Business

Finance Minister Clears Air On N424bn Budget Padding

Published

3 years ago

December 5, 2022

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has cleared the air over the N424bn that was said to have been padded by the minister into the 2023 Appropriation Bill.

Ahmed has been accused by the Humanitarian, Health, Power and Education to have inserted, N206bn, N8.6bn, N195.468bn, and N2.250bn respectively.

The Finance Minister, however, got a clean slate before the senate when she appeared to defend herself over cases of puddings in the proposed N20.51 trillion 2023 budget from the Senate Committee on Appropriation when she made clarifications on them.

She explained to the committee that the various sums were sent to the ministries for perusal before approval by the Federal Executive Council, before the budget presentation itself by the President, Major General, Muhammadu Buhari, ( Retd.) on Friday, October 7, 2022.

She stated, “This project in question under the Humanitarian Affairs ministry is a project that was called National Social Safety Net project.

“This is a total sum of $473.5m which translates to N296bn. This project was correctly described by the IR departments that collated the report but in the –process of collating the at the budget office, the wrong code was selected. This code that was selected resulted in the description showing as purchase and security weapons.

“The same project was correctly captured in the MTEF because it was also presented in the MTEF.

“She noted that the amount was correct and “it is correctly provided for in the ministry of Humanitarian Affairs disaster management, and social development because they are the agency implementing this national social safety net scale-up the programme.”

She added, “This project is also described as refurbishment and procurement of Harris RF 578 100 military communications equipment in the sum of N8.6 billion.

“The Honourable Minister of Defence wrote to his Excellency Mr President, requesting the immediate release of $1.36 3m, and N158.92 8m for the implementation of phase one of this project.

“The Honourable Minister of Defence also requested the sum of $2.27 8m and N11.9 4 billion to implement phases two and three of the project, all of which Mr President graciously approved and was conveyed to us.”

Ahmed added, “All the proposed budgetary sums like the N206 billion in the Ministry of Humanitarian Affairs, Disaster Management and Social Development, the N8.6billion in the Ministry of Defence, N195.468 billion in the estimates for the Ministry of Power, etc, were all captured before the presentation by Mr President.

“Most of these sums are bilateral or multilateral loans captured in the budget of agencies selected for project execution for the sole purpose of transparency.

“The totality of such loans captured in the proposed budget of the relevant agencies is N1.771 trillion.

“Had heads of the affected MDAs carried out thorough scrutinisation of their approved budgetary proposals, the issue of insertion or budget padding wouldn’t have arisen at all, a realisation of which made the Minister of Defence, Bashir Magashi apologise after feigning ignorance of N8.6 billion in his Ministry’s budget during an interface with Senate Committee on Defence,” she said.

Ahmed noted that it was evident that there were internal coordination issues between the project of implementation units in some ministries, departments and agencies, with their CEOs and their accounting officers of the implementing ministry.

She stressed, “And also there’s also a gap of coordination even with the Minister of Finance, Budget and National Planning. We will be taking necessary measures to make sure that going forward these gaps are addressed on our site and also work with the ministers to make sure that the gaps that they have between the Project Implementation units on the CEOs are also bridged.

“Specifically for multilateral bilateral funded projects, the PIUs are domiciled in the designated implementing MDS and the lenders will not deal with any other agency but that beneficiary agency including the Ministry of Finance, Budget and National Planning on procurements and as well as on several other aspects of the project implementation.”

Satisfied by her submission, the Chairman of the Committee, Senator Jibrin Barau (APC Kano North), said the clarifications made by the Minister were well understood by all the committee members and commended her for ensuring transparency with capturing of such loans or grants in the budget.

Earlier at an interface with the Senate Ad-hoc committee on uneven disbursement of a N500 billion Development fund by the Development Bank of Nigeria, the Minister of Humanitarian Affairs, Hajiya Sadiya Umar Farouq, failed to supply the committee with verifiable evidence of beneficiaries.

She said about 9.8 million pupils nationwide are already benefiting from the school feeding programme at the rate of N100 per meal, aside from beneficiaries of other clusters of the programme.

But the Chairman of the Committee, Senator Sani Musa and other members like Ayo Akinyekure, Uche Ekwunife, Mathew Urhoghide, etc, told the Minister that her presentation and that of the Coordinator of the program, Dr Umar Bindir, were beautiful on paper but lacked substance.

The implementation of the program according to them is a nullity.

Consequently, the Committee directed her to furnish it with the names of beneficiaries of different clusters of the program, their contact address, and telephone numbers on the basis of states, local governments and wards within the week.
PUNCH

Business

Naira Records Highest Depreciation Against US Dollar

Published

1 day ago

January 10, 2026

Editor

The Naira recorded the highest depreciation against the United States dollar at the official foreign exchange on Friday to end the week on a negative note.

Central Bank of Nigeria data showed that the Naira extended its dip on Friday to N1,423.17 against the dollar, down from N1,419.72 traded on Thursday.

This represents a N3.45 depreciation against the dollar on a day-to-day basis, the highest in the week under review and in 2026 so far.

Meanwhile, at the black market, the naira remained at N1,490 per dollar on Friday, the same rate recorded on Thursday.

In the other week, the Naira recorded three gains and two losses against the US dollar and other currencies.

The development comes amid the continued rise in the country’s external reserves, which hit $45.67 billion as of January 8, 2026.

Business

KPMG Flags Five Major ‘Errors’ In Nigerian Tax Laws

Published

2 days ago

January 9, 2026

Editor

Fresh apprehension has surfaced over Nigeria’s newly implemented tax framework after KPMG Nigeria highlighted what it described as “errors, inconsistencies, gaps, and omissions” in the new tax laws that took effect on January 1, 2026. The professional services firm in a recent statement cautioned that failure to address these issues could weaken the overall objectives of the tax reforms.

Nigeria’s tax overhaul is built around four major legislations: the Nigeinpieces of legislation:ria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service (NRS) Establishment Act, and the Joint Revenue Board (JRB) Establishment Act. The laws were signed by President Bola Ahmed Tinubu in June 2025 and formally commenced in 2026. However, the reforms have continued to attract controversy since they were first introduced in October 2024.

Despite the concerns, government officials have consistently described the reforms as essential to improving Nigeria’s low tax-to-GDP ratio and modernisingpieces of legislation:modernizing the country’s tax system in line with evolving economic conditions.

In a detailed review, KPMG outlined several areas of concern.

Capital gains, inflation modernizing inflation and market response

KPMG flagged Sections 39 and 40 of the Nigeria Tax Act, which require capital gains to be calculated as the difference between sale proceeds and the tax-written-down value of assets, without adjusting for inflation. According to the firm, this approach is problematic given Nigeria’s prolonged high-inflation environment.

Data from the National Bureau of Statistics shows that headline inflation has remained in double digits for eight consecutive years, averaging over 18 percent between 2022 and 2025. Over the same period, asset prices have been significantly influenced by currency depreciation and general price increases.

Market data also reflects investor sensitivity to tax policy changes. Although the NGX All-Share Index gained more than 50 percent over the year and market capitalisation inflation,capitalization approached N99.4 trillion, equities experienced sharp sell-offs in late 2025. In November alone, market value reportedly declined by about N6.5 trillion amid uncertainty surrounding the new capital gains tax regime.

KPMG warned that taxing nominal gains in such an environment could result in investors paying tax on inflation-driven increases rather than real economic gains. The firm recommended introducing a cost indexation mechanism to adjust asset values for inflation, noting that this would reduce distortions while still enabling the government to earn revenue from genuine capital appreciation.

Indirect transfers and foreign investment concerns

Attention was also drawn to Section 47 of the Nigeria Tax Act, which subjects gains from indirect transfers by non-residents to Nigerian tax where the transactions affect ownership of Nigerian companies or assets.

This provision comes at a time of subdued foreign investment. Figures from the United Nations Conference on Trade and Development indicate that foreign direct investment inflows into Nigeria remain below pre-2019 levels, reflecting ongoing investor caution.

While similar rules exist in other countries, KPMG noted that they are often supported by detailed guidance and clear thresholds. The firm advised Nigerian tax authorities to issue comprehensive administrative guidelines to clarify scope, thresholds,capitalizationthresholds, and reporting obligations inorder to reduce disputes and limit potential negative effects on foreign investment.

Foreign exchange deductions and business impact

Another issue identified relates to Section 24 of the Act, which restricts businesses from deducting foreign-currencyforeign currency expenses beyond their naira equivalent at the official Central Bank of Nigeria exchange rate.

In reality, limited access to official foreign exchange forces many companies to source FX at higher parallel market rates. Under the current rule, the additional cost becomes non-deductible, effectively increasing taxable profits and overall tax liabilities.

KPMG observed that although the provision aims to discourage FX speculation, it does not adequately reflect supply constraints. The firm recommended allowing deductions based on actual costs incurred, provided transactions are properly documented, to avoid penalisingforeign currencypenalizing businesses for factors outside their control.

VAT-related expense disallowances

Section 21(p) of the Nigeria Tax Act also came under scrutiny for disallowing deductions on expenses where VAT was not charged, even if the costs were entirely business-related.

Given Nigeria’s large informal sector and persistent VAT compliance gaps, analysts argue that the rule unfairly shifts part of the VAT enforcement burden onto compliant taxpayers. KPMG advised that the provision be removed or significantly amended, stressing that expense deductibility should be based on whether costs were wholly and necessarily incurred for business, while VAT compliance should be enforced directly on defaulting suppliers.

Non-resident taxation uncertainties

KPMG further highlighted ambiguities around the compliance obligations of non-resident companies. While the Nigeria Tax Act recognizespenalizingrecognizes withholding tax as the finalthe final tax for certain nonresident payments in the absence of a permanent establishment or significant economic presence, the Nigeria Tax Administration Act does not clearly exempt such entities from registration and filing requirements.

Nigeria’s network of double taxation treaties, including agreements with the UK, South Africa, Canada, and France, generally supports the principle that final withholding tax extinguishes further obligations. Experts warn that inconsistencies between the laws could create uncertainty and discourage foreign participation.

KPMG recommended harmonizing the relevant provisions of the NTA and NTAA, with explicit exemptions for non-resident companies whose tax obligations have been fully settled through withholding tax. The firm noted that such alignment would ease compliance and enhance Nigeria’s appeal for cross-border transactions.

As Nigeria undertakes its most extensive tax reform in decades, KPMG concluded that the success of the overhaul will depend on clarity, consistency, and alignment with international best practices. Without timely amendments, businesses may face higher costs, foreign investors could remain cautious, and capital markets may continue to experience volatility.

Recall that KPMG concerns come after a lawmaker, Abdulsamman Dasuki, raised alarm over alleged alterations to the gazetted tax laws.
(DAILY POST)

Business

Naira Records First Depreciation Against US Dollar In 2026

Published

2 days ago

January 9, 2026

Editor

The Naira recorded its first depreciation against the United States dollar in the official foreign exchange market on Thursday, the first time in 2026 so far.

The Central Bank of Nigeria’s data showed that it weakened on Thursday after days of gains to N 1,419.72 per dollar, down from N 1,418.26 on Wednesday.

This means that for the first time this year, the Naira dipped by N1.46 against the dollar on a day-to-day basis.

Similarly, the Naira also depreciated by N10 at the black market to N1,490 on Thursday, down from the N1,480 recorded the previous day.

This comes despite the continued rise in the country’s foreign reserves to $45.64 billion as of Wednesday, 7th January 2026.

DAILY POST reports that the Naira recorded a seven-day bullish run at the official foreign exchange before Thursday’s decline.