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Fuel Subsidy May Hit N6trn in 2022, IMF Warns Nigeria

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By Derrick Bangura

IMF’s Resident Representative for Nigeria, Mr. Ari Aisen made these disclosures while presenting the latest Sub-Saharan Africa Regional Economic Outlook, in Abuja.

He also revealed that Nigeria received a total of $6.8 billion facilities from the IMF following the outbreak of the COVID-19 pandemic in 2020.

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According to him, Nigeria received $3.4 billion in Special Drawing Rights (SDR) and as well as a loan in the same amount.

The IMF chief expressed worry that many African countries, including Nigeria risk sliding into critical debt servicing problem unless urgent actions were explored to significantly raise revenue.

Aisen noted that over 80 per cent of the federal government’s revenue was committed to debt service, a situation he described as an “existential problem”

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“It is a reflection of low revenue. It is an existential issue for Nigeria. It is essential for macro-economic stability. It is important for the provision for social service,” he said.

Further x-raying the fiscal challenges, he regretted that as an oil exporter, Nigeria was not only unable to take advantage of the current global high oil prices to build reserves, but also confronted by low earnings due to the subsidy on petroleum products.

With N500 billion monthly fuel subsidy payouts, he noted that the country might end up with a record N6 trillion subsidy at by year-end.

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However, he raised optimism that the Dangote Refinery would reduce fuel importation when completed, thereby cutting down the subsidy burden.

Speaking on the economic outlook for the continent, the IMF official identified key priority areas as how to reduce debt vulnerabilities, balance inflation and growth; and manage foreign exchange rate pressures.

Aisen stated: “Unrivalled potential for renewable energy and an abundance of minerals, a successful transition offers opportunities for diversification and job creation; ensuring the green transition is also a just transition.”

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He also noted that fragile and conflict-affected African countries were at the risk of falling further behind in terms of development, especially now that the world economy was faced with an unprecedented high energy and food prices.

The Fund, he stressed, had done a lot to help to Sub-Saharan African countries, having given them the $23 billion Special Drawing Rights allocation and planning to re-channel additional $100 billion SDR from developed countries.

According to him, Africa needed $425 billion to recover from the COVID-19 pandemic. This was in addition to between $30 and $50 billion per year for climate adaptation and $6-10 billion annually for commodity import.

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Aisen further said: “I think the biggest critical aspect for Nigeria is that we have done a macro-fiscal stress test, and what you observe is the interest payments as a share of revenue and as you see us in terms of the baseline from the federal government of Nigeria, the revenue almost 100 per cent is projected by 2026 to be taken by debt service.

“So, the fiscal space or the amount of revenues that will be needed and this without considering any shock is that most of the revenues of the federal government are now in fact 89 per cent and it will continue if nothing is done to be taken by debt service.

“It is a reflection of the low revenue of the country. The country needs to mobilise more revenue to be able to have macroeconomic stability. It has become an existential issue for Nigeria.

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“The war in Europe is hunger in Sub-Saharan Africa and Africa. So, I think we should pay very close attention to this issue.”

He added: “In Sub Saharan Africa, Russia and Ukraine are first and the fifth major sources of wheat imports to Sub-Saharan Africa.

“So clearly having this conflict is the epicenter of the wheat-producing countries being hurt, which puts as we said, a big premium on the price of wheat. And it is especially complicated in Sub-Saharan Africa where we have 57 per cent of the population on moderate or severe food insecurity and this is extremely concerning for the IMF because after two years of the pandemic on top of these people already suffering, you have this extra shock affecting the price of basic food items in an already very vulnerable population is something of great concern to us.”

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Furthermore, he advised Nigeria to in the short-term to prioritise its debt, inflation, growth and foreign exchange management.

In his contribution, the Director-General of the Budget Office, Mr. Ben Akabueze, who disagreed with Aisen on Nigeria’s debt service/revenue figures, put debt service/revenue at 76 per cent.

He admitted that even at that level, it was way far too high, adding: “There is no doubt that the debt servicing –revenue is way beyond what we want it to be,” adding that the federal government had taken steps to significantly increase revenue.

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Akabueze stressed that additional revenue was the only choice before the government, assuring that the nation would not default in its debt service obligations.

He expressed regret that vested interests had made the removal of petrol subsidy very difficult over the years.

“When you try to remove subsidy or raise tariffs, you get summons, you see resolutions get passed, asking you not to,” he said

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According to Akabueze, when the executive arm of government prepared the 2022 budget, it was with the understanding that the petrol subsidy would be removed but that somehow, that move was frustrated.

In his remarks, the Director of Policy at the Central Bank of Nigeria, Dr. Hassan Mahmoud explained that the recent upward adjustment of the Monetary Policy Rate (MPR) was to ensure an environment in which the nation could still attract investors and to prevent capital outflows that could hurt the nation’s economy.

The United Nations Resident and Humanitarian Coordinator in Nigeria, Mr. Matthias Schmale, agreed with the food insecurity raised by the IMF representative, saying there was an urgent need to increase social safety net for the vulnerable population.

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He said: “By the way, our own analysis is that they are already 15 million people in acute need of food support in the country and that was before the Ukraine-Russia conflict and our prognosis right now is that this may rise to 19.5 million.

“Basically, all the 80 million who live below the poverty line in Nigeria are food insecure. So, the currently almost 50 million need help now. If we want to avoid serious damage to the house, and serious hunger, I mean, a few weeks or months. So there needs to be an element of social protection and direct support to these people.”

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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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