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NIPC: Pioneer status firms rise to 32

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N1.1trn invested, 7,192 workers employed

 

Number of companies benefitting from Federal Government’s Pioneer Status Incentives (PSI) rose to 32 as at the end of June, New Telegraph has learnt.

The Nigerian Investment Promotion Commission (NIPC) disclosed this in its latest report on PSI applications for Q2 2019.

A pioneer status incentive grants companies making investments in qualifying industries and products a tax holiday of three years from the payment of company income tax.

The three-year tax holiday has the possibility of an extension for one or two additional years to enable the industry concerned to make a reasonable level of profit within its formative years.

As at the end of last year, number of beneficiary companies stood at 23, while there were 267 pending applications for the status.

However, by June 30 this year, NIPC said beneficiaries had risen to 32, with 181 applications still pending.

According to the report, a total of 51 new applications for pioneer status were received in the first six months of the year.

Out of these, full PSI approvals were granted 10, while 16 were granted approvals-in-principle.

NIPC said it declined 22 applications within the period, while six companies were granted extensions for another two years.

The commission said the 32 companies currently benefitting from tax exemption had invested a total of N1.137 trillion in the economy while the total figure of their employed staff stood at 7,192.

Some of the companies with massive investments include Indorama Eleme Fertilizer Chemical Limited with N360 billion investment and 475 employed staff; Jabi Mall Development Company Limited with N123.7 billion investment and 170 employed staff. This is followed by Cross River-based Lafarge Africa Plc, which invested N120.8 billion with 71 staff.

Others are International Towers Limited, a telecom infrastructure company, which is said to have invested N38 billion and employed 750 people; First Concept and Properties Limited with N21.2 billion investment and 22 employees; and Delta Mall Development Company Limited with N20 billion investment, among others.

In 2015, the Federal Government had placed an administrative suspension on the processing and issuance of PSI.

Government, however, lifted the suspension in August 2017, and 27 new industries and products were included in the scheme.

Since the lifting of the suspension, there has been an increased participation of both indigenous and foreign investors in the scheme.

The NIPC quarterly reports indicate that between August 2017 and December 2018, the NIPC granted fresh PSIs to 36 companies and approved the extension of PSI for 10 companies already enjoying the incentive.

Amongst these companies, the manufacturing sector received most of the PSI approvals followed by other sectors such as power, telecommunication, real estate amongst others.

The reports also indicate that the NIPC approved some PSI applications made prior to the suspension of the scheme in 2015.

Meanwhile, the Chartered Institute of Taxation of Nigeria (CITN) had recently cited multiple taxation and abuse of tax incentives as part of challenges impeding development of the Nigerian taxation system.

President of the institute, Dame Gladys Olajumoke, who stated this at the second Annual International Academic Conference on Taxation, said many of the tax incentives granted by government had not achieved commensurate benefits for the economy, saying that in some cases, the incentives were abused by investors.

She noted that tax incentives and waivers, if granted at all, should be sector-based and granted through tax laws so as to promote transparency.

“It should also be streamlined with respect to pioneer status, import duty waivers and double dipping for income exemption. Incentives should be sector-based and industry-focused to ensure a level playing field,’’ she said.

Olajumoke lamented the abysmal tax compliance culture in Nigeria, which she said must be reversed to enhance the taxation system in operation.

According to her, in the mid of the abysmally low tax compliance levels, there was also the cry from corporate entities about double and multiple taxation.

She said businesses, especially Small and Medium Enterprises (SMEs), had been greatly affected.

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Aviation

Qantas flight from London to Sydney with no stops takes off

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Qantas flight from London to Sydney with no stops takes off

A Qantas aeroplane has set off on an ultra-long haul flight from London to Sydney as part of a trial for a potential commercial route.

The test flight, as part of Qantas’s Project Sunrise, will see a Boeing 787-9 Dreamliner carry just 40 people – including crew – to the other side of the world in approximately 19 hours.

The flight was scheduled to leave London at 6am and arrive into Sydney around lunchtime on Friday, a Qantas spokesman said.

A Dreamliner can usually carry between 230 and 300 people, depending on its interior set-up, reports metro.co.uk.

Currently it is impossible to fly an aeroplane at full capacity of both passengers and cargo from cities on the east coast of Australia to London without stopping to refuel.

It is possible to fly non-stop from London to the city of Perth in Western Australia as it is 1,600 miles closer.

Despite vowing to slash carbon emissions and reach net zero by 2050, the Australian airline is testing the viability of the London to Sydney route as a regular commercial flight.

The airline said all carbon emissions from Thursday’s take-off will be fully offset.

Those on board will be mostly Qantas employees and will be fitted with monitors to track their sleep patterns, food and drink intake, lighting, physical movement and in-flight entertainment.

The data will be assessed by researchers from the Charles Perkins Centre – a medical institute at the University of Sydney – to assess the impact of the flight on their health, wellbeing and body clock.

A team from Melbourne’s Monash University will work with pilots and crew to monitor melatonin levels before, during and after the flight. Melatonin is the hormone that regulates sleep cycles.

Pilots will wear a device that tracks brainwave patterns and monitors alertness, Qantas said, to gather data on the best work and rest patterns for long-haul services.

