Connect with us

Business

BudgIT Seeks End to Fuel Subsidy

Published

on

  • BudgIT Seeks End to Fuel Subsidy

A civic technology organisation, BudgIT has urged the Federal Government to end the controversial petroleum subsidy regime after 13 years.

According to BudgIT, the Federal Government has spent close to N10 trillion on importing petroleum products under the guise of subsidy between 2006 and 2018 to the detriment of socio-economic developments.

In a statement by its Principal Lead, Gabriel Okeowo, BudgIT said the country was dancing on the edge of a razor blade by continuing the subsidy regime.

BudgIT said its research showed that the country currently imports an average of 91 per cent of its daily petrol needs, saying this exposes local petrol prices to price shocks from international factors of production and exchange rate volatility.

“There is a near perfectly inverse relationship between the fall in the value of naira and the rise in the cost of imported petrol. That is, when next the naira is devalued, Nigeria’s subsidy bill can be expected to jump,” the statement said.

It said the continuation of petrol price regulation perpetuates safety nests for “exceptional forms of corruption within the country’s subsidy regime.”

“Import subsidy creates petrol price arbitrage – the differential between the regulated price in Nigeria and the high petrol prices in neighbouring countries – which is big enough to incentivise smuggling of subsidised products to neighbouring border towns. According to NNPC, there are 2,201 petrol stations in Nigeria’s porous border towns and coastal frontiers, with a combined fuel tank capacity of 144.9 million litres. Analysts argue, ringing corruption alert that the population around that area is far from justifying the size of the petrol market.

“BudgIT notes with dismay that ‘fuel subsidy’ deprives Nigeria of funds needed for critical socio-economic development as it discourages investors, who generally prefer a deregulated industry, from investing in the downstream sector especially in the area of refinery construction and operation. For instance, the 10 trillion consumed by the subsidy regime is sufficient to construct 27,000megawatts (Mw) of electricity or build about 2,400 units of 1000-bed standard hospitals across 774 local government areas of Nigeria, found our research.

“We equally note that the Nigerian masses worship low oil prices. More so, the political class fears that increases in petrol price (and in the cost of living by extension), occasioned by a deregulated price regime, could become a flashpoint for mass uprisings and political instability. Nonetheless, we can never shy away from the opportunity cost of the corrupt subsidy regime.

“Nigeria’s population is expected to balloon to 398 million people by 2050. With no strategic framework to end its subsidy program plus zero political will to reform the entire sector, the Nigerian government risks carrying the financial burden of a program that could drown out the development of its other sectors over the next 15 years.

“It’s high time fuel subsidy is removed. Efficient palliative measures should be provided for those that will be worse hit by the removal. Four sectors – Transportation, Power, Health and Education – should be prioritised to cushion the effects.

“While we are calling on President Muhammadu Buhari to do the needful, we also believe that funding for cheaper mass transit and subsidies to public institutions should be targeted for these groups.”

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.

Continue Reading
Comments

Business

Dangote Commits $700M To Sugar Production In Support of Backward Integration Policy

Published

on

Dangote Sugar Refinery Plc

The management of Dangote Sugar Refinery Plc has said it is committing over $700m to its sugar projects to support the Backward Integration Policy of the Federal Government to make Nigeria self-sufficient in sugar production.

According to a statement issued on Sunday by Dangote Industries Limited, the company disclosed this to visiting members of the Nasarawa House of Assembly on Friday.

The company noted that Nigeria was one of sub-Saharan Africa’s largest importers of sugar, second only to South Africa with an annual import of over $337m.

The Dangote Sugar management however assured the lawmakers that with the completion of its sugar projects in Nasarawa and Adamawa under the BIP, the nation would be saved more than half of the forex expended on sugar imports annually.

It added that the investment would also lift its people as other people-oriented infrastructures would come with the sugar projects.

The state lawmakers commended the Dangote Group for the choice of the state for the project and the accelerated pace with which the project was being executed, despite occasional delays arising from communal disagreements.

General Manager for the BIP, Dangote Sugar, John Beverley said when the factory was fully operational, it would have the capacity to crush 12,000 tons of cane per day, while 90MW power would be generated for both the company’s use and host communities.

He also disclosed that some 500km roads in all would be constructed to ease transportation within the vicinity. He solicited the support of the lawmakers in controlling the menace of land encroachment by settlers and itinerant farmers.

The Speaker of the Nasarawa State House of Assembly, Ibrahim Abdullah, and his team members, who were conducted around the company’s 78,000 hectares BIP in Tunga Awe Local Government Area commended the company for the project.

