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Power Sector Reforms Must be Completed

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The President, Lagos Chamber of Commerce and Industry, Dr. Nike Akande, discusses how to move the nation’s economy forward in this interview with Anna Okon

What is the nation’s economic outlook for 2016?

With the cabinet in place, ongoing budget processes, drive for economic diversification, concerted efforts against corruption and the various reforms in the critical sectors, we expect to see positive developments in the economy.

This year (2016), Gross Domestic Product growth is expected to rebound, though slowly, if the right mix of fiscal and monetary policies is put in place to stimulate the economy and attract domestic and foreign investments.

While the recovery is expected to be driven by increase in government expenditure, the growth in oil sector may be constrained still by low price and dragging investment drive.

The Treasury Single Account is also expected to plug leakages, curb corrupt tendencies, increase revenue to government and thereby improve funding for government projects.

The Managing Director, International Monetary Fund, Christine Lagarde, recently paid a visit to Nigeria. The core of her visit were issues bordering on drastic fall in government revenue occasioned by the plunge in global oil prices, budget deficit financing, economic diversification and lots more. What is your take on these issues?

We must recall that the new political administration led by His Excellency, President Muhammadu Buhari came into power on May 29,, 2015 at the time the country was facing serious economic challenges as you earlier highlighted.

The challenge faced by the economy, as a result of the decrease in oil revenue, which prompted fiscal imbalances, is a global phenomenon especially among the oil-exporting countries. We need international cooperation and partnership as there is, obviously, no easy way out of the crisis. Therefore, the visit of the IMF boss is, indeed, timely as it offers us the opportunity to deliberate on these issues towards fostering the international partnership and cooperation, especially with the Fund.

Above all, the government needs to develop other sectors of the economy like manufacturing, agriculture and solid minerals and service sectors to strengthen the current economic cord.

The way to do this is to create an enabling environment in terms of the right infrastructure, affordable long-term financing and the right policies.

Nigerians are very enterprising. Once the environment is right, Nigerians will make things happen. We also need to patronise made-in-Nigeria products to encourage our local manufacturers.

There had been persisting scarcity of petroleum products leading to long queues at filling stations, traffic congestion on the roads and loss of man hours. What is LCCI’s position on the downstream petroleum sector?

The persistent fuel crisis in Nigeria again underscores the need to urgently review the current policy framework of the oil and gas industry, especially with regard to the petroleum downstream sector. We commend the efforts of the government in revamping the refineries with a view to reducing our fuel importation in the coming years. We hope to see a situation where eventually all our refineries are operating optimally and the private sector should be encouraged to participate more in the sector thereby creating jobs for Nigerians.

The private sector is ready to partner the government to make these efforts work as government must not be left alone in these endeavours.

How have your members been coping with the challenges of electricity supply and consumption in Nigeria? And what is the way out?

The power situation has been a challenge from time past and fixing it will require consistent investments in that sector. The present administration has shown that power supply is one of its top priorities.

The Honourable Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was the governor of Lagos State, is known to be a go-getter.

I believe private sector businesses are ready to pay for electricity once it is available. I urge the government to continue with the pace of reforms in the sector to ensure that more electricity consumers have meters.

You are the second female president of the LCCI in its 127-year history. How would you assess the leadership opportunities for women in the corporate world in Nigeria? And what is the Chamber doing to encourage women entrepreneurs?

Women are doing well in many spheres of the corporate world. For instance, the Chairmen of First Bank, Access Bank and Guaranty Trust Bank are all women. We also have many women as Chief Executive Officers of big organisations across all sectors. We are doing well. But we can do better.

The ratio, to a large extent, is still skewed towards men. The LCCI has a vibrant women group which focuses on the advancement of the interest of women. They seek opportunities for women in all areas of enterprise and finance. They also collaborate with embassies and international organisations that have programmes for women.

In addition, the Chamber has a robust mentoring programme for young people to make them entrepreneurs. We attach these young people to our members for a period of time to teach them and share experience with them on managing businesses. The third batch of about 35 mentees graduated only a few weeks ago. We also train young entrepreneurs to build their capacities in different areas of business.

You are a two-time Minister of Industry. What was the experience like? And how would you assess the present administration from a private sector point of view?

First of all, my experience as a two-time Minister of Industry was very exciting and yet challenging. But I thank God for the opportunity to serve my country at such a high level.

During my tenure, we set up industrial development centres all over the country to support industrialisation, especially small scale industries. I also supervised many parastatals that interfaced with investors. One of them was the Nigerian Industrial Development Bank, which is now the Bank of Industry.

I have also supervised the Benue Cement Company, the Machine Tools, Oshogbo and many more.

Frankly speaking, the government has been doing a great job fighting terrorism. You know you cannot do business when security is not guaranteed.

Also, the government has also been doing a lot in fighting corruption which is also one of the biggest problems we have in the country.

With the new budget and some new policies, I am sure we will have more programmes and activities this year. We will continue to give government the necessary support to make the country better.

As the new President of the Lagos Chamber of Commerce and Industry, what is your vision for the chamber and how do you plan to achieve it?

First of all, I give glory to the Almighty God for the opportunity to serve my country on this platform and in this capacity. I am also grateful to members of the LCCI for electing me. Being the President of the Chamber is, indeed, a great task. I will, therefore, be resolute in contributing my quota to the advancement of the cause of the Nigerian private sector and the progress of our economy as a whole.

Furthermore, while a lot has been done by all my predecessors towards achieving the core objectives of the Chamber, I am prepared to build on their worthy legacies by pushing the frontiers as regards strengthening the effectiveness of the LCCI advocacy and research activities to create a more conducive environment for investors.

We will also work towards putting in place strategic innovative programmes to attract and retain more members across sectors. In fact, since my assumption of office, quite a number of people have shown interest in joining the Chamber.

Also, we will diversify our trade fairs and exhibitions to cover more sectors and specialised exhibitions thus making it the best in Africa.

We aim to consolidate on the landmark achievements of our training arm through which we embark on capacity building for Small and Medium Enterprises.

We are looking at improved close collaboration and partnership with federal and state governments as well as the private sector to improve the business environment.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Economy

MEND Tackles Ex-Agitators For Threatening To Bomb Oil Installations In Rivers 

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pipleline vandalisation

A war of words has ensued between a militant group, the Movement for the Emancipation of the Niger Delta (MEND) and a coalition of ex-agitators over alleged plan to attack oil installations in the region by the latter group.

Following the political crisis rocking Rivers State, a coalition of ex-agitators and fighters in the region under the aegis of Niger Delta Development Force had last week threatened to blow-up oil facilities in the region over what it termed a plot to seize financial allocations meant for local government areas in Rivers State through the courts.

The former warlords dared the Federal Government and the Central Bank of Nigeria, saying if they proceeded in withholding the funds for the state, it would have grave consequences.

Kicking against the threat, MEND’s spokesman, Jomo Gbomo, in a statement on Friday, said it will support security operatives in safeguarding crude oil installations from any attack.

Gbomo also said MEND is not in support of the violence that Rivers State has been experiencing due to the lingering feud between the Minister of the Federal Capital Territory, Nyesom Wike, and his successor and estranged political godson, Siminalayi Fubara.

Describing the attack plan as threat to the economy of the country, Gbomo said it would be most unfortunate for a political dispute between two politicians to cost the state and Nigeria assets that are pivotal to nation’s survival.

Noting that the both feuding political gladiators are sons of the Niger Delta, the spokesman asked those making the threats not to allow themselves be tricked using the present circumstance into carrying arms against the Nigerian state on behalf of any of them, not even for any price.

He said as an Ijaw son, he knows the gains of having an Ijaw man as governor in Rivers, adding that it is an achievement which would not have been possible but for the collaboration of other ethnic groups.

According to him, the current healthy collaboration from the various ethnic groups which produced an Ijaw son as governor was spearheaded by the FCT Minister.

The statement said not only would MEND back the Federal Government in protecting oil facilities, but it would also ensure that the masterminds of the threats to attack oil installations are fished out and meant to face justice.

The MEND spokesman, however, urged the elders and traditional institutions in the region to intervene in the face-off between Governor Fubara and the FCT Minister.

He also urged parties in the festering political crisis to seek judicial redress if peaceful dialogue fails.

 

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Economy

Northern Governors Oppose New VAT Model as FG Defends Tax Reform Bills

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Value added tax - Investors King

The Federal Government has addressed concerns raised by the Northern Governors’ Forum regarding the proposed tax reform bills before the National Assembly.

Investors King gathered that Governors of 19 Northern States of Nigeria, under the platform of the Northern Governors’ Forum met with the traditional rulers from the region to agree to disagree with the Federal Government’s new value-added tax model.

In a communiqué read by the chairman of the forum, Governor Muhammed Yahaya of Gombe State, the governors strongly opposed the new derivation-based model for Value-Added Tax (VAT) distribution in the new tax reform bills proposed by President Tinubu’s government.

Addressing the governors’ concern, the FG in a statement on Thursday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga stated that the proposed bills will streamline Nigeria’s tax administration processes, enhance efficiency and eliminate redundancies across the country’s tax operations.

According to Onanuga, the bills which is currently before the National Assembly for consideration emerged after extensive review of existing tax laws.

The statement reads, “While we commend the Governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration.

“President Tinubu and the Federal Executive Council recently endorsed new policy initiatives aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.

“These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernise Nigeria’s tax landscape.

“First is the Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.

“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.

“Third, the Nigeria Revenue Service (Establishment) Bill seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.

“Fourth, the Joint Revenue Board Establishment Bill proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering federal and all states’ tax authorities.

“The fourth bill also suggests establishing the Office of Tax Ombudsman under the Joint Revenue Board, which would serve as a complaint resolution body for taxpayers.

“It is instructive to note that these proposed laws will not increase the number of taxes currently in operation. Instead, they are designed to optimise and simplify existing tax frameworks.

“The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians.

“The reforms will not lead to job losses. On the contrary, they are structured to stimulate new avenues for job creation by supporting a dynamic, growth-oriented economy.

“Importantly, these laws will not absorb or eliminate the duties of any existing department, agency, or ministry. Instead, they aim to harmonise revenue collection and administration across the federation to ensure efficiency and cooperation.

“At the moment, tax administration lacks coordination among federal, state, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency. Without reform, this inefficiency will persist.

“The proposed laws aim to coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers.

“Under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.

“The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.

“On the proposed derivation-based VAT distribution model, which the Northern Governors oppose, it must be stressed that the new proposal, as enunciated in the Bill, is designed to create a fairer system.

“The current model for distributing VAT is based on where the tax is remitted rather than where goods and services are supplied or consumed. The ongoing tax reform seeks to correct the inherent inequity in the current derivation model as a basis for distributing VAT revenue.

“The new proposal before the National Assembly outlines a different form of derivation which considers the place of supply or consumption for relevant goods and services. This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.

“These reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country. There is no better time than now for the National Assembly to give due consideration to these bills that will overhaul our tax systems and create the revenue all the tiers of government require to fund the development our country and people urgently need.”

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Economy

Solid Minerals Sector Adds Over N1 Trillion to Nigerian Treasury in 16 Years – NEITI

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mining sector

The Nigerian Extractive Industries Transparency Initiative (NEITI) said the solid minerals sector has contributed around N1.137 trillion in direct payments to various government levels over 16 years.

This was disclosed in the 2023 Solid Minerals Audit Report, the 16th audit cycle, which provided a comprehensive overview of the sector’s contributions from 2007 to 2023 published on Wednesday.

The report was conducted by indigenous firm Haruna Yahaya and Co., and covered the solid minerals industry’s economic contributions, revenue streams, and exports, providing recommendations for sector reforms.

The report showed a substantial increase in government receipts from N7.59 billion in 2007 to N341.27 billion in 2022, a 44-fold rise, indicating solid sector growth.

The 2023 report underscored the sector’s evolution into a vital revenue contributor for Nigeria, with cumulative contributions now exceeding N1 trillion. It disclosed that in 2022, the sector generated N345.41 billion, with a reconciled final revenue of N329.92 billion.

Meanwhile, the report also identified the solid minerals sector’s Gross Domestic Product (GDP) contribution at 0.83 percent in 2022, with incremental growth to 0.75 per cent in 2023, underscoring untapped potential.

The initiative reiterated the policy measures and reforms needed to unlock the sector’s capacity to significantly contribute to Nigeria’s economic diversification

“Company payments analysis indicated that total government revenue, including reconciled and unilaterally disclosed figures, reached N401.87 billion in 2023.

“Key revenue streams included VAT (N128.32 billion), FIRS taxes (N370.09 billion), Education Tax (38.64 percent), Company Income Tax (10.64 percent), and royalties (N9.06 billion).

The report also showed that discrepancies initially amounted to N301.6 billion but were reconciled down to N100 million, demonstrating NEITI’s transparency commitment.

The production and export data showed 95.07 million tonnes of minerals produced in 2023, with a significant export volume of 4.32 million metric tonnes, valued at N117.29 billion.

The report highlighted top mineral-producing states, including Ogun, Kogi, and Rivers, with Ogun leading production. Revenue contributions were led by Osun, Ogun, and Kogi states

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