Business

2017 Budget: Experts Laud FG’s New Exchange Rate Benchmark

Published

7 years ago

December 19, 2016

Some financial experts
have commended the Federal Government for using a more realistic exchange rate of N305 to the earlier proposed N290 per dollar for the 2017 budget estimates.
The Tide source last Thursday in Lagos said that the proposed exchange rate of N305 was more realistic given the developments at the foreign exchange market.
Head of Banking and Finance Department, Nasarawa State University, Keffi, Dr Uche Uwaleke, said the 2017 budget proposals were based on realistic assumptions.
“The government should be commended for using a more realistic exchange rate of N305 to the dollar instead of the earlier N290 to the dollar provided for in the Medium Term Expenditure Framework,’’ Uwaleke said.
He also said the oil price benchmark of $42.5 per barrel was achievable given the OPEC agreements on production cuts.
According to him, the output projection of 2.2 million barrels per day is based on the optimism that the Federal Government will address the agitations in the Niger Delta region.
“It is gratifying to note that capital expenditure is not below 30 per cent of the budget size with power, works and housing taking the largest chunk.
“Equally laudable is that more attention will be given to foreign loans this time as opposed to domestic loans which are more expensive to service. I think it is a good document,’’ he said.
Uwaleke, however, noted that implementation remained the challenge of the budget, urging the National Assembly to work on its speedy assent and implementation.
He said that the budget outcomes and level of implementation would determine its impact on the stock market and the economy in general.
Uwaleke said the country’s foreign reserve position would improve if revenue targets were met, adding that naira would appreciate.
“Inflationary pressure on high exchange rate will abate, monetary policy will ease, interest rates will come down, production by firms will pick up, leading to jobs’ creation and stock market rebound,’’ he said.
Also, Prof Sheriffadeen Tella of the Department of Economics, Olabisi Onabanjo University in Ago-Iwoye, Ogun, said the proposed oil-benchmark price was appropriate.
Tella said the exchange rate and oil output were rather too optimistic as the exchange rate would still be affected by slow growth in foreign reserves and exports, speculative attacks and capital outflows through imports of raw materials.
He stated that the oil output would be negatively affected by low demand, improved output from the Middle-East’s shale oil and activities in the Niger-Delta region.
“All these will not make forex and oil export projection realisable unless we deliberately work against them.
“It is imperative that a large proportion of borrowing for domestic production must come from within while at the same time paying off existing domestic debt so that those owed can have money for reinvestment.
“The allocations to power, road and building look huge but inadequate unless most activities on road and power are done through public private partnerships which is the way to go,” Tella said.
He also called for a speedy passage of the budget for implementation to take off on time for multiplier effects to be felt by the beginning of the third quarter.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the proposed N7.3 trillion budget would have impact on the economy in 2017 with a review in government policies.
Omordion said that government should invest massively to drive economic diversification and productivity to take the economy out of recession.
“The benchmark of $42.5 is okay and achievable if crude oil price remains above $50 per barrel and the Niger Delta militants are settled to allow peace in the region and meet up with proposed output,” he said.
NAN reports that President Muhammadu Buhari on Dec. 14 presented a budget proposal of N7.30trillion for 2017 before a joint session of the National Assembly.
The President said N2.24 trillion, representing 30.7 per cent of the budget, would be committed to capital expenditure aimed at pulling the economy out of recession.
He said the capital expenditure was increased from N1.8 trillion in 2016 to N2.24 trillion in 2017.
The President also announced N2.98trillion as recurrent expenditure for the 2017 fiscal year.
He said, having reviewed the trends in the global oil industry, the government had decided to set a benchmark price of $42.5 per barrel and a production estimate of 2.2 million barrels per day for 2017 fiscal year.

Business

Fuel Scarcity: IPMAN threatens shutdown over bridging claims

Published

5 days ago

May 3, 2024

The Tide

The Independent Petroleum Marketers Association of Nigeria (IPMAN) Depot Chairmen Forum, has exonerated its members from the current fuel scarcity in the country.

According to IPMAN, this is caused by its inability to source petroleum products.

The IPMAN Depot Chairmen Forum also threatened to withdraw its services over non-payment of N200 billion bridging claims by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to its members, since 2022.

Alhaji Yahaya Alhassan, the Chairman, of the Forum said this while briefing newsmen in Abuja, yesterday.

Alhassan said the Nigerian National Petroleum Company Limited (NNPC Ltd.) was the sole importer of the product, but the marketers could not source products from NNPC Ltd. deport, rather from the private depots at high rate.

“We cannot buy fuel from the private depots at N950 and transport the product from Lagos to the North and other parts of the country with N2 million and still sell it at N900 or N1, 000.

“It is expedient for us to state that we are more pained by the non-availability of petroleum products in the country, which has given rise to another round of untold hardship for Nigerians.

“Contrary to claims that IPMAN members are hoarding Premium Motor Spirit (PMS) known as fuel, we would like to categorically state that PMS scarcity is wholly triggered by inability to get fuel from NNPC and not IPMAN,’’ he said.

Meanwhile, the NNPC Ltd. Chief Corporate Communications Officer, Olufemi Soneye said the disruption was due to logistical issues which had since been resolved.

“We currently have an availability of products exceeding 1.5 billion litres, which can last for at least 30 days. Unfortunately, we experienced a three-day disruption in distribution due to logistical issues, which has since been resolved.

“However, as you know, overcoming such disruptions typically requires double the amount of time to return to normal operations.

“Some folks are taking advantage of this situation to maximise profits. Thankfully, product scarcity has been minimal lately, but these folks might be exploiting the situation for unwarranted gain,’’ Soneye said.

He however, said the lines would clear out soon.

On the non-payment of bridging claims, the IPMAN forum said it was distressed and depressed by the laidback attitude of the NMDPRA towards the survival its member’s businesses, arising from its refusal in paying the claims.

“It is with deep frustration that we have assembled here today as the IPMAN Depot Chairmen Forum. It is also disheartening to note that some of our members have completely shut down businesses and retrenched employees.

“As businessmen and women, our members acquired bank loans to keep their fuel retail outlets running on a daily basis across the nooks and crannies of Nigeria in order to serve the teeming population of Nigerians,’’ Alhassan said.

He recalled that Sen. Heineken Lokpobiri, Minister of State Petroleum Resources (Oil), at a stakeholders meeting in February mandated the NMDPRA management to clear the entire debt in 40 days.

“However, today, we have crossed the 40 days’ time lapse given to the NMDPRA to clear the debt, and it is shameful to state that only the paltry sum of N13 billion has been paid, ignoring minister’s directive.

“We are not happy with the indiscriminate increment in the issuance and renewal of Sales and Storage Licence, by the NMDPRA, and the subsequent delays in acquiring the licence, which our members are recently subjected to.

“We are also calling on President Bola Tinubu to look into this unwholesome figure which is highly detrimental to our business and reverse it forthwith, as it is bound to impact negatively on the masses.

“We are poised to take far reaching decisions that may cripple the supply and sales of petroleum products across Nigeria if our demands are not met within the shortest period of time.

“We are collectively prepared to withdraw our services, shut down every single outlet, and suspend lifting of products forthwith till our demands are fully met, and the consequences will be terrible.

“We call on our members to however remain resolute and law abiding, even as we draw close to the immediate ultimatum for our demands to be met by the NMDPRA,’’ the chairman said.

Reacting to the IPMAN’s claims, the Acting Head, Corporate Communications, NMDPRA, Seiyefa Osanebi said the bridging claims payment was ongoing.

“The bridging claims payment is always an ongoing process,” she said.

Maritime

Shippers’ Council Registers 160 Port Operators

Published

1 week ago

April 29, 2024

The Tide

The Nigerian Shippers Council (NSC) says it has registered 160 Port stakeholders into its Regulated Port Service Provider and Users platform since the initiative began in 2023.
Executive Secretary, NSC, Mr Pius Akutah, made the disclosure on the sideline of a sensitisation programme by the commission for port operators in Lagos, with the theme, “Regulated Port Service Provider and Users”.
Represented by the Director, Consumer Affairs, Chief Cajetan Agu, Akutah emphasised the significance of the programme for stakeholders.
He said the sensitisation programme was the second edition after its commencement during the last quarter of 2023.
The Secretary said the 160 registered port operators consist of agencies, terminal operators, shipping companies, individual port users as well as service providers.
“We invited the ports stakeholders for enlightening them on the processes for online registration of Regulated Port Service Provider and Users.
“We have demonstrated to them how to register and how to make payment and we were able to present before them the various categories of the registration.
“The rate of payment is also in the registration. The payment of each group depends on the operation. A shipper pays N30,000, terminal operators and shipping companies pay N300,000, truckers also pay N30,000, while some pay N50,000 and N100,000.
“The Council was able to intimate them on the benefits, because port users benefit more as we help to interface on reducing port charges from time to time”, Akutah said.
He said that there was a need to continue to work with port operators to stop delays and eliminate high costs to make the port efficient.
Also speaking, the Deputy Director, Stakeholders, Service, NSC, Mr Celestine Akujobi, said “the sensitisation exercise was important for the council to enable us bring all the port stakeholders together”.
According to him, this is to avoid challenges during the implementation of the council’s responsibilities.
“By the time we introduce sanctions on defaulters, no operators will complain that he or she is not aware of the registration.
“I’m happy with the turnout of this sensitisation. This shows that the operators are well informed of the statutory friction of the council as the port regulator.
“The final implementation will commence as soon as we discover that all the operators have keyed into the portal.
“We are engaging other ports across the country and we’re hopeful that before the last quater of 2024, the council will implement sanctions on defaulting operators”, Akujobi said.
Earlier, Vice Chairman, National Association of Government Approved Freight Forwards (NAGAFF), Dr Ifeanyi Emoh, said port challenges were enormous, adding that they originated from some of the government agencies.

Emoh urged the council to look into regulating other government agencies, so that there could be a window through which they can collect port charges collectively instead of indiscriminately.

By: Chinedu Wosu