The Executive Chairman, Lagos State Internal Revenue Service, Mr. Olufolarin Ogunsanwo, says taxation is the future of Nigeria following the drop in oil prices.
He made the declaration in a keynote address at a symposium on taxation organised by the Lagos chapter of the Society of Women in Taxation, an arm of the Chartered Institute of Taxation of Nigeria.
The forum was tagged, ‘Tax education/career development for secondary school students in Lagos State.’
Ogunsanwo said, “Many states in Nigeria can no longer pay salaries as a result of over dependence on oil; It is therefore not out of place to say taxation is the future of Nigeria.”
According to the LIRS boss, a tax is an imposition by the government on individuals, corporations, goods and service which no direct benefits is derived but for the benefit of all.
He added that for any tax to be valid, it must be backed up by law.
The President, CITN, Dr. Teju Somorin, while presenting a paper titled: Choosing taxation as a profession’, said the first step in becoming a tax professional was to study a course in taxation.
She said, “The CITN is ensuring that taxation is studied in higher institutions at the levels of Ordinary National Diploma, Higher National Diploma and Bachelor of Science.
“There is a curriculum for both the OND and the HND programmes at the polytechnic. This curriculum was adopted by the National Board for Technical Education and you can also have a second degree in taxation.”
According to Somorin, prospective candidates can also become a member of the institute through professional examinations organised by the CITN, adding that “irrespective of the professional background, you can register to take the examination from the foundation level and you will qualify to be a professional in taxation.”
Meanwhile, the Executive Chairperson, Society for Women in Taxation, Lagos Chapter, Mrs. Dena-Rose Ajayi, explained that the objective of the symposium was to educate the youths, saying “as the tax leaders of tomorrow they need to imbibe the tax culture early in life.
Ajayi said she believed the participating students could imbibe the culture of taxation from the symposium
Despite the appreciable progress recorded in the foreign exchange market since the Central Bank of Nigeria (CBN) announced its new foreign exchange policy, manufacturers in the country have decried their inability to get the greenback to import raw materials for production.
They have therefore called on the federal government to create a special window to enable them access foreign exchange for importation of raw materials.
Speaking on behalf of his colleagues in a chat with journalists during a public lecture he delivered at the University of Lagos, the Group Managing Director of Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi, enjoined the federal government to take urgent steps to address the matter to save the economy.
According to him, “The first half of the year was not good for manufacturers, a lot of policy changes have taken place but it is too early to begin to think that they will have any impact on businesses yet. On the 20th of last month when the CBN announced the new foreign exchange policy, a huge amount of dollars was released into the system and everybody thought it was going to continue that way.”
He added: “ As I speak to you now, we are made to do future placements for dollars. It is tenured 30, 90 days for anyone to be able to access the dollars. The question I asked them is if I am told I can only get the greenback every 90 days what happens before the 90 days? I should fold my hands and wait for what I don’t have guaranty I am going to get. For some time now we have bided for N282, N285/$ and we didn’t get it. All we were told is “your bid is not successful.”
He added: “Where should manufacturers go to get dollars to buy raw materials? We have repeatedly asked this question without an answer. We have asked the government to create a window for the real sector, not traders to access the dollar to get materials to produce and sustain the economy. If that does not happen we will remain where we are. Half year is gone, the second half is year and we still do not have direction.”
Government, he stated, can identify the real manufacturers by checking their status with the Manufacturers Association of Nigeria (MAN) and other organs of government. He advised the federal government to set up committees to visits local manufacturers to see what they are doing and arrange for them to get dollars for raw materials.
“In-fact we have been asked to fill foams with the Raw Materials Research Council (RMRC) to confirm what materials we need for production, that we have done. They issues licences for imports of raw materials, if you don’t have the licence how possible is it for you to import. They know who the manufacturers are, it is not rocket science, “he said.
The Central Bank of Nigeria said it has set aside N2.5bn for members of the National Youth Service Corps with good business ideas to actualise their dreams.
The N2.5bn, which was set from the N220bn Micro, Small and Medium Enterprises Development Fund, the bank said, would be disbursed to the corps members under the Youth Entrepreneurship Development Programme.
