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2023 budget: LCCI knocks FG  on proposed N10.57trn loan

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…Says debt servicing gulped N664.73bn  in Q2, 2022

…Advocates higher production, exports expansion to strengthen Naira value

…Seeks better security, friendly policies to boost FDI,

…Warns of job loss with high diesel price, poor power supply

By Agunsoye Adenike

The Lagos Chamber of Commerce and Industry ( LCCI) has called on the Federal Government to stop plans  to raise N10.57 trillion  loan to finance 2023 Budget deficit. This is a follow up to the expenditure  of N664.73billon on domestic debt servicing in second quarter of 2022.

The President, Dr Olawale Cole lamented at the LCCI 134th Annual General Meeting (AGM) on Thursday in Lagos that the chamber is of the view that while nothing is wrong with the N10.78 trillion deficit, everything is wrong with the plan to issue N10.57 trillion (N8.8 trillion in new commercial loans and N1.77 trillion drawdown on bilateral and multilateral loans) new loans to finance the deficit. This  fresh loan is being considered by the Federal Government according to him  at a time that Nigeria is  already placed on the watchlists of some of her foreign bondholders.

“The world is a bit confused at our president’s well-publicized call for debt cancelation at the last United Nations General Assembly,” he pointed out.

The LCCI  President disclosed that Nigeria’s debt-servicing bill has increased by 1.8 percent from N896.56bn in 2022 Q1 to N912.71bn in Q2 2022. while it spent $597.95m (N247.98bn) on external debt servicing, giving a total of N912.71bn

He noted that  “the borrowings are significantly increasing, and Nigeria is struggling to service these debts due to revenue mobilisation challenges and an increased fuel subsidy burden.

“The International Monetary Fund (IMF) has warned that debt servicing may gulp 100 per cent of the federal government’s revenue by 2026 if the government fails to implement adequate measures to improve revenue generation,” he lamented.

On the Fiscal development, the President said that the record N20.5 trillion naira (or $47.3 billion) proposed expenditure by the Federal government to run the economy in 2023 reflects the huge needs that exist in critical sectors of the economy.

The proposed budget, which is 19 per cent higher than the 2022 budget is expected to take effect from January 2023 to address economic growth, fiscal sustainability, and security.

“The protracted challenges for the naira exchange rate are deep-rooted in the weak productive base of the country. In the course of the year and recently too, the CBN announced the naira redesign project which drove some speculative spending that helped the naira to appreciate but that was short-lived because of lack of fundamentals to sustain such appreciation.

“The real solution to our forex scarcity crises is to boost production and expand exports. We must also resolve the crises around oil production as 80 per cent of forex earnings come from the oil and gas exports. The naira witnessed has recorded a continuous fall from N415/USD early in the first quarter to about N443/USD as at mid-november.”

The President of the Chamber proposed that the nation’s foreign trade in goods rose quarter-on-quarter, QoQ, by 1.23 per cent in the second quarter of 2022 to N12.84 trillion from N13.0 trillion in the first quarter of 2022.

According to the NBS, the value of exports rose QoQ by 4.31 percent to N7.41 trillion in Q2, 2022 from N7.10 trillion in Q1, 2022.

However, the value of imports declined by 7.89 percent to N5.44 trillion in Q2, 2022 from N5.90 trillion in Q1, 2022.

The trade balance stood at a surplus of N1.97trillion in the second quarter of 2022.

He ascertained that the total value of capital importation into nigeria in the second quarter of 2022 stood at $1,535.35 million from $875.62 million in the corresponding quarter of 2021, showing an increase of 75.34 per cent. When compared to the preceding quarter, capital importation decreased by 2.40 per cent from $1,573.14 million.

“The largest amount of capital importation was received through portfolio investment, which accounted for 49.33 per cent ($757.32 million).

“This was followed by other investment with 41.09 per cent ($630.87 million) and Foreign Direct Investment (FDI) accounted for 9.58 per cent ($147.16 million) of total capital imported in Q2 2022.

“The concern here is that FDI’s (at a low of 9.58 percent) are more valuable than the other types of investment inflows. We need more FDI’s to create jobs and increase output in the economy. To achieve this, we must tackle the worsening insecurity in many parts of the country and implement investment-friendly policies to create an enabling investment and regulatory environment,” he said.

He confirmed that the National Bureau Of Statistics released the 2022 Multidimensional Poverty Index (MPI) with five components of health, living standard, education, security, and unemployment.

The report revealed that about 133 million people (63 per cent of total population) are poor in many areas of human life in Nigeria.

He recalled that last year, the national poverty reduction with growth strategy was developed by the Presidential Economic Advisory Council to actualise President Buhari’s aspiration of lifting 100 million Nigerians out of poverty by 2030.

“The total cost of implementing the proposed initiatives was estimated at $1.6 trillion over 10 years between 2021 and 2031. Similarly, the report proposed the creation of a Nigerian investment and growth fund to mobilise funds for the implementation.

“During the period, the annual average reduction in poverty is projected to be around 11.2 million per annum, 80 per cent of which will be self-employment, and 20 per cent in wage-paying jobs. Unfortunately, most of these provisions have not been implemented due to weak finance base and uncoordinated policy mix.

“The national grid collapsed for the 7th time in September 26, 2022. It is evident that the national grid cannot supply sufficient power to meet the electricity demand of nigerians.

“There have been issues with the vandalisation of power installations, a disrupted gas supply, distribution companies (DisCos) lacking the capacity to take up power generated by the power generating companies (GenCos), and the challenges of achieving 100 per cent metering for power consumers.

“With the cost of diesel at record levels and persisting poor power supply, businesses are running on unsustainable costs and producing at uncompetitive prices.

“This can lead to job losses if the output is constrained due to the unbearable cost of production. If not quickly tackled, these challenges will likely subdue the GDP growth potentials and projections for 2022.

“The most sustainable solution to Nigeria’s power shortages is the transition to renewable energy and the decentralization of the national grid.”

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2024 Budget: SERAP condemns Wike’s proposal to allocate N15bn for VP’s residence, N2.8bn for publicity

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…Urges senate to reject wasteful spending in supplementary budget

…Calls on EFCC, ICPC to investigate alleged spending of previous allocated N7bn for VP’s residence construction

By Sodiq Adelakun

The Socio-Economic Rights and Accountability Project (SERAP) has called on Senate President Godswill Akpabio to reject the plan by FCT Minister Nysom Wike to spend N15 billion on a residence for Vice President Kashim Shettima.

SERAP, in a letter dated December 2, 2023, and signed by deputy director Kolawole Oluwadare, urged Akpabio to exercise the Senate’s authority and constitutional oversight roles by rejecting the proposed N2.8 billion for publicity by the FCTA, as well as any other wasteful and unnecessary spending in the 2023 supplementary budget and the 2024 budget proposed by President Bola Tinubu.

SERAP has criticised the plan to allocate N15 billion for a new residence for the vice president, stating that it violates the Nigerian Constitution and the country’s international obligations regarding corruption and human rights.

The group has called on the Senate to ensure that Governor Wike’s proposed expenditure aligns with constitutional provisions and his oath of office.

SERAP has also emphasised that the National Assembly, including the Senate, has a constitutional duty to address Nigeria’s debt crisis by rejecting extravagant and unnecessary spending that caters to the personal comfort and lifestyles of public officials.

The letter read in part, “The National Assembly cannot continue to fail to fulfil its oversight function. The Senate must assert and demonstrate its independence by checking and rejecting all wasteful and unnecessary spending by the executive.

“It would be a grave violation of the public trust and constitutional oath of office for the Senate to approve the plan to spend N15 billion on ‘a befitting residence’ for the vice president at a time when the Federal Government is set to spend 30 percent (that is, N8.25 trillion) of the country’s 2024 budget of N27.5 trillion on debt service costs.

“The Federal Government also plans to borrow N7.8 trillion to fund the 2024 budget. Nigeria’s public debt stood at 87.4 trillion naira as of June with 38 percent owed to external creditors including multilateral and commercial lenders.

“Should the Senate and its leadership fail to stop wasteful and unnecessary spending and rein in government borrowing, SERAP would consider appropriate legal action to compel the National Assembly including the Senate to discharge its constitutional oversight roles in the public interest.

“SERAP urges you to refer to the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) the allegations of corruption in the spending of the previously approved N7 billion for the construction of a new residence for the vice president.

“The ‘construction’ was reportedly abandoned but the whereabouts of the N7 billion remain unknown.

“The Senate has the constitutional competence and legitimacy to compel compliance with the Nigerian Constitution and the country’s international obligations.

“The Senate ought to assert its authority and vigorously exercise its constitutional oversight roles to check the apparently wasteful and unnecessary spending by Mr Wike especially given the growing debt crisis and the indiscriminate borrowing by the government.

“It is a travesty and a fundamental breach of the lawmakers’ fiduciary duties for the National Assembly to allow the executive to use the national budget as a tool to satisfy the comfort and lifestyle of public officials.

“Nigerians have a right to honest and faithful performance by their public officials including lawmakers, as public officials owe a fiduciary duty to the general citizenry.

“Cutting the N15 billion on ‘a befitting residence’ from the FTCA budget would be entirely consistent with your constitutional oath of office, and the letter and spirit of the Nigerian Constitution, as it would promote efficient, honest, and legal spending of public money.

“According to our information, the Minister of the FCT, Nysom Wike and the Federal Capital Territory Administration (FCTA) plan to spend N15 billion for the construction of ‘a befitting residence’ for the Vice-President, Mr Kashim Shettima.

“The plan is contained in the N67 billion FCT supplementary budget which President Bola Tinubu had on Tuesday transmitted to the National Assembly for approval.

“SERAP notes that Mr Wike proposed plan to spend N15 billion on a new residence for the vice president despite the recent allocation of N2.5 billion for the renovation of the current residence of the VP in the federal government’s supplementary budget already passed by the National Assembly and signed by President Tinubu.

“The House of Representatives has reportedly approved the plan to spend N15 billion on ‘a befitting residence’ for the vice president.

“The National Assembly has also approved another N3 billion for the renovation of the vice president’s residence in Lagos State. Mr Wike also plans to spend N2.8 billion on publicity for the FCTA.

“The proposed plan to spend 15 billion on a ‘a befitting residence’ for the vice president is different from the N100 billion for the FCT contained in the federal government supplementary budget.

“SERAP notes that the Federal Government has also budgeted N8 billion on the two official residences of President Tinubu in Abuja and Lagos.

“On top of the planned spending of N15 billion on ‘a befitting residence’ for the vice president, billions of naira have been allocated for the purchase of cars for the Villa and the Office of the First Lady.

“Section 14(2)(b) of the Nigerian Constitution of 1999 [as amended] provides that, ‘the security and welfare of the people shall be the primary purpose of government.

“Under Section 16(1)(a)(b), the National Assembly including the Senate has the obligations to ‘harness the resources of the nation and promote national prosperity and an efficient, a dynamic and self-reliant economy’, and to ‘secure the maximum welfare, freedom and happiness of every citizen.’

“Under sections 59(2) and 299 of the Nigerian Constitution, the National Assembly including the Senate has legislative powers over money bills including the proposed N15 billion, and other wasteful and unnecessary spending by the Federal Government.”

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FIRS grants waiver on penalties, interests on outstanding tax liabilities till December 31

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The Federal Inland Revenue Service (FIRS) has granted a full waiver on accumulated penalties and interests for outstanding tax liabilities.

Chairman of the revenue service, Zacch Adedeji, made the decision known in a notice personally signed by him and made available to newsmen through his Special Adviser on Media, Dare Adekanmbi.

The agency imposes penalties and interests for failure by companies to fulfil their tax obligation as and when due as stipulated in extant tax laws.

Adedeji said the forgiveness of piled up penalties and interests was “in recognition of the challenges that many taxpayers have faced in settling their outstanding tax liabilities.”

According to him, the concession also syncs with the commitment of President Bola Tinubu to support businesses to flourish.

