Business News
NEITI Hails Fuel Subsidy Removal, Offers Eight Strategic Considerations
The Nigeria Extractive Industries Transparency Initiative (NEITI) has lauded the political will and sincerity of purpose demonstrated by President Bola Tinubu in removing fuel subsidy.
A statement from NEITI House, Abuja on Tuesday, described the move as a positive move by the administration to decisively implement the findings and recommendations contained in the NEITI reports.
The statement, signed by Mrs Obiageli Onuorah, the Deputy Director/Head Communications and Stakeholders Management, said bold step was required to block leakages, grow revenues and advance the ongoing reforms in the oil, gas and mining industries.
President Bola Tinubu, in his inaugural speech on Monday, said the fuel subsidy regime had ended with the commencement of his administration.
Onuorah recalled that its recommendations for the removal of fuel subsidies have remained a persistent request since 2006 given the agency’s concerns about the huge financial burden that the subsidy regime imposed on the growth of the Nigerian economy over the years.
She explained that from the NEITI reports, between 2005 and 2021, the country spent $74.39 billion which translated to N13.69 trillion on subsidy.
According to the NEITI report, a breakdown of these figures showed that in 2005, the government paid $2.6 billion dollars (N351 billion) as subsidy. In 2006 and 2007, it paid $1.99 billion and $2.18 billion (N257 billion and N272 billion) respectively.
The report further pointed out that subsidy payments more than doubled in 2008 and 2010 and witnessed the highest increase ever in 2011 to $13.52 billion (N2.11 trillion).
She said a sharp decline was witnessed in the years 2012, 2013, 2014 and 2015 when it dropped to $3.34 billion (N654 billion) in 2012.
Onuorah said the decline in subsidy expenditure continued in 2016 and 2017 to as low as $473 million dollars (N154 billion) in 2017.
“The reduction was short-lived as the payments skyrocketed to over $3.88 billion (N1.19 trillion) in 2018 and 2021 to $3.58 billion (N1.43 trillion).
“By these figures, Nigeria expended an average of N805.7 billion annually, N67.1 billion monthly or N2.2 billion daily,” she said.
She said the NEITI data also showed that the amount expended on subsidies from 2005 to 2021 was equivalent to the entire budget for health, education, agriculture and defence in the last five years.
Onuorah added the sum equals the capital expenditure for 10 years between 2011 to 2020.
The deputy director explained that it was during this time (2011) that fuel subsidies dwarfed allocations to all critical areas of the economy.
“NEITI ‘s persistent calls for the removal of petroleum subsidies were informed by the fact that the ways of funding the expenditure over these years relied more on federation accounts funds, the Federal Government and sometimes from external borrowing with negative consequences on government overall revenue profiles.
“NEITI was also concerned that the consequences of funding subsidies have resulted in poor development of the downstream sector, declining GDP growth, rise in product theft, pipeline vandalism, environmental pollution and undue pressure on foreign exchange.
“Other challenges imposed on the economy were naira depreciation, low employment generation, the declining balance of payments and worsening national debt,” she said.
Onuorah said in a policy advisory released by NEITI in late 2022 to drive home the urgency to remove subsidy and resubmitted earlier in the year 2023, NEITI recommended eight steps to manage subsidy removal.
She listed the steps to include the urgency to strengthen the implementation of the Petroleum Industry Act (PIA) as a whole and not in parts.
NEITI also underlined the importance of unveiling the implementation of people-oriented welfare programmes to provide relief for the poor and vulnerable and advised on priority attention to be paid to the rehabilitation of the nation’s four refineries currently ongoing.
On other policy considerations, she said government should commission a special report on actual PMS consumption in Nigeria, enforce stringent sanctions for criminal activities in the sector and conduct appropriate stakeholders’ consultations, engagements and enlightenment. (NAN)
A payment of N169.4 billion has been reportedly paid by the Federal Government as subsidy in August.
It is alleged the payment was to keep the pump price at N620 per litre.
According to a report by DailyTrust, a document by the Federal Account Allocation Committee (FAAC), reviewed on Wednesday, September 20, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy, the report added.
