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Removal of Petrol Subsidy: Conclusion Will be Drawn in June– NEC

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Following insinuations that the subsidy on petrol will be removed after the first half of the year 2022, the National Economic Council (NEC) has stated that a decision is yet to be made on fuel subsidy removal.

It noted that deliberations are still ongoing on the matter and a conclusion will be drawn in June when the provision for its payment in the 2022 budget will be over.

After the NEC meeting presided over by the Vice President, Prof. Yemi Osinbajo on Thursday at the Presidential Villa in Abuja,  the Governor of Edo State, Godwin Obaseki spoke with journalists.

Governor Obaseki explained that NEC has been discussing the fuel subsidy matter for over a year.

He hinted that a committee has been set up to look into the matter, adding that last year almost N2 trillion was spent on fuel subsidy.

“There was an ad hoc committee set up by NEC and headed by Gov. Nasir El-Rufai that included members of the executive arm of government and worked on recommendations as to what we should do about the cost of Premium Motor Spirit (PMS) locally.

“Because as you realise, as it has been told to us, the cost of PMS in Nigeria today is about N162 for a litre whereas every other country surrounding Nigeria is selling the product at more than 100 per cent of the cost in Nigeria.

“The country, as at last year, spent almost N2 trillion subsidising petroleum products. That is money that could have gone into building roads; money that could have gone into healthcare and education.

“When NEC looked at some of the analyses last year, it realised that less than one-third of the states of the country consumed two-third of the subsidy.

“So, for NEC, the argument has been put out; should we continue this regime of spending money that we do not have to subsidise the living standard of mostly those who have vehicles. NEC hasn’t come up with any decision yet. I think recommendations have also been made to the President. That is what I am aware of has transpired so far,” he said.

Also speaking, Nasarawa State Governor, Abdullahi Sule noted that the governors did not make any presentation on the issue since a conclusion has not been reached. 

In his words, “We didn’t make any presentations on this because there has not been a decision. But in reality, all of us Nigerians know that there is now the Petroleum Industry Act.

“NNPC is now a limited liability company, so it will run differently. If the Minister of Finance provides for six months, you probably can understand part of the reason for provision of six months before NNPC fully takes off and at that moment, that’s when decisions will be made.

“But I want to make the correction that it is not governors who are making recommendations. It is actually a NEC committee, which comprises all the other people that are looking at this and no decision has been made and probably by the time a decision will be made, the Petroleum Industry Act has fully taken charge, and it will not require any recommendation from anybody.”

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Economy

Experts Urge Swift Government Action on Nigeria’s Untapped N3 Trillion Logistics Sector

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Experts at the Courier and Logistics Management Institute conference in Lagos have emphasized the critical importance of the overlooked logistics, courier, and transport sector in Nigeria, valued at over N3 trillion.

During the event themed “Logistics Solutions and National Infrastructure Development,” the CLMI Executive Chairman, Prof. Simon Emeje, highlighted the urgent need for the federal government to prioritize this sector, which remains relatively untapped on a global scale.

Emeje underscored the sector’s significance, stating, “Any country that does not pay attention to logistics, courier, and the transport sector cannot survive.

The government must not ignore this sector because it is the bedrock of any economy.”

The logistics, courier, transport, and management industry boasts an average asset worth over N3 trillion, offering substantial potential for job creation.

Emeje emphasized that commerce is crippled without effective logistics, illustrating the importance of the sector in facilitating trade, enhancing the supply chain, creating jobs, and propelling economic growth.

Despite its undeniable importance, the Nigerian logistics sector faces hindrances such as infrastructural deficits and weak government policies, preventing it from reaching its full potential.

Emeje called for immediate attention to address these challenges and unlock the sector’s capacity to create millions of employment opportunities for Nigerian youth.

Former Minister of Communications, Barr. Adebayo Shittu, urged the institute to draft a comprehensive proposal for government adoption, offering assistance in facilitating engagement.

