National Assembly passes N6.06tn 2016 budget

     The Senate and the House of Representatives yesterday passed the 2016 budget of N6.060tn.This showed a reduction of about N17bn from the adjusted figure of N6.077tn, which President Muhammadu Buhari presented to the National Assembly.

   Crude oil production for the nation was pegged at 2.2 million barrels per day and the exchange rate of N197 to $1 was kept as originally proposed by the President.

   Both chambers approved N1.587tn as the capital expenditure portion of the budget as well as recurrent expenditure of N2.646.3tn.

    They also approved N351.37bn for statutory transfers, N1.475.3tn for debt servicing, and N2.2tn for fiscal deficit.

FIRS to collect taxes on behalf of FCT IRS

    The Federal Inland Revenue Service (FIRS) and the FCT Internal Revenue Service (FCT-IRS) have  jointly issued a public notice informing taxpayers and the general public that the FIRS will continue to administer and collect taxes due and payable within the FCT on behalf of the FCT-IRS.

Read the notice below;

FIRS & FCT IRS public notice

 Source: Pwc

External reserves drop by $6.7bn

According to report;

   The nation’s external reserves reduced by $6.7bn within a period of 21 months.This disclosure was contained in a paper presented to the just-concluded two-day retreat of the National Economic Council by the Minister of Budget and National Planning, Senator Udo Udoma.


According to Udoma, the nation’s external reserves stood at $37.5bn as of June 2014.The minister, however, regretted that as of mid-March this year, the figure had reduced to $27.8bn.Udoma disclosed that 28 of the 36 states of the federation had between August 2015 and January 2016 benefitted from the Central Bank of Nigeria’s salary bailout facility meant to cushion the effect of the economic crunch on the states.He said a total of N373.56bn was disbursed to the states.

The minister said the states also had their bank loans amounting to N575.52bn restructured into 20-year Federal Government bonds.Udoma said the 2016 budget, which was passed into law by the National Assembly on Wednesday, was specially designed to reflate the economy through government expenditure-led growth strategy with emphasis on infrastructure development.

“Most of the policies, programmes and projects (in the 2016 budget) will need the support of state governments for effective implementation,” he noted.


Excepts from Punch

CBN raises benchmark interest rate to 12%

  The Monetary policy Committee of the Central Bank of Nigeria on Tuesday announced a tightening of the monetary policy stance by increasing the Monetary Policy Rate by 100 basis point from 11 per cent to 12 per cent.

It also increased the Cash Reserve Ratio by 250 basis points from 20 per cent to 22.5 per cent, while retaining the liquidity ratio at the rate of 30 per cent.

Addressing journalists shortly after the two-day MPC meeting held at the central bank headquarters in Abuja, the CBN Governor, Mr. Godwin Emefiele, said the committee expressed concern that the excess liquidity in the banking system was contributing to the current pressure in the foreign exchange market.

This, according to him, has a negative impact on consumer prices, with the inflation rate rising to its highest level in three years at 11.38 per cent.

The governor said at 11.38 per cent, the inflation rate had breached the CBN’s policy reference band of six per cent to nine per cent.He lamented that the challenges facing the economy were part of the reasons why businesses were currently finding it difficult to service their loan obligations to banks.

The development, according to him, has led to the resurgence of non-performing loan portfolio, with the banking sector recording about five per cent NPLs as against the three per cent recorded few months back.

FG to inject relieve fund to revive the nation's economy

 

  Minister of Finance, Kemi Adeosun, announced to newsmen at the end of the National Economic Council Retreat in Abuja yesterday March 22nd that the Federal government has proposed to inject N350 billion into the economy within the next few months.

"From the Federal Ministry of Finance in anticipation of the approval of the budget, we have virtually lined up about N350 billion which we would be pumping into the Nigerian economy in the forth coming months. We explained our rational and the processes that we have put in place to ensure that this money actually achieves the desired objective which is to stimulate the economy. Part of the money will help offset the debt owed local contractors, who had laid off their workers for lack of funds”she said

Access Bank profit after tax hits N66 billion in 2015

   Access Bank has recorded a Profit-Before-Tax (PBT) of N75 billion for the financial year ended on Dec. 31, 2015.The report is contained in the company’s audited result released to the Nigerian Stock Exchange (NSE).

