By Adedapo Adesanya
Vice President Yemi Osinbajo has assured that the demon, multiple taxation, would be tackled by the Presidential Enabling Business Environment Council (PEBEC) so as to allow the business environment in Nigeria to thrive.
Mr Osinbajo gave this assurance on Monday in Abuja at the First Abuja Small and Medium Enterprises (SMEs) Conference and Exhibition 2021 organised by the Abuja Chamber of Commerce and Industry (ACCI).
The event was aimed at providing solution strategies for resolving tax, regulatory, packaging and logistic challenges facing Nigerian SMEs, causing the sector to have a high mortality rate.
Mr Osinbajo, represented by Mrs Mariam Katagum, Minister of State for Industry, Trade and Investment, said the government was focused on improving the Ease of Doing Business and encouraging tax and fiscal responsibility.
He noted that the problem of taxation on the growth of SMEs in the country was exacerbated by a lack of reliable data for statistical analysis.
According to him, the mortality rate of SMEs in Nigeria is very high, and among the factors responsible for this are tax-related issues.
He said it was because of this that the government, through the Finance Act 2019 and 2020, amended various tax and fiscal legislation to align the Nigerian business environment with global standards.
“One of such amendments is the categorisation of companies into small, medium, and large companies, based on annual gross turnover as seen in the Finance Act 2019. The Act also has, as one of its strategic objectives, support to small businesses, in line with the Ease of Doing Business reforms.
“However, some of the specific challenges related to taxation are multiple taxations at the national and sub-national levels, non-clarity on the procedure and amount to pay and non-friendly tax administrators,” he said.
For SMEs to sustain their role of contributing to the mainstream economy, Mr Osinbajo said they must implement effective strategies in their business operations, inclusive of logistics.
He said the function of logistics is important to SMEs because it is the quintessence of the organisation’s relationship with suppliers and customers.
He noted some challenges related to logistics as high transportation costs, lack of quality delivery service and infrastructure, adding that the challenges related to packaging are non-availability of quality materials, high cost of materials and lack of an inbuilt culture of packaging.
To resolve some of these challenges, he said specific actions must be put in place to overcome them. He noted that the Muhammadu Buhari-led administration was taking measures like sensitisation and awareness creation, general capacity building and streamlining of taxes across the national and sub-national levels.
He listed others as the implementation of relevant sections of the Finance Acts, specific technical training on packaging and logistics, sharing of knowledge and peer review with SMEs in other jurisdictions.
He also called for strict observance of international standards, adding that regulatory authorities must develop friendly criteria for SMEs.
Mr Osinbajo noted that the conference is apt, in view of the African Continental Free Trade Area (AfCFTA), because several African countries have the scale to compete with Nigerian businesses in terms of productive capacity, packaging, exports and logistics.
Nine Oil-Producing States Got N625.43bn in Two Years—Presidency
By Adedapo Adesanya
The presidency has revealed that nine oil-producing states received 13 per cent derivation totalling N625.43 billion, subsidy and SURE-P refunds from the federation account in the last two years.
In a statement, the Senior Special Assistant to the President on Media and Publicity, Mr Garba Shehu, listed the states to have received the refunds dating from 1999 to 2021 to include Abia, Akwa-Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo, and Rivers.
He stated that Abia State received N1.1 billion, Akwa-Ibom – N15 billion; Bayelsa – N1.6 billion; Cross River – N432 million; and Delta – N14.8 billion.
The others included Edo, which received N2.2 billion; Imo – N2.9 billion; Ondo – N3.7 billion and Rivers – N12.8 billion.
The presidential spokesman noted that the states were paid in eight instalments between October 2, 2021, and January 11, 2022, while the ninth to 12th instalments remain outstanding.
He recalled data obtained from the Federation Account Department, Office of the Accountant General of the Federation, which it said showed that a total of N477.2 billion was released to the nine states as a refund of the 13 per cent derivation fund on withdrawal from Excess Crude Account (ECA), without deducting derivation from 2004 to 2019, leaving an outstanding balance of N287.04 billion.
According to Mr Shehu, states also got N64.8 billion as a refund of the 13 per cent derivation fund on deductions made by Nigeria National Petroleum Company (NNPC) Limited without payment of derivation to oil Producing states from 1999 to December.
He further stated that the benefitting states still have an outstanding balance of N860.59 billion from the refunds, which it said was approved by President Muhammadu Buhari.
Nigeria’s Total Pension Fund Rises 1.14% to N14.59trn
By Adedapo Adesanya
Nigeria’s total pension fund assets rose by 1.14 per cent to a record high of N14.59 trillion as of the end of October 2022 compared to the N14.42 trillion recorded in the previous month.
