OPEC+ output cut, N22.7trn CBN loan… 7 business stories to track this week

Here are the seven top business news you need to track this week — May 8 to May 12.

NATIONAL ASSEMBLY’S APPROVAL OF N22.7 TRILLION WAYS AND MEANS LOAN

The senate approved the sum of N22.7 trillion ways and means loan last Wednesday.

The fund has already been spent by the executive arm of government without the initial approval of the national assembly.

According to the senate, the beneficiaries of the funds are the office of the accountant-general of the federation, ministry of foreign affairs (ECOWAS national unit), Nigeria Bulk Electricity Trading, Azura Power West Africa, Niger Delta Power Holding Company, and Accugas Limited.

The N22.7 trillion is money borrowed by federal government from the Central Bank of Nigeria (CBN) through the “ways and means advances”.

President Muhammadu Buhari had asked the national assembly to approve the securitisation of the loan. If this request is granted, the N22.7 trillion will be included in Nigeria’s public debt stock which currently stands at N46 trillion.

At the moment, only the senate has given approval to Buhari’s request.

Stakeholders are expecting the house of representatives to sit on the matter; as further approval from the house would mark the implementation of the securitisation of the CBN loan — a situation that would further increase the nation’s debt burden.

SOLUDO, EL-RUFAI TO SPEAK ON NIGERIA’S POST-OIL FUTURE MAY 9

Charles Soludo and Nasir el-Rufai, governors of Anambra and Kaduna states, will speak at a policy deliberation on pathways for creating a robust and resilient economic future for Nigeria on Tuesday, May 9, 2023.

The event, themed, ‘How Nigeria Can Build a Post-Oil Economic Future’, is jointly organised by the Africa programme of the Carnegie Endowment for International Peace, and Agora Policy, an Abuja-based think tank.

The governors will serve as panelists in a policy conversation.

Other panelists at the event include Aigboje Aig-Imoukhuede, former chief executive officer of Access Bank; Shubham Chaudhuri, World Bank’s country director for Nigeria; and Zainab Usman, director of the Carnegie Africa Programme.

OPEC+ COUNTRIES TO CONSIDER OIL CUT

Last month, the Kingdom of Saudi Arabia and other oil-producing countries announced plans to cut production by 1.15 million barrels per day (bpd) from May till the end of the year.

The decision may significantly affect oil prices globally.

TheCable had reported that global oil prices recently fell to $73 a barrel for the first time since December 2021.

FG INCREASES TAX  RATE FOR BEER

The federal government recently increased the excise duty rate on beer and stout by 87.50 percent to N75 per litre in 2023, from N40 per litre in 2022.

This decision may see Nigerians paying more for the product as price increases become imminent.

The federal government also introduced an ad valorem rate of 20 percent on the products.

Ad valorem rates are charged based on the estimated value of the goods being taxed, rather than a fixed rate.

The essential characteristic of an ad valorem tax, which is charged annually, is that it is proportional to the value of the underlying asset.

The tax increases are contained in the recently unveiled fiscal policy measures (FPM) outlining the rates of excise duties for the current year.

PANTAMI INSISTS TELECOM SECTOR EXEMPTED FROM 5% TAX

The new FPMs — approved by President Muhammadu Buhari — include supplementary protection measures (SPM), revised excise duty rates, and green taxes.

The policy measures also impose a 5 percent excise duty on mobile telephone services (GSM), fixed telephone, and internet services — postpaid and prepaid.

However, last week, Isa Pantami, minister of communications and digital economy, kicked against it, saying the exemption of the telecommunications sector from the proposed 5 percent excise duty still stands.

Pantami said the president’s initial approval on tax exemption subsits.

He asked telecom operators to remain calm, adding that reports of implementation should be regarded.

FG SIGNS $99 MILLION PROGRAMME TO IMPROVE AGRICULTURAL SECTOR

The federal government and the Food and Agriculture Organization of the United Nations (FAO) have signed a five-year country programming framework (CPF) to improve the country’s agricultural sector.

The CPF is an initiative whose funding is expected to be drawn from federal, state, local governments, and international donors.

It outlines FAO’s prioritised support to the government of Nigeria for the creation of an enabling environment for enhanced agriculture productivity and requires $99.5 million for full implementation.

FG APPROVES BLOCKCHAIN TECHNOLOGY POLICY TO IMPROVE DATA INTEGRITY

The federal executive council (FEC) has approved the national blockchain policy to allow for the use of blockchain-related technology.

Pantami had said the approval was a significant move and a step towards the country’s digital transformation.

The minister said the policy would institutionalise blockchain technology in Nigeria and ensure its adoption in various sectors such as banking, security, education, and commerce.

He also said blockchain technology would help to ensure data integrity and could add up to $1.76 trillion to the global gross domestic product (GDP) by 2030.