Business
Governors Lament Rising Petroleum Subsidy
Governors in Nigeria under the aegies of the Nigeria Governors’ Forum (NGF) have lamented over the rising subsidy on petroleum products, particularly Premium Motor Spirit (PMS), saying it has placed immense financial burden on States.
NGF, the umbrella body for the 36 State Governors in Nigeria, disclosed this in a memo forwarded to the House of Representatives.
The memo, which was signed by the Head, Legislative Liaison, Peace and Security, NGF, Fatima Usman Katsina, for Chairman of the Forum, is in response to the call by the House for memoranda by the Ad Hoc Committee on the Volume of Fuel Consumed Daily in Nigeria, tasked with investigating the actual amount of PMS the country consumes daily.
Titled “Findings on the Volume of Fuel Consumed Daily in Nigeria”, and dated July 1, 2022, the memo was addressed to the Committee’s Chairman, Abdulkadir Abdullahi.
It stated in part: “Although the operating environment has significantly worsened since the report was released, with NNPC (Nigeria National Petroleum Company) now consistently reporting zero remittance to the Federation Accountant as profit from joint venture, production sharing contract and miscellaneous operations, the position of the forum remains generally the same”.
The governors referred the House to a November 2021 report by its National Executive Council’s ad hoc committee interfacing with the Nigeria National Petroleum Corporation (NNPC) on the appropriate pricing of PMS in Nigeria, which was chaired by Governor of Kaduna State, Nasir el-Rufai, and had governors of Edo, Jigawa, Ebonyi, Akwa Ibom and Ekiti, as well as the Governor of the Central Bank of Nigeria; Minister of Finance, Budget and National Planning; Accountant-General of the Federation, Group Managing Director of the NNPC and the Permanent Secretary, MBNP.
They also recalled how the report noted that the “federation (FAAC) net oil & gas revenues have been declining since 2019 and are projected to decline significantly in 2022 by between N3bn and up to N4.4bn unless action is taken now.”
The memo further read, “The following are some of the major findings relating to the volume of fuel consumed in the country:
“Remittances to the Federation Account Allocation Committee have continued to shrink as NNPC recovers shortfall quite arbitrarily from the Federation’s crude oil sales revenue. FAAC deductions for PMS subsidy are above 2019 levels, even without adjusting for reduced purchasing power of the naira due to inflation and FX rate deterioration.
“An analysis of the average monthly PMS consumption by states showed that a third of the country accounts for over 65 per cent consumption of PMS. The analysis showed that the following States of Lagos, Oyo, Ogun, Abuja, Delta, Kano, Kwara, Edo, Rivers, Kaduna, Kebbi and Adamawa accounted for 65 per cent of PMS consumption in the country. Most states with high PMS consumption either have borders with neighbouring countries or are in close proximity, this has been an avenue for smugglers to benefit from profitable arbitrage opportunities in PMS pricing.
“Households directly consume only about 25 per cent of the PMS that is consumed nationally, with the remaining three-quarters being consumed by firms, MDAs, transport operators or smuggled to neighbouring countries where the PMS price is nearly three times what it is in Nigeria; and of the PMS consumed by households, the richest 40 per cent of households account for over three-quarters of the PMS purchased by households, while the poorest 40 per cent of households purchased less than 3 per cent of all PMS sold in Nigeria.
“In the current fiscal regime, remittances to FAAC would continue to shrink as NNPC recovers this shortfall from the Federation as a result of crude oil price recovery.
“The report recommended a PMS pricing structure that addresses regional arbitrage and smuggling of PMS and provides additional revenue to the Federation Account.
“There is a significant market opportunity for additional export revenue streams for Nigeria to be had given the price parity with our neighbouring countries.
“Privatisation of the three government refineries as is, or after their full rehabilitation if affordable and viable, and expediting the licensing procedure for modular refineries will reduce the recurring government expenditure on refinery maintenance and increase the country’s refining capacity.”
The governors noted that there were also economic risks highlighted in the report. “Fiscal pressures are threatening Nigeria’s recovery, as rising prices continue to push millions into poverty,” they said.
According to the memo, “Rising prices are pushing millions of Nigerians into poverty. Rising inflation between 2020 and 2021 is expected to have pushed an additional 5-6 million Nigerians into poverty.
“Food insecurity is increasing in both poor and non-poor households, with some adults skipping meals. Because inflation is high, even if it remains stable, it will continue to push many more Nigerians into poverty.
“Fiscal pressures are growing unsustainably with the PMS subsidy significantly reducing the flow of revenues into the Federation Account.
“Thirty-five out of 36 states are likely to see transfers from the federation fall (in nominal terms) between 2021 and 2022, with the average decline projected to be about 11 per cent. Most states are already experiencing fiscal stress, with 30 out of 36 states recording fiscal deficits in 2020, including Lagos and every oil-producing state except Akwa Ibom.
“With the projected decline in gross distributable federation revenues in 2022, fiscal deficits and debt burdens will grow even larger and faster. This will mean that transfers from the federation will not be enough to cover even salaries, and certainly not recurrent costs, which are growing in nominal terms.
“With the coming into effect of the Petroleum Industry Act, gross oil & gas revenues could be (much) lower than currently projected because of the new fiscal terms and the earmarking of deductible revenues specified in the PIA, and that could reduce net oil & gas revenues even further”.
Consequently, the NGF stated that greater accountability and transparency around oil and gas revenues “are the only immediate options for easing the pressure on government finances and maximising socially responsible profit gain.”
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