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Tag: budget

  • PDP assails Buhari’s curious budget

    PDP assails Buhari’s curious budget

    With declining oil production, low and still falling crude oil prices, fewer buyers for Nigeria’s oil, and a determination to borrow almost two trillion naira of the six trillion naira it has budgeted for next year, it is no surprise that the opposition Peoples Democratic Party (PDP), appears peeved that the President Muahammadu Buhari government seems smug about both the 2016 Budget and the economy as a whole. The opposition of course has a right to pick holes in the budget. But it is not obvious that they have performed that role with depth or finesse. Yet, of all the issues needing the diligent attention of the opposition, budget tops the scale. It offers the opposition the opportunity to, as it were, present their own budget, to expertly take the government’s budget apart, block by block, piece by piece.

    The Buhari government has, for instance, indicated that ‘for now’ it would not countenance any increase in the pump price of fuel; but it has made no provision for fuel subsidy in 2016, instantly indicating to the perceptive that removing fuel subsidy, whether in one fell swoop or in phases, is a decision already made. What the ruling party waits for is the proper timing early next year to effect the removal. Whether this bald fact escaped the opposition is not clear. It should by now have presented a coherent policy on the subsidy matter, prepared a consistent and coherent alternative to President Buhari’s economic plans, or what seems like an economic plan, wondered how far-reaching 500,000 jobs would be when tens of thousands are losing their jobs every week, assess the undue optimism of the $38 oil price benchmark, and carefully propounded a social and political charter for Nigerians — alternative policies the public can see and connect with.

    Instead of a studious approach to criticising the Buhari economic agenda, the spontaneous Olisa Metuh, the PDP’s publicity secretary, has issued a statement sweepingly dismissing the Buhari budget “…as a big fraud and executive conspiracy tailored towards mortgaging the future of the nation.” The party seems more bothered about the decision of President Buhari to borrow almost two trillion naira to finance the deficit. The PDP did not give indication its statement is a tentative first reaction until a more comprehensive one is made, though if it were, the statement should have been worded differently and expertly nuanced. The party did not suggest, though it is expected of them, that they would still issue a more comprehensive response to the budget proposals. Even its tentative response, assuming that is what it was, was shallow, immature, and amateurish.

    The PDP is today so dispirited that it lacks cohesion and focus to take on the weak-kneed All Progressives Congress (APC). Its main protagonist is the uncouth and paranoid Governor Ayo Fayose of Ekiti State. The party does not have a philosopher, organiser, defender, and exemplar. If it were possible to produce an alternative to the PDP, the country would be glad to embrace that option, for it is not compulsory, given its poverty of ideas and other shortcomings, that it should be the leading opposition party. Sadly, at the moment, the PDP is still the country’s best bet to engage and discomfit the ruling party. It still has what could pass as a country-wide structure, and it controls a few states. It must be encouraged to reform and restructure in order to present itself as a credible opposition party.

    So far, it has performed very poorly and behaved even more egregiously. It has not given indication it has an alternative political charter for the country; nor does it seem capable of even analysing Buhari’s economic agenda and budget, let alone providing an alternative framework. The PDP should be reminded that the APC did not blunder its way into electoral victory in March, nor climbed upon a concatenation of chanced events and freak political accidents to record the triumph it achieved in the last polls. In the same way, the PDP must not expect that the country, by a string of strange coincidences, would turn around somewhere down the road to embrace the party.

    Fortunately for the PDP, all is not lost. The APC is still at war with itself, and while the Buhari presidency pursues the anti-graft war with single-minded resolve, it has not managed to inspire the public, nor shown that its methods and programmes are fundamentally different from those of the PDP, nor yet given indication that it has become formidable, well organised, inspired and eruditely visionary. For the PDP to offer an alternative, it has to do profoundly much better than the APC by out-thinking, out-structuring, and out-inspiring the ruling party. But at the rate the PDP is atrophying, it will need something close to magic to unnerve the ruling party, not to talk of offering Nigerians the sound alternative they need.

