FG Orders Oil Marketers to Accept Cashless Payments, Deploys Security Agencies to Filing Stations
The Federal Government of Nigeria has expressed displeasure over reports that filling stations are reusing to accept mobile bank transfers and credit cards from customers buying their products.
It, therefore, ordered oil marketers across the country to desist from such attitude, saying that it was adding to the frustrations of citizens who have been battling scarcity in Nigeria.
To forestall the rejection of cashless transactions by petroleum products retailers, the Federal Government said it will deploy security agencies to filling stations across the country to enforce the use of Point of Sale machines and the acceptance of bank transfers at the various outlets.
Specifically, the government in a statement issued by General Manager, Corporate Communications and Stakeholders Management of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Kimchi Apollo in Abuja, directed all retail outlets to ensure the free use of POS and bank transfer for the sale of petroleum products to alleviate the suffering of customers.
Apollo said the failure of the oil marketers to embrace cashless policy is causing untold hardship for Nigerians at a time when all hands should be on deck to assist the government in the transition to the new naira.
According to the NMDPRA, it would work with law enforcement agencies to enforce the use of POS machines and acceptance of cash transfers at retail outlets, stressing that oil marketers who flout the directive would be dealt with.
He reassured Nigerians of the authority’s commitment to ensuring good quality service in the sale and distribution of petroleum products nationwide.
Investors King had reported that some Nigerians, especially vehicle owners have been turned back at some filling stations who refused to accept bank transfers nor use POS as means of payment.
Aside this, other traders who use POS for payments reportedly charge their customers more for receiving payment via alternative payment channels.
One of the affected individuals, who simply identified himself as Ayinla, informed Investors King how a food vendor in Osogbo, capital of Osun State debited him extra N500 after buying food worth N5,500 from the seller.
Ayinla said, “I went with my friends to the Ogo-Oluwa Area in Osogbo to eat at an eatery. After eating, we asked the woman selling the food to calculate our bill, she did and informed us it’s N5,500. I have her my ATM card to use on the POS she is having. When she gave me the machine for me to input my password, I saw she had dialled N6,000 as the money she wants to debit.
“Surprised, I asked her why the extra charge of N500, she said it was the charge of paying through POS. I was shocked. We started altercation and at the end of the day, we stopped her from extorting us. This is what many Nigerians now go through in the hands of greedy traders who want to exploit already frustrated Nigerians at this critical period,” he lamented.
Rivers State Customs Service Generates Over N54 Billion in Q1 2023
The Nigeria Customs Service, Area 2 Command in Onne, Rivers State realised N54.992 billion in revenue in the first (Q1) of 2023.
According to the Command Controller, Comptroller Baba Imam, this amount realised is part of the N336 billion revenue projected for 2023.
Imam revealed this information while addressing journalists in Onne, Eleme Local Government Area of Rivers State on Tuesday.
This represents an increase of N1.133 billion when compared to the amount generated in the first quarter of 2022.
Imam revealed that the command made several seizures, which he stated is a reflection of their commitment to facilitating only legitimate trade in accordance with extant laws.
The seizures included 24 containers carrying refined vegetable oil, two containers carrying 1,165 cartons of Analgin injection and fireworks, and one 20ft of machete that was detained on documentation grounds until an end-user certificate was provided.
The duty-paid value of the seized containers was N94,652,168.39 million, while the duty-paid value of the seized vegetable oil containers was N833,172,538.42.
Imam stated, “In revenue generation, the command was given a target of N336 billion as revenue target for 2023.
“As of today, the command has generated a total revenue of N54, 992,123, 687.15 billion which transits to 16.3 per cent of the target. When compared to the same period last year, the Command has an increase in revenue of N1,132, 925, 556.82bn.
“This figure was realized in spite of not having vessels berth in Onne Port for some time due to the election atmosphere. We look forward to a continuous rise in revenue generation in the coming months as we expect vessels to berth on our coastline within the next few weeks.”
Speaking further on the command’s anti-smuggling activities, he said within the past few weeks, there has been a lot of seizures.
“This is made visible with the display of a total number which comprises 26 seized containers and one detained container for violation or contraventions of various customs laws and breach of procedures as provided under the revised import prohibition guidelines Schedule 3 Article 4 of the Common External Tariff 2022-2026 as well as Section 46 paragraph (b), (d), (e), (f) and 169 of Customs and Excise Management.
“Twenty four containers laden with refined vegetable oil comprising a total of 24,860 gallons of 25 and 10 litres of La-Jonic vegetable oil. Also seized were other two containers laden with 1,165 cartons of Analgin injection and fireworks with other items.”
Return to Trade Surplus in 2022
By Coronation Merchant Bank Economic Research
The latest report from the National Bureau of Statistics (NBS) in its series on foreign trade in goods shows the total value of trade declined by -4.5% q/q to N11.7trn in Q4 ’22. This is the third consecutive q/q decline recorded. On a y/y basis, it rose marginally by 0.1%.
The total export value increased by 7.2% q/q to N6.4trn compared with N5.9trn recorded in Q3’22 while the import value declined by -15.5% q/q to N5.4trn from N6.3trn. The net result was a surplus of N996.8bn vs a deficit of -N409.4trn recorded in Q3 ‘22. Total trade as a percentage of nominal GDP (2022) stood at 5.9% in Q4 ’22 compared with 6.2% recorded in Q3 ’22.
