Femi Otedola praises windfall tax, criticises bank executives

[dropcap]B[/dropcap]illionaire businessman Femi Otedola has voiced his support for the introduction of a windfall tax on Nigerian banks, emphasising its role in fostering a fairer and more equitable economic landscape.

In a statement released on Wednesday, Otedola highlighted the significance of this measure, especially following recent reforms in the Nigerian banking sector.

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Otedola noted that taxing extraordinary profits made by banks ensures a fairer distribution of wealth.

“Taxing these extraordinary gains ensures a fairer distribution of wealth, allowing those who benefit disproportionately to contribute more significantly to the broader societal good,” he stated.

He proposed that the revenue from windfall taxes could be utilised to bolster essential public services such as healthcare, education, and infrastructure. This would, in turn, benefit all citizens and help reduce social inequalities.

“The recent announcement of a windfall tax on the extraordinary profits earned by Nigerian banks is a significant first step towards achieving these goals,” Otedola added.

Highlighting the impact of consolidating various foreign exchange rate systems into a single investors and exporters (I&E) window, Otedola explained that this led to the depreciation of the Naira and a substantial increase in the value of bank assets denominated in United States Dollars.

He stressed that these extraordinary gains should be redirected to fund critical infrastructure development and public welfare initiatives.

“This extraordinary gain should be redistributed to fund critical infrastructure development, education, healthcare access, and public welfare initiatives, addressing the intense pressure on public finances and alleviating the cost-of-living crisis many Nigerians face,” he asserted.

Otedola also critiqued the extravagant spending habits of bank executives, particularly their expenditure on private jets.

“Nigerian banks are spending an estimated $50 million annually just on maintaining private jets, with over $500 million gone into purchasing nine private jets by four banks. This level of extravagance significantly erodes public trust in our financial institutions,” he remarked.

He urged a shift in financial priorities, encouraging banks to focus on operational efficiency, technological innovation, and customer service rather than personal gain.

“The core values of banking—trust, integrity, and service—must be upheld. It is crucial for banks to focus on operational efficiency, technological innovation, and customer service, rather than executive extravagance,” Otedola said.

Furthermore, Otedola praised recent recapitalisation initiatives in the banking sector, which set minimum capital requirements of N500 billion for international banks and N200 billion for national banks.

He described these reforms as timely and essential for the sustainable growth of Nigeria’s economy.

“By taking decisive action to implement these changes, the Federal Government is demonstrating a commitment to ethical leadership and accountability. These reforms will empower our banking sector to play a pivotal role in driving Nigeria’s economic development, ultimately securing a prosperous future for all Nigerians,” he said.