Daily Watch – CBN restricts forex on milk importation to 6 big boys, Nigeria, South Africa clash over AU position

One of South Africa’s top trade negotiators has emerged as the new secretary-general of the African Continental Free Trade Area (AfCFTA) agreement following a bitter political fight with Nigeria at the African Union summit. Amid high political drama, Wamkele Mene, who was also Pretoria’s chief negotiator during the AU’s discussions on the formulation of the AfCFTA, was on Monday night endorsed by the AU heads of state summit in Addis Ababa as the newly-appointed head of the AfCFTA secretariats. Mene’s appointment was settled by voting by heads of state following intense debates after Nigeria attempted to block Mene’s appointment by putting up arguments in favour of their preferred candidate, Cecilia Akintomide, a Nigerian banker. The West African country “went for the jugular” when the matter was tabled at the AU, hours after South Africa’s President, Cyril Ramaphosa, took his seat as chairperson, by arguing that their candidate, Cecilia Akintomide, who was ranked third, should hold the position. Nigeria said that Akintomide’s appointment was a move to boost women empowerment, a key focus of Ramaphosa’s acceptance speech as this year’s chair of the AU. Diplomats at the summit said the matter sparked a passionate debate. They said after two days of discussions on the issue, it took seven rounds of voting for SA to secure the two-thirds majority it needed for Mene’s appointment to go through. Mene will now be in charge of the day-to-day operations of the newly created continental trade body, which will oversee the implementation of a tariff-free trade regime.

Nigeria will get a grant of more than $1 million from the U.S. government for technical and financial work on a power plant project in the capital Abuja, the U.S. Trade and Development Agency (USTDA) said on Tuesday. The money will go towards the 1,350 megawatts NNPC-Abuja Independent Power Project plant and NNPC will work with U.S. firms GE and Continuum Associates, the USTDA and NNPC head Mele Kyari said at the Nigeria International Petroleum Summit.

The FG raised the sum of ₦1.17 trillion from Value Added Tax between January and December 2019, the CBN’s has shown. Comparing the figure to the target of N1.7 trillion the FG set in the 2019 budget, the country’s government had a shortfall of about ₦530 billion. The breakdown of the total VAT made showed that the Federal Inland Revenue Service in the first quarter of 2019 generated the sum of ₦301.62 billion while in Q2, the VAT revenue dropped by ₦6.13 billion to ₦295.49 billion. The Q3 witnessed a decline of the VAT revenue of ₦4.62 billion to ₦290.87 billion. The trend continued in Q4 as VAT revenue dropped by ₦2.92 billion from ₦290.87 billion in the Q3 to ₦287.93 billion. The Federal Executive Council on 11 September 2019 approved an increase in the value-added tax rate from 5 percent to 7.5 percent due to the government’s inability to raise the much-needed revenue to finance its operation. The increase, which the FG started implementing 1 February this year, is being planned to generate about ₦2.08 trillion revenue in the 2020 fiscal period.

The Central Bank of Nigeria on Tuesday announced the restriction of foreign exchange for milk importation to six companies; Nestle, Friesland Campina, Chi Limited, TG Arla Dairy Products, Promasidor Nigeria, Nestle Nigeria, and Integrated Dairies. The monetary regulator said the new move is aimed at boosting local production as it engaged the manufacturers after they keyed into the bank’s backward integration to enhance their capacity and improve local milk production. In July last year, the CBN announced a plan to restrict forex for milk importation. The move was condemned by many Nigerians, interest groups and stakeholders who mistook the decision for an outright ban on milk importation. The Lagos Chamber of Commerce and Industry and the Manufacturers Association of Nigeria said they were not consulted contrary to the claim by the CBN governor that the CBN held several meetings with some milk importing companies, particularly representatives of Friesland Campina, one of Nigeria’s oldest importers of milk, on the issue. Describing the CBN’s decision as unilaterally taken, the Director-General of MAN, Segun Ajayi-Kadir, had said it might lead to the downsizing of their staff while the proposed policy will also cut down on the contribution of the manufacturing sector of the economy to the country’s gross domestic product. Subsequently, the bank explained the restriction policy, saying that “there is neither a plan nor a decision to ban the importation of milk into the country,” an act it said it had no legal power to take.