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Economy

CBN lifts Dangote Refinery, Fertiliser plants with N100billion intervenation fund. —-to save Nigeria 41% forex on fuel importation in 2022.

Tunde Ayodele

The Central Bank of Nigeria(CBN) may have committed  a whooping sum of N100billion to the multi- billion  dollars Dangote petrochemical and fertiliser plants as an intervention funds.

This was disclosed by Mr Godwin Emefiele, the Governor of the apex bank while on a guided tour of the project in Lagos.
He promised  that the CBN was willing to offer similar  assistance to such landmark projects  capable of impacting on the Nigerian economy .
“The CBN had given a N100 billion intervention to the projects and we are ready to support Nigerian businesses set up to uplift the country economically”, he declared.

Meanwhile,the $15billion oil refinery being constructed by Dangote Group is to save Nigeria from spending about 41 per cent of its foreign exchange on importation of petroleum products next year.

This is coming as the Federal government is thinking of removing fuel subsidy completely.
Government has been complaining it has been spending N120billion monthly to subsidise fuel in the country, saying  that petrol price will go up to N240 per litre.

According to the Central Bank of Nigeria (CBN), all costs associated with either demurrage from import, costs associated with freight would be totally eliminated when Dangote refinery becomes  operational in 2022.
It was gathered that based  on agreement with the Nigerian National Petroleum Corporation (NNPC) and the oil companies, the Dangote Refinery could  buy its crude in naira, refined it and produce it for Nigerians’ use in naira.
Already, there is hope that the refinery would be completed by the first quarter of 2022, thereby putting an end to the issue of petrol subsidy in the country.
To ensure the take -off of the project in 2022, the management of refinery has embarked on preparing young Nigerian graduates to take over the management of its 650,000 barrels per day single train refinery.
The company has already trained several Nigerian engineers in some of the world’s biggest refineries in India and other parts of the world to gain first-hand experience on how to manage a refinery of this magnitude.
The President of the Dangote Group, Aliko Dangote said in Lagos during the tour of the refinery by the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, that the country was blessed with great talents that were capable of running a refinery of this size if given the necessary encouragement.
He noted that the outbreak of the Corona Virus last year, which forced many expatriates out of the construction site, made it possible for the company to identify great talents that exist within the country.
Dangote  explained: “One thing that gladdens my heart is the young Nigerians we have trained to take over the operation of the Dangote Refinery. These young Nigerians are the ones that are going to run the refinery when it becomes operational.
“We want a situation whereby the operation of the refinery will be the sole responsibility of Nigerian graduates.
“We can start the process by bringing in team leaders to keep giving them that training they require to run a world class refinery. However, we will ensure that Nigerian engineers, welders and others are the ones running the refinery. We have created that capacity, human capacity, equipment capacity and every other thing to ensure the successful operation of the refinery by Nigerian engineers.”
Also, Dangote noted that while the refinery would serve Nigeria and other countries across the world, the fertiliser and petrochemicals plants were capable of generating $2.5 billion annually.
He said: “I will like to thank the President personally for helping us and assisting us in making sure that we are now back on track.
“At the tour, the CBN governor said that arrangement was in place to enable refinery sell refined crude to Nigeria in naira when it commences production.
Emefiele said: ”Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira. That is the element where foreign exchange saved for the country becomes very clear.
“We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.”
The CBN governor stressed that the refinery would make the price of Nigeria petroleum products cheaper in naira.
He added: “If we are lucky that what the refinery produces is more than we need locally,  you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency.”
“I am saying that by this time next year, our cost of import of petroleum products for petrochemicals or fertiliser will be saved, which will save Nigeria’s reserve.
“It will help us so that we can begin to focus on more important items that we cannot produce in Nigeria today.”
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Economy

Breaking: Tinubu sacks Emefiele as CBN Governor, appoints Cardoso, four other deputies

Dr. Olayemi Cardoso, New CBN Governor
The Eyewitness Reporter
The Federal government has finally decided the fate of the suspended governor of the Central Bank of Nigeria (CBN), Godwin Emefiele as President Bola Ahmed Tinubu has appointed Dr. Olayemi Cardoso as the substantive CBN governor.
Emefiele, who was suspended in June, has been charged to court, and since then, he is still being held by the Department of State Service (DSS).
However, in a statement signed by the President’s Special Adviser on Media and Publicity, Ajuri Ngelale, Friday,  the nomination of Cardozo with four other deputies was dependent on their confirmation by the Senate.