Also, its profit after tax appreciated to N66 billion against N30 billion achieved in the preceding year.
Based on the improved performance, the directors of the bank recommended a final dividend of 30k per share bringing the total dividend for the year to 55k.

  Also, interest income grew by 17 per cent to ₦207.8 billion during the review period from ₦176.9 billion in the previous year due to improved income from lending activities and increased yield on investment securities.

   Commenting on the result,the bank’s Group Managing Director,Herbert Wigwe said that the result reaffirmed the bank’s resolve to add value to shareholders investment even amid harsh operating environment.

“We achieved strong financial progress in 2015 as the group recorded a 44 per cent growth in PBT to ₦75 billion from ₦52 billion in 2014, with significant contribution from our securities trading business,”

Mr. Wigwe attributed the growth to the bank’s diversified business model and robust risk management framework.He said the bank successfully raised capital by way of rights issue which strengthened its capital base and provided headroom to harness opportunities in key growth sectors of the economy.“We also made remarkable headway in redesigning our systems and processes to enhance service delivery across all customer touch points, with emphasis on tailored customer interactions.

GTBank declares N120.7bn profit before tax for 2015 financial year

     

    Guaranty trust bank 2015 results shows positive performance across most financial indices posting a N120.7billion profit before tax ,the bank has also proposed N1.52/share to be paid as dividend, making a total-year dividend of N1.77 per share (inclusive of the 25 kobo interim dividend paid at half year 2015)

      The Bank’s statement of financial position remained strong with 7.2 per cent growth in Total  Assets, from N2.36 trillion in 2014 to N2.52trillion in the year under review. Loans to customers grew by 7.5 per cent to close at N1.37trillion from N1.28 trillion in 2014. Despite the implementation of the Treasury Single Account (TSA) by the Federal Government, customer deposits remained relatively stable with a marginal year-on-year decline of 0.49 per cent from N1.62 trillion in 2014 to N1.61trillion in 2015.

  Segun Agbaje, the Managing Director/CEO of Guaranty Trust Bank Plc, said the bank’s financial performance in 2015 is an  indication that we have earned the loyalty of our customers and an attestation of the hard work and dedication of our staff, management and Board.

Exchange rate as at 23/03/2016

COUNTRY          CURRENCIES       IN NGR(Naira)
 EUROPE                     EUR                         N351/Euro
US DOLLAR               USD                          N320/Dollar

GBPOUNDS               GBP                          N445/Pound

CBN considers 3% Interest Rate for Microfinance Banks

    The Central Bank of Nigeria (CBN) will soon announce a uniform interest rate of three per cent to be charged by microfinance banks (MFBs).

   According to report,“What the central bank wants to do is that every MFB must not exceed three per cent interest rate monthly. This covers both reducing balance and flat interest rate. The three per cent would be inclusive of all charges such as insurance, administrative and other charges.

“To do that, the CBN is not considering how many people would be thrown into the labour market and a lot of people would be fired because the MFBs would have to struggle to manage their cost of operation,”

NAICOM to Enforce Compulsory Insurances among State Government

   

   The National Insurance Commission (NAICOM) has said it will henceforth ensure effective implementation of compulsory insurances nationwide through its ongoing campaign for implementation of the six compulsory insurances among state governments.

The six compulsory insurances are;

•  Group life Insurance in line with the Pencom Act 2004;
•  Employers liability Insurance in line with the Workmen’s Compensation Act 1987; 
• Buildings Under Construction insurance, under section 64 of the Insurance Act 2003; 
• Occupiers liability Insurance as stipulated by section 65 of the Insurance Act 2003; 
• Motor Third party Insurance as contained in section 68 of the Insurance Act 2003 and
• Health care Professional Indemnity Insurance, under section 45 of the NHIS Act 1999.

