While the deposits hitting the current accounts of bank customers are being debited for stamp duty, the Revenue Mobilisation Allocation and Fiscal Commission has placed an embargo on the fund as a result of a court case, EVEREST AMAEFULE writes
For the three tiers of government looking for ways to shore their revenue base, the fund accruing from the recently reenergised stamp duty is still far from their reach.
This is because the Revenue Mobilisation Allocation and Fiscal Commission has placed an embargo on the fund lodged in a Single Treasury Account with the Central Bank of Nigeria known as the Stamp Duties Account.
Going by the projection of the Nigerian Postal Services and the CBN, the account may have attracted about N833bn in the first four months of the year.
The Federal Government had projected that the deduction of N50 on every banking deposit into a current account with a value of N1,000 and above would give the nation as much as N2.5tn per annum. This translates to N206.33bn a month and N833.33bn for the first four months of the year.
Although the implementation started in January through the issuance of a memo by the CBN, sources at the RMAFC said the revenue agency had placed an embargo on funds accruing from the duty.
This is because of a court case that was instituted against the CBN and 23 banks by one of the companies allegedly appointed by NIPOST to act as its agent for the collection of the stamp duty for transactions in the banks and other financial institutions.
The company, Kasmal International Services Limited, owned by Senator Buruji Kashamu, had gone to court to compel the banks to remit about N6tn to NIPOST for the stamp duties they are supposed to have collected between 2004 and 2013.
The banks had allegedly failed to deduct stamp duties on electronic transactions because the Stamp Duty Act of 2004 had not made any provision for the deduction of stamp duty on electronic transactions but on transactions where stamps are supposed to be affixed.
However, Kasmal International Services Limited contends that the banks are supposed to collect the duty on behalf of NIPOST. The company also claims that it is entitled to 20 per cent of the fund in accordance with the agency agreement it allegedly signed with the postal agency.
It is on the strength of the subsisting court case that the RMAFC has restricted access to the stamp duty account, which is supposed to be swept into the Federation Account for sharing among the three tiers of government.
This development, investigation showed, would not only affect the fortunes of the three tiers of government, which are currently starved of funds to carry on with basic functions of governance, but also the operations of NIPOST, which has been expecting relief with the implementation of the duty.
One of the things that may be affected at NIPOST is the new salary structure, which has since been submitted to the government. The government’s nod on this may have to linger. Several proposed renewal programmes of the postal system may also stay in the pipeline.
The Special Assistant to the Minister of Communications on Media, Mr. Victor Oluwadamilare, declined to comment on the development. Similarly, the Public Relations Manager of NIPOST, Mr. Taiye Olaniyi, declined to speak on the subject.
Attempts to speak with Acting Postmaster General of Federation, Mr. Richard Balami, on the restriction of access to the fund proved abortive. A text message sent to his mobile phone had yet to be replied as of press time.
It is not only access to the stamp duty account that has been stalled by the court case instituted by Kasmal. In April, the Senate called for a public hearing into the controversy surrounding the sour relationship between NIPOST and the firm. The upper legislative chamber found out that it could not do much because of the court case.
The work of the technical committee set up to clear the grey areas on the implementation of the stamp duty has also been stalled as a result of the court case. Part of the work of the committee is to determine what percentage of the duty should go to NIPOST as the cost of collection.
Membership of the committee chaired by RMAFC is drawn from the CBN, NIPOST and Office of the Accountant-General of the Federation.
The committee is also expected to examine some transactions that have been exempted from stamp duty in order to ensure that they don’t become an albatross to the implementation of the policy. It is also expected to monitor the accruals into the stamp duty account.
Since the CBN took the decision to coerce banks to start deducting stamp duty in January this year, the duty has been enmeshed in one controversy or the other. There was the resistance of bank customers who said it was unjust to coerce them to pay dated duty that they get no benefit whatsoever from.
There has also been controversy over the role of the different government agencies and agents in the collection of the stamp duty as well as what accrues to who. These issues have not been resolved.
The appointment of agents for the collection of the stamp duty has also not gone without its controversy. Apart from the ongoing dispute on the status of Kasmal International Services Limited in relations to the stamp duty, the appointment of agents for the collection of stamp duty in other sectors of the economy has also attracted negative publicity.
