Investor Presentaiton

The Country and its institutions Business Organisation Labour and Social and Regulation Security Regulations The Nigerian Financial Services Industry Tax System Foreign Exchange Transactions Investment in Nigeria Accounting and Auditing Requirements Importation of Goods Exportation of Goods COVID-19 - Economic and Fiscal Measures The COVID-19 pandemic and drop in oil prices caused significant reduction in Government 11.1 Passage of the Finance Act, 2020 revenues and income of citizens in 2020. Specifically, the enforcement of a lockdown occasioned a loss of livelihood for many Nigerians who depended on daily commercial activities, events and physical movement to earn a living. Also, the significant fall in oil prices in the first half of 2020 led the Federal Government (FG) to amend the benchmark oil price in the 2020 budget from $57 per barrel to $20 per barrel. Consequently, Nigeria's GDP in real terms declined by 6.10% and 3.62% year-on-year in Q2 2020 and Q3 2020, respectively, plunging the economy into a recession. According to the World Bank's Nigeria Development Update report, Nigeria's GDP is expected to contract by 4.1% in 2020, while about 11 million more Nigerians are expected to fall into poverty as a result of the COVID-19 pandemic and the economic recession by 2022. By implication, the total number of persons categorized as "poor" will increase from 90 million to 100 million (about half of the nation's population) by 2022. The economy's poor performance necessitated the formulation of the following recovery plan by the FG to cushion the effect of the pandemic on the citizenry, tighten government expenditure and improve revenue collection: 3147 On 31 December 2020, His Excellency, President Muhammadu Buhari, GCFR, signed Finance Bill, 2020 into law following its passage by the National Assembly. The amendments made by Finance Act, 2020 are intended to provide counter- cyclical fiscal policy measures that will aid economic recovery and growth from the effect the COVID-19 pandemic on the Nigerian economy. The following changes were introduced by Finance Act 2020 as palliatives in response to the COVID-19 pandemic: i. ii. A 50% temporary reduction of the 0.5% minimum tax rate for companies liable to minimum tax for the years of assessment falling due on any date between 1 January 2020 to 31 December 2021. Reduction of import duty payable on tractors from 35% to 5%, and the duty on motor vehicles for the transport of goods from 35% to 10%. iii. Exemption of airlines registered in Nigeria from import duty on aircraft, engines, spare parts and components. iv. Exemption of airline transportation tickets issued and sold by commercial airlines registered in Nigeria from VAT. V. Temporary reduction in the minimum tax rate for insurance companies from 0.5% to 0.25% of gross premium and gross income for non-life and life insurance businesses, respectively. vi. Inclusion of donations made to the government during a pandemic, natural disaster or other exigency as allowable deductions for CIT purposes. Please click here to read our Impact Analysis of Finance Act, 2020. 11.2 Economic Measures: CBN announced the following policy measures worth #3.5 trillion: COVID-19 76.20 6248 76.20 58.15 62.48 31.44 58.15 11.24 52.77 28.15 83.44 18.41 64.20 82.77 24.00 15.33 83 Investment in Nigeria Guide - 8th Edition 31.44 28.15 • Additional moratorium of 1 year on CBN intervention facilities. • Interest rate reduction on intervention facilities from 9% to 5%. • Creation of #50 billion target credit facility for affected households and small and medium enterprises. 76.20 82.77 . Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors. • Improve FX supply to the CBN by directing oil companies and oil servicing companies to sell FX to the CBN rather than the NNPC. KPMG

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