The sustained rise in the prices of goods and services in Nigeria is driven by a complex interplay of domestic economic challenges, monetary policy decisions, and external factors. The trends identified by manufacturers, agricultural experts, and economic analysts reveal that inflationary pressures are likely to persist, affecting both the productive and service sectors. This analysis will explore the various underlying causes and how they are expected to shape price trends in Nigeria.

1. Monetary Policy and Rising Interest Rates

The continuous increase in the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN), now at 27.25%, has had a ripple effect across the Nigerian economy. The Manufacturers Association of Nigeria (MAN) has expressed concerns that higher borrowing costs, which now exceed 35%, are compounding the challenges faced by the manufacturing sector. With the cost of credit rising, manufacturers are forced to either raise prices to cover costs or reduce production capacity, exacerbating supply shortages.

As production costs rise, the prices of manufactured goods inevitably increase, further eroding consumer purchasing power. This cost-push inflation is particularly damaging for a country like Nigeria, where many industries depend on imports for raw materials. As the Naira continues to depreciate, manufacturers pay more for inputs, worsening the inflationary spiral.

2. Depressed Consumer Demand and Inventory Buildup

Despite rising production costs, many manufacturers face the challenge of declining consumer demand due to reduced purchasing power. With inflation soaring, consumers are spending more on essential goods like food and fuel, leaving less disposable income for other goods and services. As a result, manufacturers are accumulating unsold inventory, which reached ₦1.24 trillion in the first half of 2024—a significant increase from ₦869.37 billion at the end of 2023.

This situation is unsustainable for the manufacturing sector, as companies must either continue raising prices to offset losses or cut production, leading to layoffs and potential business closures. The resulting unemployment would further suppress demand, creating a vicious cycle of stagnating economic activity and rising inflation.

3. Food Inflation and Agricultural Challenges

The agricultural sector, a crucial component of Nigeria’s economy, is also grappling with significant challenges that are contributing to rising food prices. Worsening insecurity, particularly in the northern regions, has severely disrupted farming activities, reducing both output and productivity. Armed conflicts and banditry have prevented farmers from accessing their lands, while attacks on rural communities have driven many farmers away from agricultural activities altogether.

Moreover, Nigeria suffers from a lack of adequate storage and processing facilities. According to the Food and Agriculture Organisation (FAO), Nigeria loses up to 50% of its agricultural produce post-harvest due to poor infrastructure, inadequate storage, and inefficient food processing methods. This wastage leads to shortages, driving up the prices of staple foods such as grains, fruits, and vegetables. Even during harvest seasons, when prices typically ease, the lack of proper storage ensures that these gains are short-lived, with prices quickly rebounding after seasonal abundance passes.

The combination of insecurity, high post-harvest losses, and inefficient food distribution systems guarantees that food prices will remain elevated in the near and medium term, putting further pressure on household budgets.

4. The Depreciation of the Naira and Smuggling

One of the most significant factors driving inflation in Nigeria is the persistent depreciation of the Naira, particularly against stronger currencies like the CFA franc in neighboring countries. As the Naira weakens, the price differential between Nigeria and its neighbors increases, creating opportunities for smugglers to move food items and other essential goods out of Nigeria to sell them at higher prices.

This cross-border smuggling exacerbates local shortages, further driving up domestic prices. With the Naira currently trading at around ₦1,700/$ in the parallel market, there is little hope for a near-term recovery. The government’s decision to float the Naira in 2023, while aimed at addressing exchange rate imbalances, has led to increased volatility in the currency market, with speculative activities and weak foreign investment inflows adding to the pressure on the Naira.

Without robust interventions to stabilize the currency, such as increasing foreign reserves or attracting substantial foreign investment, the exchange rate is likely to remain under pressure. This continued depreciation will ensure that imported goods, including food items and raw materials for manufacturing, remain expensive, further fueling inflation.