    The Commissioner for Insurance, Alhaji Mohammed Kari said the Commission has embarked on visitation of the various state governors beginning with the Ogun State government for the purpose of sensitising them on the need to enforce the compulsory insurances in their states through the insurance of the state governments’ assets and encouragement of the citizens of the states to insure their assets.

According to him, “We have taken the campaign to state governments to see how we can enforce compulsory insurances adding doing this at the state level will open up several opportunities that will be to the benefit of the states as well as the insurance industry.”

He said that discussions were going on with some state governments on the need to adopt compulsory insurances, of which Ogun State is part of, adding that the commission will extend such crusade to other states of the federation, to ensure that the motive of the MDRI was achieved.

’’Our motive is to ensure that all the 36 states, including the Federal Capital Territory (FCT) comply with these insurances’’, he stressed.

Interswitch emerges most efficient payment processor in Nigeria – EPIS AWARDS

Interswitch Limited, Africa’s leading digital payments and commerce provider has emerged as a multiple award winner at the maiden edition of the Electronic Payment Incentive Scheme (EPIS) 

An awards organized by the CBN and Nigeria Inter-bank Settlement System (NIBSS). The transaction-switching and payments processing leader was recognized as the most efficient payment processor, most efficient Payment Terminal Service Provider (PTSP) and most efficient Payment Terminal Application Developer (PTAD).

   Speaking at the event, Managing Director, NIBSS, Adebisi Shonubi, said that the event marked a memorable point for all the years of commitment put in by industry regulators and other stakeholders that have striven to drive the growth of electronic payment in Nigeria and the eventual transformation into a cashless society.

    Commenting afterward, Divisional CEO, Switching and Processing, Interswitch, Akeem Lawal remarked, “At Interswitch, for the last 13 years, we have been at the cutting edge of the electronic transaction revolution in Nigeria. We are always excited about innovations that make transactions more seamless and efficient. This latest recognition is more evidence of our unrelenting resolve to consistently provide best-in-class integrated transaction solutions that are secure, convenient and tailored to the requirements of the market. We are proud to be recognized for our efforts, even as we look forward to continuing to drive social and economic value creation not only in Nigeria, but across the African markets we operate in as well. We also owe our success to our customers and would like to thank all our customers for their continuing contribution to our success”. It will be recalled that the growth of the e-payment industry in Nigeria 

Excepts from Vanguard

Bizblog term of the week: Capital Allowance

        Companies charges depreciation on depreciable asset such as buildings, plant & equipment, or machinery.But for tax purpose,tax authorities charges capital allowance.So we can say,capital allowance is the depreciation that tax authorities charges.

    Capital Allowance is a claim against Assessable profits by companies when computing tax liabilities,it is a yearly deduction or depreciation that can be claimed for income tax purposes on the cost of certain assets.

   Depreciation is a non-allowable expenses for tax purposes that must be added back to profit before tax before now applying capital allowances in calculating your tax liability.

FG to split NNPC into 30 firms

     The Group Managing Director of NNPC, Dr. Ibe Kachikwu, has said there will be an announcement of overhaulling of the Nigerian National Petroleum Corporation as well as the firm’s unbundling into 30 different companies.

   Explaining the restructuring by the Federal Government in the oil sector, the minister said, “We are starting first with simple governance issues; those that are not contentious, that are very rapid and that deal a lot with the transformation of the national oil company.

“For the national oil company, a lot of work is going on; I am sure some of you have seen the effects; but within the next one week, we are going to be announcing some real major overhaul of the system, one that hasn’t been done in over 20 years.”

Kachikwu added, “The effect of that will be to quite frankly unbundle the huge company into four to five main operational zones – the upstream, downstream, midstream, refining, and of course, every other company that is trending to the venture group.”

“But what is more important is that at the same time, we are also unbundling the subsets of these companies to close to about 30 independent companies with their own managing directors; and so, titles like the group executive directors, which you have been used to in the last 30 years, will disappear; and in place of those, you are going to have chief executive officers.”

