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World Bank warns Nigeria about rising fuel subsidy

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says it could pose debts sustainability problem

Nigeria’s increasing fuel subsidy could pose debt sustainability issue for the country, the World Bank has said.

The bank made the observation in its latest ‘Africa’s Pulse’ report, a biannual analysis of the near-term regional macroeconomic outlook.

The National Assembly on Thursday approved the request of President Muhammadu Buhari of N4 trillion for petrol subsidy.

But the World Bank noted the rising cost of subsidies could also weaken the country’s public finance.

“Risk remains high on increasing fuel subsidies, which could weigh heavily on public finance and pose debt sustainability concerns,” the report said.

“Nevertheless, public debt as a percentage of GDP is currently moderate.”

The Washington-based institution added that the country’s soaring military spending and debt servicing costs could prey on the country’s debt sustainability level.

“Persistent fuel subsidies, increasing military spending for security purposes, and rising debt servicing costs weigh heavily on public finance to keep public debt at a sustainable level in Nigeria,” the report added.

“The fiscal balance deteriorated considerably in several Sub-Saharan African countries as governments scaled-up spending to mitigate the prolonged effects of the pandemic on firms and vulnerable households.”

On sub-Saharan Africa’s recovery, the bank noted that it is multi-speed, with wide variation across countries.

“The recovery of the three largest economies in the region — Nigeria, South Africa, and Angola — will continue to be sluggish,” it said.

“High oil prices will support growth in Nigeria and Angola.

“Excluding Angola, Nigeria, and South Africa, growth is projected at 4.1 per cent in 2022—higher than the growth of the region as a whole.

“Non-resource-rich countries are projected to be adversely affected by rising commodity prices, dragging down growth in the region.

“The opposite occurs with resource-rich countries whose growth would be propelled by favourable terms of trade.”

The bank further said the war in Ukraine would further improve the economic performance of resource-rich countries (especially their extractive sector) and decelerate the economic activity of non-resource-rich countries as their import bills soar.

“Given limited trade exposure, the impacts of the Russia-Ukraine conflict are expected to be negligible,” the bank added.

It projected a 2.7 per cent growth for Nigeria in 2022.

“Of the region’s three largest economies, South Africa’s growth is expected to decline by 2.8 percentage points in 2022, dragged by persistent structural constraints, while Angola and Nigeria are projected to continue with the momentum of 2021, up by 2.7 and 0.2 percentage points, respectively, thanks partly to elevated oil prices and good performance of the non-oil sector,” the bank said.

According to World Bank, growth in Nigeria is forecast to increase to 3.8 per cent in 2022 and stabilise at 4 per cent from 2023 to 2024.

It stated, “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 60 per cent of fiscal revenue, while oil and gas account for 80 to 90 per cent of total exports. Weak oil production, below the OPEC quota, held back the recovery process.

“Although at a slower pace than the average 7 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 Dangote refinery expected in 2023.”

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Dangote deploys technology to curb truck crashes, improve road safety

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Dangote deploys technology to curb truck crashes, improve road safety

Dangote Cement has stepped up the deployment of advanced safety technology and monitoring devices across its truck fleet as part of efforts to improve driver behaviour and reduce road crashes involving its vehicles.

The company said the technology, which enables real-time monitoring of its trucks and drivers, was being complemented by intensive driver training, strict safety protocols and incentives for accident-free driving.

The Head of Operations, Dangote Cement Ibese, Ogun State, David Idiege, disclosed this on Thursday at a press briefing on the company’s road safety measures, explaining that the initiative was designed to give the company greater control over what happens on the road.

With more than 4,000 trucks operating from the Ibese plant, Idiege said the company had invested in cameras and other state-of-the-art devices capable of monitoring its trucks in real time and helping to detect unsafe driving practices.

“That is why we have cameras in our trucks and state-of-the-art technologies that make us see in real time what is happening in any of our trucks at every material time,” he said.

According to him, the technology is particularly important in addressing practices such as speeding and proxy driving, where authorised drivers hand over trucks to unauthorised persons.

“Proxy driving, cases where our drivers give the truck to some other person to drive for them, and the company has stringent sanctions applied to any driver caught in proxy driving,” he said.

