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World Bank Raises Concerns Over Fuel Subsidy

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The World Bank has said that increasing fuel subsidy puts the Nigerian economy at a high risk as subsidy payments could significantly impact public finance and pose debt sustainability concerns.
The Washington-based lender said this in a new biannual report known as Africa’s Pulse.
According to the bank, Nigeria is projected to have a 3.8per cent growth in 2022, adding that as an oil-dependent country, weak oil production hampers economic recovery.
It added that the increasing fuel subsidy poses a high risk to the country’s economic growth, despite the increase in oil prices.
The bank said, “Growth in Nigeria is forecast to increase to 3.8per cent in 2022 and stabilise at 4per cent in 2023-24. Real GDP growth was revised up by 1.2 percentage points for both periods compared with the previous forecast. Nigeria’s economy is still dependent on the oil sector. Oil-related revenue contributes 40 to 60per cent of fiscal revenue, while oil and gas account for 80 to 90per cent of total exports.
“Weak oil production, below the OPEC quota, held back the recovery process. Although at a slower pace than the average seven per cent during the boom period, growth prospects for the Nigerian economy are somewhat bright thanks to high oil prices coupled with reforms initiated by the passing of the Petroleum Industry Act and the completion of the DangoteRefinery expected in 2023.
“Risk remains high on increasing fuel subsidies, which could weigh heavily on public finance and pose debt sustainability concerns. Nevertheless, public debt as a percentage of GDP is currently moderate.”
According to the World Bank, the high level of oil prices will affect countries that are shielding the impact on their consumers through fuel subsidies, such as Nigeria and Ethiopia.
It added that the high cost of fuel subsidies, due to the increase in oil prices, may deteriorate the country’s fiscal balance.
In 2021, the Nigerian National Petroleum Company Limited said fuel subsidy gulped N1.43trillion, although there was no record for under-recovery in January.
The National Assembly has approved N4trillion as fuel subsidy bill for 2022, which is an increase of 179.72per cent over the previous year’s subsidy bill.
However, experts have warned the Federal Government that the N4trillion fuel subsidy bill would adversely affect the country’s economy.
The Country Director, World Bank, ShubhamChaudhuri, had said Nigeria’s decision to postpone the full deregulation of the downstream sector of the petroleum industry by 18 months might cost the country over N4trillion in subsidy payments on petrol in 2022.
The World Bank country director, however, noted that while the World Bank could come up with advice on subsidy removal, its role was certainly not to dictate as it had no ability to do such.
Chaudhuri said, “With economics, really, you are not meant to make a political decision. What you are meant to do is to lay out what are the cons and consequences of different decisions.
“So, that is what we are doing, we are just being very clear that this would come with a fiscal cost and the fiscal cost is the number, perhaps N4trillion this year.”
He said despite the fact that the price of oil had gone up; the rise in global crude oil prices was not helping Nigeria that much.
Industry figures seen on Sunday showed that the price of Brent, the crude against which Nigeria’s oil is priced, was $118.11 per barrel at 5.06pm Nigerian time, as it traded at the same rate the preceding day.

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FG Targets Production Of Locally Made Vehicles By Dec

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The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, has affirmed that Nigeria now has the capacity and materials to manufacture Made-In-Nigeria cars for local use and export.
With the enabling environment being provided by the government, she said manufacturers should be held responsible if the cars are not rolling out by December 2024.
Currently, Nigeria produces less than 10 per cent of the vehicles used in the country.
Last year, Nigeria’s vehicle assembling industry, estimated to be worth around N302billion, tanked to a new low due to increasing production costs and weakened demand for locally assembled automobiles.
According to the Manufacturers CEOs Confidence Index, activities of motor vehicles and miscellaneous assembly deteriorated further below the benchmark (50 points) from 48.6 to 46.7 points.
But speaking at the Automotive Component Manufacturers meeting in Abuja, she noted that the automobile industry is faced with both challenges and opportunities.
A statement issued last Friday by the Director of Information and Public Relations, Adebayo Thomas, said, “In a significant move aimed at fostering sustainable growth and development in Nigeria’s automobile industry, the Federal Government has issued a clarion call to all stakeholders, including manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem.
“The call comes as part of a broader strategy to enhance the sector’s contribution to the nation’s economy.”
Encouraging the stakeholders to key into the Nigerian Automotive Development Policy, the Minister said, “As far as we are concerned, the auto industry is now set to go.
“We are counting on all stakeholders to make that happen. If we do not produce made-in-Nigeria cars before the end of this year (December), it will be your fault, because I am sitting down here giving you all the assurances that this administration has created the enabling environment to make sure that the auto policy kicks off.”
Anite emphasised the need for collaboration among manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem, saying by working together, they can address challenges, streamline processes, and drive innovation.
She also urged stakeholders to maintain high-quality standards across the board, including vehicle manufacturing, safety features, emissions control, and after-sales services.
Stringent adherence to quality, she said, will boost consumer confidence and attract investment.
The minister assured all that the government would continue to encourage increased investment in research and development, adding that, innovations in electric vehicles, fuel efficiency, and alternative energy sources are critical for long-term sustainability.
On local content, she also emphasised the importance of promoting local content by sourcing materials and components locally.
By doing this, she said, the sector can create jobs, reduce import dependency, and contribute to economic diversification
In his introductory comments, the ministry’s Permanent Secretary, Nura Rimi, emphasised the significance of team action and shared vision as outlined in the Nigerian Automotive Development Policy.
He also urged stakeholders that the country “will overcome obstacles and unleash the full potential of Nigeria’s automotive component sector.”
He encouraged NADDC and other stakeholders to use the chance to form alliances, explore new areas of collaboration, and devise ways to catapult the automotive components manufacturing industry to new heights of success.
The statement added, “The government’s charge underscores the pivotal role stakeholders play in shaping its trajectory. Their commitment to sustainable practices will drive Nigeria’s automotive sector towards a brighter and more prosperous future.
“Environmental Responsibility: Stakeholders are reminded of their environmental responsibilities. Sustainable practices, recycling, and eco-friendly manufacturing processes are essential for a greener future.”

