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ABCON “shakes the table” as it clamours for end to economic subsidies

The Government has been urged to discontinue its subsidy schemes for fuel and FOREX. The Association of Bureaux De Change Operators of Nigeria (ABCON) believes that putting an end to these subsidies would help remedy structural issues in the economy.

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ABCON

The Federal Government has again been urged to discontinue its subsidy schemes for fuel and FOREX. This time, the call came from the Association of Bureaux De Change Operators of Nigeria (ABCON). The body believes that putting an end to these subsidies would help remedy structural issues in the economy.

ABCON asserted in its quarterly economic review for Q2 2019, that the subsidies are tantamount to structural deficiencies in the Nigerian economy. Specifically, ABCON’s President, Alhaji Aminu Gwadabe, was quoted to have said that the subsidies are misguided.

“The subsidies are misapplications, which have resulted in the creation of economic rents in various dimensions, as well as maladjustments in sectoral business structures, creating hyper unemployment rates, which have triggered unmanageable social unrest like kidnappings, terrorism, banditry, arm robberies, and large scale cultism.”

ABCON’s Recommendations: The Association of Bureaux De Change Operators of Nigeria said the Government should address the issues of fuel and forex subsidies by doing the following:

  1. Reorganising the sub-sectors
  2. Deregulate and decentralise fuel importation
  3. Consider the implementation of a single exchange policy

[READ: Campaign to restrict foreign airlines continues as Air Peace flies Lagos-Dubai route]

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There is no doubt that ABCON’s concerns and recommendations are both well-intentioned. However, in view of our economic realities of Nigeria, it can be argued that the country is not quite ready to remove its economic subsidies.

ABCON

Nigeria depends largely on fuel importation due to dysfunctional refineries

The Negative Implications of Subsidies Removal

First and foremost, in order to successfully remove fuel subsidy, Nigeria needs functional refineries that can be able to refine enough crude to meet local demand. Otherwise, any removal of fuel subsidy while the country still depends on importation would only portend economic hardship on the people. Needless to stress on the fact that millions of Nigerians are already economically strapped.

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moving on to the CBN’s FOREX windows, removing them might ultimately force the Federal Government to float the naira. This is something the President Buhari-led administration has been trying to avoid since the 2015 economic recession that hit hard.

Note that the implication of a floated naira is that the exchange rate would be set by the FOREX market forces of demand and supply. As such, the dollar might end up exchanging for as high as N1,000 under a floating exchange rate regime. This too portends its own set of negative economic implications, especially when considering the fact that Nigeria is more of an import-dependent economy.

[READ: Federal Government records N10trn from TSA implementation]

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Business News

Paga Group relocates to the UK

Oviosu announced that he is very excited about moving to and working with the UK government.

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Paga records over $2 billion worth of transactions in 2019 , Paga acquires Ethiopian-based startup, Apposit, announces Paga subsidiaries

Paga Group has redomiciled from Mauritius to the United Kingdom (UK). The group is the holding company for its operations in Nigeria, México, Ethiopia, and the UK.

This was disclosed by the Chief Executive Officer and founder, Paga, Tayo Oviosu on Friday.

Why it matters: The company took the decision due to bureaucratic challenges it faced last year.

He said, “The laws and courts of Mauritius are not very fast-moving, and the rules are difficult. I’ve had one court case that was eventually thrown out after a year.

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“In the UK it would have been thrown out immediately, and the person would have had to pay us for our lawyer fees.

“Basically, not an easy place to do business. It is more painful than useful. I say stick to good ol’ America or UK or Netherlands or Luxemburg. Where you know there are professionals, and the legal system works.”

Oviosu said he is very excited about the move, looks forward to working with the UK government to promote trade with the UK.

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The Paga Group has raised $34.7 million in funding so far, according to Crunchbase.

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Appointments

Stanbic IBTC Holdings Plc appoints Sola David-Borha as Non-Executive Director

Sola David-Borha has been appointed as a non-Executive Director to the board of Stanbic IBTC Holdings Plc.

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Stanbic IBTC Holdings Plc appoints Mrs Sola David-Borha as non-Executive Director

Stanbic IBTC Holdings Plc has announced the appointment of Mrs Sola David-Borha to its board as a Non-Executive Director, subject to the receipt of all required regulatory approvals.

In a statement issued by the company, signed by the company’s secretary Mr. Chidi Okezie and sent to the Nigerian Stock Exchange, stated that “Mrs. David- Borha is currently the Chief Executive, Standard Bank (Africa Regions). Prior to that, she served as Chief Executive of Stanbic IBTC Holdings PLC (2012-2017) as well as the Bank (2011-2012), after holding various executive positions in Corporate Banking; Corporate & Investment Banking; and Investment Banking Coverage for Africa (excluding South Africa). She is also an Independent Non-Executive Director on the Board of CocaCola Hellenic Bottling Company.”

She has a vast experience in the financial world and an astute board leader with a keen corporate governance. Sola has led and sat on various boards including being the former Vice Chairman for the Nigerian Economic Summit Group, subsidiaries of the Stanbic IBTC and Standard Bank Groups, Coca-Cola HBG A, and many others. She is also vastly educated having obtained MBA from the prestigious Manchester Business School and Bsc in Economics from the University of Ibadan. She is also an honorary fellow of the Chartered Institute of Bankers of Nigeria (CIBN).

Recall that Stanbic IBTC had earlier declared a Profit After Tax (PAT) of N45.2 billion for H1, 2020. Its gross earnings also increased by 7.8% to N126.57 billion with a basic earnings per share of 419 kobo and a proposed interim dividend payment of 40 kobo per share.

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Coronavirus

WHO endorses emergency use of China’s COVID-19 vaccine

China says WHO has approved the emergency use of its COVID-19 vaccine.

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WHO endorses emergency use of China’s Covid-19 vaccine

The World Health Organization (WHO) has endorsed the plans by China to start administering experimental coronavirus vaccines to people while clinical trials are still underway.

This disclosure was made by a Chinese Health Commission official, Zheng Zhongwei, during a news conference on Friday, September 25, 2020.

Zheng recalled that China launched its emergency programme in July, having communicated with the WHO in late June. Hundreds of thousands essential workers and other limited groups of people considered at high risk of infection have been given the vaccine, even though its efficacy and safety had not been fully established as Phase 3 clinical trials have not yet been completed.

Zheng at the news conference said, “At End-June, China’s State Council approved a plan of COVID-19 vaccine emergency use program. After the approval, on June 29, we made a communication with the relevant representatives of the WHO Office in China, and obtained support and understanding from WHO.’’

Nairametrics had reported that Chinese Pharmaceutical firms have been quite aggressive about the development of a Covid-19 vaccine with the likes of Sinovac Biotech and Sinopharm publicly displaying their vaccine candidate for the first time at a trade fair in Beijing earlier this month.

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(READ MORE: COVID-19: European regulator ready to approve first successful vaccine this year)

It was pointed out that China National Pharmaceutical Group (Sinopharm) and the US-listed Sinovac Biotech SVA.O, are developing the three vaccines under the state’s emergency use program just as a fourth COVID-19 vaccine is being developed by CanSino Biologics 6185 HK, was approved for use by the Chinese military in June.

The WHO chief scientist Soumya Swaminathan, while describing it as a temporary solution, said earlier this month in Geneva that national regulatory authorities could approve use of medical products within their own jurisdictions in the current emergency situation.

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He emphasized that the long-term solution in the successful development of a Covid-19 vaccine, lay in completion of Phase 3 trials, this is as China has not publicly released full details of its emergency use programme.

Zheng disclosed that China’s annual production capacity of COVID-19 vaccines is expected to reach 610 million doses by end-2020 and 1 billion doses by 2021. He said that the price of the vaccine will be affordable for the general public.

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