The CBN is targeting to create one million jobs through the YEDP, which is an initiative of the apex bank launched on March 15 this year by the governor, Mr. Godwin Emefiele.
The purpose of the programme is to address the challenges of youth unemployment in the country.
Under the YEDP, the apex bank, in collaboration with Heritage Bank Plc, will develop the entrepreneurial capacity of the youth as well as provide each of them with a maximum of N3m to operate a business.
The activities to be covered under the programme are start-ups and expansion projects in the agricultural value chain (fish farming, poultry and snail farming), cottage industry, mining and solid minerals.
Others are tourism, arts and crafts, Information and Communications Technology and any other activity that may be determined by the CBN.
Speaking during the event at the NYSC camp in Abuja on Thursday, Emefiele said the initiative would enable the CBN to conserve the huge foreign exchange, which was currently being spent to import food items.
He said each corps member was entitled to N3m, adding that their discharge certificates as well their degree certificates would be used as collateral to secure the loan.
The governor stated, “It is not a grant and it is a loan that must be repaid. We are determined to give support to the youth and I truly must thank the National Youth Service Corps, which has helped us to put together the first set of NYSC beneficiaries so that we can nurture them as young entrepreneurs, not as people who go into the world looking for jobs.
“We want to nurture them as people who are developing the entrepreneurial spirit and entrepreneurial skills; not only for their good, but also for the good of the country.
Emefiele expressed optimism that the corps members would not default in repaying the loan owing to the fact that they would not want to lose their certificates for N3m.
He added, “We do not anticipate that any of them fails. However, we have as collateral their NYSC certificates as well as their degree certificates. We know that our youths know the importance of their degree certificates as well as their NYSC certificates as collateral for this loan.
“I don’t think that somebody who has a degree certificate or HND certificate to get gainful employment or a gainful life will abandon his certificate or his NYSC discharge certificate just because he wants to take a loan and not pay back.”
The Director-General, NYSC, Brig.-Gen. Sule Kazaure, commended the CBN for initiating the programme for the corps members.
The Nigerian stock market closed the first half of the year with a growth of 3.3 per cent compared with a decline of 3.2 per cent in the corresponding period of 2015. Although the market ended on a bearish noted yesterday, in all, it recorded a growth at the end of first six months of the year. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) closed at 29,597.79 on the last day of June, up from 28,642.25 at which it opened 2016.
Market capitalisation added N314 billion, rising from N9.851 billion to close at N10.165 trillion yesterday. Analysts said but for the rebound the market recorded recently following positive reactions to the new flexible foreign exchange policy of the Central Bank of Nigeria (CBN), the market would have ended the first half on negative note just last like last year.
After a bearish trend caused by policy flip flops, exchange rate uncertainty and budget delay, the market rebounded two weeks back following the new forex, policy bringing the year-to-date(YTD) growth to the positive territory.
Reacting to the development then, analysts at InvestmentOne Limited had said: “In the immediate, while we expect the ongoing optimism regarding a possible shift to a market-determined exchange rate regime to support market performance. We see the impacts of these events on market performance. However, in the medium to longer term, we see improved performance on the back of efficiency gains from an expansionary fiscal policy leading to improvement in aggregate demand.” However, profit taking set in reducing the YTD growth to 3.3 per cent yesterday.
The market closed with a decline of 0.7 per cent yesterday depressed mostly by Ecobank Transnational Incorpodated (-3.09 per cent), Seplat Petroleum Development Company Plc( (-2.94 per cent), FBN Holdings Plc (-2.51 per cent), United Bank for Africa Plc(-2.08 per cent); Forte Oil (-1.90 per cent); Zenith Bank (-1.44 per cent); Nigerian Breweries (-1.44 per cent), Dangote Cement (-1.03 per cent)c among others.
According to analyst at Dunn Loren Merrifield, “the current market trend suggests that, optimism that the new CBN FX policy would bring relief to the market particularly on banking stocks is beginning to fade as investor remains sceptical about the policy sustainability and transparency.”
