Subsidy

The positive trends emanating from the implementation of the twin policies of fuel subsidy removal and harmonisation of foreign exchange market are indications that Nigeria is on the right track despite the hardship currently facing the people.

Nigeria should envisage an economic growth trajectory, even in the face of prevailing challenges confronting the economy, the Chairman of the Independent Media and Policy Initiative (IMPI), Chief Niyi Akinsiju, said in a policy statement released on Tuesday by the Think-tank..

“By our conservative estimation, we can posit that the economy may have survived the most elementally critical stage as it adjusts to the subsidy removal policy and unification of the foreign exchange rates,’’ he said.

The Think-Tank boss said that IMPI was confident of increased Gross Domestic Product (GDP) growth in 2024, buoyed by the non-oil sector and driven by expansion in the financial sector which shall benefit from regulatory increase in interest rates as the Central Bank of Nigeria battles to tame inflation and stabilize the foreign exchange rate.

He was emphatic that these would act together to impact the living standards of the citizens in the months ahead.

Aside the touch President Tinubu put on the fiscal and monetary sector, he has also escalated progress in the oil and non-oil sector which have combined together to boost the nation’s GDP.

The latest GDP numbers from the National Bureau of Statistics (NBS) have shown in many ways that the Nigerian economy is not only fast adjusting but also adapting to the national economic reforms being spearheaded by the President Bola Ahmed Tinubu administration.

The reformation is headlined by the twin policies of fuel subsidy removal and unification of the foreign exchange rates.

“Whereas the GDP figures of the third quarter (Q3) 2023, which was the first full quarter of the administration, evinced national economic production activities data which reacted sharply to the introduction of the two policies, the economy recorded a marginal increase in the GDP growth trajectory for the year which had commenced an incremental momentum in Quarter 1 (Q1) 2023 by a 2.31 percent growth.

“Though the figure was, in reality, a reflection of a 1.21 percent decline from a high of 3.52 percent growth recorded in the fourth quarter, 2022 (Q4 2022), the Q2 2023 GDP added some form of velocity when it grew by .20 percent to 2.51 percent.

The half-year momentum,  however,  balked when the then new administration of President Tinubu announced on the May 29, 2023 inauguration day that it had removed the very popular payment of subsidy for Premium Motor Spirit (PMS) also known as petrol.’’

He said that the national economy has continued to manifest different characterisations of macroeconomic disruptions across all indicators from high inflation rate to high interest rate to high exchange rates and high unemployment rate.

In the ordinary sense, not many analysts gave the reform-era economy a fighting chance to grow as exponentially as it did in Q4 2023, not in the face of the hoopla that had characterised the reactions to the two policies in the public space.

Though analysts attributed the relatively high GDP figure of Q4 2023 to a low base effect, yet, to our minds, the emerging reality, as it were, is that the Nigerian economy appears to have been waiting for this hypodermic intervention to wean the  populace off unmitigated consumption and channel earned revenue to savings and productivity enhancing infrastructure.

“Besides, a sectoral analysis of the GDP Q4 2023 showed even more interesting undercurrents in the different sectors that make up the national economy.’’

The NBS explained that the performance of the GDP in Q4 2023 was driven mainly by the services sector, which recorded a growth of 3.98 per cent and contributed 56.55 per cent to the aggregate GDP. Impressively, the agriculture sector grew by 2.10 per cent, from a growth of 2.05 per cent recorded in Q4 2022.

“This, in our consideration, may have provided the answer to questions over the level of preparedness of the federal government to feed its citizens in the aftermath of the subsidy removal and unification of the exchange rate which will inexorably lead to depreciation of the local currency thereto.

“As it were, the increase in the growth of the agricultural sector, as reflected in increased crops production, is indicative of more jobs creation because the agriculture, besides the food security implication,  is a major enabler of employment.

“Directly linked with this is the equally impressive 3.86 percent growth in the industry sector as encapsulated in the manufacturing sector. This is an improvement on the lowly -0.94 per cent recorded in the fourth quarter of 2022. In addition to this, the sector grew by 30.93 percent in 2023 compared to 6.93percent in 2022 on annual basis.

“It is, indeed, exhilarating to finally see a big movement in the percentage contribution of manufacturing to GDP recording a high of 17.3.4 percent. This is despite the envisaged constrictions of possible low productivity in the sector in consequence of the twin policies highlighted above by some critics and cynics.’’

