The Federal Government has approved a new Minimum Energy Performance Standard (MEPS) for air conditioners, aiming to enhance energy efficiency, reduce electricity costs, and promote environmental sustainability.
Air conditioners account for over 40 percent of household electricity use, much of which is wasted due to outdated technology.
The new MEPS aligns with international best practices, ensuring that only energy-efficient and climate-friendly air conditioners enter the market. The standard also mandates the transition to lower-emission refrigerant gases, supporting Nigeria’s commitment to the Paris Climate Agreement.
Developed under the “Scaling Up Energy-Efficient and Climate-Friendly Cooling” project, the initiative is led by the Energy Commission of Nigeria (ECN), with support from the United Nations Environment Programme (UNEP U4E) and funding from the Clean Cooling Collaborative (CCC).
The implementation will occur in phases, using the Nigeria Seasonal Energy Efficiency Ratio (NSEER) to measure progress. The initiative targets to increase energy efficiency by 6% in 2026, 36% in 2029, and 48% in 2031.
ECN Director-General, Dr Mustapha Abdullahi described the MEPS as a “game changer.” The renowned energy expert highlighted its potential to lower electricity costs while reducing carbon emissions. He reaffirmed the government’s dedication to advancing energy efficiency and fostering environmental sustainability within the cooling sector
The enforcement will involve energy labels for manufacturers and importers, alongside public awareness campaigns to educate consumers on the benefits of energy-efficient products.
UNEP’s Dr. Rose Mwebaza lauded Nigeria’s leadership in energy efficiency, noting the MEPS could save 11.5 terawatt-hours annually by 2040 and cut 39 million tonnes of CO₂ emissions over 15 years. Noah Horowitz, of the CCC, added that the move would prevent Nigeria from becoming a dumping ground for inefficient air conditioners.
“We are confident based on our in-depth market review and consultations with industry that by 2026, all air conditioners entering the country will meet the standard set by the ECN and SON in collaboration with UNEP U4E. This is a significant step in addressing one of the major challenges in the power sector – reducing energy waste in an affordable manner for consumers and mitigating greenhouse gas emissions” Dr Abdullahi said.
Beyond air conditioners, the government is developing similar standards for refrigerators, the second-largest household energy consumers. Efforts also include training programs for proper equipment disposal and a consumer finance initiative to make energy-efficient products more accessible.
With Nigeria being Africa’s largest and fastest-growing cooling market, these reforms set a benchmark for sustainable energy use across the continent.
The Federal Government has been urged to use creativity to channel the country’s youths towards positive innovations and growth.
Media Executive, Paul Effiom, gave the advice during an interview in Lagos.
He noted that the integration of creative programmes into the education system would be transformative.
“Art, music, drama, creative writing and design would not only enhance learning but also equip students with critical thinking and problem-solving skills.
“By exposing students to the creative industry, we nurture a generation that is not only academically sound but also capable of innovation and self-expression,” he said.
He added that bringing creatives into public schools promotes inclusivity and social development thereby giving underprivileged students access to opportunities beyond their circumstances.
Effiom noted that mentorship from industry professionals can help to bridge the gap between edict and real world opportunities.
“Beyond academics, creative fields offer viable career paths as Nigeria’s booming entertainment industry has shown that creativity is a major economic driver.
“Creative expression also builds resilience and emotional intelligence as art, music and poetry provide therapeutic outlets for students facing social and economic challenges, it reduces stress, boost self-esteem and promotes mental well-being,” he said.
Effrontery, who is the CEO, I Paw Media Concept and the drummer for female artiste,Yemi Alade, noted that the lack of exposure to these field may result to youths failing to realise their full potential.
Effiom revealed that he held a summit tagged: “My Creativity and I” last September to share knowledge to students about the importance of creative space.
The Federal Government has directed the National Institute for Cancer Research and Treatment (NICRAT) to decentralise its operations at the grassroots to ensure effective cancer control.
The Minister of State for Health, Dr. Adekunle Salako, announced the government’s directive during this year’s World Cancer Day symposium organised by NICRAT in Abuja.
The minister said it had become imperative for the inclusive participation of State governments in the cancer control governance.
He described cancer as a critical health challenge with a high number of new cases and deaths.
Salako said over 70 per cent of cancer patients present themselves at the late stage mainly due to ignorance, superstition, poverty and inadequate screening services.
The minister stressed that the active participation of the states in cancer control space has become necessary.
Justifying the need for the initiative and the readiness of the government to support it, Salako said: “According to the World Health Organisation (WHO), cancer is the second leading cause of death globally; in Nigeria, it is no different. But despite this statistics, there is hope.
“The Government of Nigeria is committed to improving cancer care, treatment, and prevention across the nation.
“I will like to see NICRAT moving its activities quickly to sub-national levels by establishing regional offices, paying advocacy visits to our Governors and engaging the Nigerian Governors’ Forum (NGF).
“At the ministry level, we will be developing initiatives to incentivise states for domesticating national cancer care policies.
“The Federal Government of Nigeria believes that every Nigerian, regardless of where they live or their economic status, deserves access to quality cancer care and is, therefore, working towards universal health coverage, where cancer services are available, affordable, and accessible to all.”
The minister said the government was aware of the enormity of the challenges confronting the people living with the disease, stressing that it was the reason the government had put in place several preventive and care initiatives to curb the spread of the disease.
The Federal Government has jacked up the retirement age of clinically-skilled health professionals in the country from 60 to 65 years.
This followed President Bola Ahmed Tinubu’s approval in alignment with his commitment to improving the welfare of healthcare workers and strengthening the nation’s health sector.
The President has also approved the payment of seven months’ outstanding COVID-19 hazard allowances, further demonstrating the administration’s focus on addressing the needs of healthcare professionals.
