VenturesNow

Again, Nigeria postpones fuel subsidy removal

Published

2 years ago

April 28, 2023

The Nigerian government said it has agreed to “not to remove” fuel subsidy as planned for June 2023.

Nigeria’s Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, made the position known while speaking with journalists after the National Economic Council (NEC) meeting on Thursday in Abuja, the nation’s capital.

The Council, according to Ahmed, agreed that further debate on the matter was necessary, adding that the FG and the states, as well as representatives of the incoming administration, needed more preparation.

She said, “Council agreed that the timing of the removal of fuel subsidy should not be now. But we should continue with all of the preparatory work that needs to be done. This has to be done in consultation with the states and other key stakeholders including representatives of the incoming administration.

“Council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. But we have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians.

“So, this will require looking at alternatives to the fuel subsidy that needs to be planned for and subsequently put in place. But also what needs to be done to support the people that will be most affected as a result of the removal.”

Nigeria, a West African nation, is one of the world’s top oil producers, yet it does not refine crude oil domestically. The state-owned Nigerian National Petroleum Corporation (NNPC) operates four refineries: two in Port Harcourt (PHRC), one each in Kaduna (KRPC), and Warri (WRPC). Despite several investments to upgrade the refineries, none of them has operated at full capacity for years.

The country spent 4.39 trillion Naira ($9.7 billion) on petrol subsidies in 2022 and reportedly expended over N1.15 trillion in 2021 alone. Meanwhile, some petrol stations across the country sell the product for as high as ₦300, almost double the official subsidised price of ₦175.

The Nigerian government had announced that the controversial subsidy regime would be discontinued by June this year. The minister of finance had also mentioned on occasions that Nigeria had no provision for fuel subsidy in the 2023 appropriation bill beyond June.

It also recently secured $800 million from the World Bank to expand its national social programmes in preparation for the removal of petrol subsidies in June.

A new administration will be sworn in in Nigeria by May 29 after incumbent President Mohammadu Buhari’s two terms in office. The subsidy crisis, as well as Nigeria’s mountain of public debt, are part of the immediate hurdle before the incoming president.

Related Topics:Featured Fuel subsidy Nigeria

Click to comment

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

3 days ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

VenturesNow

Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

5 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.