Economy
Subsidy: NEC Strategizes Palliatives for Workers, Vulnerable Groups
By Mathew Dadiya, Abuja
The National Economic Council (NEC) has moved to provide palliatives for workers and vulnerable groups in the country following the removal of petroleum subsidy, which has heightened the cost living.
Arising from its maiden meeting under the present dispensation, which was presided over by the Chairman, Vice President Kashim Shettima at the Presidential Villa, Abuja on Thursday, it announced the setting up of a committee to work out, within two weeks, the modalities for organizing and distributing the palliatives.
Disclosing these to State House correspondents after the meeting on Thursday in Abuja,, Governor of Bauchi State, Bala Mohammed, joined by four other colleagues – Katisna State governor Umar Radda, Yahaya Bello of Kogi state, Dapo Abiodun of Ogun State, and Abia State governor, Alex Otti said the council also discussed the possibility of obtaining funds from the World Bank and London partners to implement the programme of Compressed Natural Gas (CNG) for vehicles in the country as part of measures to bring down the price of fuel.
Mohammed said that the Council deliberated on other recommendations including the one by the organized labour for N702 billion consequential adjustment on allowances as well as the about N23 to N25 billion monthly they requested to cushion the effects of the subsidy removal.
While noting that NEC took very far reaching decisions and deliberations on the issue of the removal of petroleum PMS subsidy and its general impact on the economy, the governor explained: “Specifically on the issue of national salaries, income and wages commission, NEC had received recommendations on the various ways and means that the country can use whatever increases that we have in the revenue to mitigate the impact that is going to make on the lives of our workers and all those people involved.
“And so, they recommended and they gave us a scenario recommending that there should be a consequential adjustment, estimated at N702,919.8 billion as part of the allowances that should be given as petroleum allowance to all workers and as well as a 23 or 25 billion monthly offer to cushion the effect on workers and others suggestion that will go a long way in making sure that there is review of our salaries and wages.”
He disclosed that the Council looked at all the issues including “the challenges and problems holistically and set up a small committee of council to review and come up with a term of reference to organized areas specifically where this palliatives can come and how it will be dispensed to alleviate the problem of workers and other vulnerable groups.
“Members of the committee is composed of Governor Kebbi as Chairman; Anambra representing the South East geopolitical zone; Governor Benue, North Central, Governor of Kaduna, Northwest; my humble self, Bauchi, representing the northeast; Governor Cross River, South South and Oyo state,southwest.
“Other relevant agencies were also included. They comprised of a budget office, representative of the CBN, representative of the Office of the Attorney General of the Federation, representative of NNPC, representative of TUC and NLC and of course, Rukayat El-Rufai, so that we can sit within two weeks to come up with recommendation to NEC for a wholistic decision that will be taken immediately to alleviate the problem that may be encountered by the removal of the subsidy.”
The Governor of Bauchi State, said the input of the committee on palliatives earlier set up and headed by former Vice President Yemi Osinbajo, would not be discarded but integrated into the ongoing process.
Governor Alex Otti explained that as part of the inaugural National Economic Council meeting, major focus was on the removal petroleum subsidy and implied removal of subsidy on foreign exchange, which has led to some convergence of some sort.
He also said that the impact of these two actions definitely is increased prices, and that’s a way to solve the problem and reduced the shock, a presentation was made by the National Automotive Design and Development Council on the great things that are happening in the automotive industry.
“It was that about six states in the country, including Lagos, Ogun, Anambra, Enugu, Akwa Ibom, Kaduna and Kano and have benefited from domestic production of vehicles or assembling of vehicles by Nigerian companies operating in Nigeria. And these companies include INNOSON, Maikano, Dangote Peugeot, Peugeot automobile of Nigeria, Stallion Hundai, Honda, Elizade/Toyota, Coscharis and Ford, Kojo Motors, Jet Systems motors.
“At the moment, about 50,000 jobs have been created by this simple action of either assembling vehicles in Nigeria or producing them Nigeria. A great feat is that some of these companies have gone into the manufacturing or assembly of electric vehicles and vehicles powered by CNG – compressed natural gas. The impact of this is that the pressure on the price of petroleum products particularly PMS will be reduced. The more we use electric vehicles and CNG powered vehicles,” he said
According to the Abia State governor, some of the decisions that were taken include that legislative support will need to be given to these companies that are doing great things in Nigeria.
“It is important to underscore the point that former President had made a commitment that by 2060 that Nigeria would join countries that will eliminate fossil fuel powered vehicles and move to electric vehicles in pursuit of the net zero emission that some of the countries in Europe, America and Asia have signed on to. So if that must happen, then we need to ramp up the production of electric vehicles and CNG vehicles.
“It is estimated that if we give legislative support to this company, that about a million jobs from the 50,000 jobs that exist in that industry would be created,” he added.
Koki State governor, Yahaya Bello, said issue of flooding or flood disaster across the country was also discussed adding that at 128th NEC meeting held on 28th October 2022, the then chairman of Nigeria Governors Forum and the former governor of Sokoto state, Aminu Tambuwal, drew the attention of the council to the devastating effects of the 2022 flood which affected almost all the states of the Federation, resulting into loss of lives and livelihoods.
Bello said that the council resolved, as at that time to set up a five man ad hoc committee on flooding, comprising of governance of Jigawa, Kogi, Anambra, Bayelsa, Lagos and Yobe States and co-opted some other ministries and agencies. The terms of reference was to review the current flooding situation in the country and design a template for compensation of victims.
The Council, he said, noted that there were limitations in carrying out the assignment pointing out the delay in the non submission of field templates by some states, as only 16 states out of the total number of states affected forwarded their submissions to NEC Secretariat.
He said up to date, about 15 others were yet to do so, saying, “the submission from defaulting states are awaited as we speak.”
NEC recommended that the plight of victims of the unfortunate flawed disaster across affected states of the Federation could be alleviated if the much needed intervention from the federal government materialized without further delay.
The Council called for the need to expedite release of funds to affected states as recommended by designated committees constituted by the federal government to that effect.
“So resolution of NEC, council resolved at all states should make a comprehensive submission by next week. Members are also to liaise with the Office of the Vice President, Office of the Secretary to the government of the federation and also all the private sector and other well spirited Nigerians to help I. tackling this flooding in the country,” the governor said.
Ogun State governor, Dapo Abiodun who spoke on petroleum, said, the contribution by some of the key oil and gas sector heads like the NNPC Group Chief Executive Officer, Mele Kyari and Nigeria Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), Ahmed Farouk gave inputs.
“We had from the marketers and of course, it was a robust dialogue, cross fertilization of ideas by all the executive governors across the length and breadth of Nigeria today,” Abiodun said.
Selloffs in BUA Cement and Tier-one banking stocks on Tuesday dragged the Nigerian Exchange Ltd. (NGX) market capitalisation down by N394 billion, a 0.66 per cent decline.
Specifically, the market capitalisation, which opened at N59.812 trillion, closed at N59.418 trillion.
Similarly, the All-Share Index dropped by 0.
66 per cent, shedding 651 points to close at 98,058. 07, compared to 98,708. 90 on Monday.This dip also reduced the Year-to-Date (YTD) return to 31.14 per cent.
Market breadth was negative, with 32 losers declining and 26 gainers on the Exchange.
On the losers’ table, Cadbury Nigeria led by 9.89 per cent to close at N16.40 per share, while Northern Nigeria Flour Mill(NNFM) led the losers’ table by 10 per cent to close at N37.
40 per share.However, analysis of the market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 96.08 per cent.
A total of 399.32 million shares valued at N8.93 billion were exchanged in 9,547 deals, compared to 353.18 million shares valued at N4.55 billion transacted in 9,417 deals posted previously.
Meanwhile, UBA led the activity chart in volume and value with 90.41million shares worth N2.61 billion.(NAN)
In the just concluded week, equity investors gained N836 billion or 1.41 per cent, week-on-week.
The Nigerian Exchange Ltd.(NGX) All-Share Index and Market Capitalisation appreciated by 1.41 per cent to close the week at 99,448.91 and N60.261 trillion respectively.
This is against 98,070.
28 and N59.425 trillion respectively posted in the previous week.Similarly, all other indices finished higher, with the exception of NGX Consumer Goods and NGX Lotus II which depreciated by 0.
84, 1.19 per cent respectively, while the NGX ASeM index closed flat.Fifty-eight equities appreciated in price during the week, higher than 33 equities in the previous week.
Eighteen equities depreciated in price lower than 43 in the previous week, while 76 equities remained unchanged, same as 76 recorded in the previous week.
On the gainers’ table, Eunisell Interlinked Plc, led 47 advanced equities by 20.69 per cent to close at N3.50 per share.
Also, Dangote Sugar Refinery Plc, led 17 declined equities on the losers’ table by 10.13 per cent to close at N31.50 per share.
A total turnover of 2.142 billion shares worth N85.946 billion in 41,217 deals was traded this week by investors on the floor of the Exchange, in contrast to 1.447 billion shares valued at N73.889 billion that exchanged hands last week in 39,546 deals.
