Economy
Policies to Increase National Disposable Income
By FSDH Research
If an individual, business, government or, by extension, a country wants to increase its spending and savings power, there must be a plan to increase the ability to generate income.
Any entity that desires to increase its spending and savings without a plan to increase its ability to generate income will surely have to borrow to fill the gap, all things being equal. And you know that a borrower can easily become a slave to a lender if he is not able to meet his obligations to the lender.
FSDH Research looks at the total income that was available for use by residents and firms in Nigeria (usually referred to as National Disposable Income or NDI) between Q1 2016 and Q2 2018 and concludes that it was weak and cannot take the country to the ‘Promised Land’.
Therefore, something urgent must be done so that the country will not continue to rely on excessive borrowing or avoid a situation where savings will continue to drop.
The total income available for use by residents in Nigeria comes from four major sources. The total remuneration of employees in the formal sector, operating surplus (profit of businesses), total taxes payable on products, minus any subsidies received for the product, and the net income, transfer and profit from abroad.
Our analysis shows that operating surplus dominated the total national disposable income, which represented an average of 69% during the period.
However, the growth in the inflation rate during the same period, at 37.14%, was higher than the growth in the operating surplus at 32.85%. Therefore, in reality, the operating profit contracted.
Again, household compensation was low. This is made up of salaries of employees in the formal sector including benefits in kind (such as pensions).
Our analysis shows that household compensation contributed on average 27% to the total NDI between Q1 2016 and Q2 2018. A combination of profit of firms and household compensation contributed 96% of total NDI.
Nevertheless, it grew by 38.33% marginally higher than the inflation rate during the period.
The high costs of running businesses in Nigeria caused by ineffective institutions to enforce law and order, insecurity, defective infrastructure, and inadequate support systems for new businesses are the major factors responsible for the weak growth in profit.
The high unemployment level in the country, insufficient new job opportunities and the large informal sector are all responsible for weak growth in household compensation.
FSDH Research offered suggestions into the high unemployment situation in Nigeria in our report entitled ‘High Unemployment Rate in Nigeria – FSDH Research Suggests Solutions’.
The weak NDI limits consumption of households, government and investments by firms. We note that little income is channelled into savings and investments. This is also one of the reasons the interest rate on loans is high, and a single digit interest rate may not be achievable in the short-run. As noted earlier, one can also link the weak income generation to the weak household consumption. Low level of household consumption also reduces government tax, particularly Value Added Tax (VAT). In addition, it reduces the amount that is available to purchase goods and services produced by firms. Ultimately sales drop, profit drops, tax income drops and a firm will not be able to sell as much as it should sell to enable it to expand production; the firm will not be enabled to employ more people.
It is cheaper to stimulate the economy through appropriate policies to grow the NDI, than relying on borrowing. There must be removal of all administrative delays in obtaining licences and approvals.
This includes titles to landed properties for building and agricultural purposes. Government should also invest in data generation in the solid mineral sector. It can sell the data to potential investors interested in the sector. This will reduce the risk inherent in this untapped sector of the economy.
There is the need for human capacity building in business management and leadership. This must not be left to business schools, which are only affordable to a few people.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) has unveiled a unified Taxpayer Identification (Tax ID) system for all taxable persons across the country as part of efforts to strengthen tax administration and improve transparency.
The agency announced the development in a public notice issued jointly with the Joint Revenue Board (JRB) on Monday.
According to the notice, the initiative is backed by Sections 6, 7, and 8 of the Nigeria Tax Administration Act, 2025, which mandate every taxable person in Nigeria to obtain a Tax ID, in a wider move to expand the country’s tax base.
The NRS said the new framework is designed to create a centralised and harmonised taxpayer database that would enhance interactions between taxpayers and revenue authorities at both federal and sub-national levels.
“The Tax ID will serve as a single, unified identity for all taxpayers, enabling seamless interaction with tax authorities at both federal and sub-national levels. It is designed to consolidate taxpayer records, eliminate duplication, and ensure more efficient management of tax-related information,” the agency stated.
The revenue agency explained that the new system would simplify tax compliance procedures, including taxpayer registration, filing of returns, and payment processes.
According to the NRS, the framework is also expected to improve accountability and reduce leakages in tax collection by creating better visibility and tracking of taxpayer information nationwide.
“The initiative will simplify tax compliance processes, including registration, tax filing, and payment procedures. The system will improve transparency by enabling better visibility and tracking of taxpayer records while reducing leakages and improving accountability in tax collection. The framework will also harmonise taxpayer information across all levels of government,” the notice added.
The agency further disclosed that the new Tax ID system would replace the existing Tax Identification Number (TIN) Validation API currently used by Ministries, Departments and Agencies (MDAs), financial institutions, and other organisations for taxpayer verification.
By Adedapo Adesanya
Three bellwether stocks weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.31 per cent on Monday, May 18.
This brought the NASD Unlisted Security Index (NSI) by 54.71 points to 4,133.70 points from 4,188.41 points, and shrank the market capitalisation by N32.73 billion to N2.473 trillion from N2.506 trillion.
Yesterday, FrieslandCampina Wamco Plc contracted by N12.45 to sell at N146.55 per share compared with last Friday’s closing price of N159.00 per share, Central Securities and Clearing System (CSCS) Plc declined by N2.34 to N70.00 per unit from N72.34 per unit, and NASD Plc lost 50 Kobo to trade at N34.50 per share versus N35.00 per share.
The trio overpowered the N5.56 gained Newrest Asl Plc. This stock ended the trading session at N61.15 per unit, in contrast to the previous session’s N55.59 per unit.
During the trading day, the volume of securities traded by investors slid by 56.1 per cent to 514,142 units from 1.2 million units, and the value of securities dropped 29.8 per cent to close at N17.4 million versus N29.8 million, while the number of deals jumped 12.5 per cent to 27 deals from 24 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units traded for N1.9 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
It was a horrible day for the Nigerian Naira in the different segments of the foreign exchange (FX) market on Monday, May 15, as its value further weakened against the United States Dollar.
In the black market window, the Naira lost N5 against the Dollar yesterday to sell for N1,390/$1 compared with the previous value of N1,385/$1, but at the GTBank forex counter, it remained unchanged at N1,383/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), the Nigerian currency depreciated against the greenback by N2.66 or 0.19 per cent to sell for N1,373.70/$1 compared to last Friday’s rate of N1,371.04/$1.
Equally, it fell against the Pound Sterling in the same market segment by N9.05 to trade at N1,839.66/£1 versus N1,830.61/£1, and lost N5.42 on the Euro to close at N1,600.49/€1 versus N1,595.07/€1.
The performance of the local currency during the session indicates early worries despite all signals pointing to stability, amid improved Dollar sales by the Central Bank of Nigeria (CBN), with steady, higher oil receipts to bolster the nation’s reserves.
Activity at the market showed that turnover rose 57.3 per cent to $76.29 million on Monday from $48.49 million posted on Friday.
Over the weekend, S&P raised Nigeria’s credit ratings for the first time since 2012 and highlighted improved FX market liquidity and $10 billion turnover recorded in April 2026 as one of the major gains of the CBN-led FX reforms.
The agency said the liberalisation of the exchange rate has bolstered access to foreign currency and enabled a market-driven exchange-rate environment while supporting investor and consumer confidence.
Meanwhile, the cryptocurrency market was bullish on Monday as investors monitored developments in the Iran conflict and weighed the impact of surging oil prices on inflation and US interest-rate expectations.
Ethereum (ETH) gained 0.7 per cent to trade at $2,134.10, Cardano (ADA) rose by 0.6 per cent to $0.2515, Solana (SOL) expanded by 0.3 per cent to $85.11, Binance Coin (BNB) jumped 0.2 per cent to $643.29, TRON (TRX) increased by 0.03 per cent to $0.3565, and Bitcoin (BTC) advanced by 0.02 per cent to $76,912.12.
On the flip side, Dogecoin (DOGE) slid by 1.5 per cent to $0.1044, and Ripple (XRP) decreased by 0.5 per cent to $1.38, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
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