Full Text Of Buhari’s Speech At The 2023 Budget Presentation

President Muhammadu Buhari on Friday presented the 2023 budget proposal to a joint session of the National Assembly. 

The N20.51 trillion budget, which is the last one by the present administration, is 15.37 per cent higher than the amount budgeted in 2022.

During the presentation, the Nigerian leader spoke about diverse issues affecting the country including the payment of subsidies for petroleum.

Below is President Buhari’s full text during the 2023 budget presentation: 

2023 BUDGET SPEECH

Budget of Fiscal Consolidation and Transition

Delivered By:

His Excellency, President Muhammadu Buhari,
President, Federal Republic of Nigeria
At the Joint Session of the National Assembly, Abuja. Friday, 7TH October , 2022

PROTOCOLS:

I am very pleased to be here today to present the 2023 Budget Proposals at this Joint Session of the National Assembly. This is the last time I will be laying the budget of the Federal Government of Nigeria before the National Assembly.
2. Mr. President; Mr. Speaker: As I address this Joint Session on the Budget for the last time, let me highlight some of the progress that we have made in last seven and half years, in just two important areas of Critical Infrastructure and Good Governance.

3. We have made transformational investments in Infrastructure, notably:
a. Establishing the Infrastructure Corporation of Nigeria (‘InfraCorp’), in 2021, seed capital of N1 trillion from the Central Bank of Nigeria (‘CBN’), the Nigeria Sovereign Investment Authority (‘NSIA’) and the Africa Finance Corporation (‘AFC’);
b. Leveraging finance through the NSIA into the Presidential Infrastructure Development Fund (‘PIDF’) to facilitate the accelerated completion of the Second Niger Bridge, Lagos-Ibadan Expressway and Abuja-Kano Road;
c. Through the Road Infrastructure Tax Credit Scheme pursuant to Executive Order #7 of 2019, incentivised responsible companies to invest billions of Naira in constructing over 1,500km critical roads in key economic corridors. Under this Scheme, the Dangote Group has substantially completed the Reconstruction of 34km Apapa-Oworonshoki-Ojota Expressway and the 43km Obajana-Kabba Road. Similarly, Nigeria LNG Limited is on track to complete the 38km Bodo-Bonny Road and Bridges Project by the end of 2023;
d. Under our Sukuk Bonds scheme, since 2017, over N600 billion has been raised and invested in 941km for over 40 critical road projects nationwide, complement the Ministry of Works and Housing’s Highway Development and Management Initiative and other interventions;
e. Investing significantly to restore our national railways, completing and commissioning the 156km Lagos-Ibadan Standard Gauge Rail (and its 8.72km extension to Lagos Port); the 186km Abuja-Kaduna Standard Gauge Rail; and 327km Itakpe-Warri Standard Gauge Rail. These completed projects complement our ongoing investments in Light Rail, Narrow and Standard Gauge Rail, Ancillary Facilities Yards, Wagon Assembly Plants, E-Ticketing infrastructure as well as the training and development of our rail engineers and other workers;
f. We have completed New Airport Terminals at Lagos, Abuja, Kano and Port Harcourt, and reconstructed the Abuja Airport Runway in its first overhaul since its construction in the early 1980s.
g. Other investments in airports safety facilities, aeronautical meteorological services delivery complement ongoing development of seaports and ancillary infrastructure at the Lekki Deep Sea Port, Bonny Deep Sea Port, Onitsha River Port, as well as the Kaduna, Kano and Katsina Inland Dry Ports to create a truly multimodal transport system;

h. We have transformed Nigeria’s challenging power sector, through bespoke interventions such as the Siemens Power Program, with the German government under which over 2 billion US Dollars will be invested in the Transmission Grid.
i. We have leveraged over billions of US dollars in concessional and other funds from our partners at the World Bank, International Finance Corporation, African Development Bank, JICA as well as through the Central Bank of Nigeria, working with the Finance Ministry, to support the power sector reforms.
j. The Central Bank has also been impactful in its interventions to roll out over a million meters to on-grid consumers, creating much needed jobs in assembly and installation. Our financing interventions have recently been complemented with the takeover of four electricity distribution companies and the constitution of the Board of the Nigeria Electricity Liability Management Company.
k. On the generation side, we have made significant investments in and incremental 4,000MW of power generating assets, including Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others.
l. Our generation efforts are making the transition from a reliance on oil and diesel, to gas as a transitional fuel, as well as environmentally friendly solar and hydro sources. Under the Energising Education Programme, we have commissioned solar and gas power solutions at Federal Universities and Teaching Hospitals at Kano, Ebonyi, Bauchi and Delta States. Similarly, our Energising Economies Programme has taken clean, sustainable power solutions to the Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos.
4. In terms of Good Governance, one significant challenge this Administration met at our inception was the inability of successive Governments to institutionalise reforms to ensure their sustainability. We inherited an archaic set of corporate, banking and capital markets laws; draft but unenacted Bills to reform the critical petroleum sector; an unimplemented Oronsaye White Paper to reform our civil service, amongst others.

5. I was therefore committed, at the onset of this Administration’s Good Governance and Fighting Corruption Reforms, to focus on the much-neglected area of law reform, to bequeath a better legacy to the succeeding Administration, than the one we met. Our innovative, encompassing and historically significant legislative interventions include:
a. Critical corporate and financial laws to enhance our countries’ global competitiveness, including the repeal and re-enactment of Companies and Allied Matters Act (‘CAMA’) 2020 – the first comprehensive reform since 1990; enacting the Federal Competition and Consumer Protection Commission (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; establishing the Federal Competition and Consumer Protection Commission; re-pealing and re-enacting the Banks and Other Financial Institutions Act (BOFIA) 2020; enacting the Asset Management Corporation of Nigeria, AMCON (Amendment) Acts of 2019 and 2021; enacting the Credit Reporting Act (CRA) 2017 and Secured Transactions in Movable Assets Act (STMAA) 2017, to mention our major legislative interventions;
b. Fundamental anti-corruption, anti-money laundering and financial intelligence laws, such as the Nigeria Police Act, 2020 (being the first comprehensive reform of Police legislation since the Police Act of 1943); the Nigerian Financial Intelligence Unit Act 2017 (which resolved the longstanding impediments to Nigeria’s full participation in the global efforts to combat illicit financing of terrorism and crime under the auspices of the global Egmont Group); the Money Laundering (Prevention and Prohibition) Act, 2022; the Terrorism (Prevention and Prohibition) Act 2022, Proceeds of Crime (Recovery and Management) Act, 2022; Mutual Assistance in Criminal Matters Act, 2019; Nigerian Correctional Services Act, 2019; Suppression of Piracy and other Maritime Offences Act, 2019; amongst others.
c. Historic reforms to our Constitutional and other public laws, including the first ever amendments to the Constitution of the Federal Republic of Nigeria to support the engagement of young persons in our politics by passing Not Too Young to Run legislation, as well as to improve the funding and independence of States’ Legislatures and Judiciaries; enacting overdue reforms through the Electoral Act, 2022;
d. Finally enacting into law the Petroleum Industry Act, 2021 after close to two decades of drafting, debates and delays – leading to the commercialization of NNPC Limited, and other much needed reforms to our energy sector. This important law also complements other landmark legislations such as the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1993 (Amendment) Act, 2019, to increase oil and gas revenues accruing to the Federation;
e. Enacting annual Finance Acts of 2019, 2020 and 2021 to support our annual Budgets and respond to emerging tax, fiscal and economic issues, including:
I. reducing headline corporate tax rates for Small and Medium-Sized Enterprises;
II. reforming archaic tax legislation in line with global best practices to combat Base Erosion and Transfer Pricing;
III. reforming the taxation of securities lending and real estate investment trusts to spur increased investments on our capital markets;
IV. empowering the Federal Inland Revenue Service and the Nigeria Customs Service to optimize their use of technology to more efficiently collect taxes and levies; and
V. increasing VAT revenues predominantly to support our States and Local Governments’ precious finances during and after the impact of the COVID-19 Pandemic on the economy;
f. Furthermore, we have issued eleven Presidential Executive Orders on a range of important issues, including the Promotion of Transparency and Efficiency in the Business Environment, 2017;
I. Promoting Local Procurement by Government Agencies, 2017;
II. the Submission of Annual Budgetary Estimates by all Statutory and non-Statutory Agencies, including Incorporated Companies wholly owned by the Federal Government of Nigeria, 2017;
III. the Voluntary Assets and Income Declaration Scheme, 2017;
IV. Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, Science, Engineering and Technology, 2018;
V. the Voluntary Offshore Assets Regularization Scheme (VOARS), 2018;
VI. Open Defecation and enhanced sanitation, 2019;
VII. the innovative Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, 2019; and
VIII. the National Public Buildings Maintenance, 2022.
6. We could not have made these historical achievements without the exceptional partnership this Administration has had with the Leadership, and Members of the National Assembly. So may I pause here, to once again, thank the Senate and the House of Representatives for your engagement, support and contribution to these successes, which history will remember us all favourably for.

