Nigerian economists and financial analysts say the recent drop in price of Premium Motor Spirit (Petrol) upon direct fuel purchase deal between Dangote Refinery and Independent Petroleum Marketers Association of Nigeria may force inflationary pressures down in the coming months.

Former President of the Council of the Chartered Institute of Bankers, Prof. Segun Ajibola, and the CEO of SD & D Capital Management, Mr. Idakolo Gbolade, disclosed this to DAILY POST in separate interviews on Monday.

This comes as Nigeria’s headline and food inflation climbed for the second consecutive month to 33.88 percent and 39.16 percent in October 2024, according to the National Bureau of Statistics’ latest Consumer Price Index.

On a year-on-year and month-on-month basis, the country’s inflation grew by 6.55 percent and 2.64 percent, respectively.

A further analysis showed that urban and rural inflation stood at 36.38 percent and 31.59 percent for the period under review.

The development showed the worsening situation the majority of Nigerians faced in the past months, weakening purchasing power.

The inflationary pressures are not unconnected with surges in the prices of food items, transportation, pharmaceuticals, energy costs, clothing, and others in Nigeria.

CBN’s monetary policies can’t solve inflationary pressures in Nigeria — Ajibola

Reacting, Ajibola said that monetary policies such as interest rate cost by the Central Bank of Nigeria cannot solve Nigeria’s inflationary pressures because they are cost-induced.

He stressed that CBN over the years has been tackling inflation with the wrong medicine.

“Monetary policies cannot solve inflationary problems in Nigeria. The Central Bank of Nigeria has been fighting a battle that it cannot defeat because the country’s inflation pressures are cost-induced.

“It is because of a rise in demand or an increase in money supply.

“The landing cost of imported items is increasing due to the current exchange rate. Locally, there are pressures from all cost edges. So unless this is tackled, the challenges in Nigeria’s inflation will remain,” he stated.

Inflation: Nigeria yet to recover from fuel subsidy removal, Naira floating shocks – CPPE

The Executive Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the continued rise in Nigeria’s inflation showed that the country is yet to recover from the shocks of the fuel subsidy removal policy and the Naira floating policy by President Bola Ahmed Tinubu’s government in June 2023.

“The rise in inflation is an indication that the economy is yet to recover from the shocks of the reforms in exchange rates and fuel prices.

“Hopefully, with some of the measures being implemented by the government or contemplated under the economic stabilisation plan, temporary import duty waivers, and other policies that will be fully implemented, we may see some reduction in the food prices,” he noted.

Nigerians suffering inflationary pressures for over 10 years — Idakolo slams CBN

Idakolo, on his part, said the CBN monetary policies such as the interest rate hike, which stood at 27.75 percent in October 2024, have not impacted the country’s inflationary pressures in the past 10 years.

“The CBN has tried various policies to stem inflation, but several other factors are making inflationary pressures increase.

“The economy has been experiencing inflationary pressures for the past 10 years,” he stated.

Fuel price cut: Experts speak on Dangote, IPMAN deal

Meanwhile, Ajibola and Idakolo agreed that the Dangote Petrol and IPMAN direct petrol sale deal could be the game changer during the festive period and January next year.

The assurance comes as Dangote Refinery and IPMAN signed an agreement on the purchase of 60 million litres of fuel weekly.

DAILY POST reports the price of petrol dropped between N5 and N50, selling around N1060 and N1150 per litre across filling stations in the last few days.

Speaking on the development, the renowned economist, Ajibola, said the recent drop in the price of petrol attributed to the Dangote Refinery and IPMAN deal may also force inflationary pressures down in the coming months.

“Good enough, the prices of petrol are reducing now because of the direct PMS purchase agreement between Dangote Refinery and the Independent Petroleum Marketers Association of Nigeria; this will have a ripple effect on the cost of doing business in the country,” he noted.

However, he said the fluctuations in the country’s foreign exchange as the Naira fell to N1690.37 per dollar at the official FX market have been major impediments for Nigeria because of its dependence on imports.

“Foreign Exchange has been so tough. It is a major cost item that may require time to address.

