Connect with us

Economy

Row in Senate Over $3.8bn Subsidy Payment Probe

Published

on

senate
  • Row in Senate Over $3.8bn Subsidy Payment Probe

The Senate has begun a fresh investigation into the alleged illegal subsidy payment on Premium Motor Spirit (petrol) by the Nigerian National Petroleum Corporation.

The probe, however, divided members of the ruling All Progressives Congress in the chamber on Tuesday.

Earlier, the Minority Leader, Senator Biodun Olujimi (PDP, Ekiti-South), raised a point of order, urging the Senate to probe the NNPC for paying subsidy on petrol without the approval of the National Assembly.

Olujimi said, “Since 1999, there has always been a budget for subsidy but this has been jettisoned by the current government. What is happening now is that there is a fund named as ‘Subsidy Recovery Fund’, which is being managed only by two individuals at the NNPC. That is the Managing Director and the Executive Director, Finance. This fund is too huge to be managed without recourse to any known law of the land.

“Right now, it is almost certain that the $3.8bn is slush fund, which is being managed by two individuals under a new terminology.

“I want to urge this Senate to cause the Downstream Committee to compel the NNPC to come before the committee and explain why this should be so. The new terminology that is now being used is ‘under-recovery’ rather than subsidy approval.”

President of the Senate, Bukola Saraki, recalled that when the National Assembly passed the 2018 Appropriation Bill, it requested that the executive should send a supplementary budget that would capture subsidy on petrol and legalise the payment.

Saraki said, “I will want to suggest that in the light of the enormity of the issues before us, where we are talking about subsidy of almost $3.8bn, which, if you remember when we did pass the budget, I said from here that there was the need for the executive to bring before us fuel subsidy item. This has always been the practice. And this money is too huge for it not to be appropriated.

“In the light of the enormity of this, I want to suggest that the Senate Leader, with the Chairman of the Committee on Petroleum (Downstream), should urgently summon those in the NNPC, who are responsible (for the payment), to look into the matter and come back to us with a report that we can all debate.”

The issue, however, became controversial when Senator Ali Ndume (APC, Borno South) accused the Committee on Petroleum (Downstream) of being compromised.

Ndume said, “I think the committee – I don’t want to be too hard on them – is not doing its oversight and when all these things happen, the committee is supposed to know. So, I am suggesting that Marafa, being the Chairman of that committee, should be out of this and the committee members too.

“The Senate Leader and other members of the Senate should look at this thing objectively and not be partisan, because by the time you have such amount of money stashed somewhere, it calls for more question. As distinguished Senator Bukar Abba (Ibrahim) said, not I, the committee might be compromised. That is what he said.”

Saraki ruled that an ad hoc committee be set up to conduct the probe, while appointing the Majority Leader, Senator Ahmad Lawan, as its chairman.

Marafa (APC, Zamfara Central), who was irked by Ndume’s comment, raised a point of order to demand a retraction of the statement. He said his committee was ready to be excluded from the probe or dissolved.

Responding, Saraki said, “Senator Marafa, listen to yourself. You decided to choose the same offensive words against your colleague. You have to first withdraw what you have just said.”

Lawan subsequently withdrew from the probe.

The Deputy Senate President, Ike Ekweremadu, however, urged Lawan not to withdraw from the probe.

“While I associate myself with what the leader said, I think he was so angry to listen to what happened. The Leader needs to calm down as we set up the ad hoc committee. He should say he should be excluded from the committee, not that he wants to withdraw when he has not been given the job,” Ekweremadu said.

Saraki insisted that Lawan would lead the ad hoc committee as the amount involved was too huge to be left with the Marafa-led committee.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Economy

World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

Published

on

world bank - Investors King

The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

Continue Reading

Economy

Nigeria’s Food Inflation Hits 40.66% Year-on-Year in May 2024

Published

on

Nigeria's Inflation Rate - Investors King

Nigeria’s food inflation rate surged to 40.66% on a year-on-year basis in May 2024, a significant increase from 24.82% recorded in May 2023.