The Coordinating Minister of Health and Social Welfare, Prof. Muhammad Ali Pate, announced this yesterday in Abuja at a meeting with health workers’ unions, emphasising the government’s steadfast commitment to revitalising the health sector.
The minister said there were several transformative initiatives in place and others in the pipeline for implementation in the health sector.
He noted that as part of ongoing capacity-building in the sector, 60,000 health workers are to undergo retraining this year, following the successful upskilling of over 53,000 professionals last year.
Pate expressed appreciation to the nation’s health workers, restating the government’s commitment to fostering positive engagement with unions and enhancing working conditions in the sector.
He said: “We thank you also for what I will say the 18 months or so of relative peace that we have had in the sector.
“I think since this administration came, I believe we have tried to build a constructive relationship with all the health workers in a mutually respectful manner and tried as a government to earn the trust of health workers and for you also to earn the trust of the government.
“On outstanding issues for many years, we’ve tried to continue to discuss them separately with individual unions or collectively, as the case may be. So, we don’t take it for granted.
“I want to convey to you the appreciation of Mr. President for all the great work that Nigerian health workers are doing all over the country.
“The second element on the areas: we know we had several correspondences with other parts of the government to see that the settlement areas are deferred, that is from June to December 2023.
“In his wisdom, the President also has approved that the sourcing to happen and the release to happen. That is a key step.”
The President of the Nigerian Medical Association (NMA), Prof. Bala Mohammed Audu, praised President Tinubu for selecting key aides to oversee critical areas of government.
He added: “In my over two decades of leadership within the NMA and the health sector generally, I’ve not seen a situation where all leadership within the unions in the health sector have come together to unanimously agree that a Minister of Health is doing what they believe is in the right direction to deliver quality health care for Nigerians.”
Almost a year into the effective take-off of the Federal Government’s E-Border project as being effectively implemented by the Nigeria Immigration Service(NIS), some developments that have followed need to be assessed.
First as a way to x-ray the performance of the NIS as an agency of government under their supervision of Dr. Olubunmi Tunji-Ojo, the Minister of Interior within the President Bola Ahmed Tinubu’s renewed hope agenda, and secondly as a way of assessing the connection between policy elucidation, implementation and congruence between projections and outcomes.
There is no doubting the fact that the issue of irregular migration through unauthorized borders is a global challenge. The most recent US election had issues surrounding such movements well debated and the policy direction of the newly Inaugurated Trump presidency attests to it.
The peculiarities of Nigeria, its being heemed in between different Sahel states and the fact that there are numerous cross-border communities interacting on commercial and family and cultural basis amongst others, place more pressure on her in this direction.
The E-Border solution was therefore conceived with the variables highlighted above in mind. One of the aims of the project was to deliver a total of 40 E-verification gates across multiple airports in Nigeria by the end of the first quarter. These installations were to include 10 gates in Abuja, 21 in Lagos, five in Kano, and four each in Enugu and Port-Harcourt. All have been built, but only Abuja and Lagos are fully functional at the moment.
To actualise the set goals, and obviously mindful of these challenges, the Comptroller General of the Immigration Service on assuming office conducted border assessment tours across our various border posts, commands, and formations in the country, to assess the status of our borders and reinforce inter-agency collaboration. It is safe to opine that the tours must have enabled her to identify areas of vulnerability and take proactive measures to strengthen our borders.
Obvious from the agency’s subsequent actions is the fact thay the tours also strengthened its border community informants network, providing it with timely and actionable intelligence on potential security threats.
Little wonder gains have been recorded in droves. Late last year, precisely on the 10th of December, 84 illegal migrants were apprehended in Oyo state. These individuals, mostly under the age of Twenty (20), were upon interrogation confirmed to be involved in different cyber and other related crimes. They were also confirmed to be from such African neighbours as Congo Brazzaville, Central African Republic (CAR), and the Democratic Republic of Congo (DRC).
Specificaly connected with the E-gates system is the arrest of 14 persons of international security interest! What this means is that from information gleaned from the immigrants which were then ran through the E-gates database, they were confirmed to be persons who pose security threats of international dimension! Such persons would have seamlessly dissolved into Nigeria if the initiative had not been commenced.
But that was not all. One Mrs. Uadiale Christiana Jacob, aka Christy Evan Osagie, a wanted convicted leader of an international human trafficking network, was also arrested by operatives of the NIS at the Murtala Muhammed International Airport in Lagos on the 24th December 2024. Again, it was through the use of the e-gate process.
Just a week ago, 90 illegal immigrants were apprehended by the NIS is Rivers State. Their profiling revealed that 85 of them are Cameroonian, 5 Chadians, aided by 4 Nigeriens. Of the 94, 74 are males and 20 females. This again point to a more proactive, more diligent and more focussed Immigration Service.
Yet these achievements, remarkable as they are, do not conclusively on their own prove that the NIS has arrived the desired destination in the bid to make our nation safer through renewed vigilance on her borders. What it shows is with more efforts, better outcomes are possible. It also shows that much more has to be done, that for the NIS, there is still much room for improvement.
Such possible improvements may however not come until other phases of the e-border solutions are commenced. For the truth is that the e-border solutions were scheduled to be installed and deployed in three phases, and only the first phase has just been operationalised.
That first phase has however brought some positive developments as earlier shown. For instance, the NIS has intercepted and repatriated one hundred and Seventy-six [176] migrants along Nigeria’s border with Benin Republic in the past 6 months. This is true of all other border areas where the NIS has received positive feedback from the community and other sister security agencies.
Yet the NIS was operating under international parameters. It had to be careful to avoid the over-generalization of all irregular migrants as criminals, terrorists, and bandits, a reality that the United Nation’s Conventions and other regional protocols to which Nigeria is a signatory frowns at.
It has to on one hand be able to allow regular migration, avoid criminalizing undocumented migrants, and refrain from stigmatising Nigeria’s neighbours without proper evidence and facts, on the other.
Again, the NIS has to navigate around the fact that citizens of both Benin Republic and Niger Republic being members of the ECOWAS region do not require visas to enter Nigeria and that Chad, yet another country from which immigrants flock in, enjoys visa free entry to Nigeria for visits not more than 90 days!
In a way therefore, the close cultural and historical relationship at the border communities have in no small way affected the performance of the e-border effort.
But the NIS seems to have apprehended this reality. Within the last one year, it introduced the issuance of ECOWAS National Biometric Card (ENBIC) that will ensure proper documentation of ECOWAS migrants as they transit between their countries of origin and Nigeria. This document doubles as a residence permit for citizens of ECOWAS apart from being a travel document.
The service has also continued with the e-registration of migrants, an initiative commenced in 2019 and have registered over 250,000 foreigners between then and late 2024. The NIS through this effort has acquired and is keeping biometric records of all categories of migrants in Nigeria.
At all times, the NIS has never for once kept its attention from closely monitoring the movement of migrants into Nigeria as part of its mandate. Even when Nigeria’s borders were closed in 2020 against the inflow of goods, the Federal Government did not order the closure of borders against humans and the NIS did not reduce its vigilance in any way.
No doubt, the E-border initiative as being implemented by the NIS has helped greatly along the line, it is hoped that further phases will do more to keep Nigeria and her borders safe and protected from dangerous and criminal elements while guaranteeing the movement of others under the laws of the land.
•Fagbemigun is an Abuja-based multimedia journalist, he can be reached via honisrael89@gmail.com.
The Federal Government has warned Ministries, Departments, and Agencies (MDAs) that failure to comply with the revised Bottom-Up Cash Planning Policy may result in restrictions on their access to funds for capital projects.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, gave the warning on Thursday at the stakeholders’ review meeting on the implementation of the Revised Policy on Cash Management and Bottom-Up Cash Planning in Abuja.
The meeting, organised by the Office of the Accountant General of the Federation (OAGF), focused on strengthening financial oversight and ensuring strict adherence to the new fiscal policies.
Edun explained that the Bottom-Up Cash Planning Policy, introduced in 2023 and incorporated into the 2024 budget, was designed to enhance transparency, accountability, and efficiency in public financial management.
However, he noted that some MDAs had been slow to adopt its operational guidelines, leading to temporary restrictions on their access to the Government Integrated Financial Management Information System (GIFMIS), the central platform for fund disbursement.
“The implementation of the revised cash management and bottom-up cash-planning policy, as the Accountant-General has informed us, was approved by Mr. President and reinforced through multiple circulars and guidelines. However, there are concerns that some MDAs are still lagging in compliance,” Edun stated.
“This necessitated a temporary block of access to the GIFMIS platform for some entities, which were later restored when they complied. And I think that will carry on. If you do not comply, then you will be withdrawn from accessing the funds that you need to implement your capital projects,” he warned.
Beyond cash management, the Minister hinted at upcoming reforms in revenue generation, with increased automation and the adoption of technology to boost internally generated revenue (IGR).
He insisted on the Tinubu administration’s commitment to fiscal discipline, stressing that government spending will be strictly tied to available revenue, without resorting to excessive borrowing or money printing.
The Accountant-General of the Federation, Dr. Oluwatoyin Madein, also reiterated the government’s commitment to strengthening financial oversight and ensuring full compliance with the revised policy. She noted that while significant progress had been made, some challenges remain, which the government is actively addressing.
“You may recall the issuance of financial documents following Mr. President’s approval for the modification of the Bottom-Up Cash Planning Policy. This initiative was designed to provide a structured framework for the planning and management of limited cash resources, ensuring efficient service delivery,” Madein stated.
“As part of the policy, capital project payments in 2024 are now centralized under the Office of the Accountant-General of the Federation, requiring stakeholders’ engagement for seamless implementation.
“While we have recorded significant progress, some gaps and infractions have been observed. Some of these challenges have been addressed, while others are at various stages of resolution and will be highlighted in the course of this quarter,” she added.
The government’s renewed focus on enforcing compliance with cash management policies points to its broader efforts to instill fiscal discipline and optimize resource allocation for national development.
The Federal Government has inaugurated a state-of-the-art fashion manufacturing hub in Maiduguri, Borno State, with the potential to create over 48,000 jobs.
In continuation of the disbursement of its N75 billion support package for Micro, Small and Medium Enterprises (MSMEs), the government also announced unconditional grants of N300,000 for outstanding MSMEs participating in the 6th Expanded National MSME Clinics programme.
Speaking on Tuesday when he launched the fashion hub and the Expanded MSMEs Clinic in Maiduguri, Vice President Kashim Shettima restated the commitment of the administration of President Bola Ahmed Tinubu to fostering innovation, upskilling the workforce, and ensuring equitable wealth distribution across the nation.
According to a statement by his Spokesperson, Stanley Nkwocha, Shettima said: “The strength of any nation lies not in its natural resources but in the hands of its skilled and enterprising citizens. You are the surest means of distributing wealth equitably across the land. You are the crucial link to securing a prosperous future.”
The N75 billion MSME Intervention Fund is being administered through the Bank of Industry, offering loans up to N1 million at 9% interest to 75,000 businesses nationwide.
