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Nigeria to Pay Siemens Over N1.15trn for 25,000MW

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  • Nigeria to Pay Siemens Over N1.15trn for 25,000MW

The new electrification project signed by the Federal Government and Siemens AG will cost Nigeria more than N1.15 trillion, the project Technical and Commercial Proposal has shown.

The Federal Government had signed a three-phase project with the Germany-based Siemens on July 22, 2019 after President Muhammadu Buhari and the German Chancellor Angela Merkel met on August 31, 2018 in Abuja.

According to the document, “the potential projects are 1,350MW in Abuja; 1,350MW, Kaduna; 1,350MW in Kano, and 450MW in Lagos (Agura).

“The budgetary cost of the Abuja, Kaduna and Kano projects was put at an average of €700/kW, while that of Lagos was €600/kW, amounting to about €3.11bn ( N1.07tn).

“These above prices are subject to changes based on additional information on the specific projects, location, financing and contractual terms and conditions,” the document said.

However, the additional projects such as “Independent Power Producer projects would be required to close the capacity gap to 25,000MW.”

“The quantity and prices are all ex-work factory and are subject to change after detailed project scoping and design. Budget prices contained here exclude the following: i. Taxes, duties and other logistics costs ii. Project management costs iii. Costs of rights of way, Environmental and Social Impact Assessment, Environmental Impact Assessment, and other required licences or permits,” the document said.

Speaking on the project, President Buhari said the size of the project showed the level of work that needs to be done order to upgrade the transmission and distribution system, adding that he was initially reluctant because of the distribution sector had been privatised.

“Siemens proposes a gas processing facility for 300 million standard cubic feet per day from existing flare gas assets for the generation of about 1,200MW of electricity within 36-48 months,” the document stated.

“Siemens is happy to support the power plant projects, particularly to speed up this process to build new power capacity in northern region and Lagos area of Nigeria.”

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

Nigeria Sees 9.11% Increase in VAT Revenue, Generating N1.56 Trillion in Q2 2024

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The federal government in the second quarter of 2024 generated a total of N1.56 trillion from Value Added Tax. This is a 9.11 percent increase from the N1.43 trillion in Q1 2024.

According to the National Bureau of Statistics report, local payments recorded were N792.58 billion, foreign VAT payments were N395.74 billion, while import VAT contributed N372.95 billion in Q2 2024.

“On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and water supply, sewerage, waste management and remediation activities with 59.75%,” NBS reported.

“On the other hand, activities of households as employers, undifferentiated goods and services producing activities of households for own use had the lowest growth rate with 46.84%, followed by Real estate activities with 42.59%.

“In terms of sectoral contributions, the top three largest shares in Q2 2024 were
manufacturing with 11.78%; information and communication with 9.02%; and Mining and quarrying with 8.79%.

“Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organisations and bodies with 0.01%; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04% each.

“However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82% from Q2 2023.”

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Economy

Finance Minister Denies VAT Hike, Confirms Rate Remains at 7.5%

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Value added tax - Investors King

Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, on Monday, debunked reports doing the rounds that the rate for Value-Added Tax (VAT) has been upwardly adjusted to 10% from 7.5%.

The Minister, in a statement signed by him, affirmed that VAT rate as contained in relevant tax laws and chargeable on goods and services remains 7.5%.

“The current VAT rate is 7.5% and this is what government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.

“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of government.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses to flourish.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” Edun said

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Economy

Nigeria to Raise VAT to 10% Amid Revenue Crisis, Says Fiscal Policy Chairman

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Value added tax - Investors King

Taiwo Oyedele, Chairman Presidential Fiscal Policy and Tax Reforms Committee, has said the committee working on increasing the Valued Added Tax (VAT) from the current 7.5% to 10%.

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

According to Oyedele, the tax law the committee drafted would be submitted to the National Assembly for approval.

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

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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