Otedola backs windfall tax, says banks maintain private jets with $50m yearly

Femi Otedola, a billionaire businessman, has said Nigerian banks are spending an estimated $50 million on the maintenance of private jets.

Otedola, who chairs FBN Holdings Plc and Geregu Power Plc, said this in an opinion piece published by Proshare in which he expressed support for the implementation of the proposed windfall tax on banks’ foreign exchange gains that has generated debate in recent days.

He said: “A concerning trend has emerged where some bank chief executives prioritise 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.”

Otedola said the banking sector must realign its financial priorities to regain the trust of the Nigerian public and fulfill its pivotal role in the nation’s economic development.

“Investments should be channeled into areas that directly improve customer services and enhance technological infrastructure,” he said. 

The tycoon said the revenue generated from windfall taxes could be channelled into essential public services such as healthcare, education, and infrastructure, benefiting all citizens and helping to 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. The consolidation of various foreign exchange rate systems into a single investors and exporters window led to the depreciation of the Naira and substantial increases in the value of bank assets denominated in United States dollars,” he added.

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.