Billionaire businessman, Femi Otedola, has supported the 70 per cent windfall tax proposed by the Federal Government on foreign exchange gains of banks.

In a statement he issued on Wednesday, Otedola, who is the chairman of FBN Holdings, slammed the banking sector for its $50m estimated bill on maintaining private jets and an even higher bill on the purchase of private jets.

In July, the Senate amended the Finance Act to impose a 70 per cent windfall tax on banks’ foreign exchange profits.

A windfall tax is a higher tax levied by the government on sectors or businesses that have disproportionately benefited from favourable market conditions.

President Bola Tinubu said the money would be part of the revenue used to fund the N6.2tn supplementary budget.

Otedola argued, “I write to express my strong support for the implementation of a windfall tax in Nigeria and to highlight the critical role this measure plays in fostering a fairer and more equitable economic environment.

“This endorsement aligns with the ongoing efforts to reform the Nigerian banking sector, aimed at enhancing economic stability and integrity within our financial institutions. Windfall taxes are levies on companies or individuals who receive substantial, unexpected profits due to circumstances beyond their usual control or investment. 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 said that 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 (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,” he said.

Otedola, who is also the chairman of Geregu Power, pointed out that while the financial statements of manufacturing, telecoms, and SMEs indicated that many of them may not be able to pay corporate tax for at least the next two years, due to their negative equity, therefore, becoming essential for the government to step in and provide support to those entities.

On the appetite of the banking sector for private jets, Otedola 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 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 $50m annually just on maintaining private jets, with over $500m 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.”