Business
World Bank can’t dictate to Nigeria on fuel subsidy removal –Chaudhuri
The Country Director, World Bank, Shubham Chaudhuri, speaks on major issues affecting the Nigerian economy.
Is the country investing enough in infrastructure to realise its potential?
Nigeria has so much potential but it has not been realised. To realise the potential, there must be investments in capital infrastructure and in basic development needs. Right now, Nigeria does not have the revenues to finance it. We have seen in some reports that Nigeria has the lowest level of government revenue to GDP among some major countries, but we have some other countries too. But if you compare them to the rule of thumb on how much the government needs to spend in order to provide the basic functions of law and order-basic services and basic infrastructure-the rule of thumb is usually between 15 per cent and 20 per cent. Nigeria, in the last few years, has been spending about 12 per cent of the GDP. It means if your revenue is seven to eight per cent of the GDP, and you are making an effort to spend about 12 per; you are already encouraging fiscal deficit which means an overall debt. However, that might be worth it if the public spending is in the right places. Nigeria has huge potential and we see this potential in two ways. Nigeria is the largest economy in sub-Saharan Africa, and you see the dynamism and the energy of the people. And if things were a bit more conducive to mobilising the energy, the potential is tremendous. I also see in it terms of Nigerians in the Diaspora-Nigerians who grow up in Nigeria and then at an individual level go abroad. In the United States, Nigerians are the most educated. It used to be the Indians but Nigeria has overtaken India in that regard.
What, in your view, is affecting the growth of the country’s per capita income?
In the last 40 years, the real per capita income has been inflation-adjusted, and per capita income in Nigeria has not grown. What it was in 1981, 1982 is what it is now in 2021, 2022. That doesn’t mean there was no time the per capita income has grown up; and most of that is related to oil price movement. But over the long run, in the last four decades, it is like four lost decades. Now the population is much higher, insecurity is much more widespread, and this year and last year, the oil price is going up. Even with what is happening in Ukraine, the oil price is no longer the boom.
How do you expect the Dangote Refinery to impact the country’s revenue when it fully commences?
Refining or the ability to refine petroleum products domestically will be great from an economic perspective – in terms of increasing domestic value-added- and will also have some job creation spillovers. It is not a solution to the physical problem of PMS subsidy, for the simple reason that it is still going to be a choice; that is if the refined products can be sold at the world price. For the refinery not to sell it at the world price, but to sell at the subsidised price, means that the government is still spending a lot. So the fiscal choice will remain and it is a choice for Nigeria to determine whether government revenues are better spent towards subsidising versus reducing the number of out-of-school children, versus reducing the number of children who die before the age of five, which Nigeria is also leading in the world. It would help on the economic front in terms of value-added.
Would subsidy have any impact on local refining of oil?
Do we want the domestic refinery, whether it is private or public, to sell PMS at a subsidised price when they could sell at the world price? The choice for Nigeria is that this state refinery could sell PMS at the world price, bringing all these revenues with them. The government can decide whether it could put that towards subsidising the PMS, or could put it on healthcare, basic education, electricity excess, and better roads. If it is a private refinery, since we have a large one coming on the line, the refinery would certainly or not be willing to sell at a subsidised price without being compensated by the government. So the fiscal choice does not go away. This is one of the things that are seen in the media where domestic refining is seen as a solution to the fiscal problem. It is not the solution to the fiscal problem. It is certainly in terms of domestic value-added, in terms of the economic benefits.
Do you expect the local refinery to bring huge benefits in terms of export?
