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Nigeria’s Revenue-to-GDP Ratio Too Low for Economic Growth—IMF

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Revenue-to-GDP Ratio

By Dipo Olowookere

The International Monetary Fund (IMF) has said Nigeria’s revenue–to-gross domestic product (GDP) ratio of about 9 per cent was too low to trigger the economic growth projected by President Bola Tinubu in his Renewed Hope Agenda.

Addressing journalists at its last press briefing for 2023 on Thursday, the global lender said the administration of Mr Tinubu must boost the government’s revenue to have funds to achieve his goals.

On May 29, 2023, Mr Tinubu took over from Mr Muhammadu Buhari, promising to jump-start the economy and work tirelessly to address food security, end hunger, eradicate poverty, create jobs, and help the most vulnerable members of society

To kick start, he removed the payment of subsidies for petrol and adopted a foreign exchange liberalisation policy, though the exchange rate between the official and the black markets remains wide (N843.07/$1 at NAFEM and N1,180/$1 at the black market.)

At the briefing yesterday, the IMF Director for Communications Department, Ms Julie Kozak, praised Mr Tinubu for the “two bold and important reforms shortly.”

However, she stressed that the revenue-to-GDP ratio must be improved to “create fiscal space for social and development spending.”

“Raising revenue from the very current low revenue to GDP ratio of 9 per cent is essential to create fiscal space for social and development spending.

“Nine per cent of GDP is a very low revenue-to-GDP ratio, and it is not high enough to be able to support strong social safety nets and development spending, to help protect vulnerable households and also to meet Nigeria’s development needs.

“The 2024 budget aims to reduce the fiscal deficit while also creating space for these priority spendings, both on the social side and also on the development side,” she said.

While commenting on the rising inflation in the country, Ms Kozak said the Central Bank of Nigeria (CBN) may have to raise the monetary policy rate (MPC) at its next Monetary Policy Committee (MPC) meeting.

Recall that last month, the National Bureau of Statistics (NBS) said inflation in October 2023 increased by 27.33 per cent, while the MPC at its last meeting in July pegged the benchmark interest rate at 18.75 per cent.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Economy

SEC Suspends Centurion Registrars for Capital Market Infractions

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Centurion Registrars Limited

By Adedapo Adesanya

The Securities and Exchange Commission (SEC) has announced the suspension of Centurion Registrars Limited, including its directors and sponsored individuals from the capital market.

The suspension was announced by the commission in a statement titled Additional Enforcement Measures on Erring Capital Market Operators.

The SEC stated, “All clients of Centurion Registrars are advised to contact Africa Prudential Plc for guidance.”

This is not the first time Centurion Registrars has had issues with the Nigerian government as it was convicted in 2022 by a Special Offences Court in Lagos over fraud involving N206.5 million stocks after it was arraigned by the Economic and Financial Crimes Commission (EFCC).

The latest action of the SEC on the company is part of the agency’s broader efforts in 2025 to crack down on capital market operators it deems illegal to sanitise the investment environment in Nigeria.

Recall that the regulator revoked the registration of Mainland Trust Limited as a capital market operator, citing regulatory non-compliance and outstanding complaints against the company.

In a related development, the commission also said it would publish the names of Capital Market Operators who violate market regulations in its Name and Shame journal.

The SEC said the decision reflects a zero-tolerance policy for infractions in the capital market and aligns with newly revised enforcement strategies.

According to the notice, “The publication will be in addition to the sanctions and penalties for the respective infractions prescribed in the ISA 2007 and the SEC rules and regulations.”

Business Post had reported that the SEC listed mainstreaming the Nigerian capital market into the economy as its top priority in 2025.

Mr Emomotimi Agama, the Director General of SEC, said this in his New Year 2025 message to the capital market community on Monday.

He also said the commission would intensify efforts to eliminate Ponzi and pyramid schemes, thereby fostering an environment for genuine investment opportunities to thrive in 2025.

He said that protecting investors remained a cornerstone of the commission’s mission.

Mr Agama also said that the commission would prioritise key initiatives aimed at deepening market integrity, enhancing investor confidence and driving economic growth.

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Economy

MTN Anticipates Higher Earnings from Nigerian Operations After Tariff Hike

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MTN Subscribers

By Adedapo Adesanya

The MTN Group expects its Nigerian subsidiary, MTN Nigeria Plc, to witness a significant increase in revenue after the federal government, through the Nigerian Communications Commission (NCC), approved a 50 per cent hike in tariffs for data, voice, and SMS.