Cardoso is a former commissioner for budget and economic planning during the first term of Tinubu as the Lagos state governor Lagos.

“This directive is in conformity with Section 8 (1) of the Central Bank of Nigeria Act, 2007, which vests in the President of the Federal Republic of Nigeria, the authority to appoint the Governor and four Deputy Governors for the Central Bank of Nigeria, subject to confirmation by the Senate of the Federal Republic of Nigeria,”
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The statement is titled, ‘President Tinubu nominates new CBN governor and management team for senate screening and confirmation.’ ⁣
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Tinubu also approved the nomination of four new Deputy Governors of the Central Bank of Nigeria, for a term of five years at the first instance, pending their confirmation by the Senate.⁣

They include Mrs. Emem Usoro, Mr. Muhammad Dattijo, Mr. Philip Ikeazor, and Dr. Bala M. Bello.

“In line with President Bola Tinubu’s Renewed Hope agenda, the President expects the above-listed nominees to successfully implement critical reforms at the Central Bank of Nigeria, which will enhance the confidence of Nigerians and international partners in the restructuring of the Nigerian economy toward sustainable growth and prosperity for all,” the statement added

Dr. Yemi Cardoso is a financial and development expert with over thirty years of experience in the private, public and not-for-profit sectors.

His private sector experience includes an illustrious career with Citibank, Chase and Citizens International Bank.
He has served on the board of several leading companies including Texaco and Chevron Oil Plc.

He is a member of the Belgian-based Cities Alliance Think Tank which aims to shape and influence policy and decision-making on urban development in Africa and has strong relationships with key international donor agencies.

He has his first degree from the University of Aston, United Kingdom and his second degree from Harvard University, USA.

In 2017, he was awarded an honorary doctorate degree in business administration by his alma mater, Aston University, in recognition of “his outstanding contributions to business and society.

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Economy

Customs, 62 government agencies may lose revenue- collection functions to FIRS.

The Eyewitness Reporter
The Nigeria Customs Service is set to lose one of its critical functions of revenue collection to a sister agency, Federal Inland Revenue Service (FIRS).
This proposal was being touted by the Presidential Committee Tax Policy and Fiscal Reforms, which was set up Tuesday by President Bola Ahmed Tinubu.
Announcing the significant shift in revenue collection procedures of the federal government, Taiwo Oyedele, the Committee’s Chairman and a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), said that the Nigeria Customs Service and 62 other Ministries, Departments, and Agencies (MDAs) of the Federal Government will no longer directly collect revenue.
Oyedele, who was speaking on a current affairs program on Channel Television Wednesday, Sun Rise,
 said the responsibility for revenue collection for these MDAs will be transferred to the Federal Inland Revenue Service (FIRS) which is best suited for the purpose
Oyedele stated that Nigeria’s revenue collection from taxes is among the lowest globally, while the associated cost of collection remains disproportionately high.

 He emphasized that many MDAs, which were not originally designed for revenue collection, have been burdened with this task, diverting their focus from their core functions that are essential for economic facilitation.

“The objective is to enable organizations like Customs to concentrate on trade facilitation and border protection, and regulatory bodies like the Nigerian Communications Commission (NCC) to focus solely on telecommunications regulation.

” This realignment will enhance efficiency, decrease collection costs, and promote transparency in revenue management.”

He acknowledged that there might be resistance from stakeholders who currently benefit from the existing process, but underscored the committee’s intention to ensure that revenues are directed to the government as intended.

“Ironically, our cost of collection is one of the highest. And the reason for that is that we’ve got all manners of agencies. The Federal Government alone, we have 63 MDAs that were given revenue targets last year, no; actually in the 2023 budget,” he said.
“And two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy. Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.
“So, move those revenue collection functions to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.
“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly. It is also a way of holding ourselves to account as to how we spend the money we collect from the people.” declared Oyedele.
Stakeholders believed that asking the FIRS to take over the revenue collection function of the customs will mean posting the tax officials to the Ports, border posts and industrial areas where Customs normally collect these monies.
While lamenting the distortions in customs operations this innovation will cause, they also claimed it will further increase the cost of goods clearance at the ports.
Some other port operators also liken the proposed takeover of the revenue collection function of the customs by the FIRS to the time when a group of Accountants under the name of Professional Import Duty Administrators(PIDA) were brought into the port to collect revenue on behalf of the Customs.
The PIDA regime was introduced under the regime of the late maximum ruler, General Sani Abacha.
His then Finance Minister, Anthony Ani, an accountant, introduced the system before it was abolished by the government of  Olusegun Obasanjo.
It could be recalled that the economic team of President Tinubu had in recent times proposed the merger of the Customs with NIMASA and the FIRS, a proposal that may have been stood down due to the public outcry, especially from the maritime industry, against it.
It should also be recalled that the controversial  Customs Modernisation project is another assault on the revenue collection function of the service.
If the latest proposal sails through, the Customs will be restricted to its other two critical functions of trade facilitation and anti-smuggling operations.
It is yet to be seen if the government will defer to the proposal of the committee which was inaugurated by President Bola Tinubu on Tuesday and tasked with delivering tax reforms achievable in 30 days.
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Economy