Global oil benchmark, Brent crude, traded sharply lower on Monday, extending its declines following Britain’s vote to exit the European Union on Thursday.
The dip in the oil price comes as investors were worried about global energy demand and shunned assets perceived as risky in the aftermath of the Brexit decision.
Brent, against which Nigeria’s oil is priced, had hit the $50 per barrel mark for the first time in 2016 on May 26 and was as high as $53 per barrel few days after before dropping to $49 on June 13.
It stood at $46.31 as of 8.05pm on Monday, weighed by a rallying dollar and continued market uncertainty over Brexit.
Brent and US crude futures have lost about seven per cent since Thursday’s settlement after the so-called Brexit vote sent global risk assets plummeting on Friday as investors fled to safe havens such as the dollar, United States Treasuries and gold, according to Reuters.
Analysts at Goldman Sachs and other research houses sought to allay fears over the impact of the EU crisis on oil specifically, pointing out that Britain’s demand for fuel was negligible at the global level.
Oil prices rose slightly early on Monday on some of that sentiment, before slipping again. Market intelligence firm, Genscape’s report of a draw of more than 1.3 million barrels at the Cushing, Oklahoma, delivery point for US crude futures provided little support.
The dollar was up almost one per cent, near Friday’s three-month high, making oil and other commodities priced in the greenback less attractive to holders of the euro and other currencies.
“We feel that a market shock such as Brexit can often induce enough chart damage to force a major long liquidation phase,” Jim Ritterbusch of Chicago-based oil market consultancy, Ritterbusch & Associates, was quoted to have said.
Safetrust Mortage Bank Limited has declared an impressive N150.6m profit before tax (PBT) for the financial year ended 2015 representing an increase of 41.8 percent on the figure for the previous financial year on the account audited by Messrs KPMG. The declaration was made by the Chairman of the Board of Directors, Mr. Akin O. Opeodu in an address issued at the Annual General Meeting (AGM) of the Mortgage Bank held at Eko Hotel & Suites, Lagos on the 7th day of June, 2016.
Also declared by Opeodu was gross earnings of N1.8billion and total assets which stood at N9billion the while the shareholders’ funds stood at N2.8billion representing 1.52 percent growth over the previous financial year’s figure of N2.75billion. Following the impressive performance, the shareholders are to be rewarded with a good chunk of the profit, N84,337,500 as dividend at 5k per share.
Regarding the business outlook in the country, Opeodu said that, “we are continuously optimistic on the outlook of the 2016 financial year. Whilst business and customer confidence remain fragile, the level of activity and Government’s commitment to improving the real sector gives a base for the growth of the Nigerian economy”. But he warned that the country needed “to brace up for likely shocks by developing the appropriate resilience to such risks”.
The Chairman also advised that, “to ensure a sustained economic uplift, the 2016 FGN Budget must be fully implemented”, positing that “lower interest rate regime should be put in place to support economic activities, reform our Governance structure, improve on the efficiencies of our labour market and simplify our process for doing business.”
To brace up for better performance in 2016, he stressed that Safetrust had taken steps to diversify the revenue base while leveraging inherent opportunities in the outlook for continuous revenue growth. He maintained that the Mortgage Bank would also continue to strengthen its risk management capabilities to ensure effective mitigation of existing risk factors in their domestic operations.
Safetrust is managed by a 9-man Board of Directors that also has Mr. Yinka Adeola as Managing Director whose voluntary retirement was announced by the Chairman at the AGM while Mr. Akintayo Oloko, an Executive Director of the Bank was appointed by the Board as the new Managing Director.
Investors in the country’s capital market recorded a loss of N278bn on Monday as concerns that the market might plummet due to the decision of Britain to leave the European Union heightened.
Some traders said there was the worry that the Brexit might slow foreign interest in the market.
The Nigerian Stock Exchange market capitalisation on Monday dropped to N10.248tn from N10.526tn, while the All-Share Index also declined to 29,840.23 basis points from 30,649.66 basis points recorded on Friday.
A total of 40 stocks recorded losses, while 16 made the gainers’ chart.
