Stanbic IBTC Holdings PLC, a member of Standard Bank Group, recently hosted a webinar titled “2022 ‘Virtual Economic Outlook- Investing and planning in an election cycle”. The event which aimed at reflecting on economic trends that shaped 2021 and projecting into 2022, held on Monday, 14 February 2022.
According to the financial services provider, the webinar affords participants the opportunity to learn directly from economic experts on the importance of planning and investment.
Bismarck Rewane, Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, and Muyiwa Oni, Head, Equity Research, Stanbic IBTC Holdings PLC, led deliberations at the virtual event.
Other speakers at the webinar were Eric Fajemisin, Executive Director, Corporate and Investment Banking; Remy Osuagwu, Executive Director, Business and Commercial Clients; Executive Director Client Solutions – Bunmi Dayo-Olagunju and Olumide Oyetan, Chief Executive, Stanbic IBTC Pension Managers.
Dr. Demola Sogunle, Chief Executive, Stanbic IBTC Holdings, set the tone for the event by appreciating the customers for the confidence and trust reposed in the organisation through their patronage. He assured Nigerians of valuable and exciting opportunities despite the likely headwinds as the nation prepares for its general elections.
Bismarck, who enumerated the current state of the Nigerian economy, noted that Nigeria’s expenditure currently stands at N19.63 trillion while its revenue stands at N10.71 trillion. This, he said, represented a fiscal deficit of N8.92 trillion, which translates to an increasing level of poverty, inflation, unemployment and the number of out-of-school children. He noted that the number of fully employed Nigerians had dipped by 54.41 per cent in the last five years and the working population grew by 18.45 per cent, while 50 per cent of Nigerians remain idle.
Highlighting Nigeria’s fiscal position in five years, he noted that while oil prices increased by 62.36 per cent; currency and balance of trade weakened by 239.76 per cent and 35.95 per cent respectively, with gross external reserves gaining 39.29 per cent.
According to him, sustained supply concerns have helped to shore up global oil prices above $80 per barrel while the Central Bank of Nigeria has continued to step up its intervention programme in the forex market as the nation’s gross external reserves continue to dwindle. Also, he said, the naira has continued to witness increased pressure due to excess liquidity.
“The nation’s economy is expected to continue its rebound as witnessed in the last quarter of 2021 while oil prices are likely to remain high as major economies re-open fully and oil demand picks up. Furthermore, the advent of COVID-19 vaccines has continued to discount the impact of Omicron on oil demand while the effect of the Iran nuclear deal is expected to push up the nation’s oil supply to the global market. This is expected to provide more support to Nigeria’s earnings,” said Bismarck.
“To boost the manufacturing sector, the Central Bank of Nigeria (CBN) is likely to intensify its forex intervention as it seeks to increase supply to manufacturers, Also, the CBN is expected to step up efforts towards exchange rate convergence, increase its intervention in the forex market while the postponement of the fuel subsidy removal will dampen the anticipated spike in inflation for the year as trade policies are expected to become less protectionist.”
Eric Fajemisin, Executive Director, Corporate and Investment Banking, Stanbic IBTC Bank noted that Stanbic IBTC, through its business advisory services, has continued to help its customers make good investment decisions and provide them with business financing. Remy Osuagwu, Executive Director, Business and Commercial Clients also of Stanbic IBTC Bank said the organisation has continued to partner with the CBN in its various intervention programmes such as the Real Sector Fund, Anchor Borrowers Fund, and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), amongst others.
Olumide Oyetan, Chief Executive, Stanbic IBTC Pension Managers said that Stanbic IBTC, through its investment management vehicle, has continued to provide avenues for investors to profitably invest their funds short and long term while ensuring the safety of invested funds.
Bunmi Dayo Olagunju, Executive Director of Client Solutions, Stanbic IBTC in her concluding remarks, stated that the economic ecosystem can improve during the election cycle if digital technologies can be leveraged effectively.
Nigeria’s Tax Revolution: Shifting Burden to the Wealthy and Streamlining the System
President Bola Tinubu’s administration is set to revolutionize the nation’s tax system.
The ambitious plan seeks to redistribute the tax burden, making the wealthy pay their fair share while stimulating business growth through corporate tax cuts.
The cornerstone of this tax reform initiative is a push to increase Nigeria’s tax revenue from 11% to 18% of Gross Domestic Product (GDP) within three years.
Spearheading this transformation is Taiwo Oyedele, who leads a panel appointed by President Tinubu.
