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Nigeria’s economy recovering from COVID-19 impact – IMF

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International Monetary Fund (IMF) has announced that Nigeria’s economy is gradually recovering from the negative impact of COVID-19.

This is as it cautioned the federal government to keep reliance on CBN overdrafts for deficit financing within legal limits.

The Fund also urged the government continue to make efforts to strengthen budget planning and public finance management practices to allow for flexible financing

The IMF, in a statement at the end of its virtual meetings with the Nigerian authorities to discuss recent economic, financial developments and outlook, described the recent removal of the official exchange rate from the Central Bank of Nigeria (CBN) website as “encouraging”.

IMF mission, however, noted that both unemployment and inflation rates remain elevated.

The mission said following the sharp output contractions in the second and third quarters, gross domestic product (GDP) turned positive in Q4 2020 and growth reached 0.5 per cent year-on-year in Q1 2021 — supported by agriculture and services sectors.
“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 per cent, owing to high food price inflation,” the statement reads.

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CBN hammers BDCs for aiding graft, money laundering

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The Central Bank of Nigeria (CBN), on Tuesday, announced the cessation of forex sales to Bureau De Change (BDCs) operators.

CBN Governor, Godwin Emefiele, who disclosed the new policy after the July 2021, Monetary Policy Committee (MPC) meeting in Abuja, said the apex bank was funneling $5.7 billion (about N2.346 trillion) annually through the BDCs.

He said the $5.7bn allocated to BDCs has become unsustainable as $20,000 is allocated to over 5,500 BDCs in the country, amounting to $110 million per week.

Economists and financial experts interviewed by Daily Trust expressed mixed feelings about the new policy and its immediate and long term implications.

They predicted a shock that will further shot up the dollar rates at the parallel market, which will stabilise in the long run. They also blamed the CBN for the downside of the expunged practice.

Emefiele also said the CBN will no longer continue registration of new BDCs as subsequent forex will be channelled through commercial banks.

The CBN governor said as part of the new forex sales policy, all commercial bank branches will create a separate desk for the purpose.

“The BDCs were regulated to sell a maximum of 5,000 dollars per day, but CBN observed that they have since been flouting that regulation and selling millions of dollars per day.

“The CBN also observed that the BDCs aid illicit financial flows and other financial crimes.  The bank has thus decided to discontinue the forex sales to BDCs with immediate effect.

“We shall, henceforth, channel all forex allocation through the commercial banks,” he said.

The apex bank head also urged banks to ensure that every deserving customer got their forex demand adding that any bank found circumventing the new system would be sanctioned.

“Once a customer presents all required documentation to purchase forex, the commercial banks should ensure they get the forex. Any customer that is denied should contact the CBN on 0700385526 or through the email- cbd@cbn.gov.ng.”

In another development, during the MPC press briefing, the CBN governor said the apex bank has continued to rev up interventions in the real sector to spur economic growth.

The CBN governor said the MPC meeting retained all existing monetary rates.

Other policies, interventions

Emefiele said “Under the Bank’s development finance initiatives, the Bank granted N756.51bn to 3,734,938 smallholder farmers cultivating 4.6m hectares of land, of which N120.24bn was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP).”

He further stated that under the “Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57bn was disbursed to 32,617 beneficiaries, and for the Targeted Credit Facility (TCF), N318.17bn was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).”

Similarly, “Under the National Youth Investment Fund (NYIF), the Bank released N3bn to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs. Under the Creative Industry Financing Initiative (CIFI), N3.22bn was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion and IT verticals.”

Under the N1tr Real Sector Facility, Emefiele said “The Bank released N923.41bn to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro-based industry, 32 in services and 11 in mining.

“On the N100bn Healthcare Sector Intervention Facility (HSIF), N98.41bn was disbursed for 103 healthcare projects, of which, 26 are pharmaceuticals and 77 are in the hospital services.”

He also said, “The sum of N232.54m was disbursed to five beneficiaries under the CBN Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for COVID-19 and Lassa fever.”

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NNPC records 63% FAAC remittance shortfall in five months

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The statutory payments made by the Nigerian National Petroleum Corporation (NNPC) to the Federation Account, a joint pool operated by the local, state and federal governments, declined by over 63 per cent in the first five months of 2021.

An analysis of the data presented by the national oil company to the Federation Account Allocation Committee (FAAC), in the first five months of this year showed that of the calendarised total sum of N613.834 billion, the corporation was only able to remit N225.852 billion.

The documents obtained from one of the federal ministries showed that N387.982 billion remained unpaid during the period under consideration, representing about 63.21 per cent actual budgetary forecast.

According to the NNPC/ FAAC data, while the corporation was expected to pay a net amount of N122.767 billion monthly into the federation account, it was only able to remit N90.860 billion in January, N64.161 billion in February and N41.184 billion in March.

But as it earlier announced, the national oil company was unable to make any payment into the federation account in April, while a paltry N29.647 billion was remitted in May.

As exclusively reported by THISDAY earlier in the month, the corporation said it would deduct N114.337 billion from the June federation proceeds at a meeting, which took place last week.

The documents showed that N225.852 billion was remitted as of May, while a projected N820.684 billion shortage of the net total forecast of N1.473 trillion for 2021 might be recorded by the end of the year if the current challenges continue.

While there might be other ancillary issues leading to the inability of the corporation to meet its obligation to the three tiers of government, the NNPC has had to deal with the major challenge of shouldering the government’s petrol subsidy payments in the last couple of months.

The elimination of payments for what the government now terms under-recovery has been a controversial issue for decades as attempts to alter the existing arrangement has always met with stiff resistance from the labour unions, civil society organisations as well as a cross-section of Nigerians.

Last year, specifically on March 19, at a time the international prices of crude oil took a downward spiral, the Muhammadu Buhari-led administration had announced the total deregulation of the downstream petroleum sector.

However, there has been a rollback of that policy following the gradual recovery of the price of the commodity in the international market, which has invariably affected the pump price of fuel in the country.

In all, added to the funding of its ongoing major projects, payment for under-recovery, among others, the funding performance of the corporation showed that as of May, N1.088 trillion had been disbursed by the NNPC, including N195.652 billion in January and N191.194 billion in February.

In March, also, N224.589 billion was distributed, while in April and May, N156.366 billion and N320 billion were disbursed respectively.

The Group General Manager, NNPC, Mallam Mele Kyari, in March, said the federal government was subsidising petrol with about N120 billion monthly, describing the development as unsustainable.

He said while the actual cost of importation and handling charges amounted to N234 per litre, the government had been selling at N162 per litre, therefore, bearing the cost burden.

He said the NNPC could no longer afford to bear the cost, saying Nigerians would have to pay the actual cost sooner or later. But the government has since then said it was in negotiations with organised labour on the matter.

On June 30, the NNPC boss revealed that the price of the product had further skyrocketed and that without subsidy, petrol would be selling at N256 per litre at the filling stations.

At the time Kyari spoke, crude oil was selling for $74.40 per barrel at the international market. It has since then hit a high of $77, before slumping below $70 on Monday and Tuesday.

Meanwhile, yesterday, the Brent crude sustained its upswing rising from $69.05 per barrel to close at $71.02 per barrel.

The price rally was in reaction to an industry report which showed an unexpected build-up in US oil inventories last week, which heightened worries about a resurgence in COVID-19 infections potentially dampening fuel demand.

Earlier, a deal by the Organisation of Petroleum Exporting Countries (OPEC,) and its allies, known as OPEC+ to boost supply by 400,000 bpd each month from August through December, sparked an oil price slump on Monday, exacerbated by demand fears with cases of the Delta variant of the coronavirus picking up in major markets.

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Hyundai, Dangote Sinotruck, Honeywell, others enjoy Nigeria’s tax holiday (FULL LIST)

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The federal government gives companies in critical sectors of the economy tax holiday, also known as the Pioneer Status Incentive, to encourage and attract investment into sectors that could significantly impact development and deliver key benefits to the country.

The incentive, provided under the Industrial Development Income Tax Relief Act, grants benefitting firms relief from the payment of corporate income tax for an initial period of three years, extendable for one or two additional years.