Announcing the N300,000 grant for each business owners, VP Shettima said, “I am pleased to announce on behalf of His Excellency, President Bola Ahmed Tinubu, that an unconditional grant of N300,000 will be awarded to each outstanding MSME exhibiting at today’s clinic”.
According to him, the intervention represents yet another fulfilment of the promise made by President Bola to provide access to capital and expand opportunities for all Nigerians.
“Every business empowered is a step closer to eradicating poverty, and we do not take for granted the critical role you play as the buffer of our economy, particularly at the informal level,” he added.
On the MSME Clinic, Senator Shettima explained that it provides “a unique platform for business owners, aspiring entrepreneurs, and innovators in Borno State to interact directly with regulatory agencies, financial institutions, and business support organisations.
“It is an avenue to receive practical, on-the-spot solutions to the challenges you face in running your businesses,” he pointed out.
The Vice President also announced the successful completion of the second cohort of the FGN-ALAT Digital Skillnovation Programme in Borno State, a partnership with Wema Bank that has trained over three million Nigerians in digital skills.
“The FGN-ALAT programme has trained over two million Nigerian youths and one million MSMEs in digital skills and resources critical for thriving in today’s technology-driven economy,” the VP noted.
He further stated that the fashion hub is among the largest ever established by the federal government, furnished with state-of-the-art equipment to support the fashion manufacturing cluster in Borno State.
He continued: “It has the capacity to boost production, achieve economies of scale, and align with global standards. We anticipate that this facility will be managed by a competent private sector entity, with federal and state governments providing vigilant oversight.
“Our vision is for this hub to become a reference point for excellence, enterprise, and training—not only for Borno State but for the entire nation.”
Commending the state government for its support, the Vice President expressed gratitude to the government of Borno State, under the stewardship of Governor Babagana Umara Zulum, for partnering with the federal government to bring the Expanded MSME Clinic and the fashion hub to the people of the state.
He reiterated the administration’s commitment to grassroots economic development, noting that “without skills, innovation stalls. Without accessible capital, dreams wither.
“This is why we are committed to standing with you, supporting you, and ensuring that your most ambitious ideas are transformed into flourishing enterprises instead of being forgotten in the cupboards of dreams not realised,” he added.
In his remarks, Governor Zulum regretted that MSMEs had suffered “untold hardship in the state due to decade-long insurgency and the prevailing economic situation in the country.”
He expressed optimism that the launch of the MSME Clinic will revive business activities, small and medium enterprises, provide employment opportunities and sources of income for individuals in Borno State.
Assuring that the government is committed to creating more opportunities for the population, Governor Zulum said in recognition of the importance of MSMEs, his administration has made several policies to encourage the citizens to build expanded sources of income.
Also, the Minister of Agriculture and Food Security, Senator Abubakar Kyari, stated that the launch of the MSME Clinic and the Fashion and Innovation Hub marks another milestone of success in the administration of President Bola Ahmed Tinubu.
He said that going around the exhibition with the Vice President, he observed that “everything speaks to the 8-point agenda of Mr. President.”
He highlighted the agenda to include food security, poverty reduction, job creation, inclusion of women and youths, provision of security, access to capital and rule of law.
On his part, the Minister of State for Industry, Trade and Investment, Sen John Owen Eno, said the MSME Clinic is a transformational programme being led by the Vice President and is responsible for unlocking a lot of economic opportunities, empowering small businesses and encouraging innovation.
He said that coming to commission MSME in Maiduguri underscores the legacy of diversifying the economy, contributing to job growth as well as trying to be competitive.
Giving a recap of the MSME Clinics across the country, especially in Borno State, the Senior Special Assistant to the President on MSMEs and Job Creation, Mr. Tola Johnson, expressed appreciation for the commissioning of the Clinic in the state.
While thanking the Governor and his team for a cordial working relationship, he said that the MSME Clinic organizes an award ceremony every June 27, and any state that the Vice President attends for the MSME Clinic prior to the award ceremony is qualified to win either the male or female MSME award.
Meanwhile, Vice President Kashim Shettima on Tuesday also commissioned a new 15 megavolt-amperes (MVA) injection substation in Maiduguri, Borno State, saying recent attacks on power infrastructure have reached emergency levels.
To this effect, he said the government is urging all security agencies and citizens as well to take active interest in the protection of the nation’s power infrastructure to forestall the resultant power supply disruptions with its economic toll.
Speaking during the commissioning of the 1x15MVA, 33/11kV injection substation at the College of Agriculture, Maiduguri, Borno State, the Vice President said, “The widespread power outages experienced across Northern Nigeria at the end of last year due to acts of vandalism serve as a stark reminder of the fragility of our electricity infrastructure.
“This invites all of us to treat interventions in our national electricity infrastructure as an emergency.”
He explained that the new facility, constructed by the Niger Delta Power Holding Company (NDPHC), includes a 0.1km 33kV line, 5km of 11kV lines, 5km of LT distribution networks, and three 500kVA distribution transformers.
“If we are truly concerned about expanding the industrial capacity and productivity of this great nation, we must make electricity a priority. The energy needs of each part of this country are a promise we cannot afford to take for granted,” he said.
VP Shettima who is the Chairman of NDPHC lauded the company’s important role in Nigeria’s power sector development, saying, “NDPHC has earned its status as the nation’s largest generation company by installed capacity.
“Its contributions to Nigeria’s energy infrastructure are unmatched, including building over 40% of the existing transmission infrastructure now operated by the Transmission Company of Nigeria.
“Over the past decades, Nigeria’s power sector has been hampered by insufficient generation capacity, outdated transmission infrastructure, and inadequate distribution networks. These are well-known obstacles and solutions to them have been placed firmly on the front burner by His Excellency, President Bola Ahmed Tinubu,” he maintained.
