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CPPE Foresees Subsidy Leading Nigeria to Bankruptcy
By Edozie Obasi-Eze
The Centre for Promotion of Private Enterprises (CPPE) has projected that barring changes to the situation in Russia and Ukraine, Nigeria’s subsidy cost may hit N4 trillion by the end of the year, which might lead the country to bankruptcy.
Chief Executive Officer (CEO), CPPE, Nigeria’s subsidy, expressed his opinion yesterday at its first-quarter press conference on the Nigerian economy.
He said, “With current subsidy trajectory, subsidy cost would not be less than N4 trillion by the end of this year. This is clearly a major source of disruption and dislocation for the finances of government at all levels.”
He averred that all things being equal, that is, if crude oil price did not shift from the current levels and the PMS price stayed fixed, Nigeria would be on the brink of bankruptcy, because the current subsidy regime was not sustainable.
He also opined that the deregulation dialogue needs to be brought to the table urgently to save the economy from further deterioration.
Dr Yusuf stressed that brave steps must be taken to ignite the reform process in the petroleum sector with the full activation of the Petroleum Industry Act (PIA).
He maintained that in the interim, all charges – import duty, levies, and taxes on importation should be suspended to moderate the cost of fuel, though the ultimate solution would be to revisit the deregulation engagement with stakeholders to pave way for a market-driven, private sector-led investment framework, with the government playing a regulatory role.
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“This is the option we have as a country to stop the bleeding, the distortions, the smuggling and loss of investment that our petroleum downstream sector had suffered over the years,” he added.
He listed the possible benefits of a market-driven pricing regime to include free resources for investment in critical infrastructures such as power, roads, rail systems, health sector, and education sector; unlocking the huge private investment potential in the downstream oil sector, especially in petroleum product refining.
According to him, it would also eliminate the patronage mentality, rent-seeking activities, and corruption that currently characterise the downstream oil sector, in addition to creating more jobs for the teeming youths in the downstream oil sector as an investment in the sector improves; would reduce smuggling of petroleum products outside the country.
The Russia Ukraine war, which he observed has disrupted global oil and gas supplies and resulted in sharp increases in energy prices globally, was already taking a toll on the cost of production, cost of business operations, haulage costs, and consequently on profit margin.
“The cost of the major energy products had increased significantly – diesel, aviation fuel, natural gas, and kerosene. The inflationary outcomes will affect the affordability of many products, leading to further worsening of poverty.
“We will see an increase in subsidy payment as the landing cost of petrol increases. Regrettably, we remain a major importer of petroleum products. Therefore, when oil prices increase, subsidy payment also surges. Only recently the estimate of subsidy was put at N3 trillion by the NNPC. That was before the Russian invasion of Ukraine.
The story would have changed now. We should expect subsidy payments to exceed the N3 trillion by the end of the year, depending on how long the sanctions and invasion last. This of course has very serious implications for our budget and government finances.
“If crude oil price remains at current levels, and the PMS price remains fixed, the country may be teetering on the brink of bankruptcy. The current subsidy payment regime is simply not sustainable. The deregulation dialogue needs to urgently resume to save the economy from further deterioration,” he noted.
Numerous individuals sustained injuries following a confrontation between rival groups in the Ile-Epo vicinity of Lagos State.
According to reports, the altercation erupted within the local market on Wednesday night and persisted into Thursday morning.
During the clash, several shops were set ablaze, and merchandise was vandalized. Despite efforts by law enforcement, the intervention was hindered by the aggressors.
This morning, a fire service truck attempting to enter the market was compelled to retreat after being bombarded with stones by unidentified assailants.
See video below:
The Nigerian Exchange Group Plc (NGX Group) has unveiled stellar Q1 2024 results, signaling a promising trajectory for the company.
Biztellers reports that this is coming shortly after the company’s 63rd Annual General Meeting (AGM).
From the results made available on Thursday, the Group reported an impressive N2 billion in Profit before Tax (PBT), bolstered by robust growth in operating margins and operational efficiencies.
From the results, Profit After Tax (PAT) rose to N1.3 billion, marking a remarkable 332% increase from the N310 million recorded in Q1 2023.
The NGX claims that “This exceptional performance underscores the group’s unwavering commitment to excellence and strategic growth initiatives”.
Recall that at the AGM, the NGX Group announced plans to capitalize on digital distribution for the upcoming recapitalization exercises mandated by the Central Bank of Nigeria (CBN).
Additionally, the group disclosed a strategic acquisition of a stake in the Ethiopian Stock Exchange, securing a seat on the bourse’s board.
These decisive moves align with the group’s overarching strategy to expand its business operations and solidify its position in the regional market.
In a bid to secure long-term sustainability and drive growth, the NGX Group implemented a strategic optimization initiative. This comprehensive plan encompasses a strategic reduction in workforce size, accompanied by significant salary increases for retained staff.
The initiative aims to streamline operations, enhance efficiency, and optimize resources, fostering a more competitive and agile organization.
The exercise follows a thorough review of the group’s operations, which revealed opportunities for optimization and improved competitiveness. The NGX Group remains steadfast in its commitment to innovation, customer satisfaction, and building a resilient organization poised for sustainable growth.
The recent approval by shareholders of a N10 billion capital raise underscores investor confidence in the NGX Group’s strategic direction and its unwavering commitment to driving sustainable growth and value creation.
The NGX Group remains dedicated to serving its customers, partners, and stakeholders, confident that these strategic measures will pave the way for future success. The company’s focus remains on innovation, customer satisfaction, and building a resilient organization poised for growth.
The Lagos State government has uncovered an 86-room under bridge apartment in the Ikoyi Area of the state, where tenants pay as much as N250,000 annually as rent, per room.
Commissioner for Environment and Water Resources, Lagos State, Tokunbo Wahab, made the disclosure in text and video clips on his verified X handle on Wednesday.
He revealed that the apartment is under the Dolphin Estate Bridge, Ikoyi, and has 86 partitioned rooms, sized “10×10 and 12×10”.
According to Wahab the enforcement team of Lagos State’s Ministry of Environment and Water Resources had successfully removed all structures, including a container utilised for various illegal activities, from beneath the Dolphin Estate Bridge.
He wrote, “A total number of 86 rooms, partitioned into 10×10 and 12×10, and a container used for different illegal activities were discovered under the Dolphin Estate Bridge.
“They have all been removed by the enforcement team of the Lagos State Ministry of the Environment and Water Resources.”
A Special Adviser to Governor Babajide Sanwo-Olu, Kunle Rotimi-Akodu, shed more light on the matter.
He gave kudos to the Lagos State Environmental Sanitation Corps, also known as KAI for the feat, who cleared up the mess on Tuesday, arresting some of people in the process.
Rotimi-Akodu, who also shared text and video clips of the development, wrote, “Squatters dwelling under the bridge leading from inward Dolphin Estate, Ikoyi were evicted today Tuesday, 30th of April, 2024 by officials of the Lagos State Environmental Sanitation Corps LAGESC (aka KAI).
“These people created their illegal settlement under the bridge, thereby exposing the critical infrastructure to impending destruction. 23 persons have so far been arrested and MoE/KAI will continue to monitor the place. The law will take its course.”
He also confirmed that the bridge has hitherto housed 86 rooms, partitioned into 10×10 and 12×10 with squatters paying an average rent of N250,000 per annum.
“Continuation of the removal of abode under Dolphin bridge. 11 more persons were arrested. It is important to note that wood materials were used to construct the shelters, some occupants used gas cylinders, and some had stored fuel for their generators, these are recipes for disaster,” he added.
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