Business mogul Otedola supports FG’s windfall tax initiative for banks

The Chairman of FBN Holdings, Femi Otedola, has declared his support for the implementation of the federal government’s proposed windfall tax on the foreign exchange (FX) gains of banks.

In a statement yesterday, Otedola said that the revenues generated from the tax can be channeled into essential public services such as healthcare, education, and infrastructure to the benefit of all citizens and help to reduce social inequalities.

He said the endorsement aligns with the ongoing efforts to reform the Nigerian banking sector, aimed at enhancing economic stability and integrity within the country’s financial institutions.

According to him, taxing these extraordinary gains ensures a fairer distribution of wealth, allowing those who benefit disproportionately to contribute more significantly to the broader societal good.

His words: “The recent announcement of a windfall tax on the extraordinary profits earned by Nigerian banks is a significant first step towards achieving these goals. 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 substantial increases in the value of bank assets denominated in United States Dollars.

“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.

Otedola said it is crucial for banks to focus on operational efficiency, technological innovation, and customer service, rather than executive extravagance.

“Amid the progress with banking sector reforms, there is an urgent need to address entrenched issues within the Nigerian banking sector.

“A concerning trend has emerged where some bank chief executives prioritize personal gain over their duty to shareholders and customers. The core values of banking—trust, integrity, and service—must be upheld. I am particularly critical of the culture of flamboyance, especially the ownership and operation of 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 and diverts crucial resources away from vital areas such as operational efficiency, technological innovation, and customer service.

“To regain the trust of the Nigerian public and fulfill its pivotal role in the nation’s economic development, the banking sector must realign its financial priorities. Investments should be channeled into areas that directly improve customer services and enhance technological infrastructure,” he stated.