Economy

Nigerians Can’t Wait for Buhari’s Seven Days, Crisis Looming – Experts

Published

2 months ago

February 4, 2023

Eric

By Eric Elezuo

Following the disappearance of naira notes from the Nigerian business circle, human rights lawyer and Senior Advocate of Nigeria, Mr Femi Falana, as well as a professor of Economics, University of Uyo, Edet Akpakpan, have asked Nigerians to reject the request by the President to be given seven days to resolve the new naira scarcity, warning that the patience of Nigerians will not last the proposed seven days, and eruption of crisis may take centre stage.

Speaking with Saturday PUNCH, Falana said it was obvious that the CBN did not print sufficient quantities of the new naira notes, and wondered what magic Buhari planned to perform within seven days.

The lawyer demanded that the CBN should scrap the deadline for the phasing out of the old naira notes, while the old notes it mopped up from circulation should be returned to Nigerians.

He said, “Nigerians can’t wait for seven days. People are fighting in the banks; somebody died in Agbor in Delta; soldiers are attacking students; a woman stripped herself naked because the ordinary people cannot get money. And El-Rufai said somebody collected N500m. No bank has been given N500m new notes! No bank, you can quote me! So, he should name the person, who has not only sabotaged the policy of the government, but has also engaged in money laundering.

“The government wants to dodge responsibilities. The government of the day must take responsibility. Who does Buhari want to consult in seven days? They do not have sufficient new notes. For that reason, they cannot maintain the deadline. So, Nigerians must be allowed to spend the old money, which they have collected from them. The CBN must return the old notes to Nigerians!”

According to Falana, the policy will not stop monetisation of elections as the rich will always have access to naira, while the masses suffer.

He said, “It is a bundle of confusion and it simply confirmed that this was not well thought out. They were just all about preventing monetisation of elections; they didn’t consider the impact on the masses.

“Some of the presidential candidates have banks and bank managers will take the money to their houses. So, it doesn’t stop monetisation of elections. They are just punishing the ordinary people. Have you seen any big man in bank queues for money? The rich can always have money in their homes.”

A professor of Economics, University of Uyo, Edet Akpakpan, urged the Federal Government to resolve the situation to avert imminent crisis.

He also enjoined banks to desist from favouring influential people against the poor through the issuance of higher denominations.

Akpakpan stated, “The idea is good but the implementation is poor as they are not ready. The situation has to be arrested or else it will be terrible, especially as we move closer to the general elections. There is a need for the CBN to make resources available.

“And again the banks should be warned not to be biased with the way the funds are issued. Let them not favour some big men over the common man. We need to stop such things. I support this policy, but the implementation has to be re-organised.”

It would be recalled that Buhari, while receiving the governors voted on the platform of the All Progressives Congress (APC), who paid him a working visit at the Aso Rock Villa, had canvass for a solution to alleviate the hardship Nigerians are going through, said he would need seven days to come out with a decision, blaming banks of compromising the process.

“Some banks are inefficient and only concerned about themselves…even if a year is added, the problems associated with selfishness and greed won’t go away,” Buhari told the Progressive Governors’ Forum members.

The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, disclosed this in a statement titled, ‘President Buhari asks for seven days for a major decision on currency redesign’.

The President said he had seen reports on television about cash shortages and hardship to local businesses and ordinary people, and promised that the balance of seven of the 10-day extension would be used to crack down on whatever stood in the way of the successful implementation.

“I will revert to the CBN and the Minting Company. There will be a decision one way or the other in the remaining seven days of the 10-day extension,” the President was quoted as saying.

The governors had earlier told the President that although they supported his decision to renew the naira, the execution had been botched and their constituents were becoming increasingly upset.

They said as leaders of the government and party in their respective states, they were becoming anxious about a slump in the economy and the series of elections that were coming.

Nigerians await with apprehension what the coming week will unfold as anger has permeated the minds of citizens, the address of Central Bank of Nigeria governor, Godwin Emefiele on Friday notwithstanding.

