Four Nigerian banks spent over $500m to buy private jets—Otedola backs FG’s windfall tax
Chairman of Geregu Power Plc, Femi Otedola, has thrown his weight behind the decision of the Federal Government to tax windfall on Foreign Exchange (FX) gains from banks.
In a statement on Wednesday, Otedola, who is the Chairman of FBN Holdings, noted that the revenues generated from the policy can be channelled into essential public services such as healthcare, education, and infrastructure and other social services that will benefit all Nigerians.
The billionaire 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.
Windfall taxes are levies on companies or individuals who receive substantial, unexpected profits due to circumstances beyond their usual control or investment, he explained.
Otedola said taxing these extraordinary gains ensures a fairer distribution of wealth, allowing those who benefit disproportionately to contribute more significantly to the broader societal good.
“The revenue generated from windfall taxes can be channeled into essential public services such as healthcare, education, and infrastructure, benefiting all citizens and helping to reduce social inequalities”, he said.
“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.
“Furthermore, the financial statements of manufacturing, telecoms, and SMEs indicate that many of these companies may not be able to pay corporate tax for at least the next two years, as they are currently showing negative equity. It is essential for the government to step in and provide support to bridge these gaps, ensuring revenue generation and fostering economic development”.
Otedola revealed that four banks in the country spent more than $500billion to purchase private jets. He also said about $50million is spent yearly by top bank owners to service their private jets every year.
He said by taking decisive action to implement these changes, the 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,” the investor said.
“It is crucial for banks to focus on operational efficiency, technological innovation, and customer service, rather than executive extravagance,” he said.
“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.”
