Category: Money

By Collins Nweze

The tourism sector is expected to drive Africa’s economic growth following the African Continental Free Trade Agreement (AfCFTA) through its travel and hospitality sub-sectors.

This can be attributed to the contributions of the two sectors to the continent’s Gross Domestic Product (GDP), from 7.8 per cent in 2016; 8.1 per cent in 2017 to 8.5 per cent (about $194.2 billion) in 2018).

This growth made African region the second fastest growing tourism industry in the world, with a growth rate of 5.6 per cent in 2018.

In 2018, there were 67 million visitors to Africa on business and leisure. This showed a seven per cent increase from 63 million recorded in 2017 and a significant increase from 58 million in 2016.

This figure is expected to rise in astronomical proportions in the coming years when the AfCFTA becomes operational. There are 55 countries on the African continent with about 1.2 billion people, and with a combined GDP of $2.4 trillion, the expectation is that AfCTA would create the world’s largest free trade area. This will hopefully promote intra-African trade that currently stands at a paltry 16 per cent.

The free movement of people and goods within the continent will expectedly open up new vistas in the tourism industry, creating business opportunities for investors.

Read Also: Tourism, insecurity and Nigerian economy

A few years ago, PricewaterhouseCoopers (PwC) predicted that the hospitality sub-sector would be one of the key drivers of economic growth on the continent. The prediction was premised on the fact that an increase in both domestic and international travels would lead to an expansion of hotel chains on the continent, which would in turn reinforce the growth potential of the sub sector.

The PwC named five African countries where the hotel sector would experience growth, with significant increase in room revenue, namely, South Africa, Nigeria, Mauritius, Tanzania and Kenya.

The company expected Nigeria to be the fastest growing hotel market in Africa over a five year period ending 2022.

Indeed, the forecast is that Nigeria will become the fastest growing tourism market on the continent, with a projected 12 per cent compound annual increase. This forecast is predicated on Nigeria’s growing affluence, which would make consumer tourism a more important sector. Adventure tourism is becoming more popular and the growing interest in experiences is allowing the country to attract visitors interested in the local culture.

International hotel brands have recognised the potential of the African hospitality industry, which explains why some of them are currently embarking on expansion programmes on the continent. In 2017, the Hyatt hotel chain announced plans to double its presence in Africa by 2020. Marriot started an expansion programme that would increase its portfolio on the continent by 50 per cent, by 2023. It is the same year the Hilton group intends to double its presence in Africa, while Radisson will reach the same goal in Francophone countries on the continent by 2022.

Many African hotel brands are establishing strong footholds on the continent, though without the spread of their international counterparts. The spread has started, all the same. The big ones are predominantly South African-owned, like Tsogo Sun, under which are Southern Sun and Sun International, Protea, as well as Laico Hotels and Resorts.

The expected growth of the hospitality sub sector is going to impact on many other sectors in the value chain – the reason it is predicted to be an economic growth driver. Such sectors include agriculture, garment, civil, mechanical and electrical engineering; furniture, manufacturing, etc.

Hotels will rely on local farmers for sources of agricultural produce, including poultry, beef and fish, thereby creating jobs and enhancing those businesses, with the ultimate benefit of improving the quality of lives of people in those sectors. They will also rely on local manufacturers of agro-allied products like fruit juice, dairy, as well as alcoholic and non-alcoholic beverages.

Establishment of more hotels means a boost to the garment sector that provides the source for the supply of curtains, table clothes, bedsheets and staff uniforms. There will be something for interior decorators as well. The economic benefits for producers and suppliers in the entire chain are quite enormous.

Job creation is expected to receive a boost in the coming years, a direct fallout of the growth in the tourism industry. In 2018, the industry provided direct and indirect employment for about 24.3 million people in 2018, accounting for approximately 6.7 per cent of total employment on the continent.

The expected boom in the industry is one that will create a healthy competition, which would enable hotels to bring out their best in terms of service delivery.

This is an opportunity for highly skilled and specialized workers such as managers, chefs, waiters and porters – the category of workers that may also benefit from regular training by hotels intent on maintaining the highest standards. All these will contribute to improving the quality of service delivery.

The emerging scenario is one that holds high hopes for African hotel brands, though it will also task their ingenuity and resourcefulness in the face of stiff competition from international brands.

By Collins Nweze

Zenith Bank Plc has introduced a new product, Z-Woman,  focused on empowering female business owners.

Z-Woman account holders stand a chance of enjoying loans of up to N10 million at a single-digit interest rate, free digital skills training, and free exhibition stands at Zenith Bank events and many other benefits which will help them grow their businesses and increase sales.

Group Managing Director/ Chief Executive of Zenith Bank, Ebenezer Onyeagwu, said Z-Woman offers women the opportunity to enjoy a partnership with the Zenith Bank brand as the name Z-woman implies.