In March, the commencement of the process for the appointment of 20 new agents caused a spat between the Minister of Communications, Mr. Adebayo Shittu, and the former Acting Postmaster General of the Federation, Mr. Enoch Ogun.
While Shittu said the process for the appointment of the agents should be suspended until the issues surrounding Kasmal was sorted out, Ogun said he received no such directive and also claimed that the appointment of agents was a routine duty handled by a standing committee charged with the responsibility.
The controversy claimed the job of Ogun, who was shown the way out of the postal system even though he had been asked to head the organisation until a substantive PMG was appointed.
As the controversy surrounding the attempt by the government to shore up its revenue base through the interpretation of the Stamp Duty Act of 2004 deepens, one thing that has remained constant since January is the alert informing bank customers of the deduction of N50 on deposits from their accounts. What becomes of the monies will be determined in the days ahead.
The Lagos State Government has issued retirement benefit bond certificates for a total sum of N1.08bn to 260 retirees.
A statement said the beneficiaries were from local governments, the State Universal Basic Education Board, Teachers Establishment and Pension Office and parastatals of government, under the Contributory Pension Scheme for the month of April.
According to the statement obtained from the Lagos State Pension Commission, the fact that this administration has been able to maintain the trend of paying terminal entitlements of retired employees monthly since it started in August, 2015 is highly commendable.
“This payment has brought the number of retirees paid between August 2015 and April, 2016 to 3,069. The total accrued rights paid by the state government from the aforementioned month to date is N13.7bn,” it started.
To expand its financial intermediation services to small businesses in Sokoto State, the Bank of Industry (BoI) has concluded plans to set up a micro, small and medium scale business development Fund dedicated to the provision of financial assistance to indigenous entrepreneurs in the state.
Indeed, the move, is subject to the execution of a memorandum of understanding with a fund size of N2 billion to be contributed by both parties in equal amount of N1 billion each.
Specifically, the bank, hinging its intervention exercise on the competitive and comparative advantage of each state, has commenced a product programme which is targeted at funding projects in 40 clusters, with focus on the groundnut oil, animal feeds, leather products, rice processing, food processing, quarries and meat processing clusters.
Speaking at the commissioning of the bank’s state office in Sokoto, the Acting Managing Director, Waheed Olagunju said the bank’s presence in the state will aid developmental impact of the Bank in support of the real sector and also complement the state government’s socio-economic development objectives.
According to the bank, it has provided loans in excess of N1.6 billion to companies and micro enterprises spread across the state with over 600 direct and indirect jobs created as at the end of March, 2016.
“Sokoto State is very central to BoI’s strategy of ensuring that our development finance services are brought closer to the people of the State especially in our bid to vastly improve our service delivery efficiency, while also reaching out to all parts of the entire North West region. Our choice of Sokoto as the seat of our State office was one that was very carefully made.
“Apart from being the nerve of Northern Nigeria, Sokoto also boasts of numerous markets, a repository of rich historical and cultural legacies, and an abundance of rich agricultural and mineral resources such as rice, livestock, cotton, tomatoes, guinea corn, millet, gypsum, gold among others.
“The management of the bank decided to open Sokoto State office so as to sustain our continued effort to serve Sokoto and Kebbi States better and vastly improve on the turnaround time for processing transactions”, he added.
The 2016 first quarter telecoms industry report has shown that MTN Nigeria lost 6.5 million Internet subscribers between the months of January and March.
From a report published on the website of the Nigerian Communications Commission, the company began the year with 39,924,737 data customers, “but ended the quarter with 33,356,595.”
It showed that another telco, Globacom, garnered 1,448,354 fresh data customers in the first three months of 2016, representing 80 per cent of the total number of new Internet subscribers acquired by all the telecommunications networks.
In January alone, Globacom pulled 354,178 new data subscribers, had 248,593 in February and 845, 583 in March, upping the cumulative figure of its data subscribers to 26, 530,420 in the first quarter.
According to the report, a total figure of 1,820,651 new data customers subscribed to the four major telecoms networks in the period under review.
The Nigerian Stock Exchange recorded a turnover of 910.659 million shares worth N6.409 billion in 15,023 deals last week.
This volume of shares traded was; however, lower than a total of 1.210 billion shares valued at N7.115 billion that changed hands in 15,973 deals during the preceding week.
