This is list of the recent policy changes in the economy of Nigeria. Changes include ususpenxion ofbank charges on deposits and withdrawals by the CBN, exclusion of raw materials for rubber and plastic production from the list of 41 banned items by the CBN, ceation of a new window for exporters and investors to access forex by the CBN and the introduction of assets and income declaration scheme to capture tax payers by the Governement.
Cashless Policy: CBN suspends bank charges for deposits and withdrawals
The Central Bank of Nigeria released a circular BPS/DIR/GEN/CIR/04/004 suspending its most recent withdrawal and deposit processing fee policy that came into effect 1st April 2017 in Lagos, Ogun, Kano, Abia, Anambra, Rivers, and FCT. It requires that the banks revert back to the old charges of 3% processing fee for withdrawals and no processing charges for lodgements.
In two previous circulars, BPS/DIR/GEN/CIR/04/001 issued on 21st February 2017, and BPS/DIR/GEN/CIR/04/002 issued on 16th March 2017 the CBN had re-introduced the charges for cash deposits.
Charges for cash deposit by individuals were as follows: Less than N500,000, zero charge; from N500,000 to N1 million, 1.5 per cent; from N1 million to N5 million, two percent charge; above N5 million, 3 per cent charge.
Charges for cash withdrawal by individuals were as follows: Less than N500,000, zero charge; From N500,000 to N1 million, two percent; from N1 million to N5 million, 3 percent charge; above N5 million, 7.5 per cent charge.
Charges for corporate cash deposit were as follow: Less than N3 million, zero charge; from N3 million to N10 million, two percent; from N10 million to N40 million, three percent; above N40 million, five per cent.
Charges for corporate cash withdrawal were as follows: Less than N3 million, zero charge; from N3 million to N10 million, five per cent; from N10 million to N40 million, 7.5 per cent; above N40 million, 10 percent.
The policy took effect on 1st April 2017 in Lagos, Ogun, Kano, Abia, Anambra, Rivers, and FCT. Subsequently, it was to be implemented in other states in the Federation over three phases. The first was to be, May 1, 2017, in the following states: Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun, and Plateau. The second, August 1, 2017, in the following states: Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa Ibom, Ebonyi, Taraba, and Nasarawa. And the third, October 1, 2017, in the following states: Borno, Benue, Ekiti, Cross River, Kebbi, Kogi, Kwara, Yobe, Sokoto, and Zamfara.
The CBN circular released suspends the implementation of the policy in Lagos, but it remains unclear if this means that it will not be implemented across the other states. The banks are to revert back to the policy that was in effect prior to 1stApril 2017. That policy requires a 3% processing fee for withdrawals above the N500, 000 limit for individuals, and no processing fee lodgements. For corporate entities, there is a 3% processing fee for withdrawals above N3, 000, 000, and no charge for lodgements.
CBN Removes Raw Materials For Plastic And Rubber Production From 41 Ban List
The Central Bank of Nigeria (CBN) in a circular released last week instructed all authorised dealers of forex to add to the official FX market, High-density polyethylene (HDPE) and Low-density polyethylene (LDPE).
Both items were previously included in item 38 of the 41 banned list and classified under “Plastic and Rubber Products, Cellophane Wrappers.”
The HS Codes for the items are as follows;
- HS Code 3901.1000,
- HS Code 3902.1000, and
- HS Code 3904.1000, are to be included to access funds from the official FX market.”
High-density polyethylene (HDPE) and Low-density polyethylene (LDPE) are key for the manufacture of plastic and rubber products such as plastic bottles, plastic bags, tubes, pipes and packaging materials.
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| Example of containers made from HDPE |
This latest move by the CBN can be seen as an alignment of the Apex bank with the Economic Recovery and Growth Plan (ERGP), in its bid to ease the local manufacturing of the plastics and rubber products.
The Central Bank had in June 2015, issued a circular banning 41 items, including plastics and rubber products (possibly finished items) from the official foreign exchange market. Nairametrics had reported in the past that the CBN was considering excluding some items from this list. This will be the first time since 2015 that the CBN is excluding items from the 41 ban list.
CBN “Frees Naira” As It Creates New Window for Investors & Exporters
The Central Bank of Nigeria (CBN) has created yet another FX window for investors and exporters. The apex bank had earlier created windows for PTA/BTA, School fees, Small and Medium Scale Enterprises (SMEs) and foreign airlines.The transactions eligible to access this window include:
a. Invisible transactions namely:
Loan repayments, Loan interest repayments, Dividends/Income Remittances, Capital repatriation, Management services fees, Consultancy fees, Software subscription fees, Technology transfer agreements, Personal home remittances, any such other eligible invisible transactions including “Miscellaneous Payments” as detailed under Memorandum 15 of the CBN Forex Manual.
b. Bills for collection
c. Any other trade-related payment obligations (at the instance of the customer).
International Airline Ticket Sales’ Remittances shall only be eligible to access the CBN FX Window (i.e. SMIS – Retail and Wholesale.
The suppliers of FX into this window shall be portfolio investors, exporters, authorised dealers and other parties with foreign currency to change to Naira. The CBN shall be a participant in this window to ensure liquidity and professional market conduct. The CBN also reserves the right to act as a buyer or seller in this window.
FMDQ, according to the circular, will be expected to publish market rates and any other relevant information on its website twice daily (morning and evening).
With this new circular, the CBN is aiming to incorporate transparency into this window. It advises the authorized dealers to promote market transparency by encouraging their corporate clients to ensure that activities in this window are operated on FX trading systems.
Furthermore, FMDQ will develop and publish a new fixing, NAFEX (the Nigerian Autonomous Foreign Exchange Fixing), to support appropriate benchmarking and facilitate derivatives activities in the Investors’ and Exporters’ FX Window.
Govt. To Introduce “Asset & Income Declaration Scheme To Capture Tax Payers
The Minister of Finance Kemi Adeosun met with fellow Finance Ministers at a meeting convened by the G24 Group to discuss strategies to drive non-oil revenue growth and achieve inclusive growth.
Speaking after the meetings, the Minister once again reiterated government’s plans to focus on tax collection as a driver for increased non-oil revenue in the country. She explained why this is important’
“Revenue mobilisation is critical to the success of Nigeria’s economic reform agenda. We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues. With a tax to GDP ratio of only 6%, one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth.
The Nigerian government has been criticised of not having the right strategy to capture more tax payers into the tax net as it has continually failed to deliver the promise of an increase in non-oil tax revenue. Mrs Adeosun however, provided an insight into how they could execute their promise this time;
Our data gathering programme over the last year has now given us the tools we need to be more aggressive at pursuing tax avoiders, both domestically and abroad.
Just like some of our contemporaries in the G24 have done successfully, we are going to focus on tax in 2017 through an asset and income declaration scheme to address our low tax revenue collection and ensure improved compliance, a broader tax base and more sustainable revenue. This is fundamental to delivering on our reform plans.”
She also explained that the government will also balance its tax drive with accountability and transparency.
“While we focus on raising revenue’s and bringing people into the tax system, we must be equally aggressive in our approach to budget implementation and transparency. Our people must know where their hard earned tax contributions are being spent and the impact that they are having on national development, and the daily lives of citizens. This will be a core focus for us.”
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