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FG Alerts Nigerians on Possible Economic Recession, Says it Borrows to Import Fuel

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Zainab Ahmed Finance Minister

The Federal Government has alerted Nigerians on possible global economic recession this year, saying that there is already a reduction in growth owing to the impacts of the COVID-19 pandemic.

However, the Nigerian government said the nation’s foreign exchange reserves were healthy enough to withstand and wave through the consequences of the global economic crisis.

Fielding questions during an interview on national television where these disclosures were made, the Minister of Finance, Budget and National Planning, Zainab Ahmed, lamented that people’s spending power had already been weakened as a result of the pandemic and inflation globally.

Ahmed said some measures had been put in place to achieve the N10 trillion revenue target of the Federal Government, as projected in the 2023 budget, saying that the realisation of this would go a long way in making the nation pull through the anticipated recession.

“Clearly there is going to be a decline in growth. And why we are having this decline in growth because of the sustained economic impact of the COVID-19 pandemic.

“We’ve seen the resurgence of COVID-19 in some developed economies, especially China, and also the effect of the Russia-Ukraine war that is having a global impact.

“It is true that’s our reserves during the first global recession. Our reserves are now down to $34bn, and that is still a healthy level. It means we are able to meet at least six months of imports and other expenses into the country.

“It means we can withstand another global shock if we are able to carry through a coordinated response between the monetary, fiscal as well as trade authorities. We have learnt a lot from the experience that we went through during the COVID and it shows that when we plan well we can actually withstand the shocks,” she assured.

The minister noted that Nigeria’s economy experienced a recession during the COVID but it was a short-lived one because there was a coordinated response from government and private organizations.

She added that at the time Nigeria was battling the pandemic alongside other nations of the world, the country was able to manouver because it cut cost of governance and spending to enable it pump more funds in the healthcare sector.

Ahmed maintained that, “with the right policies, we can weather another global recession.”

Meanwhile, Ahmed disclosed that the Federal Government borrows funds to purchase petrol.

This revelation is coming as the country continues to incur rising fuel subsidy bills and the present government’s insistence on removing subsidy from the second quarter of this year through gradual approach.

To achieve this, Ahmed stated that government would be able to increase the revenue performance on the 2022 figure, as well as reduce the debt service to revenue ratio.

She said, “we also have to exit fuel subsidy, because that is also a very significant contributory factor. You can look at it in two ways – it is revenue that would have come to the government but it doesn’t because it has been spent on fuel subsidy.

“But also, where there is nothing for the government to buy the refined petroleum products, we have to borrow to buy the petroleum products. So if you take that out, that’s about N3.25tn, that is a significant relief.”

On whether it would be possible to stop the fuel subsidy regime in June this year, Ahmed said, “what will be safer is for the current administration, maybe at the beginning of the second quarter, to start removing the fuel subsidy.”

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Economy

Revoke Licences of Oil Marketers Involved in Petrol Hoarding, PENGASSAN Tells FG

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Petrol - Investors King

As prices of Premium Motor Spirit (PMS), otherwise known as petrol increase to N650 per litre in some major cities across the country, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has identified fuel hoarding by marketers as the cause of the price hike.

Another reason the petroleum union adduced for the increase in sales is the biting scarcity of petrol which it described as worsening in the nation’s capital city among others.

Proferring a way forward to the menace, the union asked the Federal Government to revoke the licenses of oil marketers involved in the hoarding of the commodity.

It noted that hoarding of petrol has been causing the crisis in the sector, explaining that the nationwide scarcity of the product has been partly responsible for hike in food prices, transportation fares among other items.

The association maintained that if drastic steps were not taken by the government at the centre, oll marketers would continue to hoard the commodity and sell at prices they seem okay.

While revealing that it monitored how the Nigerian National Petroleum Company Limited (NNPC) supplied the products to marketers and also following up with its members from the Nigerian Midstream and Downstream Petroleum Regulatory Authority in various depots and terminals, PENGASSAN promised to ensure that none of its members derails from their core ethical practices.

The union was of the opinion that there was no justification for petrol to sell for N650 per litre since the government has adjusted some parameters in the industry.

It lamented that the masses are being subjected to hardship with the inflated petrol and reiterated its call on the Federal Government to seize the operating licences of oil marketers who hoard fuel to frustrate the masses.

The submissions of PENGASSAN were contained in a statement co-signed by its President, Festus Osifo, and Secretary, Lumumba Okugbawa.

According to the association, some overbearing marketers have initiated some means of creating artificial scarcities in order to give way for inflation of the price of petrol uncontrollably.

Since data available to it from its members showed that there was over 30 days petrol sufficiency across the country, the association said there was no justification for the current scarcity and hardship that Nigerians were being subjected to.

The union called on the management of NMDPRA to compel all marketers and retailers to make the products available at approved prices and that they should monitor oil marketers for compliance.

If a retailer is found to have sold beyond the approved price or hoarded the commodity, PENGASSAN advocated for severe sanctions including revocation of licence to serve as a deterrent for others.

Recall that Investors King had reported that the Federal Government had recently announced that it was going to put up a 14-man steering committee on petroleum products to halt the prolonged scarcity of petrol.

It was gathered that the committee, chaired by President Muhammadu Buhari was yet to be functional as the government has not inaugurated it.

 

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Fuel Scarcity: Car Owners Abandon Vehicles as Nigerian Masses Stage Protest

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Petrol - Investors King

As the fuel scarcity bites harder across the country, vehicle owners have been abandoning their vehicles and opting for public transportation.

Investors King reports that some other Nigerians, especially civil servants have resigned to fate by trekking to work while others who could afford skyrocketing transport fares were moving around in public vehicles.

Findings across some states revealed that a litre of Premium Motor Spirit, popularly known as petrol, was being sold between N280 and N350.

This came as downstream petrol marketers have blamed the Nigerian National Petroleum Commission (NNPC) for only selling the petroleum products for private depots owners and ignoring retailers whose numerical strength outweighs that of the major marketers.

The scarcity is worsened because most filling stations were not operating while the few that are selling the product are struck with long queues, fighting and bribery.

At various Government Secretariats and other offices checked by Investors King, it was observed that the parking spaces were not filled with vehicles as it was usually done.

A civil servant who did not want his name mentioned lamented the fuel scarcity and hike in fuel price saying, “I have no choice than to keep my vehicle at home. My office doesn’t want to listen to excuse of wasting time at filing stations in search of fuel. So, I have to opt for public vehicle so that I won’t be sacked.”

Meanwhile, some aggrieved Nigerians have staged protests over fuel scarcity and the expensive prices of fuel and called on the Federal Government of Nigeria to find a lasting solution to the challenge.

The protesters blocked the Lagos Benin Expressway at Oluku Junction in expression of their displeasure, saying that hike in fuel is contributing negatively to skyrocketing prices of food items.

Many commuters and other road users were stranded during the demonstration as the busy road was totally blocked for hours.

“We can’t continue to experience this pain. We are tired. Government should find lasting solution to this issue. We are here just to let the world know that we are not happy and this fuel scarcity is really affecting us negatively. Enough is enough,” one of the protesters said.

There was no vehicular movement when the protesters, mostly youths, stormed the road.

Meanwhile, commercial motorists have been warned against steps they take in a bid to minimize the fuel consumption of their vehicles which could lead to loss of lives and property.

Speaking, the Executive Secretary, Office Of Transportation, Engr. Bilal Adiat said because petrol is scarce and expensive, hence commercial motorists are now improvising ways of reducing the fuel consumption of their vehicles so as to maximize profit.

Bilal said most of the steps taken by the commercial drivers are against the mechanical set-up of the vehicles which could lead to fire disaster and loss of lives and properties, urging for both motorists and Nigerians at large to be wary of the dangers inherent in keep fuel in gallons.

 

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Despite Nationwide Blackout, FG Reveals Discos Failed to Utilise 1,070.36MW

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power project

As major parts of Nigeria continue to complain of blackout, the Federal Government has revealed that Electricity utility firms otherwise known as the DisCos had a total of 1,070.36 megawatts unused between December 24 and December 30, 2022.

For most Nigerians, prolonged power outage they experience could be attributed to lack of sufficient megawatts within the reach of the power utility companies.

Discos had lamented low power supply from generating companies (GenCos), which they attributed the blackout to.

While blaming GenCos for the incessant drop in electricity supply, DisCos through a statement from Ikeja Electric said it has been shedding load owing to low power allocation.

The General Manager of the Corporate Communication Department, EKEDC, Godwin Idemudia, while apologising to customers, especially those affected by the power outage, lamented a sharp decrease from the electricity it gets from the grid, saying it was not enough to meet the demand of its customers.

Hence, the continued lamentation of electricity consumers who are at the receiving end of the excuses proffered.

But, contrary to the argument and excuse adduced by EKEDC, latest power utilisation data obtained from the Transmission Company of Nigeria, an agency of the Federal Government, revealed that the Discos did not utilise the over 1,070MW of electricity between December 24 and December 30, 2022.

Nigeria has 11 Discos including Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt and Yola.

Figures from TCN showed that there are electricity that utility firms were not releasing to electricity consumers.

On December 24, 2022, the figures showed that a total of 118.04MW of electricity was unused by Enugu, Ibadan and Port Harcourt Discos, while the eight other power distributors took and distributed excess load on that day.

Also, on December 25, nine power distributors obtained excess load allocation, but two others including Enugu and Ibadan, could not distribute a total of 93.73MW of electricity.

However, the next day, being December 26, the quantum of unutilised energy increased, as seven Discos, including Abuja, Benin, Enugu, Ibadan, Jos, Kano and Port Harcourt, failed to distribute a total of 198.82MW of electricity.

While four companies took excess load allocation, according to TCN’s data, six of the power firms were said to be unable to distribute 180.99MW of electricity on December 27, as the remaining five took excess load allocation.

The data further revealed that the six Discos that could not distribute the 180.99MW of electricity include Abuja, Enugu, Ibadan, Jos, Kano and Port Harcourt.

The transmission company further stated that five distribution companies comprising of Benin, Enugu, Ibadan, Jos and Port Harcourt, could not distribute 89.09MW of power on December 28.

TCN stated that five Discos accepted excess load allocation that was more than their maximum load nomination for that particular day.

 

 

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