“Similarly, the cost of energy, fuel, and electricity will have a major impact on inflationary pressures.

“Reliance on local production, reduction of import duties for some consumables, we may have gradual improvements during this year if all that has been said is implemented,” he stated.

Idakolo further told DAILY POST that “the direct petrol sale deal between Dangote refinery and IPMAN is a welcome development because it will discourage importation of petroleum products and eliminate the cost associated with importation.

“The federal government concession to sell crude to local refineries in Naira is another way of sourcing the locally refined crude at a lower cost. These measures will go a long way to ease inflation in the long run if it is consistent”.

Federal Capital Territory (FCT) Minister, Nyesom Wike, has approved the payment of ₦70,000 as the new National Minimum Wage for all staff of the FCT Administration, News360 Nigeria reports.

This announcement was made by the Acting Head of the Civil Service of FCT, Mrs. Grace Adayilo, on Tuesday in Abuja, in a statement released by her Press Secretary, Ewhenji Anthony Odey.

In addition to the new wage, the Minister has also approved the payment of three months’ arrears for all staff, with payments set to begin in November 2024.

According to the Head of Service, “this gesture will further spur the entire staff of the Administration to support the Minister to continue to deliver on the Renewed Hope Agenda of President Bola Ahmed Tinubu.

“Mrs. Adayilo equally thanked the Minister for always granting expeditious approval for payment of staff allowances and claims”, the statement added.

Nigeria’s President Bola Tinubu has written to the National Assembly to approve a fresh N1.767 trillion as a new external borrowing plan in the 2024 appropriation act.

According to the president, the loan is based on an exchange rate of N800 to $1.

Tinubu’s request was read by the speaker, Tajudeen Abbass, during plenary on Tuesday.

Accordingly, if approved, the loan will be used to part-finance the budget deficit of N9.7 trillion for the 2024 budget.

The president has also forwarded the MTEF/FSP 2025-2027 to parliament and the National Social Investment Programme establishment amendment bill to make the social register the primary tool for the implementation of the federal government’s social welfare programmes.

Last Thursday, the Federal Executive Council, FEC, approved a $2.2 billion external borrowing plan as part of the Federal Government’s 2024 Appropriation Act financing program.

With the latest move to get an additional $2.2 billion fresh borrowing plan, DAILY POST reports that Nigeria’s external debt may increase to $45.1 billion by the end of 2024.

This is as the Central Bank of Nigeria recently said the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024.

CBN’s data on international payment statistics showed that the amount represents a 39.77 per cent increase from the $2.56 billion spent during the same period in 2023.

According to the report, while the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37m, the highest monthly expenditure in 2023 was $641.70m, recorded in July.

External debt for the states and the Federal Capital Territory also climbed from $4.61bn to $4.89bn within the period under review.

In another letter, the President asked the Senate for an Amendment to the National Social Investment Agency Act to make the social register the main source of data for all investment programmes.

The Chairman of the Ogun State Independent Electoral Commission, Babatunde Osibodu, declared the All Progressives Congress the winner of the Saturday Local Government elections in the state in the early hours of Sunday.

Osibodu said the “APC won all 20 local government seats and 236 councillorship wards in the state.”

He announced this at the electoral body’s headquarters in Oke-Ilewo, Abeokuta, the state capital, while presenting the official results in a live broadcast.

Osibodu said, “A total of 613,156 votes were cast in the chairmanship elections across the 20 local government areas.

“The elections saw participation from 19 political parties, including the Accord Party, African Action Congress, African Democratic Congress, Action Democratic Party, All Progressives Congress, Allied People’s Movement, All Progressives Grand Alliance, and Labour Party.

“Other parties included the Peoples Democratic Party, Social Democratic Party, Young Progressive Party, Action People’s Party, Action Alliance, Boot Party, People’s Redemption Party, National Rescue Movement, and the Zenith Labour Party.”
However, several opposition parties have rejected the results and the conduct of the election.

The NNPP Chairman in the state, Femi Aina, questioned the integrity of the election, calling for the state House of Assembly to summon the OGSIEC to account for what he termed a “chaotic” election.

