AfDB cautions Fed Govt against tax increase

By Favour Nnabugwu

 

African Development Bank (AfDB) President Dr.  Akinwunmi Adesina has cautioned the Federal Government to pull the brake on tax increment.

He said the fact that Nigeria taxes are relatively lower cannot be justification for incessant tax raise.

According to him, it will be double jeopardy to over tax citizens who provide basic amenities the government has failed to offer.

The AfDB boss gave the advice yesterday in Abuja while delivering a lecture at the annual conference of the Institute of Chartered Accountants of Nigeria (ICAN).

He listed such facilities as portable water, electricity, security and neighbourhood roads among others.

Dr. Adesina said: “Low tax to Gross Domestic Product (GDP) rate in the country is not an excuse for the Federal Government to keep increasing taxes.

“While other countries with high tax rates have functional free education and free health care system among others, such cannot be said for Nigeria.”

“In Nigeria, the inefficient system has imposed an implicit tax on the Nigerians as the people are made to provide basic essential facilities that should have been made available by government.

“While tax rates are relatively low in Nigeria, it simply is not an excuse to keep increasing taxes.

“Take the case of Norway for example. Its tax-to-GDP ratio is 39 per cent. Singapore’s tax-to-GDP ratio is 13.2 per cent. And Nigeria’s tax-to-GDP is 6.1 per cent. It is easy to make the comparison and say Nigeria needs to raise its taxes to similar levels as in Norway or Singapore.

“But, also consider the following: In Norway, education is free through university. In Singapore, a country that had only 1/3 of Nigeria’s per capita income at its independence in 1965; today has 100 per cent access to electricity and 100 per cent access to water.

“While progress is being made the challenge, however, is that in many parts of Nigeria, citizens do not have access to basic services that governments should be providing as part of the social contract.

“People sink their own private boreholes to get water. They generate their own electricity often times with diesel. They build roads to their neighbourhoods. They provide security services themselves.

“These are implicit taxes, borne by society due to either inefficient government or government failure. As such, we must distinguish between nominal taxes and implicit taxes — taxes that are borne by the people but neither seen nor recorded.

“It has become so common that we do not even bother to question it. But the fact is governments can simply transfer its responsibility to citizens without being held accountable for its social contract obligations.”

In an attempt to boost tax revenue in February last year, the federal government raised VAT from five per cent to 7.5 per cent.

The International Monetary Fund (IMF) has been persistent in encouraging Nigeria to increase its value-added tax (VAT) rate to at least 10 per cent by 2022 and 15 per cent by 2025 to boost revenues after its recovery from a recession.

Nigeria, 12 others’ll grow global trade to $30tn – Report

By admin

 

A new report commissioned by Standard Chartered and prepared by PwC Singapore has said Nigeria and 12 other countries will be responsible for driving global trade to $30tn by 2030.

The report said global exports would more than double from $17.4tn to $29.7tn over the next decade, hinting that much of the growth would be driven by 13 markets.

It said Nigeria would be growing at an annual rate of 9.7 per cent, and export about $112bn by 2030, adding that its key corridors would be through India, Indonesia and Mainland China.

According to the report, Kenya, the second African nation on the list, would be growing by 7.6 per cent annually, with $10bn in exports by 2030 through key corridors, namely Pakistan, Uganda and the United States of America.

The list consists mostly of Asian countries with Mainland China contributing the most at $5.02tn by 2030 and growing at 7.1 per cent annually.

Other countries are Hong Kong ($939bn, 5.7 per cent), South Korea ($972bn, 7.1 per cent), and India ($564bn, 7.6 per cent).

Bangladesh, Singapore, United Arab Emirates, Indonesia, Malaysia, Vietnam, and Saudi Arabia also featured in the report.

The report is based on an analysis of historical trade data and projections until 2030, as well as insights from a survey of more than 500 C-suite and senior leaders in global companies.

According to the report, global trade will be reshaped by five key trends: the wider adoption of sustainable and fair-trade practices, a push for more inclusive participation, greater risk diversification, more digitisation and a rebalancing towards high-growth emerging markets.

It said almost 90 per cent of the corporate leaders surveyed agreed that these trends would be shaping the future of trade and would be forming part of their five to 10-year cross-border expansion strategies.

The research also found a significant trend towards the adoption of sustainable trade practices in response to climate concerns and a rising wave of conscious consumerism.

It said while almost 90 per cent of corporate leaders acknowledged the need to implement these practices across their supply chains, only 34 per cent ranked it as a ‘top three’ priority for execution over the next five to 10 years.

The Executive Director, Corporate Commercial and Institutional Banking, Standard Chartered Nigeria, Korede Adenowo, said, “The predicted doubling of global trade offers strong evidence that globalisation is still working, despite recent dislocation. In addition to the growth of intra-regional trade pathways, the corridors of the future will still cut across continents.