The VP disclosed that the injection substation and its associated network will have a transformative impact on Maiduguri and its environs.
“By enhancing the quality of electricity supply, reducing losses, and improving voltage levels, this project will stimulate economic activities, fast-track the growth of small and medium-scale enterprises, and support essential services,” he said.
Calling for increased generation capacity near consumption points to improve grid stability, particularly in the North-East, Senator Shettima urged the people of Maiduguri and its environs to take active roles in protecting these facilities from vandalism.
“Our collective responsibility in this regard is critical to sustaining our ambition to transform the power sector,” he said.
The Federal Government has extended an invitation to foreign investors with the assurance the electricity sector is ripe for investment and transformative growth.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, gave the invite during his address at the African Energy Summit in Dar es Salaam, Tanzania.
Speaking to a gathering of selected investors and development partners ahead of the Africa Heads of State Energy Summit, Edun stated the government’s commitment to achieving macroeconomic stability, advancing clean energy goals, and ensuring universal energy access.
He described the country’s electricity sector as a pivotal area for investment and collaboration, aligning with Nigeria’s broader energy transition goals under the “Mission 300” initiative.
A statement from the ministry said Edun detailed the Federal Government overnment’s focus on ensuring energy security while pursuing the global shift toward sustainable energy solutions. According to the minister, the Nigerian electricity sector offers vast opportunities for foreign and domestic investors. With a focus on clean energy transition and grid modernization, the government aims to increase the capacity and reliability of the power sector, unlocking its potential to drive economic growth.
Edun also informed the audience that President Bola Ahmed Tinubu would personally participate in the summit, signifying Nigeria’s commitment to leading conversations on energy access and clean energy in Africa. The president’s attendance is expected to strengthen collaborative efforts among African nations, investors, and development partners toward achieving the continent’s energy and climate goals.
“Nigeria’s electricity sector is poised for transformative growth, and investors are invited to be a part of this exciting journey,” Edun said. He expressed optimism that Nigeria’s robust investment climate, supported by the government’s economic reforms, would attract global stakeholders to help drive progress in the energy sector.
“With one of the largest populations in Africa, Nigeria’s demand for reliable electricity continues to grow, presenting immense opportunities for investment. The federal government has already taken steps to reform the power sector, focusing on expanding access to renewable energy sources, encouraging private-sector participation, and ensuring regulatory stability to attract investors.
“As President Tinubu is set to join the discussions, Nigeria aims to build on its energy ambitions, securing investments that will empower its citizens, strengthen the economy, and contribute to Africa’s clean energy future,” he said.
The federal government’s quest to achieve N2.25trillion Value Added Tax (VAT) revenue target for 2025 has elicited mixed feelings with opinions divided as to its feasibility and otherwise, reports Ibrahim Apekhade Yusuf
Can the federal government attain the N2.25trillion target as receipts from Value Added Tax (VAT) as indicated in the 2025 budget?
Interestingly, analysts hold the view and very strongly too that this is a very ambitious target indeed.
Expectedly, economic experts and policy analysts have raised serious concerns over Nigeria’s federal and state governments’ ambitious revenue target of N2.5 trillion for 2025.
According to analysts, there are a couple of challenges such as economic volatility, tax compliance gaps, and the impact of recent tax reforms, which may negatively impact that target.
This revenue projection, detailed in budget documents from the Federal Government and 21 states, represents a 65.8 per cent increase compared to the N1.527 trillion forecasted for 2024.
Analysts are particularly skeptical about the practicality of such an aggressive target in light of the country’s economic realities.
The VAT revenue projection was derived from financial reports released by the Federation Account Allocation Committee (FAAC) between October 2023 and March 2024.
Analysts note that while increasing tax revenues is crucial for addressing fiscal deficits, the dramatic jump in projections warrants scrutiny.
Dr. Emmanuel Onyekwere, an economist at the Nigerian Economic Institute, said, “The N2.5 trillion VAT target reflects optimism but overlooks key bottlenecks like inflation, declining consumer purchasing power, and uneven enforcement of tax reforms. Without addressing these issues, achieving this goal could prove unrealistic.”
The federal government alone has set a VAT revenue target of N972 billion for 2025, nearly doubling its 2024 share of N512.8 billion. State governments also plan to significantly boost their VAT collections, with projections from 21 states showcasing substantial increases.
Some notable state targets include: Kebbi State: N87.3 billion in 2025 (up from N41 billion in 2024). Kaduna State: N57.8 billion (up from N48.2 billion). Oyo State: N144 billion (up from N78.8 billion). Osun State: N78.1 billion (up from N45.3 billion). Kano State: N97.3 billion (up from N76.6 billion).
In comparison, smaller states such as Gombe and Ebonyi aim to collect N39 billion and N50.8 billion, respectively, marking significant jumps from their 2024 estimates.
It may be recalled that President Bola Tinubu had last month presented the 2025 Budget – a record N49.74 trillion, a 41.9% increase from the previous year, dubbed ‘The Restoration Budget: Securing Peace, Rebuilding Prosperity’.
With a projected deficit of N13.39 trillion, funding will be sourced from: Debt (69%), Loans (28%), Asset sales (2%).
The Budget will consolidate on key reforms such as the new minimum wage, duty-free food imports, and tax updates.
VAT remittances by MDAs in Q4, 2024
In the fourth quarter of 2024, Ministries, Departments, and Agencies in Nigeria remitted N7.04bn in Value Added Tax to the Federal Inland Revenue Service.
This is according to daily data sourced from BudgIT’s accountability platform, GovSpend.
The breakdown of this amount showed N4.13bn in October and N2.91bn in November, with no payments recorded in December.