Aina said, “OGSIEC has questions to answer, and the state House of Assembly must summon all OGSIEC officials to explain why the election was conducted in such a chaotic manner. Why were people allowed to vote with business cards? What about the inadequate ballot papers and late arrivals of OGSIEC officials? There was no election, just a corrupt exercise. NNPP totally rejects the results because the process was entirely unfair.”

Similarly, the state chairman of the Labour Party, Lookman Jagun, rejected the election results, stating, “We completely reject any results declared in this sham of an election. Even the good people of Ogun State have expressed their opinions on radio and television that there was no election in the state.

“We call on OGSIEC to cancel the entire election for clear violations of Ogun State’s electoral law. If they fail to do so, we will reject any announced results and take the necessary steps to challenge this charade in court.”

The PDP Secretary in the state, Dr Sunday Solarin, speaking with our correspondent on Saturday, described the election as a “sham” and accused APC thugs of attacking opposition party members.

President Bola Tinubu will depart Nigeria for Brazil on Sunday for the 19th meeting of the G20 Leaders’ Summit.

Disclosing this, Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, said the president’s latest trip is at the instance of the Brazilian President and current President of the group, Luiz Inacio Lula da Silva.

This is coming about five days after his trip to Saudi Arabia.

In a statement he issued, Onanuga said: “President Bola Tinubu will leave Abuja for Rio de Janeiro, Brazil on Sunday to attend the 19th meeting of the G20 Leaders’ Summit taking place in the South American country.

“The Nigerian leader’s participation is at the instance of the Brazilian President and current President of the group, Luiz Inacio Lula da Silva.

“The Summit holding from Monday, November 18 to Tuesday 19, will bring together leaders from the world’s top 20 economies, including the European Union, the African Union, and multilateral financial institutions among others.

“This year’s meeting, under the theme, ‘Building a Just World and a Sustainable Planet,’ will see the participants discuss the fight against hunger and poverty; reform of the Institution of global governance and; sustainable development and Energy Transition.

“President Tinubu is also expected to hold bilateral meetings on the sidelines of the Summit in the advancement of Nigeria’s socio-economic reforms.”

In his entourage is the Minister of Foreign Affairs, Ambassador Yusuf Tuggar, Ministers of Livestock Development, Idi Mukhtar Maiha, Art, Tourism, Culture and Creativity, Hannatu Musawa, Minister of State for Agriculture and Food Security, Dr. Aliyu Sabi Abdullahi and the Director General of the National Intelligence Agency, Ambassador Mohammed Mohammed.

The Federal Government has spent $1.36bn to service outstanding debts owed to 12 international and multilateral creditors in the first six months of 2024.

This is according to an analysis of data from the public debt reports released by the Debt Management Office.

The figure for payments made between January to June 2024 represents a 216.07 per cent increase from $431.23m recorded in the corresponding period of 2023.

The PUNCH, however, observed that the increase was driven primarily by a sharp rise in interest rates, which significantly impacted borrowing costs, leading to higher expenses for the government.

The significant rise in the debt service payments owed by the federal and state governments shows the mounting pressure on Nigeria’s fiscal balance amid ongoing economic challenges.

The multi-lateral firms include the Africa Development Bank, European Development Bank, International Fund for Agriculture Development, African Development Fund, International Development Association, Africa Growing Together Fund, Islamic Development Fund, International Monetary Fund, and the International Bank for Reconstruction and Development.

The bilateral firms include the Japan International Cooperation Agency, Kreditantstalt fur Weideraufbua, and the Agency Francaise Development.

Recall that the DMO’s 2024 half-year public debt report reveals that Nigeria’s domestic and foreign public debt rose to N71.2tn and $42.9bn, respectively.

This is a notable increase from December 2023, where domestic debt stood at N59.1tn and foreign debt at $42.4bn, reflecting rises of 20.4 per cent and 1.1 per cent, respectively.

Domestic debt, in particular, has spiked under Tinubu’s administration, climbing from N54.1tn in June 2023 to the current N71.2tn.

