70% windfall tax, airlines’ navigation service fee… business stories to track this week

Here are the seven top business stories you need to track this week — July 29 to August 2.

CBN RAISES MPR TO 26.75%

The monetary policy committee of the Central Bank of Nigeria (CBN), on July 23, raised the monetary policy rate (MPR), which benchmarks interest rates, to 26.75 percent — from 26.25 percent.

Olayemi Cardoso, governor of the apex bank, announced the rate adjustment on July 23 at the end of the committee’s 296th meeting in Abuja.

Cardoso said the committee members voted to hike the rate by 50 basis points to 26.75 percent and adjust the asymmetric corridor to +500 and -100 basis points around the MPR.

The committee also retained the cash reserve ratio (CRR) at 45 percent, and the liquidity ratio at 30 percent.

N’ASSEMBLY INCREASES WINDFALL TAX TO 70% IN AMENDED FINANCE ACT

The national assembly has increased the windfall tax on banks’ foreign exchange (FX) gains to 70 percent — from the proposed 50 percent — in the amended Finance Act of 2024.

A windfall tax is a higher tax imposed by the government on sectors or businesses that have benefitted from favourable market conditions.

Both chambers of the national assembly passed the amended bill on July 23.

According to the amended Act, passed by the green chamber, “a levy of 70 percent on the realised profits from all FX transactions of banks within the 2023 to 2025 financial years would be levied and paid to the benefit of the federal government”.

‘THERE ARE IMPEDIMENTS TO DIRECT FAAC PAYMENTS TO LGAS’

Wale Edun, the minister of finance, says there are “practical impediments” to the implementation of direct payment of allocation to local government areas (LGAs) from the federation account.

Edun spoke on July 25 at a press briefing in Abuja.

Edun said the federal government is yet to commence the implementation of the monthly allocations to local governments due to “practical impediments”.

The minister also said the process is still in its early stages.

NAMA HIKES AIRLINE NAVIGATION SERVICE CHARGES BY 800%

The Nigerian Airspace Management Agency (NAMA) has announced plans to increase the unit rate and minimum charge for en-route air navigation services from N2,000 to N18,000.

The agency also said the unit rate and minimum charge for terminal navigation charge (TCN domestic) would be raised from N6,000 to N54,000 per flight.

Umar Farouk, managing director (MD) of NAMA, on July 26, said the agency also plans to increase the extension of service hours to airlines from N50,000 to N450,000, representing an 800 percent increase per extension to enable the agency to recover the cost of diesel and other logistics during the extension period.

NIGERIA’S CRUDE OIL PRODUCTION NOW 1.6M BPD

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says the country’s average daily production stood at 1.6 million barrels per day (mbpd) as at July 23.

Gbenga Komolafe, chief executive officer (CEO) of NUPRC, spoke on July 26 during the house of representatives special committee’s two-day public and investigative hearing on oil theft and losses.

On July 10, the Organisation of Petroleum Exporting Countries (OPEC) said Nigeria’s average daily crude oil production rose to 1.27 million barrels per day (bpd) in June.

According to the intergovernmental body, the current output figure represents a 1.57 percent rise from the 1.25 million bpd recorded in May.

CAC TO DELIST 100,000 COMPANIES DORMANT FOR 10 YEARS 

The Corporate Affairs Commission (CAC) says it will delete names of companies that have not filed their annual reports in 10 years from its register.

In a statement on Wednesday, the CAC gave the companies, which are over 100,000, 90 days to file their reports.

The commission warned that it is illegal to carry on business with the name of a company that has been delisted from the register as such an organisation is deemed to be dissolved.

REPS ASK NERC TO REVERT TO OLD ELECTRICITY TARIFF FOR BAND A

The house of representatives has again directed the Nigerian Electricity Regulatory Commission (NERC) to revert to the old electricity tariff for Band A.

The resolution was passed on Tuesday following the adoption of recommendations from the house committee on power, presented by Victor Nwokolo, the committee’s chairman.

The report was adopted by the committee of the whole, chaired by Benjamin Kalu, deputy speaker.

Nwokolo said the NERC should revert to the previous tariff as earlier contained in the motion of the house when it was considered.