This expansion in Manufacturing GDP should be a source of excitement because it is a key driver that propels progress in a nation’s economy. It is a powerful force that revolves on the growth, productivity, and competitiveness trajectories. A nation’s overall economic growth can greatly depend on robustness and performance of the manufacturing sector

“Besides, the manufacturing sector is a high labour-absorbing sector that can create direct employments for people like operators of machineries, technicians and engineers in the manufacturing sector. The sector can also create indirect employment for supply chain actors in other sectors of the economy such as raw materials suppliers, logistics and transportation, farmers, miners etc.

In addition, manufacturing helps to expand the tax base (number of taxable people and entities) and tax returns as taxes are paid by both manufacturers and workers ultimately increasing the nation’s revenue. The manufacturing sector currently accounts for about 30percent of Nigeria’s Non-Import VAT and 26percent of its Company Income Tax.

Added to the Q4 GDP impetus, Akinsiju said, was the revival in crude oil production after years of near doldrums.

According to the NBS, real growth of the oil sector spiral upward to 12.11 percent year on year in Q4 2023. This indicated an increase of 25.50 percentage points (highest in the last three years) compared to the rate recorded in the corresponding quarter of 2022 which was -13.38 percent. Growth also increased by 12.96 percentage points when compared to Q3 2023 which was -0.85 per cent.

“By way of production breakdown, the nation in the fourth quarter of 2023, recorded an average daily oil production of 1.55 million barrels per day (mbpd), higher than the daily average production of 1.34mbpd recorded in the same quarter of 2022 by 0.21mbpd.

“This is higher than the production volume of the third quarter of 2023, which is 1.45mbpd, an increase of 0.10mbpd. This has implications for inflow of foreign exchange because the nation depends on crude oil export for more than 90 percent of its foreign exchange earnings.

The principal explanation for this impressive crude oil production increase is that the country now has about 30 functioning rigs in its upstream oil and gas sector. ‘’

According to OPEC data, Nigeria’s average rigs count was 11, 7, and 20 in 2020, 2021 and 2022 respectively.

IMPI’s Policy Statement

Q4 2023 GDP Figures Indicate Economy Fast Adjusting to Tinubu’s Reformation Policies

The latest Gross Domestic Product (GDP) numbers from the National Bureau of Statistics (NBS) have shown in many ways that the Nigerian economy is not only fast adjusting but also adapting to the national economic reforms being spearheaded by the President Bola Ahmed Tinubu administration. The reformation is headlined by the twin policies of fuel subsidy removal and unification of the foreign exchange rates.

Whereas the GDP figures of the third quarter (Q3) 2023, which was the first full quarter of the administration, envinced national economic production activities data which reacted sharply to the introduction of the two policies,the economy recorded a marginal increase in the GDP growth trajectory for the year which had commenced an incremental momentum in Quarter 1 (Q1) 2023 by a 2.31 percent growth.

Though the figure was, in reality, a reflection of a 1.21 percent decline from a high of 3.52 percent growth recorded in the fourth quarter, 2022 (Q4 2022), the Q2 2023 GDP added some form of velocity when it grew by .20 percent to 2.51 percent. The half-year momentum,  however,  balked when the then new administration of President Tinubu announced on the May 29, 2023 inauguration day that it had removed the very popular payment of subsidy for Premium Motor Spirit (PMS) also known as petrol.

A few days later on 14 June 2023, the Central Bank of Nigeria, taking a cue from the fiscal authorities, announced the unification of all segments of foreign exchange market, effectively shutting down all privileged access to the multiple windows forex market, that had enabled round tripping and other forms of profiteering from the forex market to the detriment of the nation’s foreign exchange reserve in particular and the larger economy, in general.

From our reading of the national economy, the deployment of the two policies was received with a form of equanimity by economic agents in the country. In quarter three 2023, being the first full quarter of the implementation of the subsidy removal and unification of Forex rates, the economy,  as reflected in the GDP figures, did not go down as some critics had anticipated. Rather, it grew by a marginal 0.3 percent in Q3 2023, to 2.54 percent from 2.51 percent in Q2 2023. That razor thin marginal increase was easily explained away as the consequence of the two policies that now constitute the drivers of the national economy.

Some other critics had predicted actual decline in the economy with macroeconomic indicators returning stressful figures. The inflation rates had hugged a high of 26.72 percent in September, 2023. In December 2023, inflation rate sped to a historic high of 28.9 percent amidst high food inflation rate of 33.93 percent while the Naira to Dollar exchange rate at the black market closed the year at N1200/$. This scenario for many commentators was the equivalent of the proverbial Sword of Damocles literally hanging over the head of the country. But the Q4 2023 GDP figure recently released by the NBS is a reflection of strong growth compared to Q3 2023. This is indicative of a resilient economy that is in ascendancy.

By our consideration, if there was any doubt concerning the appropriateness of the deployment of the subsidy removal policy and the floating of the Naira exchange rate policy in Q3 2023, all that doubt evaporated with the strong showing of the GDP in Q4 2023, with a figure indicating an expanded national economic production value that grew by 3.46 percent (year-on-year), in real terms.

Though we acknowledge that the figure is lower than the 3.54 percent of the corresponding Q4 2022, for context, as a body of analysts, we dichotomized the GDP aggregation periods into the “business as usual” economic era, and the “economic reform” era. The period starting from June, 2023 represents the reform era.

Up until this moment, the national economy has continued to manifest different characterisations of macroeconomic disruptions across all indicators from high inflation rate to high interest rate,  and high exchange rates to high unemployment rate.

In the ordinary sense, not many analysts gave the reform-era economy a fighting chance to grow as exponentially as it did in Q4 2023, despite the hoopla that had characterised the reactions to the two policies in the public space.

Though analysts attributed the relatively high GDP figure of Q4 2023 to a low base effect, yet, to our minds, the emerging reality is that the Nigerian economy appears to have been waiting for this hypodermic intervention to wean the  populace off unmitigated consumption. This will enable the government channel earned revenue to savings and productivity enhancing infrastructure. Besides, a sectoral analysis of the GDP Q4 2023 showed even more interesting undercurrents in the different sectors that make up the national economy.

The NBS explained that the performance of the GDP in Q4 2023 was driven mainly by the services sector, which recorded a growth of 3.98 per cent and contributed 56.55 per cent to the aggregate GDP. Impressively, the agriculture sector grew by 2.10 per cent, from the 2.05 per cent recorded in Q4 2022.

This, in our consideration, may have provided answers to questions over the level of preparedness of the federal government to feed its citizens in the aftermath of the subsidy removal, and unification of the exchange rate. This will inexorably lead to depreciation of the local currency thereto.

As it were, the increase in the growth of the agricultural sector, as reflected in increased crops production, is indicative of more jobs because agriculture, besides the food security implication,  is a major enabler of employment.

Directly linked with this, is the equally impressive 3.86 percent growth in the industry sector as encapsulated in the manufacturing sector. This is an improvement on the lowly -0.94 per cent recorded in the fourth quarter of 2022. In addition to this, the sector grew by 30.93 percent in 2023 compared to 6.93 percent in 2022 on an annual basis. It is, indeed, exhilarating to finally see a big movement in the percentage contribution of manufacturing to GDP recording a high of 17.34 percent. This is despite the envisaged constrictions of possible low productivity in the sector as a consequence of the twin policies highlighted above by some critics and cynics.

This expansion in Manufacturing GDP should be a source of excitement because it is a key driver that propels progress in a nation’s economy. It is a powerful force that revolves on the growth, productivity, and competitiveness trajectories. A nation’s overall economic growth can greatly depend on robustness and performance of the manufacturing sector.

Besides, the manufacturing sector is a high labour-absorbing sector that can create direct employment. It can also create indirect employment for supply chain actors in other sectors of the economy such as raw materials suppliers, logistics and transportation, farmers, miners etc.

In addition, manufacturing helps to expand the tax base (number of taxable people and entities) and tax returns. This is because taxes are paid by both manufacturers and workers which  ultimately increases the nation’s revenue.

The manufacturing sector currently accounts for about 30percent of Nigeria’s Non-Import VAT and 26percent of its Company Income Tax. Given its potential to empower skills development, facilitate increased export and global competitiveness, andQ4 2023 GDP Figures Indicate Economy Fast Adjusting to Tinubu’s Reformation Policies*

The latest Gross Domestic Product (GDP) numbers from the National Bureau of Statistics (NBS)have shown in many ways that the Nigerian economy is not only fast adjusting but also adapting to the national economic reforms being spearheaded by the President Bola Ahmed Tinubu administration. The reformation is headlined by the twin policies of fuel subsidy removal and harmonisation of the foreign exchange rates.

Whereas the GDP figures of the third quarter, Q3 2023, which was the first full quarter of the administration, envinced national economic production activities data which reacted sharply to the introduction of the two policies,the economy recorded a marginal increase in the GDP growth trajectory for the year which had commenced an incremental momentum in Quarter 1 (Q1 2023) by a 2.31 percent growth.

Though the figure was, in reality, a reflection of a 1.21 percent decline from a high of 3.52 percent growth recorded in the fourth quarter, 2022 (Q4 2022) the Q2 2023 GDP added some form of velocity when it grew by .20 percent to 2.51 percent. The half-year momentum,  however,  balked when the then new administration of President Tinubu announced on the May 29, 2023 inauguration day that it had removed the very popular payment of subsidy for petroleum motor spirit (PMS).

A few days later on 14 June, 2023, the Central Bank of Nigeria, taking a cue from the fiscal authorities, announced the unification of all segments of foreign exchange market, effectively shutting down all privileged access to the multiple windows Forex market that had enabled round tripping and other forms of profiteering from the forex market to the detriment of the nation’s foreign exchange reserve in particular and the larger economy,  in general.

From our reading of the national economy, the deployment of the two policies was received with a form of equanimity by economic agents in the country. In quarter three, Q3 2023, being the first full quarter of the implementation of the subsidy removal and unification of Forex rates, the economy,  as reflected in the GDP figures, did not go down as some critics had anticipated. Rather, the economy grew by a marginal 0.3 percent in Q3 2023, to 2.54 percent from 2.51 percent in Q2-2023. That razor thin marginal increase was easily explained away as the consequence of the two policies that now constitute the drivers of the national economy.

Some other critics had predicted actual decline in the economy with macroeconomic indicators returning stressful figures. The inflation rates had hugged a high of 26.72 percent in September, 2023. In December, 2023, inflation rate sped to a historic high of 28.9 percent amidst high food inflation rate of 33.93 percent while the Naira to Dollar exchange rate at the black market closed the year at N1200/$. This scenario for many commentators was the equivalent of the proverbial Sword of Damocles literally hanging over the head of the country. But the Q4 2023 GDP figure recently released by the NBS recently is a reflection of strong growth compared to Q3 2023 and indicative of a resilient economy that is in ascendancy.

By our consideration, if there was any doubt concerning the appropriateness of the deployment of the subsidy removal policy and the floating of the Naira exchange rate policy in Q3-2023, all that doubt evaporated with the strong showing of the GDP in Q4 2023, with a figure indicating an expanded national economic production value that grew by 3.46 percent (year-on-year), in real terms.

Though we acknowledge that the figure is lower than the 3.54 percent of the corresponding Q4 2022, for context, as a body of Analysts, we dichotomized the analysis of the GDP aggregation periods into the “business as usual” economic era and the “economic reform” era. The period starting from June, 2023 represents the reform era.

Up until this moment, the national economy has continued to manifest different characterisations of macroeconomic disruptions across all indicators from high inflation rate to high interest rate to high exchange rates and high unemployment rate, thus, in the ordinary sense, not many analysts gave the reform-era economy a fighting chance to grow as exponentially as it did in Q4 2023, not in the face of the hoopla that had characterised the reactions to the two policies in the public space.

Though analysts attributed the relatively high GDP figure of Q4 2023 to a low base effect, yet, to our minds, the emerging reality, as it were, is that the Nigerian economy appears to have been waiting for this hypodermic intervention to wean the  populace off unmitigated consumption and channel earned revenue to savings and productivity enhancing infrastructure. Besides, a sectoral analysis of the GDP Q4 2023 showed even more interesting undercurrents in the different sectors that make up the national economy.

The NBS explained that the performance of the GDP in Q4 2023 was driven mainly by the services sector, which recorded a growth of 3.98 per cent and contributed 56.55 per cent to the aggregate GDP. Impressively, the agriculture sector grew by 2.10 per cent, from a growth of 2.05 per cent recorded in Q4 2022. This, in our consideration, may have provided the answer to questions over the level of preparedness of the federal government to feed its citizens in the aftermath of the subsidy removal and unification of the exchange rate which will inexorably lead to depreciation of the local currency thereto.

As it were, the increase in the growth of the agricultural sector, as reflected in increased crops production, is indicative of more jobs creation because the agriculture, besides the food security implication,  is a major enabler of employment.

Directly linked with this is the equally impressive 3.86 percent growth in the industry sector as encapsulated in the manufacturing sector. This is an improvement on the lowly -0.94 per cent recorded in the fourth quarter of 2022. In addition to this, the sector grew by 30.93 percent in 2023 compared to 6.93percent in 2022 on annual basis. It is, indeed, exhilarating to finally see a big movement in the percentage contribution of manufacturing to GDP recording a high of 17.3.4 percent. This is despite the envisaged constrictions of possible low productivity in the sector in consequence of the twin policies highlighted above by some critics and cynics.

This expansion in Manufacturing GDP should be a source of excitement because it is a key driver that propels progress in a nation’s economy. It is a powerful force that revolves on the growth, productivity, and competitiveness trajectories. A nation’s overall economic growth can greatly depend on robustness and performance of the manufacturing sector

Besides, the manufacturing sector is a high labour-absorbing sector that can create direct employments for people like operators of machineries, technicians and engineers in the manufacturing sector. The sector can also create indirect employment for supply chain actors in other sectors of the economy such as raw materials suppliers, logistics and transportation, farmers, miners etc.

In addition, manufacturing helps to expand the tax base (number of taxable people and entities) and tax returns as taxes are paid by both manufacturers and workers ultimately increasing the nation’s revenue. The manufacturing sector currently accounts for about 30percent of Nigeria’s Non-Import VAT and 26percent of its Company Income Tax.

Given its potential to empower skills development, it facilitates increased export and global competitiveness as well as enhance infrastructural development. Manufacturing can also influence revenue generation across other sectors.

According to the World Bank, industry employment accounted for 13percent of total employment in Nigeria in 2021, therefore, with the increase in the manufacturing GDP in Q4 2023, we can safely surmise that all things being equal, more jobs would have accompanied the exponential growth recorded in the manufacturing sector.

Further background checks of the data returned by the best performing sectors showed that the two policies that are being vilified continuously by some critics may have been directly and indirectly responsible for the impressive growth of the manufacturing GDP. To that extent,  it has created possibilities for realising the functional and associated attributes of the manufacturing sector as highlighted above.

This also speaks to how the rejuvenation of the manufacturing sector must have energised the financial service sector to deliver on its financial intermediation role in the money and credit market.

Indeed, our analysis of the latest data released by the NBS showed that the value of Nigeria’s financial service sector’s contribution to Nigeria’s GDP increased to N3.8 trillion in 2023, representing 26.5 percent Year-on-Year (YoY) from N3.01 trillion reported in 2022. This figure, by our estimation, is considered unprecedented, especially so, in the context of the prevailing macro economic challenges that the country has had to contend with.

Instructively, the growth in Fintech, foreign exchange unification, and lending to the real sector were major highlights of the banking sector in 2023. To show the connection between manufacturing GDP growth and financial institutions, the CBN has made public the quantum of banks’ credit to the private sector. Banks’ credit to the economy, according to the CBN, rose by 49.77 per cent Year-on-Year (YoY) to N62.52 trillion in December 2023 from the N41.74trillion reported in the corresponding period of 2022. A larger percentage of these credits would have been used by operators in the manufacturing sector because the sector is a large consumer of the financial sector’s credit.

Data from CBN’s Money and Credit Statistics showed that credit to the private sector stood at N62.52 trillion for the month of December, second to total credits of N63.57 recorded in October, the highest value of credits forged in 2023 and, incidentally, both high credits months were in Q4 2023.

This increased lending to private sector operators, from our point of view, is suggestive of the sustained confidence in the economy, and more than anything else, an accommodation of the subsidy removal policy and the unification of the foreign exchange rates policy by critical industry stakeholders.

Thus, it can be said about Nigeria, under President Tinubu, that the country is evolving into a robust financial environment with an expanding private sector.

Added to the Q4 GDP impetus is the revival in crude oil production after years of near doldrums. According to the NBS, real growth of the oil sector spiral upward to 12.11 percent year on year in Q4 2023. This indicated an increase of 25.50 percentage points (highest in the last three years) compared to the rate recorded in the corresponding quarter of 2022 which was -13.38 percent. Growth also increased by 12.96 percentage points when compared to Q3 2023 which was -0.85 per cent.