The total amount for the quarter was N7,038,301,823.65, highlighting the continued role of VAT in Nigeria’s revenue generation.
According to the Federal Inland Revenue Service, VAT in Nigeria is charged at a rate of 7.5 per cent on goods and services, with certain exceptions like non-oil exports being zero-rated.
“Value Added Tax is a consumption tax paid when goods are purchased and services rendered. It is a multi-stage tax, and VAT is borne by the final consumer,” stated FIRS.
The agency also emphasised the obligation of certain taxpayers to remit VAT, including Nigerian companies dealing with non-resident companies, government agencies, and firms in the oil and gas sector.
Payments made in October and November included remittances from the Federal Ministry of Works, which contributed millions in VAT on contracts for construction companies.
Notable payments in October included N24.98m for Ultrateam Projects Design & Construction Ltd. and N18.79m for Bkem Consults Ltd.
Similarly, November payments included N97.73m from Gillan Construction Ltd. and N46.67m from Centrebeam Construction Ltd.
A recent update on value-added tax (VAT) by the National Bureau of Statistics (NBS) showed that the federation’s gross collections from VAT rose by 14% quarter-on-quarter (QoQ) to N1.8trn in Q3 2024. The growth was more pronounced regarding YoY comparison, rising by 88% year-on-year (Y-o-Y). The sequential increase in VAT collection was driven by higher VAT collections across all revenue items. Domestic (non-import) VAT revenue was the key driver of the Q-o-Q growth, accounting for almost 52% of total revenue. Its VAT receipts amounted to N922.9bn, compared with N792.6bn received in the previous quarter.
Foreign (non-import) and import VAT, representing 25% and 23% of total VAT receipts, increased by 13% Q-o-Q and 10% Q-o-Q to N448.9bn and N410bn, respectively.
Regarding the sectoral contribution of VAT, the manufacturing sector emerged as the largest source of revenue, with VAT receipts of almost N205bn.
The information and communication (ICT) sector ranked as the second-largest contributor to total VAT revenue, generating about N192.8bn during the quarter.
The mining, quarrying, public administration, and defence sectors complete the list with VAT revenue contributions of N174.4bn and N95.9bn, respectively.
Overall, the total collection in Q3 indicates gross VAT collections of N4.8trn over the 9M 2024 period, double the N2.4trn received in 2023.
The robust expansion in VAT revenue was driven by exchange rate gains and enhanced tax administration.
Despite the improvement in VAT revenue, Nigeria’s revenue-to-GDP ratio has continued to hover around 7% -9%, which is considerably low compared to other emerging and developing countries.
That said, the current administration plans to introduce a series of tax reforms, which aim to reduce tax expenditures, broaden the tax net, and improve VAT revenue.
The implementation of these initiatives is expected to boost fiscal revenues and increase the country’s low revenue-to-GDP ratio.
Value Added Tax (VAT) Inflow Rises 14.16% QoQ to N1.78trn
It is instructive to note that the data released by the National Bureau of Statistics (NBS), show that aggregate Value Added Tax (VAT) for Q3 2024 grew by 14.16% to N1.78trn from N1.56trn in Q2 2024.
A breakdown of the Q3 figures shows that local VAT payments amounted to N922.87bn, a 16.44% quarter-on-quarter (QoQ) growth. Foreign VAT payments totalled N448.85bn, rising by 13.42% QoQ, while import VAT contributed N410.62bn, showing a 10.10% QoQ growth.
On a year-on-year (YoY) basis, VAT collections in Q3 2024 surged by 88.00% compared to Q3 2023. The most significant YoY increases were recorded in foreign VAT payments (+119.40%) and import VAT payments (+85.46%).
Within the local VAT segment, mining and quarrying experienced an exceptional growth of +200.96% YoY. These figures reflect, in part, the impact of currency depreciation and the persistently high cost of living in the country compared to previous quarters.
VAT serves as a critical source of government revenue in Nigeria. It has accounted for approximately 5–8% of federal government revenue recently. Notably, 85% of VAT revenue is allocated to state and local governments, making it a key pillar of subnational financing. The Federal Government retains the remaining 15%. Based on sectoral classifications, the top three contributors to total VAT revenue in Q3 2024 remained consistent with the previous two quarters. Manufacturing led with 11.50% (N204.95bn), followed by information and communication at 10.82% (N192.83bn), and mining and quarrying at 9.79% (N174.42bn)
The tax reform bill proposed by the Presidential Fiscal Policy and Tax Reforms Committee has encountered resistance in the Nigerian Senate, with members divided over its VAT distribution formula. The new bill suggests a 60%:20%:20% allocation formula among states based on derivation, equality of states, and population, respectively. This contrasts with the current formula of 20%:50%:30%.
According to analysts at Proshare: “Contrary to widespread concerns that the proposed changes would significantly reduce allocations to many northern states, we believe the impact may be less severe than anticipated.
“Two key factors support this view. The proposed reduction of the Federal government’s VAT share from 15% to 10% would leave a larger pool of VAT revenue for distribution among the states. Shifting from the current system where VAT is attributed to the states where payments are made to one that credits states based on where consumption occurs would ultimately increase the VAT revenue retained by states.”
Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets; by delivery on credible, reliable, and timely engagements through the following areas — Impact Research, Market Intelligence, Strategic Advisory, Stakeholder Relations & Digital Media.
Angst over tax reforms
The government has proposed several reforms, including the Revenue Reform Bills 2024, aimed at improving the country’s tax system and ensuring sustainable revenue for development.
In a decisive step toward addressing the fiscal challenges facing the nation, President Tinubu inaugurated the Fiscal Policy and Tax Reforms Committee in July 2023 and appointed Taiwo Oyedele, a tax specialist and former Africa Tax Leader at PricewaterhouseCoopers (PwC), as its chairman.
