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President Buhari Spent N6.88tn on Subsidy in 7 Years

The present administration of President Muhammadu Buhari has spent N6.88 trillion to subsidise Premium Motor Spirit (PMS) otherwise known as petrol. 

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President Buhari - Investors King

In the last seven years, President Muhammadu Buhari has spent N6.88 trillion to subsidise Premium Motor Spirit (PMS) otherwise known as petrol. 

Introduced in 1973, fuel subsidy has been a bane of corruption and counter-production for several years which has necessitated the call for its removal by numerous economic experts and international institutions. 

Fuel subsidies often take a significant portion of the annual budget. In the 2023 budget proposal, Investors King reported that the Federal Government intends to spend a sum of N3.3 trillion on fuel subsidies between January and June 2023 while N6.72 trillion has been projected for fuel subsidy for a full calendar in 2023.

During an appearance at the House of Representatives, the Ministry for Finance, Budget and National Planning, Zainab Ahmed disclosed that the government’s projection for subsidy in 2023 was N6.72 trillion 

It could be observed that several other countries such as India which also implemented the fuel subsidy scheme as Nigeria have removed it years back. However, fuel subsidy in Nigeria on the other hand has been on the rise since when it was implemented.  

For instance, in 2015 when the present administration came on board, a sum of N316.7 billion was spent on fuel subsidy. Although there were significant decreases in 2016 and 2017, the figure, however, rose to N722.3 billion in 2018. 

Similarly, according to the figure obtained from NNPC, a sum of N1.43 trillion was spent on fuel subsidies in 2021. 

Additionally, from the beginning of 2022 to August, data showed that a sum of N2.565 trillion has been spent to subsidise fuel consumption in Nigeria. This is about 15 percent of the 2022 budget. 

Experts both within and outside the shores of the country have nonetheless continued to warn the Federal Government that the subsidy regime is unsustainable. They claimed it will only lead to more economic challenges, revenue shortage, and debt. 

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Economy

Abuja – Kaduna Train Service Postponed by Few Days to Sort Ticketing; Minister for Transportation

Resumption for Abuja to Kaduna train has been postponed due to the need to sort out ticketing

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Lagos-Ibadan Train Services - Investors King

The resumption date of the Abuja to Kaduna train has been postponed due to the need to sort out ticketing, the Minister of Transportation, Mu’azu Sambo disclosed this during a visit to the Rigasa train station ahead of the resumption.

According to the minister, the need to ensure that more security measures are put in place and booking tickets are sorted out necessitates the postponement.

The minister added that although he could not give a definite date for the resumption of the rail service, the resumption would however not be more than a week.

He disclosed that the ministry is 90 percent ready to commence operation along the route. 

“The federal government has introduced a new system of purchasing tickets. It is the beginning of security checks that will enable the government to ascertain who boards the train at every point in time.” the minister stated. 

Investors King earlier reported that Abuja to Kaduna train service will resume on Monday. 

The earlier scheduled date for the resumption follows the minister’s statement at the presidential briefing that the train service along the Abuja to Kaduna route will resume operation before the end of this month. 

It would be recalled that Abuja to Kaduna train service was suspended following the attack on the train on 28th March 2022 when terrorists planted explosives that derailed the train.

The attack led to the death of no less than nine passengers while 60 were abducted. 

They were however released in batches after spending several months with the terrorists. 

Muazu had on several occasions disclosed that service along the route will not resume until all those held in captivity have been released and better security measures put in place to prevent a recurrence. 

While fielding questions from journalists yesterday, the minister disclosed that the number of daily trips would be reduced, and the use of National Identity Number would be strictly requested as part of strategies to secure passengers.

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Economy

CBN Governor, Emefiele Projects Inflation Rate Will Drop Below 15% in 2023

CBN expects inflation to moderate in 2023

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Nigeria's Inflation Rate - Investors King

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has projected that Nigeria’s inflation rate will fall below 15 percent in 2023.

Emefiele disclosed this in a keynote address delivered at the annual Bankers Dinner Night of the Chartered Institute of Bankers of Nigeria.

According to the CBN governor, 2023 portrays a positive economic outlook for the country while the apex bank will continue to implement policies to curtail inflation. 

The CBN Governor also called on Nigerians to embrace the new naira notes, stressing that the decision to redesign the higher denomination notes is for a purpose that is in the overall interest of the country.

He added that the redesign policy will help control currency circulation and drive a cashless economy. 

“This policy will quicken the attainment of a cashless economy as it is complemented by increased minting of our eNaira. It will curtail currency outside the banking system and, as monetary policy becomes more efficacious, help to rein in inflation,” he noted

Emefiele also used the occasion to underscore the efforts of the central bank to maintain the stability of the exchange rates in 2022. He identifies oil theft as one of the major factors preventing the country from building a robust external reserve. 

While he acknowledged that the narrative might be the same for some time, he added that the forthcoming general election which has overheated the marketplace is another factor that is driving the exchange rate. 

Investors King understands that naira has greatly suffered against dollar and other strong foreign currencies including pounds and euro. 

In October, a Bloomberg report rated Nigeria’s currency as one of the worst-performing currency in the world. 

Meanwhile, the CBN has insisted on January 31st, 2023 as the deadline to phase out the current naira notes. 

The CBN governor reiterated the bank’s decision at the same venue of the annual Bankers Dinner Night of the Chartered Institute of Bankers of Nigeria held in Lagos. 

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Abuja to Kaduna Train Service to Resume on Monday, November 28, 2022

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Lagos-Ibadan Train Services - Investors King

Barring any last-minute change, Abuja to Kaduna train service is expected to resume operation on Monday, November 28, 2022.

This is coming after eight months when operation along the route was suspended due to a deadly terrorist attack on the train. 

It could be recalled that the attack which happened at night led to the death of no less than eight people while 168 passengers were kidnapped. 

Early this month, the minister of transportation, Mu’azu Sambo disclosed during a presidential briefing that Abuja to Kaduna train service will resume operation before the end of this month, Investors King learnt. 

Mu’azu noted that following the release of the last badge of those that were held hostage, the ministry has been putting security measures in place to forestall any future occurrence of such a sad experience.

Sources confirmed that contractors were at the Idu rail station to install the tracker and cameras which will enhance security along the train corridor. 

Speaking in the same line, the Managing Director of the Nigeria Railway Corporation, Fidet Okhiria disclosed that the government has set up a high-level committee that will fine-tune a way to ensure adequate security for both the train passengers and the facilities. 

“Government has set up a committee to ensure maximum security for both train passengers and facilities during operation. We believe proper security measures should be put in place and until then, the Federal Government won’t approve the functioning of the train station,” Okhira stated in September. 

Meanwhile, the federal government has stated that millions of Nigerians will soon prefer to travel by train as the government is committed to connecting virtually all states in Nigeria to the train services. 

The ministers of transportation who disclosed this during a working visit to the train station in Lagos State noted that the ministry has a number of ongoing rail projects which include Lagos to Kano, Port Harcourt-Maiduguri, and Kaduna to Kano.

He revealed that at the completion of the rail projects, it will be much easier for Nigeria to commute from one state to another. 

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