Two things: 

(1) Lord Lugard handed over Lagos to Bola Tinubu to rule with splendour, YES or NO?. If you checked YES, you may have to return to primary school. 

(2) Nigeria is going through a metamorphosis as the nation goes for full liberalization of the downstream petroleum sector by removing any price ceiling on petroleum products: “The Petroleum Products Pricing Regulatory Agency (PPPRA) has on Thursday, announced the removal of the price cap on petroleum products, giving marketers the right to fix prices and sell as they deem fit”.

The Petroleum Products Pricing Regulatory Agency (PPPRA) has on Thursday, announced the removal of the price cap on petroleum products, giving marketers the right to fix prices and sell as they deem fit.

The agency communicated the decision through a document signed by its Executive Secretary, Mr. Abdulkadir Saidu, which was titled: Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020.

The document stated that henceforth, the PMS pricing will be determined by market forces, but the agency will continue to monitor the oil market and offer the Nigerian National Petroleum Corporation (NNPC), and marketers, advice on monthly pricing..

This is a big deal and this could shape Buhari’s legacy. It is a very pivotal moment in his Presidency because if he follows through and makes this happen, Nigeria will economically evolve from multiple angles: 

• Save money wasted through forex issued at non-market rates.
• Eliminate corruption associated with fuel subsidy.
• More money for the government since these players will pay taxes on improved revenues.
• Less borrowing since Nigeria will not need to borrow to make millionaires more crazy with subsidy scams. 

Yet, Nigeria has to find a mechanism to help the poor. If the cost of transportation rises, due to high cost of fuel, a huge percentage of the poor will struggle. This is a very interesting moment as Covid-19 continues to change the world in more ways. But do not rejoice: this could be a poison pill as the price of crude oil continues to rise. But do not rejoice: this could be a poison pill as the price of crude oil continues to rise. Due to market imperfection in a highly heterogeneous market like Nigeria, with challenging infrastructures, we could have a situation where rural dwellers with limited supply (i.e. fewer fuel stations) may have to pay more, well ahead of those in places with many stations. Of course, using basic economics, one would expect more fuel stations to be built in those rural areas to shift the price equilibrium point. Nonetheless, in the interim, there could be pain for many people, especially those in rural communities, due to this market-driven pricing of petroleum products.

You know the implication? These cities and nations are advancing and will possibly formalize their largely informal economic systems.  Most of these redesigns would not have happened without Covid-19 as some activists would have mounted ferocious challenges. But with the virus ravaging things, those counter-calls have been muted. Why? If you think collecting cash is the way to go, governments will ask you to go and mount the toll gates and be paid for doing that job.

Covid-19 is evil. Yet, it has provided opportunities for some economies to reform. I do hope Nigeria takes actions across our market sectors and territories. There are many positive things the government can do now with no opposition in the name of Covid-19. Call this moment a generational opportunity to bring reforms in markets and economic structures.

Nigerian Government Removes Price Cap on Petroleum Products As Oil Price Rises

The Petroleum Products Pricing Regulatory Agency (PPPRA) has on Thursday, announced the removal of the price cap on petroleum products, giving marketers the right to fix prices and sell as they deem fit.

The agency communicated the decision through a document signed by its Executive Secretary, Mr. Abdulkadir Saidu, which was titled: Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020.

The document stated that henceforth, the PMS pricing will be determined by market forces, but the agency will continue to monitor the oil market and offer the Nigerian National Petroleum Corporation (NNPC), and marketers, advice on monthly pricing.

The document said: “In exercise of the powers conferred on it (PPPRA) by Sections 7 and 24 at the Petroleum Products Pricing Regulatory Agency (Establishment) Act No. 8 of 2003, and all other powers enabling it in that behalf, the Petroleum Product Pricing Regulatory Agency, with the approval of the president, hereby makes the following regulation.

“Short title: Market Based Pricing Regime for Petroleum Motor Spirit (PMS) using the Pricing Template of the Petroleum Products Regulatory Agency.

“The price cap per liter in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations. From the commencement of these Regulations, a market-based pricing regime for Premium Motor Spirit shall take effect.

“The Agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly guiding Market-Based price. The price of Premium Motor Spirit advised by the Agency shall be guiding retail price at which the product shall be sold across the country. This regulation may be cited as the Premium Motor Spirit Market-Based pricing Regime Regulations, 2020.”

The PPPRA said it is acting within the powers bestowed on it by the provisions of the PPPRA (Establishment) Act 2003, to notify the general public of the development with effect from March 2020.

In reaction to this development, Nigerians have expressed conflicting opinions. While many believe that the move is long overdue, others think it’s cynical of the federal government to make the decision now.