Additional information: The Punch

Economy

Marketers Warn Against Imminent Fuel Price Hike over Poor Supply

Published

1 week ago

March 15, 2023

Eric

The disparity in the pump price of Premium Motor Spirit, popularly called petrol, is to further widen due to the incomplete delivery of products to many filling stations, oil marketers stated on Tuesday.

Dealers under the aegis of the Independent Petroleum Marketers Association of Nigeria, said there had been a lopsided pattern in the distribution of PMS lately, stressing that this would cause scarcity and worsen the price disparity in retail outlets.

They told our correspondent that the Nigerian National Petroleum Company Limited, through its NNPC Retail subsidiary, had not been delivering the exact number of trucks of fuel that were meant for independent marketers.

“Here in Port Harcourt, for instance, we have Oando and NNPC Retail, and they have products in some private depots. Master Energy and Liquid Bulk also have products, but there is no volume for independent marketers,” the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, stated.

He added, “Independent marketers have no volume in all these depots and we have over 3,400 tickets lying and waiting at the NNPC Retail account. This new system is now making independent marketers beg for petroleum products from NNPC Retail.

“It is until NNPC Retail has finished loading products to its own outlets before it would now attend to independent marketers. It has made the independent marketers the third tier in terms of the bulk distribution of petroleum products, which is very incorrect.”

Independent marketers operate about 80 per cent of filling stations nationwide, both in villages and other remote areas, making them the largest downstream distributors of petrol.

Ukadike explained that the recent lopsidedness in products distribution by NNPC Retail “is the problem that leads to price disparity,” adding that “we are now forced to go and buy products from retail outlets and some of these tank farm owners at a very exorbitant price.”

Also commenting on the issue, the National President, IPMAN, Debo Ahmed, said the situation at private depots (coastal depots) was quite worrisome.

He said downstream oil sector operators “must do something now to restore the depleted faith of independent marketers, especially at the Port Harcourt coastal depots.”

Ahmed’s remarks, which was forwarded to our correspondent by the association’s PRO, read in part, “In the second week of February this year, a vessel discharged about 28 million litres (622 trucks) of PMS in TSL depot (Oando).

“A 162-trucks programme was released for IPMAN, which was about 7.3 million litres. Out of the 162-trucks programme given to us, we struggled to load less than 100 trucks. About 62 tickets are still there waiting for the next vessel.

“In the last week of February, another vessel discharged 13 million litres (288 trucks) of PMS at Liquid Bulk. Only a 56-trucks programme was released for IPMAN. We were all expecting the next programme, just to hear that the product finished last week.”

He also stated that last week, a vessel with 13 million litres (288 trucks) discharged at Master Energy.

“As at this moment, IPMAN has not received any programme for that product. Another vessel will discharge at TSL. IPMAN, what’s our fate?” the association’s president stated.

He added, “This is the right time to toss away the crutches of comfort and restore the hope and expectations of all independent marketers. Is important we start our protest as soon as possible.

“This is important so that Nigerias will know what is going on with us and the new retail. The lopsided distribution pattern will continue to cause scarcity and price disparity in retail outlets.”

When contacted for comments on the matter, the Chief Corporate Communications Officer, NNPCL, Garba-Deen Muhammad, requested that the enquiry be sent to him via WhatsApp. This was done, but he had yet to reply up till the time of filing this report.

The Punch

Economy

Naira May Fall to N900/$ from Demand Pressure – Report

Published

4 weeks ago

February 23, 2023

Eric

Andersen, an independent tax and business advisory firm has said that the parallel rate of the naira may fall to N900 in 2023 from demand pressure if mitigating measures are not taken.

The firm that has a worldwide presence through the member firms and collaborating firms of Andersen Global disclosed this in its report titled ‘Nigeria’s 2023 economic outlook’, which was presented by its partners in Lagos.

