Nigerian Banks Urged to Rein in Excess Spending Amid Windfall Tax Demand
A leading figure in Nigeria’s banking industry, Femi Otedola, Chairman of FBN Holdings, is urging his peers to scale back on extravagant spending and pay a windfall tax to support the economy. According to Otedola, Nigerian banks spend an estimated $50 million annually maintaining their private jets, with four banks alone investing over $500 million in nine such aircraft.
The comments came as a statement to Bloomberg, with Otedola expressing strong support for a proposed 70% tax on the realized profits of banks from foreign exchange gains. This move, he argued, would help distribute wealth more fairly and redirect the revenue towards vital public services like healthcare, education, and infrastructure.
Guaranty Trust Bank, Nigeria’s largest lender by market value, saw its profit more than triple in 2023 to 539.7 billion naira (approximately $326 million), driven by revaluation gains. FBN Holdings also experienced a significant increase in net income, more than doubling to 307.22 billion naira.
Otedola’s stance reflects growing concerns about the wealth disparities in Nigeria, where bank executives’ extravagant lifestyles have led to increasing public distrust. By advocating for windfall taxes, he hopes to restore confidence in the financial sector and support economic development.
As the debate over tax policies and banking practices in Nigeria continues, Otedola’s statement may serve as a catalyst for a re-evaluation of the financial industry’s priorities.