RECENT ECONOMIC DEVELOPMENTS
7. The 2023 Budget was prepared amidst a very challenging world economy that is weakened by the lingering effects of the COVID-19 pandemic, high inflation, high crude oil prices resulting in huge cost of PMS Subsidy and negative spill over effects of the Russia-Ukraine war.
8. Many economies around the world are currently contending with fiscal instability, slow growth, food crisis, and high interest rates. Like many other countries, our economy faces headwinds from low revenues, high inflation, exchange rate depreciation and insecurity.
9. However, Nigeria’s real Gross Domestic Product grew by 3.54 percent in the second quarter of 2022, marking the seventh consecutive quarter of growth. Our interventionist and reflationary measures have been very effective and impactful. We must however continue to work towards achieving much higher levels of growth, especially given our high population growth rate, so that the average Nigerian can truly feel the impact of planned economic growth.

10. Distinguished Senators and Honourable Members, despite continuing efforts, unemployment, underemployment, and poverty rates remain high. We are currently implementing several skills development programmes and work opportunity programmes to enhance the employability of our youths and tackle the troubling level of youth unemployment.
11. While it is evident that our economy still faces significant challenges, what could have happened without the implementation of some of the measure we introduced, would have been much worse for the country.
REVIEW OF 2022 BUDGET IMPLEMENTATION
12. Distinguished and Honourable Members of the National Assembly, the implementation of the 2022 ‘Budget of Economic Growth and Sustainability commenced on the first day of the year. It was, however, necessary to forward an amended budget proposal to address some exigent issues, especially the significant increase in fuel subsidy.
13. The amended 2022 Budget was based on a benchmark oil price of 73 US Dollars per barrel, oil production of 1.60 million barrels per day, and exchange rate of 410.15 Naira to US Dollar.
14. As at 31st July 2022, Federal Government’s retained revenues was 3.66 trillion Naira, excluding the revenue of Government-Owned Enterprises. Thus, revenue collection was only 63 percent of our target, largely due to the underperformance of oil and gas revenue sources.
15. Despite higher oil prices in 2022, oil revenue was below target due to significant oil production shortfalls and high petrol subsidy cost resulting from the significant rise in Crude prices which ultimately increased PMS prices worldwide.
16. Oil output stood at an average of 1.30 million barrels per day as at June 2022, while the sum of 1.59 trillion Naira was spent on fuel subsidy between January and June 2022. The NNPC, working in collaboration with security and other relevant agencies, is putting in place additional measures to curb the incidence of pipeline vandalism and crude oil theft in order to meet our crude oil production quota.

17. On the expenditure side, the sum of 8.29 trillion Naira had been spent by July 31 2022 out of the total appropriation of N17.32 trillion. Despite our revenue challenges, we have consistently met our debt service commitments. Staff salaries and statutory transfers have also been paid as and when due.
18. Total non-debt recurrent expenditure in January to July 2002 was 3.24 trillion Naira, of which 2.87 trillion Naira was for Salaries, Pensions and Overheads. A total of 3.09 trillion Naira was spent on debt service obligations during the period.
19. Furthermore, about 1.48 trillion Naira had been released to MDAs for capital expenditure as at the end of July 2022. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2022.
20. To further address structural problems in the economy and drive growth, capital releases thus far have been prioritised in favour of critical ongoing projects in the power, roads, rail, agriculture, as well as health and education sectors.
21. As at the end of July 2022, the fiscal operations of the Federal Government resulted in an estimated budget deficit of 4.63 trillion Naira. This represents 63 percent of the estimated deficit for the full year. This is largely attributable to revenue shortfalls and higher debt service obligations resulting from rising debt levels and interest rates.
22. The deficit was mainly financed through domestic borrowing amounting to N4.12 trillion. Hence, total public debt stock increased from 39.6 trillion Naira as at the end of December 2021 to 42.8 trillion Naira as at the end of June, 2022.
23. However, our debt position remains within cautious and acceptable limits compared to peer countries. As at the end of June 2022, total public debt is within our self-imposed limit of 40 percent of GDP, which is significantly below the 55 percent international threshold for comparator countries, and a global average of 99 percent post-COVID-19.
24. Nonetheless, our debt-service-to-revenue ratio needs close attention. The current low revenue performance of government, as reflected in the lowly revenue-to-GDP ratio of just about 8 percent. Our medium-term objective remains to raise this ratio to 15 percent, at which the debt service to revenue ratio will cease to be a concern.
25. Mr. Senate President and Rt. Honourable Speaker, revenue shortfalls remain the greatest threat to Nigeria’s fiscal viability. We have therefore accelerated efforts towards ensuring that all taxable Nigerians declare income from all sources and pay taxes due to the appropriate authorities. We are also monitoring the internally generated revenues of MDAs to ensure they are appropriately accounted for and remitted to the Consolidated Revenue Fund.
26. The 50 percent cost-to-income ratio in the Finance Act 2020 has significantly improved operating surplus remittances by Government Owned Enterprises (GOEs). I therefore solicit the continuing cooperation of the National Assembly in enforcing the legal provision and other prudential guidelines imposed on the GOEs during the consideration of the budget proposals of the GOEs.
27. I am happy to report that the revenue collection and expenditure management reforms we are implementing are yielding positive results, with recent significant improvements in non-oil revenue performance. However, while we continue to implement revenue administration reforms and improve our collection efficiency, we urgently need to find new ways of generating revenue.
28. As we seek to grow our government revenues, we must also focus on the efficiency of utilization of our limited resources. Critical steps we are taking include immediate implementation of additional measures towards reducing the cost of governance and the discontinuation of fuel subsidy in 2023 as announced earlier. We are however mindful of the fact that reducing government spending too drastically can be socially destabilizing, and so will continue to implement programmes to support the more vulnerable segments of society.
29. Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties. However, its current fiscal impact has clearly shown that the policy is unsustainable. As a country, we must now confront this issue taking cognizance of the need to provide safety nets to cushion the attendant effects on some segments of society.