5. Energy Costs and Petrol Price Increases

Energy prices, particularly petrol, have been a key driver of inflation in Nigeria. The removal of petrol subsidies by the Tinubu administration has led to a sharp increase in fuel prices, with petrol now selling for around ₦1,000 per liter—up from ₦187 per liter when the administration took office. Given that transportation costs account for a significant portion of the cost structure for many goods and services, the impact on inflation has been profound.

Higher fuel prices have not only driven up the cost of transporting goods but also increased the operating costs for small businesses and households that rely on petrol-powered generators due to the country’s unreliable electricity supply. With global oil prices likely to remain high due to geopolitical tensions and the depreciation of the Naira against the U.S. dollar, petrol prices are unlikely to decline soon, ensuring that energy costs will continue to be a major contributor to inflation.

6. Structural Economic Issues and Foreign Exchange Shortages

Nigeria’s heavy dependence on crude oil exports and the chronic underperformance of the oil sector, due in part to oil theft and declining production, have reduced the country’s foreign exchange earnings. This, in turn, limits the ability of the Central Bank of Nigeria (CBN) to stabilize the Naira through interventions in the foreign exchange market.

With dwindling foreign reserves and limited inflows from non-oil exports, Nigeria has been unable to meet the foreign currency needs of manufacturers and importers. The resulting scarcity of foreign exchange has led to higher costs for imported goods, from industrial machinery to everyday consumer products. Until Nigeria can diversify its export base and increase foreign exchange earnings, these challenges will persist, keeping the pressure on prices.

>> Click here to continue reading..

The Nigerian National Petroleum Company Limited has pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86bn.

By pledging 272,500 barrels daily, it means that about 8.17 million barrels of crude will be used for different loan deals by the national oil firm on a monthly basis.

This is according to an analysis of a report by the Nigeria Extractive Industries Transparency Initiative and the NNPC’s financial statements.

Under these deals, notable projects include Project Panther, Project Bison, Project Eagle Export Funding (Original, Subsequent, and Subsequent 2 Debts), Project Yield, and Project Gazelle.

According to The PUNCH’s findings, NNPC has already fully repaid $2.61bn in loans, representing 29.4 per cent of the total credit facility, while $6.25bn or 70.6 per cent, remains outstanding.

Also, out of the $8.86bn credit facility, only about $6.97bn has been received from seven crude-for-loan deals.

One of the key projects, Project Panther, involves a joint venture between NNPC and Chevron Nigeria Limited, backed by international and local banks.

The project secured a $1.4bn loan facility, with 23,500bpd pledged to service the debt. Repayment is set to commence after a moratorium, with financing terms including an SOFR (Secured Overnight Financing Rate) plus 5.5 per cent margin and a liquidity premium.

Another significant deal is Project Bison, tied to NNPC’s attempt to acquire a 20 per cent equity stake in the Dangote refinery. However, the national oil company only acquired a 7.25 per cent stake.

The project secured a $1.04bn loan from Afrexim Bank, with 35,000 bpd pledged as collateral. NNPC fully repaid this loan in June 2024.

Project Eagle Export Funding comprises three separate loans aimed at meeting various financial obligations.

The original loan, secured in 2020 for $935m, was serviced with 30,000 bpd and was fully repaid by September 2023.

A subsequent loan of $635m was also fully repaid by the same period. The third tranche, known as Project Eagle Export Funding Subsequent 2 Debt, was secured in 2023 for $900m, with 21,000 bpd pledged. Repayment is scheduled to begin in June 2024, and the loan will mature in 2028.

Project Yield, designed to support the Port Harcourt Refining Company, involves a $950m loan, with 67,000 bpd pledged for repayment.

The repayment of the loan, secured in 2022, will begin in December. This seven-year facility is crucial to refurbishing the refinery and enhancing domestic refining capacity.

However, despite this crude-for-loan arrangement, fuel production at the Port Harcourt refinery has yet to commence, despite multiple postponements as of August. Promises from the Federal Ministry of Petroleum Resources and NNPC have repeatedly fallen through.

More recently, there was the Project Gazelle deal, which aimed to stabilise Nigeria’s foreign exchange market.