The latest figures from the National Bureau of Statistics (NBS) highlight the rising cost of essential food items, exacerbating the economic challenges faced by many Nigerians.

The NBS report attributes the steep rise in food inflation to substantial price increases in several staple items.

Notably, the prices of Semovita, Oatflake, Yam flour, Garri, and Beans saw considerable hikes.

In addition, the cost of Irish Potatoes, Yams, Water Yam, Palm Oil, and Vegetable Oil also climbed significantly. Within the protein category, Stockfish, Mudfish, Crayfish, Beef, Chicken, Pork, and Bush Meat experienced notable price jumps.

The month-on-month food inflation rate in May 2024 was 2.28%, reflecting a slight decrease of 0.22 percentage points from the 2.50% recorded in April 2024.

This month-to-month decline was due to a slower rate of price increases for Palm Oil, Groundnut Oil, Yam, Irish Potatoes, Cassava Tuber, Wine, Bournvita, Milo, and Nescafe.

Despite the minor monthly decrease, the average annual food inflation rate for the twelve months ending May 2024 was 34.06%.

This marks a significant rise of 10.41 percentage points from the average annual rate of 23.65% recorded in May 2023.

The sharp rise in food inflation is raising concerns among economic analysts and policymakers, as it significantly impacts the cost of living for Nigerians.

The rising food prices are straining household budgets and contributing to an overall inflation rate that threatens economic stability.

In response to the inflationary pressures, the Nigerian government and relevant stakeholders are being urged to implement effective measures to stabilize food prices and address the underlying causes of inflation.

Efforts to boost agricultural productivity, improve supply chains, and tackle market inefficiencies are seen as critical to mitigating the inflationary trend.

The NBS report underscores the urgent need for comprehensive strategies to manage inflation and ensure food security for the population.

Continue Reading

Economy

Nigeria’s Inflation Rate Climbs to 33.95% in May, NBS Reports

Published

on

consumers

The National Bureau of Statistics (NBS) has revealed that Nigeria’s headline inflation rate rose to 33.95% in May 2024, a slight increase from the 33.69% recorded in April.

This 0.26 percentage point rise underscores the ongoing economic challenges the country faces as it continues to grapple with rising prices and economic instability.

The report highlights that on a year-on-year basis, the headline inflation rate increased by 11.54 percentage points compared to May 2023, when the rate was 22.41%. This significant annual increase indicates a persistent upward trend in the cost of living for Nigerians over the past year.

However, the month-on-month analysis presents a mixed picture. The headline inflation rate for May 2024 was 2.14%, slightly lower than the 2.29% recorded in April 2024. This 0.15 percentage point decrease suggests a marginal slowdown in the rate at which prices are rising month by month.

Urban vs. Rural Inflation Rates

The NBS report also provides detailed insights into urban and rural inflation dynamics. In urban areas, the inflation rate in May 2024 stood at 36.34% on a year-on-year basis, a substantial 12.61 percentage points higher than the 23.74% recorded in May 2023.

On a month-on-month basis, urban inflation was 2.35%, down by 0.32 percentage points from April 2024’s rate of 2.67%.

Conversely, the rural inflation rate for May 2024 was 31.82% year-on-year, which is 10.63 percentage points higher than the 21.19% recorded in May 2023.

Month-on-month, rural inflation slightly increased to 1.94% from 1.92% in April 2024, indicating a steady rise in prices in rural regions.

Implications and Responses

The continuous rise in inflation, particularly in urban areas, poses significant challenges for the Nigerian economy.

The increase in prices for essential goods and services such as food, transportation, and housing is putting immense pressure on household budgets and the overall standard of living.

Economic analysts suggest that the persistent inflationary pressures are driven by several factors, including supply chain disruptions, increased production costs, and fluctuating exchange rates. The impact of these factors is felt more acutely in urban areas, where the cost of living is inherently higher.

In response to these inflationary trends, policymakers are under pressure to implement measures that can stabilize prices and ease the financial burden on citizens.

Strategies such as tightening monetary policy, increasing food production, and improving supply chain efficiency are being considered to curb the rising inflation.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending