Business
Fuel Subsidy, Bane Of Nigeria’s Economy – World Bank
The World Bank has said that increasing fuel subsidy puts the Nigerian economy at a high risk.
It also noted that subsidy payments could significantly impact public finance and pose debt sustainability concerns.
Stating this in a new biannual report known as Africa’s Pulse, bank said Nigeria is projected to have a 3.8 per cent growth in 2022, adding that as an oil-dependent country, weak oil production hampers economic recovery.
It continued that the increasing fuel subsidy poses a high risk to the country’s economic growth, despite the increase in oil prices.
“Growth in Nigeria is forecast to increase to 3.8 per cent in 2022 and stabilise at 4 per cent in 2023-24. Real GDP growth was revised up by 1.2 percentage points for both periods compared with the previous forecast. Nigeria’s economy is still dependent on the oil sector. Oil-related revenue contributes 40 to 60 per cent of fiscal revenue, while oil and gas account for 80 to 90 per cent of total exports.
“Weak oil production, below the OPEC quota, held back the recovery process. Although at a slower pace than the average seven per cent during the boom period, growth prospects for the Nigerian economy are somewhat bright thanks to high oil prices coupled with reforms initiated by the passing of the Petroleum Industry Act and the completion of the Dangote refinery expected in 2023.
“Risk remains high on increasing fuel subsidies, which could weigh heavily on public finance and pose debt sustainability concerns. Nevertheless, public debt as a percentage of GDP is currently moderate”, the report said.
According to the World Bank, the high level of oil prices will affect countries that are shielding the impact on their consumers through fuel subsidies, such as Nigeria and Ethiopia.
It added that the high cost of fuel subsidies, due to the increase in oil prices, may deteriorate the country’s fiscal balance.
In 2021, the Nigerian National Petroleum Corporation said fuel subsidy gulped N1.43tn, although there was no record for under-recovery in January.
The National Assembly has approved N4tn as fuel subsidy bill for 2022, which is an increase of 179.72 per cent over the previous year’s subsidy bill.
However, experts have warned the Federal Government that the N4tn fuel subsidy bill would adversely affect the country’s economy.
The Country Director, World Bank, Shubham Chaudhuri, had said Nigeria’s decision to postpone the full deregulation of the downstream sector of the petroleum industry by 18 months might cost the country over N4tn in subsidy payments on petrol in 2022.
The World Bank’s Country Director, however, noted that while the World Bank could come up with advice on subsidy removal, its role was certainly not to dictate as it had no ability to do such.
Chaudhuri said: “With economics, really, you are not meant to make a political decision. What you are meant to do is to lay out what are the cons and consequences of different decisions.
“So that is what we are doing, we are just being very clear that this would come with a fiscal cost and the fiscal cost is the number, perhaps N4tn this year.”
He said despite the fact that the price of oil had gone up, the rise in global crude oil prices was not helping Nigeria that much.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter
