05 Jun

Daily Watch – Proposed ₦5 fuel levy suffers backlash, NAFDAC helps SMEs

  • A Senate committee has proposed a marginal increase in petrol prices to help fund badly needed road repairs. With annual inflation hitting 17.24 percent in April, the Senate Committee on Works has recommended a fuel levy of ₦5 per litre on imported and locally produced petrol to fix roads in Nigeria, according to the proposal approved on Thursday. The Senate has yet to debate the motion which would also have to be approved by the lower chamber, the House of Representatives. The Nigerian Union of Petroleum and Natural Gas Workers has criticised the proposed levy as a huge joke. In a statement reacting to negative public opinion on Saturday, the Senate said there were different opinions on the issue. It read in part that, “It’s important therefore to make it clear that there is no ambiguity in what the Senate has done as there will be no one naira added to the current price of fuel as a result of this bill.” The charge is to be accommodated within the pricing charge template in effect within the PPPRA.
  • Nigeria issued its first Forcados oil loading plan since 2016, putting June oil exports on track to hit their highest level in at least 15 months. The plan, if realised, would return loadings by Nigeria to levels not seen since militant attacks first shut down Forcados exports in early 2016. It is also likely to put more downward pressure on oil prices, which are already trading more than 16 percent below the highs reached in January on the back of a persistent global excess. Last week OPEC, along with several other oil producing nations, agreed to extend output cuts of 1.8 million bpd, but it gave Nigeria, along with Libya, another exemption. The Forcados loading schedule includes seven cargoes, for a total of 197,000 bpd. That would bring total June exports to 1.75 million bpd aboard 58 cargoes. According to a Reuters OPEC survey, production in Nigeria last reached 1.76 million bpd in March 2016. Forcados has been closed for all but a few weeks following militant attacks on the main Trans Forcados export pipeline in February 2016.
  • The closure of the Nnamdi Azikiwe International Airport, Abuja, led to a 28.2 percent decline in the number of air travellers across Nigerian airports, new figures from the National Bureau of Statistics show. According to the air transport report figures released by statistics agency Thursday, the number of air travellers declined by 983,705, due to the six-week closure of the airport. The Abuja airport was closed by the Nigerian government on March 8 for repair works to be carried out on its runway and taxiways. The airport was reopened on April 18 following the completion of the repair work. According to the NBS, the total number of passengers who passed through Nigerian airports in the first quarter of this year at 2,505,612. The bureau added that 67.3 percent were domestic passengers, while the rest were international passengers, entering or leaving Nigeria. The Murtala Muhammed Airport in Lagos, the report said, recorded the most activity as it accounted for 41.4 percent of domestic passengers, 76.5 percent of international passengers, 90.3 percent of cargo movement and 94.9 percent of mail movement.
  • The scarcity of foreign exchange which has made the naira lose its value against other foreign currencies has resulted in a decline in foreign currency transactions, the latest figures CBN figures show. The value of foreign transactions declined by 58 percent from ₦2.45 billion in 2015 to ₦1.02 billion in 2016, according to the CBN’s Nigeria Electronic Fraud Forum’s annual report of 2016. In the report, the regulator said the volume of foreign transactions also declined from 11.29 million to 10.3 million transactions and attributed the decline to exchange rate volatility as well as the CBN’s forex regulations. An analysis of the foreign transactions along all product channels showed that the ATM payment channel suffered the most decline in value dropping from ₦1.39 billion to just ₦474.45 million. In terms of volume, the ATM payment channel recorded a decline from 4.9 million transactions to 3.71 million. This was followed by the “other” payment channel, which dropped from ₦305.2 million to ₦30.8 million in terms of value and from 1.63 million to 359,985 in terms of volume of transactions. In the same vein, the POS payment channel declined from ₦655.64 million to ₦413.1 million. However, its volume of transactions rose during the period from 3.29 million to 3.65 million. The CBN has injected over $1.5 billion into the forex market in the last two months in a bid to prop the value of the naira.
  • NAFDAC says it has waived 50 percent on registration fees for locally manufactured products to promote Small and Medium Scale Enterprises. Abubakar Jimoh, spokesperson of NAFDAC, said that the measure would go a long way in promoting economic development. He explained that the measure was put in place because some people were using the registration to extort money from Nigerians. “Sometime back, we discovered that a lot of people were extorting money from Nigerians for a registration fee on products. We decided to license some consultants who are professionals,” Jimoh said. “But those unscrupulous elements fizzled into the consultancy firm that registered with us and continued their extortion from potential entrepreneurs. “They collect as much ₦250,000 to ₦300,000 for registration of less than N50,000, claiming that part of the money will be used to settle NAFDAC officials. The agency has taken the decision to stop them after the expiration of their licenses; we will stop them and deal directly with intending manufacturers.”