J’aiyé Foreign (Investors)
I’m a big big fan of Zinoleesky. That raspy voice delivered in the laconic style that makes you think this guy has no business being a singer but here is doing the thing and here I am enjoying it.
The song that really put me on to him last year was J’aiyé Foreign, a collaboration with Tiwa Savage. I can’t really explain it, but I really like the song.
Annoyingly it has no official video so you’ll just have to enjoy the YouTube lyric video.
But Zino is only half the reason for this post. Nigeria’s new president is going down a treat with many Nigerians who have an innate bias for ‘action’. And who can blame them — even if President Tinubu is only plucking low-hanging fruit, that is more than his predecessor could be bothered to do. That man could not even pluck low-hanging sitting right on top of his head.
I remain on my self-imposed 6 month studied silence so this is not to be taken as anything other than an observation. I am not commenting on the propriety or otherwise of the new president’s actions. Merely observing what I think might be an early trend
Is there a pattern to the president’s early moves? I think there might be. I’m told that foreign investors are cheering yesterday’s suspension of the EFCC Chairman, Abdulrasheed Bawa, to the rafters. He is someone who has given them a huge amount of trouble, far more than they bargained for and his exit thus comes as a big relief to them.
Once that piece falls into place, the others become easier to explain. The suspension of Emefiele as CBN governor, the removal of fuel subsidies, the unification of exchange rates, even the very public meeting with Exxon Mobil executives.
[Sidenote: Someone told me a story of how very early in the Buhari administration — and in the teeth of the FX crisis — some foreign investors went to see Emefiele for a meeting. In the course of the meeting, he casually told them something along the lines of ‘If you need dollars, just come and see me’. This immediately caused them to panic as they reasoned, correctly, that a place where you have to go ‘see’ the Central Bank governor to get your money out of is a very risky place to do business. What if one day he decides not to see you? They sold down their Nigerian investments right after that and exited the country]
I can summarise these moves as follows: the new president’s priority appears to be to send the strongest and clearest possible signal to foreign investors with his early moves. He wants them in Nigeria and will do things to clear the way for them, as a first order of business. This J’aiyé Foreign Theory not only lets us understand his early moves, it may even have predictive powers in terms of helping us make an educated guess as to where the new government might visit their next act of ‘violence’.
In completely unrelated news, here’s a story published by Bloomberg yesterday on foreign oil tankers avoiding Nigeriadue to FIRS making backdated tax demands (going as far back as 2010) of them:
At least two shipowners, who asked not to be identified discussing commercial matters, are steering clear of Nigerian ports to avoid the risk of having their ships arrested. Tanker earnings from West Africa to Europe jumped 27% on Tuesday, according to Baltic Exchange data, the biggest daily increase in a month.
Ships staying away from Nigeria makes it easier for owners willing to travel there to command higher premiums for their vessels. Many of the tax bills referred to a previous law published by Nigeria’s revenue service in July 2021. That measure says any vessel carrying crude oil, gas or refined fuels from Nigeria is liable to pay tax there.”
In other words, the cost of shipping goods to Nigeria has now jumped because ships willing to go have to factor in the risk of having their vessels seized. An open version of the story in TradeWinds has this excerpt:
One Greek shipowner has been asked to pay $18m in taxes allegedly incurred between 2011 and 2019.
According to a fifth source familiar with the matter, Nigeria’s new administration is invoking hitherto ignored legislation from 2004 that applies to non-residents.
The 2004 edict, which in the words of one knowledgeable source was “poorly defined”, imposes a tax on freight rate income and profit earned transporting Nigerian oil.
In their letters, Nigerian authorities calculated the owed amounts on the basis of past ship voyage data they retrieved. Then, they bumped up the total by penalty surcharges of 20% for each year of alleged non-compliance.
The actual reason behind the initiative is believed to be a concerted effort by the incoming administration to shore up revenue at a time when Nigeria’s new president Bola Ahmed Tinubu is cancelling fuel subsidies for the public.
According to the sources, notices were first sent by email at the end of May, through shipowners’ local agents.
We will soon find out who is behind this backtax demand — the new government or people in the previous government trying to impress the new government?