Business
IMF advises Nigeria to probe NNPC, fuel subsidy
The International Monetary Fund (IMF) has called for a probe of Nigerian National Petroleum Company’s details on fuel subsidy and its financial remittance to the federation.
It expressed concern over the volume of fuel consumption and tax write-offs by the NNPC.
IMF made the statement after it concluded its annual mission in Nigeria.
It stated, “Public finance is under stress with elevated fiscal deficits, high debt servicing costs and public debt projected to increase over the medium term.
“It leaves little fiscal room for vital social spending on education and health, where Nigeria fares poorly compared to peer countries in sub-Saharan Africa.
“Despite higher non-oil revenues relative to 2021, the General Government (GG) fiscal deficit is projected to widen to 6.2 percent of Gross Domestic Product (GDP) in 2022, mainly due to fuel subsidy costs. Without bolder revenue mobilization efforts, costly fuel subsidies and rising debt servicing costs will keep overall fiscal deficits above six per cent of GDP in the medium term raising public debt to about 43 per cent of GDP by 2027.”
It recommended strengthening of agriculture, saying in 10 years, about 25 million more jobs would be needed to employ the new labour market entrants.
The IMF also said it was worried about elevated inflation, fuel subsidies and foreign exchange crisis.
It said with the recent flooding, high fertiliser prices and other issues could become more entrenched impacting negatively both agricultural production and food prices in 2023.
Volatility in the parallel forex market and continued dependence on the CBN financing of the budget deficit could exacerbate price pressures, the IMF stated.
As an urgent step, the international body urged revenue mobilization and fuel subsidy reforms, and two other reforms to create fiscal savings of close to 6 percentage points of GDP during 2023-27 while also making room for higher social spending.
IMF urged Nigeria to remove fuel subsidy and address oil theft as the subsidy benefited the rich.
“As a near-term priority, the mission highlighted the urgent need to remove fuel subsidy fully and permanently, which disproportionately benefit the well-off, by mid-2023 as planned.”
“The government should also prioritise addressing oil thefts and governance issues in the oil sector to restore production to pre-pandemic levels.
“Nigeria must also step up tax administration reforms by automating tax, expand coverage, modernise customs operations and improve effectiveness of the State Internal Revenue Service’s administration of the Pay-As-You-Earn (PAYE) system, and strengthen inter-agency coordination and data sharing.”
IMF said Nigeria must adjust tax rates “to levels comparable to the average in the Economic Community of West African States (ECOWAS) as compliance improves. This includes further increasing the Value Added Tax (VAT) rate to 15 per cent by 2027 in steps while stop various VAT exemptions. Nigeria should also increase excise rates on alcoholic and tobacco products while broadening the base and cutting waivers.”
IMF also advised Nigeria to increase well-targeted social assistance which will reduce food insecurity and cushion the impact of high inflation and fuel subsidy removal on the poor.
Business
PH refinery: 200 trucks will load petroleum products daily, says Presidency
PH refinery: 200 trucks will load petroleum products daily, says Presidency
No fewer than 200 trucks are set to load petroleum products at the government-owned Port Harcourt Refinery, the presidency has said.
A presidential spokesperson, Sunday Dare, made this known in a statement through his official X handle on Tuesday.
Newstrends had reported that the Nigerian National Petroleum Company on Tuesday announced that Port Harcourt Refinery has resumed operations and crude oil processing after years of inactivity.
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Reacting, Dare said, “200 trucks are expected to load products daily from the refinery, Renewing the Hopes of Nigeria.”
He added that “the Port Harcourt refinery has two wings.
“The Old Refinery comes on stream today with an installed production capacity of 60, 000 barrels per day of crude oil.”
PH refinery: 200 trucks will load petroleum products daily, says Presidency
Business
Breaking: CBN increases interest rate to 27.50%
Breaking: CBN increases interest rate to 27.50%
The Central Bank of Nigeria (CBN) has raised the lending interest to 27.50 per cent from 27.25 per cent.
This latest increase in the Monetary Policy Rate came after a meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Monday and concluded Tuesday.
The Monetary Policy Rate measures the benchmark interest rate.
The CBN Governor, Yemi Cardoso, announced this in Abuja on Tuesday after the MPC meeting, last for the year, held at the apex bank’s headquarters.
He said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25% to 27.50%; and retain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The CBN governor also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
Business
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate stood at 4.3 per cent in the second quarter of 2024, the National Bureau of Statistics (NBS) has said in its latest report.
The report released on Monday said the unemployment rate decreased compared to the 5.3 per cent recorded in the Q1 of 2024.
The NBS defined the unemployment rate as the share of the labour force (the combination of unemployed and employed people) who are not employed but actively searching and are available for work.
“The unemployment rate for Q2 2024 was 4.3%, showing an increase of 0.1 percentage point compared to the same period last year,” the report stated.
“The unemployment rate among males was 3.4% and 5.1% among females.
“By place of residence, the unemployment rate was 5.2% in urban areas and 2.8% in rural areas. Youth unemployment rate was 6.5% in Q2 2024, showing a decrease from 8.4% in Q1 2024.”
Report also said the unemployment rate among persons with post-secondary education was 4.8 per cent; 8.5 per cent among those with upper secondary education, 5.8 per cent for those with lower secondary education, and 2.8 per cent among those with primary education in Q2 2024.
Employment rate – 76%
The report showed that the employment-to-population ratio, which measures the number of employed workers against the total working-age population, increased to 76.1 per cent in Q2 2024.
“In Q2 2024, 76.1% of Nigeria’s working-age population was employed, up from 73.1% in Q1 2024,” the report stated.
Self-employment – 85.6%
The report further showed that Nigeria’s labour market saw a notable shift as the proportion of self-employed individuals increased in Q2 2024.
It stated, “The proportion of persons in self-employment in Q2 2024 was 85.6%.”
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