The Federal Government (FG) has disclosed its plans to prioritise Micro, Small and Medium Enterprises (MSMEs) in the agriculture, construction and automotive industries by providing tax incentives for them.
The disclosure was made by the Minister of Industry, Trade and Investment, Niyi Adebayo during a private equity summit in Lagos.
Adebayo made known that the ministry had started work on delivering tax and regulatory incentives for SMEs. He also said the government was modernizing bilateral investment agreements with a greater sense of purpose through the Nigerian Investment Promotion Commission.
The minister said the government aimed to enhance the ease of doing business and support the growth of the MSMEs. This, he said would attract global investors when viewed against the backdrop of the country’s capacity for growth.
“The Federal Government seeks to localize at least 40% of its expenditure on stipulated goods and services to facilitate local markets access for Nigeria-made products.
“The government also seeks a comprehensive approach in mobilising capital, incentivising priority sectors and expanding market access for local producers,” Adebayo said.
Meanwhile, the acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk has described private equity firms as important agents of business and economic growth as they bring capital to the business.
Uduk stressed the fact that Nigeria has a lot of start-ups with genuine robust business plans as well as public companies with solid customer bases, proven products, and high-quality management. She said that what these businesses yearn for was investments which private equity firms could tap into.
“I see an improved investment climate, friendly market rules, and regulations, as well as increased investor education as essential elements for attracting private equity investments in Nigeria. Towards this, the commission is working on rules and regulations to ease the participation of more private equity funds,” Uduk said.
Recall that a key feature of the new Finance Act law is the introduction of a graduated tax scale for small businesses. Under the law, small companies (with gross turnovers of not more than N25 million) will pay 0% in Companies Income Tax (CIT). They will also not be required to make VAT returns with respect to goods and services rendered.
FEC approves $40 oil benchmark for 2021 budget
The FEC has approved a $40 oil benchmark for the 2021 budget.
The Federal Executive Council has approved a $40 oil benchmark for the 2021 budget, and also FX target of N379/$ for the budget which will be presented to the National Assembly in October.
This was disclosed by the media aide to the President, Tolu Ogunlesis after the FEC meeting on Wednesday. He disclosed that the Ministry of Finance said the first-half performance of the budget hit 68% of revenues while 92.3% was spent on salaries, pensions, debt service and statutory transfers.
Budget Proposal for 2021, approved today at FEC
Oil benchmark: $40
Oil Production: 1.86m bpd (incl 400k of condensate)
GDP growth target: 3%
11.95% inflation target
N13.08 trillion total aggregate expenditure (29% Capex), with a deficit of N4.48 trillion
— tolu ogunlesi (@toluogunlesi) September 30, 2020
Nairametrics reported in July that the National Assembly passed a revised budget of N10,805,544,664,642 on the 11th of June after the Federal Executive Council (FEC) approved a revised budget of N10.523trillion in May, which was signed by President Muhammadu Buhari.
President Buhari announced that the budget was revised due to the effect of the COVID–19 pandemic on the economy, and disclosed that all MDAs will be allocated 50% of their capital allocation by the month’s end.
The Oil benchmark in the revised budget was reduced from $57 per barrel to $25 and crude production was reduced from 2.18 million to 1.94 million barrels per day in the new revised budget which was disclosed by Zainab Ahmed, the Minister of Finance.
In today’s announcement, the Federal Government stated:
“Budget Proposal for 2021, approved today;
FEC Oil benchmark: $40
Oil Production: 1.86m bpd (incl 400k of condensate)
FX: N379/$ GDP growth target: 3% 11.95% inflation target N13.08 trillion total aggregate expenditure (29% Capex), with a deficit of N4.48 trillion.”
The Ministry of Finance added that the FX benchmark moved from N360 to N379, and that the National Assembly will be presented with the budget.
Petroleum Industry Bill passes first reading in Senate
The much-awaited PIB has passed the first reading in the Senate.