  • Labour seeks effective implementation of budget

    Labour seeks effective implementation of budget

    Organised labour has praised the Federal Government for the N6.08 trillion 2016 budget announced on Tuesday. But it stressed the need for the budget’s implementation to the benefit of all Nigerians.

    Commenting on the budget,  the Association of Senior Civil Servants of Nigeria (ASCSN) lauded the planned recruitment of 500,000 unemployed graduates and holders of National Certificate of Education (NCE) as teachers to curb the escalating rate of unemployment.

    In a statement signed by the Secretary-General, ASCSN, Comrade Bashir  Lawal, said: “We also commend Mr President for his decision to ensure that all the Federal Ministries, Departments, and Agencies (MDAs) are captured and brought under the Integrated Personnel Payroll Information System (IPPIS) because this will not only reduce the burden of manual preparation of payrolls, but also curb cases of sharp practices in the system.”

    While praising the government for its resolve to compile the list of the poorest in order to implement its cash transfer programme, the union stressed the need for the policy to be transparent and inclusive without discrimination.

    ”We must equally express joy in the decision of Government to make good its promise to provide a meal per day for primary school pupils,” the union said.

    The ASCSN, however, frowned at the decision of the government that fuel subsidy would not be removed for now because the impression had been created that it might be removed later more-so that no provision was made for fuel subsidy in the budget estimate.

    Also, the National President  Trade Union Congress of Nigeria (TUC), Comrade Bobboi Kaigama, praised the Federal Government for the N6.08 trillion 2016 budget. He however expressed concerned on the implementation of the budget.

    “However , we are worried that our challenge as a country as regards national budget is not how to propose, draft or present a good budget but its implementation. We are also worried that about N1.8 trillion of the budget will be borrowed to fund the budget.

    “The decision to recruit 500,000 unemployed graduates and  National Certificate of Education (NCE) holders as teachers to curb the escalating rate of unemployment and to ensure that all the Federal Ministries, Departments, and Agencies (MDAs) are captured and brought under the Integrated Personnel Payroll Information System (IPPIS) are laudable ideas.

    He said the move would not only reduce the burden of manual preparation of payrolls,  but would also curb cases of sharp practices in the system and will also help to compile the list of the less-privileged in order to implement better transfer programme.

    “We urge that the policy be made transparent and inclusive without discrimination.

    “Additionally, we are still not comfortable with the decision  of government on subsidy. The Congress, therefore, demand for a stakeholders’ meeting which include labour to discuss the subsidy issue and why it has become impossible for us to refine and purchase fuel for  as low as N50 per litre. The price of crude oil in the international market had dropped drastically. This should have a direct effect on domestic consumption of the product,” he said.

    He said the proposed deficit financing  at N2.22 trillion was high, adding that this could be reduced by the recovery of stolen funds.

    “We therefore support the government to use looted funds for the benefit of Nigerians,” he said.

     

  • Kebbi proposes N107b budget for next year

    Kebbi proposes N107b budget for next year

    Fovernor Abubakar Atiku Bagudu of Kebbi State has presented a budget of N107 billion to the House of Assembly for the 2016 fiscal year.

    The budget tagged: ‘’Bring Kebbi State back on track’’ with  N73 billion for capital expenditure and N34 billion for recurrent expenditure.

    The governor made the highest allocation of N16.4 billion to the education sector. This is followed by agriculture with N12.5 billion, while  N3.9 billion was earmarked for the health sector.

    Bagudu, who decried the level of decay in the education sector, lamented that the  immediate past administration allocated only N3 billion to the sector, which is currently characterised by poor infrastructure like furnitures and lack of enough motivated teachers in schools.

    He also increased allocation for security in the budget, as he promised to improve and build sporting facilities in schools and major towns. Bagudu also proposes to spend N1.2 billion for youth development scheme. The governor intends to curb unemployment with intervention in the agric sector.

    He further stated that in view of the dwindling revenue acruing to the state, his administration would place emphasis to the solid mineral sector, to explore the sector for the benefit of the state..

