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FG to review taxes on tobacco and alcohol, as brewers suffer loss

For a recovering economy like Nigeria, keeping factories running and providing jobs are as important as plugging the revenue hole.



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The Federal Government of Nigeria is set to embark on a downward review of the 2018 excise duties imposed on products made by brewing companies in Nigeria.

Basically, the extant tax laws were proposed by the former Minister for finance, Kemi Adesoun, to boost non-oil revenue amid declining income from the oil industry.

It has been argued that incremental rises in these products (alcohol and tobacco) somewhat aligns with global best practices, because most Governments around the world generally tax alcoholic drinks and tobacco for the dual purpose of revenue generation and discouraging the harmful effects of such products.

However, for a recovering economy like Nigeria, keeping factories running and providing jobs are as important as plugging the revenue hole.

Main Alcohol-Beverage companies are struggling for sales

According to the report, the main alcoholic beverage producers in Nigeria which include Anheuser-Busch InBev SA, Heineken BV and Diageo Plc have continued to struggle to improve increase sales due to the contraction witnessed in the economy since 2016.

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FG now rethinking earlier policy? 

According to the email response to questions received from Paul Abechi, the spoke person for the Finance Minister, Zainab Ahmed, the difficulties witnessed by the alcoholic beverage companies are forcing the government to rethink the taxes earlier imposed.

“Following continued consultation by the government, it has been decided and approved that the excise duties on wines and spirit should be reviewed.

“The process has been set in motion through the relevant departments and inter-ministerial committees and it will soon resolve the matter in a mutually benefiting way.”

About taxes on tobacco and alcoholic drinks 

The excise duty for alcoholic beverages and tobacco was approved by President Buhari and took effect on June 4th, 2018. According to the former Minister for Finance, Kemi Adeosun, the excise duty rates were expected to spread over a three- year period from 2018 to 2020 in order to moderate the impact on prices of the product.

The excise duty is a combination of the existing ad-valorem rate, with each stick of cigarette attracting on naira specific rate stick. Earlier, the projection was that by the year 2020, tobacco should attract N2.90 specific rate per stick or N58 pack of 20 sticks.

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Similarly, under the regime, beer and stout are to attract 0.30k per centilitre (Cl) in 2018 and 0.35k per Cl each in 2019 and 2020.

Wines are to also attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for spirits in 2018, N1.75k per Cl in 2019 and N2 per Cl in 2020.

Following the upward review of the taxes, the Director-General, Consumer Protection Council (CPC), Babatunde Irukera, reportedly said the decision to increase the excise duty on these commodities was consistent with prevailing global practices.

Also, Akinbode Oluwafemi, the Deputy Executive Director, Environmental Rights Action of Earth Nigeria, described the decision to increase excise duty on tobacco as praise-worthy.

The taxes are hitting hard on brewing companies’ revenue

The increase in brewing products is reportedly having a toll on the industry’s biggest players’ revenues.

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For instance, report shows that Heineken’s local unit, Nigerian Breweries Plc, reported 2018 net income that fell 41 percent from the previous year to 19.4 billion naira ($54 million) due to “increased excise duty rates” as well as “a challenging operating environment”.

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Also, International Breweries Plc, the local unit of AB InBev, declared a loss of N7bn for the nine months through September, citing rising costs that included taxes. Similarly, Diageo-owned Guinness Nigeria Plc saw its growth blunted by the higher levies.

FG makes U-turn, to embark on a downward review of taxes

The Senate intervention in the excise duty hikes on alcoholic beverages and tobacco products appeared to have finally produced results. The legislature earlier passed a resolution in 2018 calling on the government to suspend the implementation of the new excise rates to give more time to sensitise all stakeholders.

The Senate had suggested increment to no more than 50 per cent, while a larger chunk of the taxes should be shifted on imported alcoholic beverages and tobacco.

According to the Budget and Planning Minister, Udo Udoma,

“The companies don’t need additional tax at a time the economy is coming out of recession and inflation is still high,”

Similarly, the chief executive of Lagos-based Highcap Securities, David Adobri, reportedly said in a phone interview;

“A downward adjustment or abolition of the tax is needed to enable them to remain in business and create jobs.”

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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#EndSARS: ECOWAS calls for protesters to remain peaceful in their demonstrations

ECOWAS has called on protesters to be peaceful in conducting their protests.



ECOWAS ministers recommend gradual re-opening of borders 

The Economic Community of West African States (ECOWAS), has called on protesters to be peaceful in conducting their protests and urged Nigerian security operatives to exercise restraint in the handling of protests.

This was disclosed in a statement by the organization on Tuesday and comes on the heels of statements by other International bodies and personalities, who have expressed worry over the nature of brutality meted on protesters, especially after the Lekki shootings.

“ECOWAS Commission notes with concern that demonstrations by Nigerian youth calling for Police reforms, particularly the abolition of the Special Anti-Robbery Squad (SARS) of the Nigerian Police force, accused of misconduct by those demonstrating, have turned violent,” they said.

The body said it recognizes the right to peaceful protests and also called for protesters to be peaceful, due to the rising reported cases of lootings post protests during the curfews.

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While ECOWAS recognizes the right of citizens to freedom of expression and peaceful assembly and protests, it also wishes to stress that those rights should be exercised in a nonviolent manner.

“In this regard, ECOWAS calls on all protesters to remain peaceful in the conduct of their demonstrations. It also urges the Nigerian security operatives to exercise restraint in the handling of the protests and act professionally.”


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The tone of ECOWAS’ message is different compared to the rest of other stakeholders including the statement of the Lagos State Governor, House of Reps Speaker, and the Vice President, who all acknowledged that the protests were peaceful and the protesters were attacked and that the violence from the curfews was not done by the protesters but by hoodlums.

The ECOWAS message is also the first statement by West Africa’s most important regional body since the #EndSARS protests started in the first week of October.

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Economy & Politics

Kano State presents N147.9 billion budget for 2021 fiscal year

Governor Ganduje has presented the total sum of N147.9 billion as Kano State’s proposed budget for 2021 fiscal year.



Dala Inland Dry Port set to take off after N2.3 billion investment - Kano Govt., DB to support 1.26 million farmers with $95 million

Kano State Governor, Abdullahi Ganduje has presented the total sum of N147.9 billion as its proposed budget for 2021 fiscal year before the Kano State House of Assembly today.

Presenting the budget tagged “Budget for Economic Recovery and Sustainable Development,”Governor Ganduje said the budget is in furtherance of his administration’s vision for diversification of the state sources of revenue which will engineer development in the future.

Backstory: Recall that Nairametrics had earlier reported the drive and optimism by Kano State government to boost its Internally Generated Revenue. This might probably explain why IGR increased by almost 10% between 2020 allocations and proposed estimates for 2021.

What you should know: The breakdown of the budget verified by Nairametrics showed the following key highlights:

  • The total budget increased by approximately 7.0% from N138.279 billion in 2020 to N147.935 billion in 2021.
  • Capital expenditure for the periods under view increased by 10.93% from N60.485 billion to N67.095 billion.
  • Recurrent expenditure also increased from N77.79 billion to N80.839 billion, indicating a 3.92%. increase for the periods under view.
  • Internally Generated Revenue (IGR) increased by approximately 10% from N24 billion to N26.395 billion during the period under view.
  • A breakdown of the budget showed that the Education sector has over N37 Billion representing 25% of the total budget while the health care delivery service has over N25 Billion representing 17% of the total budget.

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Lekki Tollgate Shooting: Sanwo-Olu insists on 2 deaths, no bloodstains at the scene

Governor Sanwo-Olu has reiterated that only two people were killed in last week’s shooting at the Lekki toll plaza.



#EndSARS: Anyone found culpable in Lekki Toll Plaza shooting would be held accountable - Sanwo-Olu

The Lagos State Governor, Babajide Sanwo-Olu, has insisted that there were only two confirmed deaths during the shooting incident that happened a week ago at the Lekki Tollgate.

He also said that there were no bloodstains at the scene of the incident.

According to a report on Vanguard, the Lagos State Governor made the disclosure during an interview with CNN’s Becky Anderson about the incident and the fall out of the #EndSARS protests over police brutality and extra-judicial killing.

The Governor’s statement is against the backdrop of several reports in the public space, which had claimed that over 30 protesters and in some cases about 70 protesters allegedly died as a result of the shooting by soldiers at the Lekki Tollgate.

The Governor said, “Two dead bodies, that is what we have seen from all the morgues, that’s what we have seen going to hospitals, that’s what we have seen as a record. What has happened is that there have been so many footages that were seen, that people have shown, but we have not seen bodies, we have not seen relatives, we have not seen anybody truly coming out to say I am a father or a mother to someone and I cannot find that person. Nobody has turned up. I have been to the ground, there is no scratch of blood anywhere there.

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“From the footage that we could see, because there were cameras at that facility, it seems to me that they would be men in military uniform. That’s what the footage shows.”

While insisting that there was no form of international pressure as a result of the protests, Sanwo-Olu said, “I genuinely believe there would be change. For two reasons; what has happened, especially in Lagos is extremely unimaginable. It was also a clarion call for all of us in government to understand and realize what the youths want us to be doing. It hit all of us like a thunderbolt and it was just a wake-up call.”

In order to aid the investigation to ascertain what happened at the Lekki Tollgate, Sanwo-Olu assured that the Close Circuit Television (CCTV) footages will be made available to the judicial panel already set up to investigate the incident and has already started sitting on Monday.

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While responding to a question, Sanwo-Olu said he was ‘absolutely’ committed to a full investigation of the incident.

He said, “It’s beyond my control to mete out punishment to those found culpable; however, those responsible will be held accountable. I am not the Commander-in-Chief of the Armed Forces. The report will be out, we will channel the report to all the relevant authorities in the State to ensure everyone that is found culpable is accountable for the act.”

Despite the Lagos State Governor’s insistence on the number of fatalities, a lot of Nigerians do not believe his account of the incident and think that there is some form of an alleged cover-up by government officials. They are still outraged that despite some video evidence and accounts of people that were there, the government is still understating the fatality figures.

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