In a statement on Monday, the telecommunications group said it experienced increases across its service revenue, earnings, cash flow and leverage all improved in the second half of last year.

However, across the entire Africa spread, it reported a loss after tax of 11.2 billion Rand for its 2024 financial year, a significant decline from the 4 billion Rand profit in 2023, attributing this to the devaluation of the Naira and impairments relating to the conflict in Sudan.

Meanwhile, service revenue rose by 14 per cent in constant-currency terms but was down 15 per cent in reported Rand terms.

According to the numbers, MTN Nigeria’s service revenue was up by 35.6 per cent and is expected to increase in 2025 after tariff adjustments were implemented in February 2025.

Recall that following the approval granted by the Nigerian Communications Commission (NCC) in January, MTN revised prices last month, even going beyond the approved 50 per cent in some of its increments.

For internet data, MTN’s 1.8GB monthly plan is now 50 per cent higher than the previous rate at N1,500. Before now, the package was 1.5GB priced at N1,000.

In addition, the company has raised its 15GB plan to N6,500 from N4,500, while its 20GB plan has been adjusted to N7,500, up from N5,500.

Customers who use larger bundles will pay more comparatively as the 365-day 1.5TB plan jumped by 60 per cent from N150,000 to N240,000, and the 600GB 90-day plan also increased by 60 per cent from N75,000 to N120,000.

In Nigeria, the group said it renegotiated tower lease contracts, which allowed MTN Nigeria to better manage adverse macroeconomic impacts on the business.

“This underscores our dedication to transformation and creating shared value and remains integral to our future success,” the MTN Group President and CEO, Mr Ralph Mupita said.

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Economy

NECA Kicks Against Hike in Private Firms Levies

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5 Strategy Ideas for Your Company's Finances

By Adedapo Adesanya

The Nigeria Employers’ Consultative Association (NECA) has condemned the Financial Reporting Council of Nigeria over the imposition of high annual dues on private and non-quoted companies.

According to a statement, NECA warned that the move could cripple businesses and stifle economic growth, noting that the new policy significantly increased the annual dues of private firms from N1 million to as high as N100 million, depending on their turnover.

“This outcry follows the implementation of the Financial Reporting Council Amendment Act 2023 (FRC Act), which expanded the scope of companies under the FRC’s regulatory oversight,” the statement said.

Business Post reports that publicly listed companies’ dues remain capped at N25 million.

In a statement, NECA’s Director-General, Mr Adewale-Smatt Oyerinde, denounced the move as unjust and contradictory to the federal government’s efforts to enhance Nigeria’s business environment, attract investment, and create jobs.

He warned that the increased financial burden on private firms, already struggling with multiple taxation, regulatory bottlenecks, and rising operational costs, could force many to shut down or downsize.

“This policy is a direct contradiction to the Ease of Doing Business agenda and sends a negative signal to investors,” Mr Oyerinde stated.

“Many companies, especially in manufacturing, trading, and essential services, operate on thin margins. Adding such arbitrary financial demands increases the risk of layoffs, business closures, and an economic downturn,” he added.

Mr Oyerinde further noted that regulatory unpredictability discourages both local and foreign investments, weakening Nigeria’s global competitiveness.

“If regulatory agencies can impose arbitrary levies without due consultation, it erodes investor confidence and pushes businesses to the brink,” he added.

NECA urged the federal government and the National Assembly to immediately suspend the enforcement of the new levies and revert to the previous N1 million fee structure pending a comprehensive review.

Mr Oyerinde also called for an urgent legislative amendment to the FRC Act to eliminate ambiguities and ensure fair and transparent oversight.

He called for dialogue between the federal government, the Ministry of Industry, Trade and Investment, and key stakeholders, including NECA, the Manufacturers Association of Nigeria (MAN), and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), to establish a more sustainable and justifiable compliance framework.

“The private sector is the backbone of our economy, and policies that hinder its growth will ultimately harm national development. The government must prioritize economic sustainability over excessive regulation.

“With growing discontent from businesses over multiple taxation and excessive levies, pressure is mounting on the federal government to reconsider the FRC’s new financial demands to avoid worsening Nigeria’s already fragile economic climate,” Mr Oyerinde warned.

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