RECENT ACHIEVEMENTS
30. Over the last year, this Administration has implemented several priority projects. Our focus has been on the completion of key road and rail projects; the effective implementation of power sector projects; the provision of clean water; construction of irrigation infrastructure and dams across the country; and critical health projects such as upgrading Primary Health Care Centres across the six geopolitical zones.
31. We have also gone further on the implementation of several power generation, transmission, and distribution projects, as well as off-grid solutions, all aimed towards achieving the national goal of optimizing power supply by 2025.
32. In the determination to ramp up grid electricity supply to at least 7,000 megawatts by 2024, we have procured purpose-built critical power equipment under the Presidential Power Initiative with Siemens as we promised. These projects will have multiplier effects on the economy.
33. Under the Road Infrastructure Tax Credit Scheme, we are undertaking the construction and rehabilitation of about two thousand kilometres of roads and bridges, nationwide, to be financed by the grant of tax credits to investing private companies.
34. As I mentioned earlier, we have made appreciable progress in the rehabilitation and reconstruction of key road networks like the Lagos – Ibadan expressway, Abuja-Kaduna-Kano expressway and East-West Road in Niger Delta. Work has also reached completion stage on the Apapa – Oworonsoki expressway, Loko-Oweto Bridge and the Second Niger Bridge. We hope to commission these projects before the end of our tenure in 2023.
35. Furthermore, we have awarded several contracts to rehabilitate, reconstruct and construct major arterial roads to reduce the hardship to commuters and increase economic activity.

36. Regarding personnel costs, we have extended the coverage of the Integrated Payroll and Personnel Information System (IPPIS) to all MDAs to automate personnel records and the process by which salaries are paid and eliminate the incidence of ghost workers. The system is currently being reviewed to enhance its functionality and applicability to MDAs in the different sectors.
37. Distinguished Senators and Honourable Members, although we have recorded more achievements over the last year, I will now proceed with an overview of the 2023 Budget proposal.
THEME AND PRIORITIES OF THE 2023 BUDGET
38. The 2023 Budget proposal is the eighth and final budget of this Administration. It reflects the serious challenges currently facing our country, key reforms necessary to address them, and imperatives to achieve higher, more inclusive, diversified and sustainable growth.
39. The expenditure policy of Government in 2023 is designed to achieve the strategic objectives of the National Development Plan 2021 to 2025, including macroeconomic stability; human development; food security; improved business environment; energy sufficiency; improving transport infrastructure; and promoting industrialization focusing on Small and Medium Scale Enterprises.
40. Against the backdrop of the challenging global and domestic economic environment, it is imperative that we strengthen our macroeconomic environment and address subsisting challenges as a country. The 2023 Appropriation therefore is a Budget of Fiscal Sustainability and Transition. Our principal objective in 2023 is to maintain fiscal viability and ensure smooth transition to the incoming Administration.

2023 BUDGET PARAMETERS AND FISCAL ASSUMPTIONS
41. Distinguished Members of the National Assembly, the 2023 to 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2023 Budget as follows:
a. Oil price benchmark of 70 US Dollars per barrel;
b. Daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);
c. Exchange rate of 435.57 Naira per US Dollar; and
d. Projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.
2023 REVENUE ESTIMATES
42. Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 16.87 trillion Naira in 2023.
43. Total federally distributable revenue is estimated at 11.09 trillion Naira in 2023, while total revenue available to fund the 2023 Federal Budget is estimated at 9.73 trillion Naira. This includes the revenues of 63 Government-Owned Enterprises.
44. Oil revenue is projected at 1.92 trillion Naira, Non-oil taxes are estimated at 2.43 trillion Naira, FGN Independent revenues are projected to be 2.21 trillion Naira. Other revenues total 762 billion Naira, while the retained revenues of the GOEs amount to N2.42 trillion Naira.
45. The 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget and greater attention to internal revenue generation. Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues.

PLANNED 2023 EXPENDITURE
46. A total expenditure of 20.51 trillion Naira is proposed for the Federal Government in 2023. This includes 2.42 trillion Naira spending by Government-Owned Enterprises. The proposed 20.51 trillion Naira 2023 expenditure comprises:
a. Statutory Transfers of N744.11 billion;
b. Non-debt Recurrent Costs of N8.27 trillion;
c. Personnel Costs of N4.99 trillion;
d. Pensions, Gratuities and Retirees’ Benefits of N854.8 billion;
e. Overheads of N1.11 trillion;
f. Capital Expenditure of N5.35 trillion, including the capital component of Statutory Transfers;
g. Debt Service of N6.31 trillion; and
h. Sinking Fund of N247.73 billion to retire certain maturing bonds.

FISCAL BALANCE
47. We expect total fiscal operations of the Federal Government to result in a deficit of 10.78 trillion Naira. This represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
48. As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country.
49. We plan to finance the deficit mainly by new borrowings totalling 8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and 1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.
50. Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people.
51. As you are aware, we have witnessed two economic recessions within the period of this Administration. A direct result of this is the significant decline in our revenue generating capacity.
52. In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt.
FINANCE BILL 2022
53. In line with our plan to accompany annual budgets with Finance Bills, partly to support the realization of fiscal projections, current tax and fiscal laws/regulations are being reviewed to produce a draft Finance Bill 2022.
54. It is our intention that once ongoing consultations are completed, the Finance Bill 2022 would be submitted to the National Assembly to be considered alongside the 2023 Appropriation Bill.
ENSURING FISCAL SUSTAINABILITY
55. To ensure fiscal sustainability, we will further improve our business-enabling environment, accelerate current revenue-based fiscal consolidation efforts and strengthen our expenditure and debt management.

BUDGET OF GOVERNMENT-OWNED ENTERPRISES
56. Distinguished Senators, Honourable Members, you may recall that we earlier integrated the budget of Government-Owned Enterprises into the FGN’s 2019 budget submission. This has helped to enhance the comprehensiveness and transparency of the FGN budget. It has however come to my attention that Government-Owned Enterprises liaise directly with relevant NASS committees to have their budget passed and issued to them directly.

57. I would like to implore the leadership of the National Assembly to ensure that the budget I lay here today, which includes those of the GOEs, be returned to the Presidency when passed. The current practice where some committees of the National Assembly purport to pass budgets for GOEs, which are at variance with the budgets sanctioned by me, and communicate such directly to the MDAs is against the rules and needs to stop.
FINANCING INFRASTRUCTURE GAP
58. Nigeria requires a huge outlay of resources to close current infrastructure gaps and boost its economic performance. Government will develop projects that are good candidates for Public Private Partnership (PPP) by their nature for private sector participation.
BUDGET PROCESS BILL 2022
59. Distinguished Senators, Honourable Members, ladies and gentlemen. Over the course of this Administration, we have embarked on a number of reforms in the Public Finance Management space. These reforms are bearing fruits and we have seen some of the benefits of the return to a predictable January to December fiscal year for the FGN budget.
60. Earlier this year, I was briefed of the impressive performance of Nigeria in the Open Budget Survey, as the third best or most improved country in the world, matching the global average score in budget transparency and exceeding the global average in public participation.
61. I commend the Budget Office of the Federation and the Supervising Ministry of Finance Budget and National Planning, the National Assembly Leadership, the relevant Appropriation and Finance Committees as well as non-state actors who have worked tirelessly in pushing for greater transparency and accountability in our budget process.
62. We need to sustain and institutionalize the gains of these reforms. To this end, I have directed the Minister of Finance, Budget and National Planning to immediately work on mainstreaming these reforms and work with the National Assembly on passing an Organic Budget Law, which I hope to assent to before the end of this Administration.

