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Federal Government to End Fuel Subsidy in 2023

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Petrol - Investors King

The federal government of Nigeria through the Minister of Finance, Budget, and National Planning, Zainab Ahmed has reiterated that the government will stop fuel subsidy in 2023. 

Speaking before the house committee on finance at the National Assembly, the minister said that the halt is expected to take effect by June/July after the end of the current administration. 

Nigeria President, Muhammadu Buhari is expected to leave office on May 29, 2023. 

The government is proposing to spend N19.76 trillion in 2023 while N3.36 trillion of the estimate would be used for oil subsidies. This will significantly affect the capital expenditure of the most populous African nation. 

The debt repayment is already eating deep into the government revenue. Leaving it with very little to spend on both human and capital development. 

Zainab Ahmed said that the amount being used to service debt had overshot appropriation in the 2022 budget.

She noted that 60 percent of revenue was to be spent on debt servicing, but the ratio went up to 90 per cent due to the pile of debts that are due for servicing. 

She further disclosed that the government was under pressure to manage debt servicing due to the drop in revenue generation.

To meet its obligations to the citizens, the federal government will have to increase its revenue generation capacity and increase its tax net to capture viable businesses and rich individuals who are not paying taxes before. 

It also has to cut excessive government spending and prevent oil theft that now happens on a large scale.

One of the largest oil exploration companies in Nigeria, Shell Petroleum Development Company (SPDC) raised an alarm in August over the unprecedented crude oil theft, pipeline vandalism, and illegal refineries in the Niger Delta. The Minister of State Petroleum, Timipre Sylva also discloses that Nigeria is losing 400,000 barrels of oil per day to crude theft. 

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Economy

President Buhari to Present N19.76 Trillion 2023 Budget on Friday

Nigerian president, Muhammadu Buhari will present the N19.76 trillion 2023 budget to the joint National Assembly on Friday

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President Muhammadu Buhari - Investors King

Nigerian president, Muhammadu Buhari will present the N19.76 trillion 2023 budget to the joint National Assembly on Friday, according to Senate President Ahmad Lawan.

The Senate President disclosed this on Tuesday in Abuja, saying the presentation would take place at 10:00 am at the temporary chamber of the House of Representatives.

According to the details of the draft presented to the House of Representatives, crude oil was benchmarked at $70 a barrel while oil production was estimated at 1.69 million barrels per day (mbpd) for 2023.

The federal government projected the Naira-Dollar exchange rate at N435.57 despite the black market trading at over N700/US$. Also, it was forecasted that the inflation rate would moderate from the current 20.52% to 17.16% while the nation’s Gross Domestic Product (GDP) was pegged at 3.75%, slightly above 3.55% estimated for 2022.

“Growth is expected to moderate to 3.30% in 2024 before picking up to 3.46% in 2025.

“The inflation rate is projected to average 17.16% in 2023, up from the revised average of 16.11% for 2022.

“Upward pressure on prices is expected to be driven by the current and lag effect of the global price surge due to the Russian-Ukraine war, domestic insecurity, rising costs of imports, exchange rate depreciation, as well as other supply-side constraints.”

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Many Lagosians Risk Being Homeless as Cost of Rent Increases by Almost 40 Percent

The average rental price in Lagos State has increased between 20 per cent to 37.5 per cent depending on the location

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Housing - Investors King

The average rental price in Lagos State has increased between 20 per cent to 37.5 per cent depending on the location. 

Checks by Investors King showed that rental cost in Lagos State has been on an astronomical rise in the last two years. Houses in areas such as Lekki have increased by almost 40 per cent.  However, the increase of houses on the mainland is between 20 to 30 per cent.

Our correspondent gathered that several people living in Lagos spend at least 60 per cent of their annual income on rent. Unfortunately, the increase in house rent coupled with the rising inflation has significantly affected many Lagosians. 

Some of the landlords and rental agents which our correspondent spoke to blame the rising cost of rent on the increase in cement price, other building materials and construction costs. 

It could be recalled that cement price has risen from N2,450 in 2021 to N4,200 in 2022.

Our correspondent also learnt that the cost of land has also increased in almost all parts of Lagos States. In some places like Epe and Ajah, the increase was almost 100 per cent. 

The cost of a two-bedroom flat in Lekki is between N2.5 million to N3.5 million per annum.

In Ajah, it will cost between N1.5 million to N2.5 million.

Besides, some landlords and estate agents demand a rent of two years from tenants despite a law that prohibits such. 

Section 4 of the tenancy law of Lagos State 2011 prohibits an excess of more than 12 months as rent. Although there is punishment attached to any breach of this law as stated in section 5, Landlords nevertheless exploit the impetus of the house seekers because of the high demand. 

Section 5  stated that “Any person who receives or pays rent above what is prescribed in this Section shall be guilty of an offence and shall be liable on conviction to a fine of N100, 000 or to three (3) months imprisonment.”

Investors King further learnt that with the current state of the economy and the rising inflation which has limited the purchasing power of many, there could be an increase in the number of homeless people in Lagos State. 

It is therefore imperative for the government to look into the excesses of the shylock agents. Most importantly ameliorate the challenges to stop any menace that might come with the increase of homelessness in Lagos State. 

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FG Instructs DBN to Increase Funding Towards MSMES Following The Global And Domestic Disruptions

The federal government of Nigeria has directed the Development Bank of Nigeria (DBN) to step up its efforts to increase its funding for MSMEs.

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Global Banking - Investors King

The federal government of Nigeria has directed the Development Bank of Nigeria (DBN) to step up its efforts to increase its funding for MSMEs.

Following the impact of the Russian-Ukraine war that has disrupted business activities in different countries across the world, Micro Small and Medium Enterprises (MSMEs) during this period have continued to face increased difficulties.

Noting that MSMEs occupy a critical part of the Nigerian economy and contribute 48 percent to Nigeria’s GDP, the FG has demanded the DBN to expand its funding windows to provide affordable financing to a wider cross-section of MSMEs.

In a response to the demand of the federal government, the Managing Director of DBN Dr. Tony Okpanachi while speaking at DBN’s 3rd annual lecture series with the theme: “Thriving in the Face of Domestic and Global Disruptions”, assured that despite the adverse effect of domestic and global disruptions on MSMEs in Nigeria, the bank would continue to empower and drive the critical sub-sector of the economy to deploy innovative strategic solutions in the management of their businesses.

The Bank also assured of its continuous partnership with its Participating Financial Institutions (PFIs) to eliminate the financing constraints faced by MSMEs.

His words, “In Nigeria, we’re currently plagued with rising inflation of 20.52% (as of September 2022). We are as well afflicted with rising food and commodity prices, coupled with the rising and unstable exchange rates among others.

“The effects of Global disruption on international trade often come as a shock to businesses. These series of events have led to uncertainty and radical changes to companies’ well-established strategies across the globe and MSMEs are not exempted.

“The future of work is currently in a state of flux, with many old and new challenges hitting MSMEs particularly hard. Hence, Governments, corporate bodies, and individuals, mostly MSMEs must find ways to adapt to the changing times and the volatility of the market, deal with uncertainty, and figure out how to convert that into opportunities.”

The Development Bank of Nigeria (DBN) was conceived by the Federal Government of Nigeria (FGN) in collaboration with global development partners to address financing constraints faced by MSMEs and small Corporates in Nigeria.

The bank has successfully disbursed over N512 billion in loans to no less than 225,000 Micro, Small, and Medium Scale Enterprises (MSMEs) in Nigeria since it was established five years ago.

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