    In his response after the presentation, the Speaker of the House of Assembly, Hon. Samaila Kamba promised that the house would expedite action on the budget for rapid development of the state.

  • Taraba: Ishaku proposes N68.8 billion rescue budget

    Taraba: Ishaku proposes N68.8 billion rescue budget

    Taraba State Governor, Darius Dickson Ishaku on Wednesday presented to the State House of Assembly a budget of sixty eight billion and one hundred and ten million naira (N68.8 bn) for 2016.

    Tagged “The Rescue Budget “, the governor explained that the appropriation bill was prepared bearing in mind “the realities of times.”

    “We can only spend what we have; our projections are conservative and based on what we feel are more certain to accrue within the 2016 fiscal period.”

    A breakdown of the budget has recurrent expenditure of N42.7 billion, representing 62.10 percent, and a capital expenditure of N26 billion, representing 37.90 percent of the budget.

    The governor expects fiscal projections from the traditional revenues of the federal statutory allocations of N35.8 billion, Internally Generated Revenues (IGR) of N5.3 billion, Value Added Tax (VAT) of N8.6 billion, Aids and Grants N5.3 billion, proposed internal loan of N12 billion and external loan draw down of N1.4 billion.

    Ishaku told The Nation that his priority would be in the areas of agriculture, health and peace.

    Housing and urban development had the lion share of N4.8 billion, followed by skills and knowledge enhancement programme with N3.4 billion and governance with N3.4 billion.

    Agriculture was allocated N2.3 billion, health N2.9 billion while roads construction and transportation had N2.4 billion.

    From the bottom on the expenditure is poverty alleviation with N100 million, youth empowerment with N235.8 million, private sector N297 million, gender empowerment N350 million and airways with N500 million.

    The governor disclosed he has directed that a strategic framework for the implementation of his rescue agenda manifesto be developed between now and the end of February 2016, to serve as the basis for the annual budgets of the state from now to 2019.

    To remain focus on the implementation of the agenda, Ishaku said the framework will be linked with the state’s cash flow.

    He added that all the local councils affected by civil unrest in the past years will be given due consideration.

    “Though our current macroeconomic indices which serve as the benchmarks for our medium term projects for 2016 and beyond are not encouraging, we are facing the future with determination and faith to change our fortune as a state,” he said.

    The Deputy Speaker Muhammed Gwampo who presided as the Speaker pro tempo, said “the appropriation bill will be speedily deliberated upon and put into law in the soonest possible time, so that we shall not delay the governor in his agenda of rescuing Taraba state.”

  • LCCI praises Buhari for raising 2016 budget capital vote

    LCCI praises Buhari for raising 2016 budget capital vote

    The Lagos Chamber of Commerce & Industry (LCCI) has commended the President Muhammed Buhari  administration for raising the capital expenditure to 30 per cent from 15 per cent in this year’s budget.

    In a statement by its President, Dr. Mrs. Nike Akande, LCC said most of the assumptions made in the 2016 draft budget reflected the realities and desired spending priorities for national development.

    She expressed hope that adequate provision would be made within the context of the capital provision for infrastructure towards addressing the huge infrastructure deficit.

    She noted that one of the effective means of achieving this is through Public Private Partnership (PPP) model. To facilitate private capital flow into infrastructure building, she advised government to develop attractive policy frameworks for PPPs.

    She said: “We also urge the fiscal authorities to review and monitor the quality of capital expenditure and ensure that funds are directed to the critical infrastructure needed to drive productivity.”

    TheLCCI president,however, warned on the draft budget benchmark for crude oil at $38 per barrel, maintaining that it looks very fragile given the continued and projected boost of supply side of oil in the international market and its potential impact on oil price.

    She, therefore, canvassed the reduction of the oil benchmark, adding that  the chamber’s members agreed with the government that greater emphasis would be placed on non-oil revenue through diversification driven by agriculture, solid mineral and service sectors.

    The quick win for government, according to Mrs. Akande, is to focus on policies and regulations that will attract private capital and encourage investment. She added that efficiency of tax administration is very vital to expand the current non-oil revenue base.

    The LCCI chief also noted that the exchange rate benchmark of N197 per dollar in the 2016 budget appears too conservative and at variance with realities.

    She canvassed an exchange rate benchmark of N220 per dollar threshold in the 2016 budget.

    She criticised the growing budgetary provision for debt servicing, quoting the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) provision of N1.3 trillion for domestic debt service in 2016 mainly to service existing commitments.

    This figure, she argued, represents 72 per cent of the proposed capital expenditure. She canvassed an innovative strategy to reduce burden of debt service to the economy.

    “Noteworthy is the provision of zero allocation for kerosene subsidy, which has been one of the biggest burden over the years. The reduction of Federal Government’s share of fuel subsidy to N63.29 billion compared to almost N1 trillion spent on subsidy in 2015 is also a welcome development. These will definitely free up resources to finance other priorities especially infrastructure,” she said.

    Mrs Akande reiterated the Chamber’s call for the deregulation of the petroleum downstream sector in order to reduce the pressure on government finances and the foreign exchange market. According to her, this will not only create savings for investment in priority sectors but also provide a great opportunity to attract more investment to the sector.

    LCCI praised the Executive on the passage of the revised Petroleum Industry Bill (PIB),, noting that the Bill  will unlock opportunities in the oil and gas industry as well as create an transparent operating environment in the sector.

  • Buhari writes NASS to present budget on Tuesday

    Buhari writes NASS to present budget on Tuesday

    • Senate passes MTEF
    • $38 oil benchmark approved

    President Muhammadu Buhari yesterday wrote the National Assembly seeking permission to present the 2016 Appropriation Bill to a joint session of the Senate and the House Representatives.

    Chairman, Senate Committee on Media and Public Affairs, Senator Aliyu Sabi, who spoke with reporters in  in Abuja, said the Senate granted the president permission to present the 2016 budget next Tuesday as requested.

    The Senate also approved the Medium Term Expenditure Framework (MTEF) submitted to the National Assembly.

    The consideration and approval of the MTEF paves  the way for the presentation of the annual Appropriation Bill.

    The Senate retained the $38 per barrel oil benchmark as proposed by the executive.

    The lawmakers also approved the exchange rate of N197 to $1 as proposed by the Presidency.

    Insiders however described  the approval of the benchmark of $38 as proposed as ambitious as the global price of crude oil has slumped to about $36 per barrel from the $40 per barrel when the fiscal document was proposed.

    The Senate also approved the projection of 2.2000 daily oil production volume next year as proposed by the executive. It also approved the N5.720 billion non-oil revenue projection.

    The approval of the document followed the submission, consideration and adoption of the report of the Senate Joint Committee on Finance and National Planning presented by the Chairman, Finance Committee, Senator John Owan Enoh.

  • Buhari to present 2016 budget next week

    Buhari to present 2016 budget next week

    President Muhammadu Buhari will on  December 22, present the 2016 Appropriation Bill to the National Assembly for consideration and approval, The Nation learnt yesterday.

    A reliable source in the Senate told our reporter that the subject matter of the presentation of the 2016 Appropriation Bill on Tuesday next week was discussed at a close door session the upper chamber held yesterday.

    He noted that the Senate would have adjourned plenary for Christmas break tomorrow but didn’t do so because of the presentation of the 2016 budget “tentatively slated for next Tuesday.”

    The source however added that “nothing is sacrosanct as the date can still be changed if occasion demands.”

    Chairman, Senate Committee on Media and Public Affairs, Senator Aliyu Sabi did not mention the presentation of the budget at a briefing yesterday.

    Sabi only said Nigerians would be informed whenever the 2016 budget was received from the Presidency when he was asked whether the fiscal document had been submitted to the Senate.

  • Why C/River led in budget transparency survey

    Not surprisingly, Nigeria’s material circumstance fell due for appraisal as the Civil Resource Development and Documentation Centre (CIRDDOC Nigeria), a consortium of civil society organizations in conjunction with the Department of International Development (DFID), presented its annual states budget transparency survey for 2015. The event which took place in Abuja penultimate week attracted the creme de la creme of the civil society, the public and the media. The report which focuses on the debilities in our budgetary system is a stark confirmation to Nigerians long confounded by the apparent discontinuities between official avowals and performance among Nigeria’s 36 states in 2014. According to CIRDDOC’s Executive Director, Oby Nwankwo, the Nigeria Sub-national Budget Transparency Survey 2015 was inspired by their partners and their works and hoped that the survey, in turn, would contribute to the impact of their initiatives and advance budget transparency in the states surveyed and the country at large.

    As the report noted, budget translates policies into programmes, such as those meant to provide vaccinations, textbooks in schools, and subsidies to farmers. In a contractual economic environment, budget transparency and participation are therefore essential to ensuring that the allocation of public funds is prioritized to reflect the needs of the public. Due to Nigeria’s centripetal fiscal arrangement, state governments have had the onerous task of prioritizing the allocation of scarce resources. Since states and local governments are closest in proximity to the people, the need for an open, transparent, and participatory budget and procurement process is critical to ending the misappropriation of public funds that could be used for development purposes.

    Unfortunately, the finding of the State Budget Transparency Survey 2015 is that the state budget transparency is deplorable. The report finds that in most of the states surveyed, the public does not have access to comprehensive and timely information needed to participate meaningfully in the budget process and to hold government accountable. The report frowns at this lack of transparency which, according to it, encourages inappropriate, wasteful and corrupt spending, and because it shuts the public out of decision making, it reduces the legitimacy and impact of anti-poverty initiatives. A state’s score and placement within a performance category is determined by averaging the responses to 51 questions on the State Budget Transparency Questionnaire related to information contained in the eight key budget documents that all states are required to make available to the public.

    In the end, the State Budget Transparency Index 2015 reported that over half of Nigerian states failed to provide adequate budget information to the public, opportunities for public involvement throughout the budget process, and publicly available information on the procurement process. According to the report, only Cross River, Ekiti and Lagos states under their immediate past governors scored above 50 per cent on the State Budget Transparency Index, meaning that, on the average, they published more than half of the eight key budget documents, they held consultations to provide inputs in budget formulation and public hearings on the budget, and they published bidding documentation and awards on procurement projects. Whereas Cross River led the pack of winners in the overall transparency index, Ekiti led in the provision of documents. On the assumed average, Cross River State took overall best position with 77 per cent score.

    It was another memorable outing for Cross River State whose mention of its immediate past governor Senator Liyel Imoke conjures up excellence as an elated Imoke was invited to the podium to explain his magic wand amid spontaneous ovations from the cheering audience as the occasion was beamed by the national media. This is not the first time the state is leading the pack among the 36 states. In 2010, Bekwara and Obubra local governments in Cross River State were scripted in gold on the global medical map when they recorded a zero infant/maternal mortality rate, thus attracting recognition by the United Nations, earning the state an award for meeting the Millennium Development Goals 4 and 5. Again, in 2013, the United Nations Development Project for Africa (UNDP Africa) declared Cross River State the best governed state in Nigeria. In the same (2013), the state won the Bill Gates Award for Polio Eradication. The Imoke administration also attracted a private sector giant, the United States-based General Electric, which is building its factory in Calabar and investing over a billion dollars in the state because of the investor-friendly policy of the state government under Imoke. The saying that adversity introduces a man to himself cannot be more apt as applied to Cross River State. Since the ceding of its 76 oil wells to Akwa Ibom State in 2008 thus removing it from the list of littoral states in the country, the Imoke-led administration resorted to prudent management of its scarce resources and transparency, as a survivalist strategy.

