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NEC Suspends Subsidy Removal Till After Handover

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By Mathew Dadiya, Abuja

The National Economic Council (NEC) has suspended the planned removal of petroleum subsidy earlier announced by President Muhammadu Buhari’s administration.

Briefing State House Correspondents after the NEC meeting presided over by Vice President Yemi Osinbajo, the Minister of Finance, Budget and National Planning, Mrs.

Zainab Ahmed disclosed this on Thursday at the Presidential Villa Abuja.

Mrs. Ahmed said that the removal of the subsidy will likely take effect in June because the Petroleum Industry Act (PIA), and the 2023 budget provided subsidy till June, adding that any delay may require the amendment of the PIA and the budget provision.

She explained that although the removal of the fuel subsidy is imminent, the Council decided that the timing for the removal of the subsidy should not be now. 

The Minister narrated that the council decided that the Federal Government should continue with all of the preparatory work that needs to be done and that this preparation work has to be done in consultation with the states and other key stakeholders, including representatives of the incoming administration. 

“The National Economic Council discussed the issue of post-subsidy removal. The Council agreed that the timing for the removal of subsidy should not be now but that we should continue with all of the preparation works that needs to be done and that this preparation work has to be done in consultation with the states and other key stakeholders, including representatives of the incoming administration. 

“The council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary humans. 

“So, this will require looking at alternatives to the post-subsidy that needs to be planned for and subsequently put in place but also what needs to be done to support the people that are most affected as a result of the removal. 

“So, we will be working together with representatives of the state who will have a plan that will start working on putting the building blocks towards the eventual removal of the first subsidy. And finally, remind the forum that the budget for 2023 has a provision for subsidy only up to June 2023, and also the petroleum industry Act has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the PMs removal and that that period is also up to June 2020.

“I said that we agreed to form an expanded committee that will be looking at the process for the removal including determining the exact time and also the measures that need to be taken to provide support to the poor and the vulnerable and then also the alternatives that will be put in place, including ensuring that there is sufficient supply of petroleum products in the country,” the finance, budget and national planning minister, explained.

She further stressed that the issues bordering on the deadline for the removal of fuel subsidy should be the burden of the next administration as the laws state that the removal of fuel subsidy should happen in June. 

“What I said is that it is not going to be removed now. Which means it will not be removed before the transition is completed. That’s what it means. But then we have two laws that have inadvertently made the provision that we should exit by June.

“So the committee’s work, which will include the representatives of the incoming administration determining if the removal can be done by June then they will plan. The work plan will be designed to exit as of June, but if the determination is that the period is to be extended, it will mean that we as a country will have to revisit the Appropriation Act for example because the 2023 budget only made provision up to June.

“So, if we’re extending beyond June it means we’ll have to revisit the Appropriation Act and do a supplementary or amend the bill and also the Petroleum Industry Act (PIA).

“So, these are the reasons why we had to do this consultation. We would like to get input from the governors. They’re going to provide us with their representatives to work together with us to have a defined process that will take us toward the removal. 

“But one thing that is clear is everybody agrees that the subsidy should be removed very quickly because the cost is only not efficient but is also not sustainable, and that when the time comes for removal, the removal will be done once and for all,” she said 

Fielding questions on the specific measures to be put in place to mitigate the effect of subsidy removal and how the decision will affect the law on the ground as the PIA has given a definite time for the removal of subsidy, the 2023 budget provides for subsidy until June 2023, what happens after June 2023, she said:

“I said that we agreed to form an expanded committee that will be looking at the process for the removal including determining the exact time and also the measures that need to be taken to provide support to the poor and the vulnerable and then also the alternatives that will be put in place, including ensuring that there is sufficient supply of petroleum products in the country. 

“So this is a decision that has been taken to expand the committee that is currently working with representatives of the states and it also will have to be engaging with labour,  will have to be engaging with petroleum marketers. 

“The immediate committee is just comprising the Ministry of Finance, the NNPC, the downstream upstream regulator, as well as the Ministry of Finance, budget, a national plan. So there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process but that there is sufficient consultation taking inputs from key stakeholders into the measures that need to be taken.”

Responding to a question on the $800m World Bank loan to help cushion the effect of fuel subsidy removal, the Minister said, “On the issue of the $800 million so far, what we have is that $800 million that has been secured. 

“We’re hoping that the removal of fuel subsidy, with the savings that removal will cause that the Federation which is the federal government and states themselves will be able to provide further measures from this increased revenue that will accrue to the Federation account. 

“Again, that is a matter of discussion. The states may want to have their design programmes the federal government you want to do something different. So we have to discuss how to utilise that savings and that’s one thing that was also presented today at the National Economic Council.”

Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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Economy

Life Insurance Records 95% Net Claims in Q4 2023-NAICOM

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The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.

A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.

NAICOM said the insurance market average stood at about 71.

4 per cent of the N536.
5 billion gross claims reported at the close of the fourth quarter.

The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.

7 per cent for the period.

It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.

According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.

”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.

”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.

”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.

”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)

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Economy

No Mining License without Mineral Value Addition Plans-Alake Warns

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The Minister of Solid Minerals Development, Dr Dele Alake has warned that no mining license would be issued to prospective investors without requisite plans for value addition on minerals.

Alake gave the warning in a statement  by his Special Assistant on Media, Segun Tomori on Tuesday.

He said the Federal Government had resolved to ensure compliance before permitting investors to operate.

He said that his Seven -Point Agenda for the ministry had placed the mining sector on global front burner since assuming office, which had generated renewed interest from the international community in Nigeria’s mineral resources.

He said the support of the executive and the legislature had enabled the ministry to showcase the solid minerals sector globally, resulting in his election as the Chairman of the Africa Minerals Strategy Group (AMSG) at the Future Minerals Forum in Riyadh, Saudi Arabia.

According to him, with the pact that led to the formation of the AMSG, there is now unity of purpose on the African continent regarding the issue of local value addition.

“We are no longer going to allow anybody or license any company that wants to go into the mineral sector without giving us a plan for local value addition,  like processing, refining and this has a multiplier effect on the economy.

“It instantly generates employment rather than a few people carting away lithium, gold, and the likes to other countries to sell.

“These minerals must now be processed in Nigeria, creating more value and beneficiation for local communities where they are sourced, ” he said.

Reports says that the minister had earlier received members of the House Committee on Solid Minerals who were on oversight visit to his office.

The minister commended the lawmakers for their support in repositioning the mining sector, stressing that boosting the economic profile of Nigeria required joint task by both the executive and legislature.

He acknowledged the significant contribution of sub-nationals to mining development, emphasising that state chairmen of  Mineral Resources and Environmental Management Committee (MIREMCO) and five committee members were nominated by state governments. (NAN)

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