Banks have shifted personal travel allowance (PTA) and business travel allowance (BTA) rates from N413 to N419 per dollar, this, in turn, has caused the Nigerian currency to devalue by 1.5 percent.
PTA and BTA are currency exchange services designed exclusively for Nigerians who go abroad for personal or professional purposes. Each traveler can receive up to $4000 every quarter to help bridge the gap between parallel and official FX markets.
The rate has increased by around N6, according to bank sources, from N413 per dollar a few months ago.
“We are surprised to see the changes too. The differences have always been kobo — but recently it has moved from N413 to 417 and within the last week and now, our portal is exchanging for N419 to a dollar,” a source said.
“Customers have no choice. So, most people do not complain about the development. It is better than the aboki (black) market rate of N570.”
At the parallel market, the naira traded flat at N570 against the US dollar.
Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to newsmen, quoted the naira at N567/N570 to a dollar.
Airline Operators To Shut Down Operations On Monday Over Increasing Cost Of Fuel
The Airline Operators of Nigeria has announced the shutdown of its operations from Monday due to the steady increase in the cost of aviation fuel.
It was earlier reported that the airline operators had threatened to shut down their operations in March arguing that they had only three days of fuel left.
The cost of aviation fuel, also known as Jet A1, had risen from N190/liter and later N360/liter in January this year to N607/liter in March. The product now reportedly sells for N700/liter.
The position of the operators was stated in a letter sent to the Minister of Aviation, Senator Hadi Sirika, by its President, Abdulmunaf Yunusa Sarina.
The letter read, “It is with a great sense of responsibility and patriotism that the Airline Operators of Nigeria has carried on deploying and subsidizing their services to our highly esteemed Nigerian flying public in the last four months despite the steady and astronomical hike in the price of JetA1 and other operating costs.
“Over time, aviation fuel price has risen from N190 per liter to N700 currently. No airline in the world can absorb this kind of sudden shock from such an astronomical rise over a short period.
“While aviation fuel worldwide is said to cost about 40 percent of an airline’s operating cost globally, the present hike has shut up Nigeria’s operating cost to about 95 percent.
“In the face of this, airlines have engaged the Federal Government, the National Assembly, NNPC, and Oil Marketers with the view to bringing the cost of JetA1 down which has currently made the unit cost per seat for a one-hour flight in Nigeria today to an average of N120,000.
“The latter cannot be fully passed to passengers who are already experiencing a lot of difficulties.
“While AON appreciates the efforts of the current government under the leadership of President Muhammadu Buhari to ensure air transport in Nigeria grows, unfortunately, the cost of aviation fuel has continued to rise unabated thereby creating huge pressure on the sustainability of operations and financial viability of the airlines. This is unsustainable and the airlines can no longer absorb the pressure.
“To this end, therefore, the Airline Operators of Nigeria, hereby, wishes to regrettably inform the general public that member airlines will discontinue operations nationwide with effect from Monday, May 9, 2022, until further notice.
“AON uses this medium to humbly state that we regret any inconveniences this very difficult decision might cause and appeal to travelers to kindly reconsider their travel itinerary and make alternative arrangements.”
TELECOMMUNICATION: Call Tariff Hike Looms As FG Slams 5% Duty On Recharge Cards
President Muhammadu Buhari has approved the collection of five percent as excise duty on telephone recharge cards and vouchers.
The charge is part of new items on the list of goods liable for excise duty on the Finance Act in the country.
Excise duty is a levy charged at the time of manufacturing. It is also a form of indirect tax on the sale or consumption of certain goods, products, services, or activities such as tobacco, alcohol, narcotics, gambling, etc., mainly to discourage their use and consumption. Nigeria’s Finance Act has extended the list to include beverages, non-alcoholic drinks, etc.
According to a circular, Zainab Ahmed, minister of finance, budget, and national planning, directed the Nigerian Customs to create a tariff line for the collection of the excise on mobile telephones, and electricity meters (components) and set up boxes at five percent.
It was gathered that the federal government is expected to raise at least N150 billion from the duty while customs will pocket about 10 billion, a 7 percent collection fee.
The circular conforms with another list of excisable items by customs to include telephone recharge cards and vouchers at five percent.
TheCable also understands that the collection was part of new items on the 2020 Finance Act signed by President Buhari. Although no rate was not stated, it is clear that the president might have okayed the collection of the duty at five percent as empowered to do by the Act.
Section 21 (1) of the Act describes goods liable to excise duty as “Goods imported and those manufactured in Nigeria and specified in the first schedule of this Act shall be charged with duties of excise at the rate specified under the duty column in the Schedule.
Subsection 2 further added that “telecommunication services provided in Nigeria shall be charged with duties of excise at the rate specified under the duty column in the Schedule as the President may by Order prescribe pursuant to section 13 of this Act”.
In the current (2021) finance act, a new section was inserted to include “excise duty on non-alcoholic, carbonated and sweetened beverages shall be charged at a specific rate of N10 per liter”.
The new 5 percent levy on recharge cards will increase call costs and add to other taxes levied on telcos operating in the country. Some of these levies include the right of way charges, National Information Technology Development Fund Levy, National Cybersecurity Fund, and Annual Operating Levy in addition to existing statutory taxes like tertiary education tax, companies income tax, and value-added tax.
On Wednesday, telecommunication companies under the Association of Licensed Telecom Operators of Nigeria (ALTON) asked for upward reviews in voice calls, short message services (SMS), and data costs. In a recent letter addressed to the Nigerian Communications Commission (NCC), ALTON cited the rising energy costs and high operating expenses as major reasons.
Q1: Dangote Cement Ramps-Up Production At Okpella Plant
…as earnings per share hit ₦6.18
Africa’s biggest cement manufacturer, Dangote Cement, has ramped up production at its newest plant, in Okpella Edo State even as its earnings per share rose by 16.8 percent to N6.18 in the three months ended March 31, 2022. Ramping up production at the Okpella plant is part of efforts to increase cement supply in Nigeria as well as ensure timely supply of products to customers in the South-South and Southeast geopolitical regions.
Analysis of the cement giant’s three months results indicated that Dangote Cement sold a total volume of 7.2Mt of cement across the group with Nigerian operations accounting for 4.8Mt while the rest of Africa did the balance of 2.4Mt.
Chief Executive Officer, Dangote Cement, Michel Puchercos, in his comments, said that the company started the first quarter on a positive note despite the new uncertainties brought by a very volatile global environment. He stated that those increases were recorded in revenue and profitability that drove strong cash generation across the Group. Profit after Tax rose to ₦105.9 billion, up 18 percent compared to last year while Group EBITDA rose to ₦211.0 billion, by 18.6 percent with an EBITDA margin of 51.1 percent.
Puchercos said, “On the operational side, we are ramping up production at our Okpella plant and are progressing well to deploy grinding plants in Ghana and Cote d’Ivoire. Demand remained strong across all markets, and we remain confident that Dangote Cement is positioned to meet customers’ expectations despite these temporary challenges.
Continuing our efforts to deliver shareholder value, Dangote Cement completed the second tranche of its buyback program. Following the completion of both tranches, Dangote Cement has now bought back 0.98% of its shares outstanding. This share buy-back program reflects the Company’s commitment to finding opportunities beyond dividend to return cash to shareholders.”
Puchercos added, “the volatile international context is strengthening our efforts to ramp up the usage of alternative fuels and execution of our export-to-import strategy. Reducing our dependence on imported inputs and making our markets self-sufficient has never been more relevant from a regional perspective.
Our continuous focus on efficiency, meeting strong market demand, and maintaining our costs leadership drives our ability to consistently deliver superior profitability and value to all shareholders.”
Dangote Cement is Africa’s leading cement producer with nearly 51.6Mta capacity across Africa. A fully integrated quarry-to-customer producer, it has a production capacity of 35.25Mta in its home market, Nigeria. The Obajana plant in Kogi State, Nigeria, is the largest in Africa with 16.25Mta of capacity across five lines; the Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta while the Gboko plant in Benue state has 4Mta, and Okpella plant in Edo state has 3Mta. Through recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighboring countries.
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