This was contained in the monthly pension fund industry report released by the National Pension Commission (PenCom) for January and October 2022.
While the fund gained N170 billion, it has increased by a whopping N1.16 trillion from the level it was in December last year.
The number of Retirement Savings Account (RSA) registrations jumped to 9.85 million in the review month, up from 9.79 million registrations recorded as of the end of the previous month.
A total of 30,973 RSA holders switched their pension fund administrators in the third quarter of 2022, representing an increase of 109 per cent compared to the 14,821 holders that switched in the previous quarter.
Investments in corporate debt securities by the PFAs rose by 2.64 per cent month-on-month to stand at N1.53 trillion from N1.49 trillion recorded in the previous month.
On the other hand, PFAs reduced their investments in real estate by 4.93 per cent to N218.1 billion as of October 2022 from N229.4 billion recorded as of the beginning of the month.
The RSA fund II still accounted for most of the fund contribution with N6.35 trillion, representing 43.5 per cent of the total pension funds, followed by RSA Fund III with N4.05 trillion, which represents 27.8 per cent of the total assets.
Meanwhile, existing schemes accounted for 9.9 per cent of the total funds, increasing by N2.41 billion in October 2022 to stand at N1.44 trillion, while the CPFAs accounted for 10.2 per cent of the total funds, standing at N1.48 trillion as of the review period.
Investments in the local stock market dropped by N40.41 billion to stand at N828.17 billion as of the end of October 2022. This happened amid a heavy inflation rate and a hike in interest rates.
On the other hand, investments in federal government debt securities continue to increase as the CBN raised the monetary policy rate to 16.5 per cent in its last MPC meeting, which translates to higher returns in the fixed-income market.
Specifically, total allocation in FGN securities by the pension industry stood at N9.23 trillion as of the review month, accounting for 63.2 per cent of the total funds. Further checks showed that a sum of N8.84 trillion is being invested in federal government bonds.
The number of registered PFAs reduced from 22 to 20 as a result of some mergers and acquisitions as the PFAs tried to meet the required minimum regulatory capital of N5 billion, which was increased from N1 billion by the Nigerian Pension Commission.
Additionally, the total pension fund gained N156.74 billion in Q3 2022, to stand at N14.42 trillion as of September 2022.
Meanwhile, First Guarantee Pension led the list of best-performing PFAs in Q3 2022 with an average ROI of 2.38 per cent, followed by Premium Pensions and Veritas Glanvills Pensions with 2.06 per cent and 2.01 per cent average returns, respectively.
Naira Falls at Official Market, Gains at Unofficial FX Windows
By Adedapo Adesanya
The Naira continued its roller coaster ride at the foreign exchange (FX) segments in Nigeria on Thursday, depreciating at the Investors and Exporters (I&E) window and appreciating at the Peer-to-Peer (P2P) and parallel market windows.
In the official market, the Naira lost 53 Kobo or 0.12 per cent against the United States Dollar to settle at N445.83/$1 compared with the previous day’s value of N445.83/$1.
The local currency reported the fall despite the value of FX transactions going down during the session. Data showed that the turnover for the day stood at $99.50 million, 43.9 per cent or $77.94 million lower than the $177.44 million published on Wednesday.
In the interbank segment of the forex market, the domestic currency closed flat against the Pound Sterling and the Euro yesterday at N534.67/£1 and N461.79/€1, respectively.
However, in the P2P window, the Nigerian currency appreciated against its American counterpart by N4 to close at N762/$1, in contrast to the N766/$1 it was traded on Wednesday.
In the black market, which is an unofficial FX segment just like the P2P, the Nigerian Naira appreciated against the US Dollar yesterday by N5 to trade at N745/$1.
As for the digital currency market, there was a negative movement across the 10 tokens tracked by Business Post, with Dogecoin (DOGE) recording the heaviest fall, 4.1 per cent, to sell at $0.0990.
Solana (SOL) recorded a 2.9 per cent slump to trade at $13.56, Ripple (XRP) dipped by 2.6 per cent to quote at $0.3892, and Binance Coin (BNB) slid by 2.5 per cent to settle at $288.59.
Further, Bitcoin (BTC) fell by 0.9 per cent to close at $16,941.89, Cardano (ADA) depreciated by 0.7 per cent to finish at $0.3135, Ethereum (ETH) saw a 0.6 per cent depreciation to trade at $1,273.75, and Litecoin (LTC) went down by 0.4 per cent to close at $76.50.
However, the value of the US Dollar Tether (USDT) and the Binance USD (BUSD) remained unchanged during the session at $1.00 each.
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