Business News
COVID-19: Buhari Approves Import Duty Waiver For Medical Supplies
By Tony Obiechina, Abuja
President Muhammadu Buhari has approved that import duty should be waived for medical equipment and supplies to strengthen health infrastructure in response to the COVID-19 pandemic in the country.
In a statement by the Special Adviser, Media and Communication, to the Finance Minister, Mr Yunusa Tanko Abdullahi, the waiver was the latest of the fiscal policy measures that have been introduced by the federal government to combat the economic implications of the COVID-19 pandemic.
According to the statement, the waiver was targeted at critical medical supplies exempted from payment of import duty and value-added tax (VAT).
Announcing government’s fiscal response to the pandemic, Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, had said that government would engage other corporate organizations to know what they wanted most.
“We do not want to go and say that we are reducing taxes for companies. Some of the companies, for example, the pharmaceutical industry, what they would want is to fast track processes to bring in materials to produce more drugs,” she said.
“We will be giving them import duty waivers, we will be giving them support to air freight their cargo, because supply chains are broken across the world. There is a need to fast track import of materials that are needed to produce drugs within the country, so we have to have those engagements to be more specific” she stated.
Recall that the measures to facilitate the importation of some COVID-19 essential medical supplies was, according to the Minister, in line with the indicative list recommended by the World Customs Organisation (WCO) in conjunction with the World Health Organisation (WHO).
The WCO/WHO recommended list had been reviewed by the Federal Ministry of Industry, Trade and Investment and the Ministry Finance.
On the items for which the country has capacity to produce, she said; “those items for which Nigeria has adequate local capacity to produce such as textile face masks, undenatured ethyl alcohol, hydrogen peroxide (medical and disinfectant), hand sanitizers and syringes, with or without needles have been removed from the list.”
According Ahmed “already most pharmaceutical drugs are currently exempted from import duty and VAT in line with the provisions of the ECOWAS Common External Tariff (CET) and the First Schedule to the Value-added Tax (VAT) Act, 2007 as they are considered as essential items”
These two global organisations had jointly prepared and circulated an indicative list of essential COVID-19 medical supplies and equipment. The list is meant to serve as a guide to governments and Customs Administrations globally, to facilitate the importation and clearance of medicines and medical equipment during the period of the pandemic.”
Ahmed, in a request to President Buhari for the approval to implement the fiscal policy measures, had stated: “The list is envisaged to assist humanitarian actors both in the public and private sectors in the delivery of imported medicines and medical equipment to tackle the coronavirus pandemic… To enable for expeditious clearance of the items on the list, some of them would have to be declared as national essential list of COVID-19 medical supplies….”.
According to the statement, Ahmed had requested that the items be prioritised and exempted from the payment of import duty and VAT, stressing that “apart from the decision that the critical medical supplies be exempted from payment of import duty and VAT for a period of six months in the first instance with effect from 1st May, 2020, it is also decided, among others, that the Nigeria Customs Service (NCS) should ensure that in line with Standard Operating Procedures for the clearance of humanitarian and relief materials, these items are given expedited release at all times”.
“The Minister strongly believes that this measure will greatly assist in the current interventions toward providing essential medical supplies, and that it will also enable health care institutions at the national and sub-national levels and private healthcare providers bridge the gap in healthcare infrastructure and supplies in the country”, the statement added.
Business News
Afreximbank Closes $282 million India-focused Club Deal
By Tony Obiechina, Abuja
The African Export-Import Bank (Afreximbank) has announced the successful completion of a first-of-its-kind India-focussed club deal for US$282.00 million.
Initiated for the exclusive participation of Indian lenders, and arranged by Bank of Africa UK PLC, the primary syndicated club deal saw participation from Indian lenders through their overseas branches and subsidiaries in the Dubai International Financial Centre in the United Arab Emirates, Singapore and Mauritius.
The facility, which was backed by six participating banks and financial institutions, including five that joined as first-time lenders to Afreximbank, helping the Bank achieve its objective of diversifying its funding sources, carries a three-year tenor.
At a commemorative event held in Dubai, U.A.E., to mark the conclusion of the deal, Haytham ElMaayergi, Executive Vice President at Afreximbank, said that the conclusion of the initiative represented a major milestone for the Bank as it sought to fulfil the key objectives of its funding programme.
Highlighting the importance of investing in, and for, Africa, Mr. ElMaayergi said: “this facility will help Afreximbank to continue to play a major role in the development of intra-African trade and trade between Africa and the rest of the world, particularly with India.
It is a testament to the rapid growth in Africa’s economic relationship with India and is evidence of Afreximbank’s growing ability to harness resources into Africa and to fund trade finance related investments that would have a positive impact on trade between Africa and India.”