By way of production breakdown, the nation in the fourth quarter of 2023, recorded an average daily oil production of 1.55 million barrels per day (mbpd), higher than the daily average production of 1.34mbpd recorded in the same quarter of 2022 by 0.21mbpd. This is higher than the production volume of the third quarter of 2023, which is 1.45mbpd, an increase of 0.10mbpd. This has implications for inflow of foreign exchange because the nation depends on crude oil export for more than 90 percent of its foreign exchange earnings.

The principal explanation for this impressive crude oil production increase is that the country now has about 30 functioning rigs in its upstream oil and gas sector.

According to OPEC data, Nigeria’s average rigs count was 11, 7, and 20 in 2020, 2021 and 2022 respectively. Rig count is a measure of vibrant activities in the oil industry. It also referred to the number of active drilling rigs extracting oil from the ground at a given time. It is an important metric in the oil and gas industry as it provides insight into the level of drilling activity, which can influence oil production levels and market dynamics.

The draw down from this is that the Tinubu administration must have rolled up its sleeves and went to work to redeem the nation’s problematic crude oil production activities as soon as it was sworn into office.

By our conservative estimation, we can posit that the economy may have survived the most elementally critical stage as it adjusts to the  subsidy removal policy and unification of the foreign exchange rates. We, therefore, envisage an economic growth trajectory, even in the face of prevailing challenges confronting the economy.

We are confident of increased GDP growth in 2024, buoyed by the non-oil sector and driven by expansion in the financial sector which shall benefit from regulatory increase in interest rates as the Central Bank of Nigeria battles to tame inflation and stabilize the foreign exchange rate. These will act together to impact the living standards of the citizens in the months ahead.

Signed

Chief Niyi Akinsiju

Chairman

Independent Media and Policy Initiative (IMPI)

The four assembly companies being established by Nigeria to produce luxury buses and tricycles running on green, efficient, and cost effective energy have been identified as one of the appropriate measures to cushion the effects of fuel subsidy.

An Abuja-based international think tank, the Independent Media and Policy  Initiative (IMPI), praised the policy at a press conference on Tuesday by the Chairman of the Initiative, Chief Niyi Akinsiju.

According to IMPI, the companies would initially assemble 750 buses and thousands of tricycles which will be propelled with Compressed Natural Gas (CNG).

As the companies take delivery of CNG kits and start to assemble the buses of tricycles, another 100 electric buses have been imported.

The companies would continue to take delivery of Completely knocked down parts to ensure that Nigeria is flooded with buses and vehicles which would be affordable.

President Bola Tinubu’s transport polic , Akinsiju said was activation of the long dormant National Gas Master Plan which effectively provides momentum for the commercial use of natural and liquefied gas.

Akinsiju said that the multiplier effect of all of these will include technology adaptation, cheaper transport, job creation, enablement of commercial utilisation of natural gas and an environment-friendly energy use regime, in alignment with environmental sustainability.

“In the light of efforts to ameliorate the transportation cost burden on Nigerians during the last Christmas period, we all recall how the President introduced an intervention to reduce public transportation costs by 50% on selected routes nationwide as well as the free rail transport initiative across the country.

“We consider this a true exemplification of emotional intelligence by the President Tinubu administration and a show of connection to everyday existence of the average Nigerian.

“Similarly, we have conducted a performance audit of the implementation status of railway projects in the country as part of properly situating the intermodal transportation system that should facilitate cheaper and easy spatial connectivity within the Nigerian geographical space.

“We can authoritatively report that in addition to the popular Abuja – Kaduna and Lagos – Ibadan standard gauge routes, laying of tracks has been completed on the Port Harcourt-Abia axis of the Port Harcourt to Maiduguri strategic narrow rail route and from all indications, rail services are set to commence on that route shortly. Also, the Lagos-Kano narrow gauge express service will be operational soon.

“Related to this, our investigation shows that work is ongoing simultaneously on the Kaduna to Kano and the Kano to Maradi rail projects,’’ he said.

Akinsiju said that the transportation plan was indicative of a developing scenario of a truly intermodal transportation system as required in any country with a claim to driving growth and development.

