The report that Nigerians may need to adjust their expectations ahead of possible removal of subsidy as the rising price of crude oil may push petrol price to N403 per litre is one of the trending stories in Nigerian newspapers on Friday.
The Guardian reports that Nigerians may need to adjust their expectations ahead of possible removal of subsidy as the rising price of crude oil may push Premium Motor Spirit (PMS), otherwise called petrol, to N403 per litre.
As at January 14, 2022, PMS pricing template was N403 per litre, making a subsidy differential of N241 on every litre sold in the country.
According to the estimate, petrol per litre is N349 from country of import but freight and landing cost push the figure to N384, while distribution margin and bridging fund in transport logistics further push the cost to N403.
The Nigeria Governors’ Forum (NGF) had in the early hours of yesterday, rose from a five-hour meeting with a resolution to initiate talks with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) on the proposed removal of subsidy on petrol.
As NLC, on Wednesday, mandated all states organs to intensify mobilisation for next Thursday’s nationwide protest against the Nigerian government over its proposed increase in the pump price of petrol, the National Economic Council (NEC) rose from its first meeting this year, in Abuja, disclosing that a decision on the removal of petrol subsidy will be made in June when the provision for its payment in the 2022 budget expires.
While crude oil price is currently selling for about $89 per barrel pushing landing cost and retail price to record high, the 36 governors are expected to convince labour and other Nigerians on the need to finally remove petrol subsidy in the next five months after the 2012 move failed.
The newspaper says that Nigeria’s former Head of State, Gen. Abdulsalami Abubakar (rtd), has warned that the soaring hardship in the country might result into another nationwide conflagration, worse than the 2020 #EndSARS protests against police brutality.
He cautioned the Federal Government against increasing pump price of fuel, saying a rise in petrol price now will push more Nigerians deeper into poverty.
Abdusalami, who ruled Nigeria between 1998 and 1999, said this, yesterday, at the 19th Daily Trust Dialogue with the theme: ‘2023: The Politics, Economy and Security.’
While noting that the past three months had seen an improvement in economic growth rates and inflation, Abdulsalami, however, said the impact of these numbers on the lives and wellbeing of the ordinary Nigerian is suspect.
“These have disrupted the fragile value chains across the country and negatively impacted the ability of Nigerians to produce, process and distribute food. The result is a continuing rise in prices of food items beyond the reach of many families.
“On top of all these, fuel prices are expected to rise significantly in the coming months as announced last November. When this happens, as the government has planned, it will push many millions deeper into poverty.
“Young people and women are the demographic groups most affected by the country’s dire economic outlook. For example, estimates by the National Bureau of Statistics (NBS) shows that while the national unemployment rate stood at 33 per cent by the end of 2020, unemployment for young people between ages 15 and 34 years was 10 per cent higher at 42.5 per cent.
He said unemployment and underemployment remain at record levels, adding that over 80 million Nigerians are still caught up in needless poverty.
He said: “All of these tend to have negative effects on security. In fact, Nigeria now faces a food security crisis that is compounded by COVID-19 pandemic and banditry in many states in northern Nigeria.”
ThisDay reports that the National Economic Council (NEC) yesterday allayed fears of Nigerians about the possible removal of fuel subsidy early in 2022, saying the policy would remain for now. It, however, did not rule out the possibility of the subsidy being removed before the end of this year.
These formed part of the resolutions of NEC at its maiden meeting in 2022 held at the Conference Hall of the State House, Abuja, with Vice President Yemi Osinbajo presiding.
NEC which meets monthly is constitutionally empowered to advise the president on nation’s economic matters.
The federal government had disclosed plan to phase out the fuel subsidy regime by the second half of this year.
The World Bank had also last November sounded the alarm bells to Nigeria, saying further delay in removing the fuel subsidy which had been described as a major drain and waste on the economy could see the federal and state governments unable to pay salaries this year.
But a member of President Muhammadu Buhari’s Economic Advisory Council, Mr. Bismarck Rewane, recently warned that some of the economic reforms outlined by the federal government in 2022, especially the fuel subsidy removal, may be hampered by political considerations and labour union activities.
The Punch says that the International Monetary Fund has said it is set to launch a $50bn trust fund for low-income and vulnerable middle-income countries to help them build resilience to balance of payments shocks and set them on the path to sustainable recovery before the end of 2022.
The IMF disclosed this in a blog post titled, ‘A New Trust to Help Countries Build Resilience and Sustainability’ published on Thursday.
It said, “A proposed $50bn trust fund could help low-income and vulnerable middle-income countries build resilience to balance of payments shocks and ensure a sustainable recovery.
“Even as countries continue to battle COVID-19, it is crucial not to overlook the longer-term challenge of transforming economies to become more resilient to shocks and achieve sustainable and inclusive growth.”
According to the Washington-based lender, the pandemic and climate change are challenges threatening macroeconomic stability and growth, and have a potential for future balance of payments problems. It said these global public policy challenges are the shared responsibility of individual countries and the international community.
The IMF said it was considering how to channel some of the $650bn SDRs it issued in August from countries with strong external financial positions to vulnerable countries through a Resilience and Sustainability Trust.
The newspaper reports that the Federal Government has called on the Nigerian private sector to maximise the African Continental Free Trade Agreement.
The Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, made the call on Thursday at the Lighting of the Africa Trade Torch organised by the African Business Council in Cairo.
He said the participation of the private sector would be vital in birthing the goals of the AfCFTA.
He said, “I strongly believe that there can be no AfCFTA without the full participation of the private sector, as the key driver of economies within the continent and beyond.
Thus, the private sector has the sole power to operationalise the agreement. “However, the effects of the AfCFTA on economic and social transformation depends on the degree to which the private sector can seize the opportunities the agreement provides, i.e., make African economies more competitive and enable development and elevation of regional value chains with a focus on SMEs,” he said.
Citing a report by PwC, the minister said SMEs in Nigeria contribute about 48 per cent of the Gross Domestic Product, and account for about 96 per cent of businesses and 84 per cent of employment opportunities within the country.
GIK/APA