In this explosive episode of Drinks and Mics, it was a full house as Ugodre, Arnold, Tunji, and Otunba Dele sat with fan favourite Samson Esemuede, the Chief Investment Officer at Zrosk, to discuss the latest changes in Nigeria’s economy. They covered topics like the new PenCom investment rules, the proposed 25% capital gains tax, and what these updates could mean for the future of the Naira.
The crew started off by observing a massive contraction in import demand, suggesting an opportunity for economic revitalization. They also pointed out that the recent devaluation of the Naira was not handled well, but believe that a weaker currency can help make Nigerian exports more competitive
The crew didn’t hold back their surprise and concern regarding the capital gains tax, which mandates a 25% to 30% tax on profits from the sale of Nigerian equities exceeding a certain threshold, particularly for corporate entities. They highlighted that this move could turn both local and foreign investors away from the Nigerian equity market. Moreover, they argued that the high tax rate, especially compared to markets like Ghana and Kenya, and the absence of protections for existing investments, could hurt the market’s recovery.
The speakers also questioned why such a high capital requirement is needed by PenCom, since PFAs work under a defined contribution system that mainly serves as administrators or advisors.
In the end, the group agrees that economic progress should be measured by indicators like GDP per capita based on purchasing power, which will reflect the real standard of living for the average Nigerian, rather than just looking at exchange rates.
Grab a drink and listen to the latest episode of Drinks and Mics to know the policies shaking the markets and their impact on businesses, investors, and everyday Nigerians.
