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The Nigeria’s New 7.5% VAT

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The Nigerian government has approved the increase of VAT (value added tax) from the current 5% to 7.5%. This has been expected as we have noted in many articles in Tekedia. Our thesis remains that Nigeria will equilibrate at 10% VAT within the next seven years. Please read this piece where we noted that the Government’s only way to fund the national budget would be increasing tax! With the recurrent expenditure exceeding tax receipt, the key roadmap is tax since debt funding may not evidently come easily with our current debt profile.

One positive takeaway was how much work Nigeria is doing in the ease of doing business. While we are yet to get there, a lot of progress has been made; targets top 100 in Global Ease of Doing Business Index.

But I was so worried listening to the two ministers, especially as it relates to the Budget and how to close the Funding.

Gap. Put mildly, “the government is unable to figure out any other way to fund the budget, so be ready to come to their aid”. In other words, expect more taxes!!!

This 7.5% position still needs to be approved according to the nation’s TAX Act. Everyone expects this approval to go through.

The federal executive council (FEC) has approved an increase in value added tax (VAT) rate from 5 percent to 7.5% percent

Zainab Ahmed, minister of finance, budget and national planning, disclosed this to state house correspondents at the end of the cabinet meeting on Wednesday.

However, this is subject to an amendment of the VAT act of 1994 by the national assembly.

If approved by the federal lawmakers, the new rate will take effect in 2020.

Expect some demonstrations because the little increase on salaries for public workers has been cancelled by this tax increase. VAT affects poor people more as it is a consumption tax: things will cost more since producers will add the VAT on the prices of items which the buyers will pay. Simply, I expect the Nigerian Labour Congress to begin another agitation of minimum wage increase since the yet-to-be fully implemented minimum wage has already been knocked out by this VAT increase. Yes, the vicious circle continues in Nigeria!

She [Minister of Finance] said: “We also reported to council and council has agreed that we start the process towards the increase of the VAT rate. We are proposing and council has agreed increase the VAT rate from five percent to  7.5 percent. This is important because the federal government only retains 15 percent of the VAT — 85 percent is actually for the states and local governments and the states need additional revenue to be able to meet the obligations of the minimum wage.

“This process involves extensive consultations that need to be made across the country at various levels and also it will involve the review of the VAT act. So, it is not going to be implemented immediately until the act is reviewed.”

“Following these assumptions, the total revenue estimate is the sum of N7.5 trillion for the year 2020 and N2.09 trillion that will be accruing to the federation account and VAT respectively,” she said.

“There will, of course, be the distribution to the three tiers of government based on the statutorily revenue sharing formula as defined in the constitution and to this effect, it means the federal government will be receiving proposed aggregate of N4.26 trillion from the federal account and the VAT pool, while the states and the local governments are expected to receive N3.04 trillion and N2.27 trillion respectively.”

By 2025, Nigeria will be at 10% VAT. Whenever you have population growing faster than economic opportunities, governments will resort to tax to normalize disequilibrium in the economy. Nigeria has tough decisions ahead.

Updated – the VAT updated to 7.5%

The proposed increase of the Value-Added Tax (VAT) rate from 5 to 7.5 per cent by the federal government is subject to the review and approval of the National Assembly, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

Also, the minister clarified that the increment will be to 7.5 per cent and not 7.2 per cent she announced on Wednesday at the end of the meeting of the Executive Council of the Federation in Abuja

The New iPhone 11 Series

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iPhone 11

The much anticipated annual Apple event took place on Tuesday as the tech giant unveiled its 2019 products – iPhone, Apple watch, and iPad made the unveiling.

iPhone 11, iPhone 11 pro and iPhone 11 pro max came as the phone newbies of the year.

The new products are not quite different from the ones introduced last year, though there is camera system upgrade to allow for wide-angle photos. There is also an upgrade in battery capacity, such that it could last a few hours more than the predecessors.

Speed is also another new feature that differentiates the new from the old. A bit of it makes the trio faster than the predecessors.

Then they came with ridiculous prices that beat the expectation of users. iPhone 11 at $699 (N244, 000) is $50 cheaper than its predecessor, the iPhone XR. iPhone 11 pro costs $999 (N364, 000) while iPhone 11 pro max sells for $1, 099 (N 401, 000).

The trio will be available for pre-order starting from September 13, while shipping will commence by September 20. While the three devices appear similar to their predecessors, they possess amazing differences that will make things worthwhile for users.

The iPhone 11 pro and iPhone 11 pro max came on 5.8-inch and 6.5-inch OLED displays. And their colors are green, space gray, silver and gold. The iPhone 11 came with more colors: purple, green, yellow, white, red and black, making it the most multi-colored among them.

And then came the triple lens camera system that features a telephoto camera, wide angle camera that accommodates more lights, up to 40 percent, and the ultra-wide with a 120-degree field of view. These 3 cameras have the ability to shoot 4k resolution videos at 30 frames per second.

The most exciting spec upgrades came with iPhone 11 pro and iPhone 11 pro max. ‘The more speed and less energy” give them an edge that users would toss their predecessors for.

The iPhone 11 features a dual-camera system on the rear panel which contains new lens with wide angles and double optical zoom out. It also features multiscale tone mapping for improved highlights and night vision, enabling photo-brightness in dark environments.

The additional feature that distinguished the iPhone 11 from others is a 12–megapixel TrueDepth camera on the front. That enables the recording of slow motion videos and wide angle selfies.

The new iPhones are amazing.

A Path To Corporate Credit Card Business in Nigeria

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I noted a few days ago that Stripe, a U.S. fintech company, has gone into lending, mainly to companies in its ecosystem. It will use data it has on the companies to make the loans. Data-based lending is the future of lending across all nexus of modern financial services.

Stripe is looking for growth and to drive that it wants to fund companies in its ecosystem. So, the U.S. paytech firm will be making loans to companies that use Stripe. I think this is an easy matter since Stripe has data to drive this lending. Companies like Flutterwave and Paystack in Nigeria must take note of this model and see how they can enable disintermediation of the banking institution by providing capital to their more promising platform companies. You wager where you eat.

But it seems that the company is not stopping there – it is now offering credit card services with no interest or fees because the corporate clients must pay the balance in full at month end. It could be read that Stripe will simply debit the company account with it for the balance at month end! Interest earning is not the main motivation for this product; Stripe wants to grow its interchange fee and its ecosystem transaction volume by helping its customers to grow.

Notably, users are expected to pay their balance in full each month, so for now there is no interest rate, or fee, to use the card, with Stripe making its money by way of the interchange fee that comes with every transaction using the card.

“We’re not freezing cards based on late or no payments,” Cristina Cordova, the business lead overseeing the launch, said in an interview. “A pretty common reason for non-payment is that a person switched bank accounts and forgot to update the information. But we think we’ll have fewer problems because we have banking information for accepting revenue, by way of our payments business.”

This is an evolution – if Stripe processes your payment and gives you credit card, your bank has lost another business from you. Credit card is a short-term lending!

I do think Nigerian fintechs like Flutterwave and Paystack could have a path into corporate credit card business in Nigeria by exploring a similar model. Of course credit card business is monthly lending where if you do not pay off the balance at month end, interest will kick in. With data on the companies in their ecosystems (they handle their transactions), these Nigerian fintechs can manage the associated risks more effectively. 

Largely, I do think Nigeria will see corporate credit card evolution before personal credit card since getting comprehensive data on companies remain easier than people. Fintechs with better data will take the lead. Yes, the debit cards will begin to show credit cards.

The credit card business in Nigeria is still at infancy

Making Oyo State Set The Pace with Tech-Driven Governance for Efficiency

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Engr Oluseyi Makinde, the current governor of Oyo State, as an entrepreneur before his adventure into politics was an innovator per excellence whose Makon Group helped to deepen Nigeria’s capabilities in the local content space of Nigeria’s oil and gas industry and earned a patent for that.

Upon ascension into office as the chief executive of the pace setter state within his first 100 days in office, he has wowed both indigenes and others alike with some revolutionary approaches to governance in Nigeria by declaration of his assets(50 billion naira), appointment of a 27 year old Seun Fakorede as a commissioner, collaboration with digital agricultural platform Farmcrowdy to boost the capabilities of 50,000 farmers, establishment of the Oyo State anti corruption agency to reduce fraud in the state’s civil service amongst others.

A redesign anchored on adoption of smart technology will help Governor Makinde take governance a step higher. I propose a road map to make this happen.

Establishment of Oyo State Open Governance Initiative: An appointment of the Chief Data Scientist of the state who will be saddled with the integration and analysis of data from all state ministries, departments and agencies so that intelligence driven economic planning to aid allocation of scarce resources to critical sectors will create a transparent open governance model, enabling its international development partners access information to boost their support. It should also collaborate with civic tech startup Budgit which is committed to entrenching good governance in Nigeria by publishing it’s budget devoid of political considerations.

Collaboration with MainOne For Digital Oyo: Smart connected infrastructure to unlock the prosperity of Oyo State is crucial for the transformation of Oyo State. Leading broadband provider MainOne should be approached by the state government to deploy their solutions as a strategic partner similar to what they have done in Lagos and Edo States, and operational issues surrounding Right of Way sorted out for ease of their business.

Digitization of all government operations with blockchain: Governor Makinde should utilize blockchain to digitize all government contracts, ownership of all property in the state, registration of all vehicles, taxes filing and collection, monitoring of all state infrastructure such as its utilities, storage and authentication of all its agricultural commodities.

Redesigning Education with Connected Learning: Oyo State should create an E-Learning platform (Imo Oyo) which will train its public primary and secondary school students with a mix of our local content and globally competitive skills in a gamified format to make it fun. Augmented Reality will be used in training all its science students in biology, physics and chemistry to make up for the lack of efficient teachers in modern teaching tools to bring them at par globally. Also artificial intelligence tutors can train those across the state who lack access to world class quality education in Yoruba and English languages so that they are not educationally excluded. With a descent on WAEC rankings, a state of emergency with technology is needed to improve learning outcomes.

Partnership with Zenvus to deepen its farmers capabilities: Zenvus, a digital agricultural platform, which uses artificial intelligence to aggregate soil data and provide real time farm intelligence should be approached to boost the capabilities and competitiveness of Oyo state farmers through a partnership with the state government.  This done for farmers via cooperatives will help in providing information on where they can sell their products, produce prices, farming record, farm insurance and access to capital in line with goal two of the SDGs.

Partnership with Medcera to boost medical delivery: Medcera, a digital healthcare platform which utilizes artificial intelligence in creating a real time digitized medical record of patients and offers telemedicine services should collaborate with Oyo State government to improve and deepen healthcare delivery for all the citizens in line with goal three of the SDG’s.

Oyo needs this construct to redesign and take the lead as the pace setter state.

Tips On Finding Out When You Are In A Wrong Job

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There is this motivational video clip circulating in social media. This clip showcases two men digging for diamonds in different sections of a mining site. One found a medium sized diamond in his section and left with it. The other miner quickly left his section and went to dig in this other person’s side because he believed that’s where he can make it. But unknown to him, he only needed to dig a little bit more in his section to find many big diamonds. As for the place he shifted to, he will toil for nothing because all the remaining diamonds there are too small.

This video clip teaches perseverance and contentment. It teaches diligence and focus. It teaches locating your space and keeping it. It teaches nurturing yourself in whatever garden you are planted. What I understood in this very video clip is that we should remain wherever we found ourselves irrespective of how difficult we find it because that’s where we are destined to be.

But then, I always ask myself each time I watch this video, what if this second man actually needed to shift base to find his diamond? What if there is no diamond in his own section of the mine? What if his move to the other side wasn’t a mistake? What if he made the right choice by changing position? There are indeed so many ‘what if’s’ if we decide to apply that video to real life situation.

Whenever I post that video on social media and ask the questions given above, I always get evasive and unsatisfactory replies. Some people will tell me it takes luck to find out whether to move or not. Some will say it is intuition. Others will say we need the Grace of God. And then there are those that will say that we should just be patient and keep digging in our own turf because that is where we were meant to be.

This last group is the reason I am writing this piece. So I’ll ask the following questions so that you readers here can make out time to reflect on them: How do you know the difference between being patient and wasting your time? How do you that, that job or business is or isn’t the right one? How do you know when to move on and when to wait? How do you know that you are not going to look back in the future and regret your action – be it for waiting or for moving on?

You see, it may take intuition, it may take luck, it may take the Grace of God; but it also takes SKILLS. Even to listen to our intuition is a skill. To know when God asks us to move or stay is also a skill. As for luck, well, let’s just not think of that one right now.

I know that business people usually change ‘line’ each time their businesses begin to go down. I could remember I used to ask how they can go into something they are not good in because it sells and I always get responses on how learning on the trade can help out.

But, what about those of us that are in the corporate world? Do we really know when we choose the wrong career path? Do we know when we have to change line as the business people do? Or do we continue digging in the wrong turf, where we either get smaller diamonds or get nothing at all?

So, I made out time to look around, listen with intent and observe ways we can find out when we need to change our career path. Below are some of the signs I believe that can help us detect if we are in the right place or not.

1. Room for Growth: You will know if you are in the right place if the job gives room for growth or not. Growth here covers growth in career, income, academics and skills. Jobs that don’t have rooms for growth are no-go areas.

2. Performance Appraisal: If you continue to underperform or make avoidable mistakes, despite the efforts you made to improve, then it’s time to hit the road.

3. Motivation: What motivates you to be in that office? Is it the salary and other financial benefits? Are you among those that keep checking the calendar for the arrival day of the pay cheque? Anyway, if you are among those that go to work just because of the money, you are in the wrong place. Your job is supposed to give you satisfaction because of the values you add through.

4. Excitement at Place of Work: Some people are happy to go to work because each day brings new exciting opportunities while some easily feel bored in their work (they keep checking for the time to clock off). If you don’t look up to going to work in the morning and you can’t wait to leave the office by the end of the day, then you need to move on.

5. Alignment with your Career or Life Goals: We all have plans for our lives. Our jobs are supposed to go in line with these plans. If your job will not take you to that path you wish to be, consider looking elsewhere.

6. Skills Mismatch: If your skills do not match your job, and find it hard acquiring the skills needed for the job, I don’t see what you are doing there. Go and look for the one that needs what you have.

7. Insolent Attitude to the Management: One way of knowing that you are in the wrong place is when you become rude to your boss to the extent that you no longer care about receiving queries and other disciplinary actions. In fact, your actions and words continue to beg for the dreadful dismissal letter. Well, you need to leave before that letter comes.

8. Incessant Complaints: If you start complaining so much about your job, colleagues and the management, maybe it’s a sign that you should move on.

9. Ashamed of your Job: When you are not comfortable telling people what you do for a living because you think it’s too low or improper for your class or status, I don’t see why you should continue with that job. Find a job you are proud of.

10. Unethical Matters: Sometimes, people find themselves doing works that are against their personal ethics, values and believes. This type of work will continue to play against their conscience. The best thing to do is to move on.

11. Rules Breaking: When you keep breaking company rules without remorse, it is a sign that something is wrong.

12. Job Search: If you find yourself under pressure to search for jobs, then do so. I believe that’s your intuition talking to you. The only reason people search for jobs to get new ones.

Well, you can see that I didn’t state anything about the salary paid. This is because money isn’t all that matters here. If that job gives you joy but pays little, you can develop in it and look for the ones that pay higher or you can get into side hustles to augment your income.

Ok, so you have finally read through and found out that you are in the right place. Congratulations to you. But if you are among those that need to make a move, you have to consider the following before taking that decision to leave:

  • Objective Evaluation: You need to find out where your problem and dissatisfaction are coming from. This is something you should do by yourself, and you have to be honest about it. So, find out if the problem is from you, your boss, your office or the job. An honest answer to this question will help you to know where changes need to be made.
  • Do Things Differently: If your job feels monotonous and boring, try to bring new and exciting things on board. You can talk it over with the management for their approval. Ensure that whatever you are introducing will create more rooms for growth and skills development.
  • Socialise: Maybe you should socialise more with your colleagues to feel more comfortable in your place of work. Besides, they will help you understand the office ethics better. Who knows, maybe things aren’t as bad as them seem. Just give it a try first.
  • Make Friend with your Boss: When you think your boss is the problem, try to make him your friend to see if things will turn around. You never can tell; he might really be nice inside. And you know this will help you with the office politics (*smiles*).
  • Talk to Someone: Most of the times we paint horrific mind pictures of situations and lock ourselves in those horrors. In this case, we need to let people help us out of this type of problem. But be mindful of who you talk to so that your problem doesn’t get complicated.
  • Give Yourself Time: Don’t be in a hurry to leave. Give yourself more time to assess situations very well to be sure of what you are about to do. Knowing the duration of time you will give yourself is very tricky because it is hard to tell whether the time is too short or too long. But as you are waiting for things to fall in place, keep your eyes open for newer and better opportunities.

When you have tried all within your power to make that job work for you and it still doesn’t feel right, then take a bow and move on. But before you do, ensure that you have another job you are going into. I am not talking about a promise or a prospect, I am talking about a job you already have its appointment letter and have reported to. I’m stating this here because I know how uneasy it is to find a good job around here. I wouldn’t want it to be said that you read this article and then resigned from your job when there is no other one available. Think of your bills before taking any decision.

Be wise, work smart and keep the hustle real.