Economy
NEITI Fumes Over N1.1tn Tax Waivers to Oil Firms
By Dipo Olowookere
The Nigerian Extractive Industries Transparency Initiative (NEITI) has kicked against the tax holiday given to 22 oil companies by the Federal Government.
The FG had given the sector a Pioneer Status of N1.1 trillion.
According to a latest report from NEITI, it described the waiver as a loss of revenue to the FG, pointing out that this would hamper development projects in the economy.
A copy of the report obtained by The Guardian stated that granting pioneer status to oil and gas companies has greatly undermined the optimal collection of revenue due from Petroleum Profit Tax (PPT).
NEITI advised that pioneer status should not be granted to any company in the oil and gas sector, unless it is evidently clear that the company is actually pioneering an aspect of the industry in the country.
It therefore, called for a “Regular review of the pioneer status to discover some of the companies granted tax waivers that had outgrown pioneer status.
“A coordinating desk should be established in the Ministry of Finance for all the agencies that process tax incentives while the final approval for tax waivers should be issued by the Minister of Finance.”
Pioneer Status is a tax holiday incentive, designed by the government and backed by the law granted to targeted industries, products and services, designated as priority areas and growth drivers of the economy.
But speaking recently on the benefits of pioneer status, Seplat Petroleum Development Company Plc’s Chief Executive, Mr Austin Avuru, noted that the grant of pioneer status made it possible for the company to boost oil and gas production, provide employment opportunities, impact on their communities and help grow the Nigerian economy.
At the presentation of report by the Tax Justice and Governance Platform, tagged: “Pioneer Status in Oil and Gas Industry; Is It Worth It?,” discussants argued that the pioneer status given to oil and gas companies was not worth it, noting that as long as these companies are making profit, they will be adding little or nothing to the development of the nation.
The group urged the National Assembly to monitor the action of government agencies in granting tax incentive.
“The FIRS should ensure that PS beneficiaries file tax returns annually with sanction imposed on defaulters. NIPC capacity in monitoring pioneer companies should be strengthened, while removing matured companies from the pioneer status list. Government should sign a Memorandum of Understanding (MOU) with marginal field operators on the establishment of guaranteed margins for the companies.”
Explaining the benefits of pioneer status to companies, the Nigerian Investment Promotion Council (NIPC) said in a document on “Investing in Nigeria,” that the grant of Pioneer Status to an industry is aimed at enabling the industry concerned to make a reasonable level of profit within its formative years.
It noted that the profit so made is expected to be ploughed back into the business.
The agency stated: “Pioneer status is a tax holiday granted to qualified or (eligible) industries anywhere in the Federation and five-year tax holiday in respect of industries located in economically disadvantaged local government area of the Federation. At the moment, there is a list of 71 approved industries declared pioneer industries, which can benefit from tax holiday.
“To qualify, a joint venture company or a wholly foreign-owned company must have a minimum share capital of N10 million and incurred a capital expenditure of not less than N5million, whilst that of qualified indigenous company should not be less than N150,000.00. In addition, an application in respect of Pioneer Status must be submitted within one year the applicant’s company starts commercial production otherwise the application will be time-barred.”
The Guardian
By Dipo Olowookere
The portfolios of investors at the Nigerian Exchange (NGX) Limited increased by 0.34 per cent on Monday on the back of buying interest in consumer goods stocks and others.
Business Post observed bargain-hunting activities across the key sectors of the bourse, though the industrial goods index came under profit-taking, causing it to close lower by 0.57 per cent.
However, this did not affect the general outcome of Customs like it did last Friday.
The consumer goods industry went up by 1.31 per cent, the commodity space rose by 0.84 per cent, the energy counter appreciated by 0.69 per cent, the insurance sector grew by 0.52 per cent, and the banking index improved by 0.04 per cent.
As a result, the All-Share Index (ASI) was up by 363.13 points to 106,116.18 points from 105,753.05 points and the market capitalisation increased by N229 billion to N66.694 trillion from N66.465 trillion.
Investor sentiment was bullish yesterday as the bourse ended with 47 price gainers and 16 price losers, indicating a positive market breadth index.
International Breweries soared by 10.00 per cent to close at N8.47, Legend Internet appreciated by 9.97 per cent to N7.50, Cadbury Nigeria advanced by 9.96 pr cent to N29.25, Fidson grew by 9.95 per cent to N20.45, and Eterna chalked up 9.90 per cent to sell for N43.85.
Conversely, Livestock Feeds lost 10.00 per cent to settle at N8.55, Aradel declined y 9.86 per cent to N448.00, Tripple Gee fell by 9.60 per cent to N1.79, John Holt depreciated by 7.94 per cent to N5.80, and Linkage Assurance slumped by 6.15 per cent to N1.22.
During the session, the market participants traded 500.6 million stocks valued at N12.1 billion in 17,637 deals versus the 428.1 million stocks worth N20.2 billion in 14,284 deals, representing a shortfall in the trading value by 40.10 per cent, and a surge in the trading volume and number of deals by 16.94 per cent and 23.47 per cent, respectively.
Access Holdings was the most active equity for the day with a turnover of 60.9 million units valued at N1.2 billion, Fidelity Bank traded 56.1 million units worth N1.1 billion, UBA exchanged 34.5 million units for N1.2 billion, GTCO transacted 33.5 million units valued at N2.2 billion, and Nigerian Breweries sold 28.3 million units worth N1.2 billion.
By Adedapo Adesanya
The price of the Brent crude oil grade declined by $1.01, or 1.5 per cent on Monday to $65.86 per barrel as economic worries from the US-China trade war pressured demand.
Also, the US West Texas Intermediate (WTI) crude was sold at $62.05 a barrel after it went down by 97 cents or 1.5 per cent amid conflicting signals from US President Donald Trump and the Chinese government over what progress was being made to de-escalate a trade war that could weaken global growth.
According to market analysts, the US-China trade war is dominating investor sentiment in moving oil prices, and has overshadowed other developments, including nuclear talks between the US and Iran and possible friction within the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
On Monday, China lashed out at the US’ negotiating tactics, with Zhao Chenxin, deputy director of the National Development and Reform Commission, saying: “They make up bargaining chips out of thin air, bully and go back on their words.”
The Chinese official was responding to President Trump’s statement earlier in the day that the US would not lower tariffs on China unless it offered up “something substantial”.
This came as US Treasury Secretary Scott Bessent on Sunday did not back President Trump’s assertion that negotiations with China were underway.
Amid this, crude oil inventories in China rose to the highest in almost three years in March, suggesting demand growth was lagging behind refinery processing rates, which hit a one-year high last month as Chinese oil processors took advantage of cheap Iranian and Russian crude.
It was reported that 1.74 million barrels daily went into storage last month in China, citing official data from China, making this the highest rate of storage inflows since June 2023.
Some OPEC+ members are expected to suggest that the group accelerate oil output hikes for a second consecutive month when they meet on May 5.
Earlier this month, there was an unexpected decision by OPEC+ to increase output by 411,000 barrels per day of oil in May, which was three times more than the group originally planned.
By Adedapo Adesanya
The Nigerian Export Promotion Council (NEPC) has announced a 24.75 per cent increase in the value of the country’s non-oil exports, reaching a total of $1.791 billion in the first quarter of 2025.
It stated that the amount surpassed the $1.436 billion generated in the first quarter of 2024.
The Executive Director of the council, Mrs Nonye Ayeni, disclosed the figures while addressing the journalists in Abuja on Monday.
She said the significant growth reflects the resilience and diversification of Nigeria’s export sector beyond crude oil, a shift aimed at reducing the country’s reliance on oil revenue.
According to her, the surge in non-oil exports was driven by increased economic activity in the Agriculture, Manufacturing, and Solid Minerals sectors.
On the US 14 per cent trade tariff, the council says it was positive for the country, adding that it was an opportunity to focus on value addition and increased competitiveness in the global market.
Recall that Nigeria has reiterated plans to boost its non-oil revenues with the Minister of Industry, Trade and Investment, Mrs Jumoke Oduwole, saying the country was stepping up its diversification efforts.
Earlier this month, the Trade Minister said the nation would tackle this challenge with pragmatism, aiming to boost non-oil exports and strengthen economic resilience under President Bola Tinubu’s Renewed Hope Agenda.
Mrs Oduwole had said the US remains a key partner, with bilateral trade reaching N31.1 trillion from 2015 to 2024.
The measures taken by the US presents destabilising challenges to price competitiveness and market access, especially in emerging and value-added sectors vital to our diversification agenda,” the minister explained.
“Government is implementing a range of interventions in policy, financing, infrastructure, and diplomacy to help Nigerian businesses remain competitive amidst regional and global tariff hikes,” Mrs Oduwole said as she outlined Nigeria’s response.
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