The NIPC, on the authority of the Minister of Industry, Trade, and Investment, processes the PSI applications and, on the authority of the president, approves and extends them. The agency issues the pioneer certificates and can also cancel them if the provisions of the law and some set guideline documents are contravened.

According to the PSI report of the third quarter of 2020, 34 companies are currently enjoying tax relief under the pioneer incentive. These companies have about 9,678 staff and have helped in reducing the rate of unemployment in the country.

Seven other companies also enjoyed a tax holiday in 2020, but their certificates expired at the end of the year. They can apply for an extension for one or two additional years.

Beneficiaries

According to the NPC, the following are the current beneficiaries of the incentive:

Kunoch Hotels Limited

The hotel was registered with the Nigerian Corporate Affairs Commission on May 3, 2012, with the RC number: 1030799.

Operating in Lagos, the company is into hotel development and has 65 staff, and has invested about N3 billion so far.

Its certificate expires on the last day of 2021.

Amarava Agro Processors Limited

The rice milling company has 242 staff and has invested N2.9 billion so far.

Its certificate expires by September 30, 2022.

Registered on February 25, 2016, with the RC number 1318319, it listed Sriram Venkateswaran and Swaminathan Ramasubbu as its directors.

Maindata Nigeria Limited

Investing N4.2 billion and with 312 staff, the data centre and cloud-hosting company registered its company on January 10, 2014 (RC 1164042).

Its pioneer incentive certificate expires on the last day of 2022. It listed Folu Aderibigbe and Kehinde Olaleye-akin as its directors.

Masters Liquefied Gas Limited

The gas processing company is operating with 82 staff and has so far invested N918 million.

It was registered on April 12, 2013 (RC 1107804). Its certificate will expire on April 30, 2023.

Elvis Hotels Nigeria Limited

Incorporated on February 8, 2013, with registration number 1095306, the hotel has 110 staff and has invested about N3.4 billion.

Its certificate expires on July 31, 2023.

Stallion Motors NMN Nigeria Limited

The automobile company was incorporated on April 09, 2018, with Registration Number 1485394.

Presently it has 59 staff and has invested N238 million manufacturing Passenger cars.

Its certificate expired on June 30, 2020.

Hyundai Motors Nigeria Limited

It has 105 staff and has invested about N392 million in manufacturing passenger cars.

Registered with the RC 374728 on February 15, 2000, it is currently enjoying an extension on its pioneer status and it’s two years extended certificate expired October 31, 2020.

Maryland Mall Limited

With 14 staff, and an investment of about N4.1 billion, the shopping mall construction company’s certificate which was granted on November 1,2017 expired on October 31, 2020.

The company was registered with Registration Number 1143373 on September 20, 2013.

Reliance Chemical Products Limited

Manufacturing Liquid and solid sodium silicate, the company has 111 staff and has invested about N626 million.

It is currently enjoying a 2 years extension that expired on April 30, 2020.

It was incorporated with Registration Number 729851 on February 8, 2008.

Delta Mall Development Company Limited

The shopping mall has seven staff and has invested over N20 billion, according to NPC.

It’s extended tax holiday certificate expired on April 30, 2020.

It was incorporated on March 21, 2012, with Registration Number 1019187.

Afrifone Limited

The phone and tablet devices manufacturing company has 138 staff with N1 billion investment.

Its current pioneer incentive certificate was granted on June 6, 2017, and it expired on May 31, 2020.

It was incorporated with Registration Number 1327438 on April 8, 2016.

Von Automobile Nigeria Limited

With 160 staff and over N 3.4 billion investment, the passengers’ car manufacturing company certificate which was granted on July 1, 2017, expired on June 30, 2020.

It was registered with Registration Number 11301 on April 4, 1973.

Multipro Enterprises Limited

The road haulage company has 1,602 staff and has invested about N1.3 billion.

It is currently enjoying an extension on its pioneer status and it expired on July 31, 2020.

PNG Gas Limited

With 121 staff, the propane -LPG company has invested N13 billion so far and its certificate was granted on September 1, expired on August 31, 2020.