Also, the current price stagnation despite the worsening exchange rate and international crude price crossing $95 a barrel suggests a return of subsidy despite the numerous assurances by President Bola Ahmed Tinubu that the subsidy is gone.
The revelation by FAAC indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.
Reports by the Nigerian National Petroleum Corporation (NNPC) to the Federation Accounts Allocation Committee (FAAC), showed that petrol subsidy cost N1.57 trillion in 2021 alone and another N1.27 trillion from January to May 2022.
Another N3 trillion was used to cover petrol subsidy costs from June 2022 to June 2023.
The report comes barely four months after President Bola Tinubu on May 29, declared that there would no longer be a petroleum subsidy as the current 2023 budget did not contain it.
He revealed that the current 2023 budget has provision for the fuel subsidy till June.
Tinubu stated that funds for subsidies would be diverted to other things like public infrastructure, education, health care, and jobs but the removal of subsidy led to a massive increase in the cost of fuel which had a ripple effect on the economy skyrocketing prices of everything.
The CBN on Wednesday in Abuja unveiled a new online platform for the submission licence applications by microfinance banks.
Its Director, Corporate Communications, Mr Isa AbdulMumin, said the platform, known as the CBN Licensing, Approval and Other Requests Portal (CBN LARP), would be the place to process applications.
AbdulMumin said the portal replaced the current manual process where applicants for microfinance banks’ licences submitted applications to the CBN physically.
He said the new portal would improve accessibility, reduce paperwork, and expedite licence approvals.
“In due course, the CBN will extend the platform to other categories of licences.
“The online application system offers numerous benefits, including a simplified process, time saving, enhanced communication, and robust security measures.
“By digitising the application process, the CBN aims to improve accessibility, reduce paperwork, and expedite
licence approvals, benefiting both applicants and the economy.
“Consequently, with effect from Sept. 25, microfinance bank licence applicants are required to submit both hardcopy and online applications (via the CBN LARP) as part of a parallel run,’’ he said.
He added that the parallel run would end on Dec. 31, after which the manual submission of hardcopy bank licence applications would no longer be required and accepted.
“From Sept. 25, prospective microfinance bank applicants are urged to log on to www.larp.cbn.gov.ng to submit their applications,’’ AbdulMumin stressed. (NAN)
An ad-hoc committee of the House of Representatives is quizzing the Nigeria Ports Authority (NPA) over the sale of 16 vessels for N156.24 million in 2019.
Among the vessels were ML Pategi sold at N3.2 million; ML Misau sold at N1.06 million; PB Kabba sold at N5.
Documents before the committee also showed that NPA sold exotic vehicles like Ranger Pick-Up, Toyota Coaster Buses, Toyota Corolla cars, Toyota Hiace buses, Toyota Camry Salon Cars, among others at cheap prices
The documents equally indicated that NPA sold 45 million other items at the Apapa Port, Lagos in 2022 at N1 each, thereby collecting N45 million after the sales.
The property was sold through an invoice dated Aug. 9, 2022.
The NPA also sold 10,800,700 other items at its Apapa Dockyard in 2021 also at the rate of N1 each, netting N10.800 million in the process.
The documents further showed that NPA sold 20 million scrap metals at the Kirikiri Terminal II, Apapa, at N1 each, thereby netting N20 million also.
Prof Julius Ihonvbere, chairman of the committee adjourned sitting on Wednesday to Sept. 25 to enable NPA officials to prepare answers to questions posed at them.
The officials were directed to bring along with them list of properties slated for auctioning and evaluation reports on the adjourned date.
Ihonvbere said the NPA officials should also present the committee with the names of registered property valuers involved in the transactions.
The officials were also directed to present the valuers’ reports and government approval for the sale of the property from the office of Bureau of Public Procurement.
The officials were also directed to present Certificates of No Objection to the sales by appropriate government agencies and evidence of remittances of accrued revenue into Federal Government’s coffers.
Ihonvbere also told the NPA officials to present bidding procedures, newspaper publications, selection and every other document that could assist the committee in its investigation.
The committee’s job is to unravel the extent of illegal auctioning of public property, non-remittance of revenue realised into the Consolidated Revenue Fund of the Federal Gove Rep. mourns Rivers lawmaker
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