In December 2023, NNPC secured a $3bn forward sale agreement, pledging 90,000bpd from Production Sharing Contract assets to cover future tax and royalty obligations.

As of the end of 2023, $2.25bn had been drawn from this facility, with repayments scheduled to begin by mid-2024.

These crude-for-loan deals come at a time when Nigeria is struggling to boost its oil production.

The NEITI 2022-2023 report revealed a significant decline in crude oil output, reaching the lowest levels in a decade. In 2022, the country produced 490.94 million barrels of crude oil, a steep drop from the peak of 798.54 million barrels in 2014.

Although production slightly improved to 537.57 million barrels in 2023, this still represents only 67.16 per cent of the country’s peak production capacity.

One of the major challenges facing the sector is production deferment. In 2023, Nigeria deferred 110.66 million barrels of crude oil, down from 153.44 million barrels in 2022.

The deferment was primarily due to unscheduled maintenance, repair issues, and oil theft.

Despite government efforts to curb these issues, including initiatives to reduce theft and sabotage, operational inefficiencies persist.

NEITI reported that oil theft and sabotage resulted in the loss of 5.25 million barrels in 2023, exacerbating production struggles.

The House of Representatives Special Joint Committee recently directed NNPC to halt further crude-for-loan agreements.

This directive follows reports that the company is planning to borrow an additional $2bn in oil-backed loans amid efforts to settle a $6bn backlog owed to international oil traders, particularly following the removal of fuel subsidy.

The PUNCH earlier reported that the NNPC was in talks for another oil-backed loan to boost its finances and allow investment in its business, according to the Group Chief Executive Officer, NNPC, Mele Kyari.

Kyari said the company wanted the new loan against 30,000-35,000 barrels per day of crude production, though he declined to say how much money it sought.

Nigeria’s government finances rely on oil the NNPC exports, which provides the bulk of crucial foreign exchange reserves. However, pipeline theft and years of underinvestment have sapped oil production in recent years, and the cost of fuel subsidies has further depleted cash reserves.

On August 17, 2023, the NNPC announced that it had secured a $3.3bn emergency crude oil repayment loan from the African Export-Import Bank.

It explained at the time that the oil company would use the loan to support the Federal Government in stabilising Nigeria’s exchange rate.

The facility, among other things, would help the Federal Government attend to some of its dollar obligations, assist the Central Bank of Nigeria in stabilising the foreign exchange market, and provide funding for NNPC.

Providing details about the deal in the document titled, “Everything you need to know about the NNPC Limited’s $3.3bn loan, also known as Project Gazelle,” NNPC said, “This is a financing agreement secured by NNPC Limited to prepay future royalties and taxes to the Federal Government.”

The company also stated that it adopted a lower price benchmark for the $3.3bn crude-for-cash loan to reduce the risk of default and ensure financial stability.

Giving details on the benchmark oil price, the company said the facility used a conservative crude price of $65/barrel to calculate the allocated crude to be produced and sold.

NNPC also said repayments were strategically planned and tied to future oil sales, with conservative pricing in oil sales contracts mitigating the risks associated with oil price volatility.

The rising cost of maintaining a healthy diet has put a strain on many Nigerians, as the average daily cost of a healthy diet in the country reached N1,255 per adult in August 2024, according to the National Bureau of Statistics.

The NBS in a report released on Thursday that the increase represented a 28 per cent rise compared to N982 in March 2024.

The bureau collects retail food prices monthly from over 10,000 outlets nationwide to monitor inflation trends, including the prices of more than 200 food items.

“Animal source foods were the most expensive food group in August, accounting for 37 per cent of the total cost of a healthy diet while providing only 13 per cent of total calories,” the report highlighted.

At the state level, costs varied, with Ogun, Lagos, and Rivers states recording the highest average daily costs of N1,641, N1,615, and N1,572, respectively.

“Katsina, Kaduna, and Sokoto, however, had the lowest costs, at N880, N951, and N980 per day,” the report further noted. These regional disparities highlight the unequal access to affordable nutrition across the country.

