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Governors and tax reform committee agree on revised VAT sharing formula

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After extensive discussions, the governors of Nigeria’s 36 states and the Presidential Tax Reform Committee have reached a landmark agreement on a revised formula for sharing Value Added Tax (VAT) revenue.

Diaspora digital media (DDM) gathered that the consensus, achieved during a high-level meeting on Thursday, January 16, 2025, in Abuja, addresses long-standing concerns over equitable distribution and fiscal policy reforms.

The newly adopted VAT sharing formula retains a 50% allocation based on equality, raises the derivation share from 20% to 30%, and adjusts the population-based allocation from 30% to 20%.

This proposal, spearheaded by the Presidential Tax Reform Committee chaired by Mr. Taiwo Oyedele, aims to strike a balance between equity, fairness, and efficiency in revenue distribution across the federation.

A communiqué issued after the meeting, signed by Alhaji Abdul Rahman Abdul Razaq, Governor of Kwara State and Chairman of the Nigeria Governors’ Forum (NGF), outlined the key decisions and their implications for Nigeria’s fiscal landscape.

The statement emphasized the importance of updating the tax system to ensure sustainable resource management and alignment with global standards.

“The Forum has endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable resource distribution

“50% based on equality, 30% based on derivation, and 20% based on population,” the communiqué stated.

“This new approach reflects the commitment of both the NGF and the Presidential Tax Reform Committee to foster national unity while addressing the unique fiscal challenges of individual states.”

In addition to agreeing on the VAT formula, the governors and committee members reaffirmed their commitment to modernizing Nigeria’s outdated tax policies.

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They recognized the need for a robust and transparent tax system that promotes economic stability while safeguarding the welfare of citizens.

The meeting resolved that there would be no immediate increase in VAT rates or reduction in Corporate Income Tax (CIT) to maintain economic balance during this transitional period.

Another critical resolution was the continued exemption of essential goods and agricultural products from VAT.

This measure, according to the communiqué, is vital for protecting citizens’ purchasing power and ensuring food security.

The participants underscored the importance of supporting agriculture as a cornerstone of Nigeria’s economy.

The governors and committee also addressed other fiscal policies, advocating that development levies allocated to agencies like TETFUND, NASENI, and NITDA remain without terminal clauses in the proposed Tax Reform Bills.

This decision is expected to enhance the capacity of these agencies to drive innovation, education, and technological development.

The meeting welcomed the ongoing legislative processes in the National Assembly, which are expected to culminate in the passage of comprehensive Tax Reform Bills.

These bills aim to consolidate Nigeria’s tax policies, streamline revenue generation, and enhance accountability in resource allocation.

Thursday’s agreement marked a significant turning point in resolving tensions over the federal government’s proposed tax amendments.

In recent months, resistance to these amendments had grown, particularly from governors, emirs, and chiefs in northern states, who expressed concerns about potential disparities in revenue distribution.

The new VAT sharing formula represents a compromise that addresses these concerns while promoting fairness and efficiency.

The revised VAT model also signals a broader commitment to fiscal decentralization, allowing states to benefit more directly from their economic activities.

READ ALSO:  Edun confirms FG's plans to increase VAT by 10%

By increasing the derivation share, resource-rich states will receive a greater portion of VAT revenue generated within their territories.

Meanwhile, the reduced population-based allocation reflects an effort to ensure that states with smaller populations are not disproportionately disadvantaged.

The Nigeria Governors’ Forum and the Presidential Tax Reform Committee reiterated their shared vision for a unified and prosperous nation.

“This agreement demonstrates our collective resolve to tackle Nigeria’s fiscal challenges head-on,” the communiqué stated.

“By reforming VAT distribution and tax policies, we are laying the foundation for a more equitable and sustainable future.”

As the reforms move forward, stakeholders are optimistic that the new VAT sharing formula will address longstanding grievances while fostering collaboration between the federal and state governments.

The initiative also reflects Nigeria’s broader efforts to modernize its fiscal policies and align them with global best practices.

In conclusion, the dialogue between the governors and the Presidential Tax Reform Committee marks a pivotal step in addressing Nigeria’s fiscal challenges.

