Connect with us

Banking / Insurance

CBN Gov proposes N100b tax on mobile phone users

Published

on

 Mobile phone users will be in for hard times if proposal by the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele to the federal government to introduce mobile phone call tax becomes a reality.

The Governor, who broke the news at the 2016 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) on Friday night, in Lagos, said such tax, targeted at the middle, upper class and long phone call makers, can generate N100 billion annually into the federal government coffers.

Speaking on the theme: “Policy options for reversing Nigeria’s economic downturn” he said the country’s economy is currently facing a classical case of “stagflation” and although the 2016 budget is well on track to tackle it, there is need to boost revenue generation base though increased taxes.

He suggested that government could explore opportunities for more revenues to wriggle out of stagflation and recession by introducing a negligible telecom surcharge to be paid by initiator of a telephone call.

“There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy. I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk. Some analyses have indicated that the government could earn about N100 billion per annum from this alone,” he stated.

Emefiele explained that the surcharge will mainly be borne by middle and upper class people since many poor people do not make calls for more than three minutes.

He explained that stagflation occurs when a country’s Gross Domestic Product (GDP) is falling or stagnant while unemployment and inflation are rising, all simultaneously.

“As recent data from the National Bureau of Statistics (NBS) indicate, Nigeria’s GDP growth decelerated by 0.36 per cent and 2.1 per cent in the first and second quarters of 2016, respectively. More also, the rate of price inflation for the months of September and October were 17.9 per cent and 18.3 per cent, respectively, while official statistics also indicate that the country’s unemployment rate increased to 12.1 per cent and 13.3 per cent during the first and second quarters,” he stated.

Emefiele said that stagflation is a difficult condition for policymakers to deal with, insisting that no single macroeconomic policy can address rising inflation and slow growth simultaneously, because fighting inflation may require implementing policies that might, in the short term, be inimical to economic growth, whereas expansionary policies to stimulate growth usually worsen inflation.

Still on taxes, the CBN boss said government could also consider introducing minimal property taxes across the country. “This not only raises money for the government but also could be a veritable weapon against corruption since it creates a database of who really owns homes in this country. Another option to consider would be to fully implement the 2003 Cabotage Act. This is Act stipulates that all cargoes and passengers in the inland and coastal waters be transported by ships and ferries built, owned, crewed and manned by Nigerians,” he said.

Emefiele explained that contrary to the requirement of this Act, there are several foreign-owned vessels providing shipping services locally. “Out of about 600 ships that operate within our waters, only about 60 of them are owned by Nigerians and are mostly idle, in violation of the Act. Industry sources suggest Nigeria may be losing as much as N2 trillion annually from this anomaly. In addition to raising revenue, a full implementation of the Act could also spur job creation, capacity building, and significant backward integration,” he said.

Speaking further, he said that exchange rate is simply a price that is determined by the forces of demand and supply.

He said that while the proposal may seem controversial, variants of this policy have proven to be highly effective in other climes and even here in Nigeria. “For example, throughout the early days of South Korea’s economic renaissance, the government intermittently used excessively stiff tariffs, quantitative restrictions and prohibitive inland taxes to effectively ban many items with potential for high imports, and simultaneously, offered generous and subsidized loans to firms for export promotion causes. In fact, at some point, about 93 per cent of total imports into South Korea were subject to one or more such restrictions,” he said.

Emefiele admitted that interest rates are a veritable tool for curtailing inflation but with inflation at over 18 per cent, the regulator would be abjectly failing on one of its cardinal objectives if it cuts interest rates at this time. “Second, for those who say we need a rate cut to spur growth, we need to remind that high inflation is highly inimical to economic growth. Indeed, many empirical studies have estimated the threshold level at which inflation becomes significantly growth retarding to be 11 per cent for developing countries. With ours at 18.3 per cent, one must question the judgment of cutting interest rates at this time,” he said.

The CBN Governor insisted that interest rates reflect not just the cost of capital but also the cost of doing business, hence, the need to also look at interest rates from the perspective of the lender. “Given that most banks have to individually provide security, power, and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates. Notwithstanding these facts, we will continue to use moral suasion to encourage commercial banks to be more considerate in interest charges on customers,” he stated.

