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Finance Bill 2020 won’t introduce new taxes- FG

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By Tanko Mohammed

The Federal Government has said that Nigeria’s Finance Bill 2020 would not introduce new taxes or grant new tax waivers due to challenges posed by COVID-19.

The Executive Secretary, Federal Inland Revenue Service (FIRS), Mr Muhammad Nami, said this at a virtual meeting on the Finance Bill 2020 Public Consultation in Abuja on Friday.

The meeting was chaired by Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning.

According to Nami, the policy objective of the bill has no intension to introduce new taxes or grant waivers in view of the peculiarities of what is facing the economy.

“The economy is not doing very great because of the impact of COVID-19 and all other challenges so ordinarily government should be spending more money.

“However, government is no able to raise the taxes; in the same way we still balance the budget to reduce the deficit as much as possible. Therefore, there will be no new waivers.”

Speaking on the African Continental Free Trade Area (AfCFTA) agreement, Nami said the impact would not be significant, in terms of revenue to government but increase the volume of trade with other countries.

“However, in anticipation of the AFCFTA, it is expected that the volume of trade will surge.

“And, as such, even though it will not significantly affect revenue being collected currently by government, it will have a way of making the economy increase significantly.”

Speaking, Ahmed said the public consultation was an opportunity to engage the public and get contributions to the draft of the Finance Bill 2020 aimed to support the 2021 Budget and also businesses.

The minister recalled that during the preparation of the Finance Bill 2019, provision for tax relief was made to small businesses.

“The essence was to ensure that local industries grow because once the African Continental Free Trade Area (AfCFTA) takes effect our borders will be opened and we will have goods from other countries competing with goods in Nigeria.”

She said that one of the basis for reducing taxes was to help the small businesses grow and to protect local industries.

“This is being reinforced in the 2021 proposal by removing completely for the small businesses the obligation to pay education tax.”

She said that the draft Bill would go to the Federal Executive Council (FEC) for approval, after which the President would submit it to the National Assembly for consideration.

Ahmed noted that the present administration had created a new tradition of accompanying every Appropriation Bill with a Finance Bill.

Also, Mr Adeyemi Dipeolu, Chairman, Fiscal Policy Reforms Committee, said a national impact assessment committee, set up by the president, had looked at the potential impact of joining the AfCFTA.

Dipeolu said the assessment was done “before Nigeria even signed the treaty”.

“The impact assessment has already been taken into account and there is an impact preparedness committee also chaired by the Minister of Industry, Trade and Investment.”

Mr Bode Oyetunde, Secretary of the committee, also highlighted five broad thematic areas for the Finance Bill 2020 including enacting counter-cyclical measures and crisis intervention initiatives.

Other areas are fiscal relief for mass transit, Ease of Doing Business Reforms, Procurement Reforms, and tax and fiscal responsibility.

Oyetunde said the overall idea of the AfCFTA was to look at trade laws and see how to make implemental changes that would make Nigeria “more competitive in the pan African point of view”.

“This is to ensure that businesses do feel they can site their enterprises locally and export, not just to West Africa, but the entire continent and also trying to ensure that we have fair trade with instances of trans-shipment and other sharp practices in continental and global trade.

“We also deal with the emerging post COVID realities where business will have to change and we have to do business better and differently.”

He, however, proposed that many of the issues poised to promote the Nigerian economy “have to be dealt with more holistically”.

The ministry also noted that feedback and proposals on the draft of Finance Bill 2020 was welcome until the close of business on Nov. 16.

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World Bank approves $114.28m for Nigeria

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By Anthony Areh 

The World Bank has approved $114.28 million financing to help Nigeria prevent, detect and respond to the threat posed by COVID-19 with specific focus on state level responses.  

According to a statement from the bank on Friday, the amount includes $100 million credit from the International Development Association (IDA) and $14.28 million grant from the Pandemic Emergency Financing Facility. 

It stated that the Federal Government would provide grants to thirty-six states and the Federal Capital Territory (FCT) through the COVID-19 Preparedness and Response Project (CoPREP). 

It added that the project would serve as immediate support to break the chain of COVID-19 local transmission and limit the spread of coronavirus through containment and mitigation strategies. 

Mr Shubham Chaudhuri, World Bank Country Director for Nigeria said: “Nigeria has ramped up its efforts to contain the COVID -19 outbreak, but more needs to be done at the state level, which are at the frontline of the response. 

“The project will provide the states with much needed direct technical and fiscal support to strengthen their position in combating  the pandemic.” 

Chaudhuri added that the project would finance federal procurements of medical equipment, laboratory tests and medicines to be distributed to the states based on their needs.  

He also said that the project complemented the Second Regional Disease Surveillance Systems Enhancement Project (REDISSE II) which was already providing short-term emergency support to implement national and state Incident Action Plans.  

Furthermore, he said that all 36 states had incident action plans cleared by the Nigeria Center for Disease Control (NCDC) and funds had been disbursed to 23 states. 

According to the World Bank, CoPREP would finance further support to all states and the FCT through the NCDC to implement their COVID-19 Incident Action Plans.  

“Specifically, this includes: the operationalisation of 37 Emergency Operations Centers; training of 30,000 healthcare workers in infection prevention and control; support for emergency prioritised water sanitation and hygiene activities; and strengthening of risk assessment and community and event-based surveillance.” 

Others are: “provision of on-time data to inform the response and mitigation activities; additional support to laboratories for early detection and confirmation; equipping and renovating isolation and treatment centers including community support centers; and improving in patient transfer systems through financing of ambulances and training as needed.”  

