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Economy

Labour, Senate tackle Federal government over planned removal of oil subsidy.

— the whole arrangement is comical and queer—Ayuba Wabba

—We have no budgetary  provision for N5,000 monthly stipend for 40million Nigerians—Adeola Solomon

 

Eyewitness reporter

The Nigerian Senate and the Labour movement are set on a collision course with the Federal government over the planned removal of subsidy on Premium Motor Spirit(PMS) otherwise called petrol.

The Group Managing Director of the Nigerian National Petroleum Corporation(NNPC), Malam Mele Kyari, has said that petrol will be sold at between N320 to N340 per litre from early 2022 as the Federal government will exit the subsidy regime on petrol following the full deregulation of the downstream sector of the industry.

However, the Nigerian Labour Congress(NLC) has reiterated its rejection of what it described as ”deregulation based on import-driven model”.

In the press statement signed by the President of the NLC, Ayuba Wabba, the labour movement described the whole arrangement of subsidy removal and the planned palliative as ‘queer and comical” and a monologue of the federal government with neo-colonial powers.

“The response of the Nigeria Labour Congress is that what we are hearing is the conversation of the Federal government with neo-liberal international monetary institutions.

“The conversation between the government and the people of Nigeria, especially workers under the auspices of the trade union movement on the matter of fuel subsidy, was adjourned sine die so many months ago.

“Given the nationwide panic that has trailed the disclosure of the monologue within the corridors of government and foreign interests, the Nigeria Labour Congress wishes to posit that it continues to maintain its rejection of deregulation based on import driven model.

“It is difficult to convince Nigerian workers why our dear country is the only country among the OPEC member countries that cannot produce its own refined petroleum products and thus adopts the neo-liberal import production model of refined petroleum products.

“We wish to reiterate our persuasion that the only benefit of deregulation based on the import-driven model is that Nigerian consumers will infinitely continue to pay high prices for refined petroleum products.

“This situation will definitely be compounded by the astronomical devaluation of the naira, which currently goes for N560 to 1US$ in the parallel market.”

NLC said that any attempt to compare the price of petrol in Nigeria to other countries would be set on a faulty premise and such comparison would be like comparing apples with mangoes.

“The contemplation by the government to increase the price of petrol by more than 200 per cent is a perfect recipe for an aggravated pile of hyper-inflation and astronomical increase in the price of goods and services.

“This will open a wide door to unintended social consequences such as degeneration of the current insecurity crises and possibly citizens’ revolt. This is not an outcome that any sane Nigeria wishes for.

“The argument that the complete surrender of the price of petrol to market forces would normalise the curve of demand and supply as is being wrongly attributed to the current market realities with cooking gas, diesel, and kerosene is very obtuse.

“The truth is that these commodities which Nigeria can easily produce have been priced out of the reach of most Nigerian families with the majority of our people resorting to tree felling and charcoal for their energy needs.

“Finally, we wish to warn that the bait by the government to pay 40 million Nigerians N5000 as a palliative to cushion the effect of the astronomical increase in the price of petrol is comical, to say the least.

“The total amount involved in this queer initiative is far more than the money government claims to spend currently on fuel subsidy.

“Apart from our concerns on the transparency of the disbursement given previous experiences with such schemes, we are wondering if the government is not trying to rob Nigerians to pay Nigerians? Why pay me N5000 and then subject me to perpetual suffering?”

According to Congress, the government’s decision to remove the petrol subsidy is “cloudy”.

“Clearly, government thoughts on the so-called removal of fuel subsidy is cloudy and appears to be a ‘penny wise-pound foolish’ gamble.

“It is clear that the palliative offered by the government will not cure the cancer that will befall the mass of our people who suffer the double jeopardy of hype-inflation while their salaries remain fixed.

“As we had done several times, we call on the Federal Government to consider various options that can help Nigeria navigate out of the quagmire constructed by the failure of successive governments to embrace developmental governance and accountable leadership. Some of the viable options that can help include:

“Insulate the domestic consumers from the market pressure brought about by the free fall of the naira by arranging with contiguous refineries not far from Nigeria to swap crude oil with refined petroleum products;

“Accelerate work on the rehabilitation of Nigeria’s four major refineries which are all currently operating at near-zero installed capacity; and

“Establish empirical data on the quantity of refined petroleum products consumed daily by Nigerians.

“It is unfortunate that this record remains a myth and a huge crater for all manner of official sleaze and leakages in the downstream petroleum sub-sector of Nigeria’s oil and gas industry.”, the NLC declared in its reaction.

However, the Senate Committee on Finance has questioned the rationale behind the government palliative to cushion the effect of removal of subsidy.

It would be recalled that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the federal government will pay a N5000 monthly stipend to 40million vulnerable Nigerians to alleviate the impact of the subsidy removal.

But the Chairman of the Senate Committee on Finance, Adeola Olamilekan Solomon, said there was no provision for monthly N5000 transport grant to 40 million poor Nigerians in the 2022 budget currently being considered by the National Assembly.

He disclosed that the 2022 budget proposal contains fuel subsidy, but no provision for the proposed N5000 transport grant, which amounts to N2.4 trillion annually.

Solomon stated this while speaking with newsmen after presenting his panel’s report on the 2022 budget to the Appropriations Committee. He said before the executive could embark on such intervention, a proposal to that effect must be sent to the National Assembly for approval.

“The Minister of Finance, Budget and National Planning was quoted to have said that 40 million Nigerians would be paid N5000 as transportation allowance in lieu of the fuel subsidy.

”I don’t want to go into details for now. I believe that if such a proposal is to come to pass, a document to that effect must be sent to National Assembly for us to see how possible it is and how do we identify the 40 million Nigerians that are going to benefit.

”There are still a lot of issues to be deliberated upon and looked into if eventually, this will come to pass. How do we raise this money to pay these 40 million Nigerians because I know that even the federal government revenues are from this so-called oil and other sources.

”We don’t have anywhere in the budget where 40 million Nigerians will collect N5000 monthly as transportation allowance totalling N2.4 trillion.

”I know that there must be a budgetary provision for this for us (National Assembly) to consider. That is why I said it is still news out there until it is formally sent to the National Assembly for either a virement to the budget or reordering of the budget,”he said.

Mrs Zainab has claimed that the Federal government could no longer bear the burden of monthly subsidy payment of N250billion which translates to N3trillion annually but will pay N5000 monthly to 40million poor Nigerians which translates to N2.4 trillion yearly, a logic which the NLC described as queer.

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Economy

 Discos gross N2.4trn revenue in 5 years amidst power outage

The Electricity Distribution Companies (Discos) raked in a total of N2.4 trillion as revenue between 2015 and 2020, the National Bureau of Statistics (NBS) has revealed.

According to the NBS, revenue generated by the DisCos in 2015 stood at N278.89 billion and rose to N303.03 billion in 2016, showing an 8.65 percent growth rate.

Also, in 2017, revenue generated by the Discos increased by 22.25 percent to N370.46 billion and further rose by 19.48 percent in 2018 to N442.63 billion.

It further increased by 9.03 percent in 2019, to N482.61 billion as well as a sustained positive growth of 9.15 percent when N526.77 billion was collected in 2020.

The statistical agency disclosed this in its June Electricity Report which presents statistics on electricity from 2015 to 2020.

The report focuses on customer numbers, metered customers, estimated billing customers, and most importantly, electricity supply and revenue collected under the reviewed period.

In the 2020 revenue receipt, the highest collection was by Ibadan Electricity Distribution Company (IEDC) with N102.10 billion. It was closely followed by EKEDC with N81.39 billion while the least collection was recorded in YEDC with N10.64 billion.

Nonetheless, electricity supplied to customers during the period of the review showed an unstable trajectory.

The NBS stated that in 2015, 20,337.40 Gigawatt hours (GWh) were supplied across Nigeria. This fell by 6.36 percent in 2016, when 19,044.30 GWh were supplied. Also, it rose in 2017 by 2.04 percent with 19,432.39 GWh and further rose in 2018 by 10.55 percent with 21,483.25 GWh.

In total, electricity supplied in 2019 stood at 22,450.67 GWh but declined in 2020 by 1.82 percent when 22,042.28 GWh were supplied.

The NBS pointed out that customer numbers under the reviewed period increased successively on a year-on-year basis, with the highest numbers recorded in IBEDC.

Generally, customers numbers rose from 6.99 million in 2015 to 10.37 million in 2020.

Similarly, the number of metered customers increased consecutively on a year-on-year basis from 3.15 million in 2015 to 3.80 million in 2019 but declined to 3.51 million in 2020.

In 2015, Benin Electricity Distribution Company (BEDC) recorded the highest number, while IBEDC stood top between 2016 and 2019 while Abuja Electricity Distribution Company (AEDC) recorded the highest in 2020.

The NBS said the estimated billing customer records also showed a year-on-year positive growth rate consecutively from 3.85 million in 2015 to 6.86 million in 2020.

It added that in 2020, the customer numbers were highest in IBEDC with 1,282,136 and lowest in Eko Distribution Company (EKEDC) with 269,022.

The Statistician-General of the Federation, Mr. Adeyemi Adeniran, said: “Today, with the overwhelming global demand for energy and the emphasis positioned by the Sustainable Development Goal (7) on access to energy for all places the need for statistics on electricity as a form of energy.

“Thus, electricity statistics remain a very useful tool for socio-economic planning and development, particularly for a developing economy like Nigeria. These numbers will provide an insight and shape policymaking on improving energy, specifically the electricity supply in Nigeria.”

The report further stated that the trajectory of metered customers had shown annual positive growth rates consecutively except in 2020.