 

The post CBN Gov proposes N100b tax on mobile phone users appeared first on The Nation Nigeria.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Banking / Insurance

aYo diversifies insurance payment options with Revio

Published

on

aYo Chief Operations Officer, Miles Bloemstein and Revio’s co-founder and Chief Operating Officer, Nicole Dunn

African insurtech aYo Holdings, jointly owned by telecommunications giant MTN and insurer Sanlam Allianz, is pioneering omnichannel insurance premium collections and claims payouts, through a partnership with payment orchestrator, Revio. This development will make it easier for aYo’s millions of customers to pay for life and hospital cash insurance by choosing their preferred method from a range of locally relevant payment options, in addition to MTN mobile money and airtime currently offered by aYo in its seven markets across the continent.

The additional payments capabilities, facilitated via Revio in its respective markets, will allow aYo to offer greater choice to existing and new clients, boosting both sales and retention.

Miles Bloemstein, aYo’s Chief Operations Officer, who is championing the omnichannel payment strategy was inspired by the growth in alternative payment methods and adoption across the continent.  While Africa’s digital payment transactions are growing 16% year-on-year – and are projected to reach $146 billion in 2023 – the continent’s payment landscape is notoriously complex and fragmented, with few universal and interoperable payment methods available.

Download BAO E-MAGAZINE

“Localisation of payments and collections is key to business success in Africa. Our team has spent significant time in our different markets to understand local payment preferences and cultures, and the feedback is clear – payment methods matter. If customers do not see the payment methods they trust and prefer, they will not buy the product.,” said Bloemstein. Whilst MTN payment options remain the core of its strategy, aYo believes omni-payments, in addition to omni-channel delivery, is key to success in its digital insurance ecosystem.

Revio’s co-founder and Chief Operating Officer, Nicole Dunn, shared, “It’s fantastic to see market leaders like aYo adopting such a customer-centric approach to collections and payments. Today, the customer payment experience is almost as important as the customer experience of the product. aYo’s team deeply understands its customer base and has invested in the capabilities to reach new customers and retain them for longer. We’re excited to support them on this journey.”

Revio, which recently raised $5.2 million in funding from leading investors QED Investors and Partech, aims to reduce the complexity, cost, and risk of payment operations in Africa. Its single API is pre-integrated with more than 50 payment methods, with the ability to selectively expose methods and route transactions based on success rates and local adoption.

“Africa’s collection challenges are complex and unique. By helping aYo collect revenue from its customers using their preferred payment methods, we not only increase payment success rates, but reduce lapse rates and churn,” said Dunn.

The partnership will reduce aYo’s integration effort to launch new markets, and ongoing operational cost associated with managing multiple payment methods and providers. It is estimated that it will save at least 10 months’ development effort per market. In the process, aYo will reduce integration and setup costs considerably through a single integration project for all of the company’s existing markets.

The partnership is live in Nigeria and will soon be launching in aYo’s other markets. Not only will aYo customers have access to more localised and accessible payment methods for premium collections, but also payouts. Together with Revio, aYo has solutioned a new payouts process that offers multiple payout options to customers for the payment of claims, giving customers and beneficiaries options in respect of how they receive their claim payout, shared Bloemstein.

Since starting operations in 2017, aYo has evolved into a major player in the African microinsurance market, using a ‘pay as you go’ insurance model that gives policyholders the flexibility to have the cover they need at any given time. Its vision is to grow into the largest insurance technology platform in Africa by providing a range of affordable and accessible financial services products

Continue Reading

Banking / Insurance

aYo Zambia launches Illness Cover as it looks to drive insurance uptake

Published

on

Microinsurer aYo Zambia has launched a new General Illness Cover product, which will provide cover for customers who spend up to three days in hospital because of sickness or disease, as it looks to drive greater insurance penetration in the country.

The new illness cover is an extension of the company’s existing ‘Recharge with Care’ product, which provides hospital cover for customers if they are involved in an accident.