“At the zonal level, the South West zone recorded the highest average daily cost of N1,554, followed by the South-South zone at N1,381. “The North West zone recorded the lowest cost of a healthy diet at N1,041 per day,” NBS added.

The surge in costs was attributed to the rising prices of key food groups.

“Legumes, nuts, seeds, starchy staples, and vegetables were the main drivers of the increase in the cost of a healthy diet,” the report explained.

Despite the 28 per cent increase over the past six months, there was a 0.8 per cent decline in the cost compared to July 2024, which was N1,265 per day.

In addition to the rising food costs, the NBS report showed that the price of vegetables dropped by 14.5 per cent on a month-to-month basis in August.

As food prices continue to rise, experts warned that more Nigerians may find it increasingly difficult to access nutritious food.

The NBS also compared the cost of a healthy diet with the general consumer price index, noting that since July 2023, the cost of a healthy diet has been rising faster than the prices of other goods and services in Nigeria.

“The cost of a healthy diet increased at a faster rate than all goods and services in the past year,” it stated.

A former Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, has said he learnt that there were intrigues and politics in the naira redesign exercise carried out in 2022.

Shonubi, then Deputy Governor (Operations) before his appointment as Acting CBN Governor, said the former Governor of the CBN, Godwin Emefiele, told him and others that there were intrigues and politics in the whole exercise.

Shonubi, now retired, who is the Prosecution’s third witness, made this claim in reaction to a question from Emefiele’s lawyer, Olalekan Ojo, at the resumed hearing in the trial of the ex-governor of the CBN.

Emefiele is being prosecuted by the Economic and Financial Crimes Commission (EFCC) before the High Court of the Federal Capital Territory FCT (FCT) on four counts bordering on disobedience to the direction of law and illegal act causing injury to the public about the naira redesign exercise.

There are indications that the supply of crude oil in naira by the Nigerian National Petroleum Company Limited to the Dangote Petroleum Refinery which should have started on October 1, 2024, has yet to begin as of Thursday, October 3.

Officials at the Dangote refinery and those at the Nigerian Upstream Petroleum Regulatory Commission, Federal Ministry of Finance, and NNPC, among others, stayed mute when contacted for updates on the naira-for-crude deal between NNPC and Dangote.

On Monday, The PUNCH reported that the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency had confirmed the preceding day that the supply of crude in naira by NNPC to the Dangote refinery would begin on Tuesday, October 1, 2024.

On September 13, 2024, the committee announced that the Federal Executive Council under the leadership of President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.

“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.

The Chairman of the Technical Sub-Committee is Zacch Adedeji, who doubles as Chairman of the Federal Inland Revenue Service.

The Special Adviser on Media to the FIRS Chairman, Mr Dare Adekanmbi, had responded in the affirmative when contacted on Sunday and asked if the plan for the crude oil supply to the $20bn Lekki-based plant was still intact.

“I can confirm that the Chairman of the Sub-Technical Committee, Zacch Adedeji, is working day and night to ensure that things go according to plans. He knows how important it is to have the agreement implemented as has been planned for the benefit of Nigerians,” Adekanmbi had stated.

But on Thursday, impeccable sources with three domestic refineries stated that they were not aware if the deal had commenced.

NNPC officials stayed mute when contacted for updates on the deal, directing our correspondent to the Ministry of Finance to get answers. The finance ministry did not provide answers when contacted.

However, a senior official with a domestic refinery said crude oil refiners including Dangote were still awaiting the Federal Government for the supply of crude in naira.

The official also noted that the government through its committee on crude-for-naira had assured operators that efforts were in top gear to deliver on the deal.

“You know that said it was to start on October 1, the technical committee is the one in charge now and they are working on it. They are supposed to arrive at a particular agreement and communicate it to us.

“But I can tell you that as of this moment, we haven’t received that communication yet. We are still waiting for them,” the operator who spoke in confidence due to lack of authorisation to speak on the matter, stated.

