The Federal Government has spent about N2.3 trillion as subsidies on petrol and power consumption between 2015 and 2018. This is according to a report by PricewaterhouseCoopers (PwC), a global accounting and consulting firm.
The report has it that the President Muhammadu Buhari-led administration spent N1.12 trillion as electricity subsidy and another N1.2 trillion on petrol subsidy within a period of three years.
[READ MORE: NNPC spends estimated N33.60/litre on petrol subsidy]
According to the report, the highlighted subsidy expenditures within the reviewed period represent 17% of the country’s current foreign reserves and 26% of the 2019 federal budget.
The report PwC report, which was presented to power sector stakeholders at a roundtable organised by Mainstream Energy Solutions-operators of the Kainji and Jebba hydropower generation companies (Gencos), by the Chief Economist of PwC Nigeria, Dr. Andrew Nevin, also has it that the total electricity subsidy for the period alone could cover the current budget of the ministries of health and education.
The report read partly: “The Federal Government has expended about N1.2 trillion as petroleum subsidy over the past four years (2015-2018). The tariff shortfall in the electricity sector which technically is the electricity subsidy payable by the federal government stood at N1.12 trillion between 2015 and 2018.
“Both subsidies amount to N2.3 trillion, which represents about 17 per cent of current foreign reserves and 26 per cent of the 2019 budget.
Is subsidy payment healthy for the economy? Fuel subsidy in Nigeria has been a subject of discussion among the stakeholders of the country’s economy. In what appears to be another attempt to save the country’s economy which presently bites, the International Monetary Fund (IMF) had reiterated the need for Nigeria and other countries that still retain the policy of subsiding fuel consumption to put an end to the policy.
In a blog post titled, “Fuel for Thought: Ditch the Subsidies”, the IMF made known that the fuel subsidy which some countries pay as an attempt to reduce the price of fuel for consumers, typically benefits the rich more than the poor.
Lekki Tollgate Shooting: Sanwo-Olu insists on 2 deaths, no bloodstains at the scene
Governor Sanwo-Olu has reiterated that only two people were killed in last week’s shooting at the Lekki toll plaza.
The Lagos State Governor, Babajide Sanwo-Olu, has insisted that there were only two confirmed deaths during the shooting incident that happened a week ago at the Lekki Tollgate.
He also said that there were no bloodstains at the scene of the incident.
According to a report on Vanguard, the Lagos State Governor made the disclosure during an interview with CNN’s Becky Anderson about the incident and the fall out of the #EndSARS protests over police brutality and extra-judicial killing.
The Governor’s statement is against the backdrop of several reports in the public space, which had claimed that over 30 protesters and in some cases about 70 protesters allegedly died as a result of the shooting by soldiers at the Lekki Tollgate.
The Governor said, “Two dead bodies, that is what we have seen from all the morgues, that’s what we have seen going to hospitals, that’s what we have seen as a record. What has happened is that there have been so many footages that were seen, that people have shown, but we have not seen bodies, we have not seen relatives, we have not seen anybody truly coming out to say I am a father or a mother to someone and I cannot find that person. Nobody has turned up. I have been to the ground, there is no scratch of blood anywhere there.
“From the footage that we could see, because there were cameras at that facility, it seems to me that they would be men in military uniform. That’s what the footage shows.”
While insisting that there was no form of international pressure as a result of the protests, Sanwo-Olu said, “I genuinely believe there would be change. For two reasons; what has happened, especially in Lagos is extremely unimaginable. It was also a clarion call for all of us in government to understand and realize what the youths want us to be doing. It hit all of us like a thunderbolt and it was just a wake-up call.”
In order to aid the investigation to ascertain what happened at the Lekki Tollgate, Sanwo-Olu assured that the Close Circuit Television (CCTV) footages will be made available to the judicial panel already set up to investigate the incident and has already started sitting on Monday.
While responding to a question, Sanwo-Olu said he was ‘absolutely’ committed to a full investigation of the incident.
He said, “It’s beyond my control to mete out punishment to those found culpable; however, those responsible will be held accountable. I am not the Commander-in-Chief of the Armed Forces. The report will be out, we will channel the report to all the relevant authorities in the State to ensure everyone that is found culpable is accountable for the act.”
Despite the Lagos State Governor’s insistence on the number of fatalities, a lot of Nigerians do not believe his account of the incident and think that there is some form of an alleged cover-up by government officials. They are still outraged that despite some video evidence and accounts of people that were there, the government is still understating the fatality figures.
Nigeria’s Manufacturing Sector contracts for 6th consecutive month
The manufacturing sector contracted for the sixth consecutive month as 8 subsectors contracted out of 14.
The Manufacturing Purchasing Managers’ Index (PMI), for the month of October, witnessed a contraction for the 6th consecutive month, as it stood at 49.4 index points.
This was disclosed by the Central Bank of Nigeria (CBN), in its October PMI report released today.
According to the information contained in the report, despite the fact that the Manufacturing Purchasing Managers’ Index (PMI) for the month of October contracted, the Manufacturing PMI index recorded a month-on-month increase owing to improved New orders, faster manufacturing supplier delivery time, and slight changes in production and employment levels.
What you should know
The report stated that, out of the 14 subsectors surveyed, 6 subsectors reported expansion (above 50% threshold) in the review month in the following order:
- Electrical equipment
- Transportation equipment
- Printing & related support activities
- Chemical & pharmaceutical products
- Textile, apparel, leather & footwear
While the remaining 8 subsectors reported contraction (below 50% threshold) in the review month in the following order:
- Primary metal
- Petroleum & coal products,
- Paper products
- Fabricated metal products
- Furniture & related products
- Nonmetallic mineral products
- Plastics & rubber products
- Food, beverage & tobacco products
PMI for the non-manufacturing sector stood at 46.8 points in October 2020, indicating contraction in Nonmanufacturing PMI for the seventh consecutive month. Of the 17 sub-sectors surveyed, 3 subsectors reported growth, while 11 subsectors declined.
CAP Plc set to merge with Portland Paints and Products Plc.
CAP Plc and Portland Paints have taken a decision to merge their respective businesses in accordance with applicable laws.
The Board of Directors of Chemical and Allied Products Plc (CAP Plc), and Portland Paints and Products Plc (Portland Paints), have decided to merge their respective businesses in accordance with applicable laws to drive growth and expansion within the Nigerian and African markets.
This is according to a press release signed by Bolarin Okunowo, the Managing Director of Portland Paints, made available on NSE, Monday, 26th October 2020.
The completion of the proposed merger is subject to approvals being obtained from the Federal Competition and Consumer Protection Commission, the Securities and Exchange Commission (SEC), The Nigerian Stock Exchange (NSE), the Federal High Court, as well as shareholders of CAP and Portland Paints.
What you should know
- Should the proposed merger go ahead, CAP Plc will emerge as the resultant entity.
- The proposed merger will be executed by way of a Scheme of Merger (the “Scheme”) in accordance with Section 711 of the Companies and Allied Matters Act, 2020, and other applicable laws, rules, and regulations.
- The Scheme will involve the transfer of all Portland Paints Plc’s assets, liabilities and business undertakings including real property and intellectual property rights to CAP Plc.
- In consideration for the transfer, CAP Plc is offering shareholders of Portland Paints a choice to receive N2.90 cash for every Portland Paints share held OR 1 new ordinary share of CAP Plc, credited as fully paid up for every 8 Portland Paints shares held.
- The proposed consideration represents a 45% premium to the last traded share price of Portland Paints Plc on October 16, 2020, being the last business day prior to the date on which CAP Plc sent its merger proposal to the Board of Portland Paints and a 41% premium on the trading price as at close of trading on October 23, 2020.
What they are saying
Commenting on the proposed merger, David Wright, Managing Director of CAP, said, “The decision to pursue the proposed merger, is driven by the Board’s strategic plan to aggressively grow within the Nigerian and African markets.
“We believe that the Proposed Merger presents a unique opportunity that will benefit all stakeholders, from shareholders to customers, as well as the broader economy. I am excited by the prospect of an enlarged company with a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings, all of which will benefit our customers and shareholders.”
The Managing Director of Portland Paints, Bolarin Okunowo, submitted that “In recent months, the Board and Management of Portland Paints have evaluated various strategic options with a view to positioning our company to capture emerging growth opportunities.
“CAP Plc’s business is complementary to ours, and both companies will be better able to serve our respective customers by coming together. I believe the combination of Portland Paints and CAP will yield significant benefits for all of our stakeholders.”
Portland Paints and Products Nigeria Plc – with 85.98% of the company’s issued share capital owned by UAC Nigeria Plc, manufactures and sells decorative, industrial, and marine/protective coatings for the construction of oil & gas industries in Nigeria. Portland Paints is the Nigerian representative of Hempel. It is listed on the NSE.
Chemical and Allied Products Plc (CAP) – a subsidiary of UAC Nigeria Plc – which holds 51.49% of the company’s shares, manufactures and sells premium and standard paints and coatings, and is the sole technological licensee of Akzo Nobel Coatings International B.V. in Nigeria. It is listed on the NSE.