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Business News

OPS writes Buhari, demands tax holidays amid COVID-19 crisis

The Organised Private Sector has written to President Muhammadu Buhari, demanding for a tax holiday and other palliatives for the private sector.

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Ease of doing Business: NECA seeks more reforms , Unemployment to hit 33.5% in 2020, NECA warns, OPS writes Buhari, demands tax holidays for private sector amid COVID-19 crisis

The Organised Private Sector (OPS) has written to President Muhammadu Buhari, demanding for a tax holiday and other palliatives for the private sector to rescue the sector from the consequences of Coronavirus crisis.

In a letter dated March 24, 2020, and signed by the Director-General of Nigeria Employers’ Consultative Association (NECA), Dr Timothy Olawale, the group noted that the implications of the ongoing COVID-19 pandemic on the private sector could be severe enough to cause closure of companies and massive job losses.

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The group added that the government would also lose revenue through payment of taxes, and the resulting economic crisis could lead to an increase in social vices and insecurity unless the government intervened soon.

The letter read in part: “We commend the Federal Government and the Central Bank of Nigeria (CBN) for the on-going efforts at containing the Coronavirus. In particular, we note the various interventions and palliatives through the Central Bank of Nigeria (CBN) aimed at ensuring business continuity.” 

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[READ MORE: COVID-19: NSE extends time for submission of audited financial statements)

They noted that the closures and partial lockdowns around the country could heavily affect the sector, and asked the government to put more palliative measures in place for them.

“The specific support, would among others, include: A Temporary Scheme for paying Compensation to companies in the risk of laying off in order to retain jobs. This is to aid the continued existence of companies and prevent layoffs within private companies facing financial pressures as a result of Coronavirus.  

“Under the scheme, which could last for the next three months, The government will cover 60% of the salaries of employees paid on a monthly basis, who would otherwise have been fired, with companies paying the remaining amount,” the letter read.

The group also asked for support from the government to negotiate and reschedule bank loans, especially loans taken in the last three months; as well as suspension of taxes and levies since business activities had been gravely affected by the crisis.

“The Real sector is facing the risk of total shut down, as there are no imports and exports, sales are down and production at almost zero levels. At the same time workers are expected to be paid and other commitments honoured by the businesses.”

Health: Nigeria records first case of coronavirus

[READ FURTHER: COVID-19: Infections rise to 44, as 2 new cases confirmed in Abuja, Bauchi)

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They also requested tax-free cash flow boost for employers – a stimulus package to help pay wages or for investment to protect against downturn inactivity, and tax payment deferrals for businesses with a turnover of less than N50 million, particularly in those sectors worst hit by the crisis such as Aviation, Hospitality, Manufacturing, Retails, Tourism, Food and Beverage, etc.

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They added that employees, who are self-isolating or those diagnosed with the virus, should receive payment support from the government, to encourage disclosure and help contain the spread.

What it means: Olawale explained that the palliative measures would help the private sector to continue to produce in order to meet the basic needs of Nigerians and thus prevent panic buying.

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He urged the government to take cue from countries like Australia, China, Cook Island, Denmark, Ireland, France, Italy and Spain where palliative measures were given to the private sectors as well, to minimise the impact on the industry and guarantee job security for citizens.

Why this matters: The Australian government provided tax-free cashflow for employers, up to $25,000 to help pay wages or for investment to protect against downturn inactivity.

Chinese government exempted SMEs from payment of Pension contributions, unemployment and work injury insurances, and halved these payments for large companies from February to April 2020. Import goods and materials were also exempted from import tax.

Here’s why your business needs a solid value proposition (PART 1)

[READ ALSO: Participants at the AMVCA may have COVID-19)

In France, the Government had proposed that water, gas and electricity bills, as well as rents, would be suspended for companies in a difficult situation. Fixed costs would also be reduced by the saving of rents, especially for businesses that have to close.

The Japanese government pays 8,330 yen per day for each worker who misses work, while self-employed people, as well as freelance workers, who meet certain conditions, will receive a uniform 4,100 yen per day.