The report read in part, “In 2022, the value of the naira was relatively more stable in the official market than in the parallel market thereby widening the premium between the two exchange rate windows. This was due to the heightened demand pressure spurred by FX illiquidity.

“FX excess demand pressure is expected to continue in 2023 fuelled by varying factors such as elevated global interest rates attracting portfolio investments away from Nigeria; a structurally import-dependent economy; currency speculations if the gap between official and parallel market rates are not closed; etc, which will make the naira to remain pressured in the foreign exchange windows.

“Based on this, should the CBN continue to maintain the gap, the official rate is likely to be devalued to about N500/$, while the parallel market rate depreciates to about N900/$ by the end of 2023 unless mitigating measures are taken.”

On the 2023 budget, it said the total revenue was estimated to be N10.49tn and total expenditure was approximately N21.83tn, thereby indicating a budget deficit of N11.34tn, a 39 per cent increase from the last budget’s deficit of N8.17tn.

The deficit was expected to be significantly financed through domestic borrowings, it added.

According to the report, “The Director-General of the Debt Management Office stated that improvement in revenue generation serves as a solution to the increasing debt profile. Despite the increase in government income and expenditure altogether, the education and health sectors are still underfunded.

“The rising inflation rate and the impact of the Russia-Ukraine war on food and energy prices are factors likely to affect Nigeria’s 2023 budget performance.”

It noted that the financial services sector grew by 12.7 per cent in Q3, 2022.

The sector had also been driven by several factors such as technology adoption, increasing population, increase in credit to the private sector, the rise of the fintech industry, competitive landscape and government reforms among others.

“Recent trends in the sector include a focus on digitisation and adoption of new and emerging technologies, currency redesign and cash withdrawal limits, bank and fintech partnerships, insurtech, etc,” the statement said.

The Punch

Economy

Fuel Scarcity: FG Raises 14-Man Panel for Solution

Published

2 months ago

January 25, 2023

Eric

The Federal Government is meeting with operators in the midstream and downstream oil sector as part of measures towards developing strategic stock for Premium Motor Spirit, popularly called petrol, in key locations across the country.

It said the national strategic stocks would help in addressing the recurring fuel scarcity in Nigeria, as it also announced the constitution of a 14-man committee to find a lasting solution to the disruptions in the supply and distribution of petroleum products.

The Federal Ministry of Petroleum Resources stated that President Muhammadu Buhari, had approved the constitution of a 14-man Steering Committee on Petroleum Products Supply and Distribution Management, which he would personally chair.

The ministry said the move was to find lasting solution to the disruptions in the supply and distribution of petroleum products across the country.

It said the committee had the Minister of State for Petroleum Resource, Chief Timipre Sylva, as Alternate Chairman, as the team would ensure transparent and efficient supply and distribution of petroleum products.

“Other terms of reference are to ensure national strategic stock management, visibility on the NNPC Limited refineries rehabilitation programme and ensure end-to-end tracking of petroleum products, especial PMS, to ascertain daily national consumption and eliminate smuggling,” the FMPR stated in a statement.

To ensure sanity in the supply and distribution across the value chain, Sylva directed the NMDPRA to ensure strict compliance with the government approved ex-depot and retail prices for PMS.

The ministry stated that other members of the committee include the Minister of Finance; Permanent Secretary, Ministry of Petroleum Resources; National Economic Adviser to the President; and Director-General, Department of State Services.

Others include the Comptroller-General, Nigerian Customs Service; Chairman, Economic and Financial Crimes Commission; and Commandant-General, Nigerian Security and Civil Defence Corps.

The Chief Executive, NMDPRA; Governor, Central Bank of Nigeria; Group Chief Executive Officer, NNPC Limited; Special Advisor (Special Duties) to the HMSPR; were also listed as members of the committee, while the Technical Advisor (Midstream) to the HMSPR would serve as secretary.

The Punch