Read Also: Zenith Bank empowers SMEs

The Z-Woman account is designed to address the unique needs of women-owned businesses and offer them unmatched services that empower them to achieve more.

Zenith Bank is recognised as one of the most innovative financial institutions in Nigeria and was voted the most customer-focused bank in Nigeria for the Retail and SME segments in the 2018 KPMG Annual Banking Industry Customer Satisfaction Survey (BICSS). Most recently, the bank won the Best Bank in Retail Banking and the Bank of the Year at the 2019 BusinessDay Banks and Other Financial Institutions (BOFI) Awards and was ranked as the Best Digital Bank in Nigeria 2019 by Agusto & Co.

By Collins Nweze

The Managing Director/Chief Executive Officer of First Bank Nigeria Plc, Mr Adesola Kazeem Adeduntan, has pledged that the bank will support and partner Osun in Mining in order to create more employment opportunities and to help diversify the economy of the State.

Adeduntan made this known at a meeting between the First Bank of Nigeria team and the governor of the State of Osun, Mr Adegboyega Oyetola, at the Governor’s Office in Osogbo on Thursday.

He expressed the bank’s gratitude to the the Governor and the state for the conducive business environment the First Bank has enjoyed over the years. The CEO said one of the secrets of the bank’s strength is its policy of not being a financial institution that is just about profitability but one that helps the nation bake a bigger cake.

Read Also: First Bank drives economic devt with FirstGem, says CEO

“We have noticed the increased activities of Osun in mining, the awareness created during the Summit the state had last year and we are willing to help the government realize its goals in the sector. We promise to support and partner with Osun in Mining because that is one sector that will help create more employment opportunities and diversify the economy of the State “

Governor Adegboyega Oyetola in his response expressed his appreciation to First Bank for its readiness to partner with the state in Mining.

“I truly appreciate the support of First Bank of Nigeria over the years and today’s visit by the Managing Director of this reputable bank. It is also heartwarming that First Bank is ready to support Osun’s mining sector.

“I assure you that Osun is ready and determined to explore and move its mining sector from artisanal into the realm of corporate investment. Fortunately, we have received very encouraging response from within and outside Nigeria. The state is blessed with billion-dollar worth of mineral deposits and this administration is working round the clock the convert them into palpable and usable resources to improve both the economy of the State and the standard of living of the citizens. We have all the required documents to excite local international investors and we will work with them to realize our dream of an enviable mining sector in Osun.” Oyetola said.

By Collins Nweze

The Board of Directors of Fidelity Bank Plc has announced the appointment of Isa Inuwa as an Independent Non-Executive Director.

The bank has notified the Nigerian Stock Exchange (NSE) of the appointment, which has been approved by the Central Bank of Nigeria (CBN). The appointment took effect from January 22, 2020.

Inuwa joins the versatile Board of Fidelity Bank that is chaired by Ernest Ebi, a former Deputy Governor of the CBN, and comes with a wealth of multi-industry experience spanning over 35 years in the banking and oil and gas industries.

Read Also: Fidelity Bank presents prizes to promo winners

“We could not have made a better choice in Inuwa, given his pedigree and experience, a significant portion of which was in executive and strategic roles cov ering management, finance, strategy, corporate services, compliance, audit and Information Technology. We look forward to his contributions even as we remain focused on the pursuit of our strategic growth plans,” Ebi said.

Inuwa statutorily retired in June 2019 as Chief Operating Officer/Group Executive Director, Corporate Services at the Nigerian National Petroleum Corporation (NNPC), where he worked for over a decade.

While at NNPC he was seconded to Nigerian Liquefied and Natural Gas Limited (NLNG) in 2016 as Deputy Managing Director. As the Deputy Managing Director of NLNG, he served on the board of NLNG and NLNG subsidiaries including Bonny Gas Transport Limited (BGTL) and NLNG Ship Management Limited (NSML).

Inuwa was at various times a Member of the Governing Council of the Nigerian Content Development and Management Board (NCDMB), the Petroleum Training Institute, Chairman of Nigerian Pipelines and Products Storage Company Limited (NPSC) and Alternate Chairman of NNPC LNG Limited, amongst others.

In the financial services industry, his experience spans Commercial Banking, Merchant Banking and Development Finance, with requisite knowledge and experience in retail and commercial banking, operations, international trade finance, agricultural finance, treasury and corporate banking. He started out as a banker with Union Bank of Nigeria Plc where he did his mandatory youth service programme and worked at the defunct Bank for Credit and Commerce International (BCCI) and International Merchant Bank (IMB).

Inuwa rose to the pinnacle of the banking profession with his appointment as Managing Director, Intercity Bank Plc, in 1991.