The Financial Services Industry, measured by volume led the activity chart with 1.176 billion shares valued at N23.739 billion traded in 19,570 deals; thus contributing 54.91 and 27.62 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 366.923 million shares worth N4.672 billion in 4,004 deals.
Third place was the Oil and Gas Industry, with a turnover of 228.439 million shares worth N52.635 billion in 7,547 deals.
Trading in the top three equities, namely: United Bank for Africa Plc, Champion Breweries Plc and Japaul Gold and Ventures Plc measured by volume accounted for 828.822 million shares worth N12.319 billion in 5,080 deals.
This contributed 38.70 and 14.33 per cent to the total equity turnover volume and value respectively.
Reacting, analysts at Cowry Financial Market Research stated that the recent positive quarterly corporate earnings reports, further buoyed market sentiment.
The analysts noted that this was particular in the banking, industrial goods, and consumer goods sectors, delivering strong performances from key players.
They stated that the market sentiment also drove the benchmark index closer to the 100,000 points threshold.
“Notably, we think the current rally is likely to persist, though cautious profit-taking activities may create intermittent dips,” they said.
Looking ahead, the analysts predicted that the stock market was poised for further gains.
According to them, this is as investors look forward to the upcoming macroeconomic data releases and corporate earnings reports, which are anticipated to influence short-term trading dynamics.(NAN)
The International Monetary Fund (IMF),, says global growth is projected to remain unchanged at 3.2 per cent in 2024 and 2025, as Inflation recedes.
This is according to the IMF’s latest World Economic Outlook (WEO) Update Report for October 2024: “Policy Pivot, Rising Threats,” released on Tuesday during the IMF/ World Bank Meetings in Washington D.
C.The report said though the projection was in line with the July and April 2024 WEO, there had been notable revisions beneath the surface since the April WEO.
According to the report, some low-income and developing economies have seen sizable downside growth revisions, often tied to disruptions to production and shipping of commodities, especially oil, conflicts, civil unrest, and extreme weather events.
“These have been compensated for by upgrades to the forecast for emerging Asia, where surging demand for semiconductors and electronics, driven by significant investments in artificial intelligence has bolstered growth.”
It said in advanced economies, growth in the United States was strong, at 2.8 per cent in 2024 but will revert toward its potential in 2025.
The report said for advanced European economies, a modest growth rebound was expected in 2025, with output approaching potential.
For emerging markets and developing economies, it said the growth outlook was very stable around 4.2 per cent in 2024 and 2025, with continued robust performance from emerging Asia.
“Five years from now, global growth should reach 3.1 per cent, a mediocre performance compared with the prepandemic average.”
The report showed that there was global disinflation even though service price inflation persists in some countries.
“After peaking at 9.4 per cent year-on-year in the third quarter of 2022, we now project headline inflation will fall to 3.5 per cent by the end of next year.
“ This is slightly below the average during the two decades before the pandemic.
“In most countries, inflation is now hovering close to central bank targets, paving the way for monetary easing across major central banks.”
The report said the return of inflation near central bank targets paved H the way for a policy triple pivot which would provide the much-needed macroeconomic breathing room, at a time when risks and challenges remain elevated.
“The first pivot on monetary policy is underway already. Since June, major central banks in advanced economies have started to cut policy rates, moving toward a neutral stance.
“This will support activity at a time when many advanced economies’ labor markets are showing signs of cooling, with rising unemployment rates.
‘Lower interest rates in major economies will ease the pressure on emerging market economies, with their currencies strengthening against the U. U. S dollar and financial conditions improving.
“This will help reduce imported inflation, allowing these countries to pursue their own disinflation path more easily.”
The report said the second pivot was on fiscal policy and would require countries to stabilise debt dynamics and rebuild much-needed fiscal buffers.
“The more credible and disciplined the fiscal adjustment, the more monetary policy can play a supporting role by easing policy rates while keeping inflation in check.
“The pace of adjustment should be tailored to country-specific circumstances.”
It said the third pivot and the hardest was towards growth-enhancing reforms.
The report said structural reforms were necessary to lift medium-term growth prospects, but support for the most vulnerable should be maintained
It said for reforms to be successful and socially accepted, there was a need to build trust between government and citizens.
“ Building trust between government and citizens, a two-way process throughout the policy design and the inclusion of proper compensation to offset potential harms, are essential features.
The report said that multilateral cooperation was needed more than ever to accelerate the green transition and to support debt-restructuring efforts. (NAN)
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