The cost of oil subsidy is to shoot up by 70%, from 4 trillion naira in 2022 to 6.72 trillion naira in 2023.
This was revealed by Zainab Ahmed, Minister of Finance and National Planning, during a pre-2023 budget meeting with a House of Representatives Ad Hoc Committee investigating the Premium Motor Spirit (PMS) subsidy.
The current 4 trillion naira oil subsidy cost is about 10 times the 443 billion naira that the government initially budgeted for subsidy in 2022.
“Nigeria’s president said a state gasoline subsidy will cost almost 10 times more than budgeted because the war in Ukraine has pushed up oil prices and asked lawmakers to approve more borrowing to help fund it.
Higher prices hurt Africa’s biggest oil producer because the state energy company swaps unrefined crude for imported gasoline, which it sells at an increasingly steep loss to keep the pump price at 162.5 naira a litre”, Bloomberg reported.
Ms Ahmed expressed the government’s concerns about the 64 million litres consumed daily by the country, which the government subsidised at the rate of 283.2 naira per litre. According to her, this amounts to about N18.6 billion daily, adding that the consensus is that this subsidy should be removed.
However, she offered that the government is also considering halving the 6.72 trillion naira to 3.36 trillion naira by budgeting subsidy payments for 6 months only, that is, January to June 2023.
However, the committee chairperson, Ibrahim Aliyu (APC, Sokoto), disputed the Finance Minister’s claim of daily consumption of 64 million litres of petrol in the country, hinting at a subterfuge.
“If we look at average daily truck out of 64 million litres, in 2012, there was a report, and total consumption was put at 31 million. It is very difficult to have a 100% increase within 10 years.
“If we are using a 42,000-litre capacity truck, if you divide it by 64 million, you will arrive at 1,547 trucks daily, and if you take an average—simple division by 37 states, you have 41 trucks given to each state daily.
“The point, when you are talking of daily consumption, Monday to Monday, no public holidays….. In fact, during COVID, the consumption rate remains the same. I wonder how the minister can accept this kind of figure.
If you look at subsidy itself, is it for the common man? This subsidy is for the elite, not for the common man. This figure is overblown, and I feel that the ministry should have done due diligence to be able to arrive at a relative, acceptable consumption rate,” he said.
Debt Servicing and Subterranean Funds
In a related development, Dataphyte’s research has revealed that the Federal government of Nigeria intends to achieve a revenue of 8.46 trillion naira in 2023 and spend N6.31 trillion on debt servicing. This stems from its review of Nigeria’s 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
The Ministry of Finance indicated that it spent N1.9 trillion to service debts in the first four months of 2022, even though it made a lesser revenue of N1.3 trillion.
Interestingly, at times of dire economic straits like this, the country usually receives subterranean financial aid from the land of the dead. The country would be receiving another tranche of funds to the tune of $23 million that its dead military head of state, Sani Abacha, stole and stowed in the US.
The US ambassador to Nigeria, Mary Leonard, confirmed that the $23 million would add to the $311.7 million Abacha loot repatriated from the USA to Nigeria in 2020.
“This repatriation brings the total amount of funds repatriated in this case by the US to more than $334.7 million.
As a result of today (Tuesday’s) agreement, $23 million will be transferred to the Nigerian government, which through the NSIA (Nigerian Sovereign Investment Authority), will be used to continue the construction of three key infrastructural projects located in strategic economic zones of the country: The 2nd Niger Bridge, Lagos-Ibadan Expressway and the Abuja-Kano Road”, the US Diplomat assured.
Dying Servicemen and Subterminal Fears
A shootout with Nigerian troops at Ebem, a community in Ohafia Local Government Area of Abia State, has led to the death of a yet-to-be-identified soldier.
“The deceased who was serving at the 14 Brigade Headquarters of Goodluck Jonathan Barracks in the council Area, was said to have rode into the community with a motorcycle to buy provisions when the gunmen attacked.
The soldier sent a signal to the authorities in the Brigade to deploy troops for a rescue mission when he noticed that the gunmen were behind him… a group of soldiers intervened by engaging the gunmen on a gun duel, leaving two of them dead on the spot”, Premium Times reported. It was not clear, however, if the slain soldier was the one initially trailed by the gunmen.
About 1,129 security officials have been killed on active duty in the last 6 quarters, January 2021 to June 2022. Of this number, a total of 602 soldiers, 434 policemen and 93 other security operatives including the NSCDC, NIS, NCS, and DSS, have been killed.
While the number of reported fatalities among security officers is declining, some soldiers are taking the option of voluntary retirement. “No fewer than 243 soldiers in the North-East and other theatres of operation have applied to the Chief of Army Staff, Lt Gen General Faruk Yahaya, for voluntary retirement”, according to Sahara Reporters,
“The soldiers, drawn from various formations of the army across the country, are all junior cadres who are mostly fighting against terrorists and insurgents.
