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Import Prohibition Attracts $10b Investment, Says CB

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  • Import Prohibition Attracts $10b Investment, Says CB

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said the import prohibition policy of the apex bank has attracted investment valued at $10billion into the country.

The CBN chief spoke in Abuja during an interactive seesion with the Joint House Committees on Finance, Appropriation; Aids, Loans & Debt Management and Budget Research on the 2018-2020 Medium Term Expenditure Framework/Fiscal Strategy Paper.

Represented by Deputy Governor, Operations, Adebayo Adelabu,Adebayo Adelabu, the CBN governor said a reduction in inflation rate from 18.9 per cent to a little above 15 per cent has been achieved by key fiscal policies introduced by the administration which were aimed at stabilising the economy.

He said local manufacturing of some of the prohibited items, such as building materials–granite, marble, among others, has started by some companies established across the country. This he said would create jobs for the youths.

Emefiele said the official exchange rate of N305/$ and the parallel market’s N360/$ have been stable over the past few months due to the intervention of the CBN in agriculture, solid minerals, manufacturing sectors and petroleum sector which has been yielding positive results.

The CBN and Federal Account Allocation Committee (FAAC) agreed that proceeds from forex transaction would be remitted into the Federation Account for the three tiers of government to share, and reduce budget deficit.

Members, however took him to task on the bailout given to states and he said CBN does not bailout to states as provided in the CBN Act, 2007.

He added that since they cannot afford the high interest rate from commercial banks, intervention fund were given to critical sectors of the economy at single rate and was channeled through Development Financial Institutions (DFIs).

However, Permanent Secretary of Federal Ministry of Finance, Mahmud Dutse, who respresented Kemi Adeosun, Minister of Finance requested the support of the National Assembly towards boosting the 20 per cent independent revenue from government owned enterprises, saying there were plans to sanction CEOs of agencies who fail to adhere to the policy.

He said Nigeria’s tax regime should be reviewed as it is one of the lowest in the world and less than one-third of Africa’s ratio.

He said in line with the Economic Community of West African States (ECOWAS) tariff policy, the only proposal for tax review applies to excise duties on alcohol and cigarette.

Executive Chairman, Federal Inland Revenue Service (FIRS) Tunde Fowler, in his presentation disclosed that N3.233 trillion was realsied over the past 10 months, an amount that represented 79.35 per cent of its collection target for 2017 fiscal year.

The FIRS justification for 2018-2020 revenue framework, he said, was based on the Federal Government Economic Recovery and Growth Plan (ERGP).

He said its tax assessment between 2013 and 2015 revealed N1 trillion after its tax audit exercise base deployed technology which has aided the tax agency to increase its revenue.

Various measures have been adopted by FIRS to ensure increased collections of Federal Government dues in the corporate and individual taxes.

Fowler added that the new modalities structured for optimal access of accruable due from the Voluntary Assets and Income Declaration Scheme (VAIDS) had yielded over $54 million (N16.73 billion) and N207.41 billion) totalling about N16.40 billion at the federal level only.

“We have stepped up enforcement activities against tax defaulters on different fronts. These include placing non-compliance stickers on business premises of tax payers who have back-logged of taxes owed and have not made any move to liquidate such.

“We have adopted substitution as an enforcement tool by putting a lien on the bank account of errand tax payers. This, in my view, will serve as deterrent to defaulters and consequently increase tax collection.

“FIRS has so far collected over N6 billion and $4.2 million (over N1.4billion) totalling over N7.7 billion. This drive is continuous and will be unrelenting going forward,’’ he said.

Fowler revealed that as from December,31, 2017, 34 companies will no longer enjoy pioneer status.

Bala Wunti, NNPC Corporate Planning & Strategy in his presentation expressed confidence that the 2.3million barrels per day(mbpd) oil production and $45 per barrel are possible and that positive results are being yielded by the negotiation between Federal Government and Niger Delta stakeholders.

Nigeria, he said, recorded 18 per cent over-performance in the 2017 crude oil benchmark based on improved dynamics in supply and demand at the international market, just as he expressed regrets over shutting down of major export infrastructure including Trans-Forcados Pipeline.

Minister of State for Budget & National Planning, Zainab Ahmed, in her speech earlier said total oil production is pegged at 2.51 mbpd while budget oil production volume net incremental was pegged at 2.3mbpd; $45 oil benchmark; while exchange rate was pegged at N305/$ for fiscal year 2018.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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