By prioritizing fairness, equity, and citizen welfare, the revised VAT sharing formula underscores the country’s commitment to achieving economic stability and national development.

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Economy

Fidelity Bank Resumes International Transactions on Naira Debit Cards

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Fidelity Bank

Tier-one Lender, Fidelity Bank Plc., has announced the resumption of international transactions on its Naira Debit Cards.

This recommencement gives customers the freedom to make seamless payments abroad, online, and at ATMs outside the country.

The Divisional Head of eBanking, Fidelity Bank, Ifeoma Onibuje, shed light on the development.

Onibuje said: “We are delighted to inform the public that Fidelity Naira Cards are now enabled for global use.

“This means that our travelling customers can now utilize their Naira Debit cards outside the country to shop, spend and withdraw internationally without hassles.”

“Consequently, our customers can now spend up to $1,000 quarterly for international POS and online transactions; and withdraw up to $500 quarterly on international ATMs.”

The announcement offers Fidelity Bank customers another way to complete international transactions, in addition to the Bank’s existing foreign currency debit and credit cards.

The bank stated that it further reinforces its commitment to delivering solutions that fit seamlessly into customers’ lifestyles.

With Fidelity Bank’s VISA and Mastercard Naira Debit Cards, Nigerians can now enjoy effortless global access.

Beyond payments, Fidelity VISA cardholders, one of the variants of the bank’s card offerings, also enjoy premium travel and lifestyle benefits.

The benefits range from airport lounge and spa access via the Visa Airport Companion App, to fast-track immigration lanes and 20% discounts on SIXT car rentals worldwide.

This move, the bank said, also reflects its commitment to provide secure, convenient, and reliable banking services that empower customers in Nigeria and beyond.

The bank noted that it has deliberately made the process of getting a Fidelity Naira card seamless.

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It stressed that customers can easily apply for their Fidelity VISA or Mastercard Naira Debit card via the Fidelity Mobile App or simply visit the nearest Fidelity bank branch to request for one and they can start transacting globally with ease.

Ranked among the best banks in Nigeria, Fidelity Bank Plc is a full-fledged Commercial Deposit Money Bank serving over 9.1 million customers through digital banking channels, its 255 business offices in Nigeria and United Kingdom subsidiary, FidBank UK Limited.

The Bank is the recipient of multiple local and international Awards, including the 2024 Excellence in Digital Transformation & MSME Banking Award by BusinessDay Banks and Financial Institutions (BAFI) Awards; the 2024 Most Innovative Mobile Banking Application award for its Fidelity Mobile App by Global Business Outlook, and the 2024 Most Innovative Investment Banking Service Provider award by Global Brands Magazine.

Additionally, the Bank was recognized as the Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence and as the Export Financing Bank of the Year by the BusinessDay Banks and Financial Institutions (BAFI) Awards.

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Celebrity/Entertainment

How Nigerian TikToker Geh Geh Made ₦45 Million in One Night

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A Nigerian TikTok sensation known as “Geh Geh” has stunned the internet after pulling in over $30,000 from a single live session that attracted more than 177,000 viewers.

The young entertainer, who calls his platform the “University of Wisdom and Understanding,” has quickly built a cult following with his raw and unfiltered lectures about women, money, and survival in Nigeria.

During the live broadcast on Thursday, August 21, viewers showered him with virtual gifts that he later calculated to be worth over $30,000.

The milestone instantly pushed him into the spotlight as one of Nigeria’s fastest-rising online personalities.

 

Reacting in disbelief after the stream, Geh Geh said:

“More than 177,000 people watch my lectures today. Jesus! University of wisdom and understanding, the only university where once you graduate, woman go fear to ask you for money.”

 

Despite not having a formal education, Geh Geh proudly calls himself “the first illiterate to find a university in the history of Nigeria.” In a video after the viral live, he reminded fans of his humble background:

“I no be graduate too, but by the grace of God, I don find school. I be orphan, but now Nigerians don show me love.”

 

The TikTok star admitted he was overwhelmed by the generosity of his supporters.

“See gift I made over… more gift when they give me today is worth about $30,000. I no go take this love for granted, because I no really do anything for am.”

 

His rise has been hailed as proof of how social media is transforming lives in Nigeria. With no degree, no rich background, and no industry connection, Geh Geh has managed to build a fanbase that now calls themselves “students” of his unusual university.

READ ALSO:  Letting states collect VAT will harm businesses, impede economic growth - Oyedele

 

Still, his controversial views on women and relationships continue to spark heated debates. While some dismiss his advice as reckless, others insist his boldness speaks directly to Nigeria’s frustrated youth.

 

Reflecting on his sudden fame, Geh Geh compared himself to great thinkers:

“If Nigeria be country wey value great people, by now them suppose dey compare people like me with Aristotle, Wole Soyinka, Einstein… but I thank God say people dey see my head and my own difference.”

From an orphan with no prospects to a viral star earning in dollars, Geh Geh’s story has become one of digital empowerment.

His journey shows how platforms like TikTok are creating new forms of fame, money, and influence for Nigerians especially those once written off by society.

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Africa

UK Dominates Nigeria’s Q1 2025 Capital Inflows With N5.5tn — NBS

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The United Kingdom has once again cemented its position as Nigeria’s leading source of foreign capital, accounting for more than N5.5 trillion in inflows during the first quarter of 2025, according to the latest data from the National Bureau of Statistics (NBS).

Figures from the Capital Importation Report show that capital from the UK rose to $3.68bn (N5.52tn) in Q1 2025, representing 65.26% of Nigeria’s total $5.64bn inflows for the quarter.

This marked a 29.2% rise from the $2.85bn recorded in Q4 2024 and more than double the $1.81bn inflows seen in Q1 2024.

This underscores Britain’s dominance in Nigeria’s external financing profile and highlights the strong bilateral financial ties between both nations.

Breakdown of Q1 2025 Capital Inflows by Country

United Kingdom: $3.68bn (65.26%)

South Africa: $501.29m (8.88%)

Mauritius: $394.51m (6.99%)

United States: $368.92m (6.54%)

United Arab Emirates: $301.72m (5.35%)

Together, these top five countries accounted for over 92% of Nigeria’s capital inflows, reflecting both the concentration of Nigeria’s foreign investments and the risks of over-dependence on limited markets.

Other contributors included:

Cayman Islands: $114.76m (up sharply from $0.64m in Q4 2024)

Belgium: $70.54m

France: $47.33m

Netherlands: $42.68m (down significantly from $425.61m in Q4 2024)

Singapore: $36.79m

Overall, capital importation into Nigeria stood at $5.64bn in Q1 2025, up 10.9% from Q4 2024’s $5.09bn, and a remarkable 67.1% higher than the $3.38bn recorded in Q1 2024.

The NBS noted:

“Capital Importation during the reference period originated largely from the United Kingdom with $3,681.96m, showing 65.26 per cent of the total capital imported.”

READ ALSO:  NGO advises FG to discourage food importation

A separate survey by Strategy Management Partners (UK) reveals that British companies are increasingly targeting Africa as a strategic growth frontier.

50% of UK firms with annual turnover above £20m are already operational in Africa and planning expansions.

Another 28% of executives said they are interested but remain cautious about entry strategies.

Africa’s appeal lies in its resource wealth and demographic potential:

30% of the world’s mineral reserves

8% of natural gas reserves

12% of oil reserves

65% of the world’s arable land

Projected to host 25% of the global workforce by 2035

Seven key sectors remain magnets for foreign capital inflows into Nigeria and Africa at large:

1. Technology

2. Oil & Gas

3. Power and Renewable Energy

4. Agriculture

5. Manufacturing

6. Infrastructure

7. Strategic Minerals

Analysts warn that while Nigeria’s reliance on UK-driven inflows reflects strong global confidence, the concentration of sources exposes the economy to external shocks if investor sentiment shifts in these countries.

Diversification of investment partnerships  particularly within Asi

a, the Americas, and intra-African trade will be crucial to ensuring long-term resilience in capital inflows.

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Africa

U.S. Govt Reacts to Nigerian Minimum Wage

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The United States government has said that Nigeria’s new N70,000 minimum wage has lost real value due to the sharp fall of the naira, leaving millions of workers trapped in poverty.

