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Nigeria in danger as subsidy drains foreign exchange income

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Petrol subsidy and other major expenses being incurred by the Federal Government are taking a bite out of Nigeria’s declining foreign exchange earnings.

Nigeria is in the middle of a serious crunch that has strained its forex reserves, stifled the value of the naira, spooked foreign investors, and raised the cost of doing business in the import-dependent economy.

“The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above US$3.0 billion monthly in 2014 to an absolute zero dollars today,” Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said at an industry event in bemoaning the consequence of subsidy claims on the country.

Analysts and industry operators identified four activities that are eating into the government’s already lean FX income, and if discontinued, would free up more cash for the government to spend on critical infrastructure that would stimulate inclusive, robust and sustainable growth.

Struggling oil production

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Findings showed Nigeria’s forex challenges became obvious in 2016, when oil revenue, which accounts for more than half of totally collected revenue, declined significantly owing to a collapse in global oil prices and a plunge in domestic oil production volume attributed to activities of militants in the oil-rich Niger Delta.

While oil prices rebounded, Nigeria’s oil production struggled to recover from an average of 2 million barrels per day (bpd) in 2016.

Calculations by BusinessDay showed the country’s output averaged 1.34 million bpd in the first 10 months of 2022 against the 2022 budget benchmark of 1.88 million bpd, costing the nation about 161.58 million barrels in lost production worth about $16.7 billion.

The country has also been unable to meet its OPEC quota since November last year at a time of rising oil prices and severe revenue and FX woes at home.

Analysts blamed massive oil theft, vandalism of major assets, dilapidated infrastructure and declining upstream investment for Nigeria’s inability to earn more petrol dollars.

“For other countries, the rally in oil prices means more foreign exchange reserves, higher revenues, and potential economic growth. In Nigeria’s case, this blessing could turn into a curse,” Lukman Otunuga, senior research analyst at FXTM, said in a note.

Fuel subsidy

Nigeria has over time held on to the policy of capping the prices at which it sells refined fuel in the domestic market. This is irrespective of whether Brent crude — the benchmark of oil prices at the international market — increases or not.

This makes Nigeria’s state-owned oil company remit a small amount of money and sometimes zero amount into the federation account.

“It’s simple; a large chunk of Nigeria’s FX goes into payment of petrol subsidies,” Ayodele Oni, an energy lawyer and partner at Bloomfield law firm, said.

Despite its strain on Nigeria’s fiscal with foreign exchange earnings plummeting, the controversial petrol subsidy regime has also remained, with the latest end date set for June 2023. In the meantime, the practice continues to dig holes in the government finances and is set to gulp a quarter of the total budget for 2023.

President Muhammadu Buhari, who has dilly-dallied on scrapping the subsidy, shocked everyone during the presentation of the 2023 budget last October when he admitted it was unsustainable. That’s after spending N7.3 trillion subsidising petrol.

This amount is more than four times the amount it spent building new schools, health centres and equipping new science labs during the period.

In September 2022, the Economist wrote a report detailing how Nigeria is a “conspicuous absentee from this year’s merry petro-party” caused by the Russia-Ukraine war.

“Price controls are the biggest reason the boom is ruining the public purse,” the Economist said about Nigeria.

FX subsidy

Under renewed pressure from Nigerians trying to ditch expiring naira notes, Nigeria operates a multiple foreign exchange window where the US dollar can be sourced at a rate of N444/$ and another where it can be bought at a weaker rate of N780/$.

Findings showed the disadvantages of Nigeria’s current practice far outweigh its gains.

While the hard peg has the benefit of dampening imported inflation, its disadvantages include reducing the naira amount of oil revenue that goes to the federation account and undercharging duty on imports.

“A possible solution to the foreign exchange crisis in the market is for the government to ditch the failing hard peg policy and allow the naira to weaken in line with the long-term inflation rate of the currency and that of the dollar,” said Bode Agusto, chief executive officer of consulting and credit rating firm, Agusto & Co.

Agusto says Nigeria may also struggle to fully float the currency due to the volatility of its main source of dollar inflows – crude oil exports.

Debt servicing

Since the government is cash-strapped, Nigeria has resorted to huge borrowings to fund ballooning budgets thus; this has made its debt servicing obligations to widen.

