Economy
Don’t Allow Expatriate Employment Levy Hinder FDIs Inflows—LCCI
By Adedapo Adesanya
The Lagos Chamber of Commerce and Industry (LCCI) has called for a balanced approach from the federal government to ensure the proposed expatriate employment levy does not negatively impact inflows of Foreign Direct Investments (FDIs).
The advice followed the government’s announcement of an Expatriate Employment Levy (EEL) which will require firms that employ foreigners to pay $15,000 for a director and $10,000 for other employees.
The Director General of the LCCI, Mrs Chinyere Almona, speaking on Tuesday in Lagos said this call was to ensure the levy does not become an inhibition to attracting and retaining foreign investments, crucial for economic growth.
The Bola Tinubu-led government on February 27, announced the mandatory annual levy for organisations employing expatriate workers, which it rationalised is to encourage foreign companies to employ more Nigerian workers.
Mrs Almona noted that the policy is aimed at addressing wage gaps between expatriates and the Nigerian labour force while encouraging skills transfer and employment of qualified Nigerians in foreign-owned companies.
She, however, stated the need for a balanced approach to expatriate employment and its potential impact on FDI inflows.
She said while the LCCI fully supports government policies that enhance the profile of the business environment, and generate more revenue for the government, there were concerns about likely perception by foreign investors.
Mrs Almona said the perception that the Nigerian government was not accommodating to foreign workers was harmful to the country’s drive for FDI inflows.
She said the EEL might trigger the relocation of foreign companies to neighbouring countries that presented a more conducive and less expensive environment for business.
She added that the policy might likely spark retaliatory actions by other countries by imposing levies on foreigners and particularly, targeting Nigerian workers, hence, affecting diaspora remittances.
“With the drive for FDIs in Nigeria, we need a conducive business environment to attract these kinds of investments into the country.
“Capital importation into Nigeria in the fourth quarter of 2023 stood at $1.088 billion out of which only 16.90 per cent (or $184 million) came in as FDI.
“We call on the government to consider exempting sectors that require unique skill sets for projects carried out in the country, especially in construction, and other sectors where we have a critical shortage of supply of goods to meet rising demand.
“In sectors where the country cannot boost the supply of critical products like food, cement, drugs, and other agricultural inputs, we urge the government to charge concessionary or exempt manufacturers in these fields to encourage them to come in and boost the supply of such scarce products,” she said.
The LCCI head added that imposition of the levy meant that expatriates would be subjected to two administrative procedures to procure the Combined Expatriate Residence Permit and Allien Card (CERPAC) permit.
She said that having two procedures meant more human interfaces, more bureaucracy and more application costs.
“We recommend that the government should continue to work with already established and functional CERPAC, with provision for yearly or regular reviews in rates according to internationally accepted rates.
“This way, we present our economy as open for business,” she said.
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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