Fitch Applauds Tinubu’s Reforms, Affirms Stable Credit Ratings 

Fitch Ratings has affirmed Nigeria’s long-term foreign currency credit default outlook at B, citing recent policies by President Tinubu as responsible for the stable outlook. It also raised concerns over the proposed $10 billion forex loan which the government plans to use to offset forex backlogs and inject liquidity into the system. This is from its latest rating outlook commentary on the Nigerian economy. The global credit ratings agency noted that reforms such as fuel subsidy removal and the new exchange rate framework were responsible for the stable outlook. On the strengths and weaknesses of the Nigeria economy, the agency noted “Nigeria’s ‘B-‘rating is supported by a large economy, a developed and liquid domestic debt market, and large oil and gas reserves. The rating is constrained by weak governance, structurally very low non-oil revenue, high hydrocarbon dependence, security challenges, high inflation, low net FX reserves, and ongoing weakness in the exchange-rate framework.” Fitch raised concerns about the recent government announcement to secure $10 billion in foreign exchange, highlighting the absence of specific information, such as whether this amount encompasses World Bank budget support loans totaling $1.5 billion. It stated, “we forecast a broadly flat current account surplus, averaging 0.5 per cent of Gross Domestic Product (GDP) in 2023-2024. There is a lack of detail on a recent government announcement to raise $10 billion of forex, including whether this includes World Bank budget support loans of $1.5 billion. Following the sharp depreciation this year, Fitch assumes exchange-rate adjustments proceed more gradually in subsequent years.” However, it said signs of backtracking on reforms such as “a lower degree of price discovery in the foreign exchange (forex) market than in late June” and recent revelation from the nation’s apex bank which suggests that foreign reserve is significantly lower than publicly acknowledged. The agency also noted that the country’s public debt, excluding Central Bank of Nigeria loans, has a relatively extended average maturity of 9.7 years. Beyond that, the agency said the scarcity of foreign exchange is hindering economic activities in the country and impeding the flow of foreign capital and the CBN’s net foreign exchange position is lower than understood according to its financial statement published in August. Going further, the agency explained that Nigeria’s growth in 2024 will be spurred by an increase in crude oil production, a reduction in budget deficit freeing resources for capital expenditure, non-oil revenue growth, etc. But it highlighted Nigeria’s macro-economic challenges to include; high inflation which it projects to drop to 21.1% in 2024, and a high interest rate.

Finance Minister Seeks Staff Support To Drive Reforms

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has sought the cooperation and support of the staff to enable him deliver on the mandate of President Bola Ahmed Tinubu. According to a statement signed by Director (Press & PR), Stephen Kilebi on Thursday in Abuja, the minister made the appeal during a town hall meeting with the management and staff of the Ministry in Abuja. The meeting which was held at the instance of the Minister was aimed at exchanging views with the management and staff on how best to deliver on the mandate of the Ministry in the Renewed Hope Agenda of the current administration. Edun said the essence of the meeting was, “Let me meet my people, feel their pulse and know what to do with them in order to deliver on the mandate given me by Mr. President.” He added, “A tree does not make a forest. Working together, honouring one another and being fair to one another can perform wonders.” He added, “I encourage staff to perform excellently in order to deliver in their callings not only for the Ministry but for the whole country.” The Minister assured of continued staff welfare for better and efficient service delivery. The Minister while appreciating the resilience and professionalism of Nigerian workers urged the staff to join hands with him to deliver on the mandate reposed on him by the President on his Renewed Hope Agenda. He said the President’s Renewed Hope Agenda is a veritable tool for service delivery assuring that “Things are going to change and be better, not only for Nigerians, but will make the Ministry attain global competitiveness,”  Edun added that President Tinubu is a leader, a coach and a strategist and will change the narrative. He said the President is “A man of empathy, who acknowledges the sufferings of Nigerians even when Nigeria is rich in all sectors will definitely change things around for good.” Edun who acknowledged the President’s vision of inclusivity and gender friendly administration said, “I am extremely happy to be in the Ministry. I am privileged to be the Minister of Finance and the Coordinating Minister of the Economy and the Chairman Forum of African Ministers of Finance.” He noted that the task was enormous and he couldn’t do it alone without the support of the management team and the staff commitment. He assured that staff welfare would be given top most consideration to ease their suffering, disclosing that plans were on the way for the provision of Compressed Natural Gas (CNG) buses to alleviate the suffering of Nigerians as a result of the removal of fuel subsidy, stressing that with CNG buses Nigerians would pay less for transportation. Earlier, the Permanent Secretary Finance Okokon Udo, appreciated the minister for his maiden meeting with the staff and pledged the support of the management and staff of the Ministry for his success. He noted that the meeting was a “veritable platform for interaction” adding that its essence was to “rub minds, express feelings, tell ourselves the truth constructively and how to move forward”. Udo said that the Ministry has a conducive working environment for effective and efficient service delivery. The Joint Union Chairman, Comrade Mohammed Attahiru, while officially welcoming the Minister said, the “Minister has broken the jinx by holding the interactive session adding that, the interactive meeting was what the trade union had been yearning for. He mentioned that, based on the Minister’s pedigree which stood him out, the union has no doubt that he will perform creditably and promised him of their total support.

We’ll introduce reforms to enhance Blue Economy success, says Oyetola

*Visits Nigeria Shippers Council Headquarters in Lagos The Federal Government is committed to creating a conducive working environment for the Nigerian Shippers’ Council (NSC) to streamline the handling of overtime cargoes at all ports in Nigeria, ensuring effective and efficient service delivery. Adegboyega Oyetola, the Minister of Marine and Blue Economy, made this commitment during his recent visit to the NSC Headquarters in Lagos. Oyetola expressed his assurance that the government would address challenges faced by the NSC and implement necessary reforms to advance the Blue Economy agenda of the current administration. While he applauded the NSC’s contributions and achievements, he also voiced concerns over the deteriorating condition of port infrastructure, cargo overstay, and the activities of foreign fishing firms. The Minister emphasized that cumbersome bureaucratic processes contribute significantly to prolonged cargo clearance times, leading to frustration among shippers and the abandonment of containers at ports. Oyetola pledged to engage with the leadership of the Nigeria Customs Service (NCS) to resolve the issue of abandoned cargoes and address related bottlenecks. During his visit, Hon. Emmanuel Jime, the Executive Secretary of the NSC, highlighted key issues that require immediate attention, including amending the NSC Act to establish effective port economic regulation. Jime emphasized the NSC’s role as a policy-making laboratory in the marine sector and its objective to position Nigeria as the Maritime Hub in the sub-Western Region. Jime also cited ongoing concerns for the NSC, such as implementing a one-percent (1%) freight stabilization fee on imports and exports, enforcing the International Cargo Tracking Note (ICTN), and establishing a National Fleet. He expressed confidence in Minister Oyetola’s commitment to making a positive impact on the maritime sector. In addition to the NSC visit, Minister Oyetola also met with the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN). Chinyere Uromta, the Acting Registrar, appealed to the Minister to reconsider the exclusion of CRFFN from the federal budgetary allocation. She highlighted the crucial role the Council plays in the freight forwarding sector, contributing to the integrity of the supply chain and the Nigerian shipping industry. Uromta emphasized that CRFFN operates as a federal regulatory agency and serves as an international regulator of freight forwarding practices on a global scale. She called for an urgent amendment to the CRFFN Act to align with its professional status. Oyetola commended CRFFN’s efforts and expressed a willingness to consider their request.

Difficult but necessary reforms needed to ramp up tax revenue – JTB

For Nigeria to attain optimum tax revenue collection capacity across the Federal, States and Local Government tax authorities, the country must make hard but necessary reforms that would yield long term benefits. This was the position stated by the Chairman of the Joint Tax Board (JTB), Mr. Muhammad Nami, who is also the Executive Chairman of the Federal Inland Revenue Service (FIRS) at the 153rd Meeting of the Board which held today in Abuja with the theme: “Harmonization and codification of taxes at the National and Sub-national levels: Key to achieving a tax friendly environment in Nigeria.”  Nami, while delivering his address to the Board stated that for progress to be made in taxation, tax authorities must continue to explore and adopt measures and innovative initiatives that will lead to the optimisation of tax revenue for all levels of government.  “As the new administration’s attempt to address the many socioeconomic challenges facing the nation on many fronts, it becomes imperative for all the levers of State to shake-off any lethargic antecedents and focus on the goal of a national resurgence. “The unique and privileged offices we occupy as drivers of the nation’s tax administration processes presents us with a rare opportunity to take hard, but necessary decisions that are expected to yield long term benefits and add immense value to our collective prosperity as a nation. “In recent years, especially since the dawn of our current democratic dispensation, the importance of taxation has continued to be reiterated and reinforced by all, and the critical role that tax-revenue plays in funding government and governance cannot be over-emphasized.  “However, as we continue to make progress in our unique model of taxation, it is appropriate that we continue to explore and adopt measures and innovative initiatives that will lead to the optimization of tax revenue for all the levels of government, in more efficient, more effective, more inclusive, and more sustainable ways. “It is only by achieving this, that our efforts as tax administrators can trigger the manner of activity required in the productive sectors of our economy, towards achieving the immense economic potentials that we are capable of,” Mr. Nami said. The Chairman of the Joint Tax Board further assured Executive Chairmen of State Revenue Authorities present that given the thrust of the current administration’s tax policy direction, the country was on the pathway to eradicating multiplicity of taxes as a core of its overall economic regeneration objectives.  Chairman, Presidential Fiscal Policy & Tax Reforms Committee, Mr. Taiwo Oyedele, while delivering a presentation on the theme of the meeting highlighted that multiple taxation was causing low tax morale in the country, as well as discouraging investments, while creating room for corruption and making doing business difficult. The Presidential Fiscal Policy and Tax Reforms Committee Chairman further noted that the solution to the country’s revenue challenges is not to introduce more taxes, but to focus on the few taxes that are high yielding, noting that with these, tax authorities would be able to collect far more than is currently being collected.  Oyedele stated that for the government to raise more revenue, it needed to get to a point where the total number of taxes collected at the Federal, State and Local government levels would be at a single digit.  “We also need to clarify on taxing rights. We need to integrate tax collection functions—that is, all revenues that are to be collected must be collected by a single revenue agency. Government must also do well to fund our tax agencies well. We also need to harmonise revenue administration and simplify our approach to tax compliance,” Oyedele said. He further advocated for the country’s tax authorities to use more technology, review the country’s constitution and tax laws, as well revisit Nigeria’s concept of fiscal federalism.