The Central Bank of Nigeria has continued to implement an aggressive monetary policy rate hike to 27.25 per cent as part of its broader efforts to control inflation, aiming to reduce the rising cost of living and stabilize the economy.

However, this strategy has led to unintended consequences, significantly increasing the country’s debt servicing costs, as higher interest rates have made borrowing more expensive for both the government and private sector.

Nigerians have raised serious concerns about the role of the World Bank and other international creditors in the country’s rapidly growing debt-to-GDP ratio, questioning the rationale behind their continued approval of large loans despite the lack of significant progress or tangible results.

However, a further breakdown of the debt servicing report showed that the International Monetary

Fund got the highest debt repayment of $813.58m, 102.52 per cent more than the $401.73m paid in the twelve months of 2023.

This is followed by the International Development Association with a payment of $327.98m. The association got a payment of $257.33m in the corresponding period of 2023.

The government paid ADB $113.91m, EDF ($2.67m), IFAD ($5.91m), ADF ($18.15m), AGTF($1.01m), ISF ($11.96m), IDC($11.02m).

Bilateral firms, including JIC, got $336,463, KFV ($24.07), and AFD ($32.39m).

The data raises concerns about the growing pressure of Nigeria’s foreign debt obligations, with rising global interest rates and exchange rate fluctuations contributing to higher costs.

The global credit ratings agency, Fitch, recently projected Nigeria’s external debt servicing will rise to $5.2bn next year.

This is despite the current administration’s insistence on focusing more on domestic borrowings from the capital market.

At the General Debate of the ongoing 79th Session of the United Nations General Assembly at the UN headquarters in New York, United States, held in September, President Bola Tinubu called on world leaders to prioritise debt forgiveness for Nigeria and other developing countries from creditors and multilateral financial institutions.

The President, represented by Vice President Kashim Shettima, said countries of the global South would not make meaningful economic progress without special concessions and a review of their current debt burden.

He further drew the UN’s attention to the global debt burden undermining the ability of countries and governments to meet the needs of their citizens, trade barriers and protectionist policies destroying the hopes for nations, and the uncontrollable competition discouraging motivation and hampering global investments.

Meanwhile, the government’s Promissory Notes debt surged to N1.65 tn as of June 2024, marking a 6.5 per cent increase from March 2024.

Promissory Notes, a debt instrument that includes a written commitment by the issuer (in this case, the government) to repay a specific amount, have become a primary mechanism for the federal government to meet obligations it cannot fund immediately with revenue or cash.

This form of domestic debt has seen a staggering 114 per cent rise since Tinubu took office.

This sharp rise highlights the government’s growing reliance on promissory notes for financial commitments, majorly owed to government contractors, suppliers, and oil marketers.

Chief Press Secretary to the Governor of Bayelsa State, Mr. Daniel Alabrah, has congratulated the newly elected chairman of the state council of the Nigeria Union of Journalists (NUJ), Mr. Tonye Yemoleigha.

The governor’s spokesperson in a statement on Sunday said Yemoleigha’s victory in Saturday’s election was a reflection of the acceptance of his campaign promises by the delegates and members of the council.

He also said Yemoleigha’s election reflected the confidence reposed in him to effectively pilot affairs of the council.

Alabrah charged the new NUJ chairman to ensure that in keeping faith with his campaign promises, he should steady the ship and run an inclusive and transparent leadership of the council.

He also urged the new leadership to uphold the dignity of the media, protect its integrity and promote innovative and creative ideas that will attract respect to the council and journalists in the state.

The governor’s CPS said with the campaigns and election over, the different slates representing members of the council should close ranks and work together in the overall interest of journalists in the state.

“The election of a new NUJ chairman should not be a winner takes all. The media is a noble profession that should show positive leadership.

“The new leadership is expected to exercise discretion and ensure that the overriding interest of members of the council trumps other considerations.

“I congratulate Mr. Tonye Yemoleigha and the new executive of the Bayelsa Council of the NUJ. May their reign usher in a new vista that will uplift the council, its members and journalists in general.”