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Nigeria emerges third-largest debtor to World Bank’s IDA, gets $2.2 billion under Tinubu

by Folarin Kehinde
written by Folarin Kehinde

Nigeria has ascended to become the third-largest debtor to the World Bank’s International Development Association (IDA) as of June 30, 2024, reflecting a significant increase in the country’s borrowing from the institution.

According to the World Bank’s financial statements, Nigeria’s exposure to the IDA rose by 14.4% from $14.3 billion in the fiscal year (FY) of 2023 to $16.5 billion in FY2024.

This $2.2 billion increase places Nigeria among the top three IDA debtors for the first time, a notable shift from its previous position as the fourth-largest borrower in 2023.

The fiscal year for 2024 runs from July 2023 to June 2024, which means that Nigeria has received at least $2.2 billion from the World Bank under the administration of President Bola Tinubu.

This debt is different from any outstanding loan from the World Bank’s International Bank for Reconstruction and Development (IBRD).

Bangladesh remains the largest IDA debtor, with its exposure increasing from $19.3 billion in 2023 to $20.5 billion in 2024. Pakistan follows, maintaining its second position with a stable exposure of $17.9 billion over the same period.

India, which was previously the third-largest borrower in 2023 with $17.9 billion, saw a decrease in its IDA exposure to $15.9 billion in 2024, allowing Nigeria to surpass it.

Other significant IDA borrowers include Ethiopia, whose exposure grew from $11.6 billion in 2023 to $12.2 billion in 2024, and Kenya and Vietnam, both with $12.0 billion in 2024.

These countries, along with Tanzania, Ghana, and Uganda, comprise the top ten IDA debtors, collectively accounting for 63% of the IDA’s total exposure as of June 30, 2024.

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Business

JUST IN: FG increases petrol pump price to N855 per litre

by Folarin Kehinde
written by Folarin Kehinde

President Bola Tinubu’s administration appears to have upped the petrol price from N650 to N855, according to pump price displays on Tuesday on fuel dispensers at the government NNPC stations.

Amid a lingering fuel scarcity and crisis, petrol prices on dispensing machines of government-backed NNPCL stations in Lagos and Abuja on Tuesday showed N855 per litre, cementing claims that the price has been reviewed upward to reflect the nation’s current foreign exchange woes and fuel landing cost hassles.

Tinubu increases petrol pump price to N855 per litre
Several filling stations adjusted their price to N897 per litre on Tuesday morning.

Other filling stations adjusted their price to N897 per litre on Tuesday morning.

Femi Soneye, the NNPCL spokesperson, told Peoples Gazette, “I’m not aware. But I’ll find out.”

Fuel prices have dwindled between N580 per litre to N700 per litre since Mr Tinubu became president and announced the removal of fuel subsidies in 2023.

But in recent weeks, the nation has suffered an acute fuel scarcity that led the few stations with fuel to sell at exorbitant prices above N900 per litre while black market prices exceeded N1,000.

On Thursday, the Tinubu government issued a statement denying reports that pegged the official fuel increase to N1,000.

“The federal government is compelled to address the outright falsehoods currently being circulated on social media, which claim that the Minister of Petroleum Resources (Oil), Senator Heineken Lokpobiri, has directed the Nigerian National Petroleum Company Limited to inflate petroleum prices above the approved pump price,” said the statement by Nnemaka Okafor, special adviser, media and communication, to the Minister for Petroleum Resources (Oil), Heineken Lokpobiri.

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Business

BREAKING: Amidst Hardship, FG move to increase tax by 10%

by Folarin Kehinde
written by Folarin Kehinde

Taiwo Oyedele, Chairman Presidential Fiscal Policy and Tax Reforms Committee, says the committee is proposing a law to the National Assembly to increase valued added tax from the current 7.5% to 10%.

Oyedele stated this during an interview on Channels TV’s Politics Today.

He also said his committee was working to consolidate multiple taxes in Nigeria to ensure tax reduction.

Oyedele added the tax law the committee drafted would be submitted to the National Assembly.

He said, “We have significant issues in our tax revenue. We have issues of revenue generally which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.

“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, coordination within the federal government and across sub-national.

“The second one was revenue transformation. The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.

“The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.

“While we are doing that, we have a corresponding reduction in personal income tax. Anybody that is earning about N1.5 million a month or less, they will see their personal income tax come down. Companies will have income tax rate come down by 30% over the next two years to 25%. That is a significant reduction.