The drop in turnover, may, however, be attributed to the one-day public holiday declared on Monday, May 2 to commemorate the 2016 Workers’ Day Celebration.
Specifically, the financial services industry (measured by volume) led the activity chart with 757.354 million shares valued at N3.180 billion traded in 8,853 deals; thus contributing 83.17 per cent and 49.62 per cent to the total equity turnover volume and value respectively.
The consumer goods industry followed with 46.972 million shares worth N2.263 billion in 2,636 deals.
The conglomerates industry ranked third with a turnover of 40.009 million shares worth N69.233 million in 498 deals.
Trading in the top three equities namely FBN Holdings Plc., United Bank For Africa Plc. and Fidelity Bank Plc.(measured by volume) accounted for 359.455 million shares worth N1.086 billion in 2,797 deals, contributing 39.47 per cent and 16.94 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 6,837 units of Exchange Traded Products (ETPs) valued at N16.316 million executed in 25 deals, compared with a total of 12,490 units valued at N503, 694.85 transacted last week in 28 deals.
The NSE All-share index and market capitalisation appreciated by 2.55 per cent to close the week at 25,701.60 and N8.841 trillion respectively. Similarly, all other Indices finished higher during the week, with the exception of the NSE Insurance Index, that declined by 0.78 per cent
A total of 23,903 units of Federal Government Bonds valued at N28.385 million were traded in 7 deals compared to a total of 8,990 units of Federal Government valued at N N10.108 million transacted last week in 4 deals. 40 equities appreciated in price during the week, higher than 33 equities of the previous week.
25 equities depreciated in price, lower than 35 equities of the previous week, while 124 equities remained unchanged higher than 121 equities of the previous week.
The Managing Director/CEO of Nigerian Breweries Plc, Mr. Nicolaas Vervelde, Thursday said the company’s robust dividend payment policy was informed by the need to always satisfy shareholders of the company. The company is paying a total dividend of N38 billion for the year ended December 31, 2015, which translates to N4.80 per share. The dividend is almost 99 per cent of the earning per share (EPS) of N4.82.
Explaining the company’s dividend policy at the pre-annual general meeting media briefing in Lagos, Vervelde said before the board decides on the amount of dividend to pay for a year, it looks at the strength of balance sheet and cash requirement. According to him, the company has a strong balance and has little need for cash now, hence the dividend recommended for the shareholders in 2015.
“We only hope that the dividend we recommended will be appreciated by our shareholders because we believe it is good for them considering the current economic situation,” he said. Vervelde said 2015 was challenging with reduced consumer purchasing power and increased cost of doing business mainly due to inflation and devaluation.
“Notwithstanding, our twin agenda of cost leadership and market leadership supported by innovation helped us to maintain strong results and deliver good returns on investment to our shareholders,” he said.
He said the company’s products remain leaders in their individual markets, assuring that going forward, that positive trend would be sustained.
Already, Nigerian Breweries has begun 2016 on positive note, recording growth in revenue and bottom line. The company recorded a profit after tax (PAT) of N10.45 billion for the first quarter ended March 31, showing an increase of four per cent above the N10.10 billion recorded in the corresponding period of 2015.
The company explained that growth in revenue was a reflection of its strong and effective route to market, increased sales during the festive Easter period as well as higher number of sales days in the period as against the lower number of days recorded in the corresponding period of 2015 due to the general elections.
Wema Bank Plc has assured that the bank is currently working out modalities that would facilitate payment of dividend to shareholders and increase profitability in the current financial year.
The Chief Financial Officer of the bank, Tunde Mabawonku, while fielding questions from journalists during the bank’s yearly general meeting, held in Lagos yesterday explained that the process of dividend payout to shareholders of the bank is on-going, adding that the bank’s financials would be in a position to pay dividend by the end of 2016 financial year.
“The process of paying dividend is on going, if you look at the balance sheet of the bank, there are some elements called negative retained earning that we have on the books, very soon we will be coming back again to seek shareholders consent to do some scheme of rearrangement to move some balance of the negative retained earnings to the share premium.
“Until we do that, the bank will be on the position to pay dividend and I think we would do that this year, hopefully once we get the clearance from the regulators, we will come back again before the end of the year to get the shareholders consent and by the end of 2016 the financial will be in a position to pay dividend”.
