- FG Unveils New Incentives for Non-oil Exporters
The Federal Government has rolled out a new set of incentives that will guarantee payment for exporters before shipment and stakeholders are confident it will boost non-oil exports by 150 to 300 per cent, ANNA OKON writes
The government has gone beyond the revival of the Export Expansion Grant incentive scheme to introduce a new basket of incentives for existing and new exporters.
According to the Acting Executive Director/Chief Executive Officer, Nigerian Export Promotion Council, Abdullahi Sidi-Aliyu, the new basket of incentives is designed to boost the growth of the Small and Medium Enterprises sector.
Speaking during a stakeholders’ forum on the validation of the guidelines of the new incentives in Lagos on Friday, Abdullahi Sidi-Aliyu, who was represented by the Director, Export Development and Incentives at the NEPC, George Enyiekpon, revealed that the government had already made funds available for the implementation of the new incentives.
He added that unlike the EEG, which was a post-shipment incentive where exporters were required to export before accessing, the new basket of incentives was pre-shipment and exporters would be given the grant before carrying out the export.
Sidi-Aliyu said that the NEPC had constituted a technical committee on the new basket of incentives, which reviewed export incentive schemes in the country and came up with suggestions.
“The draft report of the committee proposed the reactivation of moribund schemes such as Export Development Fund, Export Adjustment Scheme Fund, Manufacture-In-Bond Scheme and the introduction of new ones such as Export Support/Litigation Fund, which is being presented for stakeholders’ validation,” he stated.
He noted that the Export Incentives and Miscellaneous Provisions Act had made provision for various forms of incentives out of which only the EEG was operational, adding that it was obvious that the EEG alone was not enough to cater for all the challenges facing the non-oil sector.
With the return of the EEG, some stakeholders including XPT Logistics International Limited expect more people to go into the export business.
The Managing Director and Chief Executive Officer, XPT Logistics International Limited – a consultancy, training and trade facilitation firm, Mr. Kolawole Awe, specifically said the export volume would rise by about 150 per cent.
The President, Federation of Agricultural Commodities Association of Nigeria, Dr. Victor Iyama, told our correspondent that the new scheme would push up the non-oil export sector by about 300 per cent.
The Chairman, Manufacturers Association of Nigeria, Export Promotion Group, Chief Ede Dafinone, stated that with the introduction of the new incentives, there would be a remarkable growth in the non-oil export volume by the end of the first quarter of 2019.
Speaking to our correspondent on the sideline of the stakeholders’ forum in Lagos, Dafinone also expressed confidence that Nigeria was about to witness a reversal of the high unemployment rate.
“The scheme will encourage new operators to come into the export sector and that way more jobs would be generated,” he said.
Iyama, who has been an operator in the agro-export sector for over 27 years, said, “I believe the growth of the sector will be tripled if there is consistency in the policy.
“This policy is better than the EEG in terms of encouraging upcoming exporters who have no opportunity to access bank loans.”
Awe said that with the widening of the basket, more people would be attracted to the non-oil export sector.
“The export sector will grow more than 150 per cent because the EEG is back; utilisation has been expanded, you can use it to pay tax, buy treasury bills, and so on. More people will go back to export to be able to take advantage of the EEG and all the other incentives.”
“This is what is being practised in more developed economies and we are just taking a cue from that,” he said.
Continuing he said, “The EDF, for instance, is targeted at the SMEs that are hampered by funding capacity to expand their market. With the EDF, they have access to funds to take care of their labelling, branding, advertisement issues and more importantly to be able to access the international market.
“So you can imagine the myriad of opportunities opened to new and existing exporters. I believe it is going to greatly impact on the figures of the non-oil export sector and the SMEs would be able to produce, sell more and employ more people and the economy will grow as a result.”
The suspension of the EEG in 2014 led to a decline in non-oil exports by over 50 per cent. By April 2017, the non-oil exports reportedly suffered a 60 per cent decline.
Reports put the yearly loss in the sector between 2014 and 2016 at $1.39bn compared with the $3.4bn recorded in 2013.
The 2016 recession added to the suspension in the EEG to compound the loss. According to data from the National Bureau of Statistics, export trade on non-oil goods in 2016 was the lowest at about $1.1bn compared to 2011 and 2012 when receipts from agro-based produce were over $3.8bn and $3.9bn, respectively.
Following series of screening of outstanding claims, meetings and negotiations with stakeholders, President Muhammadu Buhari in his 2016 budget speech announced that the EEG would be revived and made provision for it in the 2017 budget.
This, in addition to the country’s exit from recession, led to a rise in the non-oil exports to $1.26bn by the third quarter of 2017.