Jumia group gets €300 million financing from investors

   Africa Internet Group, the parent company of Jumia, Africa’s leading e-commerce platform,  announced a €300 million financing from MTN, Rocket Internet, AXA and Goldman Sachs.

   “This investment is a recognition of the success that Jumia has already achieved and provides us with a strategic flexibility to further support our efforts to offer the best shopping experience to our customers,” said founders and co-CEOs of Jumia and AIG, Sacha Poignonnec and Jeremy Hodara, said.
“We are delighted to welcome AXA and Goldman Sachs as new investors and are also grateful for the continued confidence from our existing shareholders. To us, it is a recognition of the quality of our operations across the African continent and an affirmation of the significant growth potential of Jumia.”

MTN Group Chief Digital Officer, Herman Singh, said the company was extremely encouraged by its partnership with Jumia, which built the business into one of the leading eCommerce platforms in Africa.Mr. Singh said MTN believes that Jumia strongly reinforces its digital offering, adding that the company would continue to support the company with its knowledge of the market.

$20bn idle in private accounts-CBN

    “As I’m talking to you, $20billion is in various domiciliary accounts of individuals. Naira is our currency, why are they keeping the foreign currency? From my experience in the international finance, I have never seen a country where its nationals speculate on its currency,” That was a statement made by the apex bank governor as represented by the Deputy Governor in charge of Financial System Surveillance at a session of the joint committee on appropriation of the National Assembly yesterday.

  The Deputy Governor in charge of Financial System Surveillance, Mr. Joseph Nnanna representing  Emefiele said keeping the huge volume of dollars idle had compounded the forex crisis confronting the country.

Exchange rate as at this morning 04/03/2016

COUNTRY          CURRENCIES       IN NGR(Naira)
 EUROPE                     EUR                         N335/Euro
US DOLLAR               USD                          N320/Dollar

GBPOUNDS               GBP                          N430/Pound

Bizblog term of the week:ISSUED SHARE CAPITAL

  Hello everyone,last week I posted a bizblog term on Authorised share capital..Read here in case you missed it.     

Today's term is Issued share capital;

         An issued share capital is the number of shares held by shareholders of a company,the shareholders pay an amount in relation to owning a share in the company.The value of the share owned is in respect to the share price of the company.

     For instance, if the number of shares you subscribed for is 200,000 shares and the current market share price stands at N3.50k.The value of that shares owned is N700,000(i.e You will be paying N700,000 to own 200,000shares of that company).

    A share is issued out of the authorised share capital of a company,simply put that the number of issued shares is a subset of the total authorized shares

Introduction of a new tax on communication services is on the way

      In recent news as published by Pwc,a new Bill to impose a Communication Service Tax (CST) is being introduced by the National Assembly. The Communication service tax will be levied on service fees payable by users of electronic communication services at 9% and will be borne by the customers. 

    If the Bill is enacted into law, it will mandate service providers to file monthly tax returns with the FIRS with strict penalties for non-compliance.

The categories of communication services liable to the tax include voice calls, SMS, MMS, Data and Pay TV.

Find the bill Here

UBA group gets a new managing director

      The board of directors of UBA group on tuesday announced the appointment of Mr Kennedy Uzoka and Mr Victor Osadolor as the new Managing director and deputy managing director respectively.

   Their appointment which is subject to CBN's approval is to take effect from 1st of August 2016.The current group MD,Mr Phillip Oduoza will be retiring on July 31 after two terms appointment.

   Mr. Uzoka is a graduate of Mechanical Engineering from University of Benin, Mr. Uzoka is also a holder of a Masters Degree in Business Administration from University of Lagos.He has been leading the transformation of the bank for some time, after completing the Advanced Management Programme of Harvard Business School.

  The deputy managing director, Mr Victor Osadolor holds  a Bachelor of Science degree in Accounting and he is a Fellow of the Chartered Institute of Accountants of Nigeria, Mr. Osadolor has held the position of Chief Strategy Officer at Ecobank Transnational Incorporation.

