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37% of Nigerian Businesses Cut Jobs over Cash Scarcity – Report

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About 36.96 percent of Nigerian businesses had to lay off staff or reduce working hours to weather the cash shortage caused by the naira redesign policy, according to a new report by SB Morgen (SBM) Intelligence.

In its report titled ‘Strapped: Impact of The Cash Scarcity on Individuals And Businesses’, the research organisation examined individuals and businesses across five of the country’s six geopolitical zones excluding the north-east, to see if there was any lasting damage from the naira redesign policy.

The organisation said the data in the report is only up-to-date as of April 6, 2023.

SBM Intelligence said its findings showed that transportation and feeding became more difficult due to the cash squeeze, as transportation workers had to use point of sale (PoS) machines to ease payment for their passengers.

The research organisation said ranging from egg producers stuck with their produce to rice traders who had to bring down their prices to make sales, most of the business owners interviewed were negatively affected by the cash shortage.

SBM Intelligence said the percentage of those who said their enterprise was significantly impacted totalled 76.09 percent, 17.39 percent said their businesses were somewhat affected while 6.52 percent said their ventures were not affected at all.

“Out of the 46 businesses interviewed, 36.96% had to lay off staff or reduce working hours to weather the cash shortage. About 41.30% did not have to make such adjustments,’ the report reads.

“However, when you remove those who said those issues did not apply to them, nearly half had to make staff cuts or reduce work hours. About 47.22% had to make staff or work-time changes, while 52.78% were resilient enough to stand the cash shortage without reducing staff strength or opening periods.”

SBM Intelligence said the Central Bank of Nigeria (CBN) should have pushed for a reduction in transaction failures and beefed up financial infrastructural integrity whilst taking the lead in engaging with regulators and private sector stakeholders to ramp up broadband penetration rather than force-feed Nigerians with a policy.

Speaking on the apex bank’s cashless policy, the firm advised that its targets should be paired with internet penetration and incentives should be private sector-led rather than forced through regulatory mandates.

“When transactions can be seamlessly done in rural and peri-urban areas, and mobile money operators can conveniently access enough cash to meet demand, rural residents will more readily take up digital channels,” the report further reads.

“Whether the consuming public continues to grow and maintain their bank deposits at levels seen pre-scarcity will represent the ultimate indication of how much institutional credibility the CBN retains.”

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Blue Economy Targets Top Spot in PEBEC – Oyetola

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From Anthony Nwachukwu, Lagos

Mindful of the sector’s critical role in economic diversification and sustainable development, the Ministry of Marine and Blue Economy aims to place Nigeria tops in the Presidential Enabling Business Environment Council (PEBEC) by achieving ease of doing business and fostering a conducive environment for trade and investment.

To this end, the Minister, Adegboyega Oyetola, said the ministry plans to elevate Nigeria’s maritime sector to global standards and has prioritised the implementation of the national single window and port community system to automate port processes, in order to enhance operational efficiency and attract investments.

Oyetola, who spoke at the BusinessDay Maritime Conference in Lagos Thursday, disclosed that the ministry has already reported significant progress in revenue generation, driven by innovative strategies to block revenue leakages and explore new sources within the marine and blue economy sector.

Others include ongoing efforts to upgrade infrastructure, such as the development of inland dry ports and modernisation projects at key ports across the country, while public-private partnerships (PPPs) in advancing port modernisation, dredging activities and deploying cutting-edge maritime technologies remain important.

He further announced plans for the development of additional deep-sea ports on a PPP basis to further bolster Nigeria’s maritime capabilities.

Acknowledging the significant contributions of participants in shaping the discourse in Nigeria’s marine and blue economy, Oyetola expressed hope that insights from the conference would drive positive transformations and propel Nigeria towards greater economic prosperity through the harnessing of its vast maritime resources.

He restated his commitment to developing a dynamic national policy framework for the sector by the end of the year, while urging all stakeholders to continue working together towards realising the sector’s full potential, ensuring sustainable growth and inclusive development across coastal communities.

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Shippers’ Council Partners World Bank, Ministry on Trade Facilitation Across States, Borders

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From Anthony Nwachukwu, Lagos

The Ministry of Trade and Investment, alongside the World Bank and the Nigeria Shippers’ Council (NSC) have identified simplified trade processes and procedures at the seaports, across states and regional borders as imperative for economic growth.

Speaking when the enhanced National Trade Facilitation Committee (NTFC) and representatives of the World Bank visited the NSC in Lagos Monday, the Minister of Trade and Investment, Dr.

Doris Udoka-Anite, said “the benefits of achieving harmonised, standardised and simplified trading processes and procedures are immense and cannot be overstated.

Udoka-Anite, who was represented by an Assistant Director, Office of the Minister, Dr.

Brenda Max-Nduagube, noted that “this is ever more important to small and medium-scale enterprises where the NTFC helps create a more business-friendly environment for SMEs venturing into global markets. This translates to increased competitiveness, growth potential and a more level play field.”