The airline said the data on crew wellbeing and alertness will be shared with Australia’s Civil Aviation Safety Authority to inform future regulations for ultra-long haul flights.

Qantas will also gather general feedback from passengers on food choices, stretching and wellbeing zones and in-flight entertainment.

The airline’s Chief Executive Alan Joyce said previously: “Ultra-long haul flying presents a lot of common sense questions about the comfort and wellbeing of passengers and crew.

“These flights are going to provide invaluable data to help answer them.”

It will be the second aircraft to fly the route non-stop – the first touched down in August 1989.

Qantas did fly a Dreamliner non-stop from New York to Sydney last month as part of Project Sunrise, although the route is around 1,000 miles shorter.

It is due to make a final decision on the viability of Project Sunrise as a commercial flight route by the end of the year.

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Alaghodaro: Edo on path of growth, says Sterling Bank chair

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Alaghodaro: Edo on path of growth, says Sterling Bank chair

Success of the acclaimed EdoBest Programme, revamp of primary healthcare centres statewide and creation of enabling environment and economic opportunities for citizens has placed Edo State on the path of growth with visible achievements in basic education, health and industrial sectors with the emergence of Alaghodaro Summit three years ago.

Mr. Asue Ighodalo, Chairman of Sterling Bank Plc and Chairman of the Edo Investment Summit – Alaghodaro 2019, made this known while delivering his welcome address at the third edition of the summit themed – Delivering to Our People, The Next Level – in Benin, the Edo State capital, yesterday.

At the summit, which attracted captains of industry, Ighodalo said Edo State had been repositioned as an attractive investment destination in Nigeria.

“I, therefore, would like to commend His Excellency, Governor Godwin Obaseki’s foresight and vision in creating this platform. The opportunity created for cross-pollination of ideas between the private sector, public sector and other critical stakeholders has already begun to bear fruit in moving Edo State forward.”

“In the area of education, the EdoBest programme has received critical national and international acclaim. A record number of teachers are being taken through a deep dive, technology-enabled training program, and equipped with teaching tablets to facilitate access to 21st century teaching methodologies and resources, to prepare the children of Edo state for the learning of new skills, for a new world. In addition, we have seen schools renovated across the State, and the Government Science and Technology Colleges rejuvenated,” he noted.

According to Ighodalo, the health sector in Edo State has seen both fiscal and execution commitments (through statutory allocations and the revamp of Primary Healthcare Centres statewide) because only healthy people can constitute a strong and reliable workforce.

He added that steps were also being taken for more ambitious projects like the Benin Industrial Park, the Benin River Port and Edo Modular Refinery Project which will further expand economic opportunities in Edo State.

Delivering his welcome address, Mr. Godwin Obaseki, Governor of Edo State, said his administration had implemented far-reaching reforms and people-oriented policies that have changed the fortunes of the state and restored hope to the people.

He expressed gratitude to God for successes recorded and for engendering hope in the youths and people of Edo State by showing them pathways to fulfilling and successful lives.

“Next year is an election year in Edo State. Despite the anxieties associated with the forthcoming elections, I want to assure you, our partners and other would-be investors, that because of the foundational and fundamental reforms, which we have undertaken that are very popular with our people, the chances of continuity of these policies and programmes are very high. We, therefore, encourage you to continue with your various investment programmes,” the governor assures.

Represented at the summit by Mr. Emmanuel Emefienim, Executive Director, Institutional Banking and Mr. Tunde Adeola, Executive Director, Commercial Banking, Sterling Bank, invited players in the health, education, agriculture, renewable energy and transport sectors to reach out because it understands those sectors and is committed to supporting them financially.

He lauded the Edo Investment Summit vision, saying it has become a catalyst for the transformation of Edo State into an economic hub ensuring that it becomes an attractive investment destination.

He affirmed the bank’s commitment to financing solutions that will revolutionise the health, education, agriculture, renewable energy and transport sectors as well as infrastructure in the state.

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Lender partners AFRIMA to promote music, creative industry

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Lender partners AFRIMA to promote music, creative industry

Ecobankmobile *326# has announced its partnership with the All Africa Music Awards (AFRIMA) 2019 slated for Lagos from 20th through 23rd, November.

AFRIMA is an annual celebration of African talents from all regions of the continent. The Lagos Awards, which is the 6th edition, has as its theme: “Feel Africa.”

Announcing the partnership in Lagos, Managing Director, Ecobank Nigeria, Patrick Akinwuntan, said it was one of the several initiatives by the Pan-African bank to boost tourism, culture and the entertainment industry in Africa.

He said it was also in line with Central Bank of Nigeria (CBN)’s initiative for banks to support the growth of the creative industry in the county.

According to Mr. Akinwuntan, Ecobankmobile *326#  is pleased to support the growth of the creative and music industry which is a key driver of Africas history and rich culture and most significantly youth engagement and empowerment.

“As the Pan-African bank, Ecobank is proud to partner with Africa’s most renowned music awards, which is a symbol of our support to building the family and lifestyle of Africans. Ecobankmobile *326# is joining AFRIMA to ensure that  the Lagos show is a success,“ he stated.

Akinwuntan further  said Ecobankmobile *326#, Ecobankpay, Ecobankmobile App, Ecobankxpress Account were bringing easy, affordable and convenient financial services to the youth, entrepreneurs and businesses, both local and foreign which are expected at the events.

“Our products interact with the lifestyle of Africans.  Ecobankmobile *326# makes it easy to open an instant account, make transfers, pay bills and buy airtime.  Our integrated Ecobankmobile App works seamlessly across all 33 countries where Ecobank operates in Africa; also, the EcobankPay offers customers a multi-channel payment experience that includes Mobile QR payment at merchant stores.

The channel has a distinct advantage of supporting the three main payment schemes, Masterpass, mVisa and mCash, thereby broadening acceptability regardless of which bank a client makes payment from.  Merchant QR is set up via Facebook Messenger as well as USSD payment for feature phone users,” he added.

Also speaking, President and Executive Producer, AFRIMA, Mr. Mike Dada, said: “The AFRIMA-Ecobank partnership for the 6th All Africa Music Awards brings together deep skills in financial and culture industries strategy, product ideation, technology development and deployment and organizational change management to help support African communities for successful socio-economic transformation.

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Expanding tax revenue base for budget financing

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Expanding tax revenue base for budget financing

Members of the federal parliament are currently debating finance draft bill forwarded recently to them by President Muhammadu Buhari.  Abdulwahab Isa, in this report, examines contents of the legislation aimed at deepening tax collection and encouraging investments

 

Sourcing revenue to finance budget is a headache for government. Overtime, government had depended on oil revenue to fund substantial portion of fiscal budget.

Often too, government gets disappointed with the outcome from oil derived    revenue. This is because both crude oil price and the quantity produced are beyond government control.

To fill the deficit gap created by reliance on oil revenue, government is exploring alternative revenue sources in taxes and other non-oil sectors to fund future budgets.

The paradigm shift from oil to tax revenue has begun with introduction of finance draft bill pending before members of the parliament.

For the first time in Nigeria, means to funding  every budget would be articulated by a piece of legislation to be submitted along with fiscal budget document to  members of the parliament.

Presenting the 2020 budget proposal to the joint sitting of the National Assembly on October 8 2019, President Muhammadu  Buhari pledged among others, to forward finance bill that will ensure  optimal funding of the budget.

Beyond the hike in Value Added Tax (VAT), which finance bill espouses, one important area the finance draft bill is targeting is broadening incentives for infrastructure  and investment in the capital markets.

For tax reforms, the bill envisages a number of reviews. These include Company Income Tax Act, 2004 to broaden domestic taxation earned by non-resident companies in Nigeria through dependent agents and online market platforms.   

Value Added Tax Act, 2007, which seeks to improve the efficiency of Nigeria’s VAT system, expand VAT coverage by addressing critical issues such as taxation of digital economy, VAT registration thresholds etc, Customs and Excise Tariff (Consolidation) Act, 2004, to subject certain imported goods to excise duties in a similar manner with locally manufactured counterparts, Personal Income Tax Act, 2007 (as amended) to provide clarity and efficiency in the administration of individual income taxes in Nigeria; Capital Gains Tax Act, 2007 to prevent abuse of the provisions of the Act on group restructuring. Stamp Duties Act, 2007 to increase revenue generation from duties on electronic stamps.

Tax for budget funding

The very many complex dynamics associated with crude oil revenue have made its reliance very unpredictable in funding budget.

Over the years, eggheads crafting the budget have had cause to go back to the drawing board to either tinker with the crude oil price benchmark for oil or alter production quantity forecast all together due to sudden changes not fathomed.

It’s a recurring scenario with previous budgets anchored on revenue from crude oil.  Taxes are not only predictable; their targeted assumptions are always surpassed.

The finance bill when passed into law will permit government to raise the country’s VAT from five per cent to 7.5 per cent.  Unlike oil revenue whose  volatile and unpredictable nature easily have telling effect on the budget, thus making revenue target unrealistic, tax revenue is always met and surpassed.

For instance, the Federal Inland Revenue Service (FIRS) had set tax revenue collection target of N8.3 trillion for 2019, a higher collection figure from N5.32 trillion realised in 2018.

The agency collected N1.11 trillion through VAT in 2018, N972.30 billion in 2017 and N828.19 billion in 2016. E-stamp duties collection alone stood at N15.66 billion in 2018.

The amount from VAT collection would be much higher with percentage increase in VAT to 7.5 per cent as envisaged by finance bill.

Justifying the hike in VAT, the President said:  “The draft finance bill proposes an increase of the VAT rate from five per cent to 7.5 per cent. As such, the 2020 appropriation bill is based on this new VAT rate. The additional revenues will be used to fund health, education and infrastructure programmes .

“As the states and local governments are allocated 85 per cent of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.”

However, he added that not all items were to be surcharged with VAT.

According to him, the VAT Act already exempts pharmaceuticals, educational items, and basic commodities, saying the exemptions are being expanded under the Finance Bill, 2019.

President Buhari listed specific items that would be exempted from the proposed VAT to brown and white bread; cereals including maize, rice, wheat, millet, barley and sorghum; Fish of all kinds; flour and starch meals.

