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Mauritius bank, MCB, to open office in Nigeria in African growth master plan

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The Mauritius Commercial Bank (MCB), is set to open a branch in Nigeria as part of it’s long term master plan for its African growth.

The bank which is the largest in the Indian Ocean island nation, is seeking to expand across the African continent “beyond oil and gas deals to cover renewables and mining,” a senior executive said in a statement.

MCB which already has $850 million in exposure in Nigeria, has representative offices in Nairobi, Kenya, and Johannesburg, South Africa, as part of its push into the continent, and also has offices in Dubai and Paris.

In a statement on Tuesday at the Africa CEO Forum in Abidjan, Ivory Coast, head of Corporate and Institutional Banking of MCB, Thierry Hebraud, said the coronavirus pandemic had delayed plans for the Nigeria office but they were now in the final phase of the West African country’s Central Bank approval.

“Today, more than 50% of our balance sheet is outside Mauritius, and the major part is in Africa.

“I believe within the next couple of months, we will be operating the new representative office in Nigeria,” Hebraud said.

He added that the bank is now focused on structured finance in the upstream and downstream oil and gas industry and the oil trade, and was looking to expand into renewables and mining.

“We believe we’ll continue to grow in the oil and gas sector, but at a slower pace. We’ll definitely grow in the energy and infrastructure,” he said.

“Imagine all banks withdraw from the this sector, you’ll shutdown the electricity of half the continent,” he added, saying banks needed to support Africa’s oil and gas industry to provide the energy for the continent to grow, even though climate change was driving a shift from fossil fuels.

“The Nigeria office would eventually cover Ghana, a neighbouring West African oil producer which also exports cocoa and mines gold,” Hebraud also hinted at future plans for the bank.

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No plan to increase taxes, Nigeria’s revenue chief says

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The head of Nigeria’s revenue agency, Zacch Adedeji, has reaffirmed that there is no plan for the introduction of new taxes in the country.

Adedeji, who is the Chairman of the Federal Inland Revenue, made the position known when the Chief Executive Officer of Guinness Nigeria Plc, Adebayo Alli, led the management team of the company on a visit to the Revenue House in Abuja.

He was quoted as saying, “the President gave a directive that he wants a single digit tax in the country, meaning that the maximum number of taxes we will have after the work of the Presidential Committee on Fiscal Policy and Tax Reforms will be nine taxes,” in a statement signed by the Special Adviser on Media to the FIRS chairman, Dare Adekanmbi.

“For us at FIRS, we have responded to that directive. We want to grow the pie such that even if we are taking the same percentage of the bigger pie, the result will be huge.

“By God’s grace, we will not introduce additional taxes nor increase any form of tax. We are only determined to increase the pie. We have restructured our operations at FIRS in such a way that we are now effectively carrying out our duty of assessing, collecting and accounting for taxes. We used to have functional types of taxes, but we have identified that the only customers we have are the taxpayers.”

He stated that by restructuring “our operations based on our customers, using their turnover as the basis to categorise them into large, medium, and small,” FIRS has enhanced its customer relations. He continued by saying that President Bola Tinubu wanted to increase Nigerians’ purchasing power in order to promote growth and increase businesses’ capacity for productivity through the recently implemented consumer credit scheme.

The Nigerian government has been working to overhaul the nation’s monetary and fiscal policies since the start of the Bola Tinubu administration. This has resulted in the central bank and the Oyedele-led tax advisory council implementing daring new policies.

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Nigeria’s central bank raises interest rate to 24.75% amid soaring inflation

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Governor Olayemi Cardoso of Nigeria’s central bank has announced that the bank has increased its monetary policy rate by 200 basis points, to 24.75% from 22.75%, as part of its ongoing tightening measures to combat skyrocketing inflation.

This comes after the bank boosted rates by 4 percentage points last month in an attempt to contain pricing pressures, marking the highest rate hike in almost 17 years.

The committee did not convene under Cardoso’s leadership until February, thus this decision was only the second since he entered office in September of last year.

In the aftermath of the removal of subsidies on petrol products in May last year, Nigeria’s economy is experiencing a cost of living crisis that has left millions of people struggling to satisfy their basic requirements. Annual inflation is above 30%, the worst level in nearly three decades.

At a press conference, Cardoso stated that while members of the Monetary Policy Committee (MPC) were still certain that the tightening cycle was necessary to control inflation, they also believed that price pressures had started to ease as of May.

“Considerations of the committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange rate stability,” he said.

The value of the naira appreciated by 12% by the end of last week’s trading activities, and has been on the rise so far this week also, exchanging lower than 1,400 per $ on Tuesday.

Recent measures like the removal of subsidies and the double depreciation of the naira have been defended by the government as necessary to boost economic growth and draw in investment, but they have incited public ire and, in some cases, desperation.

More tightening is anticipated in the upcoming two MPC meetings, according to David Omojomolo, Africa economist at Capital Economics, before policymakers back off and maintain stable interest rates.

“We expect Governor Cardoso’s desire to bring the inflation crisis to a close and also strengthen the naira will lead to more tightening,” said Omojomolo.

Following the increase, Nigeria’s sovereign foreign dollar bonds saw an increase. Tradeweb data shows that the 2029 note saw the biggest jump, rising 1.4 cents against the dollar to 97.9 cents at 1344 GMT, its highest level in over two years.

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