Q1 2023: FG rakes in N709.59bn VAT
Nigeria’s aggregate Value Added Tax (VAT) for Q1 2023 has been reported at N709.59 billion, the National Bureau of Statistics (NBS), has said. According to the NBS Value Added Tax report for Q1, 2023, a growth rate of 1.75 percent on a quarter-on-quarter basis from N697.38 billion in Q4 2022. Local payments recorded were N436.10 billion, Foreign VAT payments were N151.13 billion, while import VAT contributed N122.37 billion in Q1 2023. On a quarter-on-quarter basis, the activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the highest growth rate with 349.86%, followed by construction with 95.64%. On the other hand, the report noted that activities of extraterritorial organizations and bodies had the lowest growth rate with–53.54%, followed by real estate activities with– 47.01%. In terms of sectoral contributions, the top three largest shares in Q1 2023 were manufacturing with 29.65%; information and communication with 19.29%; and mining & quarrying with 12.24%. The report said: “Conversely, activities of extraterritorial organizations and bodies recorded the least share with 0.02%, followed by activities of households as employers, undifferentiated goods- and services-producing activities of households for own use with 0.03%; and water supply, sewerage, waste management, and remediation activities with 0.04%.” However, on a year-on-year basis, VAT collections in Q1 2023 increased by 20.56% from Q1 2022. Similarly, aggregate Company Income Tax (CIT) for the first quarter of 2023 was reported at N469.01 billion, indicating a growth rate of -37.79% on a quarter-on-quarter basis from N753.88 billion in Q4 2022. According to the NBS, local payments received were N300.78 billion, while Foreign CIT payment contributed N168.23 billion in Q1 2023. On a quarter-on-quarter basis, the financial and insurance activities recorded the highest growth rate with 50.42 per cent, followed by construction with 42.32 per cent. “On the other hand, water supply, sewerage, waste management, and activities had the lowest growth rate with – 69.38%, followed by other service activities with -60.13%. In terms of sectoral contributions, the top three largest shares in Q1 2023 were financial & insurance activities with 22.94%; manufacturing with 20.91%; and information and communication with 11.89%. “Conversely, the activities of households as employers, undifferentiated goods-and services-producing activities of households for own use recorded the least share with 0.01%, followed by water supply, sewerage, waste management, and remediation activities with 0.04%; and activities of extraterritorial organizations and bodies with 0.12%. “However, on a year-on-year basis, CIT collections in Q1 2023 decreased by 14.96% from Q1 2022,” the NBS stated.
IMF supports Nigeria’s exchange rate unification
The exchange rate unification policy of the President Bola Ahmed Tinubu has received the backing of global lender, the International Monetary Fund (IMF). Over the last several years, Nigeria has been operating a dual exchange rate regime which had led to round tripping with many Nigerian businesses preferring to trade dollars than engage in their legitimate businesses. According to the Apex Bank had in a statement abolished the dual exchange rate collapsing it into the Investors Exporters (I&E) window. The regulator stated that it is expected to be a willing seller and a willing buyers With the policy, all applications for medicals, school fees, business travel allowance/personal travel allowance, and SMEs would now go through the I&E window. in a short statement, on Friday, IMF’s Resident Representative in Nigeria, Ari Aisen said it would support the federal government as it implement the new reform. “The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations. We stand ready to support the new administration in its implementation of FX reforms.” The Bretton Woods institute and experts consistently warned the federal government on the dangers of keeping a dual exchange rate saying it created room for arbitrage.
Court orders DSS to allow Emefiele access to family, lawyers
A Federal Capital Territory (FCT) High Court, sitting in Maitama has ordered the Director General of the Department of State Services (DSS) to immediately grant suspended Central Bank of Nigeria (CBN) governor, Godwin Emefiele unhindered access to his lawyers and family members. Justice Hamza Muazu gave the order following an oral application by counsel to Emefiele, Joseph Daudu (SAN) with Michael Aondoakaa (SAN) in a suit marked No: FCT/HC/CV/6450/23. Listed as respondents are the Attorney General of the Federation (AGF); the Director General of State Security Service and the State Security Service. The enrolled order dated June 16, 2023, reads: “The lawyers of the applicant shall have access to the applicant immediately. And regularly at reasonable time, pending the determination of the application.” In his submission, Daudu informed the court that he has written letters to the respondents particularly on June 14, 2023, for the purpose of taking further instruction from him, but the DSS has refused to respond to the application. Responding, counsel to the 2nd and 3rd Respondents I. Awo, informed the court that the DSS does not have the penchant for refusing such a request and that it is wrong to do so. Awo assured that he is certain the Security Service would abide the order of Court and grant access to the listed lawyers and family members of Mr. Emefiele to see him, while counsel to the Office of the Attorney General of the Federation did not oppose the application. Meanwhile, counsel to the DSS, as well as the AGF requested for an extension of time to file their respective responses to the originating motion, which was granted and the suit was further adjourned till Tuesday June 20, 2023 for substantive hearing of the suit. Godwin Emefiele, has been taken into custody by DSS hours after President Bola Tinubu suspended him from office. The spokesperson to DSS, Peter Afunanya in statement confirmed that “The Department of State Services (DSS) hereby confirms that Mr Godwin Emefiele, the suspended Governor of the Central Bank of Nigeria (CBN), is now in its custody for some investigative reasons.”
EFCC has become too politicised -Transparency International
The Head of Transparency International, Nigeria, Mr Auwal Rafsanjani, says the suspension of the Economic and Financial Crimes Commission (EFCC) Chairman, Abdulrasheed Bawa, did not come to the organisation by surprise as his office has become too politicised. Rafsanjani, who is also the Executive Director of the Civil Society Legislative Advocacy Center (CISLAC), said this in an interview in Abuja. President Bola Tinubu on Wednesday announced the suspension of the Economic and Financial Crime Commission (EFCC) chairman in a statement by the office of the Secretary to the Government of the Federation (SGF). Bawa was suspended based on “weighty allegations of abuse of office” levelled against him. ”The suspension did not come to us by surprise, this is because of the way and manner the previous regimes or governments have always removed the EFCC leaders when they come into power. ”For this development, with regard to the removal of the EFCC chairman, we believe that already we knew that he was going to be removed because of so many political interests and changes that can happen.” He said that Tinubu might not likely retain Bawa because of how he was appointed and his affiliation. ”He will want to get rid of anything that has to do with that. ”Also there are some political interests, some politicians associated with the government also have issues with the current suspended EFCC chairman and therefore they are likely not to be comfortable having him there.” Rafsanjani added that “the EFCC office has been unnecessarily made to be too political. ”Therefore, it is making it difficult to do what ordinarily government agency is supposed to do. ”So, we need to look at it from that context and from that perspective, so I’m not surprised.” Rafsanjani, however, said that ”what is important is that we must insist and demand that the anti-corruption and the good work of agencies, including EFCC must continue in the country.” He also advised the government to look beyond politics in appointing the next chairman of EFCC. ”In appointing the next one, I think first and foremost, let’s make that office to be a technical professional office. ”Let’s make it less political, let us remove the use of that to settle political issues. ”I think we need to have a credibly experienced, fairly minded person to carry out that responsibility,” he said.
