Economy

IMF Describes Return of Fuel Subsidies As Disturbing

Published

4 years ago

June 18, 2021

Eric

In a virtual meeting with the representatives of the Federal Government, the mission of the International Monetary Fund stated that the resurfacing of fuel subsidies was concerning.

The IMF mission led by Jesmin Rahman, according to a press release, expressed its concerns about rising fuel subsidies to the Nigerian authorities during a virtual meeting.

The Fund also stressed the importance of introducing market-based fuel pricing mechanisms and the need to deploy well targeted social support to cushion any impact on the poor.

The mission commended the Central Bank of Nigeria for merging taking the official exchange rate to the NAFEX window.

However, they recommended the unification of all exchange rate windows and establishing a market-clearing exchange rate.

On monetary policy, they advised the country to strengthen the monetary targeting regime and integrating the interbank and debt markets.

Rahman was quoted as saying, “The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 pandemic.

“Nevertheless, the employment level continues to fall dramatically and together with other socioeconomic indicators, is far below pre-pandemic levels. Inflation slowed down in May but remains elevated at 17.9 per cent, owing to high food prices.

“As oil prices and remittance flows recover, the balance of payments has slightly strengthened, although imports are rebounding faster than exports and foreign investment subdued resulting in forex shortage.”

The mission urged the government to keep reliance on CBN overdrafts for deficit financing within legal limits.

It also asked the Federal Government to strengthen budget planning and public finance management practices to allow for flexible financing from domestic markets for better integration of cash and debt management.

The IMF applauded the Federal Government’s efforts towards containing the transmission of COVID-19 in the country and the COVAX vaccination programme.

It backed efforts to acquire additional doses from countries with surplus stocks.

“The extension of the moratorium on principal payments of qualifying credit facilities on a case-by-case basis through March 2022 should be limited to viable debtors with strong pre-crisis fundamentals.

“CBN stress tests show that the banking system would remain adequately capitalised except in case of a severe deterioration of credit quality.

“Nevertheless, it is not clear what share of forborne loans may turn non-performing as the impact of the pandemic subsides.”

It added that since NPLs often rose at the tail of economic crisis, CBN’s strong oversight remained critical to safeguarding financial sector stability.

The Punch

Economy

My Policy on Fuel Subsidy Removal Yielding Results, Says Tinubu

Published

2 weeks ago

March 11, 2025

Eric

President Bola Tinubu has declared that his fuel subsidy removal policy is yielding the desired results, pointing out that prices are gradually declining.

The President also asserted that investors are increasingly showing interest in the Nigerian economy, a development he attributed to the removal of fuel subsidies, a policy introduced on 29th May 2023.

Tinubu made these remarks on Monday while inaugurating the National Youth Council at the Presidential Villa, Abuja.

Addressing the youths, Tinubu emphasised that while politicians will always be politicians, true leadership is about fostering development that benefits future generations.

He urged Nigerian youths to take advantage of the opportunities being created by the government, particularly in the ICT sector, to contribute to national development.

Tinubu said: “I have listened to you. Today is not for long speeches. I just want to reassure you that you are the hope of this country. Everything rests on your shoulders. Every decision I have taken is about you and the future.

“When we removed the fuel subsidy, we were securing a future for generations yet unborn. Where is the investment? Where is the infrastructure? When you hear many professionals say they want to ‘JAPA’, it is because prosperity is not widespread at home. If we create opportunities and empower our people, they will have no reason to leave.

“This is your country to develop, build, and prosper in. The government is fully committed to you. Take this seriously. You can criticise politicians all you want, but ultimately, politics is about development and securing a future for the next generation.

“At the beginning, it seemed uncertain, difficult, and even hopeless. It felt like drawing water from a dry well. But today, the economy is turning a corner. Prices are falling, confidence in our economy is improving, and investors are showing interest. Technology is advancing, and you have opportunities before you.”

The President reminded the youths that they have a crucial role in advancing the nation’s development.

“It is all in your hands. My role is to help navigate, push, and implement key programmes to clear the path for you. But it is up to you to seize the moment. Look me in the eye and tell me what you think—whether it is right or wrong—and offer suggestions. We will consider them as long as they contribute to the prosperity of this country.

“I assure you that we will do everything possible to make Nigeria a better place for you, but we cannot do it alone. You represent over 60 per cent of our population. You are the heartbeat of our nation, and I hope you take this opportunity very seriously,” he said.

Economy

Naira Gains over Dollar for Three Straight Days in Parallel FX Market

Published

1 month ago

February 15, 2025

Eric

The Naira recorded three consecutive days of appreciation against the dollar in the parallel foreign exchange market, ending the week on a high note on Friday.

According to Abubakar Alhasan, a Bureau de Change operator in Wuse Zone 4, Abuja, the Naira strengthened to N1,565 per dollar on Friday, up from N1,570 on Thursday.

On a day-to-day basis, the Naira gained N5 against the dollar compared to the N1,570 traded on Thursday.

In the last three days, the Naira has gained N15 against the dollar in the black market.

In contrast, in the official market, the Naira continued to depreciate as of Thursday, according to data from the Central Bank of Nigeria.

The apex bank’s exchange rate data showed that the Naira fell to N1,507.88 per dollar on Thursday from N1,504.30 on Wednesday.

Overall, exchange rate movements across FX markets showed that the Naira ended the week with mixed sentiments of losses and gains against other foreign currencies.

Economy

NASS Passes Tinubu’s N54.99tr 2025 Budget Proposal

Published

1 month ago

February 13, 2025

Eric

The National Assembly, on Thursday passed, the N54.99trillion 2025 Appropriation Bill.

The bill was passed separately by the Senate and the House of Representatives.

A breakdown of the budget showed N3.645trillion for statutory transfers, N14.317trillion for debt servicing, N13.64trillion for recurrent expenditure and N23.963trillion capital expenditure (development fund), with fiscal deficit put at N13.08trn.

The Deficit-to-Gross domestic product (GDP) Ratio was put at 1.52%.

Last Week, President Bola Tinubu increased the 2025 fiscal year budget from an initial N49.7trillion to N54.2trillion, seeking approval from the Senate and the House of Representatives.

Chairman of the House Committee on Appropriations, Abubakar Bichi, while presenting the bill for consideration, stated that the committee met with the Presidential Economic Planning team to further discuss revenue projections and expenditure for the 2025 Appropriation Bill.

According to him, the 2025 Appropriation Bill was presented late, compared to that of 2024.

He urged the executive to present subsequent budgets to the National Assembly not later than three months before the next financial year, to maintain the January to December budget cycle.