In 2015, metered customers were 3.15 million and rose slightly by 0.23 percent in 2016. This also increased in 2017 and 2018 with 3.57 million and 3.58 million customers respectively.

Metered customers in 2019 stood at 3.80 million, showing a 5.96 percent growth rate, yet lower in 2020 when 3.51 million customers were metered.

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Economy

AfCFTA Secretary-General allays fears of turning Nigeria into dumping ground

AfCFTA Sec.Gen, Wamkele Mene
Eyewitness reporter
The Secretary-General of the African Continental Free Trade Area(AfCFTA), Wamkele Mene, has allayed the fears of Nigeria over the possibility of being turned into a dumping ground for goods under the continental trade agreement.
Mr Mene, who stated this during the visit of the AfCFTA secretariat to Lagos ports Wednesday, said adequate measures have been built into the trade agreement to safeguard the country and other African nations from being turned into dumping grounds for foreign goods.
It could be recalled that it took Nigeria’s President, Mohammed Buhari to sign the trade agreement owing to fears being expressed by the government that Nigeria, as the biggest market in Africa, could easily be turned into a dumping ground under the continental trade agreement.
However, the AfCFTA scribe said though such fears are real, the agreement has taken care of its possibility.
He said the issue of dumping is a serious one but the agreement has given each country under the agreement powers to deal with the situation when it arises.
According to him, the agreement is intended to create jobs and not job losses, as dumping could lead to job losses.
“On the issue of dumping, it is a very very serious issue. This agreement is intended to create jobs, not job losses.

“So, we have to make sure that we are very vigilant against the transshipment of goods, against fraudulent invoicing.

” Any goods that are coming in that are not part of AFCTA, we should not hesitate to take action against such goods.
“That is why we are working closely with the customs authorities in Africa.

“In the agreement, there are rules: anti-dumping measures, all these rules are meant to protect domestic economies.

“If you see there is the importation of certain goods from certain countries, the agreement allows you to take action against those goods in that country.

“So we have built into the agreement safeguards to make sure that we minimize these.

“Fraudulent invoicing, and transshipment, like any other crimes, those things will always be there, the issue is to mitigate and make it difficult” Mr Mene declared.

He disclosed that in order to mitigate the issue of dumping, the AfCFTA secretariat is working closely with customs authorities in Africa to check against this menace.
“So we are working closely with the customs authorities, that is why we have hosted them in Accra, five times so that we can jointly together confront these challenges of the possibility of dumping of goods.

“What I always find interesting is that many times, we are willing to accept goods from a country whose name I would not mention that is not on this continent., substandard goods, goods that don’t meet our own requirements, these are the things we have to be vigilant against because it is not a Nigerian market, a Malian market, a Ghanian market, it is AFCTA market.

The AfCFTA chief said that dumping will not affect one county alone but the whole of Africa and that is why the secretariat viewed the issue with all seriousness.

“We are now creating one market, so if there is dumping in Nigeria, it impacts all of us. If it is dumped in another country, it imparts on all of us.

“So I really appreciate the sensitivity of this issue of dumping and I understand it.

“I mentioned in the previous session that in Southern Africa, there is a sugar that is being dumped from another part of the world that is being brought here, displacing the local market in Southern Africa, and creating job loss.

.”So we have to work together to make sure that we prevent this scourge of dumping” Mene stated.

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Economy

Auditor General indicts MTN  over evasion of Customs duty since 2021

 

—–as House of Reps knocks FIRS over operational infractions

The Office of the Auditor General of Federation has indicted the telecom giant, MTN, over evasion of payment of Customs duties since 2021.

This was contained in the 2019 queries issued by the office of the Auditor General of the Federation which was made available to the House of Representatives Committee on Public Accounts.
The committee also heard that the Federal Inland Revenue Service, (FIRS)  received capital allowances claims by taxpayers without the certificate of acceptance from the ministry of trade and industries in 2019.

Speaking at the resumed hearing of the investigations on queries issued by the office of the Auditor General of the Federation against the Ministries, Departments and Agencies, (MDAs) of the Federal Government, the Chairman of the committee Hon Oluwole Oluwole Oke, lamented the level of external borrowings by the federal government, saying that the committee’s probe of public funds was aimed at curtailing revenue leakages to boost government treasury.

His statement was coming against the backdrop of tax evasion by the telecom service provider, MTN whose current assets stand at N2.68 trillion in the country, yet does not have proof of customs duty over the years.

The lawmakers also decried the issuance of an assets certificate by the Ministry of Trade and investment to the telecommunication firm without first evaluating their assets.

Following the failure of the MTN representative to tender the relevant documents to buttress his position that the company was up to date, the committee resolved to write the Nigeria Customs Service, (NCS) to furnish it with relevant documents, including MTN duty permit so as to ascertain the total amount it owes government since 2001.

Hon Oke, therefore, directed the Clerk of the Committee to write to the Management of the Nigeria Customs Service on the financial indebtedness of the firm to the federal government.

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