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Minister discloses major driver of inflation rate in Nigeria

The inflation rate in Nigeria is largely driven by the cost of transportation.

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The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has revealed that the inflation rate in Nigeria is largely driven by the cost of transportation.

This disclosure was made by the Minister during a virtual consultation and stakeholders engagement to discuss the economic and fiscal policy drivers underpinning the Finance Bill 2020, on Friday, November 13, 2020.

The recent increases in the retail pump price of petrol, which is used by most of the commercial transporters as energy for the vehicles, have led to sharp increases in transport costs.

According to the latest report from the National Bureau of Statistics (NBS), the average transport fare paid by commuters for bus journeys within a city increased by 7.92% month-on-month and 63.88% year-on-year to N309.73 in September 2020.

Ahmed revealed that the finance bill contained some interesting new proposals like fiscal relief for mass transit, which is designed to provide support to mass transit by reviewing the duties regime. She said this is because the Federal Government recognizes transportation as one of the major cost drivers in the economy.

She said, “If you look at the rate at which our inflation is going, and you disaggregate the components, you will find that inflation is largely driven by transport cost. So, the essence here is to reduce transportation cost so that businesses will have ease and pass benefits to eventual consumers.”

Our source had reported that Nigeria’s inflation rate rose to 13.71% (year-on-year) in September 2020, indicating 0.49% point higher than 13.22% recorded in August 2020, according to Consumer Price Index (CPI) report, released by the National Bureau of Statistics (NBS).

The report also states that Nigeria has endured a persistent increase in inflationary rate, growing from 12.13% in January to 13.71% in September, which is the highest recorded in 30 months.

Analysts at Financial Derivatives Company Limited, led by foremost economist Bismarck Rewane, said last week that headline inflation was projected to rise to 14.5% in October from 13.71% in September.

They said it meant that inflation would be rising for the 14th consecutive month and would also be the highest level in 33 months. Food inflation will be the most affected as it is estimated to climb to 17.05%.

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Business

Tony Elumelu conferred with Belgium’s most important national honour

Nigerian billionaire-entrepreneur, Tony Elumelu, has been conferred with Belgium’s oldest and most important national honour.

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The Chairman, United Bank for Africa (UBA) Group, Tony Elumelu, has been conferred with Belgium’s oldest and most important national honour titled: “The honorary distinction of Officer in the Order of Leopold.”

The entrepreneur made the disclosure via his verified Twitter handle. The award is said to be in recognition of his commitment to the eradication of poverty & the economic empowerment of young Africans.

Elumelu tweeted, “Last night, the Kingdom of Belgium conferred on me with the honorary distinction of Officer in the Order of Leopold, the country’s oldest and most important National Honour.

“I am humbled by this recognition of the work @TonyElumeluFDN in catalysing entrepreneurs across Africa and will continue to drive the economic empowerment of our brilliant young #Africanentrepreneurs to propel development in Africa.”

What you should know

Themoneymetrics  had earlier reported that Tony Elumelu had been named in “Times 100” list of 100 most influential people in the world 2020.

Why it matters

The latest award, amongst others, is in recognition of his commitment to the eradication of poverty and the economic empowerment of young Africans.

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Business

FG to sell Geregu, Omotosho and Calabar power plants for N434 billion

The Federal Government has mapped out some of its power plants for sale and to concession some assets in 2021.

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The Federal Government announced that it will sell the Geregu, Omotosho and Calabar power plants for N434 billion in 2021. The FG also disclosed plans to concession major sports stadiums across the country.

This was disclosed by the Bureau of Public Enterprises (BPE) in its 2021 Budget Defence in Abuja, reported by Vanguard.

Geregu Power Plant would be sold for N140.7 billion, Omotosho Power Plant N151.4 billion and  Calabar Power Plant N143.4 billion, the BPE said.

Senator Theodore Orji, member of the Senate Committee on  Privatization and Commercialization disclosed that Geregu is already majority-owned by private investors.

“We also found that in Geregu Power Plant, the core investor already owned 51% shares and that the transaction emanated from a request by the investor for additional 29% of FGN residual 49% shares,” Orji told the BPE

The Government also announced plans to concession some sports and entertainment infrastructure next year including the National Stadium, Lagos, Moshood Abiola Stadium, Abuja, Jos International Stadium, Adokiye Amiesimaka Stadium and the National Art Theatre

What you should know  

Our source reported in 2019 that  Femi Otedola, revealed plans to shift focus to power generation with a planned investment of up to $1 billion into Geregu Power Plc.

Chief Executive Officer, Geregu Power Plc, Akin Akinfemiwa, told our source  in June that they have invested the sum of 100 million dollars (USD) to carry out a major overhaul not only to ensure that the three turbines were operational at the nameplate capacity of 414MW but also to add an extra 21MW to bring the total nameplate and available capacity to 435MW.

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3000 participants projected to grace Diaspora Investment Summit

The Summit will hold its third edition with the theme: “Post-COVID-19 Economic Resurgence: Targeting Diaspora Investment.”

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At least 3000 participants are projected to grace the upcoming Nigerians in Diaspora virtual Investment Summit holding from Nov. 20 to 21, according to Abike Dabiri-Erewa, CEO/Chairman, Nigerians in Diaspora Commission (NiDCOM).

What you should know

The Diaspora Virtual Investment Summit is organized by NIDS, a private sector-driven initiative in collaboration with NIDCOM and Nigeria Diaspora Summit Initiative. This is the third edition with the theme: “Post-COVID-19 Economic Resurgence: Targeting Diaspora Investment.”

This year’s edition is virtual owing to the global pandemic, so the participants are expected to register online. Mrs. Dabiri-Erewa shared the registration link on her Twitter handle.

What they are saying

According to a report by the News Agency of Nigeria, Mrs. Abike said:

“The biggest advantage is that participants are free to attend from anywhere in the world.

“This virtual summit is aimed at creating an avenue for prospective, meaningful and sustainable diaspora investment to be relied upon to boost economic growth in Nigeria.

“The virtual summit will also showcase the investment opportunities and the developmental framework put in place to make investing in Nigeria more attractive to Nigerian Diaspora investors.

“The aim is to establish a platform where Diaspora investors can interact with potentials, sponsors, partners and collaborate with government; they will also direct round-table deals for mutual benefits.

“We are also expecting financial intermediaries and stakeholders who have an interest and commitment to the resurgence and revival of the Nigerian economy, with particular regard to its diversification to enhance attractiveness.

“This summit will strengthen participants’ profile, expand their network, show-case practice, products and services at a virtual conference with potential government actors.

“We project that 3,000 participants will be joining this investment summit. Participation is free. However, pitchers looking for investors are asked to pay N15,000.”

Why it matters

The event is expected to attract diaspora investors from the healthcare, education, agric-business, creative, sports and entertainment, telecom, ICT/fin-tech and manufacturing sectors, with participants taking through exhibition halls all in a bid to maximize growth potentials in the aforementioned sectors.

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