The market recorded a turnover of N4.027bn from 375.221 million shares traded in 4,229 deals.
United Capital Plc, Zenith Bank Plc, Stanbic IBTC Holdings Plc, Forte Oil Plc and Seplat Petroleum Development Company Limited were the top five losers on the chart.
United Capital’s share dropped by N0.22 (7.94 per cent) to close at N2.32 from N2.52, while that of Zenith Bank lost N1.04 (6.12 per cent) to close at N15.96 from N17.
Stanbic IBTC also closed at N16.15 from N17, losing N0.85 (five per cent), while Forte Oil posted a decline of N10 (five per cent) to close at N190 from N200.
The share price of Seplat Petroleum fell to N331.60 from N348.97, losing N17.37 (4.98 per cent).
Other losers were Dangote Sugar Refinery Plc, Oando Plc, Ikeja Hotels Plc, Guaranty Trust Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Flour Mills Nigeria Plc, AG Leventis Nigeria Plc, Sterling Bank Plc and Unity Bank Plc, among others.
Analysts said the stocks began the week on a negative footing as sell-offs across board prevailed. Asian markets shrugged off Friday’s global sell-off, while the European markets slid further as investors continued to weigh the impact of Britain’s decision. United States futures pointed to a lower open.
The NSE ASI and NSE 30 lost 2.63 per cent and 2.43 per cent, putting year-to-date returns at +4.19 per cent and +3.24 per cent, respectively.
The value of transactions was above May averages by 70 per cent, while the volume of transactions was below May averages by five per cent.
Fidson Healthcare Plc, Julius Berger Plc and GlaxoSmithkline Consumer Plc led the gainers chart, advancing by 9.91 per cent, five per cent and 4.97 per cent, respectively.
On Monday’s trading result, analysts at Vetiva Capital Management Limited said in the firm’s daily report, “Although we note the impact of broader downbeat global market sentiment, we believe today’s losses were largely fuelled by profit-taking across a handful of large cap stocks following the strength of the gains recorded in recent sessions. We think there’s still some room for profit-taking, and thus see a likelihood for another negative close in the session ahead.”
Lafarge Africa Plc have urged shareholders to leverage the Ashaka Cement’s voluntary tender offer, which provides opportunity for the minorities to participate in a much larger growth platform of Lafarge Africa to boost their portfolio.
Speaking at a shareholders forum in Lagos recently, Chairman, Lafarge Africa Plc, Mobolaji Balogun explained that the offer, which is currently on-going to Friday July 1, 2016, would enable the shareholders to move from being investors in Ashaka Cement with 1metric tones per annum (mtpa) cement production capacity to Lafarge Africa with 12mtpa and an additional 2,5mtpa due for commissioning by the end of 2016.
He added that the consideration offered for the tender is quite favorable to shareholders of Ashaka Cement.
“I encourage you and your members to accept the tender, which in simple terms creates the immediate and direct advantage of moving from investors in Ashaka Cement with 1mtpa cement production capacity to Lafarge Africa with 12mtpa and an additional 2,5mtpa due for commissioning by the end of 2016. “We continued to build on the successful completion of the Lafarge Africa asset consolidation transaction through some strategic initiatives, including increasing our shareholding in Ashaka cement to 82.46 per cent via a mandatory tender offer and acquisition of further stake in Unicem. On the recently concluded N60 billion dual series bond issuance, Balogun told shareholders that the issue comprises of a N26, 386,000,000 three year 14.25 per cent bond due 2019 (“the Series one bond”) and a N33, 614,000,000 five year 14.75 per cent bond due 2021 (“the series II bond”).
According to him, the proceeds of the bond issue will be used to part-refinance the debt of its wholly owned subsidiary, United Cement Company of Nigeria Limited (“Unicem”).
He pointed out that the dual-series issuance, the first of its kind and largest bond issuance by a corporate in Nigeria’s debt capital markets, was concluded, following a book build, with the order being oversubscribed.
He added that the transaction was Lafarge Africa’s second bond issuance in the Nigerian capital markets, having previously issued a N11.8 billion three year fixed rate bond in 2011.
Balogun said the bond affirms Lafarge Africa’s reputation as a prime issuer, adding that the proceeds of the issue would allow Lafarge Africa Plc part-refinance the debt of its wholly owned subsidiary, Unicem.
“We are grateful for the overwhelming support we have received from domestic institutional investors, especially the Nigerian pension funds. We also wish to thank the SEC for its support on the completion of the transaction.”
“These proceeds will deliver savings in financing costs to Unicem and Lafarge Africa. Unicem is currently undergoing a 2.5mtpa capacity expansion which will be completed by the end of 2016.”
In a bid to cushion the effects of the current economic crisis on their finances, most construction workers have increased their charges, MAUREEN IHUA-MADUENYI writes
Some artisans have increased their charges on construction sites by as much as 60 per cent in response to the current challenges in the nation’s economy.
According to findings by our correspondent, some builders who have ongoing construction works now have to contend with increased artisans’ charges.
Some of the skilled workers such as carpenters and masons, among others, who used to charge about N3,000 per day on building sites before the current economic hardship, now ask to be paid N5,000, accounting for an increase of about 66.6 per cent.
The unskilled labourers, who were previously being paid between N1,000 and N1,500 per day, now charge a minimum of N2,000.
This, according to investors, means that instead of paying about N90,000 monthly for a skilled worker on long-term projects, they now have to pay close to N150,000 every month, while for an unskilled worker, they have to pay between N50,000 and N60,000 every 30 days.
A former Chairman, Nigerian Society of Engineers, Lagos State Chapter, Mr. Olatunde Jaiyesinmi, said the construction sector was the first to be affected by challenges in the general economy as building material prices were subject to market forces.
Jaiyesinmi, who is also a former Chairman, Nigerian Institute of Building, Lagos Chapter, added that the cost of labour had also been recently affected.
He said, “Labour is now affected too; the artisans and labourers’ wages have gone up by between 25 and 60 per cent based on which of them you want. We have skilled labour and unskilled labour; now, a labourer who is not skilled will take about N2,000 instead of the normal N1,500 or N1000.
“The artisans, on the other hand, who were taking N3,000, now ask for N5,000. And when you hire and take them to a site say in Lekki and they have to come from Ikorodu, Agege or Abule Egba, they keep complaining about the cost of transportation; so, you are forced to meet their demands.”
Professionals in the construction sector said activities across all segments of the industry had in the last few months dropped by up to 70 per cent.
Only a few projects are ongoing, with many stalled, while investors have opted to watch before starting new construction works.
The 2nd Vice President, NIOB, Mr. Kunle Awobodu, said the increment in labour cost had not been made official by the artisans’ associations but was merely individuals’ response to the economic situation in the country.
He noted that since the inception of this government, construction activities had been at the lowest, while several companies in the sector had retrenched more than 50 per cent of their staff and others had closed down completely to venture into other things after selling off their equipment.
“Government is the major client to professionals in construction; so, if the government is not engaging in construction activities, the sector will be down,” Awobodu said.
He said that due to the dearth of artisans in the country and the current economic crisis, investors/developers were being forced to yield to the demands of the available craftsmen in order to get their jobs done.
Awobodu added, “Basically, it is not an agreed increment but a spontaneous reaction to the economy and the general inflationary trend. Transport fares have gone up; fuel prices increased; so, invariably, everything else has also increased, even the price of the foods that artisans eat on site has equally been increased.
“It has forced most of us who have ongoing projects to introduce fluctuations into the business; we have been forced to review the wages of contract staff; everything around the artisan has gone up.
“It is only natural for them to seek increase in their wages. For instance, a carpenter who was charging N3,000 or N4,000 per day now wants to be paid N5,000.”
However, a mason and the General Secretary of the Lagos State Bricklayers Association, Mr. Akinmoladun Olaniyi, told our correspondent that those who had raised their charges were individual artisans and labourers, who were not affiliated to registered associations.
He said, “As of today, we as an association have not increased the artisans’ fees because we are thinking that the economy may soon stabilise; if we increase it now, we may not bring it down after this time. Individuals have no authority to increase fees; when we increased from N2,000 to N3,000 sometime ago, we carried everyone along; so, those who are doing it now are doing so illegally.
