*1. FOOD INFLATION SEEN REVERSING ON FUEL PRICE HIKE
Business Day, Page 1-31*
In July 2024, food inflation declined to 39.53 percent from 40.87 percent in June. It was a relief for many families who were spending most of their incomes on food. However, the excitement may be temporary given the recent increase in petrol price, according to data analysed by BusinessDay. Data shows that each time the price of premium motor spirit (PMS) or petrol increases, food inflation moves in the same direction.
Food inflation rose from 24.8 percent in May to 25.25 percent in June 2023 when petrol price increased from N200 to N525 per litre after President Tinubu ended the country’s gasoline subsidies on May 29. When the pump petrol price further increased to an average of N617 per litre in July 2023, food inflation rose to 29.3 percent in August 2023 from 26.9 percent in July 2023.
*2. HOW NIGERIA CAN BOOST REVENUES WITHOUT RAISING TAXES
Business Day, Page 1*
Nigeria has one or two lessons to draw from the United Arab Emirates (UAE) on how a nation raises its revenue base without necessarily increasing taxes. The United Arab Emirates (UAE) is one of the lowest tax nations in the world. It does not impose income tax on citizens, but they only need to pay 5 percent value added tax (VAT) for goods purchased or services rendered, according to the UAE government official website.
The UAE’s corporate tax is nine percent, which it only started implementing in June 2023. This is against 32 percent corporate tax in Portugal, 30 percent in Germany, and 30 percent for Nigeria (large companies), Statista said. Yet, the UAE’s revenue stood at 463.9 billion dirhams ($126.3 billion) in 2021, up 26 percent from 2020, WAM. Its revenue in the fourth quarter of 2023 was $42.45 billion, an 8 percent increase from the further quarter of 2022.
*3. INVESTORS TAKE FGN $500M BOND TO OVERSUBSCRIPTION
The Nation, Page 1-2*
Nigeria’s first domestic foreign currency-denominated bond recorded significant oversubscription, underlining investors’ confidence in the country’s economic outlook. It was learnt at the weekend that the medium-term $500 million bond witnessed overwhelming subscriptions from local and foreign investors.
It closed as a landmark transaction that ushered in a new window of foreign exchange (forex) to governments and companies. The Debt Management Office (DMO), which oversees the government’s debt issuances and management, is expected to make final allotment results this week.
*4. NIGERIAN, CHINESE FIRMS SIGN $1B IRON ORE-TO-STEEL PROJECT PACT
The Nation, Page 1*
Efforts by the Federal Government to make local value addition the model of development in the solid minerals sector are yielding the desired results. This followed the signing of a $1 billion Memorandum of Understanding (MoU) by two firms on the establishment of an iron ore-to-steel project in Kogi State.
A statement by Kehinde Bamigbetan, the Special Adviser to Solid Minerals Development Minister, Oladele Alake, said the minister was excited by the development.
According to the statement, Dr. Alake hailed the feat in China during one of the sidelines activities of the just concluded visit of President Bola Ahmed Tinubu to Beijing.
*5. N342B RECOVERED FROM NIRSAL MFB DEBTORS
The Nation, Page 4*
The paper reported that the more than 65 per cent of the N528.1 billion given out as loans to Nigerians by NIRSAL Microfinance Bank (NMFB) has been recovered. The bank has recovered over N342.6 billion of the facility from debtors, who benefitted from the loans disbursed on behalf of the Federal Government.
It also ruled out any arbitrariness in the increment of interest rates on the loans from five to nine per cent, describing it as s response to changes in the Central Bank of Nigeria’s (CBN) benchmark rate. The government introduced the loans in 2020 under the COVID-19 pandemic economic recovery scheme.
*6. CRYPTO: SEC SHARPENS FOCUS ON ILLEGAL FUNDS, INFRACTIONS
The Nation, Page 15*
Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has said that it would commence stringent reviews of activities in the digital assets segment of the capital market to protect investors and forestall the use of the segment for illegal inflows. Director General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, said the Commission is committed to protecting investors including those in the crypto space and therefore enjoined participants in the market to play by the rules.
He warned that the regulator would deploy the full weight of the law against individuals and entities that engage in activities that are contrary to laid down regulations in the capital market. “We are certainly going to commence enforcement actions on anyone who wants to operate in this market and does not have the intention of being regulated. This also applies to those in the crypto space.
*7. FOREX INFLOWS RISE TO $2.34B ON NON-BANK SURGE
The Nation, Page 15*
Total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose by 21.4 per cent to $2.34 billion amid increased inflows from individuals and non-bank institutions. The latest report on NAFEM obtained yesterday showed that inflows saw appreciable increases across all segments, with the exception from the inflows from the Central Bank of Nigeria (CBN), which declined during the period.
The data, obtained from the FMDQ Securities Exchange, indicated that total inflows rose from $1.92 billion in July 2024 to $2.34 billion in August 2024. The increase was driven broadly by stronger inflows from both domestic and foreign sources. Inflows from domestic sources grew by 15.5 per cent from $1.68 billion in July 2024 to $1.94 billion in August. Also, inflows from foreign sources jumped by 62.1 per cent to $394.50 million as against $243.30 million in previous month.
*8. CBN’S AFRIGO JOINS FORCES WITH SECUREID ON CARD ADOPTION, FINANCIAL INCLUSION
The Nation, Page 17*
The National Domestic Card Scheme of the Central Bank of Nigeria (CBN), known as AfriGo, has joined forces with smart card manufacturing company, SecureID, on card adoption and financial inclusion.
Managing Director, AfriGOPay Financial Services Limited (AFSL), Ebehijie Momoh, spoke when she led the management team on a tour of SecureID’s plant in Lagos. AfriGo is a subsidiary of the Nigeria Inter-Bank Settlement System Plc (NIBSS) owned by all licensed banks and the CBN.
Momoh said: “The cards that our clients issue come from companies like SecureID. “There is a huge opportunity to ensure that the AfriGo card is in every Nigerian’s hand.
*9. NIGERIA, CHINA SEAL $3.3BN BRASS INDUSTRIAL PARK DEAL
Vanguard, Page 22*
Nigeria, China have signed a $3.3 billion deal to develop the Brass Industrial Park and Methanol Complex, in Bayelsa State. The Director of Information and Public Relations of the Federal Ministry of Finance, Mr. Mohammed Manga, in a statement last night, disclosed that the deal was signed on the sidelines of Africa-China Conference in Beijing. He said the “transformative project” was expected to significantly boost Nigeria’s industrial output and generate vital employment opportunities.”
The director described the deal as a reaffirmation of the two nations’ “commitment to deepening economic cooperation, strengthening bilateral ties and fostering sustainable development.” “The inaugural China-Nigeria Economic Cooperation and Trade Conference, held alongside the 2024 Forum on China-Africa Cooperation (FOCAC), has set the stage for unprecedented collaboration and growth between the two countries,” he added. The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, was said to have underscored the significance of South-South cooperation, highlighting its pivotal role in Nigeria’s sustainable development goals.
*10. N50 TRANSFER LEVY MAY GROUND FINTECH, ECONOMISTS WARN
The Punch, Page 27*
The Federal Government’s recent move to deduct a N50 Electronic Money Transfer Levy from customers’ transactions has sparked criticism from economists, who warn that the move may discourage digital transactions and harm the economy. The levy, which is set to take effect soon, will apply to every inflow of N10,000 and above received by customers of fintech companies, including OPay and Moniepoint.
According to Former Chief Economist at Zenith Bank, Marcel Okeke, that the move was ill-timed and could have far-reaching negative consequences for the economy, particularly in the fintech sector, which has been growing rapidly in recent years. Okeke argued that the government’s desire to boost revenue through this measure may have unintended consequences, potentially harming the economy and stifling innovation in the fintech sector.
*11. EQUITY MARKET LOSES N83BN IN ONE WEEK
The Punch, Page 30*
The Nigerian Exchange lost N83bn last week as both the All-Share Index and market capitalisation depreciated by 0.15 per cent due to sell-offs in big stocks. The ASI closed the week at 96,433.53 points, while the market capitalisation settled at N55.39tn. Despite a downward trend, the NGX Oil and Gas Index bucked the market’s performance with a 1.52 per cent gain. During the week, investors traded 2.14 billion shares worth N51.22bn in 55,603 deals, decreasing from the previous week’s 2.82 billion shares valued at N53.048bn traded in 50,488 deals.So This Happened (246) Reviews Sirika’s Arrest Over Alleged N8bn Air Fraud, Food Prices Rise, Others
The financial services industry led activity, accounting for 1.23 billion shares valued at N19.98bn, representing 57.40 per cent of total equity turnover volume and 39 per cent of value. Following closely was the oil and gas industry, which traded 262.484 million shares worth N18bn in 14,275 deals.
*12. VAT INCREASE’LL DEEPEN ECONOMIC WOES, ATIKU WARNS FG
Daily Sun, Page 6*
Former vice president and 2023 presidential candidate of the peoples Democratic Party (PDP), Atiku Abubakar, has warned that the plan by the Federal Government to increase the Value Added Tax (VAT) from 7.5 per cent to 10 percent would worsen the cost of living in the country. Atiku, in a statement, yesterday, alleged that President Bola Tinubu and his wife have resorted to overburdening impoverished citizens while ignoring their own extravagant excesses.
According to him, the endless rise in taxes and interest rates under the present administration is weakening businesses across the country, leading to job losses and increasing the sufferings of the people. He said: “President Bola Tinubu, alongside his coterie of advisers, has resolved to raise the VAT rate from 7.5 percent to 10 percent, even as the NNPCL has announced a soaring PMS price increase at the pump. This move unveils a new era of regressive and punitive policies, and its impact is destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.
*13. FG IMPOSES ELECTRONIC LEVY ON OPAY, MONIEPOINT USERS, OTHERS
Daily Trust, Page 23*
The paper reported that the Customers of financial technology (fintech) companies including Opay, Moniepoint and Kuda are grumbling over the implementation of the Electronic Money Transfer Levy (EMTL) on their transactions.
The implementation which takes effect today (Monday) imposes N50 on transfer from N10,000 on fintech account holders as obtained with Deposit Money Banks (DMBs). EMTL, introduced under the Finance Act 2020, places a singular and one-off levy of ₦50 on the recipient of any electronic receipt or transfer of ₦10,000 or above.
DMB account holders have been paying this transfer levy on transfer receipts above N10,000; forcing some of them to register with any of the fintechs with the hope of bypassing the charges.
However, it appears there is no escape route as the federal government has widened its dragnet in its bid to rake in more revenue.
*14. BANKS COLLUDING WITH STATES TO BYPASS FISCAL LAW — FRC
Daily Trust, Page 23*
The Fiscal Responsibility Commission (FRC) has decried the rampant collusion between banks and state governments in violating the provisions of the Fiscal Responsibility Act. Speaking at the National Summit of Fiscal Responsibility in Abuja, the Chairman of FRC, Barrister Victor Muruako, noted that banks had been aiding state governments in circumventing the law, particularly with respect to borrowing.
Muruako cited Section 44.1 of the Fiscal Responsibility Act which mandates that any government or its agencies intending to borrow funds must present a detailed cost-benefit analysis of the proposed borrowing. He said, “We are witnessing a troubling decline in accountability. In one instance, a state government’s secretary simply signed a declaration claiming compliance with the Act, which then allowed the government to proceed with borrowing.
*15. EQUITY MARKET OPENS WEEK WITH N84BN LOSS
Daily Trust, Page 23*
The Nigerian equity market closed the first trading week of September on a negative note with a 0.15% decline, falling from 96,580 points to 96,433 points. Market capitalisation lost N84 billion week-on-week (W-o-W) to close at N55.394 trillion.