For FY2022, the total value of trade was N52.4trn compared to N39.7trn recorded in FY2021. Total export value for FY2022 increased by 41.7% y/y to N26.8trn. Meanwhile, import value also increased by 22.7% y/y to N25.6trn in 2022 from N20.8trn recorded in 2021. The net result was a surplus of N1.2trn compared with a deficit of -N1.9trn recorded in FY2021. Total trade as a percentage of nominal GDP (2022) stood at 26.3% in 2022 vs 22.9% recorded in 2021, (using 2021 nominal GDP).
According to the NBS, most imports in Q4 ’22 originated from China (N1.4trn). This was followed by Belgium (N585.6bn), India (N368.9bn), Netherlands (N365.3bn), and the United States (N319.2bn). These five countries collectively accounted for 55.8% of the total imports in Q4 ’22. The value of imported manufactured products and oil-related products declined by -14.3% q/q and -18.2% q/q respectively.
Imported agricultural goods also declined by -13.3% q/q.
Imports from the Economic Community of West African States (ECOWAS) stood at N55.4bn in Q4 ‘22, accounting for 30.7% of total imports within the region. Regarding export destinations, Spain (N617.2bn) was the top exporting partner for Nigeria in Q4 ’22, followed by the Netherlands (N517.6bn), India (N490.4bn), France (N489.8bn) and Indonesia (N473.3bn). These five countries collectively accounted for 41.6% of the total exports in Q4 ’22.
Crude oil accounted for the largest share (77.8%) of total exports in Q4 ’22 and increased by 5.4% q/q to N4.9trn in Q4 ’22 compared with a decline of -21.2%q/q recorded in the previous quarter. The q/q increase in the value of total crude exported can be partly attributed to improved oil production due to the FGN’s recent efforts towards tackling crude oil theft and vandalism.
Based on data from the NBS, average crude oil production (condensates inclusive) in Q4 was 1.34mbpd compared with 1.20mbpd in the previous quarter and 1.50mbpd in Q4 ‘21. This is lower than the OPEC production quota for Nigeria pegged at 1.8mbpd and the FGN’s production benchmark of 1.7mbpd.
As for non-oil exports, superior quality cocoa beans, sesamum seeds, cashew nuts in shell, superior quality cocoa, other frozen shrimps and prawns, shelled cashew nuts, crude palm kernel oil, natural coca butter, ginger and soya beans featured as the top export commodities in Q4 ’22.
Nigeria exported goods worth N553.7bn to fellow members of the ECOWAS in Q4 ‘22, compared with N507.9bn in Q3 ’22. This represented 58.7% of total exports within Africa.
The most active port during the period was the Apapa Port. Goods worth N5.8trn exited the country through this port and accounted for 91% of total exports. Other ports widely used include Port Harcourt (N341.9bn) and Tin can Island (N159.3bn).
Global/Regional in focus
According to data from the World Trade Organization (WTO), merchandise trade increased by 13.4% y/y or USD1.5trn to USD12.8trn in Q3 ’22 compared with USD11.2trn recorded in the corresponding period of 2021. Meanwhile, on a q/q basis, total merchandise trade declined marginally by -0.9% reflecting disruptions in supply chains due to the impact from the ongoing Russian-Ukraine crisis and a slowdown in economic
activities on the back of global recession concerns triggered by rising inflation and monetary policy tightening in both advanced and emerging economies.
We understand that Russia has agreed to extend the Black Sea Grain deal for an additional 60 days (2 months) after uncertainties regarding the continuity of the initiative mounted as the original expiration date of 18 March ’23 drew near. According to data from the United Nations, c.24.1 million tonnes of grains (corn, wheat, barley, sunflower oil among others) have been exported through 1600 vessels to both advanced and emerging economies, highlighting the vital role that the Black Sea Initiative has played in promoting global food security.
Turning to China, merchandise exports to other countries increased by 6.6%q/q to USD970.6bn in Q3 ’22 compared with USD910.4bn recorded in Q2 ’22. We note that the Chinese authorities have phased out the zero-covid policy and reopened the economy. As evidenced by the growth recorded in China’s PMI (52.6 as at February ’23 vs 50.1 recorded in January ’23), the reopening is expected to spur economic activities and minimize production disruptions in the manufacturing sector.
US Central Bank Raises Interest Rates by 25 Basis Points Despite Bank Crisis
The Federal Reserve on Wednesday raised interest rates by 25 basis points to a range of 4.75% to 5% in the United States despite the recent collapse witnessed in the banking sector.
Two notable banks, Silicon Valley Bank and Signature Bank collapsed this month as high-interest rates and other economic challenges created by growing uncertainty in the sector forced them out of business.
At the Federal Open Market Committee (FOMC) meeting held on Wednesday, Federal Reserve Chair Jerome Powell explained that the nation’s financial conditions seem to have tightened more than benchmark indexes are showing.
“The traditional indexes are focused a lot on rates and equities, and they don’t necessarily capture lending conditions,” Powell said when asked what financial situation would warrant an interest rate cut, especially if credit conditions were to further tighten.
If tighter lending conditions are sustained, Powell acknowledged that could easily have a significant macroeconomic impact which would be factored into the Fed’s policy decisions.
“The question for us though is how significant will that be and what would be the extent of it and what would be the duration of it,” he said, adding that “rate cuts are not in our base case.”
In Nigeria, the story is not different as the Central Bank of Nigeria (CBN) led monetary policy committee raised the benchmark interest rate by 50 basis points to 18% despite the plunge in economic activities, increase in the unemployment rate and the drop in earnings across the board.
According to the CBN, the decision was based on the nation’s rising inflation rate, economic uncertainty and challenges of increasing capital importation to the economy.
Also, the expected removal of fuel subsidy was one of the reasons given for the increase. The apex explained the increase in pump price by about 100% would further bolster the already heightened inflation rate if not checked.
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