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Free Trade Zone

Nigeria generates N338.94b VAT

By Tanko Mohammed

The National Bureau of Statistics (NBS) says N338.94billion was generated as Value Added Tax (VAT) in the first quarter (Q1) of 2020 by Nigeria.

The NBS made this known in its latest Sectoral distribution of VAT data for Q1, 2020 posted on its website.

It stated that the amount recorded in Q1 was more than the N308.48billion generated in Q4, 2019 and N293.04billion in Q1 2019, representing 9.87 per cent increase Quarter-on-Quarter and 15.66 per cent increase Year-on-Year.

The bureau explained that the professional services generated the highest amount of N38.30 billion and closely followed by other manufacturing, which generated N37.37 billion.

It added that commercial and trading generated N17.19 billion while mining had the least and closely follwed by Textile and Garment industry and Local Government Councils with N61.83 million, 306.05 million and 319.04 million respectively.

According to NBS, out of the total amount generated in Q1, 2020, N172.67 billion was generated as non-import VAT locally while N93.67 billion was realised as non-import VAT for foreign.

It further added that the balance of N72.59 billion was generated in Nigeria Customs Service-import VAT.

Firms sue OGFZA, Nigeria over regulation of oil, gas operation

Some Oil and Gas Free Zones firms are seeking judicial intervention in the alleged attempt by Oil and Gas Free Zones Authority (OGFZA) to regulate the oil and gas operations within Snake Island Integrated Free Zone (SIIFZ).

They  have described the defendant’s plan to assume total control of space as “contemptuous’’.

The Nigerdock Nigeria Plc, Simco Freezone Company and Nigerdock Nigeria Plc-FZE in 2016 dragged OGFZA before the Federal High Court in Lagos seeking judicial intervention of  its insistence to regulate oil and gas operations within SIIFZ.

The rest defendants in the suit are the Attorney-General of the Federation and the Minister of Industry, Trade and Investment.

Mr Qudus Mumumey, Counsel to the plaintiff in telephone interview in Abuja said that the last time the suit came up in court was on the Feb. 26

According to him, the suit is fixed for June 1 for definite hearing before Justice Aneke.

Mumumey also said that all the defendants in the suit were aware of the pendency of the suit having filed their responses and represented in court by counsel.

“In the light of the foregoing, the current letter from the Ministry of Industry, Trade and Investment is contemptuous, abusive, oppressive and a clear attempt to undermine the authority of the Honourable Court’’, Mumumey said.

OGFZA, acting upon an uninformed directive of the Minister of Industry, Trade and Investment had served letters on all oil and gas free zones including SIIFZ informing them of its readiness to implement the minister’s directive which empowered the authority to assume full regulatory powers over those zones.

Recall that Nigerdock and others had by an Originating Summons filed at the Federal High Court in 2016 sought judicial intervention in the attempt made by OGFZA to regulate the oil and gas operations within SIIFZ.

The plaintiffs seek to know whether by the clear provisions of the Nigeria Export Processing Zone Act, Cap No. 107, Laws of the Federation of Nigeria 2004, Snake Island Integrated Free Zone (SIIFZ) should be regulated by the Nigeria Export Processing Zone Authority (NEPZA) being the Authority vested with the administration of the Authority and management of all the Export Processing Zones.

They further seek court determination on whether or not the Oil and Gas Free Zone Authority, by the Provision of the Oil and Gas Export Free Zone Act Cap 05, Laws of the Federation of Nigeria 2004, is empowered to regulate the Onne/Ikpokiri Export Free Zone and by extension regulate other Oil and Gas Export Free Zones in Nigeria.

The plaintiff are also seeking clarification whether  by the letter from the Attorney General of the Federation captioned Re: Interpretation of the provisions of the Nigeria Export Processing Zones Act, Cap No 107, LFN, 2004 and Oil and Gas Export Free Zone Act, Cap 05, LFN 2004 as to which government agency is seized with responsibility over oil and gas free zone in Nigeria dated 25th March 2008, the Attorney General of the Federation did not merely reinstate the provisions of the NEPZA and OGFZA Act.

The plaintiff averred that if the answers to the above questions were in the affirmative, the court should not hesitate in granting a declaration that the Nigeria Export Processing Zone Authority (NEPZA) is responsible for the administration and regulation of the Snake Island Integrated Free Zone (SIIFZ).

They also are seeking the declaration that the first defendant is responsible for the administration and regulation of the Onne/Ikpokiri Export Free Zone and Oil and Gas Export Free Zones in Nigeria.

The suit further seeks a declaration that the letter from the Attorney General of the Federation dated March 25, 2008, merely reinstated the provisions of the NEPZA and OGFZA Acts.

The plaintiff, therefore, went ahead seeking an order of Perpetual Injunction restraining the defendants their privies, agents, and servants from projecting itself as the Authority with the statutory powers and authority to license and regulate the operations and activities in Snake Island Integrated Free Zone.

They also asked fora Perpetual Injunction restraining the defendants their privies, agents, and servants from interfering with, obstructing and/or disturbing the activities of SIMCO Free Zone Company from the Management of the Snake Island Free Zone pending the determination of the case. 