It was also resolved that the backlog of the unclaimed Negotiable Duty Credit Certificates (instruments presented by exporters to enable them to benefit from payment of the EEG claims) would be settled through promissory notes.
The new basket of incentives would be claimed through the presentation of the Export Credit Certificates, which was used to replace the NDCC.
More Stimulus is Welcomed – But What’s Needed is Smarter Stimulus
Stock markets are cautiously upbeat that a stimulus package can be agreed in the U.S. before the November 3 election – but even if it does happen, it’s likely to be a “short-lived sticking plaster” that masks the major long-term issue: unemployment.
This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.
It comes as House Speaker Nancy Pelosi and Secretary Steven Mnuchin spoke again on Tuesday – the deadline imposed by the Speaker – as the two sides try and strike a deal over another significant fiscal stimulus package ahead of the election.
Earlier this month, Republican senators slammed a $1.8 trillion offer made by the Trump administration to the Democrats as too big, an offer Ms Pelosi dismissed as “insufficient.”
Discussions are due to continue on Wednesday upon the Secretary’s return to Washington.
Nigel Green warns: “No doubt, a breakthrough of the deadlock that would allow for more stimulus would provide a lifeline to millions and millions of Americans.
“U.S. and global markets are, generally, cautiously optimistic that a deal can be agreed by the two sides.
“There’s a sentiment that something will have to materialize – and this is fueling markets.
“However, the window of opportunity is closing and it is not yet a done deal.
“If talks collapse, the markets will inevitably be disappointed and there’s likely to be a short-lived sell-off.”
He continues: “Even if Pelosi and Mnuchin can get another massive stimulus package agreed, and U.S. and global markets rise, this is likely to serve only as a sticking plaster.
“A market rally is going to be difficult to be sustained due to the enormous uncertainty created by other factors including the presidential election, a possible looming constitutional crisis in the world’s largest economy, and the growing Covid-19 infections in America and other major economies.”
The deVere CEO goes on to add: “Getting over the political impasse would help boost the economy and deliver much-needed money to Americans, but the major, lasting issue triggered by the pandemic remains: mass unemployment, which will hit demand, growth and investment.
“As such, a swift rebound for the U.S. economy is doubtful as unemployment claims continue to rise.
“That V-shaped recovery talked about by so many? That will be impossible with so many millions facing long-term unemployment.”
Whilst it is certainly positive that unemployment has fallen from 15% in the U.S. to 11% in recent weeks, it should be remembered that this is still at the same rate of the 2008 crash.
In addition, a second wave of soaring unemployment could hit imminently as some support measures wind-down and business’ and households’ savings and resources have been already run-down.
Mr Green concludes: “Near-term support for sure, but a long-term strategy – a multi-year vision – for growth and investment is essential.
“What’s needed is not just more stimulus, but smarter stimulus.”
The Highest Corporation Taxes Around the World and the Main Drivers Behind them
Taxes Pay by Corporation Around the World and the Main Drivers Behind them
While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.
The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.
On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?
OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.
South America has most countries in highest corporation tax top 10
According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.
It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.
Africa: the continent with the highest average corporation tax
Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?
South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?
|Puerto Rico||North America||37.5|
|Sri Lanka||Asia Pacific||28|
|New Zealand||Asia Pacific||28|
|South Korea||Asia Pacific||25|
|United States||North America||21|
|Saudi Arabia||Middle East||20|
|Hong Kong||Asia Pacific||16.5|
Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.
Nigeria’s Crude Oil Production Declined to 1.31mbpd in September
Nigeria’s Crude Oil Output Declined from 1.37mbpd in August to 1.31mbpd in September
The Organisation of the Petroleum Exporting Countries (OPEC) reported that Nigeria’s crude oil production declined by 58,000 barrels per day in the Month of September when compared to the nation’s oil production of August.
In its latest oil market report, the cartel said Nigeria produced 1.37 million barrels per day in the month of August but that number declined by 58,000 to 1.31 million barrels per day in September. Bringing the total decline for the 30 days of september to 1.74 million barrels.
On oil price movement in September, the organisation said prices settled lower in the month under review after four consecutive months of gains.
OPEC Reference Basket declined by 8.1 percent or $3.65 in September to $41.54 per barrel, while it moderated to $40.62 per barrel from the year-to-date.
Commenting on the recent changed in Nigeria’s monetary policy rate, the oil cartel said “the recent cut is a part of the policy to continue supporting the economy that plunged 6.1 per cent in the second quarter hit by the global pandemic.
“Nevertheless, Nigeria’s annual inflation rate surged to the highest rate since March 2018 in August 2020, as it rose to 13.22 per cent year-on-year from 12.82 per in in July.”
Oil prices sustained bullish trend on Thursday after data showed U.S oil inventories declined last week.
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