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We Stand By Our Advice To Nigerian Government On Subsidy Removal — IMF

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The International Monetary Fund (IMF) says its advice on foreign exchange (FX) rate and subsidy removal was necessary for Nigeria’s macroeconomic stability.

The Washington-based institution reiterated its stance on its policy recommendations to Nigeria in an email to Premium Times on Wednesday.

Abebe Selassie, director of the African department at the IMF, had applauded the economic reforms implemented by President Bola Tinubu’s administration during a press briefing at the just concluded IMF/World Bank meetings in Washington DC., United States.

Selassie said the IMF has consistently advocated for Nigeria’s investment in infrastructure, health, and education; describing the removal of the subsidy as a step which represents a more effective use of public resources.

He said the move would unlock the economy’s vast potential to become more dynamic, attract investments, and drive growth.

Selassie had also said the Nigerian government should direct the savings from petrol subsidy removal to support vulnerable households amid the country’s economic hardship.

However, on October 25, local media reported that the IMF had denied being involved in the removal of the petrol subsidy.

The Nigeria Labour Congress (NLC), on October 28, criticised the international “lender for its denial” of responsibility regarding the Nigerian government’s recent removal of the subsidy.

Speaking on the matter on Wednesday, the IMF said it assessed Nigeria’s petrol subsidy and foreign exchange rate policies prior to the recent reforms but did not consider it “cost-effective”.

“Regarding the petrol subsidy, based on our research and international experience, we do not see this as the most cost-effective way of providing relief to Nigerian citizens,” the lender said.

“This is mainly because the petrol subsidy benefits not just low-income households that need government support, but also high-income and wealthy Nigerians who do not need this financial support from the government.

“Moreover, there is evidence that a share of the subsidised petrol was smuggled to neighbouring countries, where petrol prices were much higher. This means that the petrol subsidy benefitted not only Nigerians but also the citizens of neighbouring countries.

“Thus, removing the petrol subsidy should free resources that the government can allocate to other priority spending items, including social protection, health and education spending, and infrastructure investments.”

The IMF said the fixed exchange rate policy in operations before the recent reforms, was equally not sustainable.

“We have also assessed the viability of the fixed exchange rate regime that Nigeria pursued until mid-2023,” IMF added.

“At the time, not all dollar demand from Nigerians was being met at the official exchange rate. Instead, many Nigerians had to turn to the parallel market and pay a premium of around 60 percent to acquire dollars.

“This means that until mid-2023 some Nigerians were able to purchase dollars at the official rate of around N460 to the US dollar. But many others, at the same time, could only purchase dollars at the parallel market rate of around N750 to the US dollar.

“While some people were able to transact at a subsidized rate, many others had to pay a much higher price. This also put pressures on the CBN’s reserves and was not sustainable.

“By allowing the naira to be determined by market conditions, everyone now has access to US dollars at the same price.”

  • ‘We Stand By Our Advice’

On whether the criticisms could lead to the lender’s withdrawal from the country, IMF said its advice was to all its member countries, as summarised in its annual report on each country.

“We stand by our advice, though it’s important to underscore that individual pieces of that advice cannot be viewed in isolation,” the multilateral added.

“Our advice is a comprehensive policy package where all elements are linked to each other. That package seeks to ensure macroeconomic stability and raise living standards in a sustainable fashion.

“Importantly, our advice on petrol subsidies and the exchange rate, is set in a larger, comprehensive policy mix that also includes scaling up social transfers to provide relief to Nigerians who are already suffering from a cost-of-living crisis or who are impacted by policy reforms.”

The IMF also said governments “listen to advice from many corners and then decide on the best course forward”.

BIG STORY

Tears As Customs Officer, Wife, Four Kids Die In Osun Fire Outbreak

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The Osun State Fire Service on Monday announced that it had begun an investigation into the fire incident that claimed the lives of a Customs officer attached to the Oyo/Osun Command, Tijani Kabiru, his wife, and four children in their house in Ede.

The tragic incident, which occurred in the Akankan Area of Ede during the early hours of Monday, immediately plunged the community into mourning and sparked panic among residents, who woke up to the news of the victims’ deaths.

Residents from the area where the house was located, when contacted by our correspondent for comments, declined. However, a neighbor of the late Kabiru, a man in his 40s identified only as Kola, said that smoke was first noticed coming from the house around 3 a.m.

Upon realizing that the smoke was coming from Kabiru’s house, Kola said fire service operatives from the Ede Fire Station were contacted.

Despite the prompt response, Kola explained that the house had already been severely damaged before the firemen arrived, adding that Kabiru, his wife, and the four children lost their lives in the blaze, though one of the children managed to escape.

“I can’t say when the fire started, but we observed smoke at about 3 a.m. The response time of the firemen was not bad, but the house had been badly affected before the fire could be subdued. Kabiru, his wife, and four children were already burnt to death. But one of the children escaped death,” Kola said.

When contacted, the spokesperson for the State Fire Service, Ibraheem Adekunle, confirmed the incident in a statement signed by the Director of the Service, Mr. Olaniyi Alimi. He stated that six lives were lost in the fire.

Alimi confirmed that a probe had begun to determine the cause of the fire, which remains unknown.

The statement read in part, “We were informed of the incident via a distress call to our emergency number 08030808254 at 3:21 a.m., and our team from Ede Zonal Command proceeded to the scene, with a backup team joining them from the Fire Service Headquarters, Abere.

“The address of the fire incident is Tijani Kabiru Road, Akankan Area, Ede North LG. The street was named after the deceased, who was a Customs officer from Oyo/Osun Command.

“Mr. Tijani Kabiru, who was reported to be in his late 40s, and his wife, said to be in her early 40s, lost their lives to the inferno, which is believed to have started about an hour before the fire service received the information.

“They (the couple) lost their lives along with four of their children (three boys and a girl), aged between three and ten years. The estimated loss due to the fire is around N200m, while the property saved is valued at N500m.

“Their bodies were handed over to the men of A’ Division of the Nigeria Police Force. Only one of their sons, out of the family of seven, escaped from the fire. The boy, who is about 13 years old, survived. The cause of the incident is still unknown, but a probe to unravel it has begun.”

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BIG STORY

Police Arrest Human Rights Lawyer Farotimi Over Defamation Allegation

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Operatives of the Nigerian Police Force have reportedly arrested human rights lawyer, Dele Farotimi.

Farotimi’s arrest was disclosed by the 2023 presidential candidate of the African Action Congress, Omoyele Sowore, in a post on his X handle on Tuesday.

Sowore called for the lawyer’s immediate release, stressing that the police should not be used to settle personal disputes.

Sowore wrote, “It is pertinent that the Nigerian police are notified that the institution cannot continue to be used to settle personal scores, and we, the citizens of Nigeria, would no longer tolerate such a situation.”

“Therefore, the police at Zone 2 in Lagos are advised to release Barrister Dele Farotimi immediately.”

However, Punch Online made a phone call to the police spokesperson at the Zone 2 Command, SP Ummar Ayuba, who denied the arrest.

She simply said, “We did not make any arrest. He is not in our custody.”

Meanwhile, the Commissioner of Police in Ekiti State, Mr. Adeniran Akinwale, informed (Punch Online) that the lawyer was arrested for various alleged offences.

The commissioner said the charges included “defamation of character, cyberstalking, and other things. But those two are fully established.”

“That was why we have been looking for him before we were able to arrest him.”

“We are investigating him. If the suspect is arrested, we will bring him for investigation. We will conduct our investigation and will be able to know his level of culpability or otherwise.”

 

Credit: The Punch

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BIG STORY

JUST IN: Governor Babajide Sanwo-Olu Signs Lagos Electricity Bill Into Law

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The Governor of Lagos, Babajide Sanwo-Olu, has enacted the Lagos Electricity Bill 2024.

This new law presents a comprehensive strategy designed to address challenges in the energy sector and is expected to lay the groundwork for economic and industrial growth in Lagos.

The governor formally signed the bill on Tuesday at the Lagos House in Ikeja.

“The bill is a major step by the state government to ensure a 24-hour electricity supply to every corner of the state, following the Federal Government’s approval for states to generate and distribute energy in 2023,” said the governor’s Special Adviser on Media and Publicity, Gboyega Akosile, on X.

This development is expected to reduce the state’s reliance on the national grid.

At the signing ceremony, Sanwo-Olu highlighted the significance of the bill in transforming Lagos into a global city with a stable and continuous power supply.

In November, the Lagos State Government invited independent power producers and energy solution companies to submit bids for the construction of gas-fired power plants to address the state’s ongoing electricity shortage.

The Ministry of Energy and Mineral Resources, in collaboration with the Office of Public-Private Partnerships, issued the call as part of an initiative to improve Lagos’s power supply through the Clean Lagos Electricity Market.

The announcement was made jointly by the Commissioner of the Ministry of Energy & Mineral Resources, Biodun Ogunleye, and the Special Adviser of the Office of Public-Private Partnerships, Bukola Odoe.

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