HUMAN CAPITAL DEVELOPMENT
63. The Government notes with dismay the crisis that has paralysed activities in the public universities in the country. We expect the staff of these institutions to show a better appreciation of the current state of affairs in the country. In the determined effort to resolve the issue, we have provided a total of 470.0 billion in the 2023 budget from our constrained resources, for revitalization and salary enhancements in the tertiary institutions.
64. Distinguished Senators and Honourable members, it is instructive to note that today Government alone cannot provide the resources required for funding tertiary education.
65. In most countries, the cost of education is jointly shared between the government and the people, especially at the tertiary level. It is imperative therefore that we introduce a more sustainable model of funding tertiary education.
66. The Government remains committed to the implementation of agreements reached with staff unions within available resources. This is why we have remained resolute that we will not sign any agreement that we would be unable to implement. Individual institutions would be encouraged to keep faith with any agreement reached in due course to ensure stability in the educational sector.
67. Government is equally committed to improving the quality of education at other levels. Recently, we implemented various incentives aimed at motivating and enhancing teachers’ development in our schools.
68. In the health sector, the Government intends to focus attention on equipping existing hospitals and rehabilitating infrastructure. Emphasis will also be on local production of basic medicines/vaccines.
69. As human capital is the most critical resource for national development, our overall policy thrust is to expand our investment in education, health and social protection.
WOMEN’S EMPOWERMENT
70. To harness the potentials of all Nigerian women and enable them to productively contribute to the economy, we will continue to prioritise women’s empowerment programmes across various MDAs in 2023.
FOOD PRICES
71. Government is very concerned about the high food prices in the country. Various measures are being implemented to address structural factors underlying the issue. We will also step-up current efforts aimed at boosting food production and distribution in the country. You will recall our efforts in improving production of fertilizer, rice, maize cassava among other earlier initiatives.
BOOSTING MANUFACTURING PERFORMANCE
72. Government is not unaware of the challenges confronting the manufacturing sector. We will ensure effective implementation of policy measures aimed at positioning the manufacturing sector to generate more foreign exchange in the near future. We are also committed to improving the business environment to stimulate local and foreign investment.
SAFE SCHOOLS INITIATIVE
73. We ratified the Safe Schools Declaration in 2019. We remain committed to the effective implementation of our Safe Schools Policy. A total of 15.2 billion Naira has been specifically provided in the 2023 Budget to scale up current measures to provide safer and conducive learning environment in our schools.
DEFENCE AND INTERNAL SECURITY
74. The Government remains firmly committed to the security of life, property and investment across the country. Accordingly, defence and internal security continue to be accorded top priority in 2023. Current efforts to properly equip and motivate our valiant personnel in the armed forces, police and paramilitary units will be sustained.
75. I assure you, insecurity, especially banditry and kidnapping, will be significantly curtailed before the end of this Administration. We will redouble our efforts to ensure we leave a legacy of a peaceful, prosperous and secured nation.
76. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, let me conclude my address today by again expressing my deep appreciation for your enormous support, patriotic zeal, and cooperation in our efforts to accelerate the socio-economic development of our country and improve the lives of our people.
77. I appreciate the efforts and commitment of the leadership and staff of the Federal Ministry of Finance, Budget and National Planning, especially the Budget Office of the Federation, who have worked hard to achieve early submission of the 2023 Appropriation Bill.
78. The 2023 budget proposal is a product of inter-agency collaboration, extensive stakeholder consultations and productive engagements. I would therefore like to acknowledge the efforts of the media, the organized private sector, civil society organizations and our development partners for their contributions in the process of preparing the Budget.
79. Considering the challenging situation in our country presently, we must continue to cooperate and collaborate to ensure fiscal sustainability, macroeconomic stability and smooth transition to the incoming Administration.
80. This Administration remains resolutely committed to our goals of improving the living standard of our people and effective delivery of public services.
81. Distinguished and honourable members of the National Assembly, although no single government can solve all the problems of a country during its own tenure, I have no doubt that you share our aspiration that the 2023 transition budget is designed to address critical issues and lay a solid foundation for the incoming Administration.
82. It is with great pleasure therefore, that I lay before this distinguished Joint Session of the National Assembly, the 2023 Budget Proposals of the Federal Government of Nigeria.
I thank you most sincerely for your attention. May God bless the Federal Republic of Nigeria.

OPEC+ Agrees Oil Output Cut To Prop Up Prices

In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP
In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP

 

The OPEC+ oil cartel agreed Monday to cut production for the first time in more than a year as it seeks to lift prices that have tumbled due to recession fears.

The move could irk the United States as it has pressed the group to increase output in order to bring down energy prices that have fuelled decades-high inflation.

OPEC+, a 23-nation coalition led by Saudi Arabia and Russia, had agreed to huge cuts in output in 2020 when the Covid pandemic sent oil prices crashing, but it began to increase production modestly again last year as the market improved.

Oil prices soared to almost $140 a barrel in March after Russia invaded Ukraine.

But they have since receded below $100 per barrel amid recession fears, Covid lockdowns in major consumer China and Iran nuclear talks that could bring Iranian crude back into the market.

While analysts had expected another modest increase at Monday’s ministerial meeting, OPEC+ said in a statement that it decided to reduce output by 100,000 barrels per day in October, returning to the production level of August.

The group also left the door open to holding talks prior to its next scheduled meeting on October 5 “to address market developments, if necessary”.

“First and foremost it is a clear message from the group: OPEC+ will not allow the oil price to slide. Further cuts will be initiated if necessary,” Bjarne Schieldrop, chief commodities analyst at SEB research group, told AFP.

While analysts said the cut was mostly symbolic, oil prices rose by more than three percent following the announcement, with the international benchmark, Brent, exceeding $96 per barrel while the US contract, WTI, reached almost $90.

At its last meeting, OPEC+ agreed to a small rise of 100,000 barrels per day for September after US President Joe Biden travelled to Saudi Arabia to plead for a production bump — although it was six times lower than its previous decisions.

Energy Minister Abdulaziz bin Salman last month had appeared to open the door to the idea of cutting output, which has since received the support of several member states and the cartel’s joint technical committee.

He said “volatility and thin liquidity send erroneous signals to markets at times when clarity is most needed”.

Craig Erlam, analyst at OANDA trading platform, said the cut was “also a blow to President Biden as the hike last month was viewed as a token gesture after his visit.”

“Now it’s clear how valuable that actually was, or wasn’t as it turns out. The political damage it caused was a waste and if anything, it looks worse than if nothing had changed in the first place,” Erlam said.

Iran talks

Caroline Bain, commodities expert at Capital Economics, said the cut was not a total surprise and “little more than symbolic” as OPEC+ has struggled to meet its quotas due to lacklustre production in some of its member countries.

“The bigger picture is that OPEC+ is producing well below its output target and this looks unlikely to change given that Angola and Nigeria, in particular, appear unable to return to pre-pandemic levels of production,” Bain said.

In efforts to curb rising oil prices, the United States and its allies have released crude from their emergency reserves.

And in a bid to curb Russia’s war funding, the G7 group of industrialised powers agreed Friday to move “urgently” towards capping the price of Russian oil.

Moscow has warned that it will no longer sell oil to countries that adopt the unprecedented mechanism.

Another geopolitical issue is clouding the outlook.

Negotiations aimed at reviving a landmark nuclear deal between Tehran and world powers could lead to an easing of oil sanctions in return for curbs to the atomic activities.

However, Washington said Thursday that Tehran’s latest response to a European Union draft was “unfortunately… not constructive”.

OPEC+ Faces Output Decision After Biden’s Saudi Trip

In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP
In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP

 

The OPEC+ group of oil exporters meets Wednesday to discuss another output increase, weeks after US President Joe Biden sought to persuade Saudi Arabia to boost production during a controversial visit to the country.

