- Fed Govt Loses Trillions as Stamp Duty Fee is Unremitted
Stamp Duty charges on bank transactions may have yielded trillions of naira, but the revenue is unremitted to the Federation Account.
The fate of the revenue, which is believed to have risen to over N7trillion as at 2015, has pitched the Nigerian Interbank Settlement System (NIBSS) against the School of Banking Honours (SBH), an institution registered by the Nigerian Copyright Commission. The SBH is spearheading the recovery and remittance of the funds into the Federation Account for sharing by the Federal Government and the 36 states.
SBH’s Project Consultant/Acting Rector Tola Adekoya said based on findings from the research arm of SBH, he raised a Demand Notice dated 10th March, 2015, entitled, “Stamp Duty On Electronic Transfer Receipts (2013-2014)” on NIBSS for N7.719trillion as accruing and unremitted revenue to the Federal Government and the states.
He was invited by NIBSS for a discussion, but Adekoya is yet to honour the invitation.
“That invitation is traceable to the Demand Notice of 10th March 2015 that SBH raised on NIBSS as Stamp Duty of N7.7 Trillion due to 36 states and the Federal Government on electronic cash-less transfers which turned over an aggregate N160 Billion daily in just five states of the federation in early 2013, as reported by Central Bank Nigeria (CBN),” Adekoya said.
He said from all indications, that figure may have risen close to N20trillion. He said: ”Further reports revealed that the Stamp Duty revenue has now increased to N20trillion (in local banks), or $53.3 billion (in foreign banks) in four years to 31st March, 2017, and out of which less than one per cent was later swept into a dedicated account with Central Bank of Nigeria, in 2016.”
To him, the matter of diverted public fund should be of serious concern to the public in view of the amount that is in contention and the involvement of agencies and persons allegedly denying governments of such huge revenue collected from the unsuspecting banking public and for appropriate disciplinary action to be taken.
By its Memorandum of Association, the SBH is approved to research into banking operations, and collaborate with banks and government on banking matters. It is empowered to represent government in the suit under its Copyright Certificate No. LW1023 dated 27th September 2012, and titled, “50-Naira Stamp Duty for Government on Electronic Cashless Transfers and Manual Bank Teller Deposits”.
Adekoya said the alleged diversion of public funds should be of serious concern to the public in view of the amounts involved, and the culpability of agencies and persons that have been denying government of such huge revenue collected from unsuspecting banking public, for appropriate disciplinary action.
He said the SBH had approached the CBN in 2012 to partner on the research outcomes that would absorb retrenched and ex-bankers to lead its young emerging bankers on practical part-time banking jobs at a lower career level that is branded as “Shadow-Banking”.
“SBH clarified that Shadow-Banking products would birth other Shadow Industries to absorb the youth in high volume, until vacancies exist in their target career sectors, and for which they could be employed,” Adekoya said, adding that the SBH offer was turned down by the CBN, hence the body later aligned its job creation activities with CBN’s Financial System Strategy (FSS) 2020, but the CBN did not complement this, either, he stated.
Undeterred, Adekoya said, “the Institute then proceeded with a proposal to Nigerian Postal Services (NIPOST) on 20th April 2012 to increase its internal revenue by exploring a narrow window provided for affixing adhesive stamp on banking receipts in Stamp Duties Act 2004, and a Master Services Agreement was signed by both parties on 14th September 2012”.
“The institute then reverted to CBN on its first research work by a letter dated 27th September 2012, titled, “Revenue Collection for Government through Banks”, requesting for approval to engage banks and other financial institutions as collecting agents on the stamping and remittance of Stamp Duty on manual and electronic transfer receipts from N1,000 ( inclusive of all those from below N500,000 that CBN had earlier set as limit for banks) into government coffers,” the report said.
The SBH got approval letters from the CBN. Its two defined roles were firstly to affix N50 stamp as evidence of Stamp Duty Paid on bank receipts, as covered by the Master Services Agreement with NIPOST, and secondly to sweep Stamp Duty Revenue to government, as duly covered by the Copyright Certificate No. LW1023.