Abdullah noted that it would not only open up opportunities in the state but in Africa as a whole, and said the lawmakers were ready to partner and support the company towards the realisation of the sugar project through the relevant legislation.

When phase II of the project is completed, according to the company, it will make it the largest sugar refining plant in Africa.

Continue Reading

Business

French Trade Advisors pledge Massive Investment In Lagos Free Zone

Published

on

The Conseillers du Commerce Exterieur (French Foreign Trade Advisors) has expressed readiness to invest massively in the Lagos Free Zone (LFZ) being developed by the Tolaram Group as they endorsed the zone as the ideal industrial destination for French businesses in Nigeria.

This was made known on Thursday, April 15, 2021, during a visit to the Lagos Free Zone. The delegation led by the Ambassador of France to Nigeria, His Excellency Jerome Pasquier accompanied by his Economic Advisor, the Consulate General of France in Lagos and the Conseillers du Commerce Exterieur comprising of CEOs of several French businesses in Nigeria.

Speaking during the visit, the Ambassador of France in Nigeria, His Excellency Jerome Pasquier explained that the aim of the visit of the Conseillers du Commerce Exterieur to Lagos Free Zone (LFZ) was to discover the opportunities in the Lagos Free Zone and the Lekki Port project, which is expected to have a huge positive impact on businesses in Nigeria.

Pasquier commended Tolaram Group, the promoter of the zone, for the foresight of integration of Lekki Port into the master plan of the Lagos Free Zone (LFZ), which would serve as the gateway for import and export from the zone thereby giving businesses in the zone a competitive edge.

The Ambassador also commended the Lagos Free Zone (LFZ) for its Master Plan for the zone which includes world-class infrastructure that is in line with its vision to be the preferred industrial hub and investment destination in West Africa.

“I am impressed by the huge size of the Lagos Free Zone project. We are very happy that the French companies will be deeply involved in this Lagos Free Zone project. It is really impressive to see how ambitious this project is. The French Minister was in Nigeria yesterday and I explained to him that Nigeria is a country where we can have big projects. For us, this project means big opportunities and that explains why we need to be here. We are happy to be here and work with Tolaram Group”, he added.

It is noteworthy to mention that the first French company to be established in the Lagos Free Zone is the terminal operations arm of CMA – CGM which has established a subsidiary within the Lagos Free Zone and is the appointed operator for the container terminal operations scheduled to commence at Lekki Port next year.

In his remarks, the Chief Executive Officer, Lagos Free Zone (LFZ), Mr. Dinesh Rathi assured the Ambassador of France and the Conseillers du Commerce Exterieur that the zone remains the best destination for investment in Nigeria and the West African sub-region given the seamless integration with Lekki Port and the world-class infrastructure provided by Lagos Free Zone.

Explaining the configuration of the zone, Rathi disclosed that the clustering is planned in line with the international best practices of Work, Live, and Play. He stated that the land-use plan of the Lagos Free Zone allocates 70 percent area towards industrial developments, 20 percent towards logistics and support services while the real estate will cover the remaining 10 percent.

He also stated that Lagos Free Zone (LFZ) has simplified the process of business entry and operation in the zone in line with the Federal Government of Nigeria’s Ease of Doing Business policy.

“We have made it very easy for the business to berth and take off at zone by making our process less cumbersome and friendly, we are open for business 24/7 and willing to help investors to settle in very fast,” he said.

Continue Reading

Business

AIICO Refutes Claims of Non-Remittance of Pension Assets to PTAD

Published

on

AIICO Insurance Plc has refuted claims of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD).

This was disclosed recently in a statement by Segun Olalandu, the Head, Strategic Marketing and Communications Department.

It stated: “The attention of the Management of AIICO Insurance Plc. has been drawn to a recent report in the media on allegations of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD).

“AIICO Insurance Plc. hereby wishes to inform the public that all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive. Both parties are presently engaged in a reconciliation exercise to conclude the process. We implore the public to disregard any information that may suggest otherwise as there is no basis to that effect.”

Mr. Segun assured that AIICO Insurance Plc. remains a responsible corporate citizen of Nigeria and will continue to engage the best practice in all its business activities and operations in line with extant laws and regulatory provisions guiding its practice.

AIICO Insurance is a leading composite insurer in Nigeria with a record of serving our customers that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, and investment management services as a means to create and protect wealth for individuals, families, and corporate customers.

Continue Reading

Trending