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IMF alleges Nigeria’s return to petrol subsidy regime

Published

10 months ago

February 14, 2024

The International Monetary Fund (IMF) has alleged that the Nigerian government has resumed payment of subsidies on premium motor spirit (PMS), otherwise known as petrol, despite the product being sold for as much as N700 per litre in the country.

President Bola Tinubu declared the elimination of fuel subsidies during his inauguration speech on May 29, 2023, which led to an increase in the cost of goods and services throughout the nation.

Soon after, the various exchange rate regimes were combined into one by the Central Bank of Nigeria (CBN), which caused the naira’s value in relation to the dollar to drop.

The IMF has also cautioned that Nigeria’s foreign reserves could collapse to $24 billion in 2024 in its most recent country report, which shows a notable decline and possible FX issues for the continent’s largest economy.

The requirement to export petroleum products for refining is one major factor that affects the final product’s cost in Nigeria. Major oil marketers are worried about whether the pump price can stay the same after the Naira dropped to between N1,400 and N1,500 on the black market in relation to the dollar.

In a statement released over the weekend about the completion of its Executive Board’s Post Financing Assessment with Nigeria, the IMF voiced concerns regarding the government’s decision to cap petrol prices at retail stations. It recommended that the Tinubu administration entirely cease fuel subsidy payments in order to free up finances for government operations.

The IMF now claimed that the Tinubu administration had “capped retail fuel and electricity prices,” presumably in an effort to “ease the impact of rapidly rising inflation on living conditions, thus partially reversing the removal of fuel subsidies.”

The Nigerian government continually denied that it had reintroduced subsidy on petrol following reports by sections of the media

Related Topics:Featured Fuel subsidy IMF Nigeria

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Moroccan annual inflation rises to 0.8% in November

Published

17 hours ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”