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Waive Tax On Electronic Imports, Women Engineers Appeal To Tinubu

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The Association of Professional Women Engineers of Nigeria (APWEN), Lagos Chapter, has called on President Bola Tinubu to exempt the importation of electronic components from taxation for inventive engineers.
Chairman of APWEN, Ms Atinuke Owolabi, said this a in statement yesterday in Lagos, in commenration of the 2024 World Creativity and Innovation Day, with the theme: “Step Out and Innovate”.
The Tide source reports that World Creativity and Innovation Day is a global UN Day, celebrated on April 21, to raise awareness about the importance of creativity and innovation in problem solving.
This is with respect to advancing the United Nations’ sustainable development goals, also known as the global goal.
Owolabi explained that such a measure would significantly enhance technological progress, support local innovators, and elevate Nigeria as a leading hub for innovation globally.
She stated that in a world marked by dynamic challenges and unprecedented opportunities, creativity and innovation stand as the driving forces behind progress and transformation.
According to her, women engineers recognise the critical role that innovation plays in shaping our societies and driving sustainable development.
”On this occasion, we affirm our commitment to fostering a culture of creativity and innovation within our organisation and the broader engineering community.
”Together, let us step out, innovate, and inspire the next generation of women engineers to reach even greater heights of achievement and impact.
”We believe that by stepping out of our comfort zones and embracing new ideas, technologies, and approaches, we can unlock innovative solutions to the complex challenges facing our world today,” she said.
According to her, the theme: ‘step out and innovate’, serves as a call to action for women engineers everywhere to break barriers, challenge conventions.
She noted that it would also pioneer groundbreaking solutions that would propel them toward a brighter and more sustainable future.
Owolabi disclosed that in celebration of the World Creativity Day, APWEN Lagos had inaugurated an artificial intelligence club tailored for female engineering students and young engineers.
She said that the proactive initiative aimed to inspire and equip young engineers with cutting-edge technological insights.
Th chairman said, “Additionally, we already have a 200-capacity hall to set up a resource, technology, and innovation hub to empower women and girls in engineering.
”This endeavour serves as a catalyst for encouraging aspiring female engineers to embrace innovation and stay abreast of emerging trends in the field.
”APWEN Lagos stands united in its dedication to promoting diversity, inclusivity, and excellence in engineering.
“We encourage all female engineers to seize this opportunity to unleash their creativity, explore new frontiers, and make an indelible mark on the world.”

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Pan-Igbo Group Hails Dangote Group For Reducing Diesel Price

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A pan-Igbo group, Ndigbo Unity Forum (NUF), has commended the Chairman of the Dangote Group, Alhaji Aliko Dangote, and his management for reducing the price of diesel from N1,600 to N,1000 per litre.
The Tide’s source reports that diesel is the major fuel used by heavy duty vehicles and generating sets to transport goods as well as run industries across the country.
The President of NUF, Mr Augustine Chukwudum, told The Tide’s source in Enugu, yesterday, that Dangote’s timely response to suffering masses of Nigerians, going through hell to get a meal a day, “is highly commendable”.
According to Chukwudum, Nigerians need to appreciate the patriotism of Dangote since what he has done will go a long way in reducing prices of goods, especially food stuff which has gone out of the reach of the poor.
He called on Nigerians, who wish and pray always for the betterment of the country, to appreciate and thank God for answering their prayer through Dangote’s move.
“It is clear that if Dangote Refinery starts fully and gets all the crude oil needed from Nigeria, the prices of petrol, kerosene and diesel will further reduce.
“We commend President Bola Tinubu for being a listening President and supporting the Dangote Group on our crude oil needs.
“We appeal to Tinubu to encourage Dangote by providing the company with crude oil at a reduced rate as we have been demanding,” he said.
Chukwudum said that this move and subsequent further reduction, would bring industries in comatose back to life, jobs created for unemployed youths and reduction in crime as well.
“We call on governors of oil-producing Anambra, Imo and Abia States to bring investors, who shall build refineries in each of the states to refine thousands of barrels of crude in commercial quantities,” he said.

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