A Week in Nigeria: 7 September

Highlights from Reuters coverage of Nigeria over the last seven days

Anger aimed at South African businesses erupted in parts of Lagos and Abuja following a wave of xenophobic attacks in South Africa

In this week’s round-up: Nigeria reacts to South Africa’s xenophobic attacks, economic growth slowed in the second quarter of this year, plus tax chief opens up on infrastructure policy and collection targets.

  • Nigeria’s economic growth slowed to an annual rate of 1.94% in the three months to the end of June for the second quarter in a row, according to GDP figures released by the statistics office. Nigeria’s economy, the largest in Africa, grew by 2.10% in the first quarter compared with the previous year. The economy has been held back by sluggish performance in the non-oil sector, despite government efforts to improve those industries and wean Nigeria off the crude oil on which it depends. In the second quarter, the non-oil sector grew 1.64% and the oil sector expanded 5.15%, according to the statistics office. But crude production in the continent’s top oil-producing country dipped to 1.98 million barrels per day from 1.99 million in the previous quarter. The central bank has forecast growth of 3% for 2019. “Weak growth itself should not have been too much of a surprise,” said Razia Khan, chief economist for Africa and Middle East at Standard Chartered Bank. She argued that “Q2 represented something of a lost, post-election quarter”.
  • Nigeria is using a system of tax credits to encourage private companies to share the cost of infrastructure projects as part of a drive to diversify Africa’s biggest economy away from its reliance on oil sales, the country’s tax chief said in an exclusive interview. Tunde Fowler, executive chairman of the Federal Inland Revenue Service (FIRS), said in an interview in Abuja that more than 10 local companies had applied for the scheme to receive 50% of expenditure in tax credits. Fowler said one of the two successful applications was by a company owned by Africa’s richest man Aliko Dangote, which will build a road under the scheme. He also said Nigeria had a target to nearly double tax revenues this year from 2018 due to a surge of new payers following the end of an amnesty and the introduction of a new database that uses biometric data. Fowler said 5.32 trillion naira ($17.39 billion) was collected in taxes in 2018 and his office was targeting 8.9 trillion naira this year. He said the number of tax payers was expected to jump to around 45 million this year from 20 million in 2018. Fowler’s targets, which he described as “ambitious”, may be hard to meet in a country of 190 million people where around 80% of the workforce is employed in the informal sector. That has hindered tax collection in the past. Nigeria has struggled to improve non-oil revenues as debt servicing costs rise. Nigeria spent 35% of government revenues servicing debt in 2016, when its economy entered a recession that it left the following year. Since then, it has taken on more local and foreign debt.

Nigeria bureau chief for Reuters. Ghanaian family, British accent. Ex-BBC, before that newspapers.