The Country Manager for OPay in Nigeria, Iniabasi Akpan, has finally reacted to the role ORide played in the temporary shutdown of Gokada‘s (its ride-hailing rival) operation in August 2019. Although the shutdown lasted for two weeks, ORide was identified as one of the reasons it happened.
ORide and Gokada have been involved in the gradual transformation of Nigeria’s public transportation through ride-hailing services. Though ORide is the most recent entrant into the ride-hailing market, the competition they provide has not only affected traditional operators of motorcycle business (Okada riders) but also the bike-hailing rivals who have not been spared by its onslaught.
In pursuit of better opportunities
Nairametrics had reported how Gokada lost some of its top staff members to ORide. Four staff, including co-founder and COO of Gokada, left the company for ORide. While Gokada said the poaching was nothing significant, Akpan told Nairametrics the company wouldn’t stop any staff of rivals seeking better opportunities in ORide.
“If you are in a market, people always seek better opportunities, so we can’t say people are engaging us and we turn them back, obviously not.
“If there are opportunities or openings and people who work for the competitors want to work for us, I mean that’s not erm (bad). You expect that kind of thing in a competitive market.”
He added that, “In the banking industry, it happens quite often. People move from banks to banks to move up the ladder, it’s been there. It’s a global practice. When people want to advance their career, they look for opportunities in new places, in places where they think the vision is right and know where they are going.”
Akpan talks of new strategy
Akpan said Gokada’s intention was to remain operational in Lagos rather than expand its market base to other States in Nigeria. His statement came after Gokada informed Nairametrics it was not in a rush to conquer new grounds like its competitors but would rather offer better bike-hailing service.
According to Akpan, ORide is expanding aggressively with no time to be distracted by competitors. He said if ORide had paid attention to its rivals, it would not have expanded beyond Lagos.
“We focus on our business as much as possible, you don’t want to be distracted. When you look around too much, you get distracted.
“So, we focus on the goal which is to grow our business, expand our business, and we are doing that aggressively. So within May and now, we have eight cities. So if we are looking at our competitors, we would still be in Lagos. While the competition is still in Lagos, we’ve gone beyond Lagos.
“If we are driving financial inclusion, then we can’t be looking at (just) Lagos because more and more, the people who need the service are the guys (people) who are excluded. They need to have access to smartphones, (e)-wallet, to things that will give them access to financial services and enabling environment to improve the quality of their lives.
“So that’s why for us, beyond Lagos is very important. So while the competitors are still there trying to do stuff in Lagos, we’ve gone beyond Lagos.”
ORide is currently operating in Kano, Aba, Abeokuta, Akure, Ilorin, Asaba and Uyo four months after establishment. The company also plans to expand into Kaduna as it sees the Nasir El-rufai-led State as revenue potential but other bike-hailing companies, Max.ng and Gokada operate only in Lagos State.
Challenges since establishment in June
While ORide has enjoyed acceptance and recorded growth in its number of trips which Akpan projected at six figures, the company has not been immune to challenges since starting operation in June 2019.
“Lot and lot of challenges. You know there are vested interest in some of these things.
“Almost every sector has vested interest, Unions are there, regulators are there. And I think that generally also if you look at the infrastructure that we also have, I mean sometimes the services just don’t work; you make calls, the call doesn’t go through.
“These are all basic challenges that we face, but we are responding to almost every one of them. Making sure that the technology is efficient and has the right customer support, engage the regulators…. We just have the right structure to tackle every one of them. We have a great team. We have different people engaging different stakeholders to make sure we overcome or surmount these challenges.”
ORide is not profitable yet
Despite its growth within the short space of four months, ORide isn’t profitable. However, the profit issue is not particular to ORide as the ride-hailing market is generally not profitable to the players – be it car-hailing or bike-hailing companies.
While responding to the revenue generation of ORide, Akpan told Nairametrics that the company was not focused on its profitability yet, saying its main target was to increase locations and trips.
“Are we measuring revenue? Maybe not necessarily at this point. Revenue is secondary not a priority. Basically, what we look at is expanding the number of locations and also increase the number of trips.