It was registered with the RC Number 1125856 on July 2, 2013.

Rensource Distributed Energy Limited

According to details on the site, this company deals in renewable (solar) energy under the electric power generation, transmission, and distribution pioneer industry In Kano. It has 28 staff members and invested N158 million. Its certificate expired on the last day of 2020.

The company was registered on February 23, 2016, with registration number RC 1317198.

It has four directors; Ademola Adesina, Jussi Savukoski, Jussi Nykanen, Oludayo David Olusegun, Oyindamola Oyeduntan and Ademola Adesina as the secretary.

Sumo Steels Limited (Pipeline Division)

With its 565 staff, it invested N500 million in the manufacturing of basic iron and steel in Ogun. The company is currently enjoying its two years extension period and it’s two years extended certificate expired on the last day of 2020.

The company was registered on April 20, 2012, with the registration number 1027579.

CDK Integrated Industries Limited

The company has 440 staff and invested N14 billion in ceramics tiles in Ogun State. Its certificate, which expired on the last day of 2020, is for the manufacture of refractory products.

It was registered on July 29, 2020, with the registration number 903054. It is owned by Longe Bernard and Chagoury Ronald.

Lafarge Africa Plc

With 71 staff, the company was granted the certificate for the manufacturing of clinker and cement, lime, plaster. It has invested N120 billion in the project going on in Cross River. Its certificate expired on the last day of 2020.

It was registered on February 24, 1959, with the registration number 1858.

Edimara Properties Limited

The company got relief through its pioneer industry that constructs and operates nonresidential buildings in Lagos. So far it has invested N9 billion, also with 33 staff and its certificate expired on the last day of 2020.

It was registered on July 22, 2013, with the registration number 1130149. It has eight directors namely; Samuel Oniorosa, Adewale Adegbite, Paul Kokoricha, Enelamah Enyinna, Kokoricha Oje, Oniovosa Samuel, Adegbite Olumide, Adegbite Michael.

Wacot Rice Limited

The company got the relief for the manufacture of grain mill products in Kebbi State. It has 154 staff and has invested N18.4 billion.

It was registered on August 12, 2014, with registration number 1209432 and its certificate expired on the last day of 2020.

It has Cornelis Geradus, Jerome Shogbon, Rahul Savara as Directors; Investment Limited Tropical General, Gerardus Cornelis, Olagunju Jerome, as Shareholder and Associates Gafol Continental Management as its secretary.

Tribute Lifestyle Global Concept Limited

It got relief for e-commerce through sales done predominantly or exclusively online, in which it invested N121 million and employed 17 staff. The certificate expired on the last day of 2020.

The company was registered on June 22, 2016, with registration number 1344015 and has Anders Einarsson, Stephen Naude, Jonathan Strom as its directors.

Owerri Mall Development Company Limited

With over N16.2 billion investment and 206 staff, the company was granted a tax holiday for the construction and operation of nonresidential buildings like shopping malls and stores in Imo State. Its certificate expired on February 28, 2021.

It was registered on March 5, 2014, with the registration number 1175661 and has twelve directors; Shonekan Olatunde, Muller James, Marshall Holden, Buhrs Jason, Chikwe Onyegbuleonweya, Akinsanya Kayode, Resilient Africa Proprietary Limited, Tidlock Nigeria Limited, Somachi Investment Limited, Median Infrastructure Dev. Co Limited, Terestria Mall Dev. Limited, and Ajaja Oluseyi.

Power Gas Delta Innovations Limited

It was given the PSI certificate for distributing and supplying gaseous fuel (LPG), for which it invested N8.6 billion and employed 55 staff in Lagos. Its certificate expired on February 28, 2021.

The company was registered on May 7, 2012, with registration number 1031156, with Rishi Chandra, Rilak Sen, and Swapan Hazra as its directors.

Asaba Mall Development Company Limited

With over N13.3 billion investment and 200 staff, the company was granted a tax holiday on the construction and operation of nonresidential buildings like shopping malls and stores in Delta State. Its certificate expired on March 31, 2021.

