Economy
FG Insists New Finance Act Will Stimulate Economy
By Adedapo Adesanya
Federal government has reiterated that the Finance Act 2020 signed earlier this month by President Muhammadu Buhari will help stimulate the country’s economy towards path to growth.
This disclosure was made by Vice President Yemi Osinbajo at the Inspiration Conference 2020 of the Redeemer’s Men Fellowship themed Galvanised for Geometric Growth in Lagos on Saturday.
Speaking about the bill, the VP said that the act was aimed at boosting revenue so that all levels of government will be able to meet up with their expenditure.
“The challenges of growing the economy border on creating an environment favourable to businesses and low revenue generation,” Mr Osinbajo said.
He said that the 2020 budget of N10.6 trillion has a deficit of N2.2 trillion, “so it is clear that we are running a fairly large deficit”.
“The sources of revenue are oil proceeds and taxes, and most states do not generate enough revenue to meet their financial expectations,” Mr Osinbajo added.
This, he said, was in addition to it supporting Small and Medium Enterprises (SME) in the country.
Mr Osinbajo cited Adamawa, Benue and Ekiti as some of the states with very low Internally Generated Revenue (IGR) which are unable to cater for their expenditure.
The VP justified the increment of the Value Added Tax (VAT) from 5 per cent to 7.5 percent, noting it to be very low when compared to other African countries.
“Ghana has 12.5 percent; Cameroon has 19.25 percent; Mexico with 16 percent; South Africa at 15 percent and Egypt at 14 percent.
“To make things easier for the common man, we have exempted 16 classes of food items, tampons, sanitary towels, and tuition fees from nursery to tertiary.
“Also, before the Finance Act, many companies operating in the country without physical presence escaped taxation.
“Most digital companies made significant revenue from e-commerce, online advertising and the likes, but were not taxed.
“But now, once you have significant economic presence in Nigeria, but reside anywhere around the world, you are eligible to pay tax,” he said.
Mr Osinbajo expressed confidence in the Nigerian economy, maintaining that the government would continue to provide the enabling environment for businesses to thrive.
He explained that in spite of the perceived low growth rate, the Nigerian economy was still relatively bigger when compared with other African economies.
“Rwanda has a Gross Domestic Product (GDP) of $8.7 billion, while FCT, Akwa Ibom, Lagos, Rivers and Delta have growth rates of $29.9billion, $14 billion, $90 billion, $14.2 billion and $11.2 billion respectively.
“Even Ghana is at $65.5 billion and is less than Lagos,” he said.
He then stated that the potential of the Nigerian economy has been boosted by agriculture, manufacturing, creative industry, technology and ICT.
“Today, we produce an estimated 7.3 million metric tonnes of rice compared to 5 million metric tonnes in 2015.
“Today, people are using technology to attract investments in agriculture through crowd funding.
“There are incredible new ways of investing in agriculture in Nigeria, where companies are raising funds for farmers and farming, and such platforms should be invested on,” he said.
Mr Osinbajo also called for more collaboration between the government and the private sector to bridge the infrastructural deficit.
“The Nigerian Liquefied Natural Gas Company (NLNG) and Dangote Group have already keyed into this, while 10 other companies have applied to execute 19 road projects of about 800km,” he said.
By Adedapo Adesanya
Nigeria received its first credit rating upgrade since 2012 from S&P Global Ratings, driven by improved oil market conditions and the country’s growing ability to refine and export crude locally.
The credit ratings agency upgraded the country’s rating by one notch to B, five levels below investment grade, according to a statement on Friday.
It raised its long-term foreign and local currency sovereign credit ratings on Nigeria to ‘B’ from ‘B-‘ and affirmed its ‘B’ short-term ratings. It also raised its long- and short-term Nigeria national scale ratings on the sovereign to ‘ngA+/ngA-1’ from ‘ngBBB+/ngA-2’.
S&P also cited Nigeria’s decision to liberalise the exchange rate as crucial to the development, and changed the outlook to stable.
The decision also comes as the federal government ruled out the reintroduction of subsidies on refined petroleum products, in order to avoid a return to larger budgetary deficits and drains on foreign currency (FX) liquidity.
S&P projected the general government deficit will widen to over 4 per cent of GDP on average during 2026 and 2027, a year of a general election.