    This earned the former governor the appellation of “Mr. Due Process”. Relying wholly on Internally Generated Revenue (IGR) and the small allocation from the Federation Account, and without Derivation Fund, Imoke attacked excruciating poverty and underdevelopment head on in the state. While it is impossible to articulate the cumulative magnitude of his eight year developmental strides in one piece, this may actually be a factual aid to construe Imoke’s staggering achievements in Cross River State. Besides asphalting a network of more than 1,000 kilometres well developed, closely knit roads across the state, his government gave a face-lift to education. To accentuate his priority to education, not only did he build and renovate several schools across the state, he re-introduced scholarship awards for indigenes of the state to study at home and abroad. An attempt to encode some of his projects would definitely not exclude the inimitable ones among the lot. Urban and rural roads, Airport Bye-pass, Urban and rural Water Scheme, Tinapa Knowledge City, Monorail, the first fly-over in Calabar, Smartgov and Electronic Citizen Identification Scheme, easily come to mind.

    Others include: International Convention Centre cited by CNN as one of the three architectural wonders in Africa, International Specialist Hospital, International Golf Course, the Songhai Farm Project, Model Schools, Port-side Industrial Park, Housing Estates, Mother & Child Free Healthcare Programme, GIS and Land Registration Reform, etcetera. The Imoke administration had placed the Annual Calabar Carnival on global annual tourism calendar. What is more, the transformation of the rural economy through lifting road access restrictions to rural entrepreneurial potentials remains legendary. Add to this, the transformation of the system of governance into the new digital age for efficiency and attainment of the optimum in the aggregation of potential revenue resources of the state, excluding oil.

    Above all, the establishment of strategic assets across sectors, namely: healthcare, education, agriculture, electrification, water, urban and rural transportation to regenerate the rural-urban economy, among others. Yet, this miracle cannot be divorced from Imoke’s strategic templates which included a creative facilitation of the flow of private investor money into the state’s unproductive assets to make them operational thereby lifting the state’s tourism economy. In fact, Imoke’s capacity for prudent husbandry of scarce resources was a mystery yet to be unravelled. The state’s star-like outing at the states budget transparency survey is therefore not a surprise.

    • Orjiakor is an Abuja-based public policy analyst.
  • World Bank: govt to spend 25% of budget on subsidy

    World Bank: govt to spend 25% of budget on subsidy

    If the World Bank had its way, fuel subsidy will go now.

    The bank yesterday reported that 25 percent of the Federal Government’s budget for 2015 will be spent on funding subsidy.

    No thanks to this huge spending on subsidy, the World Bank stated, Nigeria is unable to accumulate enough in the Excess Crude Account (ECA) because of the $35 billion cost of fuel subsidy incurred between 2010 and 2014.

    The World Bank, in its economic report on Nigeria, said the cost of subsidy in 2015 is expected to be around “18 percent of all oil revenues to the country, equivalent to 25 percent of federal budget”.

    The World Bank also warned that reports of wide-spread fraud will be costly to the reputation of the government and attempts to crack down on fraud can reduce supply while price distortions encourage overconsumption of fuel.

    The report, which was presented by John Litwack, said: “The short run outlook remains difficult due to expected low oil prices. Even if oil prices recover, government oil revenues should continue to decline in the medium term relative to the size of the Nigerian economy.”

    To address this economic crisis, the World Bank noted that “fiscal adjustment will be of critical importance. Investors stand willing to bring considerable investment to Nigeria if they receive credible signals from the new government of commitments to policy directions and regulations consistent with strong private sector growth”.

    The report said: “The benefits of the fuel subsidy in Nigeria appear quite limited, while the costs are high. For given fixed domestic fuel prices, the burden of the fuel subsidy i.e. its share of government oil revenues, will likely increase over time, regardless of whether oil prices remain low or recover.”

    In 2014-2015, the report stated that “the FAAC distributions of oil revenues to budgets have been crowded out by the costs of the fuel subsidy and cash calls to NNPC”.

    The report added that “the value of the subsidy received by the wealthiest 10 per cent is 30 times the value received by the poorest 10 per cent. The vast majority of benefits to poorer Nigerians would have been from the kerosene subsidy if it was enforced. Without the kerosene subsidy, estimated per capita benefits to the poorest 10 percent of Nigerians is only N18 a month, most of which comes from transportation.”

    It was reported that the benefits of the petrol subsidy are even less now, given that the world price is lower and enforcement at the pump has weakened. “The share of the fuel subsidy in oil revenues to the Nigerian government is growing,” the World Bank warned.

    In his presentation, Masami Kojima lamented that Gas prices in Nigeria are not adjusted regularly while announced gas prices are not always implemented. He noted that the country’s Department of Gas was not operational until 2012, and under-resourced.

    Kojima added that “allocation of gas supply obligation are not announced at the beginning of each year but gas aggregator became operational since 2010, but the aggregation has not begun, and hence there is no aggregate price for gas in Nigeria.”

    On the way forward, Masami Kojima said it was time for the government to come up with new bold policy like “considering appointing champion and establishing a task  force; Consider dedicated gas bill for midstream and downstream; an Independent regulator; Separate regulatory and commercial roles; Unbundle The Nigeria Gas Company (NGC) – 1 of 20 fixes in NNPC change agenda; Officially publish tariffs and domestic supply obligations; Issue supplementary agreements; Renew licences promptly; Review regulated and pseudo-regulated prices; Make fiscal terms robust to be able to cope with large fluctuations in costs and prices by basing fiscal terms on profitability measure.

     

  • 25 percent of 2016 budget for Subsidy – World Bank

    25 percent of 2016 budget for Subsidy – World Bank

    World Bank Tuesday reported that 25 percent of the federal government budget for 2015 will be spent on funding subsidy.

    As a result of this huge spending on subsidy, the World Bank stated that Nigeria was unable to accumulate enough in the Excess Crude Account (ECA) because of the $35 billion cost of fuel subsidy incurred between 2010 and 2014.

    The World Bank in its economic report on Nigeria said the cost of subsidy in 2015 is expected to be around “18 percent of all oil revenues to the country, equivalent to 25 percent of federal budget.”

    The World Bank also warned that reports of wide-spread fraud will be costly to the reputation of the government and attempts to crack down on fraud can reduce supply while price distortions encourage overconsumption of fuel.

    According to the report which was presented by John Litwack, the report lamented that “the short run outlook remains difficult due to expected low oil prices. Even if oil prices recover, government oil revenues should continue to decline in the medium term relative to the size of the Nigerian economy.”

    To address this economic crisis, the World Bank noted that “fiscal adjustment will be of critical importance. Investors stand willing to bring considerable investment to Nigeria if they receive credible signals from the new Government of commitments to policy directions and regulations consistent with strong private sector growth.”

    The report said; “the benefits of the fuel subsidy in Nigeria appear quite limited, while the costs are high. For given fixed domestic fuel prices, the burden of the fuel subsidy, i.e. its share of government oil revenues, will likely increase over time regardless of whether oil prices remain low or recover.”

    In 2014-2015, the report stated that “the FAAC distributions of oil revenues to budgets have been crowded out by the costs of the fuel subsidy and cash calls to NNPC.”

    The report disclosed that “the value of the subsidy received by the wealthiest 10 percent is 30 times the value received by the poorest 10 percent. The vast majority of benefits to poorer Nigerians would have been from the kerosene subsidy if it was enforced. Without the kerosene subsidy, estimated per capita benefits to the poorest 10 percent of Nigerians is only 18 naira a month, most of which comes from transportation.”

    It was reported that the benefits of the petrol subsidy are even less now, given that the world price is lower and enforcement at the pump has weakened. “The share of the fuel subsidy in oil revenues to the Nigerian government is growing,” the World Bank warned.

    In his presentation, Masami Kojima lamented that Gas prices in Nigeria are not adjusted regularly, while announced gas prices are not always implemented. He noted that the country’s Department of Gas was not operational until 2012, and under-resourced.

    Masami Kojima added that “allocation of gas supply obligation are not announced at the beginning of each year but gas aggregator became operational since 2010, but the aggregation has not begun, and hence there is no aggregate price for gas in Nigeria.”