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Fuel Subsidy Causing Deterioration in Nigeria’s Fiscal Balance,IMF Says

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By Derrick Bangura

The International Monetary Fund (IMF) on Thursday maintained that prolonged payment of petrol subsidy in Nigeria was affecting the country’s fiscal balance despite revenue increase from rise in global oil price.

The Washington-based institution stated this in its latest Regional Economic Outlook for Sub-Saharan Africa titled: “A New Shock and Little Room to Maneuver,” released yesterday.
It stated: “Net commodity exporters can receive fiscal windfalls only if they contain subsidy expenditures. For example, some oil exporters provide expensive and generalised energy subsidies to the domestic population which could lead to a deterioration in fiscal balances despite the revenue increase associated with higher export prices in Nigeria.

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“Therefore, removing generalised subsidies is crucial to ensure that the rise in commodity prices generates fiscal savings. It is then essential that these savings are directed largely to strengthening fiscal sustainability supported by strong governance frameworks, given the precarious conditions faced by many countries.”
The fund reiterated that the country’s foreign exchange policy was weighing on its growth, distorting investment, encouraging rent seeking. It also noted uncertainties in the Nigerian economy.

The multilateral institution also pointed out that Nigeria’s growth was stronger than anticipated due to increase in manufacturing and agriculture.

“For countries with limited reserves, authorities have sometimes offered favorable rates, including to specific sectors. But the resulting parallel market for foreign exchange in Nigeria and Zimbabwe can weigh on growth distorting investment, encouraging rent seeking, and adding to uncertainty.

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“The decision to return to a more unified framework is often difficult, but experience suggests that the shift to a market-clearing official rate is not in itself likely to lead to a sharp increase in inflation, as prices in the real economy tend to reflect the less-favorable parallel exchange rate; and removing exchange-market distortions can give a substantial boost to development, by reducing uncertainty and strengthening competitiveness.

“In this regard, the exchange reform implemented in South Sudan last year prompted a significant appreciation of the parallel market rate, helping to reduce inflation and insulating the country from rising global food prices,” it added.

The report further reiterated that Nigeria’s economic growth was expected to reach 3.4 percent in 2022, falling back to 2.9 per cent from 2024 onwards.

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It added: “Nigeria’s growth outlook has improved through higher oil prices and a stronger-than-anticipated recovery of manufacturing and agriculture. Growth is expected to reach 3.4 percent in 2022, falling back to 2.9 percent from 2024 onwards.

“The outlook is subject to high uncertainty associated with oil prices and financial conditions. Moreover, low vaccination rates, rising security risks, and elevated price pressures weigh negatively on the medium-term growth outlook. Diversification away from oil will be critical to raise growth potential sustainably and reduce volatility.”

On his part, the Director of the IMF’s African Department Abebe Aemro Selassie, while speaking on the report during a virtual media briefing at the ongoing IMF/World Bank spring meeting yesterday, noted that the recovery in sub-Saharan Africa picked up in the third quarter of 2021 and held up despite the onset of a fourth COVID-19 wave at the end of the year.

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He said Sub-Saharan Africa’s estimated growth in 2021 had been revised upward from 3.7 per cent to 4.5 per cent.
He said: “Higher oil prices may generate a windfall gain for the region’s 8 oil exporters. But for the other 37 countries, they will worsen trade imbalances and increase living costs.

“Indeed, over the past couple of months we have increased our inflation projections significantly lifting the regional average for 2022 by a full four percentage points, and representing the worst outcome since 2008.
“This year, eleven countries will face double digit inflation; almost all of these have flexible exchange rates, and almost half of these are fragile.

“For most countries, the new crisis comes at an extremely difficult time as the COVID-19 pandemic enters its third year, fiscal and international buffers are already under strain, and policy space is limited.

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“Looking beyond the pandemic and current geopolitical tensions, creating jobs and meeting the Sustainable Development Goals will require strong, inclusive, and sustainable growth in sub-Saharan Africa.”

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NNPC Foundation Trains Over 3,000 Southwest Farmers in Climate-Smart Agriculture

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In a bid to promote food security and sustainable agricultural practices, the NNPC Foundation has successfully trained more than 3,000 farmers in the South-West geopolitical zone on climate-smart and modern farming techniques.

The training, which concluded on Friday in Ikorodu, Lagos, marked the end of the Southwest phase of the foundation’s pilot programme aimed at empowering local farmers and boosting agro-productivity.

Speaking at the closing ceremony, Managing Director of the NNPC Foundation, Mrs. Emmanuella Arukwe, described the initiative as a milestone in the lives of thousands of farmers.

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“Today marks the formal conclusion of the first phase of a national journey that speaks to resilience, food security, and economic empowerment,” Arukwe said.
“What began as a bold decision to support small holder farmers has translated into tangible action across three geopolitical zones (South-East, South-South, and South-West) in Southern Nigeria.”

She disclosed that a total of 3,860 vulnerable farmers across 10 locations in the three regions were trained in sustainable farming practices that improve productivity and market access.

“This achievement is not just a number, but a milestone in the lives of real people and real communities. We were able to strengthen farmers’ capacity to adapt to climate change,” she added.
“Through the training, we were able to improve access to markets, promote inclusive agriculture and especially gender representation. We also trained them on enhancing food production through sustainable techniques.”