It added that the implementation of reforms to broaden the tax base from very narrow levels is underpinning a steady decline in Nigeria’s debt-to-revenue ratio to 338 per cent in 2026 versus 500 per cent in 2023.
The agency said it could raise ratings over the next two years if fiscal outcomes improve significantly, either due to fiscal consolidation or structurally higher revenue, resulting in lower debt service costs.
It, however, warned that it could also lower the ratings if the implementation of Nigeria’s reform programme, particularly the series of critical steps taken to liberalise the exchange rate in 2023, reverses.
On the oil production forecast, S&P expects 2026 production to average approximately 1.66 million barrels per day, including condensates.
By Modupe Gbadeyanka
The Nigerian maritime sector may soon witness the inflow of $600 million in investment from APM Terminals.
On the sidelines of the ongoing Africa CEO Forum in Kigali, Rwanda, the Regional President of APM Terminals for Africa-Europe, Mr Igor van den Essen, informed President Bola Tinubu that his company was interested in deepening its investment in Nigeria.
According to a statement issued by the Special Adviser to the President of Information and Strategy, Mr Bayo Onanuga, the investment would be deployed in Apapa port modernisation, logistics infrastructure, and long-term private-sector investment in Nigeria’s maritime sector.
President Tinubu welcomed the investments, emphasising that Nigeria is repositioning itself for greater competitiveness through ongoing economic reforms and infrastructure modernisation.
He said the country is determined to move beyond structural bottlenecks and outdated systems, stressing the need for advanced technology, faster cargo processing, and improved operational efficiency across the nation’s ports.
He emphasised that Nigeria possesses the market scale, talent base, and economic potential to support globally competitive maritime and logistics infrastructure investments and called on other investors to take advantage of Nigeria’s reform outcomes.
Earlier, Mr Igor van den Essen lauded President Tinubu’s reform agenda and policy direction, which had strengthened investor confidence and created renewed momentum for long-term infrastructure investments.
He described Nigeria as a strategic stronghold within its African operations, referencing over 20 years of collaboration and substantial existing investments in the country’s port ecosystem.
He reaffirmed his company’s commitment to expanding investments in Nigeria and disclosed plans to support the development of world-class terminal infrastructure and technology-driven port operations.
He also commended Mr Tinubu for establishing the National Single Window (NSW), which has streamlined trade procedures, improved Customs coordination, and reduced delays in cargo clearance.
By Adedapo Adesanya
Dangote Petroleum Refinery has filed a new lawsuit against the federal government over the fuel import licences issued to marketers and the Nigerian National Petroleum Company (NNPC) Limited.
Last week, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued licences to six marketers for the importation of 720,000 metric tonnes of Premium Motor Spirit, known as petrol.
The marketers are NIPCO, AA Rano, Matrix, Shafa, Pinnacle, and Bono. The development comes amid claims by the NMDPRA that the Dangote Petroleum Refinery now supplies over 90 per cent of Nigeria’s daily petrol consumption.
Dangote said in the filing that the licences issued undermine its operations and contravene the law, which it argues allows imports only when domestic supply falls short.
Named in the suit against the country is the Attorney General and Minister of Justice, Mr Lateef Fagbemi. The federal government can only be sued via his office.
The case signals renewed tensions almost a year after Dangote withdrew an earlier lawsuit challenging similar licences. That case sought to nullify import permits issued to the NNPC and several traders.
The new filing asks the Federal High Court in Lagos to set aside import permits issued or renewed by the NMDPRA, arguing they breach an earlier order to maintain the status quo.
Dangote ended the earlier lawsuit in July 2025 without explanation, leaving unresolved questions over competition and supply in one of Africa’s largest fuel markets.
Nigeria has long relied on petrol imports due to underperforming state refineries. However, Dangote’s 650,000 barrels per day capacity refinery was touted to end that dependence.
Despite the presence of the facility, imports have continued to cover supply gaps as the refinery ramps up output.
The NMDPRA did not issue a single import licence in the first quarter of 2026 because the Dangote refinery had the capacity to meet Nigeria’s petrol demand.
Business Post gathered that only upon intervention by President Bola Tinubu were the licenses granted for the second quarter by the NMDPRA.
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