He explained that full payment of outstanding original tax liabilities without interest on or before the 31st of December this year must be done by companies wishing to benefit from the peculiar concession.

“Taxpayers are advised that the waiver of interest is subject to the full settlement of outstanding principal on or before 31 December, 2023.

“Please note that the full penalty and interest shall be reinstated after the expiration of this one-off concession window where the outstanding undisputed liability remains fully or partially unpaid.

“FIRS appreciates all taxpayers who have been diligent in complying with their tax obligations as and when due, while seeking their continued support and cooperation for a more responsive and robust tax system,” Adedeji said.

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UBA bags African Bank of the Year, eight other awards at The Bankers Award in London

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United Bank for Africa (UBA) Plc has bagged the African Bank of the Year at the Bankers Awards 2023, organised by The Banker Magazine, a publication of Financial Times of London, the world’s leading business newspaper.

This is as the Bank also clinched eight other awards across its subsidiaries solidifying its position as the leading financial institution on the African continent.

The Bank’s subsidiaries also emerged as the Bank of the Year in eight of the 20 countries where it operates in Africa. The winning subsidiaries are UBA Cameroon, UBA Chad, UBA Ghana, UBA Cote d’Ivoire, UBA Mozambique, UBA Congo,  UBA Sierra Leone, and UBA Tanzania, underscoring the bank’s dominance and impact across diverse African markets. It is noteworthy that this would be the second time in the past three years that the Bank has won the regional award as the best bank in Africa, as it had emerged winner in 2021.

UBA’s Group Managing Director, Oliver Alawuba, who received the awards on behalf of the bank, expressed his gratitude and excitement about the awards, and said the recognitions come as a reassurance that the bank is on track in its goal of consolidating its leadership position in Africa, and creating superior value for its stakeholders.

“UBA is honoured to be named the Bank of the Year in these eight countries and to receive the overall Award for Africa. This accomplishment is a testament to the hard work, dedication, and innovative spirit of the entire UBA team. We remain committed to delivering top-notch banking services that positively impact the lives of our customers across the continent.”

Continuing, Alawuba said, “We have our millions of customers across the globe and our many thousands of staff to thank for this. They are the very reason why we keep winning and receiving these accolades.”

The Banker Awards is widely recognised as a benchmark for banking excellence globally, and UBA’s multiple victories underscore the institution’s commitment to providing exceptional financial services and superior financial intermediation on the continent. As Africa’s Bank of the Year, UBA has demonstrated its ability to navigate the complexities of the African banking landscape and emerge as a leading force in driving economic growth and financial inclusion.

Speaking earlier about UBA’s consistent excellence in the financial services sector across the continent which has earned the bank great accolades overtime, Editor of The Banker, Joy Macknight, said that as always, “UBA remains a clear winner across a wide range of criteria, having performed impressively across its footprint with a strong financial performance across most of its markets.

“In a year of strong competition among the continent’s major banking groups, UBA has gained the edge on its rivals to win the Bank of the Year award for Africa for the 2nd time in three years. Congratulations. The award recognises the bank’s strength across Africa, including many of its most competitive markets,” Macknight stated.

Since 1926, the Bank of the Year awards has been celebrating the best of global banking and is regarded as the industry standard for banking excellence.

Just recently, UBA won the 2023 FMDQ Gold Awards in three Categories including the Best FX Liquidity Provider,  Dealing Institution of the Year and Best Money Market Liquidity Provider. This recognition is a testament to UBA’s impressive capital strength and capacity to provide liquidity to the Nigerian financial market even in the face of harsh economic realities. Despite the headwinds, UBA Group has consistently maintained its position as Nigeria’s leading financial institution.

In June, the banking group announced impressive half-year financial results, and further increased the performance in Quarter 3, 2023, with profit before tax (PBT) soared to N502.01 billion, Shareholders’ Funds standing strong at N1.778 trillion, and total assets, reaching N16.24 trillion.

These outstanding figures not only reflect UBA’s institutional strength, but also demonstrate its position as a corporate role model in Nigeria and across Africa.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than thirty-five (35) 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 ancillary banking services.

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