Business
Petrol subsidy stays till June 2022, says minister •N714b paid in seven months
There is no plan to end petrol subsidy for now, the Federal Government said yesterday.
Finance, Budget and National Planning Minister Mrs. Zainab Ahmed said provision has been made for the first six months of next year.
She explained that subsidy payment would stop since complete deregulation of the downstream oil and gas sector will start by July 2022.
The minister stated this at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja on Monday.
“In the 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry, “ Ahmed said.
Although The Nation had reported that no specific provision was made for subsidy payment in the 2022 budget, a top official of the Finance Ministry, said yesterday that the government was banking on extra-budgetary expenses for the purpose.
“Money to fund petrol subsidy will be drawn from a special account domiciled in the Office of the Accountant General of the Federation (OAGF),” the official explained.
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At the event, Prof. Doyin Salami, chairman of the Economic Advisory Council (EAC), described subsidy payment as illegal. Also, Director-General, Debt Management Office(DMO) Patience Oniha told participants that the government has so far issued N1.5 trillion promissory notes to its creditors.
Salami said he had argued for a long time that subsidy needed to go since the Petroleum Industry Act (PIA) made the payment illegal.
The EAC chairman said: “ The PIA essentially makes illegal to pay petrol subsidy. Yes, there is a period where NNPC(Nigerian National Petroleum Corporation) and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is a provision.
“My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”
NNPC, the only importer of petrol, deducts subsidy payment from oil and gas proceeds due to the federal, state, and local governments since no provision was made for it in the 2021 budget.
In seven months, petrol subsidy payments gulped N714 billion.
Explaining the N1.5 trillion promissory notes issued by government creditors, Oniha, added: “We can’t talk about debt alone, we must also talk about revenues.”
The DMO boss explained that “when you borrow and invest monies wisely, it will enhance growth and development”
She added that that was “why we(government) issued promissory notes of N1.5 trillion approved by the National Assembly. “
Oniha said: “We can’t talk about debt alone; we must also talk about revenues. When you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promissory notes of N1.5 trillion approved by the National Assembly.”
She noted that “to include any debt data in the country’s debt stock, it has to be approved by the National Assembly and the Federal Executive Council,
The DMO chief admitted that Nigeria’s debt service to revenue is high and should not be at the level that it is. She therefore called for multiple ways of growing revenue to invest in the future.
She said Nigeria’s Debt Management Strategy “provides a framework on how to undertake borrowings in the country”.
Another panelist, Taiwo Oyedele, suggested that “if we want to optimise, we have to harmonise multiple taxation and multiplicity of collection agencies to ensure that revenue collection mechanisms are boosted.”
Oyedele, who is Africa Tax lead at the PwC, disagreed with some policies of the government which allows about 60 MDAs(Ministries, Departments, and Agencies) to generate revenue.
According to him, “it is impossible for that number of agencies to be involved in revenue collection. They should concentrate on providing services.”
The Nation
Business
Tinubu orders creation of single-digit tax system
Tinubu orders creation of single-digit tax system
President Bola Tinubu has directed a creation of a single-digit tax system with a maximum of nine taxes for a company or an individual.
Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, disclosed this in Abuja while speaking with the management team of Guinness Nigeria who paid him a visit.
A statement on Wednesday by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman, quoted Adedeji as saying, “The President gave a directive that he wants a single-digit tax in the country, meaning that the maximum number of taxes we will have after the work of the Presidential Committee on Fiscal Policy and Tax Reforms will be nine taxes.”
The statement added that the plan was aimed at having a conducive environment “created for businesses to flourish and grow the economy.”
Business
Naira gains further against dollar
Naira gains further against dollar
The Naira rose further in the official market on Tuesday, trading at N1,382.95 to the dollar.
According to data from the FMDQ’s official trading portal, the Naira rose by N25.09, or 1.78 percent, from the previous day’s rate of N1,408 versus the dollar.
On Tuesday, total turnover was $245.58 million, up from $222.15 million on Monday.
Meanwhile, at the Investor’s and Exporters (I&E) window, the Naira traded between N1,486 and N1,300 against the dollar.
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The News Agency of Nigeria (NAN) reports that the Central Bank of Nigeria (CBN) had, earlier on Tuesday at its 294th Monetary Policy Committee (MPC), raised Monetary Policy Rate (MPR) by 200 basis points from 22.75 per cent to 24.75 per cent.
CBN governor Yemi Cardoso said that was meant to tackle the nation’s rising inflation.
Naira gains further against dollar
(NAN)
Business
CBN jacks up interest rate amid soaring inflation
CBN jacks up interest rate amid soaring inflation
The Central Bank of Nigeria (CBN) on Tuesday raised the interest rate from 22.75 per cent to 24.75 per cent amid soaring inflation.
Governor of the central bank, Olayemi Cardoso, made this known after the two-day Monetary Policy Committee (MPC) meeting held on Monday and Tuesday.
The country’s latest annual inflation rate jumped to 31.70 per cent from 29.90 per cent for last month, fueled by a continuous rise in food prices.
Cardoso disclosed that the MPC voted to adjust the asymmetric corridor around the MPR at +100 to -300 basis points.
He said the committee voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and adjust the CRR of merchant banks from 10 per cent to 14 per cent.
The committee also voted to retain the liquidity at 30 per cent.
He said, “Members noted the continued rise in headline inflation driven largely by food prices, because of supply shortages, and high cost of Logistics and Distribution.
“The committee, therefore, was of the view that addressing food insecurity is key to containing current inflationary pressures.”
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