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Nigeria’s VAT Collection Surges to N1.43trn in Q1 2024

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The latest report from the National Bureau of Statistics (NBS) reveals a substantial increase in Nigeria’s Value Added Tax (VAT) collection, reflecting a surge from N1.20 trillion in Q4 2023 to N1.43 trillion in the first three months of 2024, marking a 19.21% quarter-on-quarter rise.

This remarkable growth is attributed to various factors, including Nigeria’s 7.5% VAT rate on specific goods and services. Comparing with the corresponding quarter of 2023, the VAT collection soared from N709.59 billion to its current figure, marking an impressive year-on-year increase of 101.52%.

Breaking down the Q1 2024 figures, local payments amounted to N663.18 billion, foreign VAT payments stood at N435.73 billion, and import VAT contributed N332.01 billion. Notably, local VAT payments witnessed a modest increase of 5.27% compared to Q4 2023 figures.

However, foreign VAT collection saw a substantial quarter-on-quarter increase of 33.55%, while on a year-on-year basis, it surged by an impressive 188.32%. The Nigeria Customs Service (NCS) import VAT also witnessed a significant rise of 36.05% between Q4 2023 and Q1 2024, soaring from N244.04 billion to N332.00 billion. Compared to the corresponding quarter of 2023, this marked an increase of 171.31%.

The surge in foreign VAT and NCS import VAT collection is attributed to the weakening of the naira against the dollar. During the quarter, the exchange rate rose from N907/$ to N1306/$ and peaked at around N1600 to the USD on the official market.

Looking across sectors, the report highlights notable growth rates, with accommodation and food service activities recording the highest quarter-on-quarter growth rate of 59.15%, followed by administrative and support activities at 47.79%. However, extraterritorial organizations and bodies witnessed the lowest growth rates at -57.01%, followed by human health and social work activities at -27.73%.

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UAC Approves N644m Dividend Amid Strong Financial Performance in 2023

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Shareholders of UAC Nigeria Plc have endorsed the Board of Directors’ recommendation for a dividend payout of N644 million for the financial year 2023. The approval was given at the company’s Annual General Meeting (AGM) held on Thursday in Lagos.

The ratified dividend amounts to 22 kobos per share, maintaining the same level as the 22 kobos per share declared for the 2022 financial year.

Addressing shareholders at the AGM, Board Chairman Mr. Dan Agbor highlighted that the dividend payout reflects the group’s strategy of conserving capital for strategic investment opportunities across its businesses. Agbor emphasized that despite a challenging operating environment, the group’s primary focus in 2023 was to deliver profit.

The company reported a significant turnaround with a profit before tax of N12.3 billion in 2023, compared to a loss before tax of N4.4 billion in 2022. This performance was driven by revenue growth across all operating companies, improved profitability of associate companies UPDC Plc and MDS Logistics Limited, and one-off gains from asset divestments and the treasury portfolio.

Agbor elaborated on key initiatives that contributed to the group’s success:

  1. Asset Divestment: Unlocking N9.2 billion through the sale of low-yielding non-core assets to strengthen the Group’s liquidity, a crucial step given the current economic conditions.
  2. Strategic Merger: Completion of the merger and integration of Spring Waters Nigeria Limited (producer of SWAN Water) with its parent company, UAC Foods Limited. This streamlined the structure of the Packaged Food and Beverages Segment, enabling both businesses to operate as a single entity.

Group Managing Director Mr. Fola Aiyesimoju provided insights into the group’s financial performance, reporting consolidated revenue of N121 billion in 2023, a 10% increase from the N110 billion recorded in 2022. He noted that the first half of the year was marked by slower topline growth due to limited trading during the general elections and cash scarcity that affected consumer demand. However, the second half saw stronger performance across all operating segments, with double-digit growth in revenue, gross profit, and operating profit.

Mr. Aiyesimoju expressed confidence in the group’s future, stating that the strategic measures implemented have positioned UAC Nigeria Plc for sustained growth and profitability. The company’s ability to adapt and thrive despite economic challenges underscores its resilience and commitment to delivering value to shareholders.

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WIOCC Raises $41 Million to Expand Infrastructure in 3 African Country

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The West Indian Ocean Cable Company (WIOCC) has secured $41 million in debt funding to expand data centre infrastructure in Nigeria, South Africa, Democratic Republic of Congo (DRC). 

The funding led by IFC, a member of the World Bank Group, also saw participation from Proparco, a development finance institution and subsidiary of the Agence Française de Développement Group.  

The funding comprises loans of $10 million, ZAR 200 million ($11 million) from the IFC and $20 million from Proparco.

From a joint statement by the financiers, WIOCC is also expected to sign an additional $10 million loan with RMB in the next few weeks. 

With the funding, WIOCC which owns one of the largest data centers in Nigeria, Open Access Data Centres, said it would expand its core and edge data centers in its three operating countries to meet the growing demand for colocation and other data centre services.  

It will also grow its fibre networks, helping bridge the digital divide, and fostering economic growth across Africa. 

According to the statement, the financing is structured as a sustainability-linked debt, with pricing linked to WIOCC’s commitment to improve the energy efficiency of its data centres and obtain EDGE green building certification for them. EDGE, an innovation of IFC, makes it easy to design and certify resource-efficient and zero-carbon buildings. 

“We are excited to conclude this next stage of our capital raise, which will enable significant expansion, adding further capacity to our open-access data centre operation and extending open-access hyper scale national, international, and metro connectivity across our key markets in Nigeria, southern Africa, the DRC and Greater East and Central Africa 

“Our policy of continual investment in infrastructure to create Africa’s first, truly open-access interconnected digital ecosystem means ongoing investment for growth, ensuring readiness to meet the future demands of our client’s customers throughout Africa”  CEO of WIOCC Group, Chris Wood, stated

Head of Energy, Digital and Infrastructure at PROPARCO, Ariane Ducreux, said the Agence Française de Développement Group has been supporting WIOCC since its inception back in 2007.  

IFC Global Industry Director of Infrastructure, Bertrand de la Borde, also said that the Corporation’s long-standing partnership with WIOCC of more than 15 years demonstrates its commitment to increasing affordable and reliable digital connectivity in Africa through shared infrastructure.  

According to him, this new debt facility would help WIOCC fulfil its ambition to establish an integrated, open-access, core-to-edge cloud ecosystem throughout the African continent, which is critical to bridging the digital divide.  

 

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Biden Administration Bans Sales of Kaspersky Software Over National Security Concerns

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The Biden administration announced on Thursday that it would ban the sale of software in the U.S. built by Russian antivirus vendor Kaspersky Lab, citing longstanding concerns that the firm poses a significant national security threat.

“Kaspersky will generally no longer be able to, among other activities, sell its software within the United States or provide updates to software already in use,” stated a Commerce Department announcement.

The decision followed a comprehensive investigation which concluded that Kaspersky’s continued operations in the United States posed a national security risk due to the Russian government’s offensive cyber capabilities and potential influence over the company’s operations.

U.S. Commerce Secretary Gina Raimondo emphasized, “Russia has shown time and again they have the capability and intent to exploit Russian companies, like Kaspersky Lab, to collect and weaponize sensitive US information.”

Kaspersky, in a statement to AFP, criticized the Commerce Department’s decision as being based on the current geopolitical climate and theoretical concerns. The company vowed to “pursue all legally available options to preserve its current operations and relationships.”

“Kaspersky does not engage in activities which threaten US national security and, in fact, has made significant contributions with its reporting and protection from a variety of threat actors that targeted US interests and allies,” the company asserted.

This move marks the first action of its kind since an executive order issued under former President Donald Trump granted the Commerce Department the authority to investigate whether certain companies pose a national security risk. Raimondo stressed that the department’s actions signal to America’s adversaries that the U.S. will act decisively when foreign technology poses a risk to national security.

While Kaspersky is headquartered in Moscow, it operates offices in 31 countries and serves over 400 million users and 270,000 corporate clients in more than 200 countries, according to the Commerce Department.

In addition to banning the sale of Kaspersky’s antivirus software, the Commerce Department added three entities associated with the firm to a list of companies deemed national security concerns. These entities were cited for their cooperation with Russian military and intelligence authorities in support of the Russian government’s cyber intelligence objectives.

The Commerce Department strongly encouraged current users to switch to new vendors, although the decision does not outright ban them from continuing to use the software if they choose. Kaspersky is permitted to continue certain operations in the U.S., including providing antivirus updates, until September 29 of this year. This grace period is intended to minimize disruption to U.S. consumers and businesses and to allow them time to find suitable alternatives.

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