“Other taxes they pay are quite many: IT levy, education tax, etc. All these we are consolidating into a single one. They will pay 4% initially. That will go down to 2& in the next few years.”

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Business

Nigerians to pay more for cement as production costs increase by 121%

by Folarin Kehinde
written by Folarin Kehinde

The combined impact of Naira depreciation and high inflation has led to a 121% increase in cement production costs, dashing hopes for lower prices.

Smuggling to neighbouring countries, where cement fetches higher prices, has also made the situation worse.

In Chad and Cameroon, a 50kg bag of cement ranges from $120 to $150.

With an exchange rate of N1,600 per dollar, this translates to N240,000 to N270,200 per bag, significantly higher than the N8,000 price in Nigeria.

Kabiru Rabiu, Group Executive Director of BUA Cement, confirmed the pressure from illegal smuggling, noting that cement is being taken across borders for higher margins.

“One of the pressures that we see is that there is a lot of illegal smuggling of export of cement to Cameroon and Chad.

“What happens is that if you take cement just across the border to some of these markets, it is selling at $150 to $270.

“That is why we realize that a lot of our cement is actually not only going to the North East but to Maiduguri in particular because there are a lot of distributors taking this cement across borders because it offers a lot of margins,” he told Vanguard.

Despite a significant revenue increase of 84.5% to N1.116 trillion in Q1’24 for leading manufacturers like Dangote Cement, Lafarge Africa, and BUA Cement, the 121% spike in production costs to N586.6 billion overshadowed profits, leading to a 4.1% decline in combined Profit Before Tax (PBT).

End users, including block moulders and builders, are also feeling the pinch.

The National Association of Block Moulders of Nigeria (NABMON) has urged the government to reduce import duties on cement components to attract foreign investment and lower prices.

The National President, NABMON, Mr Adesegun Banjoko, gave the advice, saying “the price of one bag of cement in Nigeria, currently in the region of N8,000 and N9,000 was still considered too expensive.”

Another builder in Lagos, Sikiru Ajala Enterprise, said: “The average cement price for Dangote Cement is N9,000, Lafarge N8,500 and BUA N8,000 is still very costly.

“This is the major reason why most of us builders are not building as many houses as possible. When you go to the banks for a loan they ask for 30 to 35 percent interest. How can we cope with this?”

The rising energy costs, input materials, and exchange rate volatility are major contributors to the price hike.

As the Naira weakens, input costs rise, with consumers ultimately bearing the burden.

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Business

Remittance inflows surge by 130% to $553 Million in July 2024 – CBN

by Folarin Kehinde
written by Folarin Kehinde

The Central Bank of Nigeria (CBN) has reported a 130% surge in remittance inflows, with the figure reaching $553 million in July 2024.

According to the CBN, this milestone represents the highest monthly remittance inflows ever recorded, marking a significant increase from the same period in 2023.

This is according to a statement by Hakama Sidi Ali, the Acting Director of Corporate Communications, on Tuesday, August 20, 2024.

The CBN credits this surge in remittance inflows to a series of strategic policy measures designed to enhance liquidity in Nigeria’s foreign exchange market.

The statement read: “The Central Bank of Nigeria (CBN) has reported a significant increase in remittance inflows, reaching $553 million in July 2024, a 130 per cent increase from the corresponding period in 2023.

“This figure represents the highest monthly total inflows on record and reflects ongoing efforts by the CBN to enhance liquidity in Nigeria’s foreign exchange market.

“The substantial growth in remittance receipts is attributable to policy measures introduced by the CBN to enhance liquidity in Nigeria’s foreign exchange market. These measures include granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and enabling timely access to naira liquidity for IMTOs.

“Diaspora remittances are a crucial source of foreign exchange for Nigeria, supplementing both foreign direct investment and portfolio investments. The CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.”

The CBN also noted that the National Bureau of Statistics (NBS) reported a slowdown in Nigeria’s year-on-year headline inflation rate for the first time in 19 months, signalling the effectiveness of the CBN’s monetary policy tightening measures.

The CBN further expressed its commitment to closely monitoring market conditions and adjusting its policies as needed to ensure the continued flow of remittances, thereby contributing to the stability of the foreign exchange market.

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Employment scam in MINT: Group petitions CBN, National Assembly, CCB, others: CBN Deputy Governor Emem Usoro; her aide Olakunle Abiola indicted Leading Reporters
Business

JUST IN: CBN Approves Merger Of Unity, Providus Banks

by Folarin Kehinde
written by Folarin Kehinde

The Central Bank of Nigeria (CBN) on Tuesday announced the approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and the Providus Bank Limited.

