Business

Inflation Rate Decline Affects FG Bonds

Published

14 years ago

April 4, 2012

Despite the resurgence of activities in the secondary market triggered by the drop in inflation rate for February released recently by the National Bureau of Statistics (NBS), the expected yield on the FGN Bonds was on the downside last week according to market reports.

Investors that invested in the market earlier in March in anticipation of the surge in inflation rates in February were disappointed as there was decline in most of the liquid bonds. Market analysts say the decline was due to the fact that inflation erodes the power of bond’s future cashflows.

The 7th series bond, for instance, depreciated to 15.25 per cent last Friday as against the 15.46 per cent it opened the week even as the yields on the 5th series 2 bond dropped to 15.19 per cent on Friday from 15.36 per cent that it opened the week.

Also, the yields on the 9th series decreased to 15.41 percent on the same day compared with the 15.44 per cent that it opened the week under review.

In volume terms, activities in the bond market was driven by the monthly auction which took place on Wednesday, 28 March during which two bonds were offered. They were the 7.00 October 23, 2019 (N20 billion ) and 16.39 January 27, 2022 (30 billion). They were re-opened at Marginal rates of 15.30 percent and 15.41 percent while their subscription levels 216.50 per cent and 127.00 percent respectively.

Also, there was an additional (N50 billion of 16.39 January 27,2022 allotted on a non-competitive basis. The marginal rates during auction was at a lower ebb against expectation as yields in the market dipped across several short-to-medium term maturities, the highest being the 12 month treasures that dropped 67 basis points according to market reports.

Transactions over-the-counter Bond Market recorded a total of 116 million units valued at N101.6 billion in 1,029 deals last week up from a total of 91.23 million units in 875 transactions in the week which ended March 22, 2012.

Specifically, the most traded bond which measured by volume was the 16.39 percent FGN January 2022 (9th FGN bond 2022 series 1) with a recorded volume of 23.25 million valued sold at N24.8 billion 311 transactions.

The 10.50 percent FGN March 2014 (eight FGN Bond 2014 series 1) followed with a traded volume of 22.56 million units at the value of N20.9 billion exchanged in 220 deals.

According to the Nigerian Stock Market report there was no transaction through the Stock Market in the federal government development stocks, State Government Bonds and Industrial Loans/Preference Stocks Sectors. The Equities sector of the market recorded a total transaction of 1.443 billion units of shares valued at N11.53 billion traded in 18,849 deals compared with a total of 1.212 billion units of shares traded at N15.7 billion exchanged in 17,979 deals the previous week.

The financial service sector the report said, accounted for 1.13 billion units of shares at the value of N7.03 billion recorded in 10,896 deals while the consumer Goods Sector followed with 74.34 million shares valued at N2.9 billion traded in 3,324 deals.

On the price movement chart, the NSE All-share Index shed 2.6 percent to close at 20,652.47 basis points while the market capitalisation of listed equities finished lower at N6.55 trillion.

The NSE-30 Index dipped by 3.5 per cent to close at 938.84 points. Only one out of the four sectorial indices appreciated during the week under review.

The NSE-Insurance Index appreciated by 3.4 per cent to end the week at 124.28 points even as the NSE-Consumer Goods Index dropped by 2.23 per cent to close at 1,708.04 points.

The NSE-Banking Index nose dived by 6.6 percent to finish at 283.04 points.

In the quarterly analysis of the nation’s stock market, the market dipped by 0.38 per cent for the first quarter as the index fell from 20,730.63 to close at 20,652.47 points while the market capitalisation of listed equities added N16 billion to close higher at N6.549 trillion.

Vivian-Peace Nwinaene

Business

FIRS Clarifies New Tax Laws, Debunks Levy Misconceptions

Published

2 days ago

December 5, 2025

The Tide

The Federal Inland Revenue Service has said that Nigeria’s newly enacted tax laws are designed to strengthen economic competitiveness, attract investments, and improve long-term fiscal stability.

The agency also clarified that the much-debated four per cent development levy on imported goods is not a new or additional tax burden, but a streamlined consolidation of several existing levies.

According a statement released Wednesday, one of the most misunderstood elements of the new tax framework is the four per cent development levy with the agency explaining that the levy replaces a range of fragmented charges — such as the Tertiary Education Tax, NITDA Levy, NASENI Levy and Police Trust Fund Levy — that businesses previously paid separately.

This consolidation, it said, reduces compliance costs, eliminates unpredictability and ends the era of multiple agency-driven levies. The law also exempts small businesses and non-resident companies, offering protection to firms most vulnerable to economic shocks.

Another major clarification relates to Free Trade Zones. Earlier commentary had suggested that the government was rolling back the incentives that have attracted export-oriented investors for decades. However, the reforms maintain the tax-exempt status of FTZ enterprises and introduce clearer guidelines to preserve the purpose of the zones.

“Under the new rules, FTZ companies can sell up to 25 per cent of their output into the domestic market without losing tax exemptions. A three-year transition period has also been provided to allow firms to adjust smoothly.

“Government officials say the reforms aim to curb abuses where companies used FTZ licences to evade domestic taxes while competing within the Nigerian market”, it said.

With the new measures, Nigeria aligns with global FTZ models in places like the UAE and Malaysia, where the zones function primarily as export hubs for logistics, manufacturing and technology.

The introduction of a 15 per cent minimum Effective Tax Rate for large multinational and domestic companies has also been met with public concern. But the FIRS notes that this policy aligns with a global tax agreement endorsed by over 140 countries under the OECD/G20 framework.

Without this adoption, Nigeria risked losing revenue to other countries through the “Top-Up Tax” mechanism, where the home country of a multinational collects the difference when a host country charges below 15 per cent. By localising the rule, Nigeria ensures that tax revenue from multinational operations remains within its borders.

Business

CBN Revises Cash Withdrawal Rules January 2026, Ends Special Authorisation

Published

2 days ago

December 5, 2025

The Tide

The Central Bank of Nigeria (CBN) has revised its cash withdrawal rules, discontinuing the special authorisation previously permitting individuals to withdraw N5 million and corporates N10 million once monthly, with effect from January 2026.

In a circular released Tuesday, December 2, 2025, and signed by the Director, Financial Policy & Regulation Department, FIRS, Dr. Rita I. Sike, the apex bank explained that previous cash policies had been introduced over the years in response to evolving circumstances.

However, with time, the need has arisen to streamline these provisions to reflect present-day realities.

The statement said the new set of cash-related policies is designed to reduce the cost of cash management, strengthen security, and curb money laundering risks associated with the economy’s heavy reliance on physical currency.

“These policies, issued over the years in response to evolving circumstances in cash management, sought to reduce cash usage and encourage accelerated adoption of other payment options, particularly electronic payment channels.

“With the effluxion of time, the need has arisen to streamline the provisions of these policies to reflect present-day realities,”

“Effective January 1, 2026, individuals will be allowed to withdraw up to N500,000 weekly across all channels, while corporate entities will be limited to N5 million”, it said.

According to the statement, withdrawals above these thresholds would attract excess withdrawal fees of three percent for individuals and five percent for corporates, with the charges shared between the CBN and the financial institutions.

Daily withdrawals from Automated Teller Machines (ATMs) would be capped at N100,000 per customer, subject to a maximum of N500,000 weekly stating that these transactions would count toward the cumulative weekly withdrawal limit.

The special authorisation previously permitting individuals to withdraw N5 million and corporates N10 million once monthly has been discontinued.

The CBN also confirmed that all currency denominations may now be loaded in ATMs, while the over-the-counter encashment limit for third-party cheques remains at N100,000. Such withdrawals will also form part of the weekly withdrawal limit.

Deposit Money Banks are required to submit monthly reports on cash withdrawals above the specified limits, as well as on cash deposits, to the relevant supervisory departments.

They must also create separate accounts to warehouse processing charges collected on excess withdrawals.

Exemptions and superseding provisions
Revenue-generating accounts of federal, state, and local governments, along with accounts of microfinance banks and primary mortgage banks with commercial and non-interest banks, are exempted from the new withdrawal limits and excess withdrawal fees.

However, exemptions previously granted to embassies, diplomatic missions, and aid-donor agencies have been withdrawn.

The CBN clarified that the circular is without prejudice to the provisions of certain earlier directives but supersedes others, as detailed in its appendices.

Business

Shippers Council Vows Commitment To Security At Nigerian Ports

Published

2 days ago

December 5, 2025

The Tide

The Nigerian Shippers Council (NSC)has restated its commitment towards ensuring security at Nigerian seaports.

Executive Secretary/Chief Executive Officer of the Council, Dr Pius Akuta, said this in Port Harcourt, while declaring open a one day workshop organized by the Nigerian Shippers Council in collaboration with the Nigerian police( Marin Division).

Theme for the workshop was ‘Facilitating Port Efficiency; The strategic Role of Maritime police “

Akuta who was represented by the Director, Regulatory Services, Nigerian Shippers Council, Mrs Margeret Ogbonnah, said the workshop was to seek areas of collaboration with security agencies at the Ports with a view to facilitating trade

Akuta said the theme of the workshop reflects the desire of the council and the Nigerian police to build capacity of police officers for better understanding and administration of their statutory roles in the Maritime environment.

He said Nigerian seaports has constantly been reputed as one of the Port with the longest cargo dwell in the world, adding,”This is so, because while it takes only six hours to clear a containerized cargo in Singapore Port, seven days in Lome Port, it takes an average of 21 days or more in Nigerian Ports” stressing that this situation which has affected the global perception index on Ease of Doing Business in Nigerian seaports must be addressed.

Akuta said NSC which is the economic regulator of the Ports has the responsibility of ensuring that efficiency is established in the Ports inorder to attract patronages.

“Pursuant to its regulatory mandate, the NSC has been collaborating with several agencies to ensure the facilitation of trade and ease of movement of cargo outside the Ports to avoid congestion”he said.

Also speaking the commissioner of police, Eastern Port Command, Port Harcourt, CP Tijani Fakai, said Maritime police has played some roles in facilitating Ports efficiency.

He listed some of the roles to include ensuring security and crime prevention at the Ports, checking of illegal fishing activities at the Ports, checking of human trafficking and drug smuggling and prevention of fire incident at the Ports.

Represented by ACP, Rufina Ukadike, the CP said police at the Ports have also helped in the decongestion and prevention of unauthorized Anchorage.

He commended the Nigerian Shippers Council for the workshop and assured of continuous collaboration.

Speaking on the dynamics of cargo handling, Deputy Controller of customs, Muhydeen Ayinla Ayoola, said the launching of electronic tracking system and dissolution of controller General Taskforce has helped to ensure efficiency at the Ports.

Ayoola who represented the custom Area Controller Port Harcourt 1 Area command, however raised concerned over rising national security threat , which according to him has affected efficiency at the Ports.

John Bibor