Business
MAN Raises Concerns About Astronomical Charges Imposed By Financial Reporting Council on Private Companies
For publicly quoted companies, the maximum payment earlier was N1 million per annum. Now, that amount is hiked to N25 million.
The Manufacturers Association of Nigeria (MAN) has expressed grave concerns over the implementation of certain provisions of the Financial Reporting Council of Nigeria (Amendment) act, particularly those relating to charges on non-listed entities, like most members of MAN.
The Director-General of MAN, Segun Ajayi-Kadir, said that these provisions, as currently implemented, pose significant challenges to the manufacturing companies, the majority of whom are non-listed entities and are categorized under the current definition of Public Interest Entities (PIEs) of the said Act.
For instance, a new section 33 introduced under the FRCN Amendment Act, 2023 mandates annual charges for non-listed entities, calculated as a percentage of their annual turnover (maximum being 0.05% of the annual turnover for companies with turnover of more than N10 billion).
For publicly quoted companies, the maximum payment earlier was N1 million per annum. Now, that amount is hiked to N25 million!
Quite incredibly, for non-listed companies, who were previously excluded, there is no cap, and it is linked to the turnover, irrespective of whether the company is profitable or not.
The FRCN Amendment Act, 2023, Section 33 Clause 3, imposes heavy penalties on a person or an entity failing to pay annual dues with 10% of the annual due for every month of default cumulatively until payment, liable to sanctions prescribed by the Council for any default of its agents, officer or personnel engaged in the financial reporting process for failure to comply with the provision of the act and in case of chief executive officer to a penalty as may be prescribed by the Council, or on conviction to imprisonment for a term not exceeding 6 months.
The strict penalties and possible conviction to imprisonment could be construed as having the nature of a criminal law. Generally, non-payment of fees/dues typically results in other penalties or fines, and imprisonment provisions are applicable only in cases where non-payment is seen as an act of defiance or fraud.
The Section 34 of the Principle Act stipulates that the proceeds of the Fund established under Section 33 of the Act is to be applied for the expenditures of the Council, which incentivizes excessive generation of revenue and makes collection of the fees purely for administrative purposes.
Criminalizing non-payment of dues/fees, the utilization of which is more administrative in nature, makes the FRNC Amendment Act, 2023 a draconian law with no choice left for the entities to contest the charge, but to comply and pay the dues.
Ajayi-Kadir further posits that this is a direct assault on the government’s commitment to ease of doing business.
Apart from the reservations against its application to private companies, the astronomical increase for listed companies, the excessive charge on non-listed companies turnover, particularly for loss-making companies, and the commencement of implementation at this difficult time for manufacturers and other businesses amounts to yet another form of aggravated tyranny of regulation.
The investments in the productive sector of the economy will be negatively impacted if the continued implementation of this annual charge and the strenuous efforts of FRCN to execute the same are not halted.
MAN, therefore, implores the FRCN to be mindful of the potential negative impact of its continued administration of the fees on businesses and put it on hold.
As the umbrella body for manufacturers in Nigeria, we admonish the FRCN to await the enactment of the tax reform laws and realign its operations with the relevant provisions.
Urgent consideration and swift action from the government are needed to avert the unpleasant consequences of this annual fee. This will bring relief to anxious and long-suffering manufacturers and other business owners.
Quite importantly, it will boost our commitment to ease of doing and align with the broader objectives of the fiscal policy and tax reforms agenda of President Tinubu, which is primarily aimed at streamlining regulatory requirements, harmonizing taxes and revenue collection agencies, promoting business growth and cultivating a competitive landscape.
Business
History of Naira Revaluation and Devaluation (1973–2026) (Part 1)
Why was the naira devalued?
The history of the Nigerian naira is marked by two major developments: periods when the currency gained value or was officially strengthened, and prolonged periods when it lost value against major international currencies, particularly the US dollar.
Since its introduction in 1973, the naira has undergone several exchange-rate policy changes, including fixed exchange rates, currency devaluations, foreign-exchange market liberalisation, attempts to unify exchange rates and market-driven depreciation.
The Central Bank of Nigeria (CBN) has played a central role in managing these changes.
- Introduction of the Naira in 1973
Nigeria introduced the naira on January 1, 1973, replacing the Nigerian pound.
The conversion rate was:
£1 Nigerian pound = ₦2.
₦1 = 10 shillings under the old currency system.
₦1 = 100 kobo.
The new currency was introduced during a period of expanding oil revenues and economic growth.
Nigeria initially maintained a relatively strong, managed exchange rate, supported by foreign-exchange controls and the country’s oil earnings.
The introduction of the naira was a currency change, not a devaluation.- The 1970s: A Relatively Strong Naira
During the 1970s, rising oil revenues strengthened Nigeria’s foreign-exchange position.
The government maintained a controlled exchange-rate system, initially linking the naira to the US dollar before moving to a basket of currencies representing major trading partners in 1978.
The oil boom provided foreign exchange for imports, infrastructure and public expenditure.
However, Nigeria’s dependence on crude oil revenues left the economy vulnerable to fluctuations in international oil prices.
Key development: The naira benefited from a relatively strong external position, although its exchange rate was managed by the authorities rather than determined by an unrestricted market.- The Early 1980s: Mounting Pressure on the Naira
The economic situation deteriorated in the early 1980s as oil revenues weakened and foreign-exchange shortages intensified.
Nigeria faced several economic challenges:
• Declining oil receipts.
• Rising import bills.
• Pressure on foreign reserves.
• Growing external debt and trade arrears.
• Increasing demand for foreign currency.
The government maintained controls on foreign exchange, but the official rate became increasingly disconnected from the rate at which foreign currency could be obtained in the parallel market.
This created pressure for exchange-rate reform.
The crisis set the stage for the introduction of the Structural Adjustment Programme (SAP) in 1986.- 1986: Major Naira Devaluation Under SAP
September 26, 1986, marked a turning point in the history of the naira.
Under the military government of General Ibrahim Babangida, Nigeria introduced the Second-Tier Foreign Exchange Market (SFEM) as part of the Structural Adjustment Programme.
The objective was to allow market forces to play a greater role in determining the naira’s exchange rate.
According to an International Monetary Fund account, the naira’s value was discounted by approximately 66 per cent at the inaugural SFEM auction.
The exchange rate moved from about ₦1.60 per US dollar under the previous administered rate to approximately ₦4.60 per dollar at the initial auction.
Why was the naira devalued?
The policy was intended to:
•Reduce the overvaluation of the naira.
•Improve the allocation of scarce foreign exchange.
•Encourage non-oil exports.
•Improve the competitiveness of Nigerian products.
•Reduce distortions in the foreign-exchange market.
However, the weaker currency also increased the naira cost of imported goods and production inputs.
The 1986 reform began a prolonged period of exchange-rate adjustments.- …To be continued
Business
Obasanjo Accuses Tinubu : “You Made Every Nigerian Poor By 300% Naira Devaluation”
The former President also rejected the argument that Tinubu needed more time to complete his reforms, saying he did not see the economy improving.
Image: AI generated
Former President Olusegun Obasanjo has accused President Bola Tinubu of making every Nigerian poor by 300 per cent through the devaluation of the naira.
Obasanjo spoke on Wednesday during the Financial Times Africa Summit 2026 in London, United Kingdom.
He said that the naira lost its value overnight due to economic reforms undertaken by the Tinubu administration in 2023.
“We do not live in isolation as a country. We interact with the rest of the world. And overnight, you devalue the currency by 300 per cent. The naira went from N500 to a dollar to N1,500 to a dollar. What that meant was that every Nigerian is made poor by 300 per cent.”
Obasanjo said that had made Nigeria “the poverty capital of the world,” which he said meant the country had the largest number of poor people in the world.
“You cannot say to me that that is good for Nigeria. You cannot say to me that that is good for us in any sense,” he noted.
The former President also rejected the argument that Tinubu needed more time to complete his reforms, saying he did not see the economy improving.
Business
CBN Licences Abbey Bank to Start Full Commercial Banking in November 2026
Adewumi said: “The year 2026 represents a defining moment in the history of Abbey. Our approval to transition to commercial banking is a testament to the work invested in building this institution and the confidence placed in us by our regulators, shareholders, customers and employees.”
The Central Bank of Nigeria (CBN) has approved Abbey Bank Plc to begin operation as a regional commercial bank, effectively from November 2026.
The licence opens retail banking, small and medium-sized enterprise lending, trade finance and corporate banking to the lender.
Abbey Bank had operated as a mortgage bank for more than three decades.
The commercial banking licence was issued in June 2026 after the bank completed its capital-raising process.
Managing Director and Chief Executive Officer Mobolaji Adewumi said the bank began internal discussions on the transition in 2023 and submitted a formal application in 2024.
He said regulatory approval arrived in October 2024.
Adewumi said: “The year 2026 represents a defining moment in the history of Abbey. Our approval to transition to commercial banking is a testament to the work invested in building this institution and the confidence placed in us by our regulators, shareholders, customers and employees.”
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