Another source with a major modular refinery, who is familiar with the deal, said, “The crude oil refiners’ body in Nigeria hasn’t been communicated yet on the deal. So we await the official communication because up till last week, we spoke with them (the government) and they assured us that the deal was still on course.

“However, I’d like to state that deals of this nature take a while before they are completed. There are a lot of things to be sorted before a final decision is reached. So we have to wait for them.”

The government explained in September that the naira-for-crude initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.

“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” Adedeji had stated.

While stating that crude would be sold to Dangote in naira from October 1, the committee chairman and FIRS boss said, “In return, the Dangote refinery will supply PMS (petrol) and diesel of equivalent value to the domestic market to be paid in naira.

“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”

Adedeji explained that the technical committee that worked to flesh out the initiative would transition to an implementation execution and monitoring committee that would be working out of Lagos for the next three to six months.

The House of Representatives, on Thursday, approved a bill seeking to establish the Nigeria Surrogacy Regulatory Commission for the monitoring and supervision of surrogacy arrangements in Nigeria.

The bill aims to “provide for the registration, regulation, and monitoring of surrogacy agencies in Nigeria and related matters.”

Leading the debate on the general principles of the proposed legislation, the sponsor of the bill, Ayodeji Alao-Akala, stated that the bill seeks to regulate and evaluate surrogacy in Nigeria to ensure that medical and health laws are not violated.

He added that it will also protect those seeking to overcome infertility.

Alao-Akala highlighted that a black market has emerged within the system, which takes advantage of the needs of expectant parents and exploits them.

He further stated that surrogate mothers and the children to be born also require legal protection.

Following its adoption, the Speaker, Tajudeen Abbas, referred the motion to the House Committee on Healthcare Services for further legislative action.

A Senior Advocate of Nigeria and Human Rights lawyer, Femi Falana, has stated that he does not know a controversial crossdresser, Idris Okuneye, popularly known as Bobrisky and does not have any business dealings with him.

In a viral audio posted by a blogger, Martins Otse, also known as VeryDarkMan, Bobrisky had claimed that he bribed some Economic and Financial Crimes Commission officials with N15 million to drop the money laundering charge against her.

In the purported recording, the crossdresser also claimed that her “godfather,” alongside the Controller-General of the Nigerian Correctional Service, Haliru Nababa, ensured she served the six-month sentence in a private apartment and not in prison.

Sharing his opinion on the development, VeryDarkMan alleged that Falana sought a presidential pardon for Bobrisky in exchange for N10 million.

However, the blogger, who appeared before the House of Representatives Joint Committee on Financial Crimes and Reformatory Institutions on Monday, apologised to Falana over his recent derogatory innuendos against him.

But speaking on Channels Television’s Politics Today on Thursday, Falana denied having anything to do with Bobrisky or ever meeting or speaking with the crossdresser.

The senior lawyer said he has assisted 280 convicted people both home and abroad in getting a pardon, and never on any occasion has he or his law firm demanded or received a dime from anybody granted a pardon. 

He said, “Bobrisky never spoke to me, I have never met him, I do not know him from Adam. He was alleged to have spoken to my son Folarin (Falz).

“Yes, my son said this guy was appealing to people for assistance and called my son I think on May 4 this year – please can you give me N3 million to be placed in a special part of the prison, we call it the VIP section.

“My son asked him, are you calling me under the authorization of the superintendent of prisons? He said no – please don’t call me again, I am unable to assist you to bribe the prison authorities and be very careful since you are already in prison for an offence.

“Please if you are you are going to call me next time, you either do through the superintendent or you write a letter endorsed by the prison authorities and that was the last. Somebody now start releasing tapes somewhere and went out to lampoon and rather defame me by saying the guy has spoken to me.”

Embattled Rivers All Progressives Congress chairman, Chief Tony Okocha, made startling admissions about his involvement in rigging local council elections during the tenure of former Governor Rotimi Amaechi.