According to her, the World Bank’s steadfast support and collaboration “have been instrumental in advancing our national trade facilitation goals, strengthening our economy, and positioning Nigeria as a leading trade hub in the region. This aligns with the triple mandate of our ministry – to ensure the prosperity of industry, trade and investment in our country.”

Commending the Enhanced National Trade Facilitation Committee for tirelessly fostering collaboration and synergy across Ministries, Departments and Agencies (MDAs) and others, she explained that the World Bank was visiting to “fully understand the daily operations, inspection processes and trade bottlenecks, to identify policy options to make trade seamless for the Nigerian government.”

On their part, leader of the World Bank team, Aleksandar

Stojanov said that they “look at ways of supporting the government in improving competitiveness and domestic value addition, so that Nigeria can take full advantage of regional trade agreements such as AfCFTA (African Continental Free Trade Agreement), as well as the international agreements that they have.”

He explained that they were on a fact-finding mission that will guide their dialogue on trade, adding that “reducing dwell time, improving trade processes will be important. Today, the World Bank has state-level trade operations, which has an inter-state trade indicator, seamless movement of goods across states in Nigeria and export promotion at the state level.”

However, “there is one operation in the pipeline that will support trade facilitation, which has a linked indicator, that is on reducing inspections at the border and improving trade facilitation overall to the authorised economic operator system, which has been launched with the Nigeria Customs Service.”

On his part, the NSC Executive Secretary, Mr. Pius Akutah, described the council as a major stakeholder in trade facilitation in Nigeria, and West Africa at large, therefore the council is collaborating with many international government and trade facilitation groups.

 “We work with transport and cross-border infrastructures to reduce transport bottlenecks and facilitate trade, both in local and international markets,” Akuta said via electronic transmission,” Akutah said.

 “To consolidate this effort and that of the international agencies, the Nigerian Shippers’ Council has embarked on trade facilitation tools like the inland dry ports, and complaint centres across the country, in order to facilitate trade in the hinterlands and decongest the seaports, especially Apapa and Tin Can Island.”

He disclosed that while on its mandatory activities, the NSC discovered that many traders along the border corridors perform their activities informally, with many small scale businesses carrying out their trades very well.

Therefore, “we intend to do everything within our mandate to ensure that we formalise these activities. This has necessitated the council’s collaboration with the Nigeria Customs Service and other stakeholders to establish Border Information Centres at the borders.”

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FG, States, LGCs Share N1.143trn May, 2024 Revenue 

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By Tony Obiechina, Abuja 

A total sum of N1,143.210 billion May 2024 Federation Accounts Revenue has been shared to the Federal Government, States and Local Government Councils in the country. 

The revenue was shared at the June 2024 meeting of the Federation Accounts Allocation Committee (FAAC), chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

  

A communiqué issued by the Federation Accounts Allocation Committee (FAAC) revealed that the N1,143.

210 billion total distributable revenue comprised distributable statutory revenue of N 157.183 billion, distributable Value Added Tax (VAT) revenue of N463.
425 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.146 billion and Exchange Difference revenue of N507.456 billion.   

Total revenue of N2,324.792 billion was available in the month of May 2024.  Total deduction for cost of collection was N76.647 billion while total transfers, interventions and refunds was N1,104.935 billion.   

Gross statutory revenue of N1,223.894 billion was received for the month of May 2024. This was lower than the sum of N1,233.498 billion received in the month of April 2024 by N9.604 billion.  

The gross revenue of N497.665 billion was available from the Value Added Tax (VAT) in May 2024.  This was lower than the N500.920 billion available in the month of April 2024 by N3.255 billion.   

The communiqué confirmed that from the N1,143.210 billion total distributable revenue, the Federal Government received total sum of N365.813 billion, the State Governments received total sum of N388.419 billion and the Local Government Councils received total sum of N282.476 billion. 

A total sum of N106.502 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue. 

On the N157.183 billion distributable statutory revenue, the communiqué stated that the Federal Government received N61.010 billion, the State Governments received N30.945 billion and the Local Government Councils received N23.857 billion. The sum of N41.371 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue. 

The Federal Government received N69.514 billion, the State Governments received N231.713 billion and the Local Government Councils received N162.199 billion from the N463.425 billion distributable Value Added Tax (VAT) revenue.

A total sum of N2.272 billion was received by the Federal Government from the N15.146 billion Electronic Money Transfer Levy (EMTL).  The State Governments received N7.573 billion and the Local Government Councils received N5.301 billion.

From the N507.456 billion Exchange Difference revenue, the Federal Government received N233.017 billion, the State Governments received N118.189 billion and the Local Government Councils received N91.119 billion.  A total sum of N65.131 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue. 

According to the communiqué, in the month of May 2024, Companies Income Tax Oil (CIT) and Petroleum Profit Tax (PPT) increased significantly while Import and Excise Duties, Royalty Crude and Gas, Electronic Money Transfer Levy (EMTL), CET Levies and Value Added Tax (VAT) recorded considerable decreases.         

The balance in the ECA was $473,754.57

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