Chandi Mwenebungu, Director and Group Treasurer of Afreximbank, reviewing the Bank’s vision for Africa, said that its funding objectives included achieving the diversification of its liability book by geography, investor type and tenor.
Also addressing guests at the event were Said Adren, CEO of Bank of Africa UK PLC, who thanked the lenders for their participation, and Zineb Tamtaoui, General Manager of Bank of Africa, Dubai Branch, who expressed appreciation for the opportunity to put together “a landmark deal that would be a stepping stone to many India-focused club deals going forward.”
Business News
Geregu Power Earns N50.4bn From Electricity Sales, Capacity Charges
By Tony Obiechina, Abuja
Geregu Power Plc has generated N50.4bn on electricity sales and capacity charges to Nigerians in the first quarter of 2024.
The power company which is the first listed power company of the Nigerian Exchange Ltd disclosed the performance in its Q1, 2024 financial statement.
The company grew its Q1 revenue by 225 per cent from N14.
2bn in 2023 to N50. 4bn in 2023.A breakdown reveals that Geregu Power sold energy worth N31bn and received N19bn as revenue from capacity charge.
Recall that the power company posted an annual revenue of N82.9bn in the full year of 2023 but it has covered half of the amount in Q1.
The revenue was above the company’s forecast for Q1 2024 when it projected its revenue to rise to N31.24bn.
Geregu Power recorded a profit before tax of N21.9bn up from the N5.3bn recorded in Q1 of last year, reflecting 307.8 per cent growth.
During the period underreview, the company saw its profit after tax rose by 307.3 per cent to N14.46bn from N3.54bn recorded in Q1 of last year. In the full year 2023, the company made N16.1bn net profit.
The net profit was above the company projection of N5.5bn.
Geregu Power took an income tax charge of N7.43bn, up from the N1.8bn in Q1 2023. The tax charges were higher than the N2.7bn projected for Q1 2024.
The company also spent N21.5bn on the cost of sales involving gas supply and transportation, up from the N6.6bn spent on gas supply and transportation in Q1 2023.
Business News
CBN Shakes Up Banking Sector: A Paradigm Shift Unveiled
By Ademola Oyetunji
In a surprising turn of events on Wednesday, the Central Bank of Nigeria (CBN) dissolved the boards of three prominent commercial banks – Keystone, Polaris, and Union Bank. This move, although unanticipated, transpired despite the Central Bank’s recent endorsement of these banks’ financial soundness.
Governor Olayemi Cardoso, at his inaugural address during the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner last year, had lauded Nigeria’s financial sector’s resilience in 2023.
Stress tests conducted on the banking industry indicated its strength under various economic scenarios. However, Cardoso highlighted the need for banks to reassess their responsible banking framework, a sentiment echoed by President Tinubu.President Tinubu’s evident discontent with the Godwin Emefiele-led CBN triggered a comprehensive review of the financial system. A special investigator, Jim Obazee, was appointed to conduct a forensic investigation into Emefiele’s tenure, with damning revelations emerging. Recent developments suggest the initiation of a full-blown financial system reform.
The CBN’s dissolution announcement and the subsequent appointment of new executives for the affected banks, including Yetunde Oni, Mannir U. Ringim, Hassan Imam, Chioma A. Mang, Lawal M. Omokayode, and Chris Onyeka Ofikulu, might mark the beginning of implementing the investigation’s recommendations – a significant cleanup of the financial sector.
Allegations surfaced during the investigation, suggesting non-cooperation from some bank executives and Emefiele’s questionable acquisitions through proxies and cronies. Cardoso may have secured presidential approval for the CBN’s decisive action.
The CBN cited various infractions by the banks, including regulatory non-compliance, corporate governance failures, and activities threatening financial stability. Despite the challenges, the CBN assured the public of depositors’ fund safety and its commitment to upholding a safe, sound, and robust financial system.
The Special Investigator’s report revealed documents pointing to Emefiele’s involvement in Titan Trust Bank and Union Banks’ acquisitions with ill-gotten wealth. The CBN’s swift replacement of the ousted chief executives received widespread commendation, especially from high-net-worth stakeholders aiming to avert a crisis of confidence within the affected banks.
Adewale Aderounmu, an industrialist, applauded the CBN for implementing effective policies under Olayemi Cardoso’s leadership, despite detractors’ actions against the Naira. Ayomide Deepak, an Abuja-based stockbroker, welcomed the action but emphasized the need for caution in handling revelations from the investigation to prevent further economic challenges.
As the CBN wields its regulatory hammer on these banks, the hope is that other bank executives and investors will learn valuable lessons for the sake of the economy. The CBN’s action is perceived as a strategic move aimed at revitalizing the economy and financial system, not a mere vendetta.
*Ademola Oyetunji writes from Ibadan.