Based on the CBN approvals, the institute secured written commitments from three banks to lead other banks on manual stamp duty collection for government.
Adekoya said since “NIBSS needed no such circular on electronic stamp duty collection for the government, because it runs a central operation, it joined the institute at a press conference on 4th January 2013 to support the government’s revenue project, and was engaged as the ‘official sweeping agent’ for government on 7th January 2013.”
He said the government directed that the only thing we should not charge stamp duty on is naira currency. “We went to Nigeria Interbank Settlement System (NIBSS), which is the firm maintaining the portal for cash-less policy for all the banks. By January 2013, we were ready to run it. Since 1993, NIBSS has not remitted any stamp duty to the government,” Adekoya, said.
US, Japan National Debt Surges by $8 Trillion in the Last 12 Months, China Recovers
The coronavirus-induced recession has seen countries that were already battling a skyrocketing national debt plunge into more crisis.
Data analyzed by Finbold indicates that the top five countries globally with the highest public debt added $9.17 trillion between March 2020 and March 2021. The United States tops with the debt growing by $4.57 trillion from $23.45 trillion to $28.0.2 trillion.
Elsewhere, Japan’s public debt has grown from $11.42 trillion to $14.64 trillion. Cumulatively, the two countries have added $7.79 trillion in debt. Interestingly, the analysis shows that China’s national debt dropped by $0.57 trillion from $8.56 trillion to $7.99 trillion among the selected leading economies.
In terms of the country’s national debt percentage growth, Germany tops with 35.02%, followed by Japan at 28.2%, and the U.S. ranks third at 19.29%. Italy’s debt grew by 10.8%, with the UK standing at 7.19%.
US debt crisis complicated by Covid-19 response
The record surge in national debt for the covered countries is mainly due to the coronavirus pandemic. The health crisis triggered the most profound economic downturn, with millions of people losing jobs and businesses temporarily or permanently closed; hence, revenues shrunk while spending soared.
Even before the pandemic, the United States was already battling a huge national debt crisis. The situation was further complicated after Congress approved several stimulus packages for relief, widening the debt. Furthermore, the low-interest rates meant that the US had to shoulder a heavier debt burden.
Similarly, Japan’s high national debt stems from the country’s response to the health crisis. The stimulus spending also put more pressure on the already dire public debt.
China’s pandemic response helps lower public debt
Despite being the virus epicenter, it was controlled swiftly, with economic activities resuming normally. There was balance between spending and revenue generation, meaning the deficit amount was low over the last 12 months.
China was also able to inject more money into the economy after becoming a key exporter of products needed to fight and curb the coronavirus pandemic. For instance, Asian nations exported a significant amount of face masks and ventilators to countries that lacked the capacity to produce their own.
Away from the pandemic response, China’s declining public debt ties down the policy. In recent years the country has become less reliant on using credit to handle economic slowdowns. Amid the pandemic, policymakers were even reluctant to over-use debt to hit growth targets.
Overall, most countries globally have enacted a massive amount of monetary and fiscal stimulus to prevent a deep and prolonged recession, in return increasing the public debt burden. However, it appears there has been little effort to balance the coronavirus response with solving the national debt crisis.
The surging national debt for countries like the US is worrying since it has since surpassed its Gross Domestic Product (GDP) of $21.59 trillion, according to the U.S. National Debt Clock. It is an indicator the country might have problems repaying the loans.
With the debt in the unstainable territory for some countries, it might generally impact the government’s ability to tackle future economic downturns.
The Africa Digital Inclusion Facility Approves $1.3m Grants for Two Research to Enhance Women’s Digital Access to Loans and Micro-insurance
The Africa Digital Inclusion Facility approves grants worth $1.3 million for two research efforts to enhance women’s digital access to loans and micro-insurance.