The report added that “the list of the exiting soldiers did not distinguish between those embarking on voluntary retirement and those leaving the army on medical grounds. However, none of them had neither attained retirement age nor the mandatory years of service.”
“Some of the affected soldiers who spoke to SaharaReporters cited loss of interest, intimidation by superiors, corruption in the army, and low morale as their reasons for resignation”, the online news medium reported.
However, the Army Spokesperson, Brigadier General Nwachukwu, confirming the development, said the resignations took place, but the personnel did not leave due to alleged corruption in the Army, poor service conditions and low morale, as reported by the newspaper.
Besides, the House of Representatives Majority Leader, Alhassan Doguwa, said the legislative arm has appropriated sufficient funds to the nation’s security agencies to enable them to battle insecurity across the country, urging other Nigerians to pray for the country since everyone cannot go out to fight bandits and terrorists.
To this effect, Nigeria’s Minister of Defence, Bashir Magashi, has said the armed forces have increased their strength and reviewed training and order of battle to curtail security threats across the nation.
Major General Magashi (Rtd.) said this at the 15th International Security Conference and Award (ISCA) organised by the International Institute of Professional Security (IIPS) on Saturday in Abuja.
He stated that there had been an enhanced synergy between the armed forces and other security agencies, which has led to the surrender of over 70,000 terrorists and their families in the northeast while hundreds of thousands of displaced persons have returned to their ancestral homes.
He added that troops had been deployed on the Abuja-Kaduna Highway on 24-hour patrols while Operation Forest Sanity had been launched to comb the forests in the North-central and North-west.
He also stated that camps belonging to criminals had been completely smashed and many terrorists either arrested or neutralised, leading to the rescue of many victims in the affected region.
Debatable Services and Subtle Frauds
There is an ongoing dispute about the standard and quality of services in the financial, communications and transport sectors.
First, the Federal Competition and Consumer Agency has ordered Google Play Store to pull down 4 money lending companies, Maxi Credit, ChaCha, Here4U, and SoftPay, for escalating unethical, obnoxious and unscrupulously exploitative practices in the industry.
This was contained in a statement signed by Babatunde Irukera, the commission’s Chief Executive Officer.
Mr Irukera had led a similar operation to tackle possible violations of consumer rights in March, where at least 7 loan companies, including Soko Loan, were raided.
The commission also ordered all operating payment systems, including Flutterwave, Opay, Paystack and Monify to immediately desist from providing payment or transaction services to money lending firms under investigation.
The commission has also ordered telecommunication/technology companies (including Mobile Network Operators, MNOs) to cease and desist providing services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.
On the other hand, the Nigerian government, through its agency, Nigeria Broadcasting Commission (NBC), has announced the revocation of the broadcast licenses of 52 television and radio stations.
It also ordered the immediate shutdown of the affected station within 24 hours because they failed to renew their licenses as required by law.
The commission said it had, in May 2022, given the affected stations two weeks to renew their licenses and pay their debts or consider their licenses revoked. Three months after the publication, some licensees are yet to pay their outstanding debts.
NBC, the agency in charge of regulating the broadcast industry, has, however, been criticised in the past for arbitrary imposition of fines on broadcast stations over controversial programmes.
In the transportation industry, a former permanent secretary of Lagos State Ministry of Transportation, Mr. Taiwo Salaam, decried the alarming levels of traffic congestion in Lagos. He warned that if the situation continues unaddressed till 2030, the city may lose as much as 21 billion dollars monthly.
Mr Salaam, who is now a Senior Lecturer and Head of Department, Transport Technology and Infrastructure at the School of Transport and Logistics, Lagos State University, Ojo, raised this alarm when delivering a lecture on the theme: The Evolution of Transport, Congestion and Traffic Management in Metropolitan Lagos, at the school’s 3rd Distinguished Lecture Series.
The guest lecturer went further to explain that Lagos’s population is growing at 7-8% yearly, that the population growth of Lagos is 10 times faster than that of New York and Los Angeles.
He added that Lagos currently accommodates 40% of the total registered vehicles in Nigeria making it face the challenges of developing a transportation system that will serve its citizenry in terms of safety, accessibility, affordability, reliability, efficiency and comfortability.
Proffering solutions to the traffic gridlock in Lagos, Mr Salaam, who has a certificate in transport management and is the Chairman of Chartered Institute of Transport Administration of Nigeria (CIOTA), suggested Automated Guideway Transit (AGT), a type of railway, and suspended cars/buses in rope (cable cars) as the lasting solution.