The dependence on imports is the same thing. The dependence on import means that you are using up assets. The refineries can sell refined petroleum products globally, and by the way, the crude oil that Nigeria produces, if it goes directly to the domestic refineries, that means you are not earning FX from selling the product. So both on the foreign exchange and on the fiscal front, the choice does not go away. It is still a policy choice. If I have a domestic refinery that is producing 20 million litres a day of petroleum (PMS), I can export that at the world price, or I can sell it domestically at the world price, or I can sell it domestically at the subsidised price. If I sell it domestically at the subsidised price, that means that it is a conscious choice that I do not want to earn foreign exchange revenue from exporting, which is fine. But if you say I am going to sell it domestically at the subsidised price, you are also saying that the revenue is better used for subsidising PMS. The domestic refinery can sell at the world price, the federation gets the revenues and could use the revenues for education. So, it all comes to a choice. It is not by having the domestic refineries come online that the choice will be well. Either when it comes to FX availability or in terms of the fiscal cost, the clear benefits from the rest of the refinery are that it has huge benefits in terms of job creation and value-added. That is the reason domestic refinery capacity should be strengthened, but people think that having a domestic refinery would somehow take away the choice. You will still be losing N5tn this year in potential revenue, by abiding with the cost of PMS right now, because of where the crude oil price is. That cost will not go away because of domestic refining.
What is the implication of Ukraine/Russian war on the global economy?
It depends on whether it escalates further or continues or is more limited. The clear implication suddenly that we have seen is the rise in the prices of crude oil and gas. And I think that, for many of the advanced economies that inflation was getting ahead with, it would mean the tightening of monetary policies. It could also have some implications for global trade. In general, it could mean that the pace of economic activities globally is likely going to be a bit more moderate as being done before the crisis. My sense is that from everything that we have seen, they are likely to be more moderate than that.
What is the impact of the war on Nigeria?
Coming to Nigeria, you look at two main aspects. What it means for oil prices or energy prices including natural gas, and in terms of the willingness of portfolio investors or others to invest in Nigeria. On the global capital flows, investors’ kind of appetite in terms of investing in an emerging market is going to go down because of rates. It is not only going to be about the global market situation but also the rates in the home economies. For many of these investors, the rates will go up. So the surge for high returns, which has flooded many emerging markets, would come down. For Nigeria, ironically, that is the last of a concern because those flows were not coming in. So, the fact of Ukraine, I don’t see it having clear direct impact in that way.
Do you expect the rising oil price to have a positive effect on Nigeria’s revenue?
On the oil price, historically, in the last five decades, you will see that any time crude oil price goes up, it helps economic activities in Nigeria, just because it becomes a source of free cash flow that people spend on a lot of things. The oil sector by itself is part of a relatively small part of the economy, but the spillover is large. What was also the case in the last five decades was that high oil prices were good for the federation budget, finances, but that is no longer true. In 2021, it was not true and in 2022 it is not likely. We could be wrong, and we will be very happy to be wrong. Nigeria is having trouble on crude oil production, it is already below the OPEC quota, unable to produce the extent to which it should.
Then the fact that the price of what you are producing has gone up is not helping you that much. The larger reason is that the cost of the PMS subsidy is going up. So at $85 per barrel, NNPC was projecting that the cost of the PMS subsidy will be around N180bn to N200bn per month. In January, when the crude oil prices had already gone up to $90/barrel, $93/barrel, it has still gone up to N250bn per month. Now, you just mentioned it is about $100 per barrel, our guess right now is that we are looking at N4tn or even more a year in 2022 as the cost of PMS subsidy to the Nigerian government.
The Federal Government has postponed its plan to remove subsidy on PMS. Do you see this as the best decision now?
Two things, first, I want to emphasise that this is Nigeria’s choice. I think there needs to be a consensus among the political elite and that is to be communicated and accepted by the public. So, if there wasn’t a consensus earlier, I hope this could be a time for that, around what should be the choice for Nigeria and it has to be a consensus.
Number two, this is Nigeria’s choice. Our role is certainly not to dictate, we have no ability to dictate. With economies really, you are not meant to make a political decision. What you are meant to do is to lay out what are the cons and consequences of different decisions. So, that is what we are doing. We are just being very clear that this would come with a fiscal cost and the fiscal cost is the number, perhaps N4tn this year, and for the states, our projections suggest that the transfers they will receive from the federation may actually go down by as much as 10 per cent. This is because there won’t be enough coming into the federation account. We hope that there is a solution to this. We are working very closely with the Honourable Minister of Finance on mobilising non-oil revenue. If there isn’t a consensus about safeguarding oil revenue, at least, there are opportunities for mobilising non-oil revenues in terms of the budget support facilities.
Nigeria has continued to borrow despite its revenue challenges. What impact do you envisage from this?
I think the Minister of Finance is in a very difficult position in finance now. When you see some pressing financial needs now, you know that raising revenues will take some time. So, you feel that if you can borrow to meet those pressing needs now, it really helps to strengthen our ability to repay in the future. When we look at it, debt is not necessarily a bad thing. Look at the example I was giving, suppose the main income earner of a household falls sick, such that the income is no longer coming in. Will it make sense for that family to borrow so that they can keep their daughter in college? I will say yes, because they are investing in their daughter and the ability to repay the debt when she gets a job. Of course, it does not make sense to borrow so that the uncle can go out for good time. So it is all about the uses of debt. So, all about debt sustainability is looking at not just the volume of debt but what it is being used for. From that perspective and what we have seen, Nigeria is trying at least at the federal level to really make sure that the debt is used for the right things and a big part of that is being very transparent. So, we work very closely with the government. Not just the government but the public at large can decide whether this is something that works.
PUNCH
Findings by our correspondent showed that some filling stations now sell petrol below N860 per litre, while Dangote partners, such as MRS, Heyden, and others, sell at N865 or N875 in Lagos and Ogun States.
A filling station named SGR in Ogun State reduced its price to N847 per litre as of Tuesday. Marketers confirmed to The PUNCH that most importers have reduced their ex-depot petrol prices below that of the Dangote refinery.
As of Tuesday, it was learnt that Dangote refinery was selling petrol at N820 per litre while some depots sold the product at N815 per litre. According to Petroleumprice.ng, Aiteo, Menj and others put their prices at N815/litre as of Tuesday.
Our correspondent learnt that the importers were making efforts to remain in business through competitive pricing. Many had previously complained of recording losses when the 650,000-barrels-per-day capacity Dangote refinery began implementing constant price cuts earlier this year.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, confirmed the ongoing downward price review by the importers.
“Depot owners are dropping their petrol prices. Some of them are selling N815, some are selling N817, while Dangote is selling N820. NNPC is still selling at N825; it has not dropped its prices yet,” Ukadike disclosed.
He described this as the beauty of market liberalisation, saying President Bola Tinubu should not heed calls to ban fuel importation.
“This is the beauty of the liberalisation of the market. That is why we opined that the President should not ban anybody from importing petroleum products. Nobody should be stopped from bringing in petroleum products. That is the beauty of opening up the market. Implementation and local refining will checkmate unfair pricing. As an indigenous country, you must refine to ensure that you have the best price,” Ukadike said.
On claims that toxic and substandard fuels are being imported into the country, the IPMAN spokesman said the Nigerian Midstream and Downstream Petroleum Regulatory Authority is in place to check substandard fuels.
To remain viable, he urged governments across Africa to take deliberate steps as the United States, Canada, and the European Union have done to protect domestic producers from what he called unfair competition.
Dangote did not mince words when he said that the Nigeria First policy announced by Tinubu should apply to the petroleum products sector. “The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors,” he stated.
This request by Dangote seeks to place a ban on the importation of petrol, diesel, and other products being produced locally. He argued that local refiners were finding it difficult to sell their products because of what he called dumping. The billionaire businessman alleged that importers were dumping toxic fuel that would never be allowed in Europe.
“And to make matters worse, we are now facing increased dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America,” he said.
Dangote mentioned that some importers bring subsidised fuel or crude oil from Russia into Nigeria. This, he said, affects local pricing, forcing refiners to lower their prices below production cost.
“Due to the price caps on the Russian petroleum products, discounted petroleum products produced in Russia or with discounted Russian crude find their way to Africa, severely undercutting our local production, which is based on full crude pricing. This has created an unlevel playing field in most African countries. Petrol and diesel are sold for about a dollar net of taxes.
“In Nigeria, due to this unfair competition, this price is just about 60 cents, even cheaper than Saudi Arabia, which produces and refines its own oil. This is due to the fact that we are having too much dumping. To remain viable, we urge the governments across Africa to take deliberate steps as the United States, Canada, and the European Union have done to protect domestic producers from unfair competition,” he stated at a recent event organised by the Nigerian Upstream Petroleum Regulatory Authority in Abuja.
However, marketers disagreed with Dangote, urging the Federal Government not to consider adding petroleum products to the list of items banned from importation under the ‘Nigeria First’ policy.
… Govt set to develop tourist sites
… Work starts on Nnamdi Azikiwe Stadium, Awgu Games Village in earnest
The Enugu Air, CNG Mass Transit Programme, and the ultramodern transport terminals all built from scratch by the Governor Peter Administration are to be launched for operation before the second anniversary of the government.
The government has also approved the development of the state’s tourism industry, while total transformation of the Nnamdi Azikiwe Stadium and Awgu Games Village will start in June to get them ready for the National Sports Festival to be hosted by the state in 2026.
These were made known by the Commissioner for Transportation, Dr. Obi Ozor; Commissioner for Culture and Tourism, Dame Ugochi Madueke; Commissioner for Works and Infrastructure, Engr. Gerald Otiji; and Commissioner for Youth and Sports Development, Barr. Lloyd Ekweremadu after the State Executive Council meeting at the Government House, Enugu, at the weekend.
Briefing Government House Correspondents, Ozor said, “We are starting off with the initial three aircraft and two of the aircraft are already on ground. The third one will be on ground by the end of this month. We are hoping to start the commercial operations before the second year anniversary of this administration.
“You have also seen buses for the mass transit programme across the state. 50 of them are already parked at Okpara Square, and an additional 50 will be joining that fleet in the next few weeks. The 100 of them will be going into commercial operations before the end of this month, which is the second year anniversary.
“Also, the bus terminals, two at Holy Ghost, one each at Gariki, Abakpa and Nsukka, will also be commissioned and go into commercial operations before the 29th of May, this year.”
He added that the government planned to bring in the electric and CNG automotive manufacturing plant into Enugu as well as launch in the next 150 days the Enugu Smart Transport Programme, which would see to the injection of over 2,000 electric vehicles.
Also briefing newsmen, Dame Madueke said funds would be invested in the tourism industry in phases.
“We are going to have it in phases. For the first phase, we are having Awhum Waterfall, Nsude Pyramid where we are going to have the first canopy walkway in the South East. It measures about 600 metres, which will actually be the longest in Nigeria.
“We also have Ngwo Pine Forest where we are having the first zipline in Nigeria. The zipline will measure about 300 metres. In the same Ngwo, we will have a big rotunda and a smaller rotunda. We have the Cross of Hope to be located at Okpatu. The Cross of Hope will be sitting 580 metres above sea level and the cross itself will measure about 50 metres, making it a total of about 630 metres above sea level. The cross will have about 15 floors with a lift.
“At Awhum Waterfalls, we are going to have another canopy walkway and a boardwalk to preserve the ecosystem.
“We equally have the Akwuke/Atakkwu Waterpark and Ovu Lake Golf and Resort at Akpawfu,” she stated.
She explained that all the tourist sites would have experience centres, food courts and renewable energy, adding that tour buses would soon arrive to ensure ease of movement of tourists.
Ahead of the 23rd edition of the National Sports Festival, Enugu 2026, Barr. Ekweremadu said the State Executive Council had equally directed the commencement of work both at the Nnamdi Azikiwe Stadium and Awgu Games Village not later than June.
“We also briefed the council on the progress made in establishing a Lab for Animation for young people in Enugu State, which His Excellency will be commissioning soon. The lab is ready.
“We are similarly working towards empowering over 2,100 young people across the state, who were trained around December last year. This empowerment will be coming up on the 12th of August, being the International Youth Day’” Ekweremadu concluded.
By Sabastine Gabriel
The Enugu State House of Assembly has taken steps to address the issue of dropped calls and customer dissatisfaction with telecom operators in the state.
During a plenary session on Tuesday, member representing Igbo-Eze South Constituency, Hon. Harrison Ogara raised concerns over the impact of poor telecom services, which he believes are financially harming consumers who pay for unreliable services.
Ogara highlighted that with over 219 million Nigerians subscribing to telecom services, the residents of Enugu State have been particularly affected by the erratic performance of these providers, leading to significant financial losses.
He proposed that the telecom operators, MTN, Globacom, Airtel, and 9 Mobile be summoned to provide explanations on how they plan to reimburse customers affected by dropped calls.
In addition to refunds, Ogara requested that the telecom companies present accurate subscriber data and evidence of their tax compliance with the Enugu State Government.
He urged the establishment of a committee that includes state officials to investigate the financial losses incurred by residents due to telecom inefficiencies, making the findings public and ensuring that refunds are issued where due.
“Mr. Speaker, distinguished colleagues, I rise draw your attention to the current epileptic services of the telecoms services providers in Enugu State which has resulted to huge loss of funds by our citizens. Not minding being a late entrant in the global system for mobile (GSM) market, Nigeria has obviously out paced many countries across when we take into consideration the market size and telephone usage.
“It is quite absurd and preposterous that even with the rapid growth of the sector and it’s consequential growth in consumer size, users of telecom services in Enugu State have continued to groan under the scorching pressure of abysmal performance in services,” he lamented.
Other assembly members echoed Ogara’s motion, expressing frustration over the operators’ poor service and high tariffs, comparing the situation to problematic billing practices seen in other utility sectors.
The member representing Nsukka West, Hon. Malachy Onyechi likened the telecome operators to EEDC that give consumers exorbitant estimated billing without rendering commensurate services.
On his part, while supporting the motion, Hon. Clifford One, representing Igbo-Eze North 2, said that the activities of telecom operators are like the banking services where one is debited yet transaction does not go through.
Earlier the House of Assembly passed into law the Enugu State Land Use Charge Second Amendment, House Bill 6, 2025 presented by Hon. Iloabuchi Aniagu, member representing Nkanu West Constituency into law.
To give room for accelerated passage of the bill, the Enugu State House of Assembly suspended Order 14, Rule 102 sub section 1 of the House Standing Order.
…We guarantee your business, hurry and invest, Mbah urges diasporans
The Enugu State Government and the Lion Business Park Limited have sealed an investment deal with the signing of Novation Memorandum of Understanding (MOU) to develop a world-class industrial and commercial hub within the Enugu Industrial Park Free Trade Zone.
This was even as the state governor, Dr. Peter Mbah, reaffirmed the administration’s commitment to guaranteeing businesses through the provisions of infrastructure and enabling environment for ease of doing business, urging diaspora investors to turn their capital into Enugu State for a high return on investment, RoI.
Signing the MOU alongside top management of Lion Business Park Ltd in Enugu on Tuesday, the firm’s chairman, Dr. Okechukwu Mbonu, commended the governor for his visionary leadership, developmental strides and achievements the administration had recorded within a short period in office.
Highlighting the objective of the deal, Mbonu stressed that the company was poised to develop industrial and commercial hub that would catalyze trade, industry, economic growth and create jobs for the youth population.
“This strategic collaboration aligns with Your Excellency’s visionary economic agenda to grow the GDP of Enugu State from $4.4 billion to $30 billion (US Dollars) for the overall benefit of the people of Enugu State and Nigeria as a whole.
“It is therefore, a watershed moment with this renewed partnership between Lion Business Park and Enugu State Government. It is indeed a case of a promise made and fulfilled and I have no doubt that you will continue to fulfill your promises to the people of Enugu State,” the chairman added.
Mbonu, who expressed optimism about the investment, said the project would leverage on the incentives associated with businesses in a Free Trade Zone to attract foreign direct investments, promote human capital, innovation and technology development to create jobs.
Calling on the business community, private sector leaders and global investors to maximize the perfect opportunities the park presented to them to be part of the economic revolution, Mbonu added that the project had immense benefits that spurred beyond the state, the South East zone to Nigeria at large.