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All of these measures have helped these countries, as well as other affected countries, to minimise the impact of the crisis on their private sector, which is known to be the mainstay of the economy.

Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career.As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

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Economy & Politics

Senate President lists benefits of PIB as public hearing on the bill opens

Ahmad Lawan has listed the benefits of the PIB presently before the National Assembly for consideration.

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Senate president warns about dangers of youth unemployment, National Assembly to ensure youth empowerment schemes are realized - Lawan

The President of the Senate, Ahmad Lawan, has said that the Petroleum Industry Bill (PIB) which is presently before the National Assembly for consideration and passage will ensure that Nigerians benefit optimally from crude oil production and sale of fossil fuel reserves.

According to a statement that was issued by the Special Assistant, Press to the Senate President, Tabiowo Ezrel, this disclosure was made by Lawan, while declaring open a 2-day public hearing on the bill by the National Assembly on Monday, January 25, 2021.

The Senate President pointed out that the National Assembly in its consideration of the piece of legislation would ensure that the bill when passed into law, guarantees improved revenue earnings for the country.

What the Senate President is saying

Lawan in his statement said, ‘’Let me say this, we (National Assembly) will pass this bill not without ensuring that it is a bill that satisfies certain conditions. Nigeria is blessed with these resources, we want Nigeria to benefit optimally from them. In fact, we are in a hurry because we have lost so many years of benefits that we could have had.’’

He, however, noted that the non-passage of the PIB had been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time when many other countries are scrambling to exploit their oil and gas resources.

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Going further, Lawan said, ‘’The mere knowledge that the nation’s oil industry is still being governed by laws enacted more than 50 years ago is ludicrous and extremely disappointing.

‘’As legislators, we will strive to deliver a Bill that will enhance the growth of our oil and gas industry, modernize our fiscal system and enhance competitiveness, while creating harmony for all stakeholders. This is a promise we have made and that we shall achieve.’’

‘’Nigeria must have an oil and gas industry that benefits its people. Equally, our oil and gas industry must be competitive. We must create a sustainable investment climate, where business in the sector will flourish,’’ he said.

He also added that the determination by the legislature to pass the Bill is driven by the need to overhaul a system that has refused to operate optimally in line with global standards, resulting in loss of continental competitiveness, transparency, accountability, good governance and economic loss for the petroleum industry and the country.

The Different chapters of the PIB

The Senate President revealed that the PIB comprises of 4 chapters that outline;

  • How to create efficient and effective governing institutions with clear and separate roles for the petroleum industry,
  • Establish a framework for the creation of a commercially oriented and profit-driven National Petroleum Company,
  • Promote transparency, good governance and accountability in the administration of the petroleum resources of Nigeria among others.

Other benefits of the PIB

He also noted that the PIB upon passage and assent into law by the President;

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  • Would foster sustainable prosperity within host communities, provide direct social and economic benefits from petroleum operations to host communities,
  • Create a framework to support the development of host communities among others
  • Establish a progressive fiscal framework that encourages investment in the Nigerian Petroleum Industry,
  • Balancing rewards with risk and enhancing revenues to the Federal Government of Nigeria,
  • Provide a forward-looking fiscal framework that is based on core principles of clarity, dynamism and fiscal rules of general applications,
  • Establish a fiscal framework that expands the revenue base of the Federal Government while ensuring a fair return to investors.

Lawan assured that the National Assembly during the public hearing would deal with all issues relating to the oil and gas industry with thoroughness and effectiveness so as to avert colossal losses to the nation’s economy.

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Spotlight Stories

Nigeria’s Sparkle partners with Network International for virtual and physical payment cards

Nigeria’s Sparkle signs with payment experts Network International for virtual and physical payment cards.

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Nigerian fintech startup Sparkle, a digital ecosystem providing financial, lifestyle, and business support services, has partnered with Network International, to power its recently launched payment card offering.

This is coming months after collaborating with Visa to enable them to issue Visa cards to its users.

Founded by former Diamond Bank chief executive officer (CEO) and tech entrepreneur, Uzoma Dozie with the aim of providing seamless solutions to Nigerian individuals, SMEs, and retailers. Sparkle’s new virtual and plastic debit cards are targeted at SMEs and upwardly mobile, unbanked consumers across Nigeria, bringing them the convenience, flexibility, safety, and security of cashless payments across various channels.

What they are saying

  • According to Uzoma Dozie, “Digital adoption and customer experience are going to be dependent on the people, platform, and partnership. In the area of payment processing and data insights, Network International brings that to our platform, and we are truly excited about the future of the partnership and what it means for the enablement and transformational impact for Nigerians anywhere in the world who are connected to the Sparkle platform.”
  • Also speaking on this new partnership, Andrew Key, Managing Director – Africa, Network International, said, “We are delighted to strengthen our strategic alliance with Sparkle as it seeks to further disrupt the payments offering to consumers and retailers in Nigeria. Building on our two decades of experience within payments and deep insight of the African market, we look forward to deploying our trusted platform and best-in-class technology towards supporting digital and financial inclusion of Nigerian consumers and businesses.”

Sparkles’ collaboration with Network International is based on their shared commitment to further the adoption of digital payments among emerging markets across Africa and the Middle East. Its users can make in-app payments with the new virtual card, and also make e-commerce transactions with the cards attached to their Sparkle profile.

This collaboration will offer Sparkle access to the Network’s years of experience and expertise in creating card solutions for emerging markets. The company can also benefit from Network’s advanced digital infrastructure and robust security protocols, avoiding the need to invest in expensive card management infrastructure.

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Appointments

AFEX appoints Kamaldeen Raji as MD of AFEX Fair Trade Limited

Mr Kamaldeen Raji has been appointed as the Managing Director of AFEX Fair Trade Limited.

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AFEX appoints Kamaldeen Raji as Managing Director of AFEX Fair Trade Limited

Leading commodities market player, AFEX has announced the appointment of Kamaldeen Raji as the Managing Director of AFEX Fair Trade Limited (AFEX Fair Trade).

This information was contained in an exclusive disclosure sent to Nairametrics today the 25th of January 2021.

According to the information contained in the press statement, the appointment is in line with AFEX’s mandate of strengthening trade infrastructure for Nigeria’s commodities market, while providing support for smallholder farmers, who are key players in the agricultural value chain.

What they are saying

The CEO of AFEX, Ayodeji Balogun, who commented on the appointment of the New Managing Director, said:

  • “I am delighted to have Kamaldeen stepping into the leadership at AFEX as the Managing Director of AFEX Fair Trade. This is in alignment with AFEX’s five-year strategy that consolidates the best aspects of our business into business units that will deliver impressive wins in trading, financing and market system development for Africa’s commodities market.”

Kamaldeen Raji, Managing Director, AFEX Fair Trade limited said:

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  • “AFEX has delivered on its promise for a working commodities exchange model for West Africa after six years of operations in Nigeria. I am excited to join the executive leadership to contribute to our next five years as a business.”
  • “As I drive our strategy to reach one million farmers and expand our national storage capacity to 500,000 MT over the next five years, AFEX Fair Trade will build on the success of previous years.”
  • “Through AFEX Fair Trade, AFEX will continue to contribute to impact metrics that align with the United Nation’s Sustainable Development Goals (SDGs) 1, 2, 5, and 8; no poverty, zero hunger, gender equality, and decent work and economic growth.”

Kamaldeen prior to his appointment as the Managing Director of AFEX Fair Trade Limited had previously served in Commercial Manager’s capacity for AFEX. This position monitored all commercial partnerships with a focus to drive revenue activities and growth opportunities.

It is important to note that, AFEX Fair Trade is one of AFEX’s business units, responsible for commodities trading and storage, the company is charged with the task of providing extension services to farmers in a bid to boost their productivity and incomes across all segments of the agricultural value chain.

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