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Business News

FG proposes N296 billion for purchase of Covid-19 vaccines

The Federal Ministry of Health has proposed the sum of N296 billion for the purchase of Covid-19 vaccines.

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land borders to be reopened soon, Finance, Ministaer, vow to recover AMCON debt through issuance of promissory notes, FG reiterates stance on IPPIS as ASUU threatens strike, Finance Minister, Zainab Ahmed identifies capital market as key driver for economic growth , Nigeria has paid $1.09 billion to service its debts in 2019  , Dividends on oil proceeds will be taxed - FG , State governments own most bad roads - Finance Minister says, Budget deficit increases by N351.98 billion, as FG misses revenue target, Economy: Funding MSMEs in Nigeria , Finance Bill: New tax regime to take effect from Jan 2 - FG , Again, Finance Minister argues that Nigeria is not in debt distress , ECOWAS: Single currency regime not kicking off in 2020  , FG: CBN holds N43 billion stamp duty charges collected by banks , FG may shift deadline to deactivate bank accounts without tax verification, Confusion as ministry and presidency disagree over Finance Act start date, 7.5% VAT: Implementation to begin Feb 1 – FG , Finance Minister: Nigeria to go into recession if ..., Foreign tech companies that will now pay tax to FGN: see the criteria

The Federal Ministry of Health has proposed the sum of N296 billion for the purchase of Covid-19 vaccines to cover 2021 and 2022.

This is expected to be part of the supplementary budget that will soon be sent to the National Assembly for its consideration and approval.

This disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while briefing State House Correspondents, after the Federal Executive Council (FEC) meeting, which was held earlier in the week.

Ahmed said that the President earlier in the year, gave approval in principle for the Federal Ministry of Health to work with the Federal Ministry of Finance, Budget and National Planning, to submit to the National Assembly, a supplementary budget of N399 billion for Covid-19 vaccination and building of primary healthcare centres across the country.

However, she said that they have decided to step down the N103 billion for the primary healthcare centres for now and go ahead with the N296 billion for the Covid-19 vaccination.

Ahmed in her statement said, “Sometime in January, the President based on the request by the Ministry of Health gave an in-principle approval for the Ministry of Health to work with the Ministry of Finance, Budget and National Planning to prepare and take to the National Assembly, a supplementary budget for Covid-19 vaccination.

The submission that was made to the President at that time was in the sum of N399 billion, included in this N399 billion was the N103 billion for the building of primary healthcare centres. So we have worked with and met several times with the Ministry. We agreed that we will back out of this building of primary healthcare centres, that can wait till later.’

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Sigma Pensions

It can be recalled that Nigeria on March 5, 2021, commenced the vaccination of its citizens against the Covid-19 disease beginning with health workers and some top government functionaries.

This follows the arrival of the first batch of 4 million doses of the AstraZeneca/Oxford Covid-19 vaccine from the WHO-backed COVAX initiative.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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    Business News

    Power Minister explains why power outages have risen

    The Minister cited a breakdown of some National Integrated Power Plants supplying electricity to the national grid as being behind the recent power outages.

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    The Minister of Power, Engr. Sale Mamman explained why power outages have increased in Nigeria citing a breakdown of some National Integrated Power Plants supplying electricity to the national grid.

    The Minister disclosed this in a statement on Thursday morning, assuring Nigerians that the FG is working assiduously to restore the National grid to its previous historical levels and exceed that.

    What the Minister is saying

    • I sincerely regret the recent power outages across the Nation and the difficulties it has brought with it.
    • The problem is caused by the breakdown of some National Integrated Power Plants supplying electricity to the national grid. The plants are namely, Sapele, Afam, Olonrunsogo, Omotosho, Ibom, Egbin, Alaoji and Ihovbor. The Jebba Power Plant was shut down for annual maintenance.

    The Minister added that seven power plants are currently experiencing gas constraints including Geregu, Sepele, Omotosho, Gbarain, Omuku, Paras and Alaoji while Shiroro hydroelectric power plant has water management issues.

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    Economy & Politics

    Fuel subsidy: To be or not to be?

    The fuel subsidy removal extension has clearly disrupted months of expected fuel deregulation.

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    Reports emerged that the Nigerian Government may suspend plans to discontinue its subsidy payments as reports indicate that the FG plans to spend N720 billion for the next 6 months on petroleum subsidies.

    A government source disclosed that “specifically, President Buhari has asked the Nigeria National Petroleum Corporation (NNPC) to suspend any idea on subsidy removal for five to six months so that a plan that does not harm ordinary Nigerians is evolved if the deregulation must go on.”

    The news of subsidy extension may come as a surprise after Mele Kyari, Group Managing Director, NNPC just last month hinted that the Federal Government spends N120 billion a month on subsidies and may increase fuel pump price to between N211 – N238/litre soon to reflect market prices, as the NNPC may no longer carry the burden of the actual market price.

    Also, in January 2021, the federal government insisted that it will go ahead with its policy on the removal of subsidy on petrol and electricity, with no provision made in the 2021 budget for their subsidy.

    “We are not bringing back fuel subsidy. We didn’t make provision for fuel subsidy in the budget. The impact of what was done was reducing some of the cost components that were within the template. And also related to it, on matters of electricity subsidies, no provisions have been made for subsidy for fuel and no provisions have been made for subsidy for electricity,” Finance Minister, Zainab Ahmed disclosed.

    Why then is the Federal Government extending something it has clearly stated to be a burden on its finances, even to the point of making no provision for it in the National Budget? David Hundeyin, Award-winning journalist and BusinessDay columnists says the deal to extend subsidy has setback any discussion on the deregulation of the sector.

    On consequences of subsidy extension

    “It has effectively postponed any talk of deregulation for at least another 6 months, which means the current hideous arrangement which distorts the market for the benefit of a tiny few will persist for at least that long,” Hundeyin said.

    Hotflex
    Sigma Pensions

    What the government needs to put in place before subsidy removal

    The major reason subsidy removal is a touchy topic is the simple fact that Nigerians cannot afford the hike in PMS price that would accompany subsidy removal. Needless to say, that another hike in the price of PMS would further drive up food inflation rate (which is currently over 20%). When other consequences such as increased cost of transportation and increased cost of powering small businesses are considered in the light of prevailing economic realities, the hardship that a hike would inflict on ordinary Nigerians is not hard to imagine.

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    Removing fuel subsidy would require a long-term play of communication and serious policy direction which focuses mainly on increasing GDP per capita of citizens to handle the inevitable subsidy removal. Hundeyin also stresses the need for a clear communication strategy between the government and the masses.

    “The most important thing is a clear communication strategy to educate Nigerians about the true state of their public finances and rid them of the notion that the fact of being an oil-producing country entitles Nigerians to cheap or subsidized fuel. Of course, this will require political will which currently is not there, so this is unlikely to happen,” he says.

    Bottomline

    The fuel subsidy removal extension has clearly disrupted months of expected fuel deregulation, especially since the NNPC had made it clear that it cannot afford to continue paying subsidy. However, removing fuel subsidy at a period of rising food inflation and unemployment would have proved a serious political and economic faux pax as most Nigerians are barely getting by.

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    The FG needs to do more in the areas of communication, creating and implementing economic policies that drive productivity and wealth creation with the ultimate aim of improving GDP per capita.

     

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