According to the 2024 Country Reports on Human Rights Practices, released by the U.S. Department of State’s Bureau of Democracy, Human Rights, and Labour, the wage translates to just $47.90 per month.

The report noted that currency devaluation and weak enforcement have undermined the wage increase.

The report also revealed that many states are yet to implement the new wage law. Several governors cited financial challenges as the main excuse.

Even where the law exists, compliance remains poor because of limited labor inspectors and weak oversight from authorities.

Wage Devaluation and Exclusion

The report highlighted that firms with fewer than 25 workers are excluded from the minimum wage law, leaving millions of employees without protection.

This also explained that about 70 to 80 percent of Nigeria’s workforce operates in the informal sector, where wage and labor rights are almost never enforced.

This means a majority of Nigerians continue to earn far below the national benchmark, despite the government’s approval of N70,000 as the new minimum wage.

The U.S. report stressed that the naira’s sharp decline, trading above N1,500 to the dollar, had worsened the wage erosion. This has left workers unable to afford basic needs, pushing many deeper into poverty.

Human Rights and Labor Challenges

The document pointed out that weak enforcement of labor laws contributes to worsening poverty levels in the country.

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Workers in the informal sector, such as street vendors, artisans, and small traders, rarely benefit from labor protections.

The report also noted that Nigeria’s minimum wage is rarely sufficient to cover basic food, housing, and transport needs.

This has further exposed structural gaps in the government’s approach to economic reforms and poverty reduction.

Governors Push Investment Platform

Meanwhile, the Nigeria Governors’ Forum (NGF) has launched a new investment initiative called NGF Investopedia.

The platform seeks to attract capital flows into bankable projects across all 36 states, with the goal of tackling Nigeria’s annual $100 billion infrastructure financing deficit.

The launch event in Abuja gathered governors, international partners, and investors. The forum described the platform as a long-term strategy to unlock growth opportunities across states and strengthen Nigeria’s subnational economies.

NGF Chairman and Kwara State Governor, Abdulrahman AbdulRazaq, said Nigeria must urgently leverage its human and natural resources to address poverty and joblessness.

“Here is Africa’s largest economy, endowed with abundant human and natural resources,” he said, stressing that state governments must play a bigger role in attracting investments and supporting local industries.

A Widening Gap

The contrast between the U.S. report on wage decline and the governors’ push for investment highlights Nigeria’s economic paradox.

While authorities promote foreign capital inflow, millions of workers continue to survive on wages that have lost most of their value.

With inflation rising, food prices soaring, and the naira weakening, the gap between earnings and cost of living keeps widening.

Unless enforcement improves and the informal sector is integrated into wage protections, the N70,000 benchmark may remain symbolic rather than effective.

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Economy

Global Card: Fidelity Bank Hits Milestone As Fidelity Naira Card Accepted Globally

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Fidelity Bank

Fidelity Bank may have hit another milestone the Fidelity Naira Card is now accepted globally.

This was disclosed in a message sent to Diaspora Digital Media (DDM) via email on Monday.

According to the statement entitled “Your Fidelity Naira Card Now Works Globally; Shop, Pay and Withdraw with Ease!“, customers can buy favourite global brands online using their Fidelity Naira Card.

The band also stated that they can equally pay at POS terminals abroad and make cash withdrawals at ATMs as they travel.

The message reads:

“We’re excited to let you know that your Fidelity Naira Card is now enabled for global use — so you can shop, spend and withdraw internationally with confidence.

“Here’s what you now enjoy every quarter:

Channel

Transaction Limit
ATM Withdrawal abroad $500
Online/Web & POS Payments $ 1,000

“What does this mean for you?

  • Shop your favourite global brands online
  • Pay at POS terminals abroad with ease
  • Withdraw cash at ATMs when you travel.”

The statement, however, noted that the $1,000 quarterly limit applies to all international transactions combined, including ATM withdrawals, online purchases, and POS payments.

The bank urged customers who may need assistance with setting card limits or activating their cards for global use, to contact the bank’s customers care “Centre Trueserve”, which is available round the clock, whether in Nigeria, or outside the country.

“Your world, your card — spend smart, spend globally with Fidelity,” the message concludes.

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