Okocha, who served as Chief of Staff to Amaechi from 2007 to 2015, was recently ousted as the Rivers APC Caretaker Committee chairman by a Port Harcourt High Court presided over by Justice Sika Aprioku.

Premium Politics reports that Justice Aprioku reinstated Chief Emeka Beke’s party leadership following his removal from office by the national leadership of APC.

Speaking during an appearance on a Channels TV programme on Thursday evening, Okocha, supported by the Rivers APC National Working Committee, also claimed that Beke was also involved in the election rigging during the Amaechi administration.

“On the issue of whether I rigged the election, I did not hide it. I should be praised as a whistleblower.,” he said before being cut by the interviewer who told him that election riggers should be behind bars. “No,” he responded, “If you were an armed robber yesterday, and today you came to confess that you stole something somewhere yesterday. Are you saying that the law will now take a retroactive effect? The answer is No.

“The reason why we say and keep saying is because of what is going on as we speak. When you have an idea of a thing and you see the other person also wants to use the tactics that you already know. You will shout. That is the reason why we went to court.”

When quizzed about who gave the orders to rig the elections, he added, “Yes, all of us were together including Emeka Beke,” implicating the reinstated Rivers APC chair.

However, Beke who was in the interview with Okocha quickly dismissed the allegations, adding that the police would arrest him (Okocha) for rigging the election.

Beke said, “During the election, was I part of it? Have you ever heard me say rig election?” before being countered by Okocha who asked, “Are you saying that under the Amaechi government, you never participated.”

“I did not follow you to the election. I did not partake in any election whatsoever. When you wake up and confess and you want to put me there. I am not part of that. You rigged the election and we are going to ask the police to arrest you that you rigged the election,” Beke replied.

A middle-aged man identified as Odogwu Chibuzor was shot while attempting, along with other fleeing suspects, to siphon diesel from heavy-duty trucks at the Dangote Cement plant in the Ibese area of Ogun State.

Our correspondent learnt on Thursday that three other members of the armed gang fled the scene when security guards swooped in but Chibuzor was apprehended.

PUNCH Metro learnt from a police source in the area who craved anonymity for lack of authorisation to speak to the media that the head of the security unit at the Dangote Cement in Ibese, Egbunu Usman, reported the incident to the Dangote Police Post after one of the suspects, who had sustained a gunshot wound, was apprehended.

According to the source, Usman reported that at around 11:00 pm on Wednesday, four gang members, armed with a Dane gun and other dangerous weapons, stormed the 3 & 4 Section of the plant to carry out the crime.

The suspects, our correspondent learnt, each carrying at least one empty 25-litre jerrycan, had filled three before the security team swooped in on them.

As the suspects tried to flee, PUNCH Metro gathered that the security personnel at the plant opened fire, injuring one while the others managed to escape.

Additionally, a short video recording obtained by our correspondent on Thursday revealed that the suspect confessed to the crime during an interrogation by someone believed to be a member of the plant’s security team.

“My name is Odogwu Chibuzor. I’m from Enugu State, but I live in the Balogun community. Our group has more than 20 members, but only five of us were involved in this. We brought just five jerrycans. One of my friends mentioned that someone in our group had a gun, but I wasn’t aware he was carrying it.

“This was my first time with the group; I had never participated. We were filling the third jerrycan when we spotted the security guards. I was told they usually bribed some truck drivers,” Chibuzor confessed.

When contacted for a comment on the incident on Thursday, the Dangote Group spokesperson Mr Tony Chiejina, asked our correspondent to send a text message.

In response to our correspondent’s text message, Chiejina said he would find out about the incident and get back to PUNCH Metro.

“I will check and revert,” he simply texted.

As of the time this report was filed, Chiejina had not yet responded to the text message sent by our correspondent to his mobile phone as he promised.

But confirming the incident to our correspondent, the spokesperson for the Ogun State Police Command, Omolola Odutola, stated that the suspect was promptly taken to a nearby hospital for treatment before being placed in custody.

She said, “The suspect was taken to the Ilaro General Hospital for medical treatment after sustaining a bullet wound in his back. A brief video of his confession was recorded.

