Six days to elections: APC govs, bank CEOs in last-minute rush to clear naira mess
In a last-ditch effort to resolve the lingering cash crisis that has thrown the entire country into turmoil, governors elected on the platform of the All Progressives Congress on Sunday met with the party leadership at the APC National Secretariat in Abuja.
This was as the chief executive officers of banks also met to proffer solutions to the situation which had led to attacks on banks and the death of no fewer than 13 persons across the country.
The development is coming barely six days before the presidential and National Assembly polls slated for Saturday, February 25, 2023
No fewer than 12 governors turned up for the crucial meeting with the APC National Chairman, Senator Abdullahi Adamu, and other National Working Committee members, which started at 2.37pm
At the meeting were governors Nasir El Rufai (Kaduna), Abdullahi Sule (Nasarawa), Muhammad Inuwa Yahaya (Gombe), Mai Mala Buni (Yobe), Abubakar Badaru (Jigawa) and Abubakar Sani Bello (Niger), Yahaya Bello (Kogi), Simon Lalong (Plateau), Biodun Oyebanji (Ekiti), Sani Bello (Niger), Atiku Bagudu (Kebbi), Babajide Sanwo-Olu (Lagos) and members of the National Working Committee of the party in attendance.
Governors Abdullahi Ganduje (Kano) and Dapo Abiodun (Ogun) were absent, while Imo and Katsina state governors were represented by their deputies.
The party’s presidential candidate, Asiwaju Bola Tinubu, later joined the meeting at 4.45pm.
Addressing journalists shortly before their closed-door session, Adamu expressed delight with the turnout, noting the imperative of the meeting.
He said, “It is my privilege to welcome you to this important and emergency meeting. We have found a situation where there is a pressing need to get together as standard bearers of our states in Nigeria who were elected on the platform of our great party, the APC.
“I am happy with the response so far. And it is my understanding that more of the governors are on their way. You will recall the recent development that has necessitated the need for this invitation.
“We do not want to sit in judgment over anybody or bodies with regard to what is going on today in the country as it affects our great party. I thought it best to get all those who are holding forth in the critical positions in the party to get together and have some interaction so that we can have a better interpretation and appreciation of the situation that we are in. That is the essence of this invitation.”
Contrary to an order of the Supreme Court that the Federal Government should suspend the February 10 deadline for swapping the old naira notes with new ones, the Central Bank of Nigeria refused to shift the deadline.
The apex court order followed a suit filed by Zamfara, Kogi and Kaduna state governments against the Attorney-General of the Federation, Abubakar Malami.
States including Lagos, Ondo, Ekiti, Kano, Sokoto, Ogun and Cross River have also joined the suit as co-plaintiffs.
The crisis between the governors and the President, Major General Muhammadu Buhari (retd.), worsened on Thursday when the President in his nationwide broadcast ignored the apex court by extending the validity of old N200 notes while insisting that old N500 and N1,000 remained illegal.
Buhari in his state broadcast said the old N200 note would be legal tender for the next 60 days, till April 10, 2023, while urging Nigerians to deposit their old N500 and 1000 notes with the Central Bank.
After the APC NWC and governors’ meeting which ended at 7.15pm, journalists were invited into the venue, where the chairman addressed them on the outcome of the parley.
Adamu lamented that although the naira redesign was a good move, the timing and the pain it had brought on Nigerians has necessitated the need for both the CBN Governor, Godwin Emefiele and the AGF, Abubakar Malami to avoid misleading the President.
He said, “I’m sure you are quite aware of the fact that a meeting comprising the APC governors was held today and the leadership of the NWC of our great party was summoned. We had a discussion and at the end of the discussion, we have resolved as follows: That this resolution is without prejudice or whatsoever to the case that is lying at the Supreme Court at this point in time. This has to do with the issue of currency redesign.
“We noted very seriously that the programme and its implementation are causing tremendous difficulties to the people of Nigeria and to the national economy. That we urge the Attorney General of the Federation and the Governor of the Central Bank of Nigeria to respect the supreme court order of interim injunction which is still subsisting
“That the meeting is urging his Excellency, Mr President, to intervene in resolving issues that are causing this great difficulties to the economy,”
When prodded to comment on the need for the presence of the APC Tinubu, at the meeting, Adamu disclosed that “Tinubu’s visit is a normal visit.”
Addressing journalists after the meeting, the Chairman of Progressives Governors Forum and the Governor of Kebbi State, Atiku Bagudu, expressed satisfaction with the level of mobilisation that had gone into the campaign of their presidential candidate.
He stated, “As the chairman spoke, the governors and the party are one and the same. And I am very proud about the conduct of our campaign by our presidential candidate
“The Director General of the campaign and indeed, governors and the candidate across the country have been doing a tremendous job of mobilizing the Nigerian populace and we are very, very impressed with the support of the majority of Nigeria.”
Although some of the governors like Sanwo-Olu and El Rufai wore long faces when they came out of the meeting, it is not immediately know if certain governors are in support of the naira swap policy.
Tinubu refused to address the press when he came out of the meeting at about 7.15 pm.
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Dangote, PH refineries, others won’t change fuel price – NNPCL
The local production of Premium Motor Spirit, otherwise known as petrol, by Dangote Refinery, Port Harcourt Refining Company and others in Nigeria is not going to change the pump price of the commodity, the Nigerian National Petroleum Company Limited has said.
The NNPCL’s Group Chief Executive Officer, Mele Kyari, who disclosed this during an interview on Arise television in Abuja on Thursday, stressed that the notion that petrol prices would reduce once the country starts domestic production was false.
Kyari confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.
He also stated that the Port Harcourt Refinery would be delivered by the end of the year, adding that the facility was expected to further boost local production of petrol.
But Kyari declared that despite the volume of petrol being expected from these facilities, the cost of the commodity would not reduce, regardless of the fact that the product was produced locally.
“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.
“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.
Speaking on when the fuel queues being witnessed across the country would clear, during another interview on Channels TV, the NNPCL boss said the queues would not exceed Saturday.
“I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The key trouble with the PMS system is supply, but I have supplies.
“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land, you already have them on the ground,” he stated.
He validated the PMS pricing document for various states that trended on Wednesday on the internet, stating that the document was from the NNPCL.
“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document, every company keeps this record and adjusts it appropriately on the basis of changing conditions in the market.
“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document but it was not intended to be an announcement and is not an announcement, because it can change the next day,” Kyari stated.
On whether there was enough product in-country, he said, “Today I have 1.8 billion litres of PMS and that means that if we don’t do anything, I’ll have sufficient fuel for the next 30 days in my hands.
Kyari explained that the company had over 800 million litres of petrol on land, stored in filling stations, tank farms and depots, while its total stock for both marine and land stood at about 1.8 billion litres.
“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”
‘Subsidy not realistic’
Speaking to journalists after a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, at the party secretariat in Abuja on Thursday, Kyari revealed that the administration of President Bola Tinubu had concluded arrangements to have one of the four refineries repaired and operating at an optimal level before the end of the year.
The NNPCL boss argued that it was no longer justifiable to continue subsidising the commodity given the high opportunity cost the Federal Government was suffering from funding it.
Kyari, who was received by the APC chairman and members of the National Working Committee at about 12.30 pm, confessed that the country could no longer sustain the expensive subsidy regime.
According to him, over 38 per cent of the total fuel distributed in the country was consumed by Lagos, Abuja, Kano and Rivers.
Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president was working out some palliative measures to ease the pains of Nigerians.
He also added that there was an ongoing process of rehabilitation to ensure one of the refineries was ready this year.
Kyari lamented that despite its N2.8tn indebtedness to the NNPCL, the Federal Government had yet to release funds for 2022 and 2023 subsidies.
He said, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.
‘’For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.
“We can no longer bear it. If we continue, we will run into defaults and the default of NNPC is the default of Nigeria. Once NNPC goes into default and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.
‘’The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are a major concern for every investor all over the world. Every partner that we have is worried about.’’
Kyari acknowledged that the price increase would trigger inflation, noting that the market forces would determine what happens subsequently.
He noted, “Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. The market determines what happens next. Even inflation in many countries goes up when you have economic indices become difficult.
“Mr President’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 litres in an SUV, you are literally subsidising three litres with N100 for all of us.
‘’Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity.’’
Kyari submitted that the price at which petrol was being sold now is the current market price of the commodity.
‘’The price you are seeing today at our stations is the current market price of the commodity and what this means is that prices in the market can go down at any time and the market will adjust itself. The beauty of this is that there will be a new entrance because oil marketing companies now will want to invest, they have been reluctant to come in because of the subsidy,’’ he stated.
With the latest development, the NNPCL chief said the market would regulate itself, adding that oil marketing companies could now import products or buy locally-produced ones and take them into the market and sell at commercial prices.
He added, ‘’You would see competition even with NNPCL, and by law, the company can’t do more than 30 per cent of the market going forward. So competition will surely come in and definitely, the market will regulate the price itself. It is an instantaneous price and in two weeks, you will see the adjustment that is happening in many jurisdictions.
‘’But ultimately, you would see changes in price downwards and that is very likely. Efficiency will come in and every lacuna in the sector will be taken out because of the new situation.
‘’The current price is not fixed and will surely change and we did it to announce various prices depending on our cost by location and by the realities around us knowing full well that the NNPCL is the single supplier of the market today and we are seeing that exit coming very quickly. There will be no monopoly and we will not continue to be the only supplier.’’
Meanwhile, the House of Representatives has called on the Federal Government to end subsidies on not just petrol but all petroleum products.
The House, however, urged the government to roll out palliatives and other measures to cushion the effects of the removal of the PMS subsidy on Nigerians.
These were part of the recommendations by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria, which the lawmakers considered as a Committee of the Whole and adopted in plenary on Thursday.
Chairman of the committee, Ibrahim Aliyu, had laid the report, 11 months after the task was assigned to the panel.
The committee recommended that “the Federal Government should remove subsidies on all petroleum products.”
It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption.”
The panel also said the government should introduce intermodal, regional and national transport systems to ease the mass movement of people across the country.
In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians were not short-changed through profiteering.
The lawmakers equally said the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between the NNPCL, Federal Inland Revenue Service, Joint Venture Contracts and the NMDPRC on the utilisation of their crude entitlements.
The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting;
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.
“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413bn borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.
“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting and sales of crude.
The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances.
Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.
The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”
The House on June 29, 2022, resolved to investigate payments for subsidy on petroleum products, especially petrol, under the Muhammadu Buhari administration.
The Speaker of the House, Femi Gbajabiamila, had set up the panel whose probe covered 2017 to 2021, with the mandate to report back to the House within eight weeks for further legislative action.
The probe was based on a motion titled, ‘Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,’ which was unanimously adopted after it was moved at plenary by a member of the House, Sergius Ogun.
In a related development, the Nigeria Labour Congress has dismissed reports that it would embark on a nationwide protest against the increase in the pump price of petrol.
In a statement on Thursday, signed by its head of information, Benson Upiah, the congress noted that it would keep the public abreast of its moves.
The union had demanded the reversal of the fuel pump price while a meeting between the labour leaders and the FG deadlocked on Wednesday.
But clarifying its position following speculations about its next move, the congress said, “In as much as we are outraged by this mindless price increase which is intended to bring untold hardship to ordinary Nigerians, we have no plan to start any action tomorrow (today).
“What we do have for now are organ meetings slated for tomorrow, Friday, June 2nd, 2023 to deliberate on the price issue. We promise to keep Nigerians informed on our next line of action after our meetings.’’
In reaction to the fuel price hike, the Edo Civil Society Organisations on Thursday blocked a section of the Benin/Lagos highway in protest against the subsidy removal.
The protest, which was held at different locations in the state, obstructed vehicular movements forcing commuters to trek long distances.
Naira exchanges at N464.67 to dollar
Naira remained unchanged on Thursday, exchanging at N464.67 to the dollar at the Investors and Exporters window.
The local currency did not change from its value on Wednesday, while the open indicative rate closed at N464.64 to the dollar on Thursday.
An exchange rate of N467 to the dollar was the highest rate recorded within the day’s trading before it settled at N464.67.
The naira sold for as low as 460 to the dollar within the day’s trading.
A total of $250.98 million was traded at Thursday’s official Investors and Exporters window.
CBN increases interest rate to 18.50%
The Central Bank of Nigeria (CBN) has again increased the monetary policy rate (MPR) by 0.50 per cent to 18.50 per cent.
The Governor of the CBN, Mr Godwin Emefiele, announced this interest rate hike on Wednesday while addressing newsmen in Abuja.
He said members of the team agreed to raise the benchmark interest rate to curb inflation.
The CBN governor said the committee considered a perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.
He said committee members noted that the naira redesign has huge moderating factors to price development on cash.
Announcing the committee’s decision, Emefiele said, “MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.
“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.
“MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor.”
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