The White House has been pressing the oil cartel to step up production to tame prices that have surged since Russia invaded Ukraine in late February.

But the group, which is led by Saudi Arabia and Russia, has stuck to modest increases so far.

The 13-member Organization of the Petroleum Exporting Countries, along with 10 allies that include Russia, had slashed production at the height of the Covid pandemic in 2020 after a plunge in demand caused prices to sink.

The group began to raise production last year, agreeing to add 400,000 barrels per day to the market. It backed an increase of nearly 650,000 barrels per day in June, still not enough to spark a big drop in oil prices.

The alliance’s output is back to pre-virus levels, but just on paper as a few members have struggled to meet their quotas.

All eyes will be on whether OPEC+ sticks to the same output policy or steps it up.

READ ALSO: First Grain Shipment Leaves Ukraine As Southern City Pounded

Biden’s Saudi Voyage 

Biden travelled to Saudi Arabia in mid-July to meet Crown Prince Mohammed bin Salman despite his promise to make the kingdom a “pariah” in the wake of the 2018 killing of journalist Jamal Khashoggi.

Part of the reason for the controversial trip was to convince Riyadh to continue loosening the production taps to stabilise the market and curb rampant inflation.

After his meetings with Saudi leaders in mid-July, Biden said he was “doing all I can” to increase the oil supply but added that concrete results would not be seen “for another couple weeks” — and it was unclear what those might be.

Wednesday’s meeting will reveal whether his efforts were successful.

“The US administration appears to be anticipating some good news but it’s hard to know whether that’s based on assurances during Biden’s trip or not,” Craig Erlam, analyst at OANDA trading platform, told AFP.

Stephen Innes, managing partner at SPI Asset Management, said it “wouldn’t be a surprise to see the Saudis announce something that Biden could tout as a win to voters at home.”

Sceptical Market 

According to the London-based research institute Energy Aspects, OPEC+ could adjust its current agreement in order to keep raising crude production volumes.

However, analysts warn against expecting any drastic increases.

OPEC+ has to take into account the fact that the interests of Russia — a key player in the alliance — are diametrically opposed to those of Washington.

“Saudi Arabia has to walk a fine line,” said Tamas Varga, analyst at PVM Energy.

Any decision on Wednesday will have to be unanimous, which may lead to a longer meeting than normal.

“Any new OPEC+ deal aimed at further ramping up supplies is likely to be met with market scepticism, considering the supply constraints already evident within the alliance,” said Han Tan, chief market analyst at Exinity.

The group will decide output policy under a new secretary general, Kuwait’s Haitham Al-Ghais, who took office on Monday following the death of Nigeria’s Mohammed Barkindo last month.

“I look forward to working with all our Member Countries and our many partners around the world to ensure a sustainable and inclusive energy future which leaves no one behind,” Al-Ghais said in a statement.

AFP

Russia Cuts Gas Supplies To Poland, Bulgaria Over Ukraine


Greenpeace environmental activists stage an action against the ship Ust Luga, which will reportedly unload Russian oil in the harbour of Aasgaardstrand, Norway, on April 25, 2022, amid the Russian invasion of Ukraine. Ole Berg-Rusten / NTB / AFP

 

Russia halted gas supplies to Poland and Bulgaria on Wednesday, after blasts in a breakaway region of neighbouring Moldova led Kyiv to accuse Moscow of seeking to expand the Ukraine war further into Europe.

The Russian energy giant Gazprom said it had cut supplies to Poland and Bulgaria, in Moscow’s latest use of gas as a weapon in a conflict that has now dragged into its third month and claimed thousands of lives.

Explosions this week targeting the state security ministry, a radio tower and military unit in neighbouring Moldova’s region of Transnistria — occupied by Moscow’s forces for decades — followed a Kremlin commander’s claims Russian speakers in the country were being oppressed.

That triggered alarm that Moldova could be Russia’s next target in its push into Europe, with Moscow having exploited similar fears after launching its bloody invasion of Ukraine on February 24.

READ ALSO: Nearly 5.3 Million Flee Ukraine War As Refugees – UN

“Russia wants to destabilise the Transnistrian region,” Mykhaylo Podolyak, a Ukraine presidential aide, wrote on Twitter.

“If Ukraine falls, tomorrow Russian troops will be at Chisinau’s gates,” he said, referring to Moldova’s capital.

The United States echoed similar concerns — though stopped short of backing Kyiv’s contention that Russia was responsible.

“We fully support Moldova’s territorial integrity and sovereignty,” State Department spokesman Ned Price told reporters.

‘Heaven And Earth’

Ukraine leader urges Russian soldiers to lay down arms
In this file photo, Ukrainian President Volodymyr Zelensky addresses the nation in Kyiv early on February 25, 2022. Handout / UKRAINE PRESIDENCY / AFP

 

Ukraine’s President Volodymyr Zelensky has been lobbying for heavier firepower to push back the Russian advance now focused on the eastern region of Donbas.

Western allies are wary of being drawn into an outright war with Russia, but Washington pledged Tuesday at a summit to move “heaven and earth” to enable Ukraine to emerge victorious.

“Ukraine clearly believes that it can win and so does everyone here,” US Defence Secretary Lloyd Austin told 40 allies gathered at the Ramstein Air Base in Germany.

With arms flowing into Ukraine, Germany announced Tuesday it would send anti-aircraft tanks — a sharp U-turn dropping its much-criticised cautious stance.

Britain will also on Wednesday urge Kyiv’s allies to “ramp up” military production including tanks and planes to help Ukraine, with Foreign Secretary Liz Truss set to call for a “new approach” to confront Russian President Vladimir Putin.

“We must be prepared for the long haul and double down on our support for Ukraine,” she is set to say, according to pre-released remarks.

“Heavy weapons, tanks, aeroplanes — digging deep into our inventories, ramping up production. We need to do all of this,” she will add.

“There must be nowhere for Putin to go to fund this appalling war.”

Truss will also urge Europe to cut off Russian energy imports “once and for all” — a move that would deprive Moscow of a key source of leverage over its dependent western neighbours.

Underlining that precarity, energy giant Gazprom said Wednesday it had informed Bulgaria’s Bulgargaz and Poland’s PGNiG about the “suspension of gas supplies from April 27 until payment is made” in rubles.

President Putin last month said Russia would only accept payment for deliveries in its national currency.

On The Brink 

Russian President Vladimir Putin chairs a meeting on aviation via a video link at the Novo-Ogaryovo state residence outside Moscow on March 31, 2022. Mikhail KLIMENTYEV / SPUTNIK / AFP
In this file photo, Russian President Vladimir Putin chairs a meeting on aviation via a video link at the Novo-Ogaryovo state residence outside Moscow on March 31, 2022. Mikhail KLIMENTYEV / SPUTNIK / AFP

 

Fighting continues to rage across Ukraine’s east, Kyiv’s defence ministry said, announcing Wednesday that Russian forces had pushed deeper into the east of the country and captured several villages as part of its offensive to take control of Donbas.

Russia said it had carried out high-precision missile strikes against 32 Ukrainian military targets including four ammunition depots on Tuesday.

It also launched air strikes against 33 targets, as well as 100 artillery and rocket strikes.

In the south, two Russian missiles struck the industrial city of Zaporizhzhia, which has welcomed many civilians fleeing Mariupol, regional authorities said.

Russian forces are expected to soon advance on the city, which is located near Ukraine’s largest nuclear power plant.

And at the site of the world’s world-ever atomic disaster, Chernobyl in northern Ukraine observed the 36th anniversary of the meltdown back under Kyiv’s control.