“Those are top priorities for us. If we are looking at revenue or looking at income, it’s not a profitable business for now, so profitability is not a major driver at this point. And it’s not as if we are a charity organisation, somewhere down the line, obviously, we would have to make returns to our shareholders, we have that in mind.
“The very first thing is making sure people have access to quality service, the experience is different, get them to adopt the new technology that is available, and obviously, once they see the benefits, they begin to use it more and more. And down the line, longterm it pays off. That’s traditionally how most Fintechs work at this stage, but it’s a long road.”
CITN issues rejoinder to ICAN’s claim over court case
The rebuttal claims that there are some ‘critical misinterpretations’ contained in ICAN’s claims concerning the judgment.
The Chartered Institute of Taxation of Nigeria (CITN) has issued a rebuttal to the “critical misrepresentations” that are supposedly contained in a notice to members sent out by the Institute of Chartered Accountants of Nigeria (ICAN) over a court case, as reported by Nairametrics.
Recall that ICAN had informed its members that Justice S. A. Onigbanjo of the High Court of Lagos State ruled in their favour by striking out “Suit No. LD/3288GCM/19 – CITN VS ICAN” which was filed by CITN. In the suit, CITN had, among other things, prayed the court to restrain ICAN members from filing tax returns with the Federal Inland Revenue Service (FIRS) unless they have a CITN license.
CITN’s position: Now, in its rebuttal to ICAN’s claims concerning the court case, a copy of which was sent to Nairametrics, CITN clarified the following points:
- The Ruling of the Hon. Justice S. A. Onigbanjo of the 2/7/2020 in LD/3288GCM/19 did not invalidate the MOU and TOS because it did NOT address the issues in the substantive suit, itself. However, since ICAN has resiled from the MoU and ToS it freely entered with CITN, the CITN will not stop ICAN from walking away.
- The Judge only struck out the suit based on the Preliminary Objection of ICAN to the effect that the suit was an abuse of court process because the issues in it were the same as the issues in FHC/L/CS/125/2019 – ICAN VS FIRS & 1 OTHER which was earlier decided in favour of CITN. However, the issues in the two suits are completely different and distinct as has now been explicitly admitted by ICAN in its Notice under reference when it said: “The earlier ruling at the Federal High Court in Suit No. FHC/L/CS/125/2019 did not make pronouncement on the memorandum and terms of settlement between ICAN and CITN.”ICAN having admitted that the judgment in FHC/L/CS/125/2019 did not make any pronouncement on the MOU and TOS (and this is a fact), how then could issues in that suit be the same as those in LD/3288GCM/2019 (decided by Justice Onigbanjo) which only asked for judicial pronouncement on the MOU and TOS?
- Regulation 5 of the Tax Administration (Self-Assessment) Regulations, 2011, was categorically annulled by the Hon. Justice Liman in the judgment delivered in FHC/L/CS/125/2019 on 21/11/2019. None of the lawyers to the parties (including ICAN) can deny hearing the annulment of Regulation 5 during delivery of the judgment. It is unfortunate that ICAN is jumping the gun in a case with a pending post-judgment application.
- In the judgment delivered in FHC/L/CS/1480/2018 – CHIEF IGBAROOLA & OTHERS VS FIRS & OTHERS on 21/5/2019, the Hon. Justice A. O. Faji, declared: “CITN Act is thus superior to ICAN Act on the issue of tax practice. The Self-Assessment Regulations being in conflict with the CITN Act is null and void. The Plaintiffs cannot practice as tax agents without first being members of the 2nd Defendant.”
- In the Court of Appeal judgement of 2013 between ICAN v. CITN, it was held that the power to regulate and control the tax profession, to the exclusion of any other body, in Nigeria lies with CITN.
- It is, therefore, now firmly settled from all the relevant judgements at the Lagos High Court, Federal High Court and the Court of Appeal, which have all upheld the primacy of the CITN Charter, that no member of ICAN can practice taxation without first being a member of CITN.
- For the avoidance of doubt, no ICAN member, who is not registered with CITN, has been permitted by any law or court decision to practice taxation. The law has made it clear about the professional body that can regulate tax profession in Nigeria and CITN reserves the right to invoke the relevant provisions against any person that violates the provisions of its charter.
The backstory: The disagreement between ICAN and CITN dates back to 2015 following a misinterpretation of a Memorandum of Understanding (MoU) and Terms of Settlement (ToS) between the two organisations. Due to the disagreement, CITN took legal actions in a bid to basically make the MoU and ToS binding on ICAN members.
UPDATED: Court rules ICAN members do not need CITN license to file tax returns
The suit, which was filed some years ago by CITN, was basically struck out for lacking merit.
Justice S. A. Onigbanjo of the High Court of Lagos State has ruled that members of the Institute of Chartered Accountants of Nigeria (ICAN) do not need to be licensed by the Chartered Institute of Taxation of Nigeria (CITN) before they can file tax returns.
The ruling on July 2nd followed a suit filed by CITN trying to restrain ICAN members from filing tax returns for their clients unless they have a practicing CITN license.
A notice to ICAN members regarding this development, as seen by Nairametrics, noted that Justice Onigbanjo struck out the suit after describing it as “an abuse of court process and an embarrassment to the judiciary.”
The backstory: Nairametrics understands that the disagreement between ICAN and CITN stemmed from the misinterpretation of a 2015 Memorandum of Understanding (MoU) and Terms of Settlement (ToS) between the two organisations. Consequently, CITN had filed a suit before the High Court of Lagos State, seeking the following:
- A declaration that the Memorandum of Understanding and Terms of Service both dated February 12, 2015 between the CITN and ICAN are valid, subsisting, and binding on the CITN and ICAN.
- An injunction restraining ICAN whether by its agents, privies, assigns, or whosoever called, from repudiating, resiling from or acting in any manner or doing anything that is inconsistent with, contrary to or is a violation of the Memorandum of Understanding and the Terms of Settlement dated February 12, 2015, between the CITN and ICAN.
- Determine whether the Memorandum of Understanding and Terms of Settlement both dated February 12, 2015 between the CITN and ICAN are valid, subsisting, and binding on CITN and the ICAN.
However, last week’s ruling by Justice S. A. Onigbanjo which, by the way, was delivered virtually due to COVID-19, has made it impossible for the CITN to implement the terms of the 2015 MoU and ToS. The ruling also aligned with ICAN’s earlier objection to the MoU and ToS.
The status quo: In view of this development, ICAN has informed its members that they do not need to obtain any license from the CITN before they can file tax returns for their clients with the Federal Inland Revenue Service, FIRS.
ICAN members were also informed that an earlier ruling by the Federal High Court on the case does not affect the status quo. This is because “the earlier ruling by the Federal High Court in Suit No. FHC/L/CS/125/2019 did not make pronouncement on the memorandum and terms of settlement between ICAN and CITN.” More so, regulation 5 of the FIRS Act was not reflected in the earlier judgment of the Federal High Court.
China more willing to restructure Africa’s debt than private creditors
Agreements have been easier to reach with Chinese lenders than with private creditors.
A recent study by John Hopkins University reveals it may be easier for African Nations to raise debt and also get debt relief from China than private creditors.
The report of the study comes a day after China promised to cancel interests from loans to African nations and restructure debt to Africa. The study also revealed that China has restructured $15 billion of African debt and written off $3.4 billion in the past ten years.
After 1,000 Chinese loans, including restructured Mozambican and Republic of Congo debt, were analysed, the researchers concluded that “the agreements have been easier to reach with Chinese lenders than with private creditors”.
The Paris Club recently agreed to pause debt payment valued at $11 billion for the poorest 73 nations freeing up capital to tackle the coronavirus pandemic. However, not all eligible nations signed up citing fears of default ratings if debt obligations are not met.
The study discovers difficulties in renegotiating terms on International Bonds for African countries due to the disparate ownership structure making private creditors unwilling to grant complete debt relief, citing warnings on rating downgrades.
China accounts for about 20% of Africa’s external debt and lent over $150 billion to the continent between 2000-2018 the study reveals. Chinese President, Xi Jinping has urged global leaders to be more pragmatic with debt suspension for Africa.
The study says much of the terms of Chinese debt to Africa has not been transparent and the relief negotiations may follow the same path.