On the steps, taken so far to enhance profit and grow the bank’s deposit, he said; “We are doing a lot in terms of cost efficiency and in the areas we can minimize cost , we would do so, but most importantly for us is to grow the retail business, so we are doing a lot in campuses and schools and we have seen improvement in the number of accounts and with this, performance will increase in 2016.”
Reviewing its performance, the Chief Executive Officer of the bank, Segun Oloketuyi explained that the bank was able to sustain its transformation drive with total deposits for the period growing about 10 per cent over the prior year to N284.9 billion.
Gross earnings, according to him rose to N46.0 billion from N42.19 billion recorded in 2014, and closed the year with profit before tax remaining stable at N3.05 billion compared to N3.09bn in 2014.
“Given the challenging outlook for 2016, the Bank has started the year with a renewed focus on its strategic aspiration of becoming a leading retail bank in Nigeria. “The continued implementation of Project L.E.A.P- (the Bank’s Growth Strategy), narrowed our focus and channelled our efforts towards specific opportunities with great potential and symbiotic relationships. This strategy, in its final phase, will continue to guide the Bank’s allocation of resources in 2016,” he added.
The shareholders commended the bank for converting its banking license from a regional bank to a national one, urging the bank to work out modalities that would enable it to boost its profitability in the current financial year.
They also stressed the need for the bank to work more on its deposit, profit and non-performing loans in order to improve in its performance.
Specifically, the Chairman, Ibadan Zone Shareholders Association of Nigeria, Shola Aboderin commended the bank for achieving a profit of N2.2 billion and four per cent rise in its assets.
He, however, advised the bank to reduce its expenses, especially in administration and advertisement. Similarly, the National Coordinator of Standard Shareholders Association, Godwin Anono, who flayed the bank’s non payment of dividend in the previous financial year, urged the bank to do everything within its powers to increase shareholders value in the current year through dividend payout.
Transactions on the Nigerian Stock Exchange (NSE) sustained sliding profile yesterday, as more blue chip stocks depreciated in price, resulting to a further slide in market capitalisation by N52 billion.
Specifically, the All-Share Index lost 151.63 points or 0.59 per cent to close at 25,563.79 compared with 25,715.42 achieved on Wednesday.
Similarly, the market capitalisation which opened trading at N8.845 trillion decreased by N52 billion or 0.59 per cent to close at N8.793 trillion.
On the price movement chart, Nigerian Breweries topped the losers’ chart, dropping by N6.68 to close at 115.32 per share. Lafarge came second with a loss of N1.50 to close at N71.50, while Dangote Cement dropped N1 to close at N168 per share.
Cadbury declined by 82k to close at N15.68, while Union Dicon shed 59 kobo to close at N11.21 per share. On the other hand, Nestle Nigeria led the gainers’ table growing by N10 to close at N690 per share.
Forte Oil followed with a gain of N9.48 to close at N199.48 and Total garnered 97 kobo to close at N157 per share. Conoil appreciated by 82 kobo to close at N17.27, while Guinness increased by 54 kobo to close at N94 per share.
Investors exchanged 178.87 million shares worth N1.48 billion in 3,786 deals, lover than a total of 330.57 million shares valued at N2.26 billion traded in 4,053 deals on Wednesday.
FBN Holdings remained the toast of investors with 27.84 million shares worth N98.74 million. UBA followed with an exchange of 26.50 million shares valued at N92.39 million, while Zenith Bank sold 15.96 million shares worth N207.61 million.
Fidelity Bank traded 13.88 million shares valued at N15.22 million and Livestock Feeds accounted for 10.26 million shares worth N8.34 million.
The Central Bank of Nigeria has sold a total of N150.6bn worth of Treasury bills at higher yields, data from the CBN have shown.
Yields on the short-dated treasury bills rose marginally at an auction on Wednesday where the CBN sold a total of N150.6bn worth of debt with maturities ranging between three months and one year.
The central bank said it sold N45.17bn of three-month paper at 7.99 per cent yield, compared with 7.88 per cent at the last auction on April 20.
A total of N23.43bn worth of the six-month Treasury bill was sold at nine per cent against 8.99 per cent at the previous auction, while N82bn of the one-year Treasury bill was sold at 11.05 per cent compared with 10.24 per cent previously.
