Power Minister Adebayo Adelabu stated this on Sunday while speaking with the press following a gathering with various All Progressives Congress, APC, members at the Oyo State party headquarters in Oke-Ado, Ibadan.

He assured that the government of President Bola Tinubu is ready and determined to change the face of things in the power sector and “to change the game in the power sector.”

“This is why we are addressing the root cause of the power sector problems.

“We are addressing all the problems associated with all the segments of the power sector value chain – from gas supply to generation, to transmission, to distribution and to the customers themselves. There are a lot of things that we are doing that Nigerians will soon start seeing.

“Yes, there are pockets of improvements here and there, but that is not where we are going. We are still going to Eldorado whereby every Nigerian will be able to enjoy adequate, stable, functional and reliable power supply.

“But let me tell you that it is a journey and not a destination. We will start seeing this improvement as we are seeing now to improve. This is because when you are repairing, you will still suffer some damages, you will still suffer some pains.

“When they were repairing the Lagos-Ibadan Expressway for 10 years, people were having traffic jam and getting held up in serious traffic until they finished the road.

“So, while we are repairing, people must help us to bear the little pains that will come with it. But at the end of the day, we will make gains. For you to make an omelet, you must break eggs. This is the period of breaking the eggs. Very soon, we will start eating our omelet.

“I am determined to solve the problems in the power sector and Nigerians will start singing our good songs very soon,” he said.

The naira, on Monday, appreciated to N1,250 per dollar at the parallel section of the foreign exchange (FX) market.

The FX rate is a 0.43 percent increase from the N1,280 recorded on March 29.

Currency traders in Lagos, also known as bureau de change (BDCs) operators, quoted the buying rate of the greenback at N1,230 and the selling price at N1,250 — leaving a profit margin of N20.

“The dollar keeps declining and it is affecting business but business is picking up gradually,” a currency trader named Aliyu said.

At the official section of the FX market, the local currency depreciated by 0.69 percent to N1,309.39/$ on March 28 — from N1,300.43/$ on March 27.

Meanwhile, Aminu Gwadabe, president, Association of Bureau de Change Operators of Nigeria (ABCON), on March 31, said the recall of members into the FX market has led to stability in the exchange rate.

“The reconsideration of the BDCs into the mainstream foreign exchange market has not only cleared illegal economic behaviours of hoarding, rent-seeking, round tripping and FX holding position, and led to the emergence of exchange rate convergence,” Gwadabe said.

Gwadabe also said the increase in FX inflows through the CBN’s monetary tools boosts foreign reserves, granting the apex bank the power to defend the local currency.

The federal government’s subsidy reforms, rather than the expansion of money supply, are a major driver behind the persistent core inflation in Nigeria.

This is according to a study by Eric Ismail Otoakhia of the Department of Economics, Faculty of Business School, Ahmadu Bello University, Zaria, which was published in the latest edition of Bullion, a publication of the Central Bank of Nigeria (CBN).

Titled ‘Do Fuel Subsidy Shocks Prolong Price Instability in Nigeria?’, the study delves into the economic repercussions of Nigeria’s approach to handling fuel subsidies. The paper rigorously examines the ripple effects that follow the removal of fuel subsidies on the nation’s price levels from December 1996 to August 2023. By adopting a dynamic autoregressive model, the study aims to quantify the impacts of these changes on economic stability.

Subsidy reforms counterproductive to cost of living stability

The findings pointed to the counterproductive effects of subsidy reforms on the cost of living, highlighting the challenges faced by fiscal and monetary policy coordination in ensuring economic stability.

The study read:

• “The removal of such subsidies, when accompanied by income redistribution and increased government spending on public investments, inevitably leads to a persistent increase in the price level.
• “The findings of this paper have shown that government actions in handling fuel subsidies are counterproductive to fiscal and monetary policy coordination in ensuring a stable cost of living.”

The study, however, noted that fuel subsidies have been a double-edged sword, offering relief against the rising cost of living by stabilizing fuel prices, yet posing sustainability challenges amidst Nigeria’s significant infrastructure needs and escalating debt levels.

The money supply effect

Nigeria’s broad money supply (M3) surged to a new historic high of N95.56 trillion as of February 2024 despite the hawkish tightening stance of the Monetary Policy Committee (MPC). This figure represents a staggering 79.29% surge from the N53.3 trillion recorded in February 2023, showcasing a substantial year-on-year growth of N42.26 trillion.

The study, however, noted that increase in the money supply does not trigger significant and prolonged rises in inflation, suggesting that phasing out fuel subsidies introduces greater risks to economic balance.

The study added:

• “The results reveal a prolonged increase in inflation rates following a positive shock to the positive semivariance of fuel prices, indicating that fuel subsidy reforms disrupt price levels and impede fiscal-monetary policy coordination to achieve price stability.
• “In contrast, a positive shock to the money supply does not result in a significant and extended rise in inflation rates. This suggests that eliminating fuel subsidies poses a greater risk to price stability.”

The weakness in cash transfers

The World Bank recently said that cash transfers can help save Nigerians from intergenerational poverty traps as inflation and low economic growth adversely affect the poor. Also, the International Monetary Fund (IMF) emphasised the need for the Nigerian government to prioritise the full implementation of its cash transfer program to aid vulnerable households. This step is crucial before the government takes on the task of revaluating the costly fuel and electricity subsidies.

The paper, however, warns against depending solely on income transfers as a solution to the adverse effects of subsidy removal, given the government’s fiscal constraints. It recommends exploring alternative subsidy approaches, like agricultural subsidies, to promote food security and support the agricultural sector, offering a more viable and sustainable solution for economic stability.

The study noted:

• “If the current administration successfully eliminates fuel subsidies, relying solely on income transfers will not provide long-term stability in the cost of living.
• “These transfers are unsustainable given the current fiscal constraints of the government. Instead, an alternative subsidy approach, such as agricultural subsidies that encourage farmers and promote food security, may be more viable.”

The fuel tax option

The research proposes a novel approach to manage the economic implications of subsidy removal. Rather than erratic withdrawal of fuel subsidies, it suggests the implementation of a fuel tax targeting non-commercial vehicles. Such a measure would not only foster energy efficiency but also contribute to reducing CO2 emissions, aligning with global environmental objectives.

The study concludes that removing fuel subsidies leads to unmanageable increases in the inflation rate, with core inflation especially sensitive to such governmental energy reforms. The analysis criticizes the government’s recurrent attempts to remove subsidies as detrimental to the broader goal of macroeconomic stability.

Proposing a shift in subsidy strategy, the research advocates for funding subsidies through direct taxes on private, non-commercial vehicles. This strategy could expand the government’s tax revenue and correct the market failures associated with prolonged energy subsidies.

The Co-convener, Lucky Aiyedatiwa Campaign Organisation Foot Soldiers (LACO-FS) in Ondo State, Biyi Poroye, has said the allegation of certificate forgery against Governor Lucky Aiyedatiwa is the work of detractors who are crying wolf over nothing.

Naija News reports that Poroye, who is also the Chairman of Emerging Political Platform (EPP), while speaking with journalists in Akure on Monday, said Aiyedatiwa was not jittery over the allegation of certificate forgery.

According to him, Aiyedatiwa has no certificate scandal and is well-qualified to contest and win the party’s primary and November elections.

He further declared that those uncomfortable with Aiyedatiwa’s academic qualifications should approach the court of law for redress rather than brandish fake police reports on his academic records.

He said, “For some time now, the media platforms have been abuzz with lurid stories, insinuating that Governor Aiyedatiwa does not have a secondary school certificate as claimed in his bio-data.

“Thankfully, facts don’t lie. Recall that the then Governor of Lagos State, Alhaji Lateef Jakande, in his developmental stride in the education sector, relocated some dilapidated public schools to his newly built public schools.

“Therefore, Governor Aiyedatiwa who claims that he entered Ikosi High School in 1980 and passed out of the school in 1982 was right after all, because he was relocated to that school when he was in Form 3, and he passed on of it in 1982, at Form 5.

“This has in no doubt addressed the worry of all those who have been asking that how could Aiyedatiwa enter secondary school in 1980 and pass out in 1982.

“We indeed love this sort of inquest, and we want to task the good people of Ondo State and social critics to dig into the past/present of all the governorship aspirants and sponsors, across the party lines.

“For instance, how can aspirants who can not tell how they become millionaire overnight want to become the governor of Ondo State? Those who have handled the resources of the state with questionable issues. We need to ask questions.”

[NaijaNews]