Former vice president Atiku Abubakar, who has been advocating the removal of petrol subsidy and the privatization of the NNPC, couldn’t hold back his joy at the news.

He said: “FG finally withdraws from the fuel subsidy and price-fixing bazaar that had been rife with corruption and stalling investments. This is something patriots have been calling for and for which I was demonized. The stoppage of subsidy and price-fixing is a right move, although it should have come earlier when the economy was stronger.”

He urged states and the federal government to remove other impediments in order to facilitate the functionality of the refineries in the country.

“FG and state governments should proceed to remove other impediments and roll out incentives to spur investments in the sector, especially the numerous refineries that had been licensed but are yet to be built. Then ensure the quality of fuel meets set standards,” he said.

The development is seen as one of the needed changes that the COVID-19 pandemic has forced the Nigerian government to make, though many don’t see it in that light.

The concern of those who think it’s cynical for the federal government to sanction the total removal of subsidy now appears to be stemming from the rising oil price. As of Thursday, the Brent Crude has gone up to $42 per barrel, signaling a future increase. That means, the marketers will move the price upward according to the global market price and the people will bear the brunt.

“Very soon Nigerians will know the effect of this ill-thought out policy of the FG (dictated by IMF). As crude oil price rises, so will the price of petrol & diesel. In no time, disposable income will be impacted, industries will raise prices of goods & services + general price hike,” Oladimeji, a concerned Nigerian wrote in response to the news.

Many others share his sentiment, with the economy in turmoil; the burden of the subsidy removal will fall squarely on the poor. Small businesses that depend on generators for power supply will be forced to increase the prices of goods and services, transport operators will also increase the fares to reflect the current pump price.

It is believed that while the removal of fuel subsidy has come with inevitable pains, it has also solved two major problems: It has eliminated the corruption that has over the years become an integral part of the subsidy regime, and it will put a lot of money in the government’s purse and minimize the culture of borrowing.

He is a visionary and an innovator. And he is building the financial operating system for African commerce. He earned an MBA from MIT. He worked at Paypal, GTbank, Sterling Bank, and Standard Bank – Africa’s largest bank by asset. At Sterling, he headed the mobile financial services. At Access Bank, he led the digital factory and innovation unit. And then Google. Today, he runs an amazing fintech – Flutterwave which we use because it is simply superb.

Flutterwave serves customers, and has processed billions of dollars across its platforms. It is the recipient of several prestigious awards including the “Best Technology Platform” as awarded by The Asian Banker, the “Top 100 Fintech Firms”, among others. The firm has raised close to $65 million.

Yes, Olugbenga GB Agboola, the CEO of Flutterwave, will teach Fintech in the second edition of Tekedia Mini-MBA. He is coming to take us to an excursion on how to build, run and scale the future. If you speak with GB, you will experience a tech-moment from one of the finest minds in African technology scenes.

I invite ALL to join this excursion; join here.

https://www.tekedia.com/mini-mba-2/

Good People, if you have paid for Tekedia Mini-MBA and you are yet to receive your login, please have patience. My team is working; the number of registration is huge. But they are working on them one by one. Our members who paid before 10 am today must have received their logins.
Team is reading your emails and I am extending the early bird registration to Monday. So, all the accruable benefits stand.

We have digital payments which support self-registration but we understand that many members prefer bank transfer. No problems – this evening, everything will be sorted out. I have moved team members from our electronics business to assist.

As always, Nigeria and Africa always support whatever I put my hands on. I truly want to thank everyone. I do not take it for granted that an Aba businessman put a signpost in Ariaria telling his friends about this new school he is attending. We reached out to know the excitement.

Interestingly, he is coming mainly for the “Personal Finance and Wealth Management” session. Yes, he has made money and wants to understand how to manage it better the global way. Our Faculty for that has it cut out.

Registration continues here.

https://www.tekedia.com/mini-mba-2/

One of the companies joining Tekedia Mini-MBA with 40 of its workers is Reliance Infosystems. Reliance Infosystems, a Microsoft Gold Partner & Sophos Platinum Partner, under the leadership of ICT industry veteran Olayemi Popoola has been fixing technology frictions in Nigeria and across Africa with absolute commitment to quality, in the domains of business transformation, operational excellence and protection assurance.

The excellence in this company has delivered many awards including Microsoft Country Partner of the Year award.

Companies that send more than 35 staff get special customized elements in our program along with a company-specific interactive discussion. This morning I spoke with Reliance Infosystems leadership as we begin to structure those components ahead of June 22 when the program begins.

Good People, I invite you to run with Reliance Infosystems!

Register for Tekedia Mini-MBA.