- Knocks for Govt’s Plan to Exempt Firms from Tax
The Federal Government’s plan to exempt 27 industries from paying companies’ income tax for three years, with an extension for one or more years, has been faulted by financial pundits and investment firms.
The FBN Capital, the investment and research arm of FBN Holdings, said the Federal Government’s initiatives, which include tax exemption for targeted firms, may have a negative impact on revenue collection. The government is also interested in developing economic plans for six special economic zones (SEZs) – one for each geo-political zone.
According to the firm, the authorities can argue that an initial sacrifice will yield far greater fiscal benefits over time. However, the government is under fiscal pressure, judging from the Central Bank of Nigeria (CBN) Governor’s recent statement that the deficit in the first-half of this year was a provisional N2.51 trillion, compared with the full-year target of N2.36 trillion.
In these circumstances, the firm believes the government may want to redouble its efforts to scrutinise the tax exemptions granted by the previous administration.
In a report titled: “The FGN’s pursuit of Investment”, the research firm said the government has already named 27 industries as eligible for pioneer status incentives.
It said their principal benefit is exemption from companies’ income tax for three years, with a possible extension for one or two years. Also, it believed that monitoring of the scheme would be the responsibility of the Nigerian Investment Promotion Council, which will maintain a list of qualifying companies on its website. The FGN is also developing its plans for six special economic zones (SEZs) – one for each geopolitical zone.
“The two initiatives are driven by the FGN’s determination to attract investment. Nigeria has some catching up to do. Investment amounted to just 14.8 per cent of Gross Domestic Product (GDP) in 2015. We recall an old donor rule-of-thumb estimate that a steady investment ratio of 25 per cent generates about five per cent GDP growth. Nigeria requires rather higher growth, not least because its population is said to be growing by 2.8 per cent yearly,” it said.
It added that an industry or company may be designated pioneer if its development is viewed to be in the public interest, and urged government that such plan should not be interpreted as an invitation to push national prestige projects.
The FBN Capital said an opportunity has emerged for Nigeria and other low-wage economies. “An estimated 85 million manufacturing jobs are being relocated from China due to rising labour costs including 20 million in textiles and clothing. The textile worker in China is paid $700 per month, rather more than the proposed national minimum wage in Nigeria of N45,000 ($150) per month,” it said.
It however, said that free zones have delivered some impressive results. In the 1980s there was Mauritius, and much more recently Ethiopia.
“In June Nigerian government advisors witnessed the opening of the country’s fifth zone, reserved for textiles and clothing and set to create 65,000 jobs. The example of China is Ethiopia writ large, and it is no coincidence that investors from the first are prominent in the Ethiopian zones. The first four zones were established in south-east China in the 1980s.
According to data cited by the Abuja Chamber of Commerce and Industry, zones accounted for 22 per cent of Chinese GDP and 50 per cent of its Foreign Direct Investment in 2007,” it said.
BUA, Kainos Exploration to Drag Each Other to Court Over $20 Million Scandal
BUA Group on Monday threatened to drag Mr James Onyejekwe, the Managing Director of Kainos Exploration to court over a publication that claimed the Group was involved in a $20 million scandal.
BUA stated in a statement issued on Monday.
It stated that the publication engineered by Mr Onyejekwe was a “clear intent to impugn the integrity and reputation of BUA Group and its Chairman, Mr Abdul Samad Rabiu.”
“BUA takes its reputation seriously and we will continue to do everything to protect it from anyone and any entity who obstructs our mandate to conduct business in a proper, legal and socially-responsible manner.
“BUA will, therefore, utilise its legal and human resources to resist every campaign of defamation and distraction,” the statement further said.
The leading cement manufacturing company said its independent investigation showed Mr. Onyejekwe was behind the false story that went viral online.
“We have, therefore, instructed our legal team to immediately commence criminal defamation proceedings against the person of Mr James Onyejekwe who is the said originator of the malicious letter fraudulently attributed to Cavendish Petroleum against our person, with damages,” the statement seen by Investors King noted.
BUA explained that “We deem these actions necessary, in order to protect the name and reputation of BUA Group.”
“We see no reason why Mr James Onyejekwe of Kainos Exploration and Processing would single out BUA in a supposed business dispute which had no link to the BUA Group in its entirety.
“Therefore, BUA finds it absurd that Mr Onyejekwe or anyone else will decide to drag BUA into their issues and/or put out such a malicious and defamatory statement, fraudulently using the name of Cavendish/Mr Mai Deribe without recourse to the truth, facts, decorum or decency,” it added.
BUA Group described the story bordering on allegations of corruption as “false, malicious and spurious.”
Dangote Cement Emerges Best Performing Firm In Africa
The Kogi State Chamber of Commerce, Industry, Mines and Agriculture (KOCCIMA) has named the Dangote Cement Plc, Obajana Plant, as the best performing company in Africa.
The award was presented to the company in Lokoja at the weekend by the Deputy Governor of Kogi State, Chief Edward Onoja, who represented the State Governor, Alhaji Yahyah Adoza Bello, at the Annual General Meeting(AGM) of KOCCIMA.
Speaking at the occasion, the President of KOCCIMA, Mr. Victor Ibrahim, said the Dangote Cement emerged through a thorough screening process that involved 20 companies.
He said: “Our screening committee considered many criteria before Dangote Cement Plc was selected”.
According to him, the Chamber put into consideration Dangote Cement’s contributions to the state’s economy through Internally Generated Revenue(IGR), as well as its good relationship with KOCCIMA.
Mr. Ibrahim said another criterion that placed the Dangote Cement in good stead is that the company has been environmentally friendly.
“We’ve visited DCP Obajana Plant and we found it complying with global best practices when it comes to the environment. Your parking lot does not constitute any environmental danger. We also considered returns to investors, the welfare of staff, the 43km Obajana-Kabba concrete road, your good relationship with the host community and your positive image”.
He announced that the Chamber of Commerce was planning to host its Trade Fair by year-end and looking forward to collaborating with the Dangote Cement Plc.
The Deputy Governor Mr. Edward Onoja expressed the appreciation of the Kogi State Government, saying the contributions of KOCCIMA and the private sector were crucial to the development of the state.
Speaking to newsmen on the sideline of the event, representative of the Dangote Cement Plc Mr. Ademola Adeyemi said the company was elated and that the award will further spur it to continue its support to the state’s economy, KOCCIMA and Corporate Social Responsibility schemes.
MTN Appoints Chika Ekeji as Executive Lead for Strategy and Transformation
MTN Appoints Chika Ekeji, A Nigerian-American as Executive Lead for Strategy and Transformation
MTN Group has announced the appointment of Chika Ekeji, a Nigerian-American national as an executive to lead the strategy and transformation unit of the mobile network operator.
Chika has a Master of Engineering in Computer Science from Cornell University and an MBA from MIT.
He will be leaving from McKinsey & Company, where he led the West Africa Digital Practice and served telco, financial services, and public sector clients across Africa.
His appointment with Africa’s leading mobile operator will be effective on, 15th of March. In his new role, he will be based in SA.
“We are very pleased that Chika is joining us as we work to accelerate our strategic repositioning,” says MTN Group chief operating officer Jens Schulte-Bockum.
To support the execution of the repositioned strategy, Ekeji joins a group of other recent appointees, including the new group chief financial officer, Tsholofelo Molefe.
In recent weeks, MTN also made changes to the group’s regional structure and the executive committee.
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