New data seen by BusinessDay show Nigeria’s borrowing costs on local bonds jumped to a five-year high, adding pressure to a debt service burden that eats up more than two-thirds of revenues in Africa’s biggest economy.

As of August, debt service consumed 84 percent of Nigeria’s revenues, and the World Bank projects it could rise to 169 percent of income by 2025 if the government fails to implement fiscal reforms.

Source: Business Day

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Enugu Govt Refutes Report of Sale of Assets at ESBS, Water Corporation, Stadium, Lagos Liaison Office

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Mortuary tax not meant to generate revenue – Enugu Govt
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…Says only unserviceable assets at affected locations are to be disposed of

The Enugu State Government has dismissed as false and misleading a report in circulation on social media claiming that it is selling assets belonging to the Enugu State Broadcasting Service (ESBS), Enugu State Water Corporation, Nnamdi Azikiwe Stadium and the State Liaison Office in Lagos.

The government, in a statement issued by the Commissioner for Finance and Economic Development, Dr. Nathaniel Urama, on Wednesday, said the publication did not emanate from either the Enugu State Government or the Ministry of Finance and Economic Development.

Urama clarified that the government’s intended notice, which had not been published as of Wednesday, August 27, concerns the disposal of some unserviceable assets located at the affected government facilities, and not the facilities or institutions themselves.

He emphasised that the government intends to dispose of certain assets that have become unserviceable and are no longer of use to the state, in line with extant laws and due process.

He added that interested bidders would be required to obtain details of the assets from the Ministry of Finance and submit their bids in accordance with due process.

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“The information is erroneous and it is neither from Enugu State Government nor the State Ministry of Finance. We, therefore, advise the general public to please ignore the message circulating in the media,” he said.

The Commissioner urged the public and media organisations to verify information through official government channels before sharing or publishing it, warning against the spread of fake news and deliberate misrepresentation of government activities.

He reiterated that any official notice on the disposal of the unserviceable assets would be duly published through the appropriate channels.

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Nigeria records 8.51m terabytes of data use in first half of 2026

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Nigerians consumed a record 8.51 million terabytes of data in the first half of 2026, underscoring the country’s accelerating shift toward a digital-first economy.

Data from the Nigerian Communications Commission (NCC) confirmed this. Specifically, in January, consumption was 1.385 million terabytes; February, 1.260 million terabytes and March, 1.422 million terabytes.

In April, consumption was 1.414 million terabytes. It climbed to 1.504 million terabytes in May and 1.532 million terabytes in June.

In 2025 alone, Nigerians consumed over 13.2 million terabytes of data, a 35 per cent increase from 2024, reflecting how connectivity has become essential for daily life.

The surge in consumption was driven largely by the twin giants of the telecom sector, MTN Nigeria and Airtel Nigeria, whose half-year reports revealed data services have firmly overtaken voice as the primary revenue stream.

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According to industry figures, average monthly data usage per subscriber rose sharply, reflecting the growing reliance on mobile broadband for work, entertainment, and commerce.

Streaming platforms, social media, fintech apps, and remote work tools have all contributed to the spike in demand.

MTN Nigeria reported that its 55.7 million active data subscribers consumed an average of 14.8 gigabytes per month, representing a 15.2 per cent increase year-on-year. Overall, MTN’s data traffic surged by 25.8 per cent across its network in the period.

This translated into a massive N1.70 trillion in data revenue, a 38.4 per cent jump compared to the same period in 2025. Data now accounts for more than half of MTN’s total service revenue, dwarfing its voice earnings of N993.5 billion, which grew at a modest 12 per cent.

Airtel Nigeria also posted strong numbers, recording N691 billion in data revenue ($507 million). While Airtel’s voice services contributed to a combined N1.42 trillion in voice earnings alongside MTN, the clear trend is that data has become the dominant driver of growth.

Together, MTN and Airtel generated N2.4 trillion from data services in H1 2026, cementing their role as the backbone of Nigeria’s digital economy.

MTN invested N620.5 billion in capital expenditure during the period, focusing on expanding 4G coverage, scaling 5G rollout, and strengthening fibre infrastructure. The company’s aggressive push into next-generation networks is aimed at meeting the surging demand for high-speed connectivity.