Drive transformative change, Tinubu tasks new Economic Council
President Bola Tinubu on Thursday inaugurated the National Economic Council (NEC) with a charge on them to work with his administration to revive the nation’s economic fortunes. At the inauguration at the Council Chambers of the State House in Abuja, Tinubu said that the task of reviving the economy before the new administration is daunting. He, however, added that there would be no excuses for not delivering since they all begged and even danced before Nigerians to give them the job. He urged the members of the Council to put in their best, pointing out that Nigerians are waiting for them eagerly to deliver democratic dividends. “It is very reassuring that our citizens are behind us, but they want reforms and they want them very quickly.” The NEC is constitutionally under the Chairmanship of the Vice President. The NEC meets monthly and has the mandate to advise the President concerning the economic affairs of the Federation. They are also expected to advise on measures necessary for the coordination of the economic planning efforts or programmes of the various governments. Membership of the NEC comprises of the 36 State Governors, the Governor of the Central Bank of Nigeria and other co-opted Government officials. No fewer than 30 governors and two deputies were in attendance at the inauguration. They include governors Abdulrahman Abdulrazaq of Kwara, Ademola Adeleke of Osun, Yahaya Bello of Kogi, Biodun Oyebanji of Ekiti and Abdullahi Sule of Nasarawa. Others are Umo Eno of Akwa Ibom, Peter Mbah of Enugu, Bassey Otu of Cross River, Caleb Muftwang of Plateau, Nasir Idris of Kebbi, Aliyu Radda of Katsina and Hycinth Alia of Benue. The Secretary to the Government of the Federation, George Akume, Chief of Staff, Femi Gbajabiamila, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari also attended. Other officials include the acting Accountant General of the Federation, Oluwatoyin Madein, Acting Governor of Central Bank, Folashodun Shonubi, Permanent Secretaries Budget and National Planning, Federal Capital Territory Administration, and State House.
CBN collapses all forex markets into I&E window
The Central Bank of Nigeria has released new operational changes to the foreign exchange market in the country. The Apex bank in the new operational changes abolished all segments of the foreign market and collapsed them into the Investors and Exporters (I&E) window. It said in the guideline signed by Angela Sere-Ejembi, Director, Financial Markets that applications for medicals, school fees, BA/PTA, and SMEs would continue to be processed through deposit money banks. In the new changes, the CBN reintroduced the “Willing Buyer, Willing Seller” model at the I&E Window. It stated that operations in this window would be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007. It added that all eligible transactions are permitted to access foreign exchange at this window. The CBN stated that the operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places. It also announced the proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures, adding that the limits on overbought positions shall be zero. The apex bank also announced the re-introduction of order-based two-way quotes, with bid-ask spread of A1. All transactions, it added must be cleared by a Central Counter Party (CCP).
Subsidy: Marketers lament delay in payments
Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has disclosed that its members now spend as much as N25 million to purchase a 45,000 litres truck of Premium Motor Spirit popularly referred to as petrol. Before the subsidy was withdrawn, a fuel tanker was purchased for N7 million. According to NOGASA, the situation has made it impossible for its members to cough out the differentials. National President of NOGASA, Mr. Bennett Korie, who revealed this Wednesday in Abuja, insisted that there is need to also consider the problems associated with the removal. “We are 100 percent in support of subsidy removal, but you know that everybody is talking about subsidy removal but they don’t talk about the problem behind the subsidy removal. It is good to remove subsidies but there are things that people don’t know, for instance, some of the marketers don’t have the money to pay differentials. “This is because in less than an hour that Mr. President announced the removal of the subsidy, the price changed and that affected a lot of marketers. We are talking about millions of naira. Before the removal, a tanker of fuel was selling for about seven million, but in less than an hour, it went up to 25 million naira, where is the money?” he lamented. Korie said that Nigeria’s high interest rate of 30 percent was making it difficult for marketers to make profits. According to him, where would marketers get money from to continue the distribution of petroleum products across the country. He urged the federal government to pay marketers their outstanding of the Petroleum Equalization Fund (PEF) to boost their Capita and enable them stay in business. “Subsidy was removed without considering some of these problems. At the same time, before now, we have this PEF. But they are not paying the marketers. There is no money, where do we get the money? “Therefore, I want to use this opportunity to appeal to the government to please pay marketers their PEF, so that they will continue in business, if it is not paid, we would not get fuel to sell,” he said.
Sterling Bank’s CEO, Abubakar Suleiman tipped for CBN Governor
There are indications that President Bola Ahmed Tinubu may appoint the Managing Director/CEO of Sterling Bank, Abubakar Suleiman as the next Governor of the Central Bank of Nigeria, NIGERIAN ANCHOR can report. This newspaper learned that the decision followed Abubakar’s achievements since he was appointed in 2018, as Sterling Banks’ helmsman. In his official Twitter handle seen on Monday in Abuja, Imran Muhammed said President Bola Tinubu was considering Abubakar, among several other names. “According to a source, President Tinubu is also considering Abubakar Suleiman as CBN Governor,” Muhammed tweeted. Several names are being touted in the past week following the inaugural speech of the President and subsequent suspension Godwin Emefiele. Tinubu has stated that his administration will reform the financial sector of the economy and unify the country’s exchange rate, which analysts say is a disincentive to investments. Names that have been making the rounds concerning the Apex Bank appointment include former Governors, Abubakar Badaru and Nasir el-Rufai, former CBN Governor under President Goodluck Jonathan, and Wale Edu, just to name a few. Analysts have said that the Sterling Bank CEO fits the bill considering his pedigree and what he has achieved since assuming the helm of affairs at the Bank. Since his assumption of office in March 2018, as Sterling Banks’ Managing Director/CEO, Abu as he is fondly called, has been able to move the Bank to new heights. Abubakar, in his five years as CEO, has brought a lot of innovations that have positioned the Bank among one of the most financially strong banks. A look at the bank’s balance sheet would reveal the work that is being put into making Sterling Bank a leading light in the banking sector Under his leadership, Sterling Bank has posted record profits with figures more than doubling the previous financial year’s returns. From 2019 till date, the bank continue to show a strong financial position. For instance, in 2019, in his first year as head of the Bank posted a net interest income growth of N47.53 billion for the third quarter ended September 30, 2019, representing 19.3 percent when compared with N39.83 billion recorded in the corresponding period. In 2020, which was a very difficult year globally due to the adverse effect of the Covid-19, Sterling Bank Plc reported a N12.4 billion profit before tax (PBT) representing a 15.9 percent growth compared to 2019. In 2021, the Bank reported its highest nine-month profits in seven years as profit rose to N13.4 billion in September 2022, up 41.6 percent from N9.46 billion in September 2021. According to the bank, it recorded an interest income of N90 billion in September 2022, up 8.8 percent from N82.7 billion in September 2021. In 2022, the Abubakar-led management ensured that the Group’s Gross Earnings were up 16.64% to N175.14 billion from 150.15 billion posted in 2021. This was driven by strong growth in interest income. Profit before Tax grew by 29.26% to N20.76 billion as against N16.06 billion posted in 2021. According to the bank’s financial report, Net Interest Income rose by 12.65% to N76.39 billion from N67.39 billion in 2021. He has held various positions such as the Institute of Directors, governing council of the Chartered Institute of Bankers of Nigeria, member of the Nigerian Economic Summit Group committee for Agriculture and Food Security, and also serves on the advisory council of the Lagos Business School. As one of that rose through the ranks in the bank, Abubakar recently became the first CEO in Nigeria to virtually ring the closing gong for the trading day at the Nigerian Stock Exchange. The Bank was named one of the top 100 places to work in Nigeria for 2018, also winning the Best Quality of Life Award for her human resource management practices under his leadership. Abubakar was also named one of the Top CEOs in Nigeria at the BusinessDay Annual Top CEO and Next Bulls Awards 2020.
Hackers sweep Globus Bank of N1.7bn
Bank seeks court order to retrieve stolen funds Globus Bank Limited has filed an application before a Lagos High Court seeking an order to recover the sum of N962,019,843.35 fraudulently transferred electronically from its vault into accounts domiciled in eight commercial banks. Globus Bank, one of the new entrants into Nigeria’s banking sector, was incorporated by the Central Bank of Nigeria (CBN) in 2019. The N962m is part of the total N1,755,376,156.34 transferred from the bank between Monday 6th and Saturday 11th of June 2022. The bank has already recovered the sum of N817,998,969.85 from the accounts of the fraudsters. In an affidavit sworn to by its legal officer, Kosisochukwu Ngene, the bank said fraudsters took advantage of a system glitch in its USSD application between Monday 6th and Saturday 11th of June 2022 to process several fraudulent and unauthorized electronic transfers totaling N1,755,376,156.34. The bank said 709 people who were its customers were involved in the fraudulent transfers of the funds to accounts domiciled in eight commercial banks. It added that immediately it discovered the glitch, it instantaneously notified all the banks involved and requested that the beneficiary accounts be restricted. This, the Bank said was in line with Central bank of Nigeria regulation to avoid dissipation of the funds fraudulently transferred into the accounts domiciled with the banks. “Subsequently, Globus Bank immediately approached the Magistrate Court in the Yaba Magisterial District and obtained an order directing the banks to freeze and reverse the amount fraudulently transferred into various accounts domiciled in the banks. “That in response to the order served on the respondents some of the respondents were able to salvage certain sum wherein the total sum of N817,998,969.85 were returned to the bank while the total sum of N962,019,843.35 is still outstanding and yet to be returned to the bank by the respondents banks. The Bank said it still requires the order of the High Court to enable the other banks reverse and remit the salvaged funds to it. “An Order of the Court directing all the eight banks to immediately reverse and remit, Globus bank Limited the total sum of N962,019,843.35 (Nine hundred and sixty two million, nineteen thousand , eight hundred and forty three naira, thirty five kobo), being the outstanding sum yet to be salvaged from the fraudulent transfer into several accounts domiciled with the eight Respondents from the Globus bank 709 customers’ accounts, less depleted sum. “An order directing the eight commercial banks to release all account information in respect of the destination accounts and the beneficiaries of the transfer funds And for such further order(s) as the court may deem fit to make in the circumstances of this case.”
Emefiele’s exit will not negatively impact market— Experts
Former president of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, and other financial experts have opined that the unexpected exit of the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele will not have any negative impact on both the capital and foreign exchange markets. President Bola Ahmed Tinubu had on Friday suspended the Central Bank Governor, Mr. Godwin Emefiele from office. He was directed to immediately hand over to the Deputy Governor (Operations Directorate), Mr. Folashodun Adebisi Shonubi, who will act as the Central Bank Governor pending the conclusion of the investigation and the reforms. Reacting to the suspension, Unegbu said Emefiele’s removal will impact positively on the capital and the foreign exchange market because the multiple exchange rates maintained by Emefiele hurt the economy. Corroborating Unegbu stance, Managing Director of Crane Securities Limited, Mr. Mike Eze, said the market will remain stable until the investigation is concluded and it provides sufficient information to inform market reactions. “The CBN is the highest financial institution in the country and the governor works with about three deputies who help him in fashioning out policies and most of these policies were hijacked by politicians. So, most of his policies were politically motivated. He, however, noted that politicians are the ones that destabilise the economy, not Emefiele. “The capital market does not react on hearsay, the market will have enough information before reacting, so, I believe the market will be stable until the outcome of the investigation,” he said. The Executive Vice Chairman of Hicap Securities Limited, Mr. David Adonri, said even though the secondary market benefited from Emefiele’s policies, the primary market did not. “We hope that his exit will bring a much-needed positive impact on the primary market and further boost the secondary market.” “However, if the multiple exchange rate regime run by Godwin Emefiele is discontinued and replaced by a single forex regime, that can assist the forex market to boom,” he said. Meanwhile, a capital market expert, Prof. Uche Uwaleke, had told NIGERIAN ANCHOR that the suspension of Emefiele was long expected. Uwaleke, a Professor of capital markets at the Nasarawa State University, Keffi, stated that the suspension will mark an end to a turbulent era He added that the CBN Ways and Means, which grew astronomically during his tenure also cast a dark spot on his legacy. He, however, noted that Emefiele would be remembered for implementing big ideas such as the Anchor Borrower Programme, the RT200, the eNaira, and a raft of interventions that helped to stimulate the economy during periods of economic recession.