Idiege added that environmental factors, including bad weather, also contributed to some road incidents, making real-time monitoring and driver vigilance critical to the company’s safety strategy.

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Beyond technology, he said Dangote Cement was strengthening driver competence by using some of its best-performing drivers as safety ambassadors to train their colleagues.

“We also have a very good rewards system for those who drive diligently without getting involved in accidents. Aside from the rewards and certificates, we also bring those best drivers up to train their colleagues,” he said.

The company’s Head of Human Resources, Muhammed Al-Hassan, said driver development remained a key component of its road safety programme, stressing that only properly trained drivers were permitted to operate its trucks.

He said the company also encouraged safe driving through monthly and annual recognition of drivers who maintained accident-free records.

“For instance, a driver who has been driving without getting involved in accidents is rewarded monthly,” Al-Hassan said.

He added that at the company’s annual safety day, the driver with an outstanding accident-free record would be recognised as the “Safety Person of the Year” and rewarded in line with the organisation’s policies.

While the company maintains disciplinary measures for breaches of safety protocols, Al-Hassan said the broader objective was to ensure that drivers understood and complied with the organisation’s safety standards.

He disclosed that more than 250 drivers had faced sanctions for various safety violations between 2025 and 2026, but stressed that the company’s approach combined enforcement with training, monitoring and incentives.

Idiege also clarified that not every truck bearing the Dangote brand was currently under the company’s direct operational control.

He explained that some trucks previously owned by Dangote had been leased to customers and were now operated by those customers. According to him, trucks no longer managed by the company had been de-branded.

The company said the combination of smart monitoring devices, driver training, safety ambassadors, real-time surveillance and rewards for responsible driving was aimed at creating a stronger safety culture and reducing truck-related accidents on Nigerian roads.

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Fuel subsidy: FG records N20.4tn extra resources, spends N30.6tn, says Oyedele

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Fuel subsidy: FG records N20.4tn extra resources, spends N30.6tn, says Oyedele

The Federal Government generated about N20.4tn in additional resources from fuel subsidy removal and other fiscal reforms over the last three years, but spent N30.64tn on wages, debt servicing, infrastructure and electricity subsidies, the Minister of Finance, Taiwo Oyedele, has disclosed.

Oyedele gave the figures on Wednesday at a press conference, where he explained how the government had deployed the resources generated from the reforms introduced by President Bola Tinubu’s administration.

According to him, the removal of fuel subsidy resulted in N15.8tn in savings that accrued to the Federation Account and were shared among the three tiers of government.

He said the Federal Government received N5.43tn, states got N6.52tn, while local governments received N3.88tn from the subsidy savings.

The minister explained that the reforms also generated N3.12tn in incremental revenues, while the Federal Government raised an additional N11.85tn through borrowing.

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These, he said, brought the Federal Government’s total incremental resources during the period to approximately N20.4tn.

Oyedele, however, stressed that the subsidy removal did not translate into N20.4tn of cash available solely to the Federal Government, noting that a significant portion of the resources was shared among the different tiers of government.

“The Federal Government had approximately N20.4tn in incremental resources.

“Over the same period, additional expenditures amounted to approximately N30.64tn. Subsidy removal therefore did not create one large pool of cash available to the Federal Government. It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required,” he said.

Giving a breakdown of the additional expenditure, Oyedele said N9.39tn was spent on wage adjustments, while N9.37tn went into servicing external debt.

He added that N6.47tn was committed to infrastructure, while N3.14tn was spent on electricity subsidies.

The figures offer a clearer picture of the fiscal impact of the Tinubu administration’s decision to remove fuel subsidy, a policy announced in May 2023 shortly after the President assumed office.

The subsidy removal triggered a sharp increase in petrol prices, while the government’s subsequent liberalisation of the foreign exchange market also led to significant fluctuations in the value of the naira.

Oyedele’s explanation suggests that the savings from subsidy removal were used largely to ease fiscal pressures, support increased government spending and reduce the need for even higher borrowing, rather than providing the Federal Government with a single pool of funds for discretionary spending.

