This May, post-COVID-19 lockdown, Nigerians need to send their money on the right errands, if they don’t want to be caught napping during the anticipated recession.
When listing out assets that should make up the ideal portfolio in May 2020, founder of Nairametrics, Ugochukwu “Ugodre” Obi-Chukwu, explained that investors should consider choice stocks in the Nigerian and foreign stock exchanges, as well as investments in money market instruments where some decent profits can be made.
Ugodre said this during the maiden edition of the Nairametrics Monthly Investment Guide Webinar.
According to him, this will also be the time to look into Agri-Tech investments, using crowdsourcing platforms, after which you can sit back and watch your funds grow over a time span of 5 months to a year.
According to him, it is also important to invest in foreign currencies and crypto-currencies to balance one’s portfolios.
He noted that foreign direct investments have reduced over the last couple of years due to reduced trust in Nigeria’s economic policies, and the desire of foreign investors to cash out their funds with ease. This also explains why portfolio investments grew by 38% in 2019.
He said, “Foreign investors love portfolio investments because when they put their money in, they can easily take it out as well.”
Finding the right stocks
On the stock market, he noted that quite some stocks improved in the month of April and could improve in the coming months. He listed 20 suggested shares, including six stocks which he described as COVID-19 proof.
Dangote Sugar Refinery, May & Baker Nigeria Plc, GSK, Neimeth International Pharm, Nestle Nigeria, and Cadbury Nigeria Plc are fast-moving consumer goods companies that are expected to be resistant to pressure from the pandemic.
He advised investors to track stocks that are liquid, have good financials and good corporate governance, in order to limit risks borne by investors. Valuation of the shares, he said, could be done by comparing stock value and earnings per share.
Working around cryptocurrency volatility
While making a presentation on “Why Bitcoin should be in your portfolio,” Yele Badamosi, CEO of Bundle stated that foremost cryptocurrency, Bitcoin, had maintained a steady appreciation over the last decade giving investors high yields.
Although the market is highly speculative and unregulated, its high returns and high risk indicate that investors with high-risk appetites could find the market more attractive.
To avoid being on the wrong side, he advised users to consider time-based rebalancing, or tolerance rebalancing to reduce risks and rebalance one’s portfolio.
“There are reputable people in the space, but it is important to do your research, start small, and buy regularly. Be wary of get-rich-schemes and unrealistic guaranteed returns,” he advised.
With applications like Bundle Africa on Google Play Store, buying cryptocurrencies is as easy as selecting the buy button and having it saved in your bundle wallet.
What to expect in Q2 2020
According to Wale, an economist, who also spoke at the webinar, the demand for crude oil will remain low as several countries and businesses are still in lockdown, even though OPEC has cut down production.
Interest rates may remain low, though, despite this, Nigerian business entrepreneurs cannot expect single-digit interest rates.
“Foreign reserve and government reserves will remain under pressure in the coming months. The World Bank says that this is the worst year so far, going back to the great depression and this is what I think as well. This is probably going to be the worst economic crisis we have seen,” Wale said.
He added that with the exception of industries in the Healthcare sector, telco companies, digital technology companies, and food producers, other sectors could very well expect a big hit.
FG apologizes, says Self-Certification directive is not for everyone
The Federal Government has made clarifications concerning earlier announced Self-Certification Forms.
The Nigerian government has backtracked on its earlier issued guidelines on the new banking Self-Certification Forms, saying the notice does not apply to everyone.
On Thursday, the Nigerian government ordered all persons holding accounts across financial institutions and insurance firms, to complete and submit self-certification forms to their respective financial institutions.
Explore the Nairametrics Research Website for Economic and Financial Data
It stated, “This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions. Persons holding accounts in different financial institutions are required to complete & submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.”
However, on Friday morning, after receiving expected backlash on social media, FG attempted a clarification stating, “We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons,” and that, “the FIRS will clarify Nigerians on the objectives of the directive.”
We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the @firsNigeria Notice does not apply to everybody. FIRS will issue appropriate clarification shortly pic.twitter.com/KBiPh0lCwJ
— Government of Nigeria (@NigeriaGov) September 18, 2020
The FIRS earlier today made a statement, that the guidelines are only for non-residents, and people paying tax in more than one country.
and other persons who have residence for tax purposes in more than one jurisdiction or Country. Financial Institutions are expected to administer the Self Certification form on such account holders when information at its disposal indicates that the Account holder is a person
— FIRS Nigeria (@firsNigeria) September 18, 2020
“The Self Certification Form is basically to be administered on Reportable persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS. Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or Country.”
“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.” the statement read.
This is a copy of the Self-Certification form govt. wants targeted account holders to fill
The FIRS posted a copy of the self-certification form on its website.
The Nigerian government on Thursday tweeted an order to all persons holding accounts across financial institutions and insurance firms to complete and submit Self-certification forms.
This was announced by the Federal Government in a social media statement on Thursday. The FG warned that failure to comply may include a monetary penalty or inability to operate the account.
The Government also urged Nigerians to comply with the requirements and execute all forms needs, if not sanctions may be introduced in the forms of monetary penalty or inability to operate the account.
The government however deleted the tweet on Friday, explaining that it does not apply to everybody, contrary to what it had earlier tweeted. The FIRS claims those affected are non-residents.
Nairametrics has seen a copy of the “Self-Certification Forms” detailing the information that account holders are meant to share. See below;
NB: This article has been updated to reflect new information regarding who the accounts holders (reportable persons) are.
FIRS generates N490 billion tax revenue in July, collects 89% from non-oil sector
The agency has announced a significantly huge amount it collected as tax for the month of July.
The Federal Inland Revenue Service (FIRS) has announced that it generated a total sum of N490 billion in tax receipts in the month of July.
While making the disclosure in a statement on Thursday, September 17, 2020, the revenue agency disclosed that N438 billion out of that amount was generated from non-oil receipts, which represents 89% of the total figure, while N52 billion is from oil receipts, which represents 11% of the total collection.
Explore the Nairametrics Research Website for Economic and Financial Data
The FIRS stated that the significant drop in oil revenue could be attributable to the global shock caused by the coronavirus pandemic which led to a crash in crude oil prices and huge output cuts by oil-producing countries.
The statement also quoted the Executive Chairman of FIRS, Muhammad Nami, as attributing the increase in the non-oil receipt to the various reform measures that have been introduced by the board and management of the service, as well as the dedication of the staff. He said that it was gratifying to note that their collective effort as stakeholders was paying off.
The FIRS boss revealed that the FIRS continued to record a significant increase in tax revenue from non-oil sources, despite the national and global economic crises caused by COVID-19. He said that non-oil tax receipts had consistently contributed 75-90% of the total tax receipt in recent months.
Non-oil tax receipts have consistently contributed 75-90 per cent of total tax revenue in recent months. Out of N490 billion collected by the Service in July, N52 billion, representing 11% came from Oil sources while N438billion, representing 89% came from Non-oil receipts.
— FIRS Nigeria (@firsNigeria) September 17, 2020