According to IMPI, President Tinubu rightly acknowledged that the fuel subsidy regime was an albatross on the nation’s economy with debilitating impact on its sustainability and by extension, a threat to the quality of life of the generality of Nigerians, if a decisive policy statement was not immediately made and enforced.

“While taking cognizance of the associated economic challenges that households are grappling with, it is our considered opinion that the decision by the President to announce the removal of fuel subsidy is not only courageous but commendable,’’ Akinsiju said.

He said that it was a measure to eliminate the long standing subsidy related corruption perpetrated by the cartel of the subsidy regime.

“From a policy impact point of view, the measure triggered the immediate positive outturn on Premium Motor Spirit (PMS) consumption and related revenue earnings compared to the pre-subsidy removal regime.’’

“Just after about a month after the announcement of the removal of fuel subsidy, national daily fuel consumption fell dramatically from an unexplainable 66.7 million litres a day as of May 2023 to 45 million litres. The consumption size has further reduced and now stabilised at 43.3 million litres a day.

“This steep reduction has led to a quantum leap in total gross revenue going into the federation account and subsequent FAAC allocation to the three tiers of government from N786.161bn in May 2023 to a high of N1.1trn in August because NNPCL was no longer resorting to its famed under-recovery.’’

He explained that for the first time in the history of FAAC, the Federal Government of Nigeria started cultivating the culture of savings from revenue accruals beginning from the over N700bn that was saved in July last year when the FAAC received  the sum of N1.959 trillion.

“This has marked a turning point in Federation accruals and revenue generation with implications for budget performance.’’.

Abuja, Jan. 18, 2024: The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said the Federal Government will be saving N8tn annually from the fuel subsidy removal and exchange rate unification policies.

Oyedele spoke during a panel session at the Lagos Chamber of Commerce and Industry 2024 Economic Outlook and Budget Analysis.

He, therefore, said it was critical for the government to spend the amount saved from the two policies to ameliorate the suffering of the average Nigerian.

He said, “The Nigerian people made sacrifices as a result of the fuel subsidy removal of the government; that is N4tn savings a year. We did naira floatation. It is not perfect. We are also saving another N4tn. So we are having about roughly N8tn transferred from the private pockets of the people to the government.

“So, what we are saying to the government is — can we be intentional in spending this N8tn to make sure that it impacts the people most positively? Starting with the multidimensional poverty. why is it that more than 133 million people in Nigeria are living in multidimensional poverty? So these are the conversations we are having now. We want to build a platform where we can track how these monies are being spent.”

He added, “In the committee, we tried to look at the most pressing issues we face as a country — inflation, forex instability, lack of investments. One of our recommendations is for the government to suspend some taxes. We call them nuisance taxes because they frustrate people, and we can’t even see the money in government treasury.”

According to Oyedele, there is an urgent need to create digital opportunities for the teeming youthful population because Nigeria has enough capacity to generate $20bn annually from the technology sector.

Hinting on some of the recommendations the panel has made to the Federal Government, Oyedele said there was an urgent need to promote exports, including services and intellectual property because, “Before you start exporting goods, you can export services and intangibles.”

He also said that out of the $20bn diaspora remittances recorded in 2023, more than 90 per cent of the funds did not arrive Nigeria in foreign currencies because of existing loopholes which allow middlemen to divert the foreign currencies and pay the recipients of the funds in naira.

He added. “For example, just asking Nigerian companies and businesses to pay taxes in dollars is about $3.5bn annually, but we sat and thought about it, and wondered how the idea came about.

“How does it help us, that a Nigerian company will go to the market to go and look for the little dollars that is in Nigeria so it can use it to pay the government of Nigeria? So, just amend the law and you will take that pressure away.”

Kano, July 31, 2023: Some stakeholders have called on the Federal Government to channel subsidy funds into agriculture, health and education to address the impact of fuel subsidy removal.

The Stakeholders which include 19 Civil Society Organisations, traditional leaders, women groups and Unions, among others, made the call during a two-day northern regional town-hall meeting organised by Partnership for Amplified Voices (PAV) in Kano.

The stakeholders also called for increase minimum wage and subsidized production.

The Executive Director Connected Development (CODE), Mr Hamzat Lawal, said that the meeting was to come together to proffer lasting solutions on fuel subsidy removal which has affected people at the grassroots level.

Lawal described citizens engagement as a major catalyst to help improve their engagements in the northern region, states and Communities and be more effective at promoting transparency and accountability.

