Economy & Politics
FG to facilitate tax incentives for SMEs
FG has disclosed its plans to prioritise MSMEs in various industries by providing tax incentives for them.
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.
Fashion Designer In Studio
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.
(READ MORE: Finance act: VP outlines how FG plans to capture multinational firms in tax net)
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.
Coronavirus
CBN announces new policy measures, reduces interest rates for financial institutions
CBN will be reducing interest rates on its facilities through participating financial institutions from 9% to 5% per annum for a year.
As part of its monetary and financial policy measures to further mitigate the impact of the coronavirus pandemic on households, and businesses, the Central Bank of Nigeria (CBN), has approved regulatory forbearance for the restructuring of credit facilities in the Other Financial Institution (OFI) sub-sector.
This was disclosed in a circular signed by the CBN’s Director for Financial Policy and Regulatory Department, Kevin Amugo, on Wednesday, May 27, 2020.
In the circular, stated that Amugo the apex bank will be reducing interest rates on its facilities through participating financial institutions from 9% to 5% per annum for a year with effect from March 1, 2020.
According to the circular, CBN has approved regulatory forbearance for the restructuring of credit facilities in the OFI sub-sector as follows:
‘’CBN Intervention facilities availed through participating OFIs are granted a further one-year moratorium on all principal repayments, effective March 1, 2020.
‘’Interest rates on the CBN intervention facilities through participating OFIs hereby reduced from 9% to 5% per annum for 1-year effective March 1, 2020.
‘’OFIs are granted leave to consider temporary and time-limited restructuring of the tenor and loan terms for households and businesses affected by COVID-19, subject to the recently issued guidelines for restructuring affected credit facilities in the OFIs sub-sector.”
This new policy measure by the apex bank is in continuation of its intervention in the nation’s economy so as to help manage the crisis caused by the coronavirus pandemic and reduce its effects on household and businesses.
This is coming a day before the Monetary Policy Committee (MPC) meeting for the month of May which has been slated for tomorrow Thursday, May 27, 2020.
Meanwhile, the CBN said that it shall continue to monitor developments and implement appropriate measures to safeguard financial stability and support stakeholders impacted by the COVID-19 pandemic.
Economy & Politics
President Buhari directs Ministries of Power, Finance, BPE to seal Siemens deal
Presidency has approved the release of funding for the first part of Phase 1 of the PPI, to kick-off the pre-engineering and concession financing workstreams.
President Muhammadu Buhari has directed the Ministries of Power, Finance, and the Bureau of Public Enterprise (BPE) to conclude the nation’s engagement with Siemens AG over regular power supply.
The directive, which was issued via the Presidency’s Twitter handle on Wednesday, was to start the pre-engineering & concessionary financing aspects of the Presidential Power Initiative (PPI).
PPI is a power infrastructure upgrade and modernization Programme agreed to by the Federal Government and Siemens AG of Germany, with the support of the German Government. The ultimate goal of the initiative, according to the government, is to modernize and increase the Nigerian electricity grid capacity from its current capacity of about 5 GW to 25 GW, over three phases.
How it works: Under the PPI, Nigeria on behalf of the other shareholders in the Electricity Distribution Companies (DisCos), will invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, and transmission lines among others.
The President explained that all DisCos have, directly and through the BPE, been diligently carried along over the last 15 months to understand in detail the challenges in the electricity systems.
Funding: The funding for the PPI will be secured under concessionary terms (up to 3-year moratorium and 12-year repayment at concessionary interest rates) through the German Euler Hermes cover, which Nigeria will on-lend as a convertible loan to the other shareholders in the DisCos.
According to the statement, President Buhari has approved the release of funding for the first part of Phase 1 of the PPI, to kick-off the pre-engineering and concession financing workstreams.
The ultimate goal of the #NigeriaPPI is to modernize and increase the Nigerian electricity grid capacity from about 5 GW currently to 25 GW, over three phases.
— Presidency Nigeria (@NGRPresident) May 27, 2020
“To ensure fairness and transparency of the intervention, the President has also directed that the nation engage the International Finance Corporation (‘IFC’) to assist in developing the commercial structure of the intervention…
“The President has also directed that to ensure value for money and preserve the integrity & transparency of the procurement process under the Govt-to-Govt framework, Siemens AG shall be solely responsible for nominating its EPC partners to perform all onshore works; NO middlemen.
“Our goal is simply to deliver electricity to Nigerian businesses and homes… Our intention is to ensure that our cooperation is structured under a Govt-to-Govt framework. No middlemen will be involved, so that we can achieve value for money for Nigerians,” President Buhari added.
The PPI journey started on August 31, 2018, when Chancellor Angela Merkel visited Nigeria and met with President Buhari. Then the Chancellor brought along with her a business delegation that included the Global CEO of Siemens.
Nigeria and Germany agreed to explore cooperation in a number of areas, including Power.
“Our goal is simply to deliver electricity to Nigerian businesses and homes… Our intention is to ensure that our cooperation is structured under a Govt-to-Govt framework. No middlemen will be involved, so that we can achieve value for money for Nigerians.” — President @MBuhari
— Presidency Nigeria (@NGRPresident) May 27, 2020
PPI was designed to deliver improved power supply nationwide, with attendant results in job creation, investor confidence, cost and ease of doing business and economic growth. The partnership is also expected to guarantee training & capacity building for thousands of young Nigerians (non-graduates, students & graduates).
Other goals include the creation of economic opportunities for Nigerian engineering companies that will serve as local vendors for the provision of manpower and equipment. Overall, the partnership will guarantee inflow of additional investment into the power sector.
Economy & Politics
Lagos Auditor-General calls for amendment of financial management law
The report submitted for auditing showed an improvement on previous years finances for the state.
The Lagos State Auditor-General, Mrs. Helen Deile, has presented the Audited Financial Statements for 2019 to the State Permanent Secretary and Accountant-General, Dr. Abiodun Muritala.
While making the presentation on Tuesday, Deile noted that the report submitted for audit did not only show an improvement on previous years finances for the state, but conformed with basic International Accounting Principles and recommendations by International Public Sector Accounting Standards (IPSAS).
The Lagos State Auditor-General, Mrs. Helen Deile, has presented the Year 2019 Audited Financial Statements to the State Accountant-General, Dr. Abiodun Muritala, describing it as an improvement on the reports submitted in previous years#LASG
Read More.. https://t.co/sX6pSxzxWZ pic.twitter.com/HYHDnUWoL8
— The Lagos State Govt (@followlasg) May 26, 2020
She noted that the statement, “represents the overall performance of the entire State” for 2019, and detailed the Financial Performance, Position, Cash flows as well as comparison of budget and the actual amount for the year.
Review of the state Public Finance Management Law
Deile explained a need to review certain provisions of the Lagos state Public Finance Management Law as regards the timeline of submission of Financial Statements to the State Auditor-General by Ministries, Departments and Agencies (MDAs), which she said coincides with that of the State Treasury Office.
(READ MORE: Lagos to shut down Marine Beach bridge for emergency repairs)
This, she said, results in a tight timeline for the auditing of the financial statements by the Auditor-General.
She suggested that both the office of the Accountant General collaborate with the office of the Auditor-General to propose a review to the State House of Assembly for consideration and approval.
The Permanent Secretary/Accountant-General, Dr. Abiodun Muritala in his response, noted that his office would run with the suggestions of the Auditor-general.
Muritala observed that the improvements recorded were a result of strict adherence to laid down rules and procedures, and promised that the State treasury office would not rest on its oars.