Other items, according to him, are fruits, nuts, pulses and vegetables of various kinds; Roots such as yam, cocoyam, sweet and Irish potatoes; meat and poultry products including eggs; milk; salt and herbs of various kinds; and natural water and table water.

According to the president, the bill has five strategic objectives of promoting fiscal equity, reforming domestic tax laws and raising revenue.

He said government intended to raise the threshold for VAT registration to N25 million in turnover per annum, such that the revenue authorities can focus their compliance efforts on larger businesses, thereby bringing relief to Micro, Small and Medium-sized businesses.

“It is absolutely essential to intensify our revenue generation efforts, “ he said.

Providing perspective to the debate on the bill recently, Senate Majority Leader, Sen. Abdullahi Yahaya (Kebbi), added that beyond VAT increment, the finance draft bill also aimed at providing incentives for investments in infrastructure and capital markets.

Mitigating investment risks

The finance draft bill isn’t all about VAT hike and taxes. It has other laudable provisions, which include attracting investment into infrastructure and the capital market.

Speaking recently in Abuja at the Business Day Investment and Capital Market Conference, which had as theme: Market Recovery, Innovation and Regulation in Nigeria,” Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, noted that  aside from tax reforms,  finance draft bill is also meant to complement existing Securities and Exchange Commission (SEC) regulations for securities lending transactions on the Nigerian Stock Exchange (NSE).

“On tax laws, we reconstituted the National Tax Policy Implementation Committee (NTPIC) to review various tax laws and produce a single draft Finance Bill 2019 to support FGN’s 2020 budget.  This strategic objective recognizes the crucial relationship between fiscal policy, the regulatory environment and the strong capital market we all seek to ensure in Nigeria.

“We plan that, going forward, the annual budget will always be accompanied by finance bills to enable the realisation of revenue projections. Future finance bills will therefore also provide us with additional opportunities to incrementally improve the fiscal policy and regulatory/legal environment in order to further strengthen our domestic capital market, and ultimately ensure sustained and inclusive growth and development,” she stated.

Highlighting the priorities and economic agenda of the ministry, Ahmed said: “Integral to achieving our collective goals under the 11 priority areas is the need for a significant push towards mobilising domestic revenues, increased coordination and alignment of fiscal, macroeconomic, monetary, and trade policies, and the prudent management of emerging fiscal risks.”

She disclosed government’s readiness to continue to innovate in domestic capital market to guarantee transparent conduct of market transactions.

She listed five priorities areas of the ministry under her watch to include enhancing revenue generation, collection, monitoring through continued implementation of the strategic revenue growth initiatives (SRGI); reconciliation and monitoring of revenues by the Presidential Revenue Monitoring and Reconciliation Committee;  review of current tax laws and development targeted at fiscal policy reforms to coincide with the annual budget cycle; and the deployment of innovative information communication technology (ICT) solutions such as the Ministry’s ‘Project Lighthouse’ aimed at leveraging and mining big data to enhance revenue tracking for informed decision-making.

Last line

Currently being debated by members of National Assembly, the finance draft bill is a deserved legislation that will complement existing capital market regulation and recovery, attract investment in infrastructure and more importantly, expand Nigeria’s existing tax revenue base.

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Trade: Barriers trail ECOWAS ETLS compliance

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Trade: Barriers trail ECOWAS ETLS compliance

There are indications that the inability to effectively implement the ECOWAS Trade Liberalisation Scheme has caused no fewer than 80 per cent of West African countries not to comply with the ECOWAS protocols, leading to setbacks in intra-African trade.

Nigerian exporters revealed to this newspaper in Lagos that non-compliant level and other challenges were threatening the successful implementation of the protocol in West Africa and consequently hindering smooth trade facilitation between Nigeria and her counterparts in the sub-region.

Speaking on the current status of implementation, a local exporter and member of the Manufacturers Association of Nigeria Export Promotion Group (MANEG), Kola Awe, said that only very few countries like Benin Republic, Ghana and Cote D’Ivoire were the ones currently being favoured, adding that the non-compliance had caused great economic loss to Nigeria as goods were turned back without getting to their destinations.

Awe faulted that Federal Government’s National Approval Committee under the Ministry of Foreign Affairs for not resolving challenges in compliance among others.

He said: “The major challenge in ETLS is compliance. More than 80 per cent of the countries in the region don’t comply. The only country that complies with the ETLS comfortably is Benin Republic. ETLS is not about having the certificate. There are other adjoining documents you need to have to make you actually qualify for the ETLS so the certificate alone is not enough.

“If you carry out an informal export and you don’t have the SDG from Nigeria, there is no way you can apply for the ETLS or the ETLS will be granted to you. There are lots of documents that need to be put in place including your ECOWAS certificate of origin.

“The National Approval Committee needs to come out with the way of making other countries comply with it. Benin Republic, Ghana and Cote D’Ivoire are very perfect. You do a shipment to Ghana, Ghana will take you under the ETLS as long as your document is concerned and the problem also we face in Ghana, majorly is HS code. I will say that the customs officer who follows the inspection for the ETLS is not conversant with the HS code procedure. Companies are bound to make mistakes when it comes to the HS code. So you find some countries rejecting ETLS because the HS code is not the same for that particular product.

“So we need to have more experienced customs officers that understand HS code for raw materials and finished products to be able to educate people that this your HS code is wrong you know Nigerians are found of giving different HS code for duty reasons,” Awe added.

Reacting to the development, Kabir Nazid of Ministry of Foreign Affairs explained that President Muhammadu Buhari was committed to the programme on ease of doing business in the country and infrastructural policy to make it easier for micro, small and medium enterprises to sustainable economic activities.

He said: “Concerning the current status of implementation of ETLS, it is significant to mention that Nigeria has made a giant stride by setting up presidential committee on check point domicile at the Office of Secretary of Government of the Federation to address the challenges along the Nigerian corridor connecting other WA countries. Indeed, Nigeria has exhibited strong political will by addressing the barriers to free movement of persons and goods in Nigeria.

“As our corridors and borders are managed in accordance with relevant producers of ECOWAS protocols regulation, it is worthy to notice that Nigeria is the foremost country with the highest productive capacity and industrial base in the community as well as highest share of approved products and enterprises under the ETLS.”

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NITDA, stakeholders target job creation at conference

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NITDA, stakeholders target job creation at conference

Job creations through technological innovations will form the fulcrum of discussions at the 12th edition of e-Nigeria conference, the National Information Technology Development Agency (NITDA) has said. According to NITDA, the 3-day conference themed: ‘Leveraging Technology and Indigenous Innovation to Attain the Sustainable Development Goals’ will bring together all stakeholders in the country’s ICT industry to chart new course for economic development through technology.

NITDA in a statement signed by Head of Corporate Affairs and External Relations, Mrs Hadiza Umar, said President Muhammadu Buhari is would declare the Conference open, while Amina J. Mohammed, Deputy Secretary-General of the United Nations, will deliver the keynote address. The conference, which was earlier scheduled to hold from 12th – 14th November, is now to take place between November 28th and 30th in Abuja.

The agency also disclosed that Honourable Minister of Communications and Digital Economy, Dr. Isa Ali Ibrahim (Pantami), would be the Chief Host, while the Director-General/Chief Executive Officer, NITDA, Kashifu Inuwa Abdullahi would co-Host as Convener of the event.

According to NITDA, the conference would feature discussions on creating new job opportunities and economic development through technological innovation, harnessing indigenous innovation and creativity for poverty reduction in Nigeria. The agency added that other areas of focus would include leveraging disruptive innovation for achieving good health; national security; anti-corruption, and sustainable energy systems. It said stakeholders would also discuss the implications of the country’s data protection regulation on open data, big data analytics, and smart initiatives in building a productive national economy.

Already, NITDA said the launch of the Nigerian Data Protection Regulation 2019 (NDPR) and effective implementation would create about 300,000 jobs for unemployed Nigerians. The agency disclosed that so far about 11 data administrators /processors have been licensed while the applications of 16 others are being processed to ensure that the industry operates based on international best practices and standards.

e-Nigeria is Nigeria’s annual Information Technology Conference hosted by the National Information Technology Development Agency (NITDA), a Federal Government Agency under the supervision of the Federal Ministry of Communications and Digital Economy. The event is hosted in collaboration with other relevant stakeholders from the public and the private sector as well as Non-Governmental Organisations and Academia. It serves as a platform for ICT awareness creation, development of appropriate regulatory instruments and best practices in order to facilitate the positioning of Nigeria in the global Information Society.

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Taking appropriate steps with data pricing

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Taking appropriate steps with data pricing

Recent directive from the Ministry of Communications and Digital Economy on data price has sparked controversy in the telecommunications sector as operators fault the minister. This has, however, brought to fore the need for government to address challenges impacting telcos’ operational costs. SAMSON AKINTARO reports

 

The Minister of Communications and Digital Economy, Dr Isa Pantami, last week gave the Nigerian Communications Commission (NCC) five days to bring down the cost of data in the country.

The order was one among other subscriber issues the minister had tasked the telecoms regulator to address with immediate effect.

While the five-day ultimatum had since lapsed, stakeholders have described the order as unrealistic in a market where prices are expected to be determined by market forces.

The order is also deemed to be insensitive in the face of current operating challenges in the sector, which the minister was also aware of.

According to the telecoms operators, issues of multiple taxations, right of ways, among others, continue to push up operating costs, thus reflecting in the current services tariff.

The directive

Pantami had during the presentation of the new board member and Executive Commissioner of NCC, Barrister Adeleke Adewolu, directed the NCC to resolve the issues of illegal data deduction and ensure downward review of data price within five days.

The minister pointed out that there were numerous complaints from Nigerians regarding illegal data deduction and high price of data, adding that he had personally experienced illegal data deduction.

“I am urging the management of NCC to work towards reducing the price of data in Nigeria. It is too costly and people are complaining every day.

“If you go to other countries, even countries that are not as largely populated as Nigeria, data prices are not this high. I am also a victim of some of the infractions that are so common in the industry. You load your data but you barely use 20 per cent of it and the entire data is wiped off.

“The last time I commented on the issue of illegal data deduction. This is one of the issues that worry me badly today. Engr. Wakil making a presentation on behalf of EVC (Executive Vice Chairman), he tried to defend the operators on one hand and the commission on the other, but I was not fully convinced with the explanation.

