Aso Villa Reads for 05/03/2019

Every day, we bring you the best stories that the Media is reporting about the Government of Nigeria

“Despite a muted approach ahead of Nigeria’s general elections, the nation’s revenue authorities will no doubt continue with their plans to earn more revenue. Last year witnessed a form of increased tax activism by the revenue authorities as so many events clearly demonstrated the government’s intention to widen the tax net and raise additional revenue. In the year 2018, the Federal Inland Revenue Service (FIRS) recorded a total tax revenue collection of about N5.32 trillion. The oil component of the N5.32 trillion is N2.467trillion (46.38 percent), while the non-oil component is N2.852 trillion (53.62percent). The FIRS has a revenue target of N8 trillion for 2019. The proposed total expenditure for the year 2019 is estimated at N8.83 trillion which is 3.22percent less than the 2018 appropriated expenditure”. According to Business Day, “the Federal Government’s estimated revenue is N6.97 trillion and the estimated expenditure is N8.83trillion. This creates a budget deficit of N1.86 trillion which is a 4.9percent decrease from the 2018 budget deficit. “Given the level of information that will become available to the FIRS, taxpayers, especially the multinational enterprises (MNEs), are likely to experience increased information/document requests from the FIRS as well as transfer pricing (TP) audits and disputes in a bid to shore up government revenue”, according to Anderson Tax analysts. Anderson Tax had stated in their January 2019 note tilted “Nigerian tax and fiscal outlook” that although the proposed budget for the year 2019 indicates a reduction in the projected revenue and expenditure for the year, “the revenue from Companies Income Tax (CIT) and Value Added Tax (VAT) is expected to increase from the 2018 budgetary figures.”

Daily Trust reports that “the Nigerian National Petroleum Corporation (NNPC) says it is prepared to build additional Independent Power Plants (IPP) in Abuja, Kaduna and Kano which are expected to add 4,000 megawatts of power to stabilize the national grid. The national oil company also disclosed that it would construct a fertilizer plant in Brass, Bayelsa State. Chief Financial Officer of NNPC and Chairman of the Board of NNPC Power subsidiary, Gas and Power Investment Company (GPIC), Mr. Isiaka Abdulrazaq, stated this at the inaugural board meeting of GPIC at the NNPC Towers in Abuja. The GPIC, according to a statement by NNPC spokesman, Mr. Ndu Ughamadu, was established as a subsidiary under the Gas and Power Directorate to enable the corporation monetize the abundant gas resources in the country for the benefit of the nation’s economy. Mr. Abdulrazaq said the GPIC was a very strategic company through which the NNPC would create more value for the country, stressing that by the time the IPPs come on stream in Abuja, Kaduna and Kano, the Small and Medium Enterprises (SMEs) in the areas would be better for it. “GPIC is a company which the NNPC has set up basically to focus on how it can create value and monetize the nation’s abundant gas resources. The company will also be focused on developing power stations, fertilizer plants as well as petrochemical plants across the states,” Mr. Abdulrazaq said. He said the setting up of the company would add value in terms of payment of taxes and generating more revenue for the country.”

“The Nigerian National Petroleum Corporation on Tuesday announced that it had recovered assets worth over N771m from some oil marketers who under-paid for petroleum products supplied to them from the Kaduna depot of the Petroleum Products Marketing Company. NNPC’s Anti-Corruption Committee Chairman, Mike Balami, said the committee, in collaboration with Federal Government’s intelligence and anti-corruption agencies such as the Department of State Services, Economic and Financial Crimes Commission and Independent Corrupt Practices and Other Related Offences Commission, recovered the assets from the defaulting marketers. The Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, said the corporation’s anti-corruption committee brought in forensic experts to uncover the shady deals by some of the marketers involved. Balami outlined some of the recovered assets to include filling stations, water factories and six sports utility vehicles, adding that the forensic investigation would be extended to the other depots across the country to stop the bleeding of the national oil company. He noted that it was established that the affected marketers lifted petroleum products from the PPMC Kaduna depot without evidence of payment; and when confronted with the evidence, they admitted to the offence and failed to pay their liabilities”. Punch reports.

