Billionaire businessman Femi Otedola has expressed his support for implementing a windfall tax on Nigerian banks, emphasizing its role in fostering a fairer and more equitable economic environment. In a statement released on Wednesday, Otedola underscored the importance of this measure, particularly in light of recent reforms in the Nigerian banking sector.
“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. Otedola pointed out that revenue from windfall taxes could be directed towards essential public services such as healthcare, education, and infrastructure, benefiting all citizens and helping 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.
Otedola noted that the consolidation of various foreign exchange rate systems into a single investors and exporters (I&E) window 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 redistributed 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 banking sector’s current practices, particularly the extravagant spending on private jets by bank executives. “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 called for a shift in financial priorities, urging 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.
The businessman also lauded 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.
Otedola emphasized the need for ethical leadership and accountability within the banking sector. “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.