The apex bank, in a statement by its acting Director of Corporate Communications, Hakama Sidi-Ali, said the move is designed to bolster the stability of the nation’s financial system and avert potential systemic risks.

“The merger is contingent upon the financial support from the CBN. The fund will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders,” the statement read.

“It is unequivocal to state that the CBN’s action is under the provisions of Section 42 (2) of the CBN Act, 2007. This arrangement is crucial for the financial health and operational stability of the post-merger organisation.

“It is important to emphasise that no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated.”

The CBN said it remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.

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Business

BREAKING: First Bank sacks over 100 employees after ₦40bn fraud

by Folarin Kehinde
written by Folarin Kehinde

First Bank has reportedly sacked over 100 employees in July 2024, four months after discovering that Tijani Muiz Adeyinka, a manager on the operations team, allegedly diverted ₦40 billion over two years.

In details first reported by TechCabal, Adeyinka, who is still on the run, used his authorisation to approve chargebacks to accounts he controlled.

Two people with direct knowledge of the matter claimed that at least 120 employees, including full-time and contract staff of First Bank’s large operations department, were given termination letters in July. The head of transactions at the time was also fired.

Those employees were accused of laxity in carrying out their duties and were told they should have spotted the fraud earlier. First Bank’s management team believed it was impossible for a fraud of that scale and timeline to have been executed without the knowledge of Adeyinka’s superiors.

“The CEO said there will be zero tolerance for supervisory negligence,” said one First Bank employee who asked not to be named so they could speak freely.

TechCabal first reported the alleged fraud in May, showing how Adeyinka, who was the final line of authorisation on his team, carried on his scheme unnoticed for two years. When the incident was discovered in March, the bank tried to keep the matter under wraps, suspending several operations team members indefinitely. However, First Bank became more aggressive after the fraud became public.

Several employees were questioned by the Nigerian Police Force (NPF) and detained at the Lion’s Building for at least six hours, one person with direct knowledge of the incident said. Those employees needed to post bail before they were released. Restrictions have been placed on all their personal accounts except their First Bank accounts.

First Bank did not immediately respond to a request for comments.

The blast radius may have extended farther. First Bank’s CEO at the time, Dr Adesola Adeduntan, abruptly resigned in April, eight months before the end of his tenure and less than a month after the fraud was uncovered. Adeduntan, who led First Bank for nine years and “left to pursue other interests,” was initially replaced as CEO by First Bank’s board in April 2021.

The Central Bank blocked that move, claiming First Bank’s board acted without regulatory approval. It paved the way for Dr Adeduntan to serve an unprecedented third term. One publication claimed concerns over his tenure led to his resignation in April.

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Business

NCC Directs Telcos on Tariffs Transparency

by Folarin Kehinde
written by Folarin Kehinde

The Nigerian Communications Commission (NCC) has issued a directive to telecommunications operators to simplify their tariff plans, bundles, and promotional activities.

This move aims to provide clear, easy-to-understand, and accurate information about the cost of voice, short messaging service (SMS) and data services to subscribers.

The directive, titled “Guidance on the Simplification of Tariffs in the Nigerian Communications Sector,” was issued on July 29, 2024. It mandates Mobile Network Operators (MNOs) to publish a comprehensive table showing the features of their tariff plans and bundle offers.

The table should contain all necessary information for subscribers to make informed decisions, including details on add-ons, their prices, how consumers can opt-in or out, terms and conditions for renewal, and rollover policies.

The guideline is the outcome of consultations with industry stakeholders, including MNOs and Consumer Focus Groups, and extensive data analysis on consumer preferences and expectations.

The objectives of the simplification guidelines are to reduce the complexity of tariff plans and bundles, ensure transparency and fairness of promotional elements of tariff plans, protect consumers’ interests by providing clear and understandable tariff information so that they make informed decisions, and promote fair competition among licensees by standardising tariff structures.

Service providers are also required to display all relevant information about their tariffs, such as the name of the plan, price, validity period, price-per-second for on or off-network and international calls, expected data speeds, and fair usage policies.

“Operators can maintain existing bonus-led tariff plans till 31st December 2024, within which period operators are expected to educate and migrate all subscribers to the simplified tariff plans,” the directive stated.

The guidelines further mandate that MNOs must communicate tariffs to subscribers in “clear language and a user-friendly format,” with full disclosure of a subscriber’s tariff plan via Unstructured Supplementary Service Data (USSD).