Investors demanded a total of N261.52bn against N253.19bn subscription at the last auction, Reuters reported.
The CBN had said it was planning to borrow N1.07tn via Treasury bills issuance in the second quarter of 2016.
The CBN said it would auction N303.77bn worth of 91-day bills, N169.98bn worth of 182-day paper and N599.63bn of one-year paper between March 17 and June 2.
The Federal Government, through the CBN, had raised N1.22tn from treasury bills in the first quarter.
The government is planning to borrow the sum of N105bn ($527.9m) in local currency denominated bonds on May 11, according to the Debt Management Office.
The DMO said on Wednesday that it would sell N50bn of a bond maturing in 2036, N40bn of paper maturing in 2026 and N15bn of debt maturing in 2020, using the Dutch auction system.
The DMO issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
The debt office is planning to borrow about N900bn locally to finance part of the N2.2tn deficit in its 2016 budget.
The Director-General, DMO, Dr. Abraham Nwankwo, had said the slump in crude oil prices in the international market made a deficit budget inevitable this year, adding that the DMO was prepared to borrow on behalf of the government to fund the deficit.
Nwankwo dismissed the fears in some quarters that the government might not be able to borrow from the bond market to finance any shortfall in the budget because of the delisting of Nigeria from the JPMorgan Bond Index.
Investors invested about N182.845 billion in 46.758 billion between January and April 2016. Statistics obtained by THISDAY showed that investors staked N99 billion on 18.336 billion shares in January and February and N83.845 billion on 28.433 billion shares in March and April 2016.
An analysis of the performance showed that February accounted for the highest value of investment. Investors traded N57.145 billion on 12.166 billion shares in February compared to N42.05 billion staked on 5.668 billion shares valued at N42.05 billion in January.
A further analysis of the performance in February indicated that the highest volume and value of shares were traded in the first week, where investors exchanged 5.087 billion shares valued at N18.488 billion. This was followed by last week, which accounted for 4.47 billion shares worth N11.742 billion, while the second week recorded 1.407 billion shares valued at N17.277 billion. Investors traded 1.202 billion shares for N9.641 billion in the third week of the month.
A breakdown of trading data for the month January 2016 had shown that the second week accounted for the highest value of transaction. Investors staked N14.165 billion on 2.177 billion shares in 21,471 deals. The third week followed with N10.753 billion invested in 2.177 billion shares in 21,471 deals, while the fourth week recorded N9.463 billion staked on 1.133 billion shares in 16,680 deals. The first week accounted for the lowest transaction with investors investing N7.669 billion in 899 million shares in 14,164 deals.
In March, the highest value of investment was made in the third week as investors staked N18.338 billion on 11.907 billion exchanged in 19,508 deals. The fourth week accounted for N10.453 billion invested in 1.552 billion shares in 14,994 deals, while N7.992 billion was invested in 1.476 billion shares in 15,743 deals. The second week recorded N7.448 billion staked on 1.111 billion shares in 15,562 deals.
For the month of April, investors staked N13.326 billion on 8.054 shares traded in 15,212 deals in the third week. The fifth week accounted for N7.115 billion invested in 1.210 billion in 15,973 deals, just as the first week accounted for N6.429 billion invested in 1.262 billion shares in 12,274deals. Investors committed N6.201 billion in 1.111 billion shares in 15,315 deals in second week, while the fourth week recorded N5.829 billion, invested in 88.367 million shares in 13,870 deals.
Market analysts had said performance of the market reflects the economic headwinds, which have affected the market performance. The Nigerian equities market is currently suffering from the impact of adverse macro-economic situation largely due to a drastic drop in the price of oil, negative public sentiment which is related to the state of the macro-economy and exit of foreign portfolio investors in reaction to the Central Bank of Nigeria (CBN) on policy on foreign exchange.
The headwinds notwithstanding, the Chief Executive Officer of the NSE, Mr. Oscar Onyema had advised investors to take a portfolio approach to investing in the market. According to Onyema the current state of the market created both challenges and opportunities for investors.
“We believe that taking a portfolio approach to investing provides the best risk adjusted alternative for participating in the capital market. As such, we want to ensure that the NSE provides a repertoire of products that will allow investors to create well diversified portfolios of uncorrelated asset classes,” he said.
