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NECA, CIBN, MAN, Others Back Sanusi’s Call for Fuel Subsidy Removal

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  • NECA, CIBN, MAN, Others Back Sanusi’s Call for Fuel Subsidy Removal

Against the backdrop of the statement by the Emir of Kano, Mallam Muhammad Sanusi II, that the country was on the brink of bankruptcy, the Nigeria Employers’ Consultative Association and other stakeholders have asked the Federal Government to scrap fuel subsidy.

Sanusi, a former governor of the Central Bank of Nigeria, said on Tuesday that fuel and electricity subsidies as well as debt servicing had continued to eat into government revenue and urged President Muhammadu Buhari to stop the subsidy regime, which he described as fraudulent.

NECA, in its reaction to the Emir’s statement on Wednesday, described fuel subsidy as a conduit for corruption.

The Director-General, NECA, Mr Timothy Olawale, in a telephone interview with one of our correspondents, noted that the association had made its position known on the issue, arguing that the Federal Government should allow market forces to determine the fuel price.

“The fuel subsidy should be scrapped. This has always been the position of NECA. As far as we are concerned, fuel subsidy is a conduit for corruption. It is a means of enriching certain individuals. Such money going into fuel subsidy should be channelled into a productive sector of the economy and not consumption,” he said.

On the issue of debt servicing, the NECA boss described the situation where the FG was spending over 30 per cent of the budget on debt servicing as unsustainable.

“There will be little or nothing left for infrastructure, after recurrent expenditure must have been removed also. It portends a bleak future for the nation, and a burden for the generation yet unborn; it is like going into slavery. It is not sustainable,” Olawale added.

The President, Chartered Institute of Bankers of Nigeria, Dr Uche Olowu, also described fuel subsidy as unsustainable.

“But they (government) must find a way of how they can cushion the effect when they remove the subsidy. There will be pain in the short term. But in the long term, they will use the money from that subsidy to upgrade infrastructure that will encourage wealth creation activities, which will increase employment,” he said.

The Corporate Affairs Director, Manufacturers Association of Nigeria, Mr Ambrose Oruche, said the Organised Private Sector, which MAN belongs to, had taken a position on fuel subsidy in 2014, supporting the removal of fuel subsidy and saying that the money should be invested in infrastructure.

He told one of our correspondents that the body had yet to take a new official position on the current argument about subsidy removal and debt servicing.

The Centre for Social Justice said the continued retention of the fuel subsidy scheme would worsen the funding crisis currently facing the country.

The Lead Director, CSJ, Mr Eze Onyekpere, told one of our correspondents that the country’s revenue profile was not looking better.

“Continuing subsidies on petrol will compound our funding crisis. So, I support the Emir of Kano that the fuel subsidy should be removed because it is in line with what we have been talking about,” he said.

Onyekpere said there might be a critical challenge in the realisation of the revenue and funding needed to implement the 2019 budget.

This, according to him, is against the background of the revelation by the immediate past Minister of Finance, Mrs Zainab Ahmed, that only 55 per cent of the 2018 revenue projections were realised.

He said the revenue underperformance followed the trajectory in previous years where the Federal Government consistently failed to realise budgeted revenue.

Onyekpere said, “We are worried that despite the price of crude oil selling above the benchmark price in the last couple of years, we have hardly met the production target of 2.3 million barrels a day. The recent disclosure that the country produces less than two million barrels a day falls in line with the trajectory of this challenge.

“The dominance of oil in the revenue profile, as well as the relatively meagre revenue expected from the non-oil sector, compounds the revenue challenge. Increasing recurrent expenditure accruing from the increased public minimum wage will imply that we have to partly fund salaries with borrowed money which is not sustainable either in the short, medium or long term.”

He said proceeds from the solid minerals sector were still very low, despite overwhelming evidence of massive illegal mining, adding that revenue leakages from operating surpluses of agencies of government as well as non-remittance had yet to be fully addressed.

A professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Ogun State, Sheriffdeen Tella, said although the amount expended on fuel subsidy and debt servicing was huge, the country could not go bankrupt.

But he argued that development in some sectors would continue to suffer, saying debt servicing was becoming a big problem that the government must be concerned.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FG Plans to Build 10 New Airports in Anambra, Benue, Others – Aviation Minister

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Buhari in Port Harcourt

Aviation Minister Says FG Working on Building 10 New Airports

The Minister of Aviation, Hadi Sirika, on Tuesday, said the Federal Government plans to build 10 airports across the country to improve civil aviation.

The minister made the statement while defending his ministry’s 2021 budget proposals.

Sirika said President Muhammadu Buhari has done justice to the aviation ministry through the ongoing framework and implementation.

He said the administration would construct new airports in Anambra, Benue, Ekiti, Nasarawa, Ebonyi and Gombe States.

He further stated that airports in Kebbi, Osubi and Dutse have been taken over for redevelopment by the Federal Government.

Sirika said, “Consequent upon that roadmap, we have seen aviation grow in 2018 to become the second-fastest-growing sector of the economy.

“Also and by 2019, it became the fastest-growing sector of the economy and increased its GDP contribution.