Speaking, Governor Mbah reiterated the administration’s economic blueprint, which is to grow the economy and make the state the number one destination for investors in the country, saying the promise to inspire exponential growth could only be possible with investment deals such as the one executed with the Lion Business Park.
“The Enugu State Government has committed to increase their stake in this going concern by providing all the necessary infrastructure that is required in order for this business park to be fully functional. We see the business park as food that is ready. Because if we are to start the process of building a business park, we know what it will take. Procuring your licenses; getting the free trade license, getting the dry port license because we have an inland port also at the Lion Business Park,” he noted.
While harping that the location of the park was a product of strategy, innovation and due diligence conducted by a team of economic experts in the administration, the governor said, “The business park is strategically located. It is three hours from Onne Sea Port in Rivers State, less than two hours to Asaba in Delta State, and less than 25 minutes to Akanu Ibiam International Airport, Enugu. We couldn’t ask for a business park at a better location”.
He assured that the administration would continue to make the state attractive to investors to set up their industries by providing the right incentives such as electricity, paved roads, and other infrastructure.
While appreciating host communities in the state for their support, the governor enjoined them to continue to cooperate with investors.
Fresh from implementing a ₦15 price reduction in its loading cost for Premium Motor Spirit, also known as petrol, the Dangote Refinery has again slashed its refined product prices to make them cheaper, cutting its ex-depot rate to ₦835 per litre.
The new price represents a ₦30 reduction from ₦865 per litre implemented six days ago, marking a 3.5 per cent decrease, and a ₦45 reduction from the ₦880 per litre sold by the facility last Wednesday.
This price cut marks Dangote’s third downward adjustment in under six weeks.
The refinery informed its customers in a notice sent out on Wednesday morning.
A pro forma invoice was sighted by our correspondent, and checks on petroleumprice.ng also confirmed the development.
It stated that the new price is inclusive of charges by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The document detailing the revised price structure shows that PMS at the gantry will now sell for ₦835 per litre, inclusive of NMDPRA statutory levies, while coastal sales remain on hold. The diesel gantry price is set at $608 plus a $70 surcharge, payable either in naira at ₦1,650/$ or in USD.
Coastal sales are also on hold. Jet fuel will be sold at $664.75 with a $42 gantry surcharge and a $22 coastal surcharge. Prices for cooking gas at both gantry and coastal points are currently on hold.
A possible price cut was envisaged after the landing cost of imported petrol dropped to ₦853 per litre on Tuesday.
This development comes as marketers secured regulatory approval to import 117,000 metric tonnes—equivalent to 156.897 million litres—of petrol within eight days, from 8 to 16 April 2025, to boost fuel supply nationwide.
These figures were revealed in separate documents obtained by our correspondent from the Nigerian Ports Authority and the Major Energies Marketers Association of Nigeria.
Dealers said the ₦853 per litre spot import parity into tanks, which includes expenses such as shipping, import duties, and exchange rates, marks a notable ₦3 reduction from ₦856.75 per litre last Monday and ₦852.02 on Tuesday.
The document showed that on-the-spot sales at the NPSC-NOJ terminal dropped to ₦853.12 per litre, while the 30-day average cost also declined to ₦844.84 per litre.
Within the period, marketers brought in six vessels conveying 117,000 metric tonnes through Tin Can Port in Lagos and Calabar Port in Cross River State.
Importantly, the continued price drop coincides with the restart and full implementation of the Naira-for-Crude agreement with local refiners after an earlier suspension.
The Ministry of Finance disclosed this in a statement published last week on its official X handle, titled: “Update on the Crude and Refined Product Sales in Naira Initiative.”
The statement followed a meeting on Tuesday between the Minister of Finance, Wale Edun, and representatives from Dangote Refinery—a major beneficiary of the agreement — to review progress and address ongoing
implementation issues.
The committee stated that the policy is not a temporary measure but a long-term strategy to reduce Nigeria’s dependence on foreign exchange for petroleum.
It added that the initiative is a key policy directive designed to support sustainable local refining and strengthen energy security.
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