By Collins Nweze

The United Bank for Africa (UBA) has signed Memorandum of Understanding with United States Agency for International Development (USAID) to boost African trade and investment in Africa.

Details of the agreement showed that USAID will provide technical assistance and advisory services to prospective businesses in the United States through its Trade and Investment Hubs. The agency will also connect UBA with African Diaspora business groups working across the United States.

The MoU enables UBA, the only sub-Saharan African bank licensed to operate in the United States, to expand access of its reach and extend financing to American companies in the United States looking to do business with African nations. At the centre of the partnership is the Prosper Africa initiative created to increase two-way trade and investment between the United States and African nations.

Read Also: UBA Connect to deepen intra-African trade

This partnership also ensures businesses are equipped with the technical and financial tools needed to enter into new trading and investment relationships in Africa and the United States.

Recognizing tremendous growth opportunities, USAID and UBA are collaborating to advance Prosper Africa’s goal of substantially increasing two-way trade between Africa and the United States. By working together,  they will extend financing and technical assistance to businesses that will strengthen the American economy, grow African economies, and create jobs on both sides of the Atlantic,” a statement from the bank said.

The two institutions entered into the pact as part of the opening ceremony of the Tunisia Prosper Africa Conference, co-organised by the United States Embassy in Tunis and the American Chamber of Commerce of Tunisia. The event also facilitated United States and African business-to-business connections and featured remarks by key representatives from the US Government and African private sector.

By Collins Nweze

The second The Event Xperience Africa (TEXA2020) convened by one of the pioneers of the Nigerian event industry, Funke Bucknor-Obruthe, has held in Lagos.

The participants include  Mo Abudu, CEO Ebonylife TV; Mai Atafo, Creative Director, Atafo; Steve Harris, Business Coach; Edi Lawani, Ceci Johnson, Osayi Alile, and Chukwuka Monye engaging young entrepreneurs on professionalism, creativity, and effective collaboration.

Tagged ‘Rev up… Build… Grow… Thrive’, the three -day conference is geared towards helping businesses understand and implement the right structures required to grow in the events industry. It featured panel sessions, curated classes, networking sessions with different speakers on topics such as the business of events management, leveraging technology in the event industry, hospitality, experiential events production, the craft of event photography and videography and more.

To kick off the event, an opening cocktail party was held with delegates and event industry personalities from across Africa and the United States in attendance.

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Mo Abudu delivered the opening speech. She urged entrepreneurs to have big dreams for themselves and their businesses. To engage the audience in panel discussions and presentations were industry experts. They include Maria Pamela Nwonu (Nwando Signatures), Izobe Spiff, Do2tun, Ini Abimbola, Owen Omogiafo, Onye Ubanatu, Kunmi Ariyo, Yewande Rwang-Dung and sister Kemi (Co-Founders of Sara O Events), Jimi Tewe, and Sola Oyebade

The grand finale of the event kicked off with teaching delegates on the essence of branding and the importance of selling one’s value to customers.

This was done in a panel discussion themed ‘Branding, Sales and Marketing, Sell your Value’ by industry experts such as Mai Atafo, Adaora Mbelu, Bukky Akomolafe, Steve Harris, and Ayodotun Akinfenwa.

Also discussed on final day were topics focused on Human Resources, Technology, and more.

The conference which recorded over 700 attendees and speakers was hosted by Lamide Akintobi and Oluwaseun Olaniyan. Other speakers at the conference include Big H, Izobe Spiff, Emmanuel Oyeleke, Akeshi Akinseye (USA), Afi Amoro (Ghana), Mwai Yeboah (Zambia/Uk), Tedai Kevin Zhou (Zimbabwe), Christine Ogbeh, Tee A, Bankole Williams, Tomi Aluko, Edi Lawani, Do2tun, and many others.

By Oluwole Osagie-Jacobs

There is no doubt that one of the right steps this government has taken is the appointment of Alhaji Mohammed Nami, a thorough-bred tax professional, as the Executive Chairman, Federal Inland Revenue Service (FIRS).

One of the strictures against good performance of those holding public office in Nigeria is inappropriate appointment. This is worse in political dispensations where appointments are motivated by political considerations. Alhaji Nami’s appointment is a departure from the norm. It is an indication that a divine spirit is at work.

For those who don’t know him, I am pleased to announce to you that he is a tax field Commanding Officer with many years of tax and accountancy practice behind him.  Nami was baked in the crucible of Pannell Kerr Forster, a British firm renowned for accountancy and tax practice. His penchant for detail and accuracy is rarefied, and this will significantly enhance his performance. It is heartening that in his first few weeks in office, he has instituted deep reforms that would reposition the Service for better service delivery. In addition, we must thank Mr. President for the ongoing tax reforms.

While appreciating the contributions of the Executive Chairman’s predecessors in office, we cannot run away from the fact that the FIRS, as it is today, is louder than its worth. We hear of humongous tax collection that is not benchmarked against potential. Annual increase in tax revenue is hailed and celebrated as if population and needs had remained static. It is not discounted with the rate of inflation, foreign exchange, cost of collection and the number of personnel involved in revenue collection. The world is moving on in a frantic pace and technology has sired electric cars which would, in few years, discount in a significant manner the value of our major source of income which is crude oil. Nigeria needs money to build critical infrastructure for a healthy economy. It is for this reason we need someone who would drive revenue collection with the zeal of a Jehovah’s Witness.

Nami must grapple with the many intriguing complexities and ambiguities in tax legislation that make tax administration and compliance very daunting. These can be gleaned from the following judicial pronouncements;

“No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue,” according to Lord Clyde (1929).

“If a man were to make a systematic business of receiving stolen goods, and to do nothing else, and he hereby systematically carried on a business and made a profit  of 2,000 pounds a year, the Income Tax Commissioners would be quite right in assessing him as if it were in fact his vocation,” Partridge Vs Mallandaine, High Court of Justice (Queen’s Bench Division), 1885.

“It is, in my opinion, absurd to suppose that honest gains are charged to tax and dishonest gains escape. To hold otherwise would involve a plain breach of the rules of the statute, which require the full amount of the profits to be taxed and merely put a premium on dishonest trading. The burglar and the swindler, who carry on a trade or business for profit are as liable to tax as an honest business man, and, in addition they get their deserts elsewhere,” said Lord Morrison.

Lord Clyde had laid bare the distinction between tax avoidance and tax evasion in his highly celebrated judgment. Tax avoidance is not a crime. A tax payer can avoid tax by arranging his financial records in a way as to make him pay as little tax as possible. Tax evasion is a crime. This is illegal avoidance of tax by hiding taxable income or claiming unauthorised deductions. It is apparent that the war between the tax man and the tax payer is the one of wits. Tax on dishonest gains is an indication that there is no morality in tax business. It is the tax evaders Alh. Nami should go after. In this era of voluntary tax compliance through self assessment, he should go after tax defaulters. Thank God his first name is Mohammed, he should move to the mountain if the mountain refuses to move to him.

I attended the Pannell Kerr Forster training school in 1988 where I watched more than ten video clips on tax collection in Britain. A man who was apprehended by tax officers was taken aback by the detailed knowledge of the officers of his affairs. They knew he plays golf and had record of his annual subscription at the golf club. They knew he smokes and drinks. They knew the number of his children and his type of abode. Since he was not up to date with his tax returns he was given a Best of Judgment Assessment. In developed countries, it is difficult to be off the radar of the eagle eyes of the tax man. In Nigeria, you can have more than thirty houses in Lagos which you put up for rent and yet pay no personal income tax. Most billionaire traders in Aba, Onitsha and Lagos carrying on business as limited companies don’t pay tax. The few who do, declare next to nothing as taxable income. And against such it appears there is no law.

In the December 10, 2001 of Thisday, I queried the published financial statement of a foremost construction company in Nigeria. For the financial year 2000, it declared a turnover of N22.75 billion and a profit before tax ofN768.23 million. This represents 3.37per cent of turnover. This giant construction company is saying it makes less than N4 profit on every N100 of turnover. Yet, this construction company in that year won the Performance Earning and Returns Leadership (PEARL) award of the Nigerian Stock Exchange (NSE) for that year. If you are in search of hypocritical awards this is one.

The truth is that these foreign shareholders don’t depend on dividends declared in local currency. They make their money in a big way through the over invoicing of imported machinery, motor vehicles, tools and equipment. In this way, funds are transferred outside the country.

Another area in which surveillance is weak is in regard to donations. Few years ago, one of the richest Nigerians donated N3 billion at the fundraising of the People’s Democratic Party (PDP) for the building of the party’s headquarters in Abuja.

Firstly, a political party is not one of the approved bodies for donation. The consequence is that the N3 billion should be added back to his taxable income. Donations must be made out of profit and the maximum amount allowable is limited to 10 per cent of the total profits of the company before deducting the donation. Lastly, donations must not be an expenditure of a capital nature. The implication of this is that with the N3 billion donation, this billionaire cannot declare total profits from all sources below N30 billion in that particular year. I doubt if the tax authorities verified all these in his accounts.

Bringing all eligible tax payers under the tax net should be a prime objective of Nami. This can be achieved by legislation, surveillance, enforcement and whistle blowing. I am opting to be a whistle blower and I will do this free of charge.  In Nigeria, it is rare seeing someone sent to jail for tax evasion. People should start going to jail. My prayer is that at the end of Nami’s tenure, Nigerians would have accepted tax compliance as a way of life.