The Senate has asked the FG to consider increasing taxes on luxury goods to boost revenues. The recommendation was made while looking into the 2019 budget. Nigeria has been making efforts to raise revenues in the face of lower oil prices after it recovered from a recession that slashed public finances, weakened its currency and cut spending on capital projects. Nigeria has one of the lowest tax rates on the continent, relying instead on crude oil sales for much of government revenues. The government was budgeting for a deficit of ₦1.86 trillion naira ($6.1 billion) in 2019 to be funded via borrowing, privatisation proceeds and loans secured for specific projects, according to the Senate. It expected the country to generate ₦172.47 billion ($564 million) from privatisation proceeds. However, the Senate did not identify the assets for sale. Last month, the FG said it planned to cut its stake in oil joint ventures this year. Nigeria is budgeting ₦8.83 trillion of expenditure for 2019, based on oil output of 2.3 million barrels per day production at assumed benchmark price of $60 per barrel. The government has said it would borrow ₦1.649 trillion naira to help fund the budget, half of which is targeted to come from offshore sources.
A law firm, Charles Mekwunye and Co. has asked SEC to stop telecoms giant, MTN from listing it shares on the Nigerian stock market. The telco, according to the law firm, cannot list its shares on the NSE due to an ongoing suit before the Supreme Court over the divestment of MTN’s assets. This request was made in a letter dated 18 March, 2019 to SEC. The firm noted that MTN had been unfair to the Nigerian public and regulators by not disclosing the pendency of a civil matter over its shares when it recently announced its proposed initial public offer. It also expressed its disappointed in SEC, as the commission allegedly failed to call MTN to order regarding the recent publications of the telco’s proposed Initial Public Offer without any reference whatsoever to the appeal pending before the Court involving the massive divestment of its assets. The law firm “consider the move by MTN as unfair, misleading, and calculated attempt as usual to defraud the Nigerian economy and the Nigerian investing public.” Charles Mekwunye had in 2008 dragged MTN, Lotus Capital and Stanbic IBTC Asset Management, IHS Holdings and INT Towers before the Federal High Court over alleged breach of contract in the massive divestment of MTN assets.
The Ministry of Finance has directed the Debt Management Office to make ₦195 billion available for the settlement of Export Expansion Grant debt. The debt covers backlog of 10 years from 2007 to 20016 for 270 companies, according to the Nigerian Export Promotion Council. According to the Executive Director/CEO, NEPC, Olusegun Awolowo who spoke at a stakeholders’ forum on the framework for the issuance of promissory notes for the settlement of outstanding EEG claims (2007-2019), the payment will bring succour to the export sector in particular and the economy in general. Awolowo also said that the National Assembly has signalled its preparedness to pass the second batch of approval for the remaining 39 companies with a total value of about ₦124 billion. The debt settlement is expected to pave the way for the revival of the non-oil export sector of the economy and enable financial institutions inject funds for more export activities and generate more forex. The council’s analysis of data from the pre-shipment inspection agents and the NBS showed that Nigeria’s export earnings for 2017 and 2018 experienced an upward trend. There was a growth of 48.43 per cent from $1.204 billion in 2016 to $1.787 billion in 2017; it further went up by 27.22 per cent equivalent to $2.274 billion in 2018, Awolowo said, forecasting that exports for 2019 will grow by about 40 per cent in view of the settlement of the exporter’s debt through the promissory note programme.
Nigeria is seeking private investors in it plans to set up a new venture for aircraft leasing to help domestic and African carriers obtain new planes. This is as a result of the high financing costs and currency risks most airlines in the country face in the process of expanding their fleets. The FG said that the new company would initially lease aircraft from international lessors and sub-lease them to domestic operators. In the investment, in which the government will own a minority stake, it is expected that the partners will be a consortium of international lessors, financial institutions and investors. The government said bidders had until May 20 to show interest. Last Friday, Nigeria’s Medview Airline said it had been in talks with some financial institutions to raise capital as the infrastructure deficit and dollar shortages were complicating its operating environment. The FG has, however, announced plans to hand over airports to private managers to attract investment and overhaul aviation infrastructure that has suffered decades of neglect and under-investment. It also plans to set up an aircraft maintenance facility in Lagos or Abuja with private operators.