It further stated that grants to states would be conditional on states adopting COVID-19 response strategies in line with the Federal Government guidelines and strategies.  

“CoPREP will enhance the institutional and operational capacity for disease detection through provision of technical expertise, coordination support, detection, diagnosis and case management efforts in all states and the FCT as per the WHO guidelines in the Strategic Response Plan.  

“It will also help the government mobilise surge response capacity through trained and well-equipped frontline healthcare workers and strengthen the public health care network for future health emergencies.”  

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N100bn Dangote Cement’s bond oversubscribed

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By Chris Ndibe

Dangote Cement has reported the successful issuance of its N100 billion Series 1 fixed rate senior unsecured bonds due April 2025.

Mr Michel Puchercos, its Chief Executive Officer of the company, said in Lagos that the N100 billion bonds under its N300 billion bond programme, were 1.5 times oversubscribed.

Puchercos said book building with respect to the issuance commenced on April 3, following the approval of the Securities and Exchange Commission, and closed on April 15 at a coupon rate of 12.50 per cent.

He stated that the total order book amounted to N155 billion, noting that the landmark transaction was the largest ever bond issuance by a corporate organisation in Nigeria.

“Despite current market headwinds due to the COVID-19 pandemic, the transaction was extremely well received and attracted significant demand from a wide range of high-quality investors including domestic pension funds, asset managers, insurance companies, banks and international fund managers.

“The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets, reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges,” Puchercos said in a statement.

According to him, the transaction would enable the company to lower its average cost of debt and extend the average maturity of its debt.

He stated that the net proceeds of the offer would be used to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.

“It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.

“The success of this transaction, in the current challenging environment, illustrates investors’ continuous confidence in Dangote Cement’s strategy, strong cash generation and solid credit profile,” he added.

Puchercos said the bonds would be listed on the Nigerian Stock Exchange and the FMDQ Securities Exchange.

He explained that for the first time in the history of the Nigerian debt capital markets, investors would have the option of lodging securities with either the Central Securities Clearing System or the FMDQ Depository.

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Stock market makes improvement

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By Chris Ndibe

Trading on the Nigerian Stock Exchange (NSE) closed upbeat on April 22, 2020 following gains in blue chips stocks with the All-Share Index advancing by 0.66 per cent, thereby reversing two days downward trend.

Specifically, the All-Share Index increased by 150.38 points, representing a gain of 0.66 per cent to close at 22,780.30 compared with 22,629.92 recorded on Tuesday.

Similarly, the market capitalisation which opened at N11.793 trillion rose by N79 billion to close at N11.872 trillion.

The uptrend was impacted by gains recorded in large and medium capitalised stocks, amongst which are; Lafarge Africa, Zenith Bank, BUA Cement, Guaranty Trust Bank and PZ Cussons.

Analysts at Afrinvest Limited expected trading to remain mixed for the rest of the week.

Market breadth closed positive with 19 gainers in contrast with four laggards.

NEM Insurance recorded the highest price gain of 10 per cent, to close at N2.20 per share.

Lafarge Africa followed with a gain 9.66 per cent to close at N11.35, while Livestock rose by 7.69 per cent to close at 70k per share.

Transcorp rose by 7.35 per cent to close at 73k, while PZ Cussons appreciated by 6.25 per cent to close at N4.25 per share.

On the contrary, Skyway Aviation Handling Company led the losers’ chart in percentage terms, dropping by 8.16 per cent, to close at N1.80.

Union Diagnostic & Clinical Services followed with a decline of 6.45 per cent to close at 29k per share.

Guinness Nigeria lost 6.40 per cent to close at N19, while Caverton shed 4.26 per cent to close at N2.25, per share.

In spite of the growth in market indices, the total volume of shares traded dipped 25.61 per cent with an exchange of 186.23 million shares worth N1.85 billion traded in 3,446 deals.

This was against a turnover of 186.23 million shares valued at N1.85 billion transacted in 3,446 deals on Tuesday.

Transactions in the shares of Zenith Bank topped the activity chart with 30.96 million shares worth N420.53 million.

FBN Holdings accounted for 30.72 million shares valued at N130.49 million, while Guaranty Trust Bank traded 25.77 million shares worth N486.79 million.

United Bank for Africa sold 19.99 million shares valued at N115.54 million, while Lafarge Africa transacted 17.11 million shares worth N192.51 million.

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Osinbajo meets with officials of IMF, World Bank

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By Tanko Mohammed

Vice President Yemi Osinbajo in Abuja held an online meeting with representatives of the International Monetary Fund(IMF) and the World Bank through videoconferencing  to discuss how the agencies could collaborate with Nigeria in the planned additional economic stimulus to address the fallout of COVID-19 pandemic.

President Muhammadu  Buhari on March 30, set up the Economic Sustainability Committee(ESC) headed by the vice president  to  develop a clear economic sustainability plan  until 2023.

The committee was tasked with identifying fiscal and monetary measures to enhance oil and non-oil revenues in order to fund the plan; develop a stimulus package and come up with measures to create more jobs while keeping existing ones.

Buhari had also approved an initial economic stimulus package of N500 billion.

The global economy is expected to go into recession in 2020 while the IMF has predicted that Nigeria will go into recession to a level of negative 3.4 per cent.

The ESC had expressed optimism that with the plans it had drawn, Nigeria would be able to return to positive growth by 2021.

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