“We know that our fees should be increased but we are watching the economy; but if we want to consider the way the government is neglecting us, we should increase the fees but that will affect everyone.”
According to Olaniyi, a formal increment in construction workers’ wages will raise rents across the country.
“There will be a general increase in house, shops and office rents, but we don’t want to be the cause of this country’s economic woes,” he said.
He said registered bricklayers were at the moment charging N3,000 daily and nobody had authorised them to increase the fee, adding that whoever charged more was doing it alone.
Olaniyi stated that the artisans’ major problem in the country was negligence by the government.
He said, “They don’t recognise artisans, so a lot of them struggle to fend for themselves. We are still hoping that this government will do something good. For now, the government only recognises professional bodies and leave artisans out. The building industry generally has been relegated to the background.
“There is a lingering issue that has caused a lot of problem; builders, for instance, use labourers such as those who are into concreting, neglecting the artisans who are skilled. These are labourers and are largely unskilled; that is one of the reasons why we have building collapse. And this may be the reason why they have raised their wage demand.”
Investors in Glaxosmithkline Consumer Nigeria Plc (GSK) last week witnessed a record 55.6 per cent capital gain following a bullish trend at the stock market.
The shares gained N7.90, rise from N14.22 to close at N14.22 per share in a week that 40 stocks appreciated. Market operators said the renewed demand for GSK could be for speculative reasons.
The company is to divest its drinks bottling business that manufactures Lucozade and Ribena to Suntory Beverages Nigeria Limited. The planned divestment followed the purchase of business by Suntory Beverages Japan from GSK United Kingdom, the parent firm of GSK Nigeria in 2013.
Explaining the divestment, an official of the company had said: “The drinks bottling used to be part of our business but we belong to a group, GSK which has divested from that line of business and we need to maximise our potential. We are facing the direction our parent company is facing. Other subsidiaries have divested the drinks business but Nigeria was allowed to continue. But the divestment will enable us release the assets to Suntory Beverages so that we can concentrate on those things we are good at,” an official of the company said.
The official said the divestment will give the company a lot of potential to grow its business, saying as a forward looking company it has hedged against the impact of the divestment.
In a notification to the NSE, the Company Secretary of GSK Nigeria, Mr. Uche Uwechai had said the principal terms of the offer would set out in a circular to the shareholder.
“If the shareholders and regulators were to approve the sale, the retained business of GSK Nigeria would include its wellness, oral healthcare, nutrition and pharmaceutical/vaccines businesses and the company would remain listed on the NSE,” he said.
The company has also indicated that subject to the completion of the disposal and receipt of the purchase price the company will pay a special dividend of N716 million (60 kobo per share) to the shareholders.
Analysts at FSDH Merchant Bank said going by their estimate, the contribution of drinks business to the total revenue of the company is not less than 35 per cent, adding that the divestment is one of the negative factors that would affect the company’s performance going forward.
But on the positive side, the analysts cited the company’s new route to market, long standing reputation and brand activation to improve market share.
According to their forecast, GSK will grow its revenue at a rate lower than the inflation rate in the medium term. They estimate a turnover of N24.89 billion, N27.38 billion, N30.12 billion, N31.25 billion and N32.41 billion for the periods ending December 2016, 2017, 2018, 2019 and 2020.
“We estimate earnings before interest and tax (EBIT) of N0.56 billion, N2.16 billion, N2.58 billion, N2.83 billion, and N3.28 billion, and earnings before interest, tax depreciation and amortization (EBITDA) of N1.92 billion, N3.72 billion, N4.40 billion, N4.97 billion, and N5.80 billion, for the same periods,” they said.
The analysts projected PBT and PAT of N0.60 billion, N2.20 billion, N2.62 billion,N2.88 billion, N3.32 billion and N0.50 billion, N1.52 billion, N1.81 billion, N1.99 billion, and N2.29 billion in 2016, 2017, 2018, 2019 and 2020 respectively.