“The lone Dane gun used in the robbery has been recovered, along with the five jerrycans they brought to siphon diesel from the trucks. We are collaborating with other local security agencies to apprehend the remaining fleeing suspects.”

PUNCH Metro reported a similar failed robbery attempt in 2017, during which at least two suspected members of a robbery gang were shot and killed by police operatives.

The gang, consisting of about seven members armed with guns and other dangerous weapons, invaded the company, proceeded to the materials section, and attempted to steal armoured cables before being shot dead by the security operatives.

President Bola Tinubu may bar revenue-generating agencies from collecting revenues on behalf of the Federal Government as he plans to introduce a single agency – Nigeria Revenue Service – to handle the task.

This came as the Federal Government instituted a comprehensive set of fresh tax reforms aimed at significantly boosting revenue collection.

The reforms, designed to enhance the efficiency of collecting direct taxes, along with various levies that are imposed on behalf of the government, will bar the Nigerian Customs Service, Nigerian Ports Authority, and 60 other revenue collection agencies from participating in revenue collection activities, but will lead to the creation of the Nigeria Revenue Service.

By implementing these changes, the government seeks to streamline the tax collection process, ensuring that all taxable entities contribute their fair share and that the revenue generated is maximised to support public services and infrastructure development.

The policy directive was instituted on Thursday when the President forwarded four executive bills to the National Assembly for consideration, aiming to implement significant tax reforms.

Nigeria is contending with a revenue challenge that cuts across all government tiers but wants to attain a minimum tax-to-GDP ratio of 18 per cent. The country’s tax-to-GDP ratio is below Africa’s average and ranks as one of the lowest in the world.

This has led to fiscal deficit and over-reliance on borrowing to finance public spending resulting in a cycle of inadequate funding for socio-economic development.

One of the key proposals is the renaming of the Federal Inland Revenue Service to the Nigeria Revenue Service.

A source at the Presidency, however, hinted that the new bill would not lead to a merger but seek to remove the revenue collection arm from the agencies and allocate its function to the Nigerian Revenue Services.

“There is no merger of agencies. The bill will only take the revenue collection arm of each agency involved and take it to the Nigerian Revenue Service.

“The plan is that the new revenue agency will be like the US or UK revenue agency that collects all government revenues while other revenue agencies like NIMASA, NPA, Customs, etc, will now focus on their core mandate, which is trade facilitation. There is no merger at all,” the official said.

The bill seeking the name change for FIRS was outlined in a letter read by Senate President, Godswill Akpabio, and the Speaker, House of Representatives, Tajudeen Abbas, during the plenary sessions.

The proposed law, titled the Nigeria Revenue Service (Establishment) Bill, seeks to repeal the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007, and establish the Nigeria Revenue Service.

According to Tinubu, the new agency will be responsible for assessing, collecting, and accounting for revenue accruing to the government.

In addition to the name change, Tinubu submitted three other tax reform bills under the title, ‘Transmission of Fiscal Policy and Tax Reform Bills’ to the National Assembly.

The President also transmitted to the parliament the Joint Revenue Board Establishment Bill, which seeks to create a Tax Tribunal and a Tax Ombudsman.

He wrote, “The Nigeria Tax Bill: This bill seeks to provide a consolidated fiscal framework for taxation in the country.

“The Nigeria Tax Administration Bill: Aimed at offering a clear and concise legal framework, this bill will ensure the fair, consistent, and efficient administration of tax laws, facilitating ease of tax compliance, reducing disputes, and optimizing revenue collection.

“The Joint Revenue Board (Establishment) Bill: This proposal seeks to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombudsman, which will work to harmonise, coordinate, and resolve disputes arising from revenue administration in Nigeria.”

Tinubu emphasised that the proposed tax bills would have far-reaching benefits for the country, promoting taxpayer compliance, strengthening fiscal institutions, and fostering a more effective and transparent fiscal regime.

“I am confident that the bills, when passed, will encourage investment, boost consumer spending, and stimulate Nigeria’s economic growth,” Tinubu stated.

On the floor of the House of Representatives, Speaker, Abbas, confirmed receipt of the bills, stressing that they were designed in line with the objectives of the present administration.

He noted that when passed into law, the bills would encourage the growth and sustainability of the economy.

The House also consolidated six bills seeking the repeal of the Fiscal Responsibility Act, 2007 to enact the Fiscal Responsibility Bill, 2024.

The bill aims at ensuring prudent management of the nation’s resources, ensuring long-term macro-economic stability of the national economy; and securing greater accountability and transparency in fiscal operations within the medium-term fiscal policy framework.

Abbas, who presided over plenary, urged the Committee on Rules and Business to fix a date for debate on the general principles of the newly consolidated bills.

The PUNCH recalls that the tax reforms are policy recommendations from Taiwo Oyedele’s Presidential Fiscal Policy and Tax Reforms Committee, which seeks to reduce taxes in the country from the current 62 to a maximum of nine.

It also aligns with the recommendations of the President Tinubu Policy Advisory Council, which proposed declaring a state of emergency on revenue generation in the country.

Speaking in an earlier interview, Oyedele noted that fiscal reforms were needed to protect small businesses, the vulnerable and the poor while effectively taxing the rich.

He said, “Revenue transformation for us means we can no longer continue to celebrate incremental progress because the base was just so small and for us, it wasn’t about raising the taxes from existing taxpayers.

“In fact, one of the things we found out is that poor persons are those paying taxes, so it is time for them to take a break which means we have to look at the system to take that burden away from the vulnerable people, small businesses and let the middle class and the rich who can afford to pay do so.

“We have a brand new national fiscal policy that sets the framework for where we want to be, where we want to go, what we want to do, and what we want to stop doing as a country. We have identified company income tax, personal income tax, value-added tax, stamp duty, capital gains, and excise tax and we have redrafted new ones.”

This new law will expunge the revenue collection function from 62 revenue-generating agencies and transfer the responsibility of revenue collection to a single agency to promote collection efficiency.

Some of the agencies include Federal Airports Authority of Nigeria, Nigerian Ports Authority, Federal Inland Revenue Service, Nigeria Deposit Insurance Corporation, Nigerian Meteorological Agency, National Agency for Food and Drug Administration and Control, Federal Road Safety Corps, Nigeria Customs Service, Standards Organisation of Nigeria and the Nigerian Airspace Management Agency.

Others are the Bank of Agriculture, Nigerian Bulk Electricity Trading, Tertiary Education Trust Fund, Federal Radio Corporation of Nigeria, Nigerian Railway Corporation, Federal Reporting Council of Nigeria, Nigerian Maritime Administration and Safety Agency, Corporate Affairs Commission, Nigeria Civil Aviation Authority, National Broadcasting Commission and Joint Admission Matriculation Board.

Commenting on the implications of the new law, a former National President of the National Association of Government Approved Freight Forwarders, Dr Eugene Nweke, faulted the bill.

He added that customs all over the world were known for revenue collection.

“Customs all over the world are known for revenue collection. What it means is that they would outsource that function to a third party. Customs all over the world are known for revenue collection and anti-smuggling operations,” Nweke said.

According to him, revenue collection had lots of technicalities.

“What they should do with Customs is to train our importers and compel the NCS to go beyond the issues of scanning with a lot of compromises. The government should stop always thinking of how to protect a bill,” he advised.

also reacting, National Public Relations Officer, Association of Registered Freight Forwarders of Nigeria, Taiwo Fatobilola, said, “It is not possible, don’t mind the government. They think revenue collection is what anybody can wake up and start with? Do they know how much it takes to train people on something the NCS have been trained to do? Please don’t mind them, it’s not possible.”

however, National Public Relations Officer, Nigeria Customs Service, Abdullahi Maiwada, said he was not aware of the bill.

“I am not aware of that, I am just hearing it from you,” Maiwada told The PUNCH.