- Nigeria’s capital imports slumped to a nine-year low in 2016 as Africa’s biggest economy battled a weaker currency and its first recession in 25 years. The NBS said on Wednesday that capital importation into Nigeria fell 47 percent last year to $5.12 billion, largely because the weak currency meant fewer dollars were required for the same naira investment. It said $9.64 billion was imported in 2015. “This was the lowest value since the (data) series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016,” the statistics office said. Equity investments from portfolio investors and direct investment rose sharply from 2012 to 2014, at a time when Nigeria was one of the fastest growing economies in the world and a top destination for investment. But a sharp drop in the price of crude oil, Nigeria’s main export, from mid-2014, slashed government finances, weakened its economy triggering a recession and battered its currency, frustrating business and leading investors to flee its markets. The NBS said portfolio investments fell the most in 2016, deterred by the recession and the currency, down by 69.8 percent from 2015, as investors weighed market conditions relative to expected returns. The NBS said Nigeria imported the bulk of its capital from Britain, the U.S. and Netherlands, with the telecoms, banking and oil sectors the main beneficiaries.
- The CBN has sold $660 million in three- and five- month currency forwards at an auction aimed at clearing a backlog of dollar demand, traders said on Wednesday. Last Wednesday, the regulator had asked commercial lenders to bid in a special currency auction targeted at clearing backlog of dollar obligations of manufacturing, airlines, agriculture and petroleum sector. Traders said the results of the auction was announced late Tuesday while payment for the dollar sales is due on Wednesday. This is the first major dollar sales to the key sector by the CBN this year in a bid to spur growth and revive Africa’s biggest economy which slipped into recession last year due to currency crisis necessitated by a drop in global oil prices.
- Deposit Money Banks that have liquidity challenges will be penalised by way of temporary suspension from its lending window according to the CBN. In a circular issued on Wednesday, the apex bank announced a change in its rules of engagement with the banks, spelling out new rules regarding how financial institutions could borrow cash from fellow banks or the CBN to cover their temporary shortfalls or meet their obligations. The regulator declared that any commercial bank that failed to comply with the new directives would be suspended from its window for eight weeks.
- The Federal Executive Council on Wednesday approved the revised National Tax Policy which will see the Value Added Tax on luxury items, like champagne, increase from the current five percent, among other changes. Finance minister, Kemi Adeosun, who made the announcement, said while the implementation of the revised policy would take immediate effect, some aspects that required changes in law would be referred to the National Assembly. In her words, “With VAT of five per cent, we have the lowest VAT. While we don’t think VAT should be increased on basic items if you are going to drink champagne in the United Kingdom, the VAT is 20 percent; so, why should it be five per cent in Nigeria?” An office of tax simplification would be established; a tax policy implementation committee would be set up where only one revenue agency per level of government would be allowed; the Independent National Electoral Commission will be required to mandate political parties to articulate their tax agenda during election campaigns and an administrative framework for amnesty and whistle-blowing, among others will be created.
- Medview Airline says it is targeting revenue of ₦58.49 billion for the financial year ending December 31, 2020. The airline’s CEO, Muneer Bankole made this known on Tuesday at the company’s listing of 9.75 billion shares by way of introduction at ₦1.50 per share on the NSE in Lagos. Bankole said that the company was also targeting a profit before tax of ₦9.17 billion in the same period. He said the company had projected revenue of ₦47.55 billion, ₦38.66 billion and ₦31.43 billion for 2019, 2018 and 2017 respectively, as well as profit before tax of ₦8.51 billion, ₦6.09 billion and ₦4.35 billion for 2019, 2018 and 2017 respectively. The company had posted a revenue of ₦25.85 billion for the 2016 financial year on a profit before tax of ₦949 million. The Medview chief attributed the company’s performance to efficient service delivery and professional team. “Quality of service offered to customers is the key to business,” he said. Bankole said that the company which commenced operations in 2007 had lifted over 46 million tonnes of cargo into the country, in partnership with a Saudi cargo airline and affirmed that the firm which operates 19 approved international routes, was currently designated to open 14 more routes.