After about four months of deliberations and consultations with relevant stakeholders across the country, the 38-member committee introduced 20 key policy recommendations known as “quick wins” for immediate implementation. This birthed the tax reform bills transmitted to the National Assembly by the President in September 2024.
The panel’s economic stabilisation bills (ESBs) comprised four documents: The Nigeria Tax Bill, The Nigeria Tax Administration Bill, The Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
The tax reform bills feature several proposals, including the increase in VAT distribution to subnational governments to 55 per cent, with the federal government’s share reduced to 10 per cent.
The bills also propose zero VAT on exports and essential goods for the masses, as well as input VAT credit on assets, services, and goods consumed by businesses, intending to lower production costs.
The committee responsible for drafting the bills laid out a set of ambitious objectives that aim to boost the country’s revenue, improve the business environment, and reform the tax system for sustainable development.
The primary goal, it stated, is to increase Nigeria’s tax-to-GDP ratio, which, at only between 6.7 and 10.8 per cent, lags far behind many other countries in Africa and around the world, including Ghana and South Africa.
The target is to reach at least 15 per cent by 2030, according to the committee.
The committee also noted that the bill was designed to balance the need for increased revenue with the need to provide support for low-income earners and struggling businesses.
To achieve this, the proposed legislation seeks to reduce income taxes for low-income earners and even eliminate them for those earning minimum wage.
Moreover, corporate income tax will be lowered from 30 per cent to 25 per cent, providing a much-needed boost for businesses.
Among the key proposals in the bills is the elimination of nuisance taxes, which will simplify the tax system and reduce the administrative burden on both taxpayers and the government.
The bills also seek to implement progressive taxation, ensuring that the wealthy contribute their fair share of taxes, while also expanding the tax base by capturing revenue from digital and e-commerce sources.
The Senate’s recent passage of the tax reform bills for the second reading sparked a heated debate, particularly concerning the proposed changes in the VAT revenue-sharing formula among the federal, state, and local governments.
Discussions around this issue indicated that optimism surrounding the tax reform bills has been marred by the widespread distrust and disappointment in the president’s unfulfilled promises.
Criticism of the proposed legislation has ranged from allegations of regional bias, with some arguing that the proposed changes to the VAT revenue-sharing formula are designed to primarily benefit the Southern states, particularly Lagos, which is considered President Tinubu’s home turf and a primary beneficiary of the proposed changes to the VAT revenue-sharing formula.
Governor Zulum of Borno State, a prominent figure among the opposition, expressed his reservations about the impact of the bills, claiming that the state would be unable to pay salaries, a situation that he warned could lead to a collapse of the entire northern economy.
Even as the tax reform bills remain the subject of intense debate, analysts and experts have weighed in with their perspectives, urging the Nigerian people to refrain from introducing ethnic and regional biases into the discussion and instead focus on holding the government accountable for its actions and prioritising the interests of all Nigerians.
Samuel Agbeluyi, president of the Chartered Institute of Taxation of Nigeria (CITN), in a recent press conference with members of the Finance Correspondents Association of Nigeria in Lagos, voiced his support for the tax reform bills, characterising them as crucial measures that will address Nigeria’s ongoing revenue challenges.
While Agbeluyi recognised that the proposed bills are not without their fair share of concerns, he expressed confidence that they have the potential to bring about much-needed improvement to the country’s tax system, ultimately benefiting both the government and the citizens.
“The bill is a clear and positive one. I doubt if anybody is seeing it from a negative perspective. I also agree that there are issues that have been raised in the bill but overall, the bill is what we need,” he stated.
Agbeluyi also addressed the importance of synchronising national identification systems, such as the National Identity Number (NIN) and Bank Verification Number (BVN), to enhance the collection of tax-relevant data with greater efficiency and accuracy.
The CITN president underscored the gravity of the revenue crisis facing Nigeria, stating that over 90 per cent of the nation’s revenue is currently devoted to servicing debt, a situation he described as “a recipe for disaster.”
With a pressing need for reform to improve the nation’s financial standing, Agbeluyi pointed to the current tax structure as a major source of inefficiency, highlighting the existence of more than 60 different types of taxes, of which only a small number contribute significantly to government revenue.
Responding to the public’s apprehensions regarding third-party involvement in tax collection, Agbeluyi reiterated the necessity of private sector contractors in this process, provided that the engagement is executed with the utmost levels of accountability and transparency.
He noted that third-party contractors can bring invaluable expertise and innovation to the table, particularly in the areas of data gathering and revenue generation, where their contributions have already proven instrumental in enhancing the efficiency of tax collection.
Agbeluyi highlighted the indispensable role that data can play in driving tax reform, stating with conviction that “data don’t lie.”
He suggested that by conducting simulations using various VAT allocations and applying attribution methods, stakeholders could leverage data to gain a more accurate understanding of the potential impact of the proposed reforms.
The Nigeria Employers’ Consultative Association (NECA), a prominent business advocacy group, also expressed its support for the Tax Reform Bills, asserting that the passage of these bills into law would result in far-reaching positive consequences for the country.
Wale-Smatt Oyerinde, the director-general of NECA voiced his disappointment at the level of opposition that the Tax Reform Bills have faced in the political arena, despite the many potential benefits that the bills could bring.
“NECA affirms its support for the Tax Reform Bills because of the far-reaching positive consequences of its enactment. It is instructive to note that the organized private sector is a member of the Committee and plays a very important role in the engagements with various stakeholders. It is thus worrisome that a Bill that should ordinarily attract a warm welcome from the political elites is facing unnecessary criticism and backlash,” he stated.