The guidelines further mandate that MNOs must communicate tariffs to subscribers in “clear language and a user-friendly format,” with full disclosure of a subscriber’s tariff plan via Unstructured Supplementary Service Data (USSD).

Additionally, “operators must offer stand-alone data bundles at fair prices to avoid tying consumers with products they do not need; bonuses on promotions must be stated in actual value; access fees and asymmetric fee structures must be eliminated,” among other conditions.

The NCC emphasised that while complying with these guidelines, operators must also meet the Key Performance Indicators (KPIs) standards set out in the Quality of Service (QoS) Regulations.

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Business

WhatsApp to discontinue service in Nigeria over $220m fine

by Folarin Kehinde
written by Folarin Kehinde

One week after Nigeria’s Federal Competition and Consumer Protection Commission imposed a $220 million fine on WhatsApp for a data privacy breach, the Meta-owned company may suspend its operations in the country due to further regulatory demands.

Sources close to the situation indicate that Meta, WhatsApp’s parent company, is contemplating withdrawing certain services from Nigeria.

Alongside the substantial fine, the FCCPC has directed WhatsApp to cease sharing user data with other Facebook companies and third parties without explicit user consent. The commission also requires WhatsApp to disclose details about its data collection practices and to enhance user control over data usage.

In response, a WhatsApp spokesperson emailed TechCabal, “We want to be clear that, technically, based on the order, it would be impossible to provide WhatsApp in Nigeria or globally.” The spokesperson criticized the FCCPC’s order as flawed, asserting that it inaccurately portrays WhatsApp’s data handling and would necessitate significant changes to the platform’s infrastructure.

Meta has not addressed the FCCPC’s allegations regarding user opt-out options from the 2021 privacy policy but maintains that the update does not involve sharing user data. The company’s privacy policy states, “While traditionally mobile carriers and operators store this information, we believe that keeping these records for two billion users would be both a privacy and security risk and we don’t do it.”

The potential suspension of WhatsApp could have significant repercussions for individuals and small businesses in Nigeria, many of whom rely on WhatsApp, Instagram, and Facebook for customer engagement.

Some privacy lawyers have questioned the FCCPC’s use of the National Data Protection Regulation as the foundation for the fine. Enacted in 2019 by the National Information Technology Development Agency, the NDPR is Nigeria’s principal data protection framework. Two unnamed lawyers have expressed doubts about the NDPR’s authority in such a high-stakes matter and questioned whether a government regulation can be deemed definitive in privacy issues.

Additionally, two unnamed government officials have raised concerns about the fairness of the $220 million fine. “We are too revenue-focused. What is the opportunity cost of $220 million in government coffers?” questioned an industry expert.

Should WhatsApp choose to halt its operations in Nigeria due to these demands, both the FCCPC and the Nigerian government will face significant scrutiny and consequences.

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Business

Lagos Govt to tax content creators, remote workers, influencers N200b annually

by Folarin Kehinde
written by Folarin Kehinde

The Lagos State government has unveiled an ambitious plan to generate N200 billion annually by expanding its income tax base to include remote workers and leveraging digital solutions for enhanced revenue collection, Nairametrics is reporting.

According to the synopsis document for the EKO Revenue Plus Summit, which is expected to hold on September 25th and 26th, 2024, with the theme “Unlocking New Revenue Streams for Lagos State”, this southwest state plans to raise N5 trillion internally generated revenue (IGR) from four major sectors.

One of such sectors is the digital economy, through which Lagos State plans to introduce a Resident Global Digital Citizen Tax Management System, targeting remote workers, foreign firms, and digital influencers. This system will also involve accreditation and licensing of digital economy operators, supported by a robust platform including e-Portal, Market Place, and a Recovery Platform.

According to the synopsis document, the initiative’s estimated budget is N250 million, covering portal construction, data mining, partnerships, stakeholder engagements, and communications. The southwest state aims to generate N200 billion annually from about two million people in this area.

With the EKO Revenue Plus Summit happening in September, Lagos State plans to hit N5 trillion in internally generated revenue (IGR) under the current governorship of Babajide Sanwo-Olu. A part of the document read: “Increasing Lagos State IGR to 5 Trillion Naira in the life of the current administration requires a comprehensive and innovative approach that leverages technology, strengthens tax administration, expands the tax base and explores new revenue stream options, especially in the non-tax areas, while optimizing the existing processes.”

News credit: nairametrics

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