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Pat Utomi Says More Loans Won’t Solve Nigeria’s Problems

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Pat Utomi Says More Loans Won't Solve Nigeria's Problems

Pat Utomi, a political economist and former presidential candidate, has stated that securing more loans would not solve Nigeria’s problems, especially the budget deficit.

He made this known in reaction to the federal government’s commitment to borrow more funds to finance the N16.45tn 2022 budget.

Minister of Finance, Budget, and National Planning, Zainab Ahmed said it was necessary that the government would continue to borrow in order to fund developmental and infrastructure projects as it does not get enough from its revenues.

She noted that Nigeria’s revenues could barely accommodate services even as she emphasised that despite the concerns, its borrowings were still within acceptable limits.

The minister stated, “If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.

“So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis.

“Nigeria’s borrowing has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits. As of July 2021, the total borrowing is 23 percent of GDP.”

Expressing his view on the matter, Utomi, who said that the increase in the budget might not be significant given the country’s high inflation rate, urged the government to focus on cutting the cost of governance and harnessing non-oil sources of revenue to fund the budget.

He stated, “What really bothers me is that I am not seeing a significant pullback in the cost of governance, a cut down of the frivolities of government and channel of the available resources to sectors that will create multipliers.”

When asked if the National Assembly should further cut down the budget, Utomi said, “It is really not a function of cutting it further. The focus should be on turning to sources of revenue that drive economic growth.”

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Economy

Dollar To Naira Exchange Rate Today (Fri. Aug. 12, 2022)

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Dollar To Naira Exchange Rate Today (Fri. Aug. 12, 2022)

Dollar to naira, on Friday, August 12, 2022, opened at (undisclosed) at the Investors & Exporters FX window ( I&E FX Window), where the currencies officially trade.

According to the data at the FMDQ Security Exchange where forex is traded officially, the dollar to naira exchange rate stood at (undisclosed).

This would mean that the Nigerian currency either gained or lose in value against the United States dollar, as foreign exchange (forex) trading closed at N419.22 per $1 on Thursday, August 11.

How much is the dollar to naira at the black market today?

Going by sources at the Bureau De Change (BDC) in Lagos, dollar to naira is currently selling for N670, and being bought for N665 in the black market in the state.

It is however pertinent to note that the Central Bank of Nigeria (CBN) does not recognise the parallel market (black market), as it has directed individuals who want to engage in forex to approach their respective banks.

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Economy

FG Vows To Go Ahead With New Tax On Data And Call

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FG Vows To Go Ahead With New Tax On Data And Call

The Federal Government has vowed to go ahead with the planned implementation of a five percent hike in call and data tariffs.

A statement from the Federal Ministry of Finance Budget and National Planning maintained the tariff hike will go on despite resistance from Minister of Communication and Digital Economy Prof. Isa Ali Pantami.

The statement insisted the government will begin “the implementation of five percent excise duty tax on all voice calls, SMS and data services, in addition to the existing 7.5 percent Value Added Tax (VAT), paid for goods and services across all sectors of the economy”.

Minister of Finance Budget and National Planning Zainab Ahmed made the disclosure at a stakeholders’ meeting organised by the Nigerian Communications Commission (NCC), the telecoms industry regulator.

Ahmed, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, said: “Henceforth, the five percent excise duty will be collected by telecom operators and payment made to the federal government on a monthly basis, on or before 21st of every month.”

Reacting to Patanmi’s resolve to resist the tariff hike, Ahmed noted: “The five percent excise duty has been in the Finance Act 2020, but has never been implemented.

A circular stating the planned hike was addressed to the Communications and Digital Economy Minister and other relevant ministries and agencies of government.

Part of the circular reads: “This is to convey that his Excellency Mr. President has approved Supplementary Protection Measures (SPM) for implementation of ECOWAS Common External Tariff (CET) 2022-2026 and excise duties on non-alcoholic beverage, cigarettes and Tobacco products as well as telecommunication services with effects from 1st April 2022.

The circular signed by Ahmed adds: “A grace of ninety (90) days commencing from the date of implementation of this circular i.e April 1, 2022, shall be granted to all importers who had opened Form M and must have entered into irrevocable trade agreement before the coming into effect of this circular to process and clear these goods at the prevailing duty rates.

However new import transactions entered from the 1st of April 2022 will be subjected to the new import duty regime”.

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Nigeria’s Crude Oil Production Drops, Says OPEC

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Nigeria's Crude Oil Production Drops, Says OPEC

Nigeria’s crude oil production plunged by 2.3 million barrels in July 2022 when compared to what the country produced in the preceding month of June, data from the Organisation of Petroleum Exporting Countries (OPEC) shows.

In its latest Monthly Oil Market Report for August 2022, OPEC stated that crude oil production figures based on direct communication indicated that Nigeria’s output dropped by an average of 74,000 barrels per day in July.

This implies that for the 31 days in July, the country lost about 2.3 million barrels of crude oil. The organisation further stated that the average cost of Brent crude, the global benchmark for oil, during the month under review was $105.12/barrel.

By losing 2.3 million barrels in July this year, it means Nigeria’s oil earnings fell by about $241.1m or N101.13bn (at the official exchange rate of N419.37/$) in the month under review.

Data from OPEC showed that Nigeria’s oil production in June 2022 was 1.158 million barrels per day, but this dropped to 1.084 million barrels per day in July.

The country had produced 1.024 million barrels per day in May this year, according to figures released by OPEC on Thursday.

The Federal Government, operators and experts have consistently fingered crude oil theft in the Niger Delta as the major reason for Nigeria’s poor output and its continued failure to meet the monthly oil production quota approved by OPEC.

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