Making a case for tax reforms
While interrogating the ideals and ideas behind the proposed tax bill, Kelechi Okparaocha, a member of WTS Global, a leading independent non-audit tax practice worldwide with representation in more than 100 countries, emphasised the need to understand the policy environment around the tax reforms.
Okparaocha noted that in the twilight of 2024, Nigeria was overhauling its tax laws and processes pursuant to the establishment of the Presidential Committee on Fiscal Policy and Tax Reforms (the Committee).
According to her, “In furtherance of the Reforms, the Committee has proposed four (4) bills – the Nigeria Tax Bill (NTB), Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill (NRSEB), and the Joint Revenue Board Establishment Bill (JRBEB) – for the overhaul of Nigeria’s tax system. In this update we highlight crucial changes that would arise from these reforms.”
The NTB, she said, “is expected to unify all Nigerian taxes and proposes a reduction in income tax (CIT) rate from 30% to 25% over the next 2years as well as the exemption of small companies, which has now been reclassified as companies with an annual revenue threshold of N50,000,000.00, from CIT. It also proposes the elimination of minimum tax on loss-making companies and those with low profit margins. The NTB also proposes the introduction of a new Development Levy of 4% which will be gradually reduced to 2% over the next five years for the funding of infrastructure and developmental projects across Nigeria.”
On the proposed phased increment of Nigeria’s VAT rate with a view to achieving a new VAT rate of 12.5% in 2026 and 15% in 2030, she said it aligns with the nation’s VAT rate with the ECOWAS standard by 2030.
“The NTB also introduces a streamlined VAT refund process; ensuring refunds are issued within 30 days of application without requiring an audit. It also proposes VAT reliefs for small companies to reduce their tax burdens. Notably, the NTB revised the VAT Revenue sharing formula by ensuring that sub-national units are fairly treated and rewarded for their economic contributions.”
Overall, she acknowledged that “it is clear that the proposed reforms aim to improve Nigeria’s competitiveness while aligning Nigeria with global standards in taxation. These reforms are expected to create a more business-friendly environment in Nigeria, while ensuring that the country’s tax system remains equitable and efficient, fostering economic growth and improving tax compliance.”
FIRS assures on mandate
Expectedly, the FIRS Chairman Zacch Adedeji in 2024 emphasised the agency’s ongoing efforts to improve tax collection, especially by widening the scope of VAT collection to include non-resident suppliers like Google and Amazon.
“What we are doing at the FIRS is to look at issues of policy. We now collect tax from non-resident resource suppliers like Google, and Amazon,” he said.
The FIRS has also collaborated with the United Nations Development Programme to analyze and close VAT gaps, with a target of generating N5tn from VAT by the end of 2024.
Meanwhile, the Federal Government continues to push for tax reforms aimed at expanding the tax base and improving compliance.
He further noted the challenges faced by Nigeria’s tax system, citing low voluntary compliance and inefficiencies in administration.
One key element of the Federal Government’s 2025 budgetary plan that should excite farmers across the country is the allocation of N132bn to support the country’s beleaguered farmers. And the reason is simple: far from being another line item in the agriculture ministry’s budget, this allocation is actually going into a special purpose vehicle of the Federal Government – the National Agricultural Development Fund (NADF) – established with the sole objective of addressing those familiar challenges that have hobbled the agricultural enterprise. In this, the Federal Government surely has its heart in the right place.
From the general outlines of the budget, the N132bn allocation is expected to address such age-long challenges as low productivity in general and lack of access to credit/finance. Also, it is expected to result in improved seedlings through targeted interventions, in addition to grants and subsidies for mechanised equipment, storage facilities, and modern farming tools.
That the government considers these issues as challenges to be tackled headlong without which its advertised quest for sustainable farming practices, increased crop yields, and improved access to markets would remain a mirage is merely stating the obvious. Yet, the question remains as to the extent to which the fund can go in addressing the problems, given their complexity and widespread nature. In fact, the temptation is to see the allocation as amounting to a mere drop in the ocean.
If there are any lessons to learn from the past years’ experiences, the problems usually have little to do with the quantum of resources allocated; rather they have more to do with poor prioritisation of activities and wastefulness by the implementation agencies. In fact, it does not even require a deep scrutiny into the operations of most of the budgets of ministries and extra-ministries to detect a disturbing pattern of abuses – from over-sized bureaucracy to excessively large overheads, all of which together end up consigning operational issues into a distant third place.
Today, if Nigerians have become keenly aware of the linkages between the open-ended larceny associated with the serial interventions by the Godwin Emefiele-led leadership of the CBN in the recent past and the nightmares currently driving the country and citizens to the edge, it is only in the background of the subversion of the multi-purpose interventions that characterised that era.
Our expectation is that NADF will live up to its promise of being a truly transformational agency for the sector. And just in case the Fund needs any reminding, it is that time is of the essence as the country cannot afford any tardiness or lethargy. And if we may restate the obvious, the N132bn allocation is no small money; it is not expected to be spent as the Fund pleases. And as against the familiar tradition of a needlessly expansive bureaucracy, what we expect to see is a compact, service-oriented agency dedicated to its primary mission of empowering farmers by ensuring access to critical resources, such as improved seeds, fertilizers, irrigation systems, and market opportunities.
And while at it, it is important that the Fund sees itself primarily as an agency for catering to the needs of Nigeria’s farming population; not to the palates of some greedy bureaucrats. In the same vein, we expect the National Assembly, through its appropriate committees, to periodically monitor and track the utilisation of the funds when finally appropriated.
What Nigerians want to see by year’s end are concrete deliverables in terms of the numbers of the farmers impacted by way of farming inputs and credits they are able to access and, indeed, their overall productivity.
