INSTANT NEWS

In September 2023, Nigeria witnessed a significant rise in its headline inflation, which increased by 0.90 percent, reaching 26.72 percent, compared to the 25.80 percent recorded in August of the same year. This data, unveiled in the September Consumer Price Index report by the National Bureau of Statistics (NBS), reveals a concerning trend in the country's inflationary pressures.

On a year-on-year basis, this surge in headline inflation signifies a notable increase of 5.94 percentage points when compared to the rate in September 2022, which stood at 20.77 percent. It's evident that the inflation rate in September 2023, when measured year-on-year, has surged compared to the corresponding month in the preceding year, September 2022.

Moreover, examining the data on a month-on-month basis, the report indicates that the headline inflation rate for September 2023 was 2.10 percent, reflecting a notable decrease of 1.08 percent compared to the rate recorded in August 2023, which was 3.18 percent. This particular aspect of the report suggests that the rate of increase in the average price level during September 2023 was less pronounced than what was observed in August 2023.

These statistics shed light on the changing economic landscape in Nigeria, where inflationary pressures are becoming a growing concern. It is essential for policymakers and economic stakeholders to closely monitor and address the factors contributing to this upward trajectory in inflation to ensure the country's economic stability and the well-being of its citizens.

Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, has suggested the suspension of Value Added Tax (VAT) on diesel as a measure to alleviate the economic repercussions stemming from the elimination of fuel subsidies. Oyedele made this proposal during an appearance on Channels Television's Sunrise Daily breakfast program on Wednesday.

Addressing the pressing need for immediate action, Oyedele emphasized the importance of targeting "low-hanging fruits" within the first 30 days of the committee's operations. Drawing parallels with the removal of fuel subsidies on petrol, Oyedele proposed the suspension of VAT on diesel to counteract the rising prices and potential inflationary effects. He stressed that this proposal was a tentative step toward addressing a prevalent concern.

While Oyedele acknowledged that this suggestion does not guarantee implementation, he emphasized the committee's intention to present it for consideration and discussion. The committee's primary objective during this initial period is to tackle pressing issues that have long been recognized but remained unaddressed.

Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), outlined the broader scope of the committee's agenda. Over the next six months, the committee plans to enact significant tax reforms, streamline tax laws, introduce executive orders, and establish comprehensive regulations. The committee, inaugurated by President Bola Tinubu, has been granted a one-year timeline to execute its policies, with the 30-day, six-month, and one-year phases progressing concurrently.

Notably, Oyedele highlighted the Federal Inland Revenue Service (FIRS) as the most suitable entity for revenue collection on behalf of ministries, departments, and agencies. He also underscored the committee's commitment to addressing excess bank charges and reducing the multitude of taxes and levies imposed on businesses. With the aim of enhancing efficiency and reducing complexities, the committee's vision involves consolidating the number of taxes to a more manageable figure of around 10.

As Nigeria navigates the complex landscape of fiscal reforms and economic adjustments, the insights and proposals put forth by the Presidential Committee on Tax Policy and Fiscal Reforms hold the potential to shape the nation's financial trajectory and alleviate some of the challenges associated with subsidy removal and revenue generation.

In recent years, Nigeria has increased its agricultural produce exports to Europe, America, Asia and other African countries. Exporting agricultural products now accounts for almost 80% of Nigeria's total exports, with a total of N598.2bn worth of agricultural products exported in 2022 alone. This figure accounts for an 18.5% increase compared to 2021. 

Europe has become a particularly important market for Nigerian exporters. In Q4 2022, Spain, The Netherlands, India, France and Indonesia were the major export markets. The federal government's efforts to encourage both production and exports have contributed to the surge in shipments to the developed world. 

One factor that has played a significant role in increasing Nigeria's export earnings is the establishment of the Nigeria Customs Export Processing Command in Ijora, Lagos, which has become a one-stop-shop for agro-export. Within three months of operation, the command processed non-oil exports with a total tonnage of 118,184.96. It processed export goods worth N86.426bn, including cocoa beans, cashew nuts, sesame seeds, hibiscus flower, soya beans and ginger. 

Nigeria's quest to increase its export earnings received a significant boost in the fourth quarter of 2022 with the role of the new export terminal. The Lilypond Export Command, despite being a new command, recorded some major achievements, including a drastic reduction in delay in export processing, which has made the business of export effective and efficient. It has also reduced congestion along the access roads to the port and inside the port terminals, giving space for import containers, which has led to a reduced cost of export business. It has also reduced the issue of contract cancellation and the issue of pilfering of cargo has been eliminated.

Cocoa beans top the list on the export chart, followed by cashew nuts, sesame seeds, hibiscus flowers, soya beans and ginger. There has been a growing demand for Nigeria-made cosmetics and furniture by countries in the West Africa sub-region. The Nigerian Customs Service (NCS) provided the data on export to the National Bureau of Statistics (NBS), which shows that Nigeria exported N5.76tn worth of items in 2021, which increased by 23.13% in the first quarter of 2022, while imports declined by 0.67%.

This surge in Nigeria's agro-produce exports is a welcome development for the country, as it could be a significant boost to the country's economic growth. The government's efforts to encourage both production and exports should continue to support the sector, and initiatives like the new export terminal should be encouraged to drive the continued growth of Nigeria's agro-produce exports. 

The Global Voice Group (GVG) has announced its plans to address the issue of global revenue loss to fraud in the telecom industry, which currently amounts to $39.89 billion. As a major provider of IT solutions to governments and regulatory authorities, GVG will discuss and offer actionable solutions to telecom companies at the 2023 RegTech Africa Conference. The conference has the theme, ‘Elevating National Policy on Financial Inclusion, Consumer Protection and Cybersecurity’ and is scheduled to hold between 24th – 26th May 2023 in Lagos-Nigeria.

According to a survey by the CFCA Global Telecommunications Fraud Loss in 2021, the total revenue loss due to fraud in the telecom industry was $39.89 billion, with an additional $28 billion lost globally in uncollected revenue. With razor-thin margins, fierce competition, and constant attempts by fraudsters to swindle companies, telecom operators cannot afford to lose more money on their billing. Billing discrepancies lead to disputes and possible customer churn.

Cyril Okoroigwe, the CEO of RegTech Media, explained that telecom billing is a complex process that involves interrelated technologies and processes working together to provide a seamless service. To ensure that telecom companies bill their clients as per the commercial agreement, GVG will share insights on revenue assurance in telecom at the conference. Regulatory technology (RegTech) is becoming a key consideration in many African countries, with benefits including fraud detection and transaction monitoring, as well as increasing telecom tax collections.

Operators that rely solely on lower rates to beat the competition may not survive in the long term. Those that invest in revenue assurance technology solutions will not only provide great service but also raise their revenue by plugging in the leaks. Given the rate of 5G adoption, telecom companies need to start modernizing their revenue assurance processes now, Okoroigwe said. Smart businesses must prepare their systems to automate every touchpoint, including billing, charging policies, and fraud detection.

Traditional revenue assurance systems are of little value because they alert when the damage is already done. With the sheer volume and velocity of data in 5G, there is a need to act in real-time. A unified fast data platform should address revenue assurance needs during the entire life cycle in one seamless motion. Telecom companies need to match their revenue assurance processes with the technologies of the future, such as 5G. Current 5G deployments are not widespread, and telecom operators can absorb any losses. However, as 5G adoption increases, telecom companies need to start preparing their systems to adapt to the new technology.