Airtel, meanwhile, faced challenges with fibre cuts and vandalism, forcing reinvestments to stabilize its network. The operator is blending 5G expansion with satellite partnerships to extend coverage into rural and semi-urban areas, where demand for reliable Internet is rising.

Despite these investments, many consumers continue to express dissatisfaction with service quality. Complaints of slow speeds, unstable connections, and high costs remain widespread, highlighting the gap between consumption growth and infrastructure capacity.

The NCC has repeatedly urged operators to deepen investments in fibre, towers, and spectrum to sustain the country’s digital transformation. Analysts note that the sector is undergoing a structural shift from voice-first to data-led growth, with internet connectivity now central to economic activity.

Industry experts predict that Nigeria’s data consumption will continue to rise exponentially as smartphone penetration increases and more services migrate online. The rollout of 5G is expected to further accelerate usage, enabling innovations in fintech, e-commerce, healthtech, and entertainment.

The consumption of 8.51 million terabytes in H1 2026 marks a historic high for Nigeria’s telecom industry. It reflects not only the appetite of a digitally hungry population but also the broader transformation of the economy.

With MTN and Airtel leading the charge, the challenge now lies in improving service quality, expanding infrastructure, and ensuring affordable access for millions of Nigerians. As data becomes the lifeblood of communication and commerce, the telecom sector’s ability to keep pace with demand will determine how effectively Nigeria harnesses the opportunities of the digital age.

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Oji River women mobilise support for Governor Mbah, APC ahead of 2027 polls

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…Dame Madueke: Mbah’s investments in Education, Healthcare, Infrastructure transforming Oji River

Women of Oji River Local Government Area of Enugu State have pledged their support for Governor Peter Mbah and the All Progressives Congress (APC) ahead of the 2027 general elections.

The women made their position known on Sunday at a gathering organised by the Enugu State Commissioner for Culture and Tourism, Dame Ugochi Madueke, at her country home in Inyi, Oji River LGA, as part of activities to celebrate womanhood and highlight the achievements of the Governor Peter Mbah administration in the council area.

Madueke said the event was organised to bring together women from Oji River irrespective of their political, religious or community affiliations, while also providing an opportunity to showcase projects and programmes executed by the state government in the area.

She said the Mbah administration had established 20 Smart Green Schools and 20 Type 2 Primary Healthcare Centres in Oji River, while work was progressing on the Umabi-Ehuhe Achi and Enugu-Aku-Inyi roads.

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The commissioner also commended Governor Mbah for appointing indigenes of Oji River to various positions in his administration, as well as supporting women through different empowerment initiatives, including monthly financial assistance facilitated by the wife of the governor, Mrs Nkechinyere Mbah.

“Today, we are giving out a lot of wrappers, rice, food and empowerment for the women. We also have a medical team that will check their vitals and everything,” she said.

Madueke disclosed that the gathering was also used to assess Permanent Voter Card (PVC) ownership among participants, noting that only women with PVCs were welcomed into the venue.

While noting that more than 3,000 women attended the gathering, she attributed the large turnout to sustained sensitisation efforts by the Executive Chairman of Oji River Local Government Area, Mr Greg Anyaegbudike.

The commissioner said the women had resolved to support Governor Mbah and APC candidates in the 2027 elections.

“We promise him that come 2027, Oji River will deliver votes for APC from top to bottom,” she declared.

Dame Madueke said the gathering was also a demonstration of the important role women play in community development and political participation, adding that the initiative was aimed at strengthening unity among women in Oji River and creating a platform for them to engage with government programmes and development initiatives.

She said the administration’s investments in education, healthcare, infrastructure and human capital development had created tangible benefits for communities across the state, including Oji River.

Speaking, the wife of the council chairman, Mrs Uche Anyaegbudike, said women across Oji River had benefited from various empowerment and welfare programmes.

She said the initiatives had provided uniforms and wrappers to women, while petty traders, church groups and other beneficiaries had received financial assistance.

According to her, about 150 women received N100,000 each during the previous August meeting, while 20 women currently receive N100,000 monthly under an empowerment scheme.

She said the interventions had enabled beneficiaries to expand their businesses and improve their livelihoods.

Also speaking, the council chairman, Mr Greg Anyaegbudike, described the large turnout as evidence of the women’s support for Governor Mbah and the APC.

He said the women were not compelled to make any political declaration, stressing that their support was based on the impