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States to earn over N4tn yearly from VAT reforms

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The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has projected that states could earn more than N4tn annually from 2026, when new Value Added Tax reforms take effect.

Oyedele made this disclosure on Tuesday at the launch of the BudgIT State of States 2025 Report in Abuja, where he delivered the keynote address.

The event also marked the 10th anniversary of the initiative.

He said, “With VAT reforms kicking in from 2026, states’ share will rise to 55 per cent. That could amount to over N4 tn in 2026. The question is: will this money be spent, or will it be invested?”

The fiscal policy expert noted that while recent economic reforms had more than doubled the Federation Account Allocation Committee transfers, from N5.4tn in 2023 to N11.4tn in 2024, many Nigerians were yet to feel any direct relief.

According to him, governments now have more money in their coffers, but households continue to struggle with reduced disposable income.

“States are receiving more money than ever before. But there is a paradox: while governments have more naira, ordinary Nigerians have less disposable income in their pockets,” he said, urging state leaders to channel the extra revenues into projects that tangibly improve citizens’ lives.

The BudgIT report highlighted that 21 states still rely on federal allocations for over 70 per cent of their revenues, a trend Oyedele described as worrying.

However, he pointed to examples of progress, including Enugu’s 381 per cent growth in internally generated revenue and Bayelsa’s 174 per cent rise.

He explained that the new tax laws, which transfer the full proceeds of electronic money transfer levies to states and exempt state government bonds from tax, would help reduce borrowing costs and create fiscal space.

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“This is a unique opportunity for states to build resilience, close existing tax gaps, and invest in infrastructure,” he stressed.

The keynote speech also drew attention to the mismatch between spending and outcomes. Oyedele acknowledged that, for the first time in many years, capital expenditure had overtaken recurrent expenditure.

Yet, he warned that implementation in critical areas remained poor.

“States implemented only two-thirds of their education budgets, spending less than N7,000 per citizen. In health, implementation was even lower, at just N3,500 per citizen,” he observed.

On debt, he noted a reduction of N2tn in domestic obligations and a $200m fall in foreign loans, with 31 states lowering their domestic debt stock.

Still, states owe over N1.2tn in arrears to pensioners, contractors, and workers.

“Borrowing is not the problem; unproductive application of debt is,” he cautioned.

According to the 2025 rankings, Anambra topped the fiscal performance table, followed by Lagos, Kwara, Abia, and Edo. Cross River, however, slipped dramatically from fifth position in 2024 to 29th in 2025, raising concerns about governance choices.

Oyedele urged state governments to seize the opportunity provided by upcoming reforms to move beyond survival and ensure shared prosperity.

Also speaking, the Deputy Governor of the Central Bank of Nigeria in charge of Economic Policy, Dr Muhammad Abdullahi, called on state governments to entrench fiscal discipline and transparency as revenues surge under ongoing reforms.

He described the BudgIT report as an annual reference point that has “distilled hard fiscal truths, benchmarked performance, and re-centred conversations on capital investment, social outcomes, and fiscal credibility.”

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He noted that while reforms in 2024 and 2025 had expanded revenues and pushed capital expenditure above recurrent spending, states must not slip back into a pattern where overheads dominate budgets.

“The challenge is to lock in this fiscal discipline permanently,” he said.

The CBN deputy governor urged states to digitise internal revenue systems, complete Treasury Single Account adoption, and strengthen capital budgeting.

He also called for higher execution of education and health budgets, insisting that implementation must rise above 80 per cent.

Abdullahi warned that subnationals remained highly exposed to foreign currency risks. He disclosed that the CBN was developing an instrument to help them hedge exposures and monetise revenues.

Reviewing the broader macroeconomic environment, Abdullahi said Nigeria had inherited severe distortions, including multiple exchange rates, heavy deficit financing through Ways and Means, and dwindling reserves.

According to him, the apex bank’s response was to return to orthodox monetary policy, normalise the foreign exchange market, and restore credibility.

He concluded that states which prioritise discipline and capital investment, rather than simply relying on higher revenues, would achieve sustainable transformation.

In his goodwill message, the Head of Economic Intelligence at the Nigerian Governors’ Forum, Razaq Fatai, who represented the Director-General, Dr Abdulateef Shittu, said the State of States report had become a valuable tool for guiding governance and promoting fiscal accountability across the country.

He explained that the NGF had served as a technical partner in refining the report over the past decade, ensuring that governors used the findings to improve decision-making.

According to him, “The essence of State of States is to help guide governance and ensure that governors at different levels take the information provided and make sure it reaches their people.”

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Fatai noted that initiatives such as the State Fiscal Transparency, Accountability and Sustainability programme had strengthened budget credibility and debt transparency, while the ongoing State Action on Business Enabling Reforms programme was pushing states to improve the business climate.

He added that the NGF would continue to provide a platform for peer learning and collaboration to entrench transparency and accountability at the subnational level.

Speaking earlier, the Co-founder and Global Director of BudgIT, Oluseun Onigbinde, said the State of States report had become a mirror reflecting the choices made by subnational governments.

Onigbinde noted that what began as an effort to make every kobo traceable had grown into a tool of accountability embraced by both governors and citizens.

“This report began with a simple belief, that every kobo meant for citizens should be traceable, justified, and used to improve lives,” he said.

He added that transparency had become a competitive advantage among states, with more governors publishing budgets and citizens using data to demand accountability.

Onigbinde, however, warned that Nigeria remained at a crossroads, with rising inflation, growing debt, and an overreliance on federal allocations leaving many states unable to build resilient local economies.

He urged states to prioritise education, health, and infrastructure while using transparency as a foundation for public trust and give investors returns on their finances.

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Bank recapitalisation: Local investors provide 72% of N4.6tn

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The Central Bank of Nigeria (CBN) on Wednesday said domestic investors accounted for the bulk of funds raised under its banking sector recapitalisation programme, contributing 72.55 per cent of the N4.65tn total capital secured by lenders.

The apex bank disclosed this in a statement marking the conclusion of the exercise, which began in March 2024 and saw 33 banks meet the new minimum capital requirements.

The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.

According to the CBN, Nigerian investors provided about N3.37tn of the total capital raised, underscoring strong domestic confidence in the banking sector, while foreign investors accounted for the remaining 27.45 per cent.

“Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy,” the statement said.

Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”

The bank confirmed that 33 lenders had met the revised capital thresholds, while a few others were still undergoing regulatory and judicial processes.

“The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme,” it stated.

“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.

“All banks remain fully operational, ensuring continued access to banking services for customers.”

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The regulator stressed that the recapitalisation exercise was completed without disrupting banking operations nationwide, noting that key prudential indicators, particularly capital adequacy ratios, had improved and remained above global Basel benchmarks.

Minimum capital adequacy ratios were pegged at 10 per cent for regional and national banks and 15 per cent for banks with international licences.

The CBN added that the exercise coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall system stability.

To sustain the gains, the apex bank said it had strengthened its risk-based supervision framework, including periodic stress tests and requirements for adequate capital buffers.

It added that supervisory and prudential guidelines would be reviewed regularly to improve governance, risk management, and resilience across the sector.

“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement added.

Meanwhile, data from the National Bureau of Statistics showed that foreign capital inflows into the banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025 from $7.00bn in 2024, reflecting strong investor interest during the recapitalisation drive.

However, the Centre for the Promotion of Private Enterprise has cautioned that despite the strengthened banking system, credit to small businesses remains weak, warning that the benefits of the reforms are yet to fully impact the real economy.

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Court freezes N448m assets in Keystone Bank debt recovery suit

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The Federal High Court in Lagos has ordered the freezing of funds and assets valued at N448,263,172.41 in a debt recovery suit instituted by Keystone Bank Limited against five defendants.

The order was made on March 26, 2026, by Justice Chukwujekwu Aneke following an ex parte application moved by Keystone Bank’s counsel Mofesomo Tayo-Oyetibo (SAN), against Relic Resources, Olufunmilayo Emmanuella Alabi, Uwadiale Donald Agenmonmen, The Magnificent Multi Services Limited, and Raedial Farms Limited.

In his ruling, Justice Aneke granted a Mareva injunction restraining the defendants, whether by themselves, their agents, privies, or assigns, from withdrawing, transferring, dissipating, or otherwise dealing with funds, shares, dividends, and other financial instruments standing to their credit in any bank or financial institution in Nigeria, up to the sum in dispute.

The court further directed all banks and financial institutions within the jurisdiction to forthwith preserve any funds belonging to the defendants upon being served with the order.

The said institutions were also ordered to depose to affidavits within seven days of service, disclosing the balances in all accounts maintained by the defendants, together with the relevant statements of account.

In addition, the court granted a preservative order restraining the defendants from disposing of, alienating, or otherwise encumbering any movable or immovable property, including any future or contingent interests, up to the value of the alleged indebtedness.

The court also granted leave for substituted service of the originating and other court processes on the second and third defendants by courier delivery to their last known addresses.

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The matter was adjourned to April 9, 2026, for mention.

According to the originating processes before the court, the suit arises from a N500 million overdraft facility granted by the claimant to the first defendant on March 28, 2023, for a tenure of 365 days at an interest rate of 32 per cent per annum.

The claimant averred that the facility, initially secured by a $200,000 cash collateral and subsequently by a mortgaged property located at Itunu City, Epe, Lagos, expired on March 27, 2024, leaving an outstanding indebtedness of N448,263,172.41 as at October 31, 2024.

In the affidavit in support of the application, the claimant alleged that the facility was diverted for personal use by the third defendant and channelled through the fourth and fifth defendant companies.

It further contended that the first defendant is no longer a going concern and has failed, refused, and neglected to liquidate the outstanding indebtedness despite several demands made between May and October 2025.

The claimant also expressed apprehension that the defendants may dissipate or conceal their assets, thereby rendering nugatory any judgment that may be obtained in the suit, and consequently urged the court to grant the reliefs sought in the interest of justice.

After considering the application and submissions of learned silk, Justice Aneke granted all the reliefs sought and adjourned the matter to April 9, 2026, for further proceedings.

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Sanwo-Olu unveils Lagos 2026 economic blueprint, vows inclusive growth

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The Lagos State Governor, Babajide Sanwo-Olu, on Tuesday unveiled the 2026 edition of the Lagos Economic Development Update, reaffirming his administration’s commitment to driving inclusive growth and ensuring that economic progress translates into tangible benefits for all residents of the state.

The unveiling of this year’s outlook, held in Ikeja, provides an in-depth analysis of the state’s economic trajectory, capturing global, national, and local developments shaping Lagos’ growth outlook.

Represented by his deputy, Obafemi Hamzat, the governor described the report as more than a policy document, noting that it serves as a strategic compass for guiding economic direction and strengthening decision-making.

He added that despite global economic headwinds — including post-pandemic recovery challenges, inflationary pressures, and exchange rate fluctuations — the state has remained resilient through deliberate policies, fiscal discipline, and sustained investment in critical infrastructure.

“It is with a deep sense of responsibility and optimism that I join you today to officially launch the third edition of the Lagos Economic Development Update — LEDU 2026.

“This platform has evolved beyond a mere policy document; it has become a compass guiding our economic direction, shaping decisions, and reinforcing our commitment to building a resilient, inclusive, and prosperous Lagos,” he said.

He noted that while the global economic environment has remained unpredictable, Lagos has stayed on course through “clarity, discipline, and foresight,” anchored on the T.H.E.M.E.S+ Agenda.

According to him, the state had strengthened its fiscal framework, improved revenue generation, and invested in infrastructure critical to long-term growth.

Sanwo-Olu further highlighted progress recorded since the inception of LEDU, including the expansion of the state’s economic base driven by innovation, entrepreneurship, and digitalisation; improved efficiency in revenue systems; and sustained infrastructure development spanning roads, ports, energy, and urban planning.

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He added that continued investment in human capital remains central, as “people are the true engine of growth.”

Speaking on the theme of this year’s report, “Consolidating Resilience, Advancing Competitiveness, Delivering Shared Prosperity,” the governor said it reflects Lagos’ current economic priorities.

He explained that consolidating resilience involves strengthening institutions and fiscal discipline, while advancing competitiveness requires boosting productivity, innovation, and investment.

Delivering shared prosperity, he added, means ensuring growth translates into jobs, expanded opportunities, and improved livelihoods for residents.

Looking ahead, he reaffirmed the administration’s commitment to economic diversification, private sector-led growth, data-driven governance, sustainable urban development, and social inclusion.

He also stressed the importance of partnerships with the private sector, development institutions, civil society, and the international community in achieving the state’s development goals.

“As we launch this edition of LEDU, I urge all stakeholders to engage actively, strengthen collaboration, and align with our shared vision.

“We have built resilience; now we must translate it into sustained competitiveness and ensure that growth delivers tangible prosperity for every Lagosian,” he said.

Also speaking, the state Commissioner for Economic Planning and Budget, Ope George, said Lagos has demonstrated remarkable resilience in navigating both global and domestic economic challenges.

“Lagos is not just responding to economic shocks — we are building systems that make us stronger because of them,” he said, noting that deliberate policies, disciplined fiscal management, and strategic investments have reinforced the state’s position as a leading subnational economy in Africa.

He added that the state would continue to prioritise economic diversification, private sector growth, sustainable urban development, and social inclusion, stressing that growth must be measured not only by numbers but also by its impact on people’s lives.

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In his goodwill message, Chief Consultant at B. Adedipe Associates Limited, Biodun Adedipe, described the LEDU initiative as a credible framework for tracking economic performance and refining development strategies.

He noted that Lagos remains central to Nigeria’s economy, adding that its continued growth signals broader national progress.

“If Lagos works, a significant share of Nigeria’s commerce works,” he said, expressing optimism about the state’s economic future.

Meanwhile, the Chief Executive Officer of the Nigerian Economic Summit Group, Tayo Adeloju, urged the state government to prioritise affordable housing as a critical driver of shared prosperity.

He noted that high housing costs could limit upward mobility for low-income earners, stressing that making housing more accessible would enhance living standards and support inclusive growth.

Adeloju added that sustained fiscal discipline, improved service delivery, and a broader productive base would further strengthen Lagos’ position among Africa’s leading megacity economies.

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