Both Shittu and Prof. Emeje called on the Federal Government to establish a dedicated ministry to foster an enabling environment for Courier and Logistics Management, drawing parallels to the recognition given to the entertainment industry.

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Economy

President Tinubu Seeks Senate Approval for $8.6 Billion and €100 Million Borrowing Plan

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Bola Tinubu

President Bola Tinubu’s administration has formally requested the approval of the Nigerian Senate for a borrowing plan totaling $8.6 billion and €100 million.

The request was presented to the Senate through a letter read during the plenary by the Senate President, GodsWill Akpabio.

According to the letter, the proposed funds are integral to the federal government’s 2022-2024 external borrowing plan, previously sanctioned by the administration of former President Muhammadu Buhari.

Tinubu clarified that the projects earmarked for funding through this loan cut across diverse sectors, emphasizing their selection based on rigorous economic evaluations and their anticipated contributions to national development.

The letter highlighted, “The projects and programs in the borrowing plan were selected based on economic evaluations as well as the expected contribution to the socio-economic development of the country, including employment generation, and skills acquisition.”

The specified sectors earmarked for development include infrastructure, agriculture, health, water supply, roads, security, and employment generation, along with financial management reforms.

The borrowing plan’s comprehensive approach aims to address critical needs and propel the nation’s progress.

President Tinubu emphasized the urgency of the Senate’s approval, stating, “Given the nature of these facilities, and the need to return the country to normalcy, it has become necessary for the Senate to consider and approve the 2022-2024 external abridged borrowing plan to enable the government to deliver its responsibility to Nigerians.”

This appeal follows previous successful requests, including the National Assembly’s approval of an over $800 million loan for the National Social Safety Network Programme in August.

Also, the assembly greenlighted the 2022 Supplementary Appropriations Act of N819 million to provide palliatives to Nigerians, mitigating the impact of fuel subsidy removal.

As the deliberations unfold, the Senate’s decision on this substantial borrowing plan will play a pivotal role in shaping Nigeria’s economic trajectory.

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Nigeria-Morocco Gas Pipeline Construction Set for 2024

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Nigeria’s Gas Minister, Ekperikpe Ekpo, announced the scheduled commencement of the Nigeria-Morocco gas pipeline construction in 2024.

The revelation came during a meeting with a delegation from Morocco, led by Ambassador Moha Ou Ali Tagma, on Monday in Abuja.

The Nigeria-Morocco gas pipeline, a colossal undertaking covering 5,600 kilometers and traversing 13 African countries, is poised to transform the energy landscape of the region.

Spanning nations from Nigeria to Morocco and reaching Europe, the pipeline aims to facilitate gas transportation, enhance economic integration, combat desertification, and contribute significantly to the reduction of carbon emissions.

Ekpo, expressing Nigeria’s readiness for the project, stated, “I believe by 2024, we will conclude on it.”

He emphasized the importance of natural gas in the context of climate change, highlighting its role in ensuring low carbon emissions and fostering prosperity.

The pipeline, originating at Brass Island in Nigeria and reaching the northern region of Morocco, will interlink with the existing Maghreb European Pipeline, connecting Algeria to Spain.

Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), underscored the commitment to a consistent gas supply and the provision of necessary infrastructure.

Despite the ambitious vision, some analysts have raised concerns about the viability of the Nigeria-Morocco gas pipeline. Notably, the project has encountered delays, with a Memorandum of Understanding signed in 2016 and 2018, followed by another in 2022.

Analysts, including oil and gas expert Dan D Kunle, have stressed the need for comprehensive studies to assess economic impact, financial returns, and agreements with transit countries.

While challenges and skepticism persist, Kyari has expressed confidence in securing funding for the project.

However, alternative perspectives suggest exploring investments in LNG plants, regasification facilities in Moroccan ports, and LNG vessel carriers for a more flexible and globally accessible energy solution.

As Nigeria and Morocco navigate this ambitious venture, meticulous planning and strategic considerations will be crucial for ensuring its success.

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