources, with $1 billion from the African Export-Import Bank (Afreximbank) and $460 million from the Russian Export Centre.

    Mr Adegbite disclosed that a Memorandum of Understanding (MOU) would be sealed by all parties in the agreement this month to guide the transactions.

    “Contract agreement with the Japanese government would also be signed and it would take about two or three years to execute it. “Ajaokuta Steel has been on since 1979. For us to industrialize, we need to have steel production in Nigeria.

    “We had done much in the past to start production at Ajaokuta. But somewhere along the line, we missed it and Ajaokuta was never completed,” the Minister said.

    He, however, pointed out that in line with President Muhammadu Buhari’s directive, the coming on board of the companies would help support the nation’s economy, including in the provision of employment, technology development, and conservation of foreign exchange.

    “President Muhammadu Buhari said we can resuscitate it without spending the revenue that we don’t have. So, we agreed with the Russian government and hopefully, by the end of this month, the MOU will be signed.

    “The funding will come from Afreximbank and of course the Russia Export Center. Jointly, they would fund the resuscitation of Ajaokuta and the payback will come from Ajaokuta itself.

    “On completion of work, the plant would be operated by Russian experts, based on terms to be stated in the MOU,” the Minister disclosed.

    Speaking on the many potential that the completion of the Ajaokuta Steel Plant would have on the economy, Mr Adegbite said it would make the country one of the best mining destinations in the world, bringing about more investments and the country would slowly move away from the dependence on oil as there was a wealth of gold, bartye, bitumen, and iron one.

    He added that there was a collaboration with the state governments in order to bring about rapid development of the sector, adding that local and foreign investors would have the needed assistance to establish their investments in the country.

  • List of Items Exempted from VAT in New Finance Bill

    On Monday, President Muhammadu Buhari signed the Finance Bill 2019 into law, approving the 50 percent in the value added tax (VAT) from 5 percent to 7.5 percent.

    On Tuesday, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, released a statement through her media aide, Mr Yunusa Tanko Abdullahi, listing some items exempted from VAT under the new law.

    She listed these commodities as basic food items (agro and aqua based staple foods) such as additives, cereals, cooking oils, culinary herbs, fish of all kinds (other than ornamented), flour and starch, fruits, live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, and water; locally manufactured sanitary towels, tuition (primary, secondary and tertiary education); and services rendered by microfinance banks.

    The Minister described the Finance Bill as a peoples bill “considering the expansion of VAT exemption list,” noting that “a large sum of money realised from the taxation would rather go to the people; the states and the Local Governments Areas (LGAs) are to get 50 percent and 35 percent respectively while only 15 percent will go to the federal government.”

    Mrs Ahmed also said the finance act has “taken care of essential palliatives to support MSMEs and mitigate the impact of the VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.”

    According to her, to make life better for small business owners, government introduced “a VAT registration threshold for MSMEs with a turnover of less than N25 million per annum; reducing the corporate tax rate for MSMEs from 30 percent to 20 percent for small firms (with turnover of between N25 million and N100 million per annum.); and exempting micro-firms (with turnover of less than N25 million per annum).”

    The Minister commended President Muhammadu Buhari for ensuring that “the strategic objectives in the finance bill recognise the crucial relationship between fiscal policy, the regulatory environment and the strong capital market we all seek to effect in Nigeria.”

  • CBN allays fears as foreign reserves dip to $38.3b

    Though the Central Bank of Nigeria (CBN) has said Nigerians should not panic over the gradual decline in the foreign reserves, observers have cautioned both the fiscal and monetary authorities not sleep with their eyes closed because it might spell doom for the country.

    This is because if the depletion of the reserves continues with the steady fall, the nation, which is Africa’s largest economy, may fall into another recession under the administration of President Muhammadu Buhari.

    During his first term in office as a civilian leader of the country, just after a year he was sworn into office in 2015, Nigeria went into an economic recession. However, a year later, 2017, Mr Buhari and his team led the nation out of the crisis.

    One of the main reasons for sliding into recession was a decline in the price of crude oil at the global market coupled with decline in the volume of the commodity produced.

    The period was when restive Niger-Delta youth were attacking oil facilities in the oil-rich region, making it difficult for Nigeria to meet its daily production, resulting into lesser revenue from the sale of crude oil, the country’s main source of foreign earnings.

    But when federal government held meetings with stakeholders from that part of the country, the attacks reduced and Nigeria started producing up to 1.7 million barrels per day, resulting into more money.