The sprawling complex fell into Russian hands on the day Moscow’s troops began their invasion in February, suffered a power and communications outage that raised alarm about a possible new calamity at the site.

That put the world “on the brink of disaster”, Zelensky said at a press conference with UN atomic watchdog chief Rafael Grossi, adding that Russian troops’ conduct showed that “no one in the world can feel safe.”

“For the Russian military, the Chernobyl zone and the plant was like a normal battleground, territory where they didn’t even try to care about nuclear safety,” he said.

To the east, at the entrance to Barvinkove, six Ukrainian soldiers were ready at any moment to dive into their trench, which they dig every day with a shovel.

“Otherwise, we’re dead,” said Vasyl, 51, who serves with his 22-year-old son Denys.

Ukraine officials said there was fighting all along the frontlines in the Donetsk region, and that resistance in the Azovstal factory in the besieged port city of Mariupol was still holding out.

The country’s best-known singer Sviatoslav Vakarchuk made a morale-boosting visit to the eastern front, where a military press officer admitted the situation was difficult.

“It’s far from rosy,” Iryna Rybakova, of the 93rd brigade, told AFP.

“Of course, we were prepared for this war, especially the professional army, but for those who’ve been recruited, it’s more complicated.”

The UN’s refugee agency said it now expects more than eight million Ukrainians to eventually flee their country, with nearly 5.3 million already out, and that $1.85 billion would be needed to host them in neighbouring countries.

In a meeting with Putin, UN Secretary-General Antonio Guterres called for Moscow and Kyiv to work together to set up aid and evacuation corridors in war-torn Ukraine.

He also called for an independent investigation into “possible war crimes” in Ukraine.

“I am concerned about the repeated reports of violations of international humanitarian and human rights law and possible war crimes,” Guterres said.

“And they require independent investigation for effective accountability.”

burs-oho/je

© Agence France-Presse

Libya Oil Firm Closes Major Oil Field

Libya flag

 

Libya’s National Oil Corporation announced Sunday the closure of production at a major oil field in the country’s south, declaring a “force majeure”.

“On Saturday… the Al-Fil field was subjected to arbitrary closure attempts, due to the entry of a group of individuals and the prevention of the field’s workers from continuing production,” the NOC said on Facebook.

It added that the field was shut down on Sunday — marking the second closure in a matter of weeks — “making it impossible for the NOC to implement its contractual obligations”.

READ ALSO: More Rain Lashes South Africa’s Flood-Ravaged Southeastern Region

The firm said it “is obliged to declare a state of force majeure” and would no longer be able to provide crude to the Mellitah complex on the country’s northwestern coast.

Declaring force majeure is a legal move allowing parties to free themselves from contractual obligations when factors such as fighting or natural disasters make meeting them impossible.

According to Libya’s state news agency, the closure comes after a group of individuals declared that they were halting production “until a government appointed by parliament takes office in the capital”.

Libya has recently once again found itself with two rival governments after the eastern-based parliament in February appointed a new prime minister in a direct challenge to the UN-brokered government in Tripoli.

The move underlines the extent of divisions in the war-wracked country as observers fear a renewed descent into violence.

Al-Fil, some 750 kilometres southwest of Tripoli, is jointly managed by the NOC and Italian energy giant ENI and produces around 70,000 barrels of oil per day.

The field had already been forced to close temporarily in early March when an armed group shut down valves delivering crude.

Oil revenues are vital to the economy of Libya, a country sitting on Africa’s largest known reserves.

AFP

Pregnant Lady, Others Feared Dead As Fire Guts Jetty In Port Harcourt

Fire incidents are common in jetties in Rivers State.

 

Several persons, including a pregnant woman and a toddler, have been reportedly burnt to death in an early morning fire at the popular Bonny-Bille-Nembe jetty in the Port Harcourt, Rivers State.

Several fibre and wooden boats are also said to be destroyed in the inferno which started at about 2 am on Monday.

The cause of the massive blaze is not known. However, previous fire outbreaks at the jetty had been attributed to the storage of inflammable substances like petroleum products used in powering the speed boat engines in makeshift buildings within the slump.

READ ALSOGunmen Attack Imo Commissioner Father’s House, Burn Down Buildings, Cars

The last fore outbreak at the jetty was in November during which several persons were burnt and properties estimated at several millions of naira, destroyed.

The jetty is usually a busy transit point for thousands of residents traveling from Port Harcourt by sea to Bonny, Bille, Nembe, and other riverine communities.

The effects of these disasters are usually massive due to slow response to emergencies by the authorities or difficulties accessing the scene due to the terrain.

National Grid Collapse, Fuel Shortage: Relief Is On The Way – Buhari

The fuel scarcity led to a hike in transportation fares across the country.

 

President Muhammadu Buhari has assured Nigerians that the inconveniences caused by the prolonged shortage of petroleum products, and the collapse of the national grid, would soon be a thing of the past.

In a statement by his spokesman, Garba Shehu on Wednesday, the president while apologizing to Nigerians, promised that “relief is on the way”.

Buhari expressed sadness at the fact that Nigerians are experiencing at the moment something which he says his administration has successfully averted within its seven years in office.

President Buhari said: “The government is working round the clock to attend to this issue. An action plan agreed earlier this month is being implemented to address the scarcity. Working together with the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN), this plan is now bearing fruit”.

[READ ALSO] ‘Businesses Are Suffering,’ Elumelu Laments Over Hardship, Poverty In Nigeria

He said sufficient fuel supply has returned to a handful of states with reduced queues at stations falling, adding that in the coming days, that would be the case across the rest of the country.

“Looking to the longer term, funds are being targeted toward keeping fuel availability affordable for the country. The international energy markets have surged drastically in recent months; the government will however ensure that consumers are protected against these price spikes,” he said.

The President added that he has received information that some people are not behaving properly at the depots and among owners of petrol stations and in this regard, he has directed the Ministry of Petroleum Resources, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the NNPC and the entire security apparatus of the nation to take strong action against those responsible.

On the issue of electricity blackouts experienced across the nation, President Buhari remarked that the situation is also being addressed.

“A dip in hydroelectric generation due to seasonal pressures has coincided with technical and supply problems at thermal stations. On this, the government is also working tirelessly to resolve the issues at the latter to guarantee sufficient power flows into the national grid,” Buhari said.

President Buhari disclosed that as part of emergency measures put in place following a meeting convened with key stakeholders to address the low power generation in the country, the main challenge was identified as being one of low gas power generation due to sabotage of gas pipelines leading to a shutdown of power plants coupled with ongoing routine maintenance on other gas power plants.

“To recover over 1000MW, actions were agreed upon between the players in the Nigerian Electricity Supply Industry (NESI) and also NNPC. The actions targeted the National Integrated Power Project (NIPP) plants, (Niger Delta Power Holding Company (NDPHC) and power plants run under NNPC Joint Ventures, Agip and Shell (NAOC and SPDC) and progress on the key actions have already ensured the restoration to the grid of 375MW after the pipeline from “Okpai 1” was repaired.

“To also ramp up the underutilised capacity of the NDPHC capacity, a USD 50 Million Gas Supply agreement is being finalized to secure the sustainability of up to 800MW of underutilized NIPP assets,” he explained.

The President assured Nigerians that the government’s attention to these problems will bear fruits very soon.

Tokyo Shares Slump As Oil Surges On Ukraine Crisis

File photo: A pedestrian walks past an electronic board displaying share prices on the Tokyo Stock Exchange in Tokyo on November 4, 2020.  Behrouz MEHRI / AFP

 

Tokyo stocks slumped Tuesday as surging oil prices and the Russia-Ukraine crisis continued to drag down global markets.

