25th to 31th January 2016

January 28, 2016
MAN rejects CBN’s 11% interest rate Says 3-5% sustainable

In apparent reaction to the decision of the Central Bank of Nigeria (CBN) to keep the benchmark of interest rate at 11 percent, the Manufactur¬ers Association of Nigeria (MAN), warned that the rate is still high and not sustainable for the members of the Organ¬ised Private Sector (OPS). The President of MAN, Dr. Franks Jacob, at an an¬nual briefing in Lagos, noted that no local manufacturer can be able to survive with any loan above single digit interest rate in the face of the economic challenges in the country. “For us the only interest rate that can be sustainable is 3 to 5 percent, as anything higher than that cannot work for manufacturers”, he said. Jacob said the high rate of interest on loans from the banks is one of the rea¬sons MAN has been kicking against Nigeria opening up its border to European Union Economic Partnership Agree¬ment and others. According to him, lo¬cal manufacturers contend against several challenges from electricity, infrastructure and low technology, which are not burdens to the devel¬oped world. READ MORE

Value of Nigeria’s external trade falls to N4.1tr in Q3

The total value of Nigeria’s merchandise trade at the end of third quarter of 2015 was ₦N4.1 trillion, representing a N7.8 per drop from the ₦N4.4 trillion recorded in the preceding quarter. This development arose from a decrease of ₦320.6 billion or N12.1 per cent, in the value of exports, combined with a marginal decline of ₦N17.4 billion or one per cent, in the value of imports against the levels recorded in the preceding quarter. Also, the value of the nation’s merchandise exports was ₦N2.4 trillion in the third quarter of 2015, representing a decrease of ₦N320.6 billion or N12.1 per cent, over the value ₦N2.6 trillion, recorded in the preceding quarter. This decline was attributed to a fall in crude oil exports by ₦N372.8 billion or 18.8 per cent over the preceding quarter. According National Bureau of Statistics (NBS) in its latest foreign trade statistics, released recently, the structure of Nigeria’s exports remains dominated by crude oil, which contributed ₦N1.5 trillion or 69.1 per cent to the value of total domestic exports in 2015. READ MORE

January 29, 2016
FG rules out tax increase

The Federal Government has assured Nigerians and other stakeholders that despite the dwindling oil price, it will not increase taxes. This assurance came at the end of the National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo. Minister of Budget and National Planning, Senator Udo Udoma disclosed this to State House correspondents at the Presidential Villa, Abuja. Udoma said there was no plan to increase either the Value Added Tax (VAT) or Corporate Tax. He, however, said government’s desire was to see an increase in taxes collection rate which currently stands at about 20 per cent.. We expect at least 20 per cent increase in tax collection rate which is conservative in terms of our revenue projection.”Udoma added that government will work closely with the National Assembly to explore other innovative, financing methods for the N6.08 trillion 2016 budget. READ MORE

FG Revenues Rose by 5.6% In December

Federal government revenues rose by 5.6 per cent in December to N315.019 billion, from N297.450 billion the previous month despite a drop in oil prices and production hiccups, the finance ministry said on Tuesday .Mahmoud Isah Dutse, permanent secretary at the ministry of finance, said shut-ins, shut-down of production for repairs and production shortfall due to technical hitches at different terminals throughout the month had a negative impact on crude oil and gas revenue. He said there was a revenue loss of $143.96 million because of a reduction in export sales and a drop in the average price of crude to $43.40 in November from $49.58 in October. READ MORE

JANUARY 31, 2016
Vitafoam, Vono merger to boost stakeholders’ value

Vitafoam Nigeria Plc has disclosed that it proposed merger with Vono Products Plc will result to economies of scale and in turn benefit stakeholders in the long run. Vitafoam Nigeria Plc’s Group Managing Director, Mr. Taiwo Adeniyi, while briefing newsmen in Lagos expressed optimism that the merger of Vonoproducts Nigeria Plc with Vitafoam Nigeria Plc would translate into higher earnings and enhanced shareholder value. Adeniyi who reviewed the current operating environment appealed to the federal government to create enabling environment for manufacturers in view of the effects of high exchange rate of the Naira on importation of raw materials. He explained that the shareholders of both companies overwhelmingly endorsed the merger at the recent Extra Ordinary General Meeting, EGM .According to him, the shareholders appreciated the potential benefits of the merger such as economies of scale, cost savings and improved operational and administrative efficiencies among others. READ MORE

N66.1bn target for stamp duties: Cost of finance services will skyrocket —Economist

The Central Bank of Nigeria (CBN), after its Monetary Policy Committee (MPC) meeting declared that hard time awaits Nigeria’s economy, saying the Federal Government targets N66.1bilion revenue from stamp duties. Olu Ajakaiye, a professor of Economics, past President, Nigerian Economic Society and the Chairman, African Centre for Shared Development Capacity Building, speaks on CBN’s assessment of the economy Government targets N66.1billion from stamp duties on deposits of N1.000 and above. This type of policy can affect the cost of finance services. For instance, getting loan now requires high interest rate, so with N50 stamp duties on deposits, the interest rate may increase, because banks will still pay Valued Added Tax (VAT) on what they collect. So, imposing stamp duties will increase the cost of finance services on what producers pay. The positive side is increase in revenue generation for government to reduce borrowing from external sources. But on the whole, it is an empirical question. READ MORE