According to Business Day, “the sesame crop is gaining a lot of traction in Asia and Nigerian exporters are positioning to supply the market. The latest foreign trade report released by the National Bureau of Statistics (NBS) shows that sesame seeds worth N34billion was exported in q4 2018 from N15.8billion over the same period in 2017, representing 115 percent year-on-year increase. While on a quarter on quarter basis the country export for the period rose by 278 percent from N9 billion in q3 2018 to N34 billion in q4 2018. Stakeholders say the export numbers are an indication that the sesame seed production has the capacity to grow and earn the country huge foreign exchange and create hundreds of jobs as long as the government draws a master plan for the sub-sector, as it has done in rice. “Sesame has a lot of potentials. It has both commercial and medicinal value and oil extracted from the seeds is better than every other seed oil,” Mutairu Mamudu, national president, Sesame Farmers Association of Nigeria told BusinessDay in a telephone response to questions. “It is 100 percent free of cholesterol and that is why the demand for it is very huge both locally and internationally,” said Mamudu. He noted that the country is still not exploiting the full potentials of sesame, urging the government to encourage more investments in the value chain of the crop. Nigeria’s sesame production is put at 200,000 metric tonnes with an average of 0.8 metric tonnes per hectare, according to data obtained from the Federal Ministry of Agriculture and Rural Development (FMARD).”

“The Minister of Finance, Mrs Zainab Ahmed has said that the Federal Government is willing to set up a National Savings Committee that will make recommendations to the government on the best ways to mobilise savings that would lead to economic growth. Mrs Ahmed, stated this when she held a meeting with members of the Capital Market Master Plan Implementation Council, CAMMIC, in Abuja, Tuesday said there is need for Nigerians to imbibe the culture of savings so as to be able to participate actively in the capital market as a means of growing the economy. “We need to grow domestic investments that will be here to stay, not just people that are shopping around for where to make profit alone. It is true that the current financial system is still tiled largely toward the banks. There is a need to look at all the players and help solve the problems. We are open to setting up the working group so we can have a review, extract recommendations and get to work”. According to Blueprint, “those that can be done immediately we will try to do them and the long term ones we can then plan to do them as we move along.” Ahmed said the government is concerned about the volatility of the capital market and is ready to work with CAMMIC to ensure that the market is stable. According to her “We know we need foreign investors in our market, but most importantly we need to grow our domestic investors that are here to stay. The foreign investors come in and when anything happens, they quickly take their money and go away but our domestic investors will always be here with us.”

“With less than two years to meet its 80 percent financial inclusion target, the Central Bank of Nigeria (CBN) has approved the setting up of a financial inclusion Trust Fund to help drive its course. The apex bank disclosed this in its quarterly published financial inclusion newsletter released on its website on March 1 2019. The Trust Fund “will provide resources for institutions to execute critical cross-agency initiatives that will help achieve the National Financial Inclusion objective,” it said. As stated in the newsletter, the central bank held its 7th meeting of the National Financial Inclusion Steering Committee on Thursday, December 13, 2018 and was chaired by Godwin Emefiele, the CBN governor. The Committee provides policy and strategic direction on the implementation of the National Financial Inclusion Strategy (NFIS)”. Business Day reported this.

Business Day reports that “the Central Bank of Nigeria (CBN) on Tuesday announced a ban on Foreign Exchange (FX) access for the importation of all manner of textiles, as part of some important measures it would take to revive the ailing sector. The inclusion of textile brings to 43, the number of items which the apex bank has banned from FX access since 2015 when that policy was first announced. “Effective immediately, the CBN hereby place the access to FX for all forms of textile materials on the FX restriction list. Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX in the Nigerian Foreign exchange market,” CBN Governor, Godwin Emefiele announced at a meeting with textile industry stakeholders in Abuja. “In addition, we shall adopt a range of other Strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria. The details of those strategies will be unfolded in due course,” the governor said. Apart from the FX ban, the apex bank would also provide some financial support to Textile manufacturers, specifically funds at single digits rate, to refit, retool and upgrade their factories in order to produce high quality textile materials for the local and export market. Addressing the stakeholders, Emefiele said the CBN intervention had become necessary due to immense challenges of this sector and especially considering that Nigeria currently spends over $4 billion annually on imported textiles and ready-made clothing. The governor emphasized that with a projected population of over 180 million, the needs of the domestic market are huge and varied, with immense prospects, not only for job creation, but also for growth of the domestic textile industries. But the industry, sadly faces severe operational difficulty in the past two decades due to high energy cost, smuggling of textile goods, and poor access to finance. The death of the industries also jerked up unemployment, insecurity and other negative social vices.”

“In the swift reaction to the concerns raised by some critical stakeholders within the railway industry over the non-inclusion of locomotives to run the wagons, Jerry Oche, an engineer and regional District Manager, with the headquarters in Ebute Metta, Lagos, told BusinessDay that the locomotives are expected to arrive the country towards the end of this year. According to the Senior NRC official in telephone chat with our reporter on Monday this week, “Production time for Railroad locomotive engines and wagons across the globe is not the same because of design processes”. Responding to the implications for the NRC and how it will cope with the operational demands in the face of existing fewer locos being over stretched, Jerry Oche said, “We will use the available locos until the new ones arrive. We have also ordered new spare parts which on arrival will enable us turn our more locomotive engine after servicing”. This is according to Business Day (6 March 2019, page 30).