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CBN Must Review 41 Items Restricted From FX Market

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The Organised Private Sector, OPS, yesterday, insisted that the Central Bank of Nigeria, CBN, must review its policy on the 41 items restricted from official foreign exchange market.

According to the group, the decision is hurting the manufacturing sector in such a way that could no longer be ignored, having led to the closure of many companies and relocation of others from Nigeria to Ghana and other neighbouring countries. It has also led to the refusal to repatriate over $10 billion held offshore by Nigerian businesses. These views were expressed by the Manufacturers Association of Nigeria, MAN; National Association of Small and Medium Enterprises, NASME, and the Lagos Chamber of Commerce and Industries, LCCI, at a ‘Stakeholders’ Dialogue on the Manufacturing Sector in Nigeria’, organised by NOIPolls and the Centre for the Study of the Economics of Africa, CSEA, in Abuja.

Generally, MAN, NASME, LCCI and NOIPolls stated that about 272 manufactures are either ailing or have closed shop over the last couple of months, while thousands of jobs are being cut on a daily basis.

According to Mr. Vincent Nwani, Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), the CBN announced the 41-item list without consulting the sector and that the chamber has made several representations to the apex bank without the desired results.

“We did press releases; we did stakeholders engagement; we engaged with the CBN at all levels, at least three times; we met the directors twice–up to the CBN Governors on this same matter of the 41 items- giving them examples of product-by-product. There must be an urgent review of the CBN’s policy on the restriction of access to foreign exchange placed on 41 items, as about16 of the total items in the list, serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items.”

Specifically, he said the ban on oil palm has led to the loss of about 100,000 jobs over the last couple of months, with major blue chip companies in Nigeria relocating to neighbouring countries; while the ban on glass and glassware has led to the loss of 80,000 jobs mainly in the pharmaceutical industry, as companies in this sector now find it difficult to package their products.

He said: “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand of the country is put at about 1.8 million metric tonnes. Today, Presco Oil has orders of up to December 2017 to fill, it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.

“Some of the items placed on the restriction list by the CBN should be reinstated until the country develops the capacity to produce them locally. Some of the items need a period of between three and seven years for the country to develop self-sufficiency in their production. For instance, it takes a minimum of five years for oil palm to be planted and for harvest. The CBN should have given us more time. The manufacturing and industrial sectors lost about N1.4 trillion as a result of foreign issues, while about 780 raw materials needed by the sector were affected by the restrictions placed by the CBN.

“I have talked about palm oil, I have talked about glass and glassware, I have talked about rubber and rubber ware. Glass and glassware, rubber and rubber wares you need about a 3 year gestation period. The palm oil, we need 5 years gestation period before we can have the local capacity to be able to supply the 1.2 million metric tons that is in deficit as we speak. I will not be able to remember all the items off hand but we have the list and I can simply make it available.

“We have sent it to CBN before, they put up resistance about it and we are ready to send it again. You know the challenge the organized private sector had initially was that we were not able to understand the magnitude of this challenge.

“We are making this demand on the basis that we don’t have local capacity for the affected items on the list. Even if we are having scarcity of foreign exchange some of these lists need to be supplied and because of that, few of our members who have been able to earn export credit or export income in dollars have refused to bring it in or repatriate it. We have about $ 10 billion stuck in one country or the other earned by our members. Some of them are not manufacturers; some are agriculturists or merchants of different products. They cannot bring it in because the business confidence, the manufacturing confidence, industrial confidence is negative.

“Until we do something to boost this confidence all of this money will be stocked abroad. Even Nigerians that are living in the Diaspora that was able to bring in $ 23 billion in 2013. Last year we saw about 5 billion dollars, this year it is going to be less than 3 billion dollars. This is what negative confidence can do to an economy.”

Speaking in the same vein, Executive Secretary of NASME, Mr. Eke Ubiji, stated that recently, about 222 of its members have either collapsed or are ailing, while he blamed lack of access to credit, foreign exchange challenges, high interest rate, multiple taxation and poor infrastructure, among others, for their woes.

MAN

Also speaking, Mr. Ambrose Oruche, Director, Economics and Statistics of the Manufactures Association of Nigeria, MAN, lamented that the unavailability of productive inputs is the major challenge confronting manufacturers, stating that this was as a result of the restriction placed by the CBN on certain items.
According to him, the current operating environment in the country is harsh for many manufacturers to continue to operate, disclosing that some economic policies churned out by the Federal Government and the CBN are conflicting and are retarding the growth of the manufacturing sector.

He argued that the manufacturers were not consulted by the CBN and other regulators before the restrictions were placed on the items, noting that many of the products under foreign exchange restrictions are raw materials needed by manufacturers.

He said, “Presently, about 50 manufacturers have closed shop, while some have downsized.

Some manufacturers are still producing due to their love for this country. Government policy on cement should have adopted in this case.

“In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible for us to be a net exporter of the commodity.”

MPR

Mr. Oruche further faulted the decision of the CBN to increase the Monetary Policy Rate, MPR, to 14 per cent, stating that it has made it difficult for manufacturers to access funds to finance t heir operations. According to him, the fact that the economy is technically in recession, the CBN’s effort should have been directed towards expanding the economy rather than contracting it.

He also listed high interest rates, poor patronage of local manufactured products, poor supporting infrastructure, such as poor power supply, policy somersault and policy inconsistency, among others, as the challenges confronting manufacturers. To address the declining fortunes of the manufacturers, Mr. Oruche called for the resuscitation of domestic refining, as this would ensure that certain chemicals imported into the country, can now be sourced locally.

He also stated that attention should be paid to developing the infrastructure base of the economy and also on energy generation and distribution, while the Federal Government should also grant incentives and concessions to businesses.

The Chief Executive Officer of NOIPolls, Mr. Bell Ihua, said that the organization’s survey covered all six geopolitical zones of the country and that urgent actions were needed by the federal government to save the sector.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Netflix Increases US, Canada Subscription Fees…Nigerian Subscribers To Suffer Same Fate

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With the increase in inflation rates and the unstable foreign exchange, Netflix is likely to hike its subscription fee in Nigeria.

This is following the latest increase in its subscription fee in the United States and Canada, effective immediately for new subscribers.

Usually, when the inflation rate rises, prices of goods and services also increases, and consequently, banks raise their interest rates as well to cope and maintain their profit margin.

In the U.S., subscribers to Netflix’s basic plan, which allows for one stream on one screen at a time and does not have HD streaming, will now be charged $9.99 a month, up from $8.99.

The standard plans, which allow for users to stream on two screens at the same time now costs $15.49 per month, an increase from $13.99, while premium plans have also increased to $19.99 a month.

Investors King gathered that this is the third time Netflix will raise its prices in three years and the first since October 2020 for streamers residing in the U.S. and Canada.

Presently in Nigeria, Netflix’s subscription rate ranges from about  3,300 to about 5,800 per month.

Investors King recalls that Netflix, in 2020, officially launched its presence in Nigeria and since its launch, the streaming company has dominated Nigeria’s relatively new video-on-demand market with some hit movies and web series like King of Boys, Òlòtūré, Citation, Lionheart, Namaste Wahala, among others.

Today, Netflix has over 151 million paying subscribers in more than 190 countries.

Meanwhile, the Federal Government of Nigeria is making plans to force international social network services and digital platforms to register and open offices in Nigeria.

This means that media services, social media platforms and digital streaming platforms like Netflix and the others must register and pay tax in Nigeria and register with the National Broadcasting Corporation (NBC).

This move, according to the government, is to ensure that all these platforms register with the NBC, apply for a broadcasting license and pay tax.

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NLNG Halts Cooking Gas Export, Directs All Sales to Local Market

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The Nigerian Liquefied Natural Gas (NLNG) Limited has suspended cooking gas export to prioritise the local market by supplying 100 percent of its propane and butane (cooking gas) products to Nigerians.

Before now, “Nigeria LNG Limited supplied LPG (Liquefied Petroleum Gas) both to the Nigerian and international markets. With the decision of the Board of Directors, all of the company’s LPG production will be delivered to the domestic market.”

In its statement, the NLNG said it had designed a scheme to sustainably supply LPG (butane and propane) for usage in cooking gas blending as well as in agro-allied, autogas, power and petrochemical sectors of the Nigerian economy to improve gas utilisation in Nigeria.

The initiatives were designed to increase LPG availability in Nigeria, diversify its uses and support the Federal Government’s Decade of Gas initiative, NLNG Managing Director and CEO, Dr Philip Mshelbila said.

Committing 100 per cent of Nigeria’s LPG supply is a major milestone in NLNG’s journey of domestic gas supply, he said, adding “We supplied our first butane cargo into the domestic market in 2007, which helped to develop over the years the LPG industry in Nigeria from less than 50,000 tonnes to over 1 million tonnes market size annually by the end of 2020.

“In 2021, we increased our LPG supply commitment from 350,000 metric tonnes (or 28 million 12.5kg cylinders) to actual delivery of 400,000 metric tonnes (or 32 million 12.5kg cylinders) thereby directing most of our production into the domestic market.

“But this was not enough for NLNG, hence this commitment to do all that we possibly can and supply 100 percent of our LPG production to the domestic market.”

With recent talks of going green, by reducing harmful emissions which cause global warming, Mshelbila noted that gas is the cleanest of the fossil fuels, and an essential energy source the Nigerian market needs to be reckoned with during this energy transition period.

“Other countries are revolutionising their energy industry to cut down on carbon emissions drastically. Nigeria should not be left out in this drive, considering its abundant gas resources.

“Gas is essential for life and living at the moment, because it can support everything we will need to develop our economy and create better living standards for Nigerians. We need to change the narrative, and NLNG is being pragmatic about it,” he said.

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FCT-IRS Encourages Taxpayers, Businesses to File 2021 Tax Returns Before Jan 31, 2022

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Company Income Tax (CIT) - Investors King

The Federal Capital Territory Internal Revenue Service (FCT-IRS) has said all employers should file their tax returns for the previous year and submit them before January 31, 2022.

It called on taxable persons working under the Ministry Department and Agency of the government, private firms and self-employed persons resident in Abuja, to fill and sign form A which is the income declaration form.

According to a statement issued by the Service Corporate Head of Communications, Mustapha Sumaila, all tax returns should be submitted through any of the service’s tax offices across the territory.

Employers were asked to also file Employer’s Annual Declaration and Certificate– form H1 and form G, disclosing all emoluments paid to its employees resident in Abuja for 2022.

These documents as required by the law must be submitted before January 31, 2022, the stipulated deadline.

The tax agency, however, stated that the deadline for individual taxpayers is March 31, 2022.

“In compliance with section 41 of the Personal Income Tax Act (PITA) 2011 (as amended), all taxable persons, resident in the FCT are required to file annual returns of all incomes from all sources for the year ended December 31, 2021 and within 90 days from the commencement of the year (i.e between 1st January 2022 and 31st of March 2022, using the prescribed form A,” the statement read.

FCT-IRS noted that all defaulters will be penalized as it frowned at the refusal to prepare the tax returns files or late submission, adding that the agency would apply the laws where necessary.

It, therefore, called on agents–employers and individual taxpayers to do the needful and submit their returns promptly.

Appealing to Abuja residents to ensure compliance, it reminded them that payment of tax is their civic responsibility and no taxable person should be left out.

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