By Martins Odey

Nigeria’s FEC approves amendments to Medium Term Expenditure, budget

By Tanko Mohammed

Nigeria’s Federal Executive Council (FEC), presided over by President Muhammadu Buhari, on Wednesday in Abuja approved the amendment of the Medium Term Expenditure Framework of 2020 to 2022 as well as amendment to the 2020 budget.

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, made this known at the end of the virtual session of the Federal Executive Council (FEC), held at the Council’s Chamber of the Presidential Villa, Abuja,

President Buhari had in December 2019 signed the 2020 appropriation bill of N10,594,362,364,830 into law.

The budget was increased from N10.33 trillion to N10.594billion by the National Assembly with Nigeria’s daily oil production rate at 2.18 million per barrel but increased the Oil Benchmark Price to 57 dollars per barrel against the 55 dollars proposed by the Executive.

However, the minister announced that the Council approved a revised budget of 10.523trillion, a difference of N71.5billion when compared to the approved budget of N10.594trillion.

Ahmed said the Council approved the reduction of oil benchmark price from the initial 57 to 25 dollars per barrel, crude oil production from 2.18million to 1.94million per day.

“The council has approved our recommendations and the approval has these key parameters.

“The crude oil price is approved at $25 per barrel, crude oil production is at 1.94 million barrels per day and then an exchange rate of N360 to $1.

“The revised budget is now in the total sum of N10.523 trillion, a difference of just about N71.5 billion when compared to the approved budget.

“This is because, as we cut down the size of the budget, we also have to bring in new expenditure previously not budgeted, to enable us adequately respond to the COVID-19 pandemic.

“The federal government in this budget will have direct revenue of funding the budget of N5.158 billion. The deficit to this budget, N5.365 trillion and this will be financed by both domestic as well as foreign borrowing.

“The foreign borrowing we are doing for 2020 are all concessionary loans from the IMF, which has already been approved and has crystallized, from the World Bank, Islamic Development as well as Afro EXZIM bank.

“There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both existing facilities as well as some special accounts with the approval of Mr. President and the National Assembly,’’ she said.

The minister added that revenue to be realized from privatization would also be used in financing the projects.

She said: “the multilateral loans draw down coming from special accounts and coming from the privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.’’

She also revealed that the federal government would on behalf of Ebonyi State Government obtained a loan of 80 million dollars from the Islamic development bank, for the construction of Abakiliki ring road project.

While the federal government is the one borrowing from the bank, Ahmed said the federal government will be on-lending this loans to Ebonyi State government.

“We have done our debts sustainability analysis that proves that Ebonyi state has the capacity to repay this loan.

“This Ebonyi ring roads connects 13 local governments in the states as well as the neigbouring Cameroon republic.

“It is a major road that will provide access to the citizens in the state, to farmers, markets and will enhance economic activities in the state. And the neigbouring states will also benefit from this project,’’ she said.

The minister disclosed that the Council also approved the purchase of three locally manufactured boats for the Nigeria Customs Service for its surveillance and anti-corruption activities on the maritime waters.

Workers’ Day: Maritime workers resist pay cut

Maritime Workers Union of Nigeria (MWUN) has warned that it would not accept pay cut from the management of any maritime company in the face of COVID-19 pandemic.

Its President-General, Mr Adewale Adeyanju, made this known in his May Day speech in Lagos on Friday.

Adeyanju said members of the union would not also accept the lockdown period as their annual leave.

According to him, workers cannot be made to pay for a problem they did not create.

“Comrades, most disheartening is the attempt by some management to cut the salaries, wages and allowances of our members without any probable cause.

“On this matter, we stand with the Nigeria Labour Congress who has acknowledged that in spite of the known fact that workers produce capital, they are always relegated and at the receiving end,’’ he said.

According to him, any move to deduct the salaries, wages, allowances and downsizing of Nigerian workers at this time is illogical and illegal and, therefore, must be resisted.

”We also wish to bring to the public space, the attempt by some management to cheat our members by forcing them to convert this lockdown period occasioned to their annual leave.

“The union has been informed that some managements have issued internal memo to this effect.

“We condemn this attempt without recourse to normal consideration and processes.

“We find it strange that workers will be subjected to punishment for a situation that is entirely out of their control and this we will resist within the ambit of law,” the MWUN leader said.

Adeyanju said the union had stood in support of the industry in spite of it being hard-hit by the pandemic, saying the union  would continue to protect the interest of the workers.

He added that the union’s goal had always been to support and assist its members to attain a high degree of livelihood.

“Comrades, I can assure you that we will continue to fight for the benefit of all and stand by our watchword that `an injury to one is an injury to all’.

“As labour leaders, we promise to remain on guard and jealously protect jobs, wages, income and livelihood of our members at this trying time.

“Our efforts will be focused on maintaining, respecting and improving upon existing collective bargaining agreements and all such sundry matters of job welfare,” Adeyanju said.

By Moses Uwagbale