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Arukwe noted that the programme would now move to the North-West, North-Central, and North-East zones as part of its next phase, saying the foundation is committed to supporting livelihoods nationwide.

“This is only Phase One. We will now turn our focus to the North-West, North-Central, and North-East zones. What we have achieved in the South will inform and strengthen our next steps,” she said.
“The NNPC Foundation will continue this mission, to support livelihoods, build resilience, and empower the hands that feed our families and beyond.
We have decided that most times you get a lot of requests from people asking us to give them palliatives and all kinds of things to help them.
But we think it is much better to teach people to fish than just give them fish so they can continue,” Arukwe explained.

Chairman of Ikorodu Local Government, Mr. Wasiu Adesina, while commending the initiative, urged the beneficiaries to apply the knowledge gained to boost productivity and profitability.

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“As we all know, agriculture is the bedrock of any nation. Without agriculture, there will not be a nation, because there will be no food to eat,” Adesina stated.
“It is the farmers that produce our food, and it is important that we train our farmers with new techniques in agriculture, and that is exactly what the NNPC Foundation is doing.

“To the farmers, you have to take advantage of this training and face the farming squarely. In some great countries like the United States and the United Kingdom, farmers are the most richest people in those countries.

“This is because they make a lot of money from farming. We need to inculcate that habit in Nigeria and develop ideas in farming. Even after my tenure, I am going back to farming, so, maybe I will ask the NNPC Foundation to train me so that I also join you to be a farmer.”

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He appealed to the foundation to provide further empowerment for the trained farmers to help them kickstart their agricultural ventures.

“If the farmers have land for farming, I believe the foundation will provide financial aid to keep their farms running,” Adesina added.

Also speaking at the event, the Lagos State Commissioner for Agriculture and Food Systems, Ms. Abisola Olusanya, represented by the Director of Fisheries, Mrs. Osunkoya Daisi, lauded the Foundation’s efforts in bolstering the state’s food security.

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“On behalf of the Lagos State Government, we would like to express our sincere appreciation to NNPC Foundation for training our farmers and for training all the farmers all over the country,” she said.
“Definitely, the training will help improve food production. We can see the impact of climate change effects in agriculture. I am sure farmers have been equipped with climate-smart agriculture techniques to improve production.”

The NNPC Foundation Ltd/Gte is the Corporate Social Responsibility (CSR) arm of the Nigerian National Petroleum Company (NNPC) Limited. It was incorporated in February 2023 to manage the company’s CSR initiatives and enhance Nigeria’s socio-economic development.

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Education

NUC grants ESUT full accreditation for Law, 7 other programmes

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The National Universities Commission, (NUC), has given full accreditation to the Enugu State University of Science and Technology (ESUT), for her Law programme.

According to the Public Relations Officer of ESUT, Mr Ikechukwu Ani, this is contained in a letter addressed to the institution’s Vice Chancellor, Prof. Aloysius Okolie, on Wednesday in Enugu by the NUC.

Ani said that in the letter, the Executive Secretary of NUC, Prof. Abdullahi Ribadu said the report was contained in the result of the October/November 2024 accreditation of academic programmes in Nigerian universities.

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Ani disclosed that other programmes in the institution accredited by the NUC include Master of Science in Business Management; Education Computer Science; Education Physics and Agricultural Engineering.

Other accredited programmes he said were Quantity Surveying; Urban and Regional Planning; and Applied Microbiology.

He said that the letter quoted Section 10 (1) of the Education National Minimum Standard and Establishment of Institutions, Act CAP E3, Laws of the Federation of Nigeria 2004 as empowering the NUC to lay down minimum academic standards for all academic programmes taught in Nigerian universities.

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He said the session also empowers the NUC to accredit such programmes.

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Crime

Court remands 2 over alleged attempted murder

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Court discharges man accused of burning father’s house in Abuja

An Ikeja Magistrates’ Court, Lagos, on Wednesday, remanded two persons, Olaitan Fasasi and Kehinde Tobiloba in a correctional facility over alleged attempted murder.

Fasasi, 40, and Tobiloba, 26, whose addresses were not provided, are being charged with conspiracy, attempted murder and membership of a secret society.

The Magistrate, Mr L.A Owolabi, did not take the plea of the defendants for want of jurisdiction.

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Owolabi directed the police to forward the case file to the Director of Public Prosecution for legal advice.

He thereafter adjourned the case until May 31 for mention.

The Prosecutor, Josephine Ikhayere, told the court that the defendants committed the offences at about 5.02p.m on Feb. 15, at Mushin, Lagos.

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She said that Fasasi, Tobiloba and others now at large, attempted to commit murder by shooting at a resident, Alfred Ademola.

“They armed themselves with a locally made gun. They belong to Eiye Confraternity, a group proscribed by law,”, she said.

Ikhayere said that the offences contravened Sections 230(1) and 411 of the Criminal Law of Lagos State, 2012.

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He said that the actions of the defendants also contravened Section 2(3)(a)(b)(c)(d) of the unlawful societies and Cultism Law of Lagos State Law.

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