 

Fuel subsidy: FG records N20.4tn extra resources, spends N30.6tn, says Oyedele

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Electric Vehicles: Six-point blueprint to drive mass adoption, by Metropolitan CEO 

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Electric Vehicles: Six-point blueprint to drive mass adoption, by Metropolitan CEO 

Nigeria’s electric vehicle transition risks remaining trapped in a cycle of policy announcements unless government and industry move swiftly to turn existing incentives, infrastructure plans and regulations into a coordinated, bankable market, Metropolitan Electric Limited has warned.

The company’s Chief Executive Officer, Olugbenga Obadina, made the call at the 3rd Nigeria Auto Industry Summit, organised by the Nigeria Auto Journalists Association in conjunction with the National Automotive Design and Development Council in Lagos.

Obadina said Nigeria had reached a critical stage in its electric mobility journey, stressing that the immediate challenge was no longer the absence of policies but the failure to coordinate and execute them effectively across government agencies.

According to him, several building blocks for EV adoption are already in place, including the National Automotive Industry Development Plan 2023–2033, which targets a 30 per cent local EV production share and 40 per cent local content.

He also cited the zero-rating of VAT on EVs and semi-knocked-down assembly parts under the Nigeria Tax Act 2025 and the reported reduction of EV import duty from five per cent to zero under the 2026 Fiscal Policy Measures.

Other initiatives, he said, covered government EV procurement, charging infrastructure, standards, battery recycling and skills development.

However, Obadina warned that these measures would have limited impact if investors and operators continued to face uncertainty over tariffs, customs procedures, financing, charging permits and other regulatory requirements.

“The policy pieces are largely in place. What is needed now is to connect them, with coordination and execution across agencies,” he said.

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He added, “Investors price execution certainty, not policy intention.”

Six-point EV compact

To move Nigeria from growing EV interest to mass adoption, Metropolitan Electric proposed a six-point “Nigeria EV Compact”.

The first is the development of a stable 10-year EV roadmap under a single coordinating body with sufficient authority to align the activities of relevant government agencies.

The second is to create anchor demand by progressively increasing EV procurement quotas for government fleets and public transportation.

The company also recommended financing “kilometres, not cars” through a naira-denominated green-mobility facility, credit guarantees and multi-year leasing arrangements.

It called for charging infrastructure to be treated as regulated infrastructure, with standardised permits, defined service levels and transparent tariffs.

The fifth proposal is performance-based localisation, with incentives tied not just to vehicle assembly but to production, quality, job creation, components, research and development and exports.

The final recommendation is to strengthen consumer and investor confidence through technician certification, transparent warranty disclosure, battery-health standards and clear rules for battery disposal and end-of-life management.

Obadina stressed that the goal should not be permanent government subsidies but the creation of a market capable of attracting private finance, supporting local production and eventually competing without extraordinary government intervention.

“The objective is not permanent subsidy. It is a bankable market that scales, localises and eventually competes,” he said.

Put fleets before private cars

Obadina argued that Nigeria should avoid simply copying the private-car-led EV transition experienced in wealthier economies.

Instead, he urged policymakers to prioritise vehicles that cover high daily mileage, including buses, logistics vehicles, institutional fleets and two- and three-wheelers.

Such vehicles, he explained, can generate returns on vehicle and charging infrastructure investments faster because of their intensive utilisation.

He said charging infrastructure should therefore be planned around actual depots, routes and daily driving patterns rather than deployed without regard to vehicle utilisation.

Obadina pointed to Metropolitan Electric’s operations as evidence that electric mobility can work in Nigeria when the wider ecosystem is properly coordinated.

Since 2023, the company has supplied, deployed and maintained more than 200 EVs, with another 150 units ordered. It has also deployed more than 6MW of charging infrastructure and operates in Lagos, Abuja, Abeokuta, Port Harcourt and Kaduna.

The Metropolitan Electric boss challenged policymakers, investors and journalists to judge the country’s EV transition by actual performance rather than policy announcements.

He said stakeholders should track the number of EVs operating daily, cost per kilometre, charging uptime, warranty performance and who ultimately bears the risks associated with batteries, financing and recycling.

“Count what operates, not what is announced,” Obadina said, insisting that Nigeria’s EV future must be “engineered, assembled, financed, charged and maintained here.”

 

Electric Vehicles: Six-point blueprint to drive mass adoption, by Metropolitan CEO

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