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PMB Promises Govt’s Attention to Forex for Manufacturers

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Nigeria Spends N2.49tn Servicing Debts in Nine Months – DMO

 

By Edozie Obasi-Eze

Scarcity of foreign exchange to fund importation of essential machinery and raw materials for the manufacturing sector has caught the attention of President Muhammed Buhari.

The President, while receiving a delegation of the leadership of the Manufacturers Association of Nigeria (MAN), led by Mansur Ahmed, to the Presidential Villa Abuja, on Wednesday promised that decisive steps would be taken to address the situation.

He assured that the relevant Ministry would instructed to revisit the manufacturers’ concerns on the increase in excise duties on the identified products and other tariff-related matters.

On the African Continental Free Trade Area (AfCFTA), the President made it clear that Nigeria would fast track the process of setting up the Designated Competent Authority that would superintend the administration of Rules of Origin and Commission as well as the automation for issuance of electronic Certificate of Origin.

According to him, the Federal Government would ensure the establishment of relevant structured platforms for monitoring and evaluation of the performance of the Ease of Doing Business and improved Government patronage of made in Nigeria products.

In his words, ‘‘Our strategic plan to boost manufacturing activities in the country is on course. We will continue to improve the patronage of locally made goods, bridge the gap between skills required by industry and those provided by our tertiary institutions and ensure seamless access to long term finance for our Small and Medium-Scale Enterprises (SMEs).

‘‘We recognize that MAN remains a key stakeholder in this journey and we will continue our engagement with you.’’

Buhari noted that a private sector-led economy was the way to create jobs in the country, and urged the leadership of MAN to continue to encourage manufacturers that government recognizes the resilience of their members and other private sector organisations in promoting a virile manufacturing sector in Nigeria.

“I beseech you to continue to support the Government in our quest to provide the appropriate environment that will attract the necessary investment both domestic and foreign for the upliftment of the nation’s economy,” he added.

He pointed out that the government had also provided stimulus packages for the manufacturing sector; recorded improvement in energy management and support for exporters with a view to improving the operating environment for businesses in Nigeria, in addition to significant progress in road and rail development despite limited resources.

On the issues confronting the manufacturing sector, President Buhari said, ‘‘I have listened carefully to all the challenges enumerated by the president of MAN and would like to assure you that, like we have done in the recent past, we will give consideration to some of the constraints that are yet to be fully addressed, especially those that align with our policies and programmes for economic recovery and sustainable development.

‘‘Let me assure you that this Administration is fully aware that the survival of Nigeria lies in Agriculture and having a viable domestic manufacturing sector.

I must emphasise here that when I say Agriculture, I also refer to Agro-Allied business which is the value-added component in the value chain.

‘‘A strong manufacturing sector creates more jobs and wealth for our people. It will usher in sustainable economic prosperity because we will produce what we consume as a nation and generate foreign exchange by exporting surpluses and by import substitution.’’

Business

Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies. 

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Yemie ADEOYE

INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.

Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.

Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.

This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.

Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”

Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.

However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.

Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.

In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.

He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”

“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.

“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”

Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.

 

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Banking

CBN Denies Currency Devaluation

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CBN Pegs Interest Rate at 14%

 

The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.

 

Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.

 

However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.

 

In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.

 

However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’

 

“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.

 

“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.

 

He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.

 

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Banking

BREAKING: CBN Increases Interest Rate By 0.5%

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CBN Pegs Interest Rate at 14%

 

The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.

 

The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.

 

Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting,  thereafter.

 

While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

 

In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.

 

Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”

 

Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.

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