It was registered on October 8, 2013, with the registration number 1146422 and has seven directors; Edward Mc Donald, Akinsanya Kayode, Justin Muller, Jason Buhrs, Owolabi Odekunu, Jacobus Van Biljon, and Cornelius Semiteje.

Triton Aqua Africa Limited

This company got relief for investment in agriculture through marine and freshwater fishing (Tilapia), and aquaculture, for which it invested N4.4 billion and employed 416 staff. Its certificate expired on March 31, 2021.

The company was registered on September 30, 1996, with the registration number 300858 and has Krishnamoorthy Kalyanasundaram, Nigli Kelvin, Muhtari-inuwa Obiageli, and Adeyeye Daniel as its directors.

ATC Nigeria Limited

The telecommunication company got a two years extension on its relief for investing in infrastructure in Lagos. It invested N260 billion and employed 197 staff, with its certificate expired on March 31, 2021.

Confluence Metal Fabricating Company Limited

The company got the PSI certificate on the manufacturing of tanks, reservoirs, and containers of metal. It has invested N1.9 billion and employed 31 staff in Kogi State. Its certificate expired on April 30, 2021.

The company was registered on March 4, 2015, with the registration number 1246282 and has Bernard Calil, Mark Hadad, Kabiru Shuaibu, Wissam Hazzoury, and Uzor Kalu as its directors.

Unicane Industries Limited

The company got relief for the manufacture of basic chemicals (ethanol) in Kogi State. It has 32 staff and has invested N31 billion.

It was registered on August 16, 2013, with registration number 1135511 and its certificate expired on April 30, 2021.

It has Marta De Saavedra, Bernard Call, Shuaibu Kabiru, Derjani Naheed, Hazzoury Wissan, and Kalu Uzor as its directors.

Grand Pela Hotels and Suites Limited

The hospitality company got relief for the construction of a hotel it invested N1.2 billion with 112 staff in FCT. Its certificate expired on April 30, 2021.

It was registered on February 9, 2011, with registration number 935307. Its directors are; Nwakaeze Ebuechukwu, Nwakaeze Chidinma, Nwakaeze Onyinyechukwu, Nwakaeze Uju, and Nwakeze Chukwudi.

Globus Resources Limited

With about N19 billion investment and 111 staff, the company was granted a tax holiday for the processing and packaging of fresh, chilled, or frozen meat/poultry (production of table birds) in Oyo State. Its certificate expired on April 30, 2021.

It was registered on August 30, 2003, with the registration number 491412 and has six directors; Nigli Kelvin, Inuwa Obiageli, Krispalani Sunil, Jain Yashpal, Enterprise Limited, and Hamels Nominees Ltd.

Karshi Agro Farms Limited

The agro company got relief for the production of poultry and animal feed concentrate, feed supplements, and animal feeds, which it invested about N3 billion and employed 171 staff in Kaduna. The certificate expired on April 30, 2021.

The company was registered on March 22, 2016, with registration Number 1323854 and has Shikha Bansal, Gaurav Bansal as its Directors.

Obu Cement Nigeria Limited

The company got its tax relief from the manufacturing of clinker and cement in Edo. It invested about N89 billion and 573 staff and its certificate expired on May 31, 2021.

Txtlight Power Solutions Limited

The company was relieved of tax for operating generation facilities that produce electricity (Solar) in FCT. It invested N589.4 million and had 57 staff. Its certificate expired on June 30, 2021.

The company was registered on August 20, 2013, with the registration number 1136227 and has Nova Lumos Netherlands B.v, David Vorman, and Uzodinma Iweala as its directors.

Crown Flour Mills Limited

With about N41 billion investment and 206 staff, the company was granted a tax holiday for the manufacturing of animal feed concentrates and feed supplements in Kwara State. Its certificate expired on June 30, 2021.

It was registered on May 24, 1971, with the registration number 8575.

Sumo Steels Limited (Cold rolled flat sheet division)

With its 243 staff, it invested N300 million in the manufacturing of cold-rolled flat steel in Ogun. The company is currently enjoying its two-year extension with Its certificate expired on June 30, 2021.

The company was registered on April 20, 2012, with the registration number 1027579.

