Business

Nigeria’s Economy On Brink Of Collapse, NECA Raises Alarm

Published

2 years ago

August 7, 2022

Editor

The Nigeria Employers’ Consultative Association, NECA, on Sunday in Lagos, raised the alarm that the nation’s economy is on the brink of collapse, warning that spiralling inflation, rising energy cost, scarcity of FOREX, the dwindling value of the Naira among others, are bleeding the economy.

The Director-General of NECA, Mr. Wale Oyerinde, lamented that the economy was under the weight of an almost comatose aviation sector, stuttering education system, rising debt, depleting foreign reserve and rising fuel subsidy expenses, among others.

The newly-appointed D-G of NECA advised the Federal Government to employ a holistic and multi-pronged approach towards resolving the challenges faced by the nation.

According to him, “The nation is currently faced with multiple challenges.

“(It’s) a dire combination of spiralling inflation, rising energy costs (aviation fuel, diesel, etc.), scarcity of FOREX, dwindling value of the Naira and an almost comatose aviation sector.

“Also, with a stuttering education system, rising debt, depleting Foreign Reserve and rising fuel subsidy expenses among others, that threatens to lay bare the country’s economy, there is no better time for the Government to reappraise current economic policies and deepen its engagement with the organized private sector.

“While Government’s effort to salvage the economy is commendable, there is, however, a need for a more holistic approach to resuscitate the stuttering economy.

“Being dependent on crude oil for about 90 per cent of its foreign exchange earnings and 80 per cent of its budgetary revenues, Nigeria has always lived dangerously on the precipice, with a major chunk of its revenue dependent on the complexities of global crude demand and supply.

“A dangerous blend of self-destructive tendencies, insecurity and fiscal and monetary policy inconsistencies have also conspired to make the situation worse.

“While revenue continues to shrink, the nation continues to dig its feet deeper into debt.

“At different times over the past few years, various international bodies including the World Bank, International Monetary Fund and the World Trade Organization have warned about the excessive nature of the country’s borrowing.

“While some stakeholders have canvassed that the revenue to GDP ratio of the country is healthy, a recent announcement by the Minister of Finance, Budget and National Planning that the revenue to debt service ratio is in the negative, calls for urgent concern.

“In April, the World Bank warned that the rising cost of fuel subsidy could significantly impact public finance and pose debt sustainability concerns.

“Alas, this projection is almost happening. The Fiscal Performance Report released recently by the Federal Government confirmed the accuracy of these projections.

“The combination of a struggling aviation sector and roads taken over by bandits have also conspired to fuel the situation, leading to rising inflation at 18.6% (according to the NBS).

“These have continued to worsen the promotion of Commerce and the increase the rate of de-industrialization of some regions of the country.”

The DG of the umbrella body for employers in the country, while recommending how to deal with the multi-face challenges, called for “a deliberate and economic priority influenced approach and wide consultation with Stakeholders should commence, with the view of harvesting alternative policy options to re-energize all sectors of the economy.

“While the challenges of revenue shortage are acknowledged, burdening businesses with new taxes or levies will be counter-productive and self-destructive action.

“Over-burdening already burdened businesses will only lead to business closure and an escalation of job losses with consequential effects on our social and economic stability.

“Government should, in the short-term widen the tax net, reduce wastages in governance, and focus on economic projects that will stimulate the Nigerian economy and guarantee an enabling environment for businesses to operate.

“An enabling environment for local businesses will create the platform for new foreign direct investment, which could increase FOREX inflow into the country.

“In the medium term, the Federal Government should, as a matter of urgency, fix the four national refineries and encourage the development of Modular ones as a precursor to total removal of fuel subsidy.

“With over N5 trillion budgeted for subsidy payment in 2022, an amount larger than the budget for education and agriculture, this is unrealistic and unsustainable.

“Economic interventions aimed at improving living standards (to stimulate consumption) and Enterprise sustainability (to promote job creation) should be implemented.

“While FOREX scarcity persists, allocation of the available FOREX to manufacturing and other productive sectors of the economy should be given priority.”

Business

Marketers Distribute 25 Million Litres Dangote Diesel

Published

15 hours ago

June 16, 2024

Editor

Independent marketers have lifted and distributed over 25 million litres of Automotive Gas Oil, popularly called diesel, produced by the Dangote Petroleum Refinery in less than three months after the plant started releasing AGO to the market.

It was also gathered on Saturday that the registration of oil marketers with the $20bn firm was still ongoing, as more dealers register with the plant ahead of its readiness to push out Premium Motor Spirit, also known as petrol, into the domestic market in July.

Marketers are also ready to begin PMS distribution from the plant.

The Independent Petroleum Marketers Association of Nigeria, Major Energies Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria confirmed the registration of their members with the Lagos-based refinery.

They also confirmed the continued lifting of diesel from the facility, stating that this has stabilised the price of the commodity and ensured its adequate supply since the commencement of production in March this year.

Diesel price crashed from about N1,800/litre to N1,200/litre after Dangote refinery released the product into the Nigerian market late March 2024, and since then the product’s availability has been guaranteed across the country.

Commenting on the stability of diesel price and its availability since Dangote started production, as well as the registration of marketers with the refinery, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, told our correspondent that over 25 million litres of AGO from the plant had been distributed by IPMAN members nationwide.

“Independent marketers are registering with Dangote, and many of us have lifted a lot of product from Dangote’s depot. I’m aware of so many marketers who have registered with the Dangote refinery.

“I can also confirm that independent marketers have loaded over 25 million litres of diesel since the refinery started the domestic sale of diesel to downstream oil sector operators in Nigeria,” Ukadike stated.

On April 2, 2024, oil marketers revealed that the Dangote refinery had commenced the sale of diesel to the domestic market.

Dealers and officials of the plant also confirmed the development at the time, as they explained that the plant actually started diesel sales the previous week.

“They started pumping out diesel to marketers since last week. They also promised to sell aviation fuel soon. Some of my members confirmed this to me after making a purchase,” the National President, IPMAN, Abubakar Maigandi, had told our correspondent at the time.

Maigandi had also stated that the move by Dangote would lead to a crash in diesel price, as the commodity rose to a high of about N1,700/litre at the time.

“The price of diesel is going to fall because of the release of products from Dangote Refinery. In fact, it is already coming down in Lagos,” Maigandi had stated.

This eventually happened after Dangote crashed diesel price to N1,200/litre.

Although officials of the Dangote refinery have remained silent on issues about the plant, dealers stated on Saturday that the marketers were anxiously awaiting the release of petrol from the plant, with the hope that this may crash the cost of the commodity.

“Marketers are loading more products from the plant and are eager to begin the lifting of PMS from the refinery, since the Chairman of the group has said that PMS should hit the market in July,” Ukadike stated.

He added, “I must say that it is a good thing to know that PMS is being finalised for release from that plant. This is because since Dangote diesel came into the market the price of diesel has not crossed the N1,200/litre mark.

“Independent marketers even in far away northern states are selling diesel at N1,200/litre at the pumps. So the coming of Dangote has slowed down the skyrocketing price of diesel. Now we are expecting PMS by July and this will end the importation of petroleum products.”

Business

How Oil Mafia Tried To Stop Our Refinery – Dangote

Published

3 days ago

June 13, 2024

Editor

The founder of Dangote Group, Aliko Dangote, has revealed that both local and international criminal organisations, which he described as “mafia”, made repeated attempts to sabotage his $19bn refinery project located in Lagos.

Speaking at the Afreximbank Annual Meetings, Dangote likened the oil cartels to a mafia stronger than the drug mafia hell-bent on maintaining their grip on the industry.

“Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact,” he said.

Dangote, who described himself as a fighter, said they “tried all sorts” to stop him.

“But I’m a person that has been fighting all my life. You know, so I think it’s part of my life to fight,” he said.

He added, “As a matter of fact during the COVID period, some of the international banks really were looking forward to making sure that they push us into default of our loans so that the project will just be dead. And that didn’t happen with the help of banks like Afreximbank.”

The PUNCH reports that Dangote also revealed that he has paid off $2.4bn of the $5.5bn borrowed for the Lagos-based refinery.

Dangote also unveiled plans to diversify into the steel sector, aiming to utilise solely Nigerian-produced steel and achieve self-sufficiency.

Dangote Refinery recently rescheduled the launch of its petrol sales to July 10-15, pushing back its initial June target due to “minor” logistical issues.

Business

Again, Naira Depreciates At Parallel Market

Published

2 weeks ago

May 31, 2024

Editor

The naira depreciated Friday to N1,485.99 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM rose to N1,485.99 per dollar from N1,484.75 per dollar on Thursday, indicating N1.24 depreciation for the naira.

The volume of dollars traded in the market declined by 1.7 percent to $213.52 million from $235.51 million traded on Thursday.

However, the naira was stable at N1,450 per dollar in the parallel market.

Consequently, the margin between the parallel market and NAFEM rates narrowed to N35.99 per dollar from N59.75 per dollar on Thursday.