The Nigerian National Petroleum Corporation (NNPC) has presented a bill of N3 trillion to the federal executive council (FEC), as payment for petrol subsidy in 2022.

Tension was brewing between the federal government and organized labor unions over the former’s attempt to remove the petrol subsidy by June. The Nigerian Labour Congress had threatened to embark on indefinite nationwide strike, citing the amount of suffering the petrol subsidy removal will bring upon Nigerians.

Backing down from the lingered standoff, the federal government had suspended its plan to remove the subsidy and proposed an 18-month extension for the implementation of the petroleum industry law to cater for subsidy shortfall.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Wednesday at the end of the FEC meeting in Abuja, that a request was presented to provide additional funding to meet the incremental petrol subsidy request in the 2022 budget.

She explained that the sum of N443 billion was originally allocated for fuel subsidy in 2022, which was scheduled to last from January till June. But with fierce opposition from organized labor unions fueled by the concern that there are no structures in place to cushion the effect of the subsidy removal, the only option is to adjust the budget to accommodate the N3 trillion for the petrol subsidy.

“What this means is that we have to make incremental provision of N2.557 trillion to be able to meet subsidy requirement which is averaging about N270 billion per month. We also presented to Council today a request for Council’s consideration to make additional funding provisions to enable us to meet incremental fuel subsidy request in the 2022 Budget.

“You’ll recall that in the 2022 Budget, as appropriated, we have made a provision of N443 billion for a subsidy for January to June. Having taken into account the current realities; increased hardship in the population, heightened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, it was agreed by Council that it is desirable to exit fuel subsidy.

“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.

“In 2021, the actual under-recovery that has been charged to the Federation was N1.2 trillion, which means an average of N100 billion, but in 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because an NNPC’s assessment is that the country is consuming 65.7 million litres per day, now we’ll end up with the incremental cost of N3 trillion in 2022.

“So, this has been considered by Council and we’ve also been asked to approach the National Assembly for an amendment to the fiscal framework as well as the Budget, to also further discuss with NNPC on how to make provisions for this and also how to rationalize this expenditure,” she said.

Ahmed also explained that the new turn of events means that the Petroleum Industry Act (PIA) and the budget will be revisited to include the changes.

“The PIA had required that all petroleum products should be deregulated within six months of signing the PIB into law. And the six months would have meant from August to February. But when we were doing the budget we stretched that to June. So it means technically that from September, there will be a new fuel subsidy.

“But having to step back and take into account the realities of today, what it means is we have to go back and amend the PIA, so the ministry of petroleum resources will be leading on that. They had indicated that they will be asking for an amendment to extend it to 18 months from six months. And then it means we can now also amend the budget. So the two processes will go side by side.

“In the case of the budget, we’re looking at extending to December in the first instance, because this budget year is January to December and we’re going to engage NNPC to further interrogate the request that they presented with a view of trying to see how we can scale it down so that the country is not incurring N3 trillion for a fuel subsidy.”

The N3 trillion budgeted for the subsidy accounts for 17.5% of the N17.126 trillion 2022 budget, which opens further room for budget deficit. The 2022 budget already has a deficit of N6.39 trillion, which amounts to 37% of the budget. The N3 trillion also amounts to 55% and 43% of the capital component and recurrent expenditure of the 2022 budget respectively.

The presidential spokesman, Femi Adesina, has said the federal government will continue borrowing to fund the budget since Nigerians don’t want it removed. This means, as oil prices rise, a bigger deficit is expected in the implementation of the 2022 budget.

As the payment industry maintains its burgeoning outlook, big players in the tech space are exploring ways to win market shares by onboarding more payment services. Besides partnering with payment companies, many Silicon Valley big names have been creating custom payment systems that will potentially make them major competitors in the payment market.

To this end, Apple is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, Bloomberg reports, citing people with knowledge of the matter.

The iPhone maker has been running Apple Pay for purchases on iPhone, iPad and Mac. The new feature signals Apple’s intent to expand its payment ambition.

The report said that Apple has been working on the new feature since around 2020, when it paid about $100 million for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card.

Bloomberg noted that the system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay. In order to accept payments on an iPhone today, merchants need to use payment terminals that plug in or communicate with the phone via Bluetooth, such as Block Inc.’s Square, which dominates the market.

The upcoming feature will instead turn the iPhone into a payment terminal, letting users such as food trucks and hair stylists accept payments with the tap of a credit card or another iPhone onto the back of their device, the report said.

Citing the people with the knowledge of the matter, Bloomberg said it’s unclear whether the payment acceptance option will be branded as part of Apple Pay, though the team working on the feature has been working within Apple’s payments division since being brought over from Mobeewave. It’s also not known if Apple intends to partner with an existing payment network for the feature or launch it alone.

Mobeewave’s payment acceptance technology started with Samsung, which invested in the startup before it was sold to Apple. Samsung implemented credit card acceptance with a tap on its devices using the startup’s payment technology in 2019.

Apple may begin rolling out the feature via a software update in the coming months, the people said. The company is expected to release the first beta version of iOS 15.4 in the near future, which is likely to see a final release for consumers as early as the spring. An Apple spokeswoman declined to comment.

That would put the debut near a few other announcements; Apple plans to launch an iPhone SE and iPad Air with 5G as early as March or April, in addition to a new Mac running an Apple custom processor, Bloomberg News has reported.

Apple has been escalating its push in payments in recent years, launching the Apple Card in the U.S. in 2019 and rolling out Apple device installment plans on the credit card later that year. It also offers the Apple Cash card for digital peer-to-peer payments and is working on a service for Apple Pay that would let people buy things and pay them off later in installments, Bloomberg News reported last year.

I have been in business right from Oriendu Market in Ovim, Abia State, helping my grandmother on her garri and yam stores. In Federal University of Technology Owerri (FUTO), I ran a great business, publishing and editing my own campus magazine – FUTO Bubbles.

In NYSC, I did my first contract for the Nigerian government, winning and executing the structured office wiring project for NYSC Jos secretariat. I bought my first car (directly imported from Europe) from that  job as a NYSC member. In America, I worked as a grad student in the day, and in the night, I was a CEO of my African company.

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Dear Member,

Greetings and Happy New Year again. I am writing because we have a really great opportunity which is emerging from a group of African diasporas and global medical science leaders. What they’re doing has a massive promise. In short, we have been looking for companies in this sector for an African play for months.

We have told the team that we would provide the remaining capital they need at the phase they are. In the Board, we have provided a short video on why we like the company and the very reason why the opportunity cannot wait till our next investment cycle which comes at the end of the quarter. We have great companies coming but the team for this specific company cannot wait for our time.

Login into the Board, watch the video along with the company’s pitch deck. We have also scheduled for the team to meet our members; date and Zoom link are provided. 

As always, if you have any questions, email our Admin.

Regards,

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