“Please go, sit down and review that issue. It is very important and I want to get your feedback with that report in the next five working days with the decision on it because the complaint from Nigerian is beyond what I can handle as it is today, people are complaining,” he said.

Telecoms challenges

Incidentally, the minister also acknowledged that there were challenges confronting operators in the sector.

Pantami said government was aware of the challenges mobile operators were experiencing in their business such as multiple taxation, vandalism and issues of Right of Way (ROW).

According to him, “the way we pursue the mobile operators to do what is right, we should also work together to protect their interest and resolve the challenges they face.  Our interest is to protect Nigerians”.

What the law says

The law governing telecommunications in the country, Nigeria Communications Act (NCA), from which NCC derives its powers, allows the commission to make regulations for the progress of the sector. It, however, does not empower the regulator to fix price of services, rather, the NCA mandates the commission to ensure that tariffs reflect costs of providing services.

Section 108, sub-section 4 of the NCA states that “the tariff rates established by a licensee mentioned in subsection (1) of this section shall be on the basis of such principles as the Commission may from time to time stipulate in its guidelines or regulation including the following— (a) tariff rates shall be fair and, for similarly situated persons not discriminatory ; (b) tariff rates shall be cost-oriented and, in general, cross-subsidies shall be eliminated ; (c) tariff rates shall not contain discounts that unreasonably prejudice the competitive opportunities of other providers ; (d) tariff rates shall be structured and levels set to attract investments into the communications industry ; and (e) tariff rates shall take account of the regulations and recommendations of the international organisations of which Nigeria is a member.”

In accordance with the law, NCC, working with its consults, KPMG, had recently embarked on a cost study, which is still ongoing, to determine if current price of data in the country should be reviewed downward or upward in line with the reality of the markets (that is, after the cost elements of the operators have been scientifically factored into consideration).

According to stakeholders, it would be catastrophic if NCC takes action not supported by realities of the market.

“The commission will completely lose its credibility if it panders to the whims of the minister, who has demonstrated lack of understanding industry’s dynamics through the directive,” a telecom analyst said.

“If NCC toes the hasty path of the Minister calling for arbitrary reduction in the cost of data, the Commission will definitely lose in court if and when operators challenge its action and that will be unfortunate for a regulator,” he added.

Telcos react

Speaking on the directive, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, noted that price was not a policy issue as it is determined by market forces.

Emphasising that the issue of pricing also has to do with regulation and nothing to do with policy, which the minister is supposed to be championing, Adebayo said the NCC should be allowed some level of independence.

“The telecoms regulator shouldn’t be muzzled so that the gains recorded in the country’s telecom industry are not reversed,” he said.

He wondered how the directive would work without a good framework that will save the huge investments made by the telecom operators.

“I don’t know how the government is going to achieve that (data reduction) in five days. Have they put into consideration the high cost of operating our businesses and the very harsh operating environment we are in?” he asked.

“Why are they trying to muzzle the NCC and stampede it into doing what is unrealistic? Do they know that operators don’t just sit down and fix tariffs? They, with NCC, rely on so many things before coming up with tariffs. We do not know under what circumstances the directive was given, and to be honest with you, we don’t know how that is going to be achieved.

“We have said it several times that when policies interfere with commercial matters, the industry will be jeopardised. Government needs to be careful not to whittle down the powers of the regulator.

“To arrive at prices NCC normally conducts survey and research, and after all that, it will benchmark the country’s tariffs based on what is obtained in other jurisdictions,” he said.

Last line

Rather than calling for reduction of data price, which obviously cannot happen by fiat, the minister should as a matter of urgency come up with policies that will remove bottlenecks to infrastructure deployment and reduce the number of taxes payable by telecom operators.

When these necessary steps are taken, price of telecommunications services will naturally come down and the sector will be able to attract new investors to deepen the competition.

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Telecoms: Subscribers’ complaints down by 50%

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Telecoms: Subscribers’ complaints down by 50%

19,063 issues resolved in 10 months

 

Number of subscribers’ complaints to the Nigerian Communications Commission (NCC) over telecommunications services went down by 50.5 per cent in the last 10 months, New Telegraph has learnt.

According to official report of the telecoms regulator, a total of 19,983 complaints were escalated to the commission between January and October this year, a downward trend from 40,410 recorded in the same period in 2018.

Issues such as wrong billings, Value Added Service (VAS) subscriptions, call set up complaints, missing balance, among others are top complaints from the subscribers.

The NCC had opened various channels such as the toll-free line – 622, Consumer Web Portal, various Social Media handles in addition to written complaints, for the subscribers to lodge their complaints if they are unsatisfied with their service providers. However, such complaints are expected to go to the regulator only if the service providers fail to address it.

The reduction in the number of complaints escalated to the regulator indicated that the telecom operators have improved in addressing issues raised by the consumers. In addition, the implementation of Do-Not-Disturb (DND), which allows subscribers to stop unwanted messages, may have also contributed to a reduction in complaints from mobile users.