Download BAO E-MAGAZINE

“To date, more than 3.5 million Zambian consumers have purchased cover to protect themselves against hospitalisation in the event of injury, or loss of life,” said aYo Zambia CEO Andrew Nkolola. “But many of our customers have been asking us: ‘How will we deal with the financial blow of falling ill? We don’t want benefits only when we’re in an accident.’ We realised it was a huge gap in the market and have responded accordingly.”

Nkolola says aYo Zambia is committed to contributing to the growth of insurance in the country. Earlier this year, Finance Minister Situmbeko Musokotwane expressed his concern over Zambia’s low insurance penetration levels, which leaves millions of Zambians without cover if a disaster strikes.

When it first launched in Zambia, aYo offered hospital and life cover to individuals through two insurance products, ‘Send with Care’ and ‘Recharge with Care’. A growing market demand for insurance for the whole family prompted the company to create the new Family Cover product last year, which allows policy holders to add up to seven people, including themselves.

Now, the new General Illness Cover adds a further layer of protection that helps ordinary Zambians stay afloat when the unexpected happens. It pays up to K3,250 if a policyholder is hospitalised through illness.

As with aYo’s existing products, General Illness Cover customers must maintain active Mobile Money (MoMo) accounts to pay premiums and claim. Customers can sign up and claim by dialling the USSD code *296# on their mobile phones and following the prompts. They can also claim using ayo4u.com/zm. All Family Cover claims are paid directly to the claimant’s mobile money wallet without any hassles.

aYo Zambia has been voted best microinsurance product of the year for both 2021 and 2022.

Continue Reading

Banking / Insurance

AllLife Announces R50 000 Accidental Death Cover for All South Africans

Published

on

AllLife CEO, Steph Bester (Image: Supplied)

AllLife, providing life insurance to South Africans living with dread and chronic diseases, today announced that it is making R50 000 accidental death cover available to South Africans. The announcement is a critical step in the organisation’s core business proposition that everyone deserves the right to life insurance. Fewer than four out of ten South Africans have any form of life cover in place. This places enormous pressure on families and loved ones in an economic climate that requires multiple breadwinners per household.

“Business is about so much more than profits. At AllLife, we have made it our mission to bring access to life cover to marginalised communities over the years. Today’s announcement highlights that we are ready to take the next step on that mission,” says Steph Bester, CEO at AllLife. “By offering accidental death cover to the majority of South Africans, we want to show everyone that they not only deserve life cover but that there are ways for them to get that cover. Our entire team is exceptionally proud of this offering and to be involved with a business that believes in making a difference that’s bigger than ourselves.”

Download BAO E-MAGAZINE

The R50 000 accidental cover is available to all South Africans between the ages of 18 and 75 with a valid ID number and email address, with no exceptions. As per the working model, AllLife will carry the premium for the policy in their quest to ensure a better tomorrow for those left behind when the unthinkable happens.

The policy is available to all South African earning over R5000 a month, the application process takes ten seconds and is as simple as entering an individual’s name, surname, ID number and email address on an easy-to-navigate webpage. Afterwards, policy documents will immediately be emailed to the new policyholder.

“We are not stopping here. We recently launched an extension to our portfolio with a product that ensures all people in South Africa are covered, regardless of whether they live with dread or chronic conditions such as cancer or heart conditions. In fact, one of the biggest reasons people are being denied access to life cover is for being deemed overweight, a demographic we now also offer cover to. We continue to make it our mission to uncover and offer life cover products that are inclusive to all South Africans, regardless of someone’s health,” adds Bester.

In 2005, AllLife was the first company to offer life cover to people living with HIV, a population segment entirely ignored and even feared by the many big life insurance companies at the time. Next, in 2013, it included life cover for people living with diabetes, yet another segment largely avoided by the mainstream life insurers.

“In a world where real-life challenges mar our every day, it is refreshing to find some hope and good news, knowing someone has your back. Many South Africans have monthly budgets that don’t balance, leaving tough decisions around what to keep and cancel. Knowing that someone in a family unit has cover in place without worrying about the monthly debit order goes a long way,” ends Bester.

 

Continue Reading

Ads

Most Viewed