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
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has introduced a 1.5 per cent stamp duty on eligible virtual asset transactions, with the tax deducted directly from the cryptocurrency purchased before it is credited to the buyer’s wallet.
According to the new guidelines issued on Monday, anyone buying Bitcoin (BTC), USDT or other cryptocurrencies in Nigeria will receive fewer digital assets due to the deduction.
This requires registered crypto exchanges and other Virtual Asset Service Providers (VASPs) to withhold the levy in the digital asset being traded and remit it to the government, marking Nigeria’s most comprehensive move yet to bring cryptocurrency transactions into the country’s tax net.
Unlike traditional taxes deducted from a customer’s bank account, the 1.5 per cent charge will be taken from the cryptocurrency itself, meaning buyers will receive less Bitcoin, USDT or other tokens than they paid for.
The tax body stated that “income tax deducted at source and stamp duty shall be remitted to the service in the originating token of the transaction.”
Besides the new stamp duty, the guidelines also clarify how income tax, Value Added Tax (VAT) and other tax obligations will apply to virtual asset activities such as trading, staking, mining and other crypto-related transactions.
To illustrate the new rule, the tax authority said a buyer who pays N1 million for one Bitcoin will receive only 0.985 BTC after 0.015 BTC is deducted as stamp duty and remitted to the government. When that Bitcoin is later sold, the next buyer will also have 1.5 per cent deducted from the cryptocurrency credited to their wallet.
The NRS said the guidelines are intended to provide clarity for taxpayers, crypto exchanges, peer-to-peer (P2P) marketplace operators, financial institutions, tax consultants and all participants in Nigeria’s virtual asset ecosystem.
According to the guidelines, the 1.5 per cent duty applies to eligible virtual asset transactions facilitated through registered exchanges and other recognised intermediaries. Where a cryptocurrency is used to complete a transaction that already attracts stamp duty under the law, the applicable duty on the underlying instrument will also be payable.
For crypto users, the implication is higher transaction costs, as eligible purchases will attract the 1.5 per cent stamp duty, while VAT on exchange service fees and income tax on taxable gains may also apply, depending on the nature of the transaction.
By Adedapo Adesanya
The Naira opened the week on a positive note, as it appreciated against the US Dollar by N3.39 or 0.25 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, August 3, to N1,364.83/$1 from N1,368.22/$1 last Friday.
However, it suffered a marginal decline against the Pound Sterling in the official market during the session by 10 Kobo to close at N1,837.89/£1 compared with the preceding session’s N1,837.79/£1, and lost 6 Kobo on the Euro to sell at N1,573.93/€1, in contrast to the previous trading day’s N1,573.87/€1.
At the black market segment, the Nigerian currency traded flat against the Dollar yesterday at N1,405/$1, and at the GTBank forex counter, it was unchanged at N1,374/$1.
Interbank FX transactions increased sharply as market makers’ activities raised total Dollar volume exchanged to $137.048 million, more than 132 per cent above $58.990 million in turnover at the previous close. The surge in turnover was driven by increased deals at the NFEM window. The central bank reported that deal count at the interbank FX window rose to 138 from 67 on Friday.
As for the cryptocurrency market, major tokens advanced despite ongoing uncertainty around unresolved Coldcard wallet sweeps that have drained hundreds of Bitcoin (BTC), while traders are watching whether bitcoin can hold above $63,000 through the US session. BTC rose by 1.70 per cent to $63,765.88.
Bitcoin treasury firm Strategy disclosed Monday it sold 1,638 bitcoin for about $105 million between July 27 and Aug. 2, its third sale of 2026, per an SEC filing.
Also, an attacker has moved about 1,816 bitcoins, or roughly $114 million, from more than 5,200 addresses since July 30 in a fourth wave of sweeps targeting BTC in Coldcard-generated addresses.
Cardano (ADA) appreciated by 6.7 per cent to $0.1959, Binance Coin (BNB) gained 1.5 per cent to sell for $590.82, Solana (SOL) jumped by 1.3 per cent to $73.72, TRON (TRX) soared by 0.9 per cent to $0.3286, Dogecoin (DOGE) also grew by 0.9 per cent to $0.0703, Ripple (XRP) advanced by 0.5 per cent to $1.07, and Ethereum (ETH) rose by 0.4 per cent to $1,863.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
