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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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Economy

Nigerians to groan under fresh fuel scarcity for another two weeks- Independent Petroleum Marketers

The Eyewitness Reporter 
The current fuel crisis in the country may not go anytime soon as the Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that the situation may likely persist for the next two weeks.
Speaking against the fresh fuel scarcity in the country, the IPMAN’s Public Relations Officer, Chinedu Ukadike disclosed that there is no petrol product available for supply in the country.
Ukadike, in a statement, said there is a breach in the international supply chain, adding that fuel is not available even for Nigeria’s sole supplier, the Nigerian National Petroleum Company Limited (NPCL).
This follows an ongoing turnaround maintenance of refineries in Europe.Ukadike explained that once there is a breach in the international supply chain, it will have an impact on domestic supply because they depend on imports.

“The situation is that there is no product. Once there is a lack of supply or inadequate supply, what you will see is scarcity and queues will emerge at filling stations.

“On the part of NNPCL, which is the sole supplier of petroleum products in Nigeria, they have attributed the challenge to logistics and vessel problems.

“Once there is a breach in the international supply chain, it will have an impact on domestic supply because we depend on imports.

” I also have it on good authority that most of the refineries in Europe are undergoing turnaround maintenance, so sourcing petroleum products has become a bit difficult.” IPMAN spokesman said.
According to him, “NNPC Group CEO has assured us that there will be improvement in the supply chain because their vessels are arriving”.“Once that is done, normalcy will return. This is because once the 30-day supply sufficiency is disrupted, it takes two to three months to restore it.

“We expect that by next week or so, NNPC should be able to restore supply and with another week, normalcy should return,” he said.

Ukadike further stated that “NNPC has said the marketers who have not been able to renew their licences will not be allowed to remain on their portal which has been shut for some time now.

” Because of this, we have not been able to request new products”.

 “At this nascent period of deregulation, you will discover that this leads to scarcity, even when the product arrives.

“As it is now, even by their data, out of 15,000 marketers that are on the portal with licences, only 1,050 renewed their licences.

“The requirement for renewal by NMDPRA is so much. Marketers are facing a hostile environment. NNPC placed a deadline of April 15, 2024, for marketers to renew their licences.

“We are, therefore, appealing to NNPC to extend this deadline and also to NMDPRA to hasten the release of licences of marketers who have completed their processes, and also reduce bottlenecks around licence renewals.”

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Economy

CBN sells $15.830m at N1.021 per dollar to 1,583 BDCs

CBN Governor, Olayemi Cardoso
The Eyewitness Reporter 
In its ongoing effort to ensure liquidity in the foreign exchange market which is expected to ease the pressure on the naira, the Central Bank of Nigeria (CBN) on Monday disbursed the sum of $15,830,000m to 1,583 licensed Bureau De Change Operators at $10, 000 each.
In a letter dated April 22nd, 2024 and addressed to the President of the Association of Bureau De Change Operators of Nigeria and signed by Dr Hassan Mahmud, the Director, Trade and Exchange Department of the CBN, the beneficiaries are mandated to sell allocated forex to eligible end users ” at a spread of not more than 1.5 percent above the purchase price.
The CBN said the sale of forex to the BDCs will meet market demand (retail-end) for invisible transactions.
The apex bank however advised all the BDCs to continue to abide by the rules and conditions as stipulated in the operational guidelines.
The beneficiary BDCs have trading locations at Lagos, Abuja, Akwa and Kano.
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Economy

News Alert! CBN revokes operational licenses of 4,173 Bureau De Change operators for breach of regulatory guidelines

CBN Governor, Olayemi Cardoso

The Eyewitness Reporter

In its continuous efforts to sanitize the foreign exchange market and halt the frightening slide of the naira in exchange for the dollars, the Central Bank of Nigeria has revoked the operational licenses of 1,173 Bureau De Change operators.

In a press release issued Friday, March 1st, 2024 and signed by Mrs. Sidi Ali Hakama, the Acting Director, Corporate Communications, the apex bank said the axed BDCs failed to observe at least one of the following regulatory provisions which include payment of all necessary fees, including license renewal within the stipulated period in line with the Guidelines, rendition of returns in line with the Guidelines, compliance with guideline, directives and circulars of the CBN, particularly Anti-Money Laundering(AML), countering the Financing of Terrorism(CFT)and Counter-Proliferation Financing(CPF) regulations.

The apex bank said it relied on the powers conferred on it under the Bank and Other Financial Institutions Act(BOFIA)2020, Act n0.5 and Revised Operational Guidelines for Bureaux De Change 2015(the Guidelines).

“The CBN is revising the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria. Compliance with the new requirements will be mandatory for all stakeholders in the sector when the revised guidelines become effective.

‘Members of the Public are hereby advised to take note and be guided accordingly”, the statement concluded.

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