On his part, the National Coordinator, NG Cares, Dr Abdulkarim Obaje, in his presentation, tagged “understanding the NG Cares initiative of Federal Government, Financed by world bank”, called for enforcement of funds release policy to ensure timely release of palliatives.

“The fund should not stay more that 10 working days in the account of the state government and immediately be disbursed to the beneficiaries,” Obaje said.

He advised CSOs to work closely with government and citizens, to effectively monitor the subsidy savings and spendings to promote transparency and accountability at sub national level.

Dr Eze Onyekpere, also speaking on “fuel subsidy Savings and other FG policies: How can citizens optimally benefit?” noted that an Infrastructure support fund has been set up by proclamation to alleviate suffering due to fuel subsidy removal.

Speaking earlier, the Falakin Bichi, Alhaji Abba Wada-Waziri, emphasized the need for more efforts, by CSOs to ensure that palliatives are distributed at the grassroots level.

Others who spoke during the town-hall meeting, include: Hajiya Mairo Bello from AGIP, Safiyan Lawan-Bichi, from Kano budget working group and Fatima Musa-Aliyu, Bridge connect Africa, among others.

The town-hall meeting, with the theme “How Best Citizens Can Benefit From Government Policies on Electricity Palliatives and Fuel Subsidy Savings”, was organized by Partnership for Amplified Voice (PAV) with support from World Bank.

The PAV is an accountability Civil Society platform facilitated by partnership of two leading CSOs in Nigeria, BudgIT Foundation (BudgIT) and Connected Development (CODE).

Abuja, July 31, 2023: President Bola Tinubu says fuel subsidy removal and foreign exchange regime policies are yielding position results and attracting commendations from the global communities.

Tinubu stated this at a Gala/Award Night on Saturday, organised by the office of the Head of the Civil Service of the Federation (HOCSF), to recognise and honour outstanding civil servants to mark the 2023 Civil Service Week.

Represented by the Secretary to the Government of the Federation, Sen. George Akume, President Tinubu appreciated civil servants for their numerous contributions to the economic development of the country.

The president, who accepted the fact that the policies had in one way or the other affected the masses, said the government was working on measures to cushion the effects.

“We shall without delay cushion the pains being experienced by our people as a result of these measures through a number of well-targeted interventions aimed at giving adequate relief and succour to a great number of our long- suffering citizens, ” he said.

He, however, pledged to give more supports to the civil service sector, being the custodian of public trust to consolidate on the gains of the ongoing reforms in the sector.

Earlier, in her opening remarks, the HOCSF, Dr Folasade Yemi-Esan, said every human being had an inherent desire to be appreciated or acknowledged for their efforts, and so hard-working civil servants deserve reward for their services to the nation.

According to Yemi-Esan, when an individual feels valued and recognised for hard work, he or she is more likely to be committed and enthusiastic next time around.

She used the occasion to present prizes namely, a brand new 2022 JAC JS4 Luxury Model SUV, a 2 Bedroom semi-detached bungalow; and a plot of land to the top three outstanding civil servants.

The gesture, which is in collaboration with the Aig-Imoukhuede Foundation, also favoured 29 other outstanding civil servants who went home with other awards while few got N500,000 each.

“The Star Prize of a Brand New 2022 JAC JS4 Luxury Model SUV won by Mrs Juwon Olayiwola of the Federal Ministry of Education; a 2-Bedroom Semi-Detached Bungalow was won by Mr. Nwachukwu of Service Welfare Office, office of the HOCSF and the 3rd prize, a Plot of Land, was allocated to Mrs. Chukweke Stella Oluchi, Office of the Secretary to the Government of the Federation (OSGF).”

While urging heads of MDAs to reward outstanding workers, the HOS said recognition/rewards could serve to inspire employees to go the extra mile to innovate and achieve excellence in the course of discharging their jobs.

“In this ever-evolving corporate world, fostering a positive and motivating work environment has become crucial for the success of any institution.”

Also, the Chairman, Federal Civil Service Commission, Dr Tukur Ingawa, represented by Dr Simon Etim, a Commissioner in the Commission, said rewarding a worker is critical innovative factor for motivation in executing the needed jobs in any organisation.

The theme for the service week is: ‘Digitalisation of work processes in the public service: A gateway to efficient resources utilisation and national development’.