Policy Tracker: West Africa
NIGERIA
Nigeria’s New Health Insurance Law Targets Vulnerable Citizens ( March 2022)
Nigeria’s president, Muhammadu Buhari has signed Nigeria’s National Health Insurance Authority Bill 2022 into law. The approved new insurance law aims at expanding coverage for vulnerable citizens unable to afford the costs of health care in Africa’s most populous country. The 2022 National Health Insurance Authority Bill will ensure coverage of 83 million poor Nigerians who cannot afford to pay premiums. According to the President, the full implementation of the new law, which repeals the country’s National Health Insurance Scheme Act, will provide health insurance coverage for all Nigerians.
According to a November 2021 survey by NOI Polls, about eight out of 10 people do not have health insurance cover, in Africa’s largest economy. The majority of Nigerians pay cash if they have to visit a health care facility when ill. This insurance law came in in a time of need for Nigerians. According to a statement by the president, the new National Health Insurance Authority will collaborate with the State Government Health Insurance Schemes to accredit primary and secondary health care facilities, and ensure the enrolment of Nigerians.
Moreover, Dr Faisal Shuaib, who is the Executive Director of Nigeria’s National Primary Health Care Development Agency outlined how the move presently aligns Nigeria with the global push for universal access to quality and affordable health care. This comes after as before the health insurance has been decentralized in Nigeria. An approximate 3% of the whole population have been estimated to have coverage, mainly due to the mandatory enlistment of government workers, leaving the majority of citizens uninsured.
To the Nigerians, this new law implies the promotion, regulation, and integration of health insurance schemes. The provisions of this law have made sure that health insurance is now mandatory for every citizen and legal resident. The law will also enforce the basic minimum package of health services for all citizens across all health insurance schemes operating within the country.
To make sure that the vulnerable groups are included, the new law establishes a Vulnerable Group Fund that targets children under the age of 5 years, pregnant women, older people, people with physical and mental disabilities and the impoverished people. According to the Lancet Nigeria Commission, launched in March, 2022, the Nigerian Government is recommended to institute universal government prepaid health insurance for children, pregnant women, and vulnerable groups if the effectiveness of the law is to be attained.
Nigeria approves the Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments (May 2022)
Nigeria’s president Muhammadu Buhari has approved the implementation of the 2022 Fiscal Policy Measures (FPM) which comprise Supplementary Protection Measures (SPM) for the enforcement of the Economic Community of West Africa States Common External Tariff (ECOWAS CET) 2022-2026. This was issued on 1 March 2022 through a communique by the Minister of Finance, Mrs Zainab Ahmed. This Fiscal Policy Measures excises duties on goods such as non-alcoholic beverages, alcoholic beverages, cigarettes and tobacco products, and telecommunication services with effect from 1 April 2022.
Enforced by the government, the Fiscal Policy Measures are a set of tools designed to foster economic growth through expanding investment both in the public sector and the private sector. They also diversify resources from less desirable investments to more desirable ones. The new FPM supersedes the 2021 FPM which has been in force since September 2021. The approved Supplementary Protection Measures (SPM) as given in the 2022 FPM provides the following provisions:
Import Adjustment Tax (IAT) list with additional taxes (levy) on 172 tariff lines of the extant ECOWAS CET
Import Prohibition List (Trade), applicable only to certain goods originating from non-ECOWAS Member States
National list consisting of items with reduced import duty rates to promote and stimulate growth in critical sectors of the economy.
The 2022 FPM specifically introduced the following changes:
Import duty reduction has been granted on certain goods to be implemented by Nigeria. However, only verifiable investors/manufacturers who require these items as inputs for production will be able to access the concessionary import duty. This seems to be a strategy by the FGN to stimulate growth in critical sectors of the economy.
New excise duty rates have now been implemented on goods such as non-alcoholic beverages, fruit juice, and energy drinks (and all other non-alcoholic beverages) at a specific rate of ( Naira) ₦10 per litre.
All goods imported will now be removed from the Export Prohibition List of the ECOWAS CET and formerly imported goods on which the import duty was fully paid may now be re-exported at a rate of 2.5% export surcharge of the present value, but only at the approval of the Federal Ministry of Finance, Budget and National Planning.
Import tariff and Value Added Tax (VAT) exemptions on some COVID-19 essential medical supplies have also been included in the FPM in line with the World Customs Organization (WCO) recommendation as supported by the WHO. The exemption of these items is however subject to importers obtaining a letter of support from the Federal Ministry of Health and Import Duty Exemption Certificate from the Ministry of Finance Budget and National Planning. The approved list of exempted medical supplies takes immediate effect and remains effective till 31 December 2022.