The benchmark Nikkei 225 index dropped 1.71 percent, or 430.46 points, to 24,790.95, while the broader Topix index gave up 1.90 percent, or 34.17 points, to 1,759.86.

The dollar fetched 115.52 yen, up from 115.27 yen in New York Monday.

The Tokyo market opened in negative territory, tracking falls on Wall Street, although bargain-hunters temporarily lifted the Nikkei above water by mid-morning.

But Russia’s intensifying assault on Ukraine continued to weigh on the market, with many investors already jittery about taking risks as they braced for possible further losses on Wall Street later in the day.

“Particularly in the afternoon session, investors increased their wariness about rising oil prices, and the Nikkei again extended its losses,” Okasan Online Securities said.

“Near the closing bell, the index was hovering near the intra-day low,” the brokerage added.

All sectors of the Tokyo market faced selling pressure but energy-related issues were among the hardest hit, as were steel, maritime shipping and finance related stocks.

Energy firm INPEC gave up 6.09 percent to 1,341 yen. Nippon Steel fell 6.54 percent to 1,972.5 yen.

SoftBank Group plunged 4.95 percent to 4,474 yen and construction equipment maker Komatsu fell 3.67 percent to 2,545.5 yen.

Toyota accelerated its losses in the afternoon, ending down 1.84 percent to 1,811 yen. Rival automaker Nissan gave up 5.51 percent to 438.8 yen.

Nintendo surrendered earlier gains and fell 1.42 percent to 56,410 yen, but Sony managed to stay above water and ended up 0.36 percent at 11,150 yen.

AFP

Ban On Russian Oil Will Have ‘Catastrophic Consequences’, Moscow Warns

Indigenous Firms Plan To Increase Oil Output
File photo used to illustrate this story.

 

Russian Deputy Prime Minister Alexander Novak warned Monday that a ban on Russian oil imports would have “catastrophic” consequences, as Western allies consider further sanctions on Moscow over Ukraine.

“A ban on Russian oil will lead to catastrophic consequences for the global market. The surge in prices will be unpredictable — more than $300 per barrel, if not more,” Novak said in remarks carried by Russian news agencies.

Novak added that it would be “impossible” to quickly replace Russian oil on the European market.

“It will take more than one year and it will be much more expensive for European consumers,” he said.

“European politicians should then honestly warn their citizens, consumers what awaits them and that prices at gas stations, for electricity, for heating will skyrocket,” he said.

READ ALSO: More Than 1.7 Million People Flee War In Ukraine, Says UNHCR

Novak said talks of an embargo on Russian oil creates “instability and leads to significant harm for consumers”.

He added that in retaliation for the halt on the Nord Stream 2 pipeline project, Russia could stop supplies via the Nord Stream 1 pipeline.

“So far we have not made this decision. Nobody will benefit from this,” Novak said.

“Although European politicians are pushing us to this with their statements and accusations against Russia,” he added.

AFP

As Ukraine Pushes Oil Over $100, Nigerians See Mixed Blessings

A motorist fill his tank with fuel bought with a jerrycan to avoid long queues formed during a fuel shortage in Lagos and neighbouring Ogun State, on March 3, 2022.  PIUS UTOMI EKPEI / AFP

 

Weaving in between the Lagos traffic, hawkers selling plantain snacks and water more recently offer drivers another treat: jerry cans filled with petrol to help with fuel shortages.

Petroleum-producing nations may be reaping extra revenue since Ukraine’s crisis pushed oil prices above $100 a barrel, but Nigerians this week were struggling with yet another round of fuel scarcities.

President Muhammadu Buhari says Africa’s top producer has a “great opportunity” with higher oil prices, but that was a hard sell for Lagos accountant Abdulazeez Oyefeso after three hours in a line for fuel.

“It’s more revenue for the country, but it doesn’t get down to the common man,” Oyefeso said, leaning against his Lexus among the cars snaking along Lagos’s main Alfred Rewane road near a gas station.


RELATED

Russia, Ukraine Agree Civilian Evacuation Corridors As Fighting Rages

Russia, Ukraine Delegates Resume Peace Talks


 

On the opposite side of the major avenue, touts carrying plastic jerry cans filled with yellow fuel and funnels crafted from water bottles flagged down passing cars offering to fill tanks for a premium.

Oil sales account for nearly 90 percent of Nigeria’s export revenue. But soaring prices — the highest in ten years after the invasion — are a mixed blessing.

OPEC member Nigeria has little capacity to refine its own crude and relies heavily on fuel imports so higher oil prices mean more budget spending.

Nigeria also operates a byzantine system of fuel subsidies that costs the state billions of dollars to artificially keep fuel costs low.

In place since the 1970s, fuel subsidies are politically sensitive and Nigeria’s import reliance also leaves the domestic market open to sporadic fuel shortages.

Currently, a litre of gasoline costs an average of 165 naira (40 US cents). On the black market this week it was fetching between 350 to 500 naira.

Since last month, the government said a batch of adulterated fuel was removed from the market, causing a shortfall.

State-run Nigerian National Petroleum Corporation chairman Mele Kyari on Thursday said measures were in place to get adequate supplies to depots.

“I am very sure that very soon we will see relief from this,” he told reporters.

Sleeping In Car

A roadside fuel vendor popularly called ‘fuel tout’ sell fuel from jerrycans, sold at above official rate to motorists trying to avoid long queues of vehicles at filling stations following fuel shortages in Lagos, on March 3, 2022. PIUS UTOMI EKPEI / AFP

 

Unruly lines of cars searching for fuel caused massive traffic jams earlier this week in Lagos and other cities. Motorbikes ferrying men on the back clutching four or five jerry cans to find fuel were a common sight.

Some commuters just walked. Others jumped off Lagos’ typical yellow Danfo minibuses caught in jams to continue on foot.

“My gauge was on reserve when I left home early this morning but the car stopped mid-way. Luckily, I have a small keg,” said one Lagos driver Onifade. “The government has to do something.”

Around Awolowo district of Lagos, where several filling stations operate, roads were blocked early in the week. Drivers wait on the sidewalk under the sun. Some had slept in the line overnight.

“People that had fuel this morning are the ones that slept in the queue yesterday night,” taxi driver Ali said. “And those people you see right now might sleep here tonight.”

More Budget Costs

Nigeria approved a long-awaited new oil law last year that aims to improve operating conditions to bring in more foreign investment to the flagging sector.

But some of Nigeria’s production is tied up in deals with refining companies for fuel and swaps for infrastructure projects so oil high prices are not the revenue boon they should be.

Today, most of Nigeria’s 1.4 million barrels per day oil output comes from off-shore “deep water” projects, where the government takes only 20 to 30 percent of revenue, said Bismarck Rewane, an economist at Financial Derivatives Co.

“The increase in price is not enough to compensate for the loss in production,” Rewane said. “Theoretically the picture looks great, but in reality it is more complicated.”

Nigeria’s finance minister last year suggested the costly fuel subsidy programme would end in June as urged by the World Bank and IMF.

But in January, ministers delayed the plan, saying the timing was problematic.

Less than a year from an election, ending subsidies could be costly as Nigerians see cheap fuel as one tangible they get from oil wealth.

“Nigeria, however, is in the uncanny position of being stuck in a subsidy arrangement that guarantees that high oil prices leads to an exponential rise in government expenditure,” said local risk analyst group SBM Intelligence.

“Momentary gains in the government’s coffers, therefore, might not make a big dent in the fiscal deficit.”

Lagos hawkers, though, did not let macroeconomic concerns deter them from a another chance for a fast buck.

Sitting on an empty blue 10-litre jerrycan on the roadside, Ahmed said he came just to make cash to supplement his carpet business.

“This is just a hustle,” he said. “This is our oil, and it’s a way to make quick money.”

AFP

Oil Tops $100, Stocks Dive As Russia Invades Ukraine

Exporting crude oil has been Nigeria's main source of revenue for decades. Sodiq Adelakun/Channels Television
Exporting crude oil has been Nigeria’s main source of revenue for decades. Sodiq Adelakun/Channels Television

 

Oil prices soared past $100 and safe havens rallied while equities tumbled Thursday after Russian President Vladimir Putin sent forces into Ukraine, accelerating fears of a major war in eastern Europe.

After weeks of warnings from the United States and other powers, the Kremlin — which is said to have around 200,000 lined up — ordered a wide-ranging offensive into its neighbour, days after saying it would provide “peacekeepers” to two breakaway regions.

The Russian president said in a surprise statement on television: “I have made the decision of a military operation.”

He also vowed retaliation against anyone who interfered and called on the Ukraine military to lay down its arms.

READ ALSO: Russian Ground Forces Cross Into Ukraine, Says Kyiv

There were later reports of incursions from several directions, with Ukraine’s border guard service saying Russian tanks and other heavy equipment crossed the frontier.

The news sparked a furious reaction from world leaders and pledges to ramp up sanctions on Moscow.

Oil prices rocketed more than six percent with Brent cruising past $100, for the first time since September 2014, while other commodities including wheat rallied on fears about supplies from the resource-rich region. Aluminium hit a record high.

Safe have assets also surged, with gold hitting a more than one-year high, the Japanese yen piling higher against the dollar and the Swiss franc hitting a five-year high on the euro.

The dollar was up nine percent against the ruble, which has been battered in recent weeks on worries about the impact of sanctions on the Russian economy, while the Moscow Stock Exchange plunged almost 14 percent after suspending trading earlier in the day.

The country’s central bank said it was intervening to “stabilise the situation”.

Asian equities plunged, with Hong Kong, Sydney, Mumbai, Singapore and Wellington down at least three percent, while Seoul, Taipei, Bangkok and Manila fell more than two percent. There were also steep losses in Tokyo, Shanghai and Jakarta.

London lost more than two percent at the open while Paris and Frankfurt lost more than four percent.

“It is hard to find any reasons for the selloff to reverse now that it appears the tanks are rolling,” said OANDA’s Jeffrey Halley.

“Stronger sanctions are to come on Russia and energy prices will inevitably head higher in the short term.”

Ukrainian President Volodymyr Zelensky had earlier warned Russia could start “a major war in Europe” in the coming days.

US President Joe Biden deplored the Russian operation as an “unprovoked and unjustified” attack, adding that it would cause “catastrophic loss of life and human suffering”. Further stringent sanctions would be announced, he said.

He was joined by leaders around the world, with NATO ambassadors holding an urgent meeting and the European Union saying Moscow would face “unprecedented isolation”.

Earlier, the United Nations was told a full-scale Russian invasion would have a devastating global impact that would likely spark a new “refugee crisis”.

China called for “restraint” on all sides.

“Russia/Ukraine tensions bring both a possible demand shock (for Europe), and more importantly a much larger supply shock for the rest of the world given the importance of Russia and Ukraine to energy, hard commodities and soft commodities,” said National Australia Bank’s Tapas Strickland.

The crisis comes as governments struggle to contain runaway inflation fuelled by demand as life returns after recent Covid-19 lockdowns, with many fearing the fragile global economic recovery from the pandemic could be knocked off course.

After staging a slight bounce Wednesday in reaction to what were considered light sanctions against Moscow, Asian markets were back in the red after a hefty drop on Wall Street.

‘Policy mistakes’

The stand-off in Europe has provided central banks with a further headache as they move to lift pandemic-era financial support and tighten monetary policy.

Attention is on every utterance from Federal Reserve officials as they prepare to hike interest rates next month, with speculation over how fast and hard it will move.

Commentators said bets are on six increases this year, down from previous forecasts for up to seven, adding the stakes are rising further.

“Policy mistakes at this point in time are almost guaranteed,” Shana Sissel of Banrion Capital Management told Bloomberg Television.

“The question isn’t, ‘Is there going to be a policy mistake?’, but, ‘How bad will it be? Will the Fed hike too much too fast, will they front-load everything?'”

And with uncertainty reigning supreme, warnings abound of worse to come, with BNY Mellon Investment Management’s Lale Akoner saying: “Expect volatility to really persist in the next few months.”

Geopolitical risks were flaring at a “very inopportune time”, she added, as traders try to navigate central bank tightening.

Key figures around 0710 GMT

Brent North Sea Crude: UP 6.8 percent at $103.38 per barrel

West Texas Intermediate: UP 6.4 percent at $97.97 per barrel

Tokyo – Nikkei 225: DOWN 1.8 percent at 25,970.82 (close)

Hong Kong – Hang Seng Index: DOWN 3.2 percent at 22,901.56 (close)

London – FTSE 100: DOWN 2.7 percent at 7,298.98

Shanghai – Composite: DOWN 1.7 percent at 3,429.96 (close)

Dollar/yen: DOWN at 114.61 yen from 114.96 yen late Wednesday

Euro/dollar: DOWN at $1.1251 from $1.1308

Pound/dollar: DOWN at $1.3478 from $1.3545

Euro/pound: UP at 83.46 pence from 83.41 pence

New York – Dow: DOWN 1.4 percent at 33,131.76 (close)

AFP

Somali Leaders Reject ‘Illegal’ Oil Deal With US Company

Somalia Election: Mohamed Abdullahi Emerges As President
A photo of the Somalian flag.

 

Somalia’s President and premier have declared null and void a deal signed by their energy minister with a US company to explore for oil and gas off the coast of the troubled Horn of Africa nation.

Minister of Petroleum and Mineral Resources Abdirashid Mohamed Ahmed and Coastline Exploration Ltd had announced on Saturday seven production sharing agreements (PSAs) covering deepwater offshore blocks.

Ahmed hailed it as a “huge moment” for Somalia, one of the poorest countries in the world, which is in the grip of a political crisis over long-delayed elections and also battling a jihadist insurgency.

Read Also: China Helps Virus-Ravaged Hong Kong Build Isolation Units

“Recently completed seismic programmes indicate that Somalia has the potential to become a significant oil and gas producing country,” he said in a statement.

The PSAs “will have an immediate positive effect on the country”, he said, and are expected to generate tens of millions of dollars for federal and state coffers.

But both Somalia’s president and prime minister — who are often at loggerheads — swiftly denounced the deal late Saturday.

The office of President Mohamed Abdullahi Mohamed, better known by his nickname Farmajo, said it flouted a decree that bans the signing of any agreements with foreign governments or entities during the election period.

“Therefore the agreement which the minister signed is null and void,” it said in a statement.

Prime Minister Mohamed Hussein Roble also dismissed the agreement as “illegal, unacceptable” in a post on Twitter, saying he would “take all appropriate measures to protect our national resources”.

Somalia is plodding through an election process that is more than a year overdue and has been marred by violence, including an attack Saturday in the central town of Beledweyne that killed 14 people on the eve of a round of voting for parliamentary seats there.

Coastline, which is based in Houston, Texas, had hailed the deal as a “defining moment” for Somalia, which has so far not produced oil or gas although exploration started in the 1950s before being derailed by the civil war.

“Somalia contains the largest remaining unexplored set of basins situated in warm waters in the world,” Coastline chief executive W. Richard Anderson said in a statement.

There was no immediate response from Coastline to requests for comment about the Somali leaders’ reaction to the deal.