“Against this backdrop, we continue to focus on making globalisation work for more markets and businesses, ranging from micro to multinational, and drive a more sustainable and inclusive model for global trade. This includes growing our range of sustainable finance solutions to help our corporate clients implement sustainable and fair-trade practices across their supply chains.”

Agric Minister Seeks AfDB’s Support to Recapitalise Bank of Agriculture

By Favour Nnabugwu

 

The Minister of Agriculture and Rural Development, Mr. Mohammad Abubakar, has called on the African Development Bank (AfDB) to support the recapitalisation of Nigeria’s Bank of Agriculture (BOA).

According to a statement on the ministry’s website, both parties have agreed to set up a task force team to develop a plan for accelerated implementation within the next 60 days during a delegation he led to the president, AFDB’s office in Abidjan.

Abubakar said his consultative mission to Abidjan was at the instruction of President Buhari.

“Our mission is to examine ways Nigeria could enhance food production, lower food prices, and create wealth,” the minister said.
Abubakar welcomed the bank’s proposed strategy to support Nigeria’s food production and described it as a landmark one that would spur Nigeria’s food supply production.

“It will reverse the ugly trend of a sharp increase in prices of food in the country. I am pleased with the bank’s strategy to facilitate the production of nine million metric tonnes of food in Nigeria and to support us in raising self-sufficiency. The bank’s Special Agro-Processing Zones initiative is a laudable one and Nigeria is grateful,” she said.

Abubakar thanked the Bank for its support and said the meeting gave him reassurances of what Nigeria can achieve with the bank’s support in the farming seasons ahead.

Earlier, the President of AfDB, Dr. Akinwumi Adesina, said that the bank’s strategic support for Nigeria’s food production would be hinged on five factors: support, scale, systemic, speed, and sustainability.

He added, “I want to assure President Buhari that the African Development Bank will provide his government with very strong support to tackle the country’s food security challenges.”

Adesina urged the Nigerian Agric Minister to concentrate on building the correct team and tactics to optimise the country’s farming seasons, saying that dramatically increased food output will result in lower food prices, which will in turn lower inflation rates.

Citing successes in Sudan, Adesina explained how the AfDB supported the country with 65,000 metric tonnes of heat-tolerant wheat varieties, cultivated on 317,000 hectares.

In response to Bank successes in Sudan and Ethiopia, Abubakar said: “This gives me an additional measure of confidence. If you can do it in Sudan, you can equally do it in Nigeria. Not just in wheat, but also rice, maize, and soybeans.”

Adesina said: “The task, responsibility, and challenge of feeding Nigeria rest on your shoulders. You will receive maximum support from me, and the African Development Bank for the responsibility that President Buhari has given you. You will not be alone.”

He added: “The bank stands ready to fully support and help Nigeria in the next farming seasons. So, we must make sure things turn around. The president must succeed, and Nigeria must succeed. Agriculture must succeed.

NAIC pays N1.7bn claims to 5,000 farmers in 2 years

By Favour Nnabugwu

The Nigerian Agricultural Insurance Corporation (NAIC) paid a whopping N1.7biilion claims to over 5,000 farmers in two years

A breakdown of it showed that the Corporation paid N856million in 2019 and N848 million as claims to its insured farmers in the 2020.

The Managing Director of NAIC, Mrs. Folashade Joseph said the claims were paid to the Corporation’s clients to cover losses incurred by them in the course of doing business.

Joseph enjoined agricultural investors and lending institutions to continue to partner NAIC to realize the food security agenda of President Muhammadu Buhari.

He said the amount was shared among 5 million farmers who suffered various setbacks in their farms as a result of natural course.

The scheme was launched in 1987 by federal government to restore the confidence and productivity of Nigerian farmers who suffered losses as a result of natural disaster such as flood, drought, pest and diseases.

She explained that the essence of the sensitization is to let the farmers known and understand exactly what NAIC does, the importance of insurance, and make them understand how insurance works, how they can access NAIC products and services, processing their claims, and what they need.

Agribusiness is evolving fast and so many risks are being thrown up, many new participants are coming into the business of agriculture, and the risks are on the increase if you look at them across the value chain there is no so many participants so we need to keep sensitizing the farmers and let them know we are serving them, and we need to know from them on how to serve them.

“Our assurance to farmers is that when they are insured and they suffered for any of the products insured including natural disasters and whatever they will get paid for their losses, and that is the purpose of insurance and setting up NAIC. Our motor is ‘Plowing the Farmer Back to Business, Plowing the Farmers into Prosperity’, and we settle claims.”

NAIC currently deals with thousands of farmers (Small, Medium, and Large scale farmers) across the country, which NAIC serves farmers with investment as little as N100, 000, and at the same time serves multinational farmers. In terms of reach out to farmers, it cuts across.

“The response of farmers has been fantastic because they have realized that every business needs insurance, and agric too is a business, and we see it as a business and there is risk in all that we do.