Oyedele articulated the primary objectives of the reform, saying “We aim to make the rich pay what is fair and protect those in poverty.”
This move is crucial in a country where extreme wealth disparities persist, with only a small fraction of the population enjoying immense riches.
Notably, the plan also includes a reduction in the corporate income tax rate, which currently stands at an effective rate of over 40%.
The aim is to benchmark this rate against Nigeria’s international peers, fostering a more business-friendly environment.
Nigeria’s tax system has long been plagued by complexity, with nearly 70 different taxes and overlapping jurisdictions.
The reform initiative seeks to simplify this by streamlining tax structures and drastically reducing the number of taxes to single digits.
Also, a tax amnesty is under consideration, aimed at encouraging tax compliance and offering relief for past debts. The hope is that by fostering transparency and accountability, more Nigerians will willingly contribute to the country’s fiscal health.
In a nation where government debt has surged dramatically in recent years, this tax revolution is seen as a pivotal step towards reducing the deficit and ensuring sustainable economic growth.
Federal Government’s $3 Billion Rescue Plan to Bolster Naira Stability
The National Economic Council (NEC) has confirmed the deployment of the $3 billion emergency loan-for-crude oil, secured by the Federal Government in August, for the stabilization of the national currency.
The naira’s value has been under siege, with fluctuations in the Investors & Exporters’ window and a parallel market rate that briefly hit N1000/$ this month.
Addressing reporters following the 136th NEC meeting at the Aso Rock Presidential Villa, Nasarawa State Governor Abdullahi Sule expressed confidence in the plan.
He stated, “With the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”
The emergency loan, secured from Afrexim Bank, was initially intended to relieve pressure on the naira, facilitate the settlement of taxes and royalties in advance, and provide the Federal Government with vital dollar liquidity for naira stabilization.
The recent nomination of Olayemi Cardoso as the new Central Bank of Nigeria (CBN) governor by President Bola Tinubu has already shown promise.
The naira experienced a boost in the black market, strengthening by N10 against the dollar, closing at N990/$1.
Governor Sule indicated that the implementation of the intervention would require careful planning and time.
He emphasized the need for the new CBN team to devise effective strategies. In response to inquiries about a supplementary budget, Sule stated that there is no immediate need for one, as the situation does not warrant it.
As Nigeria’s economic landscape faces evolving challenges, the NEC’s decision to harness the $3 billion loan offers a glimmer of hope for a more stable naira in the near future.
Former FIRS Chairman Muhammad Nami Accused of Controversial N6 Billion Payments After Sudden Exit
Documents reveal questionable approvals and alleged backdating, raising concerns over financial misconduct
Muhammad Nami, the former chairman of the Federal Inland Revenue Service (FIRS), is under scrutiny for approving payments totaling N6 billion to contractors and consultants just days after his abrupt removal from office.
Documents obtained by TheCable shed light on these controversial transactions.
Nami, who was succeeded by Zacchaeus Adedeji, greenlit the payments on September 16, two days after his removal on September 14.
Sources privy to the situation, although not authorized to speak publicly, claim that Nami directed staff to work over the weekend to finalize these transactions.
Additionally, files were allegedly moved from the FIRS headquarters to his residence, where they were purportedly “backdated and signed.”
Perhaps the most eyebrow-raising revelation is that Nami transferred approximately N5 billion from the FIRS account to the Joint Tax Board (JTB) without apparent justification.
It is reported that the FIRS director of finance and accounts reluctantly approved these payments after warning Nami about potential repercussions.
Nami allegedly reassured his subordinates that the incoming FIRS chairman would remain oblivious to these approvals.
Also, documents indicate that Nami approved significant payments, including N1.4 billion for a ‘Business Case for Strategic Leadership’ retreat, N250 million for FIRS Data Mining Management and Analytics in Taxation Course, and N221 million for a ‘Skill Development and Management Improvement Workshop Training.’
Curiously, Nami also appropriated over N81 million for a study visit to the Inland Revenue of Malaysia.
The FIRS, when contacted for comment, remained tight-lipped about the situation. Spokesperson Abdullahi Ismaila stated that he had no knowledge of the payments, while Tobi Johannes, Nami’s former media aide, distanced himself from the matter, emphasizing that his role ceased when Nami’s tenure ended.
These revelations have ignited concerns about financial misconduct within the FIRS and have raised questions about the oversight and accountability of government agencies. The full extent of these allegations is yet to be determined as investigations into the payments and their legitimacy continue.
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