The index dropped by 0.15%, falling from its opening value of 96,580 points to close at 96,433 points, marking the beginning of September on a bearish note. Across the sectoral spectrum, performance was in the mixed bag. The NGX Oil & Gas index recorded a weekly gain of 1.48 per cent, while NGX Banking index lost 0.23 per cent W-o-W.
*16. UTM FLNG GETS FG’S NOD TO CONSTRUCT 1ST FLOATING LNG PLANT
Daily Trust, Page 24*
The federal government has officially granted UTM FLNG Limited “License to Construct (LTC)” Nigeria’s first Floating Liquefied Natural Gas (FLNG) facility, expected to be Africa’s largest crude oil producer, in the global gas market. The issuance of the LTC to UTM FLNG by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) last Friday came as a major fulfilment of the assurance by President Bola Tinubu in July, 2023, to give all necessary support to the Nigerian company to ensure the actualisation of the landmark gas project.
Tinubu had during an audience with the management of the company and its foreign partners at the State House, Abuja, pledged to remove all impediments to the timely completion of the facility. Meanwhile, the UTM FLNG plant, with a capacity of 2.8 million tonnes per annum (MTPA), will produce Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG) and condensate from re-injected gas at the OML 104 Yoho Field.
*17. SEC WARNS AGAINST CAPITAL MARKET INFRACTIONS
Daily Trust, Page 24, Leadership, Page 23*
The Papers reported that the Securities and Exchange Commission has said that it will deploy the full weight of the law against individuals and entities that engage in activities that are contrary to laid down regulations in the capital market. The Director General of the SEC, Dr. Emomotimi Agama in an interview, said the Commission is committed to protecting investors including those in the crypto space and therefore enjoined participants in the market to play by the rules.
“We are certainly going to commence enforcement actions on anyone who wants to operate in this market and does not have the intention of being regulated. This also applies to those in the crypto space. We are sending this signal to all those that want to play by the books that they are welcome to our space. But for those that do not want to play by the books, of course we definitely will not allow them operate within our space,” Agama said. The DG disclosed that the Commission decided to take the recent step of issuing Approval-in-Principle to two crypto exchanges because it observed that Nigerian youths were becoming increasingly interested in the digital space and so it was important to provide regulation, clarity and indeed the protection of investors which is its primary responsibility.
*18. INVESTORS’ RETURN DEPRECIATE BY N1.12TN IN TWO MONTHS
This Day, Page 26*
The Paper reported Nigerian equities market depreciated by N1.12 trillion between July and August 2024, as investors’ profit-taking persisted in some blue-chip companies listed on the Nigerian Exchange Limited (NGX). The downward trend in the two months under review is coming on the backdrop of a hike in the Monetary Policy Rate, leading investors to divest into lucrative high yield Treasury Bills (T-Bills).
An investigation by paper revealed that the market capitalisation in July 2024 dropped by N1.09 trillion or -1.92 per cent to close at N55.514 trillion from N56.602 trillion it opened for trading, while in August 2024, it dropped further by N36.04 billion or 0.06 per cent to close at N55.478 trillion from N55.514 trillion.
According to capital market analysts, investors in the local market sustained profit-take based on the sentiment, stressing that Nigeria’s capital market is still one of the best performing Exchanges in Africa and World at large.
*19. NAIRA DEVALUATION, SUBSIDY REMOVAL CRIPPLE MANUFACTURERS
Leadership, Page 1-7*
The recent removal of fuel subsidy and the devaluation of the Naira have severely impacted manufacturers in Nigeria, leading to a significant decline in tax revenues as well as operational challenges. Since the removal of fuel subsidies on May 29, 2023, fuel prices have surged by approximately 193 per cent, causing a ripple effects across various sectors.
Manufacturers are particularly affected as the rising costs of fuel and raw materials have led to increased production expenses. Reports indicate that tax revenue from manufacturers plummeted by over 70 per cent in the first quarter of 2024, highlighting the financial strain on the industry.
*Felicia Odanwu
Principal Information/PRO
For: Director Information/PR
9th September, 2024.*
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