 The Group Chairman,Mr Tony Elumelu stated his confidence in the expertise of the new executive directors.

Talks to stimulate crude oil prices

Nigeria and Saudi Arabia are holding talks to stimulate oil price that has bottomed out over the last 20 months, Presidential spokesperson, Garba Shehu, has said.

President Muhammadu Buhari who is on a visit to Riyadh, Saudi Arabia, to discuss ways to stabilize prices, was quoted to have told Saudi Arabia’s King Salman, that the two countries need to work together to achieve a stable oil market

Nigeria, Africa’s biggest oil producer, has been suffering from a slump in crude prices that has eroded vital oil revenues and hammering its currency.

“The two leaders accepted the fact that their two economies are tied to oil and that all cannot be well with both countries when the world oil market is unstable,” said Buhari’s spokesman, Shehu.

They therefore committed themselves to doing all that is possible to stabilize the market and rebound the oil price,” he added. Russia, Saudi Arabia, Qatar and Venezuela said last week, had after talks in Doha last week, agreed that they were ready to freeze production at January levels if other producers did the same.

Iran’s Oil Minister was quoted on Tuesday as saying the proposal was “laughable” because it did not allow that country to regain market share it lost during sanctions. But during his visit to Riyadh, Buhari is expected to fly to Doha to discuss oil price stability with Qatar’s ruler.

Meanwhile, oil prices fell 4 per cent on Tuesday, sliding to $33.36 per barrel, after Saudi Oil Minister, Ali Al-Naimi, ruled out any production cuts, restating the Kingdom’s rationale for maintaining output was that demand would pick up excess crude that has crushed prices over the past 20 months.

Excepts from TheSun

Dangote Cement posts N181.3billion profit after tax for 2015 financial year

    

   The News agency of Nigeria(NAN) reported that Dangote Cement Plc has declared a Profit After Tax of N181.3 billion for the financial year ended Dec. 31, 2015 as released by the Nigerian Stock Exchange (NSE).

     This Year's profit after tax value grew above the value that was reported in 2014 which was N151.5 billion.  

The profit represented a growth of 13.67 per cent when compared with the figure for 2014.The company’s Profit Before Tax stood at N188.3 billion compared with N184.7 billion achieved in the corresponding period of 2014.

Further breakdown of the result indicate that the company declared a revenue of N491.7 billion compared to N391.6 billion recorded in 2014, representing an increase of 26 per cent.

  Report also shows that the company’s Board of Directors has recommended a dividend of N8 per share against N6 paid in 2014, a growth of 33 per cent.

FIRS to hold principal officers of companies responsible for non-compliance

   

    The Federal Inland Revenue Service (FIRS) has again issued a public notice to remind companies of their obligations to file tax returns and to do so on time (within 6 months of financial year end date). Those that are in default for past years are also required to bring their filing up to date in all cases within 14 days from today. FIRS threatens to hold principal officers of defaulting companies personally liable which may include fines and imprisonment.

     The FIRS has been posting "non-compliance stickers" in the office premises of companies considered to be in default of timely filing of returns or payment of taxes. Such stickers may not be removed without the approval of the FIRS Chairman after such defaults have been rectified.

   The clamp down by FIRS against tax evaders is getting way serious,so every company and individual are mandatorily obliged in this scenerio to comply 100%.No other choice than to comply or face the music which is not an entertaining one in this case.View the non compliance sticker after the cut;

Nokia got acquired by Microsoft and the CEO burst in tears

 “We didn’t do anything wrong, but somehow, we lost”.That was a statement made by Nokia's CEO as he ended his speech at a press conference to announce the acquisition of NOKIA by MICROSOFT


  During the press conference to announce NOKIA being acquired by Microsoft, Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly.

Nokia has been a respectable company. They didn’t do anything wrong in their business, however, the world changed too fast. Their opponents were too powerful.They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. 

LESSON FROM THIS POST;