“From 2015 till now, we’ve seen a lot of growth in civil aviation, the number of airports is increasing.

“So far, about seven airports have been added to the map, some of them completed, some of them under construction.

“There are airports coming up in Benue, Ebonyi, Ekiti, Lafia, Damaturu, Anambra and so on.

“All these show that civil aviation is growing during this administration.

“So, we have about 10 new airports coming up, that is almost half the number of airports we used to have in Nigeria.

“We are adding 50 per cent of the number of airports,” the minister added.

Sirika noted that Nigeria Air, the proposed national carrier, was part of the new roadmap and could be delivered before 2023.

He said, “We are on it. The transaction adviser has brought in the outline business case.

“It is being reviewed by Infrastructure Concession Regulatory Commission, Soon after it finishes, it will go to the Federal Executive Council and it will be approved.

“We will not leave this government without having it in place.”

He defended why Lokoja, Kogi State needs another airport, saying it is an alternative to the Nnamdi Azikiwe International Airport in Abuja.

He said, “Lokoja is an important northern town. It is a cosmopolitan town, it’s a mini Nigeria and it is extremely very important in growth and development of our country.

“We have a lot of agricultural activities there. There is fishery, there is perishable item production and so on.

“So, establishing an airport there is quite apt. For me, it is something we should have done long ago for its importance.”

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Economy

FG Says Over N6 Billion Disbursed to Poor Households in Zamfara

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Over N6 Billion Disbursed to Poor Households in Zamfara

The Federal Government said it has disbursed over N6 billion under the Conditional Cash Transfer (CCT) scheme to poor households in six out of the 14 local governments in Zamfara in 2020.

The Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar-Farouk disclosed this on Tuesday during the flag off of Grant for Rural Women Project in Gusau.

The minister said the CCT program was created in 2016 to address the deficiencies in capacity and lack of investment in human capital of poor and vulnerable households.

The programme is designed to deliver timely and accessible cash transfers to beneficiary households.

“And sets to support development objectives and priorities, to achieve improvement in health and nutrition, school enrolment and retention, environmental sanitation and empowerment among others,” she explained.

Umar-Faruk said a total of 130,000 beneficiaries from Anka, Bungudu, Birnin Magaji, Kaura Namoda, Tsafe, and Talata Mafara local government areas received between N30,000 to N80,000, depending on the dates the beneficiary enrolled in the programme.

Speaking on the grant for Rural Women, the minister said the programme was introduced to deepen the social inclusion agenda of President Buhari administration that includes lifting 100 million Nigerians out of poverty in 10 years.

It is designed to provide a one-off grant to some of the poorest and most vulnerable women in rural Nigeria.

“A grant of N20,000 will be disbursed to over 150,000 poor rural women across the 36 states of the federation,” she said.

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Economy

Delta State Gov Okowa Presents N378.48 Billion Budget for 2021

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Ifeanyi Okowa Presents N378.48 Billion Proposed Budget for 2021

The Executive Governor of Delta State, Senator (Dr) Ifeanyi Okowa, on Tuesday presented a N378.48 billion budget to the state’s House of Assembly for consideration for the 2021 fiscal year.

The budget christened “Budget of Recovery” appropriated N207.52 billion for Capital Expenditure while Recurrent Expenditure was allocated N171.32 billion.

According to the Governor, capital expenditure accounted for 54.76 percent of the budget while 45.24 percent represented recurrent expenditure.

He explained that the allocations were in line with his administration’s agenda of spending more on projects and programmes that would impact positively on the socio-economic well-being of the people of Delta.

The proposed budget for 2021 is N96.2 billion or 34.05 per cent more than the N282 billion approved for 2020.

The governor said that the 2021 budget proposals reinforced the state government’s commitment to road infrastructure, education, health, job and wealth creation programmes as the principal-drivers of the Stronger Delta agenda.

According to him, N113 billion, representing 89.94 per cent of the capital budget is allocated to the economic sector while N35 billion is allocated to the social sector; the administration sector got 10.93 billion and the regional sector, N42 billion.

“In 2021, we propose to spend N66.66 billion on Road Infrastructure; N6.79 billion on Health; Education will gulp N23.55 billion; Agriculture, N2.04 billion and Water Sector, N1.83 billion.

“Job and Wealth Creation Bureau will gulp N1 Billion and Youth Development, N1.25 billion. These key sectors are very essential in our 2021 budget,” Okowa said.

Okowa also explained that due to the negative impact of COVID-19 on the economy and the world at large, government spending was significantly affected by the global pandemic and that Delta was no exception.

The governor, therefore, stated that “the proposed 2021 Budget for Delta is primarily focused on protecting and supporting our people in a COVID-19 environment, accelerating infrastructural renewal, incentivizing growth, enhancing job creation, engendering social inclusion and developing sustainably.

“Overall, the proposed 2021 Budget is predicated on inclusive economic growth that is sustainable and people-centred, with strengthening fiscal sustainability through increased efficiency in spending, improved revenue mobilization and debt sustainability.

“It also entails improving processes and systems in Public Financial Management, and Monitoring and Evaluation, to bolster better public sector service delivery.”

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