The African Development Bank has approved two grants for research that will increase African women’s access to a range of digital financial services including loans and micro-insurance.
The grants, for $1 million and $300,000 respectively, will be disbursed through the Africa Digital Financial Inclusion Facility, a blended finance vehicle supported by the Bank, to two financial technology firms, Pula Advisors Kenya Ltd., and M-KOPA Kenya Ltd.
Pula Advisors will use the $1 million for research of social, cultural and economic factors that impact women farmers’ access to micro-insurance in Kenya, Nigeria and Zambia. Research findings will inform the design and implementation of gender-centric insurance products. The project will be undertaken over a 3-year time frame.
“This grant funding will be used to leverage technology to develop innovative and responsive loan and insurance products that can spur productivity and inclusion, especially for our women smallholder farmers and traders.” said Sheila Okiro, the Bank’s Coordinator for ADFI.
The three-year project will have three phases: product development; piloting; and scaling; the outcomes are expected to benefit 360,000 farmers, 50% of them women, as well as boost farm yields by up to 30%. This will also raise incomes and enhance household and national food security.
M-KOPA will use the $300,000 grant funding for research involving 250 women and 250 men in Kenya’s Kisumu, Eldoret and Machakos counties. The company will assess the barriers to and opportunities for women’s access to digital financial services and financial literacy programmes via smartphone, and use the research insights to design a financial services app that is relevant to small-scale women traders.
The project, approved by the Bank on 9 February, 2021, will benefit women with no or limited access to financial services that run small informal businesses. Once developed, the mobile app will be used to pilot small loans to the women traders.
Both projects align with ADFI’s digital products and innovation and capacity building intervention pillars as well as its cross-cutting focus on gender inclusion, a thematic running across all its interventions.
The PULA grant approval meets African Development Bank strategic goals, including the Ten-Year Strategy, two High-5 priority areas—feed Africa and improve the quality of life for Africans— and the financial inclusion strategies of Kenya, Nigeria and Zambia.
The M-KOPA project is aligned with the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program that seeks to increase access to finance for women.
ADFI is a pan-African initiative designed to accelerate digital financial inclusion throughout Africa, with the goal of ensuring that 332 million more Africans, 60% of them women, gain access to the formal economy. The Facility was formally launched in June 2019 at the Bank’s Annual Meetings in Malabo, Equatorial Guinea. Current ADFI partners are the French Development Agency (AFD); the French Treasury’s Ministry of Economy and Finance; The Government of Luxembourg’s Ministry of Finance; the Bill and Melinda Gates Foundation; and the African Development Bank, which also hosts the fund.
FirstBank Boosts Cross Border Payment With FirstGlobal Transfer
FirstBank Boosts Cross Border Payment With FirstGlobal Transfer
First Bank of Nigeria Limited has announced the launch of First Global Transfer (FGT) to promote the international transfer of funds across its subsidiaries in sub-Saharan Africa.
The bank, in a statement, said: “First Global Transfer (FGT) initiative is specifically designed to ensure safe, timely and improved efficiency in the transfer of funds across the network of FirstBank subsidiaries in Africa.
“The FGT is not restricted to FirstBank and FBNBank customers alone but it is also open to every individual resident in the country the funds’ transfer is originating from.
“Intending users of the initiative are to visit any of the bank’s branches in Nigeria or subsidiaries in Africa, which are: FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, or FBNBank Senegal to enjoy the service.
“For example, with First Global Transfer, individuals and customers in Sierra-Leone can walk into any FBNBank branch to send money to FirstBank customers in Nigeria as well as FBNBank customers in Gambia, Ghana, DR Congo, Senegal or Guinea.”
Speaking on the initiative, Dr. Adesola Adeduntan, Chief Executive Officer, FirstBank said, “today’s customer is influenced by the technological advancement shaping businesses across various industries and our First Global Transfer (FGT) initiative is one of those advancement created to impact every individual in our host community in Africa, whilst promoting the ease and swift transfer of money from one country to another for business or personal activities.”
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