Olawepo- Hashim foresees economic boom under Tinubu’s multi- pronged reform programmes

Mr. Gbenga Olawepo-Hashim,
 The Eyewitness Reporter

A stakeholder in Nigeria’s Energy Sector and a former Presidential Candidate, Mr. Gbenga Olawepo-Hashim, has predicted a phenomenal economic rebound in Nigeria owing to the current financial and economic reforms embarked on by the newly inaugurated administration of President Bola Ahmed Tinubu in the past one month.

The new administration, according to a report, inherited a floundering economy, with gross domestic product (GDP) growth rates for 2022 at 3.1 percent and for the first quarter of 2023 at 2.31 percent.

The 2022 trade surplus of only $2.85 billion dwindles in comparison to 2014’s $54.1 billion.

Also, Foreign Direct Investment (FDI) into Nigeria’s economy fell from $2.2 billion in 2014 to $0.47 billion in 2022, while budget deficit rose by 370.54 percent from 2016 to 2023.

Total public debt as of June 2013 was N7.93 trillion. It’s now at around N77 trillion.

But in the last one month, the President has announced two major economic reforms.

These include ending the debilitating petrol subsidies and the unification of the naira’s multiple exchange rates.

The petrol subsidies, experts agree, have strained Nigeria’s public accounts, contributing to a situation where higher global oil prices hurt, rather than help the economy.

Addressing journalists in Abuja, the nation’s capital on Monday, Olawepo-Hashim noted that the current policy reforms have eliminated distortions in the foreign exchange management on the one hand; and the removal of the corrupt system of oil subsidies on the other hand.

Before now, in Nigeria, there are four foreign exchange (FX) markets: the Interbank FX market, the Investors and Exporters (I&E) window, Bureau De Change (BDC) window, and the Small and Medium Enterprises (SME) window.

 However, due to the limited FX supply from exporters and foreign investors, the CBN played a significant role in supplying FX (in this case, USD) to these windows.

Olawepo-Hashim however stated that the policy to unify the exchange windows should have a long-term positive effect on foreign exchange rate and free flow of capital in the country while also yielding a positive impact due to increased confidence in the new government.

According to him, the removal of the subsidies regime in the pricing of Petroleum products is expected to lead to more investment in Mid and Downstream sub sectors of the oil and gas sectors with a net effect of the creation of value-added needed jobs.

He stressed that the new law on decentralization of electricity generation, transmission, and distribution, if properly implemented with concomitant policies, is capable of attracting about 300 billion US dollars over 5 to 7 years into the electricity sector from local and foreign financing sources.

Olawepo-Hashim equally explained that Nigeria per capital comparison with South Africa needs to generate, transmit and distribute about 200,000 MW of electricity, adding that “we can if we stay steadfast to needed reform.

 “Nigeria recorded that feat before with liberalization  of the telecom sector as she moved from a nation of 400,000 telephone lines in 1999 to a nation of 222 million active lines now.”

While stressing the importance of a naira exchange rate based on market indicators and informed projections to settle around 660 Naira to 1 US Dollar in the exchange market within the next 6 to 9 months, he urged the government to pay attention to immediate deployment of relevant social intervention programmes to cushion the effect of inflation on the burgeoning numbers of the poor.

He also emphasized that “our economic growth expectations must be inclusive and must not leave the majority of our people behind.

“It is a great season of hope and confidence for Nigeria. The nation is steadily on to an assured future as an economic powerhouse and great nation.”

Olawepo-Hashim argued that “Nigeria with the right policy mix will exceed the projection of Price Water Cooper that Nigeria will be the 9th largest economy in the world by 2050 adding that “we are capable of hitting the great economic Milestone predicted by PWC much earlier and climbing higher on the ladder.”

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