The 2020 Petroleum Industry Bill has scaled the first reading on the floor of the Senate during plenary on Wednesday.
The much-awaited bill was presented by the Leader of the Senate, Yahaya Abdullahi, and was read by the President of the Senate, Ahmad Lawan.
This was disclosed by the Senate via its Twitter handle on Wednesday.
2. Petroleum Industry Bill, 2020 (SB. 510) by Senator Yahaya Abdullahi (Senate Leader)
Petroleum Industry Bill, 2020 (SB. 510) is read the First Time.
— The Nigerian Senate (@NGRSenate) September 30, 2020
Back story: Nairametrics had reported on Monday when the Minister of State for Petroleum Resources, Timipre Sylva, clarified that the new PIB seeks to commercialize the Nigerian National Petroleum Corporation (NNPC) rather than scrap it.
Sylva said, “We have heard so much noise about NNPC being scrapped but that is not being envisaged by the bill at all. NNPC will not be scrapped but commercialized in line with the deregulation move being made across all the streams in the sector comprising of upstream, downstream and midstream. We have said that NNPC will be commercialized. But if you are talking about transforming the industry, the only new thing that we are introducing is the development of the midstream, that is the pipeline sector. So we have provided robustly for the growth of the midstream sector. Through commercialization, the required competitiveness in the sector will be achieved.”
Meanwhile, the federal parliament had vowed to ensure thoroughness in its consideration, which according to the principal officers, would be treated simultaneously with the 2021 national budget.
Lawan stated this during a National Assembly joint leadership meeting on the PIB, with the Minister of State for Petroleum, Timipre Sylva.
The meeting also had in attendance the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, and other heads of the NNPC subsidiaries.
He assured that both chambers would forward the documents to their respective committees for further legislative actions as soon as Buhari’s covering letter, which accompanied the bill, was read to the lawmakers.
P&ID dispute: $200 million guarantee to FG judgment shows FG’s commitment to tackle corruption- Malami
Nigeria’s Attorney-General has said that the recent P&ID ruling shows that the country is on the right track in its anti-corruption fight.
The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, has said that the UK court ruling ordering P&ID to release $200 million to the Nigerian government demonstrates the FG’s commitment to tackling fraud and corruption.
This was said in a statement released by Malami on Tuesday evening after the judgment was issued by the London Court.
Nairametrics reported that a London Commercial Court had ordered the release of a $200 million guarantee as security to be paid to the Nigerian government in the P&ID $10 billion Arbitral Claim, as reported by the CBN in a statement.
“Nigeria’s Foreign Exchange Reserves was this morning boosted by over $200Million when the London Commercial Court ordered the release of the $200Million guarantee put in place as security in respect of the execution of the much discredited P&ID $10 Billion Arbitral Claim,” CBN said.
Malami stated that “We are glad having this victory in addition to multiple successes recorded so far.”
He added that the recent judgment on Nigeria’s cases against P&ID demonstrated an outcome of strong commitment and determination of the present Federal Government to tackle fraud, corruption, non-compliance with the due process.
Malami praised the efforts of the FG, especially due to the fact that an order for the extension of time to challenge award and agreement was essential to the court judgment that enabled Nigeria to challenge the order for cash deposit of $200m to bank guarantee.
He also cited successes like payment of the legal cost of €1.5m in favour of the country, the Court Order to the release of bank guarantee in favour of the Federal Government of Nigeria, award of payment of €70,000 to Nigeria as further legal cost relating to the issue.
On January 31, 2017, an arbitration tribunal had ruled that Nigeria should pay P&ID, the sum of $6.6 billion as damages and breach of contract after a 2010 deal for a gas project in the Niger Delta part of Nigeria collapsed. The pre and post-judgment accrued interest of 7% has seen the amount standing against Nigeria, rise to almost $10 billion, an amount that would have caused a serious dent on the country’s external reserve.