To Nigeria, this implies that this 2022 FPM will promote the government's plan to stimulate growth in the economy. It has become so imperative that importers liaise with their advisors and make efforts to understand the impact of the new measures on their business and mostly re-evaluate their business models to take advantage of the provisions of the FPM. Other benefits to both the public and private sector includes the removal of imported items from the banned export list. Importers may also want to understand how to minimize their exposure to increased tariffs or rates.
GHANA
The release of the 2022 Ghana Budget and Economic Policy: Addressing Ghana’s youth unemployment challenge?
The Minister of Finance of the Republic of Ghana, Hon. Ken Ofori-Atta, presented the Budget Statement and Economic Policy of the Government of Ghana for the 2022 Financial Year to the Parliament of Ghana on 17 November 2021 under the theme “Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation”. This was anchored on Fiscal Consolidation and Job Creation in the 2022 Budget- the “Agyenkwa” Budget.
The Government of Ghana is seeking to empower its citizens especially its youth, to which it encourages to have an entrepreneurial mindset in the year 2022. The fiscal policies presented in the 2022 Budget Statement are intended to broaden the tax net and increase government revenue to finance various Government programmes, support entrepreneurship, and create jobs to curb the unemployment menace.
These targets were underpinned by a programme to mobilize GH¢100.5 billion in revenues and grants. The government estimated a total expenditure of GH¢137.5 billion aiming to achieve an overall budget deficit of 7.4 percent for the year 2022. This was done against the backdrop that economic growth had recovered from 0.5 percent in 2020 to 5.4 percent in 2021, and the fiscal deficit had declined from 14.7 percent in 2020 to 11.4 percent in 2021 as the Minister stated.
Deloitte’s 2022 Budget Highlights document provides a snapshot of the milestones achieved by the Government and the key policies as outlined in the 2022 Budget. This 2022 Budget Highlights document will provide an in-depth understanding of the various policy interventions outlined in the 2022 Budget Statement and help build resilient businesses on the road to economic recovery.
To youth in Ghana, who constitute approximately 65 % of the whole population and with most of them being unemployed, this gives hope if the policy is going to be effectively implemented. On another note, the Mid-Year Fiscal Policy Review of the 2022 Budget Statement and Economic Policy by the Minister showed what already seemed to be challenges as a process of fulfilling what the new policy had promised to contribute. In his speech the Minister outlined some of the challenges that the government has been facing.
He gave how the deferment of the passage of their proposed revenue measures undermined the credibility of their Budget, leading to heightened investor concerns, credit rating downgrades and closed access to the international capital markets. These happenings have led to severe pressures on the Cedi, which caused the currency to depreciate significantly. Additionally, the unforeseen Russian-Ukraine war which started in February 2022, worsened the already weakened global supply chains, exacerbated by high financing conditions, the surging food, fertilizer, financing, building materials and fuel prices -that manifested in soaring inflation domestically. These have had a debilitating toll on the cost and standard of living of the people in Ghana. Conclusively, despite the challenges, the Ghana economic policy has what it takes to curb youth unemployment in Ghana.
BENIN
Benin passes new Finance Law for 2022 (Law No. 2021-16 of 23 December 2021) and New General Tax Code
The Benin Minister of finance has announced the 2022 Finance law and the new general tax code. Benin's tax authority (DGI) has published the Finance Law for 2022 (Law No. 2021-16 of 23 December 2021). The Finance Law for 2022 entered into force on 1 January 2022. The provisions enacted in the law are the renewal of several prior measures, including:
Exemption from all customs duties and taxes and VAT during the period 1 January to 31 December 2022 for:
new trucks imported, manufactured, or sold in new condition in Benin
New four-wheeled vehicles imported, manufactured, or sold in new condition in Benin and intended for the establishment of a fleet of taxis in the major cities (excluding large and commercial vehicles)
Buses, coaches, and minibuses of all categories, imported, manufactured, or sold in new condition in Benin and intended for public transport
Aircraft and aerostats and their spare parts
In addition to the Finance Law, Benin's Ministry of Finance also announced the adoption of a new General Tax Code that consolidates prior laws and regulations and introduces new provisions. According to the Ministry, the new code:
Simplifies and corrects inconsistencies in the taxation rules
Updates obsolete, redundant, or irrelevant provisions
Introduces incentives into the tax system for SMEs in general and for those in the digital sector in particular
Balances relations between the administration and taxpayers with clear procedural provisions.
To the people of Benin, this entails tax benefits to promote persons in the informal sector with turnover up to 50 million CFA francs to join Approved Management Centers. The laws are to include a 40% reduction in corporate tax, tax on business profits, or professional tax for four years, as well as an exemption from audits for two years (release). Other benefits as mentioned by the Minister includes tax benefits for start-ups innovating in the field of Information and Communication Technologies (ICT) with annual turnover up to 100 million CFA francs, including an exemption for corporate income tax and employer payments on wages for the first two years, with a 50% reduction for the third year (release).