    In 2019, the average price of crude oil at the international market was around $59 per barrel, while the benchmark for the country’s budget was $55 per barrel. This year, the benchmark was put at $60 and the price has remained around $63 to $65.

    But despite the excess recorded from the sale of crude oil last year, the external reserves have been reducing, making some observers to raise concerns, urging the central bank to do something fast to prevent a devaluation of the Naira, which the present government does not support.

    Recall that the apex bank has been taking from the reserves to support the local currency, making it stable around N360 per Dollar at most of the various segments of the foreign exchange market.

    For example, at the beginning of a new week, the CBN regularly releases the sum of $210 million to the forex market, with wholesale sector normally getting $100 million, the Small and Medium Enterprises (SMEs) and the invisible segments receiving $55 million each. At the end of the week, it also injects over $200 million into the Retail Secondary Market Intervention Sales (SMIS).

    These interventions have contributed to the decline in the country’s reserves and the central bank has promised not to stop defending the Naira so as to avert currency speculations, which pushed the local currency exchange rate to over N500 to a Dollar over three years ago.

    According to data from CBN, Nigeria’s external reserves have dropped about $306.1 million since the beginning of this year to $38.3 billion as at Friday, January 10, 2020.

    In 2019 alone, the reserves depleted by $4.5 billion, depreciating to $38.6 billion at December 31 from $43.1 billion at January 2, 2019.

    In November 2019, the Governor of the CBN, Mr Godwin Emefiele, told some potential investors in London, United Kingdom, that the devaluation of Naira would only be possible if the nation’s external reserves go below $30 billion and the international price of crude oil drops to $45 per barrel.

    In 2017, President of Association of Bureau de Change Operators of Nigeria (ABCON), Mr Aminu Gwadabe, said Mr Emefiele assured his members that the bank had no intention to devalue the Naira.

    Meanwhile, Africa’s richest man, Mr Aliko Dangote, is already planning ahead of a possible devaluation of the Nigerian Naira by the CBN.

    He recently told Mr David Rubenstein of Bloomberg TV that in order not to be caught off guard, he was considering getting an office space in New York, United States of America, to protect the wealth of the family, expressing concerns that a devaluation of the currency may weaken his local investments.

    “In Africa, you know we have issues of devaluation, so we want to really preserve some of the family’s wealth,” Mr Dangote, 62, was quoted as saying on the David Rubenstein programme, noting that the office space in New York will help to diversify his business and avoid the risk of currency fluctuations on his home continent.

  • Buhari signs Finance Bill 2019, praises 9th Assembly

    Buhari signs Finance Bill 2019, praises 9th Assembly

    President Muhammadu Buhari has signed into Law the Finance Bill, 2019.

    President Buhari made the announcement via his Twitter handle @MBuhari on Monday.

    The President noted that the Bill was vital to the implementation of the 2020 Budget.

    The tweet read, “I am pleased to announce that this morning I signed into Law the Finance Bill, 2019.

    “We introduced the Bill alongside the 2020 Budget, to reform Nigeria’s tax laws to align with global best practices; support MSMEs in line with our Ease of Doing Business Reforms; -Incentivize investments in infrastructure and capital markets; and raise Government revenues.

    “This is the first time, since the return of democracy in 1999, that a Federal Budget is being accompanied by passage of a Finance Bill specially designed to support its implementation, and to create a truly enabling environment for business and investment by the private sector.

    “I thank the leadership and members of the Ninth National Assembly for the hard work and support that have gone into the passage of the landmark Deep Offshore and Inland Basin PSC Amendment Bill, and the Finance Bill; both vital to the successful implementation of the 2020 Budget.”

  • Market capitalisation gains N2.22 trillion in seven days

    The market capitalisation of the Nigerian Stock Exchange (NSE) rose N2.22 trillion or 17.10 percent in seven trading sessions with the market maintaining an upward trend since the beginning of 2020.

    Data obtained on Sunday showed that the market capitalisation, which opened on Jan. 2 at N12.958 trillion rose by N2.22 trillion to close at N15.174 trillion on Jan. 10.

    Also, the All-Share Index rose by 2,573.32 points or 9.59 percent during the period to close at 29,415.39, compared with the opening year index of 26,842.07.

    The nation’s bourse posted 9.1 percent gain last week, the largest weekly return for two-years, to emerge the world’s best-performing stock market for the week, NAN reports.

    Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd, attributed the growth to activities of investors who anticipate higher dividend yields.

    “Local institutional investors and funds managers are taking advantage of the two consecutive years of decline to reposition their portfolios for the New Year expectations,” Omordion said.

    He stated that investors were optimistic that the current economic recovery would likely to continue, thereby resulting in enhanced dividend yields higher than the prevailing money market rates.

    Omordion added that the listing of BUA Cement of 33.86 billion ordinary shares at N35 per share contributed to the growth of the stock market.

    He noted that rise in oil price in the global market due to the conflict between the United States of America and Iran contributed to the stock market trend.

    Omordion, however, said investors should not be carried away but set investment goal or target before jumping in any position whether for long or short term.

    Mr Moses Igbrude, President, Issuers and Investors Alternative Dispute Resolution Initiative, attributed the steady upward movement in the equities market to stability in political arena.

    Igbrude said the instability in the Middle East as a result of conflict between Iran and American increased foreign investors’ interest in the NSE.

    However, analysts at Cordros Researcher, expect profit taking to dominate activities in the market this week.

    “Looking ahead, while we expect profit-takers to dominate activities in the coming week, we still see significant legroom for a further rally as the elevated maturities from fixed income instruments hunt for investment vehicles.

    “Nonetheless, we advise investors to cherry-pick fundamentally sound stocks,” they said.

  • NAICOM extends licence renewals

    The National Insurance Commission (NAICOM) has approved the renewal of the licences of insurance brokers and loss adjusters to hold every two years as against one year.

    The Director, Policy and Regulation Directorate, NAICOM who spoke in Kano, said the two-year renewal process will commence from April this year.

    He added that the commission, last week released the guideline for the implementation of the initiative.

    Meanwhile, the Acting Commissioner for Insurance, Sunday Thomas, said, the second phase of the Market Development and Restructuring Initiative” (MDRI) will soon be unveiled and that the regulatory body will mark out clear targets and tasks for all stakeholders in the insurance industry.

    He said: “Going forward, we shall vigorously pursue the continued implementation of Compulsory Insurances in every nook and crannies of the Country. We are certainly not unaware of the challenges inhibiting the successful implementation of these classes of insurance thus far hence, our resolve to work with relevant stakeholders to ensure a seamless drive.

    “The successful implementation of compulsory classes of insurance across the nation will ensure adequate protection of strategic national assets. The commission will be working with the relevant security agencies to guarantee effective and efficient monitoring of compliance.”

    On the ongoing recapitalisation exercise, he said the essence of the initiative was to ensure that insurance industry becomes more robust in its technical competence and financial base, building confidence, trust and enhancing market value.

    This, he stressed, is aimed at repositioning the sector for self-actualisation in terms of growth and development.

    He said: “The financial inclusion strategy has been central to the Federal Government developmental plan an the commission, has, over the years, invested hugely in the development of financial inclusion mechanisms which includes the introduction of Microinsurance and Takaful Insurance products. The Commission shall continue to deploy more energy and resources in building public trust and confidence in insurance despite years of poor perception, he promised.

    “Also,  Annuity business has been making headlines recently with a boost in the contribution of the business to the sector. We are excited that the public is becoming more exposed and knowledgeable about the workings of Annuity, expecting that this will continue as the future is looking very bright for annuity business. This has also shown a positive growth in trust and confidence in the insurance sector.”

  • FG appoints new Registrar-General for CAC

    FG appoints new Registrar-General for CAC

    The Federal Government on Thursday appointed Alhaji Garba Abubakar as the Registrar-General of the Corporate Affairs Commission (CAC).

    Mr Moses Adaguusu, Head, Public Affairs of the commission, made this known in a statement in Abuja.

    Adaguusu said Abubakar’s appointment was conveyed to CAC through the Ministry of Industry, Trade and Investment.

    He said that the new registrar-general has resumed duty.

    Abubakar joined CAC in April 2004 as a Principal Manager Compliance and became a director in January 2016.

    Between August 2017 and October 2017, Abubakar was the Special Adviser to the former Registrar-General.

    Prior to joining CAC, he worked with the Nigeria Social Insurance Trust Fund, formerly National Provident Fund, as Compliance Officer between 1991 and 1993.

    Abubakar worked at NICON Insurance between June 1995 and December 1997.

    He is a member Governing Council of the Nigerian Bar Association on Business Law from March 2017 till date.

    He is a member of Inter-Agency Committee Against Money Laundering and Terrorists Financing from 2007 till date and CAC focal on Open Government Partnership.

    Abubakar is also a member, in-house committee on the review of the Companies and Allied Matters Matters Act (CAMA), among others.

    He is married, hails from Bauchi State, born on Oct. 7, 1966.

    Abubakar is a graduate of Law from the Ahmadu Bello University, Zaria and was called to the Nigeria Bar in 1989.

    The Code of Conduct Tribunal had on Dec. 24, ordered the suspension of the Acting Registrar-General of the commission, Ms Azuka Azinge, for allegedly not declaring her assets.

    On Dec. 31, the Federal Government appointed Hajiya Saratu Shafii as the Acting Registrar-General of the Commission.

  • World Bank predicts Nigeria, others economic outlook for 2020

    Nigeria’s economy will  grow by 2.1 per cent for three consecutive years covering 2020, 2021 and 2023, the World Bank has predicted.

    The report which also showed that Kenya would record six per cent growth during the same period; puts global economic growth at 2.5 per cent.

    The predictions are contained in World Bank’s January 2020 Global Economic Prospects released on Wednesday.

    The report, however, described the country’s macroeconomic framework as not “conducive to confidence.”

    According to the Bretton Woods Institution,  the macroeconomic framework is characterised by multiple exchange rates, foreign exchange restrictions and persistent inflation.

    For sub-Saharan Africa, regional growth is expected to peak at 2.9 per cent in 2020, assuming investor confidence improves in some large economies, energy bottlenecks ease, a pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters.

    The forecast is weaker than previously expected reflecting softer demand from key trading partners, lower commodity prices, and adverse domestic developments in several countries.

    The bank pegged global economic growth at 2.5 per cent in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist.

    It said growth among advanced economies as a group is anticipated to slip to 1.4 per cent in 2020 in part due to continued softness in manufacturing while growth in emerging markets and developing economies is expected to accelerate this year to 4.1 per cent.

    World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu, advised  that with growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction.

    ”Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth,” Pazarbasioglu said.

    World Bank Prospects Group Director Ayhan Kose, said low global interest rates provide only a precarious protection against financial crises,”

    “The history of past waves of debt accumulation shows that these waves tend to have unhappy endings. In a fragile global environment, policy improvements are critical to minimize the risks associated with the current debt wave,” Kose added.

    According to the report, in South Africa, growth is expected to pick up to 0.9 per cent, assuming the new administration’s reform agenda gathers pace, policy uncertainty wanes, and investment gradually recovers.

    Growth in Angola is anticipated to accelerate to 1.5 per cent, assuming that ongoing reforms provide greater macroeconomic stability, improve the business environment, and bolster private investment.

    In the West African Economic and Monetary Union, growth is expected to hold steady at 6.4 per cent.

    In Kenya, growth is seen edging up to six per cent.

    The report said economic recovery in Sub-Saharan Africa lost momentum, with growth in 2019 estimated to have moderated to 2.4 per cent. Intensifying global headwinds such as decelerating activity in major trading partners, elevated policy uncertainty, and falling commodity prices, have been compounded by domestic fragilities in several countries.

    “In Angola, Nigeria, and South Africa — the three largest economies in the region — growth was subdued in 2019, remaining well below historical averages and contracting for a fifth consecutive year on a per capita basis,” it said.

    Regional growth is expected to pick up to 2.9 per cent in 2020, assuming investor confidence improves in some large economies, energy bottlenecks ease, a pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters.

    In the West African Economic and Monetary Union, growth is expected to hold steady at 6.4 per cent.

    Among the region’s exporters of agricultural commodities, sustained strong public infrastructure spending, combined with increased private sector activity in Madagascar, Rwanda, Uganda, or continued reforms to raise the productivity and competitiveness of export-oriented sectors, such as in Burkina Faso and Côte d’Ivoire, will continue to support output. In Kenya, growth is seen edging up to six per cent.

    The World Bank said a sharper-than-expected deceleration in major trading partners such as China, the Euro Area, or the United States, would substantially lower export revenues and investment. A faster-than-expected slowdown in China would cause a sharp fall in commodity prices and, given Sub-Saharan Africa’s heavy reliance on extractive sectors for export and fiscal revenues, weigh heavily on regional activity.

    A broad-based rise in government debt has led to sharp increases in interest burdens, crowding out non- interest expenditure and raising concerns about debt sustainability. Insecurity, conflicts, and insurgencies— particularly in the Sahel—would weigh on economic activity and food security in several economies.

    Also, extreme weather events are becoming more frequent as climate changes, posing a significant downside risk to activity due to the disproportionate role played by agriculture in many economies in the region.