Out of the 19,983 complaints received within the period, NCC said it was able to resolve 19,063, leaving 920 issues pending. The complaints resolutions figure also showed improvement over the 2018 record as 24,368 issues were resolved out of the 40,410 complaints received between January and October of that year.

Analysis of the complaint figures by channels showed that the highest number of complaints was recorded through the toll-free 622.

According to NCC, 18, 717 complaints came in through the channel in the 10-month period. The regulator’s consumer portal was the second preferred channel of complaints as 770 issues were reported through the portal. Through its social media channels, subscribers lodged a total of 315 complaints in 10 months, while 181 complaints were received through direct letter writing to the Commission by subscribers.

While noting that there has been a paradigm shift from mere service provisions to consumer satisfaction, NCC said all hands must be on deck to ensure that complaints are not only attended to but resolved as at when due. This, it said, would enhance and improve the complaint resolution rate from the current cumulative average of 78.22 per cent as of Oct 2019 to at least 99.99 per cent by December 2019.

Meanwhile, the NCC has issued fresh Service Level Agreements (SLAs) for the telecom operators in addressing subscriber complaints. In the SLAs document, a copy of which was seen by our correspondent, the regulator stipulates the amount of time an operator must take to address subscriber issues and sanctions for failing to keep to the time limit.

For instance, for complaint on overcharging subscribers account for calls/SMS/MMS, NCC said the concerned operator must resolve the issue within 24 hours and must provide feedback to the consumer and refund where applicable. Failure to keep to this timeline, the regulator said would attract five per cent of the overcharged amount to be paid to the consumer for every 24hrs of default.

In another instance, the guideline states that when a subscriber is charged for unsuccessful call attempt or undelivered text message, the telco must refund the subscriber within 24 hours, while failure to do so attracts five per cent of the charged amount to be paid to the consumer for every 24 hours of default.

On subscribers’ call to customer care agents of the operators, NCC said when a subscriber is given wrong information by customer care representatives, such an issue must be resolved within 24 hours and correct information must be given to the consumer.

Failure to do that, the regulator said, attracts “N250, 000 fine, payable to NCC when complaints exceed 100 subscribers per day.”

Speaking on the process that birthed the new SLAs, NCC’s Director of Consumer Affairs Bureau, Mrs. Felicia Onwuegbuchulam, said the document on Consumer Complaints Categories and SLAs went through its first in–house review in 2017.

“The review process was expanded in 2018 to include several relevant departments of the Commission as well as Service Providers under the umbrella of Association of Licensed Telecom Operators of Nigeria (ALTON), – thus the birth of the Industry Working Group on Complaint Categories and Service Level Agreements (SLAs),” she said.

Onwuegbuchulam added that a technical working committee comprising two key staff of all service providers was inaugurated during the NCC strategic meeting on complaint management held on September 27, 2018; specifically to review the existing Service Level Agreements/Key Performance Indicators (SLAs /KPIs) and make changes, observations and adjustments where necessary and revert to the Commission through ALTON in two weeks.

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Economy: Dangote Group restates commitment to value addition

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Economy: Dangote Group restates commitment to value addition

The President/Chief Executive of the Dangote Group, Alhaji Aliko Dangote, has disclosed that the group’s multi-billion dollar investments in key sectors of the in Nigerian are geared towards transforming the economy for the better.

Dangote, who disclosed this at the 2019 Lagos International Trade Fair, said that the group had invested in sectors such as power and energy, oil and gas, cement, agriculture, railway, automobiles, road construction, foods and beverages and transportation.

He explained that the investments were meant to vividly create job opportunities for Nigerian teeming youths in line with Federal Government’s diversification agenda to reduce unemployment rate in the country.

Dangote, who was represented at the event by the Group Executive Director, Dangote Group, Knut Ulvmoen, explained that the firm considered first the interest of Nigeria, saying that the company’s vast key projects and investments were meant to add value additions to Nigeria’s growth.

Dangote also noted that its biggest project, Dangote Refinery in Lekki, the ongoing $11 billion petrochemical and fertilizer plant, rice mill, sugar plantation, tomato, cement, infrastructure, assembling line for trucks projects were meant to transform the economy and take it to the next level.

He said: “At Dangote Group, we consider ourselves very much together with the Lagos Chamber of Commerce and Industry because we have a lot of things in common and most importantly, the interest of Nigerians. Lagos Chamber of Commerce and Industry is the number one chamber of commerce and industry in the country. Let’s say that they represent all other chambers of commerce in the country being their leading father or mother.

“Dangote Group with the Dangote family, we have a lot of ongoing projects. We have the biggest one, which is the Dangote Refinery in Lekki and in the same area we are building a fertiliser plant too. All over the country, we are developing rice, not only with the farmers on our own farming and also to get the rice on the table. We have ordered and are installing all over the country 10 rice mills to start with. Is not only to do the farming, is also to do everything that is necessary to get the farm products to the consumers.”

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LCCI picks holes in ease of doing business ranking

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LCCI picks holes in ease of doing business ranking

In the latest World Bank’s 2020 Ease of Doing Business Report, Nigeria leapfrogged to 131 from 146, moving 15 places up the ladder. Despite this feat, members of the organised private sector are still concerned over business operating environment. Taiwo Hassan reports

 

Indeed, it was cheering news for Nigerians following the World Bank’s 2020 Doing Business Report as the country moved to 131 position from 146th position last year. The ranking is Nigeria’s best performance since 2011.

Analysis of the report also showed Nigeria climbed four spots higher to snatch the 17th position in sub-Sahara Africa and jumped two spots higher to claim the 5th spot in West Africa.

Following the feat, members of the OPS commended the Federal Government, as it reflects efforts by the Presidential Enabling Business Environment Council (PEBEC).

With the report, Nigeria has moved 39 places in five years, from 170 in 2015 up to 131.

However, Nigeria’s ranking in West African sub region is 5th. The OPS believes Nigeria can do much better as the economic powerhouse of the region.

While attributing the improved ranking to efforts of the current administration through PEBEC, the Lagos Chamber of Commerce and Industry (LCCI), however, observed that the country’s prevailing business environment was not conducive yet for businesses to grow.

The LCCI faulted the rationale used by the World Bank in assessing ease of doing business in Nigeria, saying the World Bank captured Nigerian business environment using Lagos and Kano largely as a result of their economic and commercial importance.

It stated that 77 per cent of sampled businesses by the World Bank were drawn from Lagos and the other 23 per cent from Kano.

“We are of the view that the World Bank findings in the two cities might not be broad enough considering the fact that the combined Micro, Small and Medium Enterprises (MSMEs) in Lagos and Kano is less than 15 per cent of total MSMEs (41 million) in Nigeria, according to a 2017 SMEs national survey conducted by the National Bureau of Statistics.

“We believe that only two cities will not adequately capture what it takes to do business in Nigeria. The report failed to capture citieslike Aba, the industrial hub of the South-East region, Onitsha, Abuja and Port-Harcourt where commerce also thrives,” the chamber’s Director General, Muda Yusuf, said.

Speaking further, Yusuf admitted that high cost still hurts access to credit in Nigeria, adding that Nigeria did not improve on access to credit sub-index.

Yusuf explained that the interest on SMEs and commercial loans for most deposit money banks ranged from 20 per cent to 30 per cent, and this discourages businesses from accessing credit facilities to expand operations.

The chamber went ahead to describe the tax payment model in the country as a problem and that the global bank failed to captured it in its ease of doing business report.

According to the LCCI, Nigeria did not improve on the tax payment sub-index.

“We attribute this to the cumbersome process associated with tax payment, which discourages taxpayers. To support our assertion, a report by Pricewaterhousecoopers titled ‘Paying Taxes 2019’ ranked Nigeria 157 out of 190 countries on the ease of paying taxes,” LCCI noted.

Meanwhile, in the report, the issue of multiple taxation also came to the front burner.

Yusuf noted that the issue of multiple taxation needs to be addressed, especially at the states and local government levels where various fees and levies are charged.

He posited that tax reforms that will stimulate the growth of MSMEs should be pursued vigorously such that the current revenue drive of the Federal Government does not cripple and destroy whatever gains that have been achieved in MSMEs development in the past.

Speaking on electricity reform and reality, he said, according to the World Bank, Nigeria made getting electricity easier by allowing certified engineers conduct inspections for new connection in Lagos and Kano, adding that “we believe that this reform does not reflect present realities as businesses are still grappling with epileptic power supply, and this has taken a toll on their cost of production and profitability. Lack of access to electricity and unreliable electricity supply remains a key constraint to doing business in Nigeria.

“According to Dalberg, a global policy and advisory firm, individuals and businesses spend nearly $12 billion on self-generated power supply.”

The LCCI DG noted that the challenges confronting the power sector included inadequate gas supply, non-cost reflective electricity tariff, operational efficiencies and poor distribution infrastructure remain unaddressed.

He said: “We are of the view that the $3 billion facility obtained from the World Bank to revitalize the sector is a step in the right direction and should possibly improve access to stable power supply if strategically deployed.”

In addition, the LCCI also raised eyebrow on why the informal sector not captured by the World Bank, saying it was important to note that the survey that underpinned the report was limited to locally owned limited liability SMEs in the formal sector.

However, the informal sector, which is home to a large chunk of Nigerian SMEs, was not captured in the report. Nigeria has one of the largest informal sectors in sub-Saharan Africa, which accounted for 65 per cent of its Gross Domestic Product in 2017, according to an International Monetary Fund report.

Yusuf said: “We are of the view that government needs to concentrate more on this sector with a view to transforming the sector to maximise its potential. This is very important as the report failed to highlight the challenges businesses experience in the informal sector and the structural bottlenecks encountered by them when transitioning into the formal sector.”

On the country’s insecurity, LCCI said it was obvious that the indicators used by the World Bank in the ranking for ease of doing business ignored insecurity, which stands as a critical element in investment and business decision in any nation.

According to LCCI, it is pertinent to state that no matter the improvement made in other areas, once a nation is considered insecure or unsafe, investors would naturally look the other way. Also, existing businesses are most likely to suffer losses.

Last line

The current administration has disclosed its intention to be among top 70 countries on the ranking by 2023. This goal is laudable but would only be achieved when the government addresses the major issues around infrastructure, policy, regulation, quality of institutions and inse

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