Skretting Nigeria Limited

The company got relief for the manufacturing of animal feed concentrates and feed supplements, which it invested about N239 million and employed 123 staff in Oyo State. Its certificate expired on June 30, 2021.

Dharul Hijra Fertilizer Company Limited

According to the commission’s website, the company was granted the PSI certificate, which will expire on August 31, 2021, for the manufacturing of organic fertilisers and nitrogen compounds in Kaduna State. It invested N769 million and has 22 staff.

The company was registered on April 12, 2016, with registration number 1328117.

Olam Hatcheries Limited

The company was relieved of tax for the raising and breeding of animals in ranches and farms in Kaduna State. It invested N23 billion and has 166 staff. Its certificate will expire by August 31, 2021.

The company was registered on March 14, 2016, with registration number 1322305 and has Chandrasekaran Balaji and Anurag Shulkla as its directors.

Jabi Mall Development Company Limited

With about N124 billion investment and 170 staff, the company was granted a tax holiday for the construction and operation of nonresidential buildings like shopping malls and stores in FCT. Its certificate will expire on September 30, 2021.

It was registered on December 12, 2012, with the registration number 1084178 and has Jabi Lake Mall (mall) Limited, Foac Nominees Limited, Ejekam Chu’di, and Usman Mohammed as its directors.

Harvestfield Industries Limited

It got relief for the production of Insecticides (pesticides and agrochemicals) in Ogun State. It has 179 staff and invested about N5 billion. Its certificate will expire on September 30, 2021.

The company was registered on April 4, 2000, with the registration number 377960 and has as its directors; Awofisayo Martins, Awofisayo Patience, Awofisayo Isaac, and Awofisayo Deborah.

Power Gas Global Investment Limited

The company got relief for the distribution and supply of gaseous fuel (LPG), which it invested about N7 billion and 27 staff in Rivers State. The certificate will expire by September 30, 2021.

Polar Petrochemicals Limited

The company got relief for the manufacturing of lubricants which it invested about N1.1 billion and employed 700 staff in Kwara State. The certificate will expire by October 31, 2021.

Hayat Kimya Nigeria Limited

With about N12 billion investment and 561 staff, the company was granted a tax holiday for the manufacturing of sanitary towels, tampons, and diapers in Lagos. Its certificate will expire on December 31, 2021.

It was registered on March 6, 2014, with registration number 1176010. It is owned by Hayat Kiuya and Mehmet Kigili.

Kalambaina Cement Company Limited

The company got tax relief for the manufacturing of cement, lime, plaster, which it invested about N108 billion. It has 153 staff and its certificate will expire by December 31, 2021.

It was registered on March 5, 2018, with registration number 1475842. Its directors are Abdulsamad Rabiu, Kabiru Rabiu, and Chimaobi Madukwe.

Dangote Sinotrucks West Africa

With about N1.5 billion investment and 208 staff, the company was granted a tax holiday for the manufacturing of trucks, tippers, tractors, and its components in Lagos State. Its certificate will expire by December 31, 2021.

It was registered on June 16, 2014, with the registration number 1197597.

Royal Pacific Group Limited

The company got relief for the construction of a hotel, in which it invested about N5 billion with 190 staff in the FCT. Its certificate will expire by December 31, 2021.

It was registered on March 14, 1979, with registration number 28080. Its directors are; Maruf Ahmed, Attia Nasreddin, Ali Sallam, and Attia Nasreddin.

Wells-Hosa Greenhouse Farms Limited

It got relief for the growing of tomatoes, peppers, cucumbers in Edo State. It has 143 staff and invested about N5.4 billion. Its certificate will expire by December 31, 2022.

The company was registered on December 28, 2016, with the registration number 1382725 and has as its directors; Idahosa Okunbo, Osahon Okunbo, and Nosa Igiehon.

Honeywell Flour Mills Nigeria Plc

With N49.4 billion investment and 390 staff, the company was granted a tax holiday for the production of pasta and macaroni in Ogun State. Its certificate will expire by March 31, 2022.

It was registered on June 21, 1983, with the registration number 55495.

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