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LCCI Seeks VAT Suspension, Asks for Tax Holiday for Manufacturers

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Lagos Chamber Of Commerce and Industry (LCCI) has urged the Federal Government to suspend the implementation of the 50 per cent  increment in the Value Added Tax (VAT), among others, to be able to put the overall economy back to track.

LCCI Seeks VAT Suspension, Asks for Tax Holiday for Manufacturers

Mrs Toki Mabogunje, president, who spoke during a briefing on the state of the economy in Lagos, said a year tax break should be granted for healthcare and pharmaceutical companies, airlines, manufacturers, agro-processors, small medium enterprises (SMEs) and hospitality players.

Mabogunje said agro-processing companies should enjoy import waivers for the next one year, adding that it is critical to support food security and agricultural supplies.

She said: “Commercial banks are implored to offer reprieve to businesses and corporates indebted to them. The reprieve could be in form of loan moratorium and restructuring.

We urge the CBN to review the cash reserve ratio downwards to 20 per cent from 27.5 per cent, to enable commercial banks have more liquidity to support businesses.

“In the aviation industry, we recommend support towards augmenting insurance premiums which are dollar-denominated as cover were mostly underwritten abroad due to lack of local capacity; support to pay for operational cost including international lease rental on grounded aircraft and maintenance (C& D-checks); full implementation of the Executive Order on Removal of VAT from Air Transportation.”

She reiterated the need for restrategising and ensuring proper coordination both at the states and federal level, urging the government to focus on the completion of critical infrastructure projects nationwide such as the Lagos-Ibadan expressway, Lagos-Ibadan rail project, Enugu Airport, the Second Niger Bridge, East-West Road, among others.

“These public goods would have significant positive impact on commercial activities and businesses as they reduce cost of doing business and boost productivity.

The private sector should be encouraged and incentivized to contribute to investment in infrastructural development,” she stressed.

Also speaking, Dr. Muda Yusuf, director general, said the Central Bank of Nigeria (CBN) cannot sustain continuous protection of the naira by depleting its foreign reserves, adding that the continuous drop in oil prices weakens the naira.

Yusuf pointed out that naira has been technically devalued, explaining that official devaluation will occur when the CBN can no longer have the quantum of dollar to defend the naira.

“Over the past 20 years, value-added per capita in agriculture has risen by less than 1 percent annually and it is estimated that Nigeria has lost $10 billion in annual export opportunity due to continuous decline in the production of some commodities, according to Food and Agriculture Organisation (FAO).

Over the years, Food production increases have not kept pace with population growth, resulting in rising food imports and declining levels of national food self-sufficiency (FMARD, 2008).

The main factors undermining production includes reliance on rain for agriculture, smallholder land holding, and low productivity due to poor planting material, low fertilizer application, and a weak agricultural extension system amongst others,” Yusuf said.


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E-Financial

UBA Appoints Henrietta Ugboh as Independent Non-Executive Director

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Africa’s Global Bank, United Bank for Africa (UBA) Plc, has announced the appointment of Henrietta Ugboh as an Independent Non-Executive Director.

The appointment has been approved by the relevant regulatory bodies, including the Central Bank of Nigeria.

UBA’s Group Chairman, Tony Elumelu, CFR commenting on the appointment, said, “Henrietta Ugboh brings a track record of professional success, integrity and leadership, which will further strengthen the UBA Group Board, underlining once again the Group’s commitment to robust corporate governance.”

Ugboh holds a degree in Economics and Statistics from the University of Benin, an MBA from ESUT Business School, and is an alumnus of the Harvard Business School’s Executive Management Program. She has over 30 years experience in banking with Citibank and is an Honorary Senior Member of the Chartered Institute of Bankers of Nigeria and a Fellow of the Institute of Credit Administration (FICA).

Elumelu added that with her considerable experience and expertise, which includes commercial banking, credit, and risk management, the UBA Board is delighted to welcome Mrs Ugboh to the Group Board, “We look forward to her invaluable contribution to the Group, as we continue to execute our unique growth strategy across Africa and globally.”

The Board also announced the retirement of Mrs. Owanari Duke, an Independent Non-Executive Director, who joined the UBA Group Board in October 2012.

During her tenure, Mrs. Duke provided distinguished leadership, serving on Committees of the Bank including the Board Governance Committee, Board Audit, Governance, Nomination & Remuneration Committee, Board Credit Committee, Finance & General Purpose Committee and Statutory Audit Committee.

On behalf of the board, Mr. Elumelu expressed UBA’s deep appreciation to Mrs. Duke for her dedication and significant contributions to the Group, wishing her the best in her future endeavour.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than forty-five million customers, across 1,000 business offices and customer touch points in 20 African countries.

With presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and related banking services


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NDIC Begins Auction of Defunct Heritage Bank’s Landed Assets

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Nigeria Deposit Insurance Corporation (NDIC) has commenced process for the sale of landed properties and chattels of failed Heritage Bank, in a bid to ensure timely declaration of liquidation dividends to uninsured depositors.

NDIC Begins Auction of Defunct Heritage Bank’s Landed Assets

The exercise is pursuant to the corporation’s statutory powers as liquidator of failed banks under section 62 (1)(d) of the NDIC Act, 2023. It also comes after the exercise for the sales of physical assets of the defunct bank at its leased locations nationwide

According to a statement that was issued by NDIC, the sale of landed assets is by competitive bidding and will take place at the 36 affected locations of the bank across the country, from Wednesday, December 4, 2024.

The statement said buyers who wish to participate in the auction are expected to follow laid down guidelines aimed at ensuring transparency, fair competition, equity and accountability to enable recovery of commensurate values from the exercise. This is vital for the payment of liquidation dividends to eligible claimants.

In order to allow the continuation of provision of financial services to the Nigerian public at the locations of the closed bank towards bolstering financial inclusion, preference shall be given to financial institutions who are willing to buy any of the properties at the highest auctioned prices along with all the physical assets at wholesale value.

However, corporate bodies and private individuals willing to compete are equally eligible to compete in the process without prejudice, as the auction shall be open and competitive to all bidders.

Furthermore, bidders will be given opportunity to inspect the properties and chattels across all locations prior to disposal.

All interested parties are to make available 10% bid security of the value of their sealed bids to be dropped in the bid box provided at the various centres of the Corporation.

Interested bidders are advised to submit their bids at any of the designated NDIC offices in Abuja, Lagos, Bauchi, Kano, Enugu and Port Harcourt.

 

 

 

 


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Nigeria CPI, USD and Oil in focus

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By Lukman Otunuga, Senior Market Analyst at FXTM

With the US election done and dusted, the focus shifts back to key data from across the globe.

It will be a week packed with inflation figures from major economies, including the United States, China and Germany among many others.

But the spotlight shines on Africas 4th largest economy – Nigeria.

Inflationary pressures have been cooling in recent months but the latest figure for October is expected to have jumped 33.4%, from 32.7% in September. This may be the result of fuel hikes and floods in the northern part of the country affecting the harvest season.

The CBN has been on a mission to support the Naira and attract investments using aggressive monetary policy. Interest rates were raised by 50 basis points to 27.25% in September – marking its fifth consecutive hike in 2024. Should the Naira show signs of stabilizing, annual inflation could peak in the final quarter of this year.

Dollar set for volatile week?

Outside of Nigeria, our attention falls on the US Dollar Index (DXY) which could be rattled by key US data and Fed speeches including Jerome Powell.

Besides, it would be a crime to overlook the index after its aggressively bullish reaction to Trump’s US election win. Prices jumped almost 2% last week Wednesday on the “Trump trade” before giving back post-election gains as the Pound and Yen gained.

Note: The DXY tracks the dollars performance against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

With all the above said, the DXY could see more price swings.

* US October CPI report

The October US Consumer Price Index (CPI) report to be published on Wednesday 13th November could impact Fed cut expectations around lower US interest rates in December and beyond.

Markets are forecasting: 

  • CPI year-on-year (October 2024 vs. October 2023) to rise 6% from 2.4%in the prior month
  • Core CPI year-on-year to remain unchanged at 3%
  • CPI month-on-month (October 2024 vs September 2024) to remain unchanged at 2%
  • Core CPI month-on-month to remain unchanged at 3%.

Headline and core CPI inflation is expected to remain unchanged at 0.2% and 0.3% MoM in October, but the year-over-year headline number is expected to rise 2.6% from 2.4%.

Further evidence of cooling price pressures may support the case for another rate cut in December.

Traders are currently pricing in a 65% probability of another 25-basis point rate cut by the end of 2024.

A softer-than-expected US CPI report has the potential to drag the DXY lower. Should the CPI report beat market forecasts, the DXY could push higher.

Oil hit by China demand woes

Oil tumbled last Friday after Chinese stimulus measures disappointed investor expectations.

Brent shed roughly 1.6% last week as renewed concerns about demand in China and uncertainty over the impacts of Trump’s presidency weighed on the global commodity.

Last week, we discussed how Trump’s victory may pressure oil – possibly hitting oil producing nations like Nigeria. His return to the White House could result in higher domestic oil production while potential tariffs on China may impact global demand. This combination of rising supply and falling demand could enforce fresh pressures on oil which is down 4% since the start of 2024. Should oil prices continue to weaken, this could be a threat to countries who acquire a chunk of their revenues from oil sales.

 


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