The Nation Newspaper

Author: The Nation

  • NLC cautions against electricity tariffs hike

    NLC cautions against electricity tariffs hike

    Organised Labour yesterday cautioned the Federal Government  against planned hike in electricity tariffs, saying it will increase the burden on Nigerians.

    Nigeria Labour Congress (NLC) said with the removal of petrol subsidy and the unification of Naira exchange rates, many Nigerians are reeling under financial pressure.

    An official of the Nigeria Electricity Regulatory Commission (NERC) confirmed that a review of Multi- Year Tariff Order (MYTO) is ongoing and will be implemented from July 1.

    The senior official from the NERC said: “The commission is mandated to review the tariff twice in a year. It is statutory. Until the outcome, which one cannot presume, I cannot say it will be an upward or downward review as it could go either way,” she said.

    The major determinants of the review are mostly inflation rate, Naira/Dollar exchange rate, and the price of gas.

    NLC President Joe Ajaero in a statement said: “The plan to increase electricity tariff by 40 per cent  by July 1st is both insensitive and callous and reflects an organised indifference to the well-being of consumers, especially, the poor ones.

    “The massive increase is explained away as a response to the over 100 per cent increase in the pump price of premium motor spirit (pms).

    “Details reveal a movement in inflation from 16.9% to 22.41 (threatening to needle 30), and a shift in exchange rate from N441 to N750.

    “We believe not even these figures are a justification for this reckless proposed tariff increase.

    “The issue of capacity to pay and quality of service delivery are not only germane but superior to any rationalisation by market logic.

    “The service providers in spite of sundry support have not been able to meet the threshold of 5000 megawatts.

    “Coupled with this, there have been surreptitious increases without notice in violation of statutes.

    “The inherent risk in the new regime of tariff is that there is no control, implying that by August, consumers will pay new rates.

    “The other risk is that by the time other product or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust.

    “We would want to advise apostles of the market who have called NLC all sorts of names to check their conscience.

    “The rate at which they are going is highly combative and combustible. With contemplation of payment of school fees in tertiary institutions and increases in privately-owned ones in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian.

    “The market economies which the market fundamentalists seek to emulate, have in place socio-economic safeguards which we do not have.

    “In light of this, our advice is that this proposed tariff hike should be shelved for our collective safety.”

  • LP/Obi’s witnesses contradict each other at election tribunal

    LP/Obi’s witnesses contradict each other at election tribunal

    Two witnesses of the Labour Party (LP) and Peter Obi contradicted themselves yesterday on the conditions to be met by the Independent National Electoral Commission (INEC) before deploying technology.

    A cyber security expert, Dr. Chibuike Ugwuoke, said it was a statutory requirement under the National Information Technology Development Agency (NITDA) Act that technologies to be deployed by INEC must meet the ISO 27001 2013 standard.

    He added that INEC must first obtain authorisation from NITDA to deploy such technologies.

    But, the Head of the Legal Services Department at NITDA, Emmanuel Edet, said such requirements do not exist under the NITDA Act.

    “The NITDA Act does not contain any cyber security standard code – ISO 27001 2013,” Edet told the tribunal.

     Ugwuoke and Edet were subpoenaed by Obi and the LP to testify before the Presidential Election Petition Court (PEPC).

    Ugwuoke, who said he was engaged by the petitioners to investigate information on INEC Results Viewing (IREV) portal, had tendered his report on Wednesday, in which he claimed to have discovered multiple uploads and strange objects instead of results.

    Under cross-examination yesterday by INEC’s lawyer Abubakar Mahmoud (SAN), he insisted on his claim that ISO 27001 2013 was a statutory minimum standard requirement for any organisation intending to deploy technologies.

    Although Ugwuoke claimed not to know the Section, he said what he wrote in his statement was copied from the Act.

    Ugwuoke said the petitioners recruited him on March 10; that produced a preliminary report on March 17/18 and the final report in mid-May.

    Edet, while being led by petitioners’ lawyer, Patrick Ikwueto (SAN), said his agency did not have documents requested by Obi and the LP, concerning the permission granted to INEC to deploy technologies for election and the status of the technologies.

    He said the NITDA Act did not contain any requirements about ISO 27001 2013 on cyber security.

    The witness also said no provision in their Act makes reference to INEC.

    Edet confirmed that the claim by the former Communication and Digital Economy Minister Isa Pantami that there were about 16 million attempts to hack INEC IT infrastructure during the last presidential election emanated from his agency (NITDA).

    Earlier, Hitler Uwala, an expert witness called by the Peoples Democratic Party (PDP) and its presidential candidate, Atiku Abubakar, admitted there were errors in the forensic report he produced for Atiku and his party.

    Testifying as the 26th petitioners’ witness, he played down the errors by describing them as “title errors.”

    Under cross-examination by the lawyer of President Bola Tinubu, Chief Wole Olanipekun (SAN), Uwala admitted discrepancies in his report about the actual number of the Bimodal Voter Accreditation System (BVAS) machines he examined.

    The hearing continues at 9am.

  • Hyde Energy inaugurates LPG facility

    Hyde Energy inaugurates LPG facility

    An indigenous energy trading company, Hyde Energy Limited, has inaugurated a new Liquefied Petroleum Gas (LPG) facility in Makurdi, the Benue State capital.

    The facility, with a capacity of 40MT, is expected to create jobs and boost the economy of the state, is located at the Nigerian Air Force (NAF) Base in Makurdi, and will provide the NAF and its environs with a reliable and sustainable source of energy. Besides, it is believed that it will significantly offer environmental benefits and support Nigeria’s Decade of Gas policy.

    The Chief Executive, Hyde Energy, Oladimeji Edwards, said: “We are proud to partner the Nigerian Air Force to bring this important project to completion. This facility is a symbol of our commitment to a more secure and sustainable future. We are bringing tangible benefits to domestic and business LPG users, the  economy, and the environment. From developing storage terminals to establishing LPG hubs across Nigeria, our strategy focuses on delivering LPG to homes and other end users safely and efficiently.”

    The Managing Director, NAFIL, Air Vice Marshal Al Adamu, noted that the rationale behind the project was to ease the problem of unavailability of cooking gas for the residents of the base.

    He noted the significance of the facility, saying: “This is a good project for the Nigerian Air Force Makurdi and for the community, and I am glad to witness the commissioning of the NAFIL-Hyde Energy LPG facility.

    “We are confident that the LPG facility will be a valuable asset to the Nigerian Air Force community and it will help enhance cleaner environment,” he said.

  • Repositioning power sector for greater efficiency

    Repositioning power sector for greater efficiency

    The reforms in the electricity sector are yielding positive results. Many believe that a stable power sector will guarantee sustainable growth and development. A research report has also indicated that right policies will enable Nigeria to consolidate on the gains. MUYIWA LUCAS reports.

    Going by the strategic position it holds in the country’s development, submissions by the Manufacturers Association of Nigeria (MAN) cannot be taken for granted.The association reported that insufficient electricity supply had impacted manufacturers’ profitability with a yearly loss valued at N10.1 trillion or two per cent share of Nigeria’s Gross Domestic Product (GDP).

      The MAN complained that the unfavourable situation in the sector has placed the country among the worst countries to do business with a rank of 171 out of 190.

    MAN’s position has been further accentuated by the World Bank, which in a report labelled Nigeria as the country with the world’s largest energy access deficit in 2021, with 43 per cent, representing 85 million  of the country’s population without access to grid-connected electricity.

    In addition, the country’s electric power consumption per capita of 145KwH  falls behind those of some countries like South Africa with 4,198 KwH  and Ghana with 351KwH , as well as the average for lower middle-income countries with 811KwH.

    However, hope is on the horizon for better efficiency in the sector, following the signing of the Electricity Act 2023 by President Bola Tinubu, with the real sector operators’ association backing ongoing electricity industry reforms of the present administration.

    It was, therefore, instructive when the MAN’s Director-General (DG), Segun Ajayi-Kadir, assessing the possible impact of the Electricity Act 2023 signed by Tinubu, said the Act if well-implemented, promises to be a major game-changer for the manufacturing sector as it would address the numerous constraints within the sector.

    A research report may have further raised the hopes of Nigerians of better says ahead for electricity supply. The report, conducted by Agusto & Co- a Pan-African Credit Rating Agency and a leading provider of industry research and knowledge in the country and Sub-Saharan Africa, noted that as at last December 3, the generating segment of the electricity market comprised 29 plants with a combined installed capacity of 13,014 megawatts (MW) and an average operational capacity of 4,523MW, a decline from  6,371.9MW, that is 29 per cent in 2019.

    It further noted that as at last year, there were 12 Independent Power Plants (IPPs) in the country, accounting for 31.2 per cent of the country’s total power generating capacity, which is also a 300 basis points decline from 2021, caused largely by gas constraints and faulty machinery.

    For Clarity, Agusto & Co. in the report, observed that on the average and due largely to gas constraints, only five IPPs: Azura-Edo accounted for 26 per cent; Odukpani, 19 per cent; Okpai, 16 per cent; Afam VI, 15 percent and Rivers IPP, eight per cent, accounted for circa 84 per cent of power generated from the 12 IPPs in the last four years.

    According to Ajayi-Kadir, the Electricity Act 2023 has favourable implications for the manufacturing sector as it will help reduce cost of alternative energy, competitive and lower electricity tariff, improvement in inflow of Foreign Direct Investment (FDI) and manufacturing performance.

    He noted further that it will help increase in Internally Generated Revenue (IGR), improve infrastructure and less tax burden on manufacturers, more investment in renewables, backward integration and energy security, and stable power supply and proper planning.

    The MAN chief recalled that over the past decades, the sector has encountered much turbulence in its electricity value chain due to poor policy enforcement, over-regulation, instability of gas supply and bottlenecks in its transmission network.

    “These problems have culminated into erratic electricity supply, frequent power outages and persistent collapses of national grid. For many years, the situation has stunted the growth of the economy,” he said.

    The Augusto & Co report may have tallied with Ajayi-Kadir’s position. It explained that the entire Nigerian Electricity Supply Industry’s (NESI) value chain is fraught with structural impediments, which have continued to impede optimal performance, with operators consistently ‘passing the buck’ even in the post-privatisation era of the sctor.

    The researchers further said the weakest link in the NESI value chain is the Transmission Company of Nigeria (TCN), which is still entirely government-owned. The national grid, with its frequent collapses last year, has a wheeling capacity of circa 8,100MW, a figure that pales in comparison to the nation’s peak electricity demand of 19,798 MW. The implication of this, it said, is that even with an increase in the generating capacity of the grid-connected IPPs, the TCN is unable to evacuate more than 8,100MW.

    “This is a critical bottleneck in the supply of electricity and has stalled investment in power generation. On the other hand, the TCN continues to blame load rejection by distribution companies, particularly during the rainy season, for the high frequency of grid collapses,” the report said.

    Nonetheless, it further said, it is anticipated that the current Nigerian Electricity Grid Maintenance Expansion and Rehabilitation Programme (NEGMERP), which aims to expand the country’s grid network through the diligent execution of network expansion projects funded by the Federal Government and donors, will result in some growth in NESI in the short term. This is in addition to the Presidential Power Initiative signed with Siemens AG, which is expected to result in an additional 25,000MW of operational capacity from the national grid.

    “The completion of such projects will assure prospective power generation companies that the TCN has ample capacity to receive generated electricity. With a more efficient TCN, Nigeria can achieve self-sufficiency in power supply, making electricity exports easier through the West African Power Pool’s (WAPP) future Regional Electricity Market (REM),” Augusto & Co submitted in the report.

    Legislation to the Rescue

    According to the researchers, the recent assented to the Fifth Alteration Act No. 33, 2022 (the “Electricity Constitutional Amendment”), which allows Nigeria’s 36 states to generate, transmit, and distribute electricity in areas covered by the national grid, has significant implications for the country’s struggling power sector.

    The amendment is believed could lead to increased investment in power generation and distribution infrastructure, as well as increased competition among power providers. By devolving power to the states, Agusto & Co. said, the Act could also lead to more efficient and effective management of the power sector, as states will have greater control over their power supply. This, they contended, could lead to more targeted investment in power infrastructure and more responsive management of power supply and demand.

    However, the report warns that the Act also raises concerns about the potential for fragmentation of the power sector, as different States may have different priorities and approaches to power generation and distribution, leading some, to possibly bypass the national grid entirely. Furthermore, it said States deemed to lack a sufficient economic base may be unable to attract investors in their electricity generation, transmission, or distribution, causing them to fall behind other states in terms of electricity supply.This, it further warned, could constrain the business environments in these states, thereby eroding investor confidence, discouraging investment, and limiting growth and development.

    Outlook

    The research report hinted that the NESI is currently in the second stage – the Transitional Electricity Market (TEM) – on its evolutionary path, where the state-owned special purpose vehicle (the Nigerian Bulk Electricity Trading Plc – ‘NBET’) buys electricity in bulk from the generating companies and IPPs and resells to the distribution companies (DisCos) under vesting contracts.

    “As it transitions to the medium-term market, we expect more IPPs to become operational, which will significantly raise the industry’s generation capacity over the medium term,” Augsto & Co submitted.

  • Turkey, UK hike interest rates

    Turkey, UK hike interest rates

    • Raises minimum wage by 34 per cent

    Turkey’s central bank delivered a large interest rate hike Thursday, signaling a shift toward more conventional economic policies to counter sky-high inflation.

    The bank raised its key rate by 6.5 percentage points, boosting it to 15 per cent  The increase – a jump from the current 8.5 per cent  – is the first since March 2021 but is lower than market expectations.

    It came at the bank’s closely watched first interest rate-setting meeting since Erdogan appointed two internationally respected officials to lead the bank and the finance ministry.

    The rate hike is an indication that the country is moving away from Erdogan’s unorthodox belief that lowering interest rates fights inflation.

    Also, Turkey increased the monthly minimum wage  by 34 per cent effective July 1,  bringing it to a net 11,402 lira ($483) for the second half of the year in an effort to address soaring inflation.

    “The minimum wage assessment commission completed its work with an agreement between the workers and employers,” Labour Minister Vedat Isikhan said in announcing the decision.

    A statement from the bank’s Monetary Policy Committee said it had decided to begin “the monetary tightening process in order to establish the disinflation course as soon as possible.”

    “Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved,” it said.

    Hamish Kinnear, senior analyst at the risk intelligence company Verisk Maplecroft, said increase from 8.5 per cent  to 15 percent  “marks a return to more orthodox monetary policymaking.”

    But it was lower than market expectations of an increase of 17 percent  to 20 percent , he said.

    “This is a sign that the new governor is looking to tread carefully to avoid a clash with President Erdogan,” Kinnear said in a note.

    Under pressure from Erdogan, the central bank had cut its key interest rate from around 19 percent  in 2021 to 8.5 percent  earlier this year, despite soaring inflation that hit an eye-watering 85 percent  last year.

    Inflation has eased to 39.5 percent  last month, according to official figures, but independent research group ENAG says the true rate is 109 percent .

    Economists say Erdogan’s unconventional belief has exacerbated economic turmoil, leading to currency and cost-of-living crises that have brought hardship to many households struggling to afford food, housing and other necessities. Erdogan says his economic model prioritizes growth, exports and employment.

    Experts also say the central bank has depleted its foreign currency reserves as it tried to prop up the Turkish lira ahead of elections last month. The currency has lost around 21 percent  of its value against the dollar since the start of the year.

    On Thursday, the lira weakened by  three percent against the dollar due to the lower-than-expected rate hike.

    Erdogan, who won a third term in a runoff election May 28, reappointed Mehmet Simsek to the helm of the economy. The former Merrill Lynch banker had previously served as Erdogan’s finance minister and as a deputy prime minister until 2018.

    Simsek said soon after his appointment that Turkey had no other option but to return to a “rational ground.”

    In another sign of a move toward more pragmatic policies, Erdogan appointed Hafize Gaye Erkan this month as Turkey’s first female central bank governor. A former co-chief executive of the now-failed San Francisco-based First Republic Bank, Erkan replaced Sahap Kavcioglu, who oversaw a series of rate cuts.

    “For now, Erdogan is happy to cede economic policymaking power to Governor Erkan and the new finance minister, Mehmet Simsek, so that Turkey can draw in much-needed foreign investment,” said Kinnear, the analyst.

    “But if the likely impacts of orthodox policies, such as slowing economic growth from interest rate hikes, appear to threaten the president’s popularity, he could perform a volte-face and fire the new central bank governor,” Kinnear said.

    Erdogan had fired three central bank governors who resisted pressure to cut interest rates before appointing Kavcioglu in 2021. Naci Agbal, who proceeded Kavcioglu, was removed from his post days after he raised rates.

    Can Selcuki, director of the Turkiye Raporu polling agency and a former World Bank economist for Turkey, also said questions remain about whether the new officials would be able to “stick to their preferred policy” as the country heads to local elections in March.

    “What needs to be done right now is some form of tightening, and that is an undesired process for any incumbent before elections,” he said.

    On Tuesday, Turkey increased the minimum wage by 34 per cent, a move that critics say is designed to ease the impact of inflation on households in the runup to next year’s vote.

    Inflation is well above the official five per cent  target and touched a 24-year peak of 85.5 per cent  in October, prompting Ankara to raise the minimum wage by 100 percent  over the course of last year.

    Annual inflation dipped to 39.6 percent  in May as the government provided natural gas free of charge, offsetting price rises in other goods.

    The cost-of-living crisis was largely brought on by an unorthodox policy of slashing interest rates despite rising prices, which stoked a late-2021 currency crisis. The lira has shed another 21 percent  so far this year, mostly after May elections.

    However, re-elected President Tayyip Erdogan has signalled he is ready to pivot to rate hikes after appointing Mehmet Simsek as finance minister and Hafize Gaye Erkan as central bank governor.

    The central bank is holding its policy-setting meeting on Thursday and is expected to start ramping up its rate from 8.5 percent  currently.

  • With Lucky Number game, Glo subscribers can win up to N100m

    With Lucky Number game, Glo subscribers can win up to N100m

    Total telecommunications solutions provider, Globacom, has introduced a daily draw game, Lucky Number, through which it is offering amazing cash prizes and airtime to active Glo subscribers.

    The company described Lucky Number as an entertainment platform put in place to bring more excitement to millions of Nigerians on the Glo network.

    The Lucky Number draw game, according to Globacom, automatically enters subscribers’ numbers to serially match a randomly selected Glo number from the pool of Glo’s active subscriber base. The winning number, it stated, must be matched in the right sequence, from right to left, adding that “the size of the prizes is dependent on the number of digits from the released Glo number”.

    According to the company, “Subscribers whose number sequentially matches (from right to left) a randomly selected Glo number (Winning Number)) from the pool of millions of active subscribers are declared winners for that day”.

     “Subscribers will be charged N50 for daily, N200 for weekly and 500 for monthly subscriptions and they will receive an SMS confirming subscription to the service and entry to the draw after a successful billing for the price point selected”, Globacom explained, while winners will be rewarded with either cash or airtime.

    The prizes vary based on price points and the total number matched from the winning Glo number.

     “The 50 price point attracts between N700 (Airtime) and N100,000,000 daily prize, while N200 price point subscribers can win from N200 (Airtime) to N50,000,000 weekly. Also, prizes ranging between N300 (Airtime) and 10,000,000 will be won monthly under the N500 price point”, Globacom noted.

    All active customers can subscribe to Lucky Number by dialing the USSD *4445# and following the instructions or by texting WIN or WINOT (for daily subscription), LW or LWOT (for Weekly subscription) and LM or LMOT (for Monthly subscription) to the short code 4445.

    Those who have already subscribed to the plan can view draw results by dialling *4445# and choosing option 5 or to visit https://gloluckynumber.com.

  • CBN urges tertiary institutions to embrace e-Naira

    CBN urges tertiary institutions to embrace e-Naira

    The Central Bank of Nigeria (CBN) has admonished students and management of tertiary institutions in the country to adopt e-Naira for payment of tuition fee, salary and other transaction.

    The Assistant Director, CBN Ekiti State branch, Mr. Ayodeji Adeboboye gave the advice during a sensitization programme on the e-Naira wallet at the Bamidele Olumilua University of Education, Science and Technology, Ikere-Ekiti.

    He said the advocacy was organized to sensitise the students and other stakeholders on the benefits and importance of e-Naira transactions and why they should embrace the channel.

    Adeboboye said e-Naira remains a viable alternative payment platform to physical cash transaction and should be utilized by all Nigerians for hitch-free and cost- effective transaction.

    He explained every financial transaction like payment of school fees by students, payment of staff salaries and buying and selling within the school community can be done seamlessly through the e-Naira wallet.

    The apex bank boss noted that the time has come for all Nigerians to key into the e-Naira wallet because of its numerous advantages, added that other countries have gone beyond cash payment and are now using electronic payment.

    The CBN e-Naira Consultant, Izechukwu explained the need for Nigerians to key into the CBN cashless policy, saying that Nigeria cannot afford to be left behind in the dynamic global financial ecosystem.

    He said that the e-naira offered financial inclusion and help tackle corruption and money laundering as well as improve the efficiency of the financial system.

    He, however, encouraged the university community and other stakeholders to embrace the alternative platform as it is cost effective, safe, secure, user-friendly and effective.

    In her remarks, BOUESTI Deputy Vice Chancellor, Dr. Veronica Makinde lauded the CBN for the initiative and assured of the institution’s support in promoting the use of e-Naira.

    She said that the institutions would key into the e-Naira initiative as it would help reduce bottlenecks usually experienced by students in the remittance of tuition and other sundry fees.

  • IATA clarifies int’l airfares in Nigeria

    IATA clarifies int’l airfares in Nigeria

    The global trade association of airlines : International Air Transport Association (IATA), yesterday offered clarifications on the effect of fluctuating exchange rate on  international flight tickets sold in Nigeria.

    The global body said air fares  are not determined by it , but  denimonated in the US dollar and  converted into the local currency, for sale in the Nigerian market. 

     These conversions, IATA said,   use the official prevailing exchange rate provided by the country’s financial system.

    In a statement, the body said : ” IATA simply applies the spot rate at which the Central Bank of Nigeria sells USD through banks to the market, at its fortnightly retail foreign exchange auctions.

    It must be noted however, that with the recent forex liberalisation, the auctions have given way to daily market determined rates. 

    Meanwhile, air fares on the Lagos / London route have risen astronomically .Checks by The Nation on a booking inventory by a travel management company revealed that a return trip on the average, is over N1.3 million for Qatar Airways, and Royal Dutch KLM Airlines. Royal Air Maroc and Turkish Airlines are going for N1.4 million , whereas  German Lufthansa Airlines is charging N1.5 million on the  same Lagos/ London route.

  • Naira weakens to N765/$ despite $204m turnover

    Naira weakens to N765/$ despite $204m turnover

    • N980/BP

    The naira yesterday weakened to N765/$ at the Investors’ and Exporters’ (I&E) window- the official market.

    The depreciation of the local currency from N763/$ on Wednesday to N765/$ happened despite $204 million transaction turnover at the window defined by ”willing buyer-willing seller” model.

    Thursday’s transaction volume was an improvement from below $90 million turnover recorded at the window on Wednesday.

    Data from FMDQ Exchange showed that the market, which opened at N753.50/$  lost N2 at the end of the transaction circle for the day.

    The naira also weakened against the British Pound Sterling (GBP) to N980/GBP at the close of business on Thursday.

    The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.

    This forex window is also the underlying market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark.

    The rate at the I&E window  has come to represent the official rate for the naira after the  Central Bank of Nigeria (CBN) abolished multiple exchange rates in the economy.

    The unification of multiple exchange rates into the I&E window has been described by stakeholders as a game changer in the apex bank’s plan to achieve exchange rate stability. 

    The policy, which allowed forex dealers and investors to buy and sell dollars at exchange rate of their choice provided they can find buyers. This move aims to ensure that the naira is allowed to trade at the market-clearing rate in the forex market.

    Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, said that with the I&E Window policy, government’s revenue would rise in naira terms resulting in a higher tax, revenue to Gross Domestic Product (GDP) ratio. It will also lead to possible reduction in budget deficit and some cost savings for government.

     “With the Nigerian naira now exchanging in the official forex market at market determined rates, a significant market distortion has been removed. Expectedly, impact on diaspora remittances would be marginal, the capital market will benefit as it is likely to appreciate further as foreign investors take position, there should be negligible impact on the general prices of goods and services as products already factored in parallel market rates to a large extent. Overall, this is a positive move,” he said.

    Continuing, he said  the government needs to manage the dynamics to restore confidence, adding that the backlog of forex demands needs to be addressed and the government should be ready to supply forex to stabilise the exchange rate in the short term.

    Oyedele added: “Government also needs to relax capital control and administrative bottlenecks including unbanning the list of items prohibited for forex (and complement with higher import duties), remove the need for certificate of capital importation among others to prevent the parallel market rate from simply moving further away from the official market rate. Stop the demand for certain taxes and levies in foreign currency, it creates unnecessary forex demand without adding to supply”.

     “The aggregate demand for forex across markets should reduce as the round-tripping incentive is removed, for instance people who fake foreign travels just to get forex at discounted rates. Also, Nigeria’s sovereign credit rating should improve if this is complemented with the right fiscal and monetary policies thereby attracting more forex inflows and lowering the cost of borrowing,” he stated.

    CEO of Moniepoint, Tosin Eniolorunda, said the CBN’s decision to float the naira is a clear step in the right direction for our economy, ensuring investor confidence continues to grow.

    “The decision is good for business, jobs and growth. It will help Nigeria’s brilliant entrepreneurs to do business globally and attract foreign investment. It will also help reduce inflation, leaving more money in people’s pockets,” he said.

  • FIRS, police move against multiple taxes

    FIRS, police move against multiple taxes

    The Federal Inland Revenue Service (FIRS) said it would partner with the police to stop illegal taxation in markets across the country.

    Executive Chairman, FIRS, Muhammad Nami, made this known when he met with the association of market traders, saying  the Service would collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets.

    Nami said: “One important area of our collaboration is the issue of providing adequate security in the markets. We are aware of the challenges that you have faced in the past with miscreants, self-imposed tax collection agents and touts.

    “I want to assure you that as part of this initiative, we will be collaborating with the relevant security agencies, particularly the Nigeria Police Force to tackle all forms of touting and illegal tax collection by miscreants and keep them away from your markets.”

    The FIRS will also be partnering with the Market Traders Association of Nigeria (MATAN) to collect Value Added Tax (VAT) from the markets and remit to the FIRS.

    A statement from the FIRS signed by Johannes Oluwatobi Wojuola, Special Assistant to the Executive Chairman, on Media and Communication, said “the partnership will see the FIRS collaborating with the association to deploy technology to enumerate traders for collecting and remitting VAT to the Service, consequently leading to an expansion of the tax net and increased revenue for the Federation”.

    The Association, Wojuola said has a membership of well over 40 million traders across the country’s 774 local governments, and 36 States plus the Federal Capital Territory and is considered to be the biggest player in Nigeria’s market space.

    Details of the FIRS’ partnership with MATAN was disclosed at a Stakeholders Engagement Programme on the VAT DIRECT Initiative (VDI) held in Lagos.

    Wojuola said the VAT DIRECT Initiative (VDI) is a programme designed to foster collaboration between the FIRS and the market place, especially the informal sector, in the collection and remittance of the Value Added Tax (VAT) using technology.

    Speaking during the Stakeholder Engagement, Mr. Muhammad Nami, Executive Chairman FIRS said the initiative was crucial to revenue generation and also to eliminating multiple taxation, especially from the informal sector.

    Nami who also serves as the Chairman of the Joint Tax Board (JTB) further stated that “the government is worried about the multiplicity of taxes, as a result, both the Service and JTB were working on various modalities of addressing this challenge”.

    The FIRS/MATAN partnership Nami said “has laid a very good foundation for the government to address the issue of multiple taxation and extortion by tax officials, tax agents and touts in the market place”.

    Mr. Nami further noted that the success of this collaboration would lead to increased revenue for the country, and in turn provide government the needed resources to fund infrastructure and other social amenities.

    The administration of VAT in the informal sector Nami lamented “is characterized mainly by a low level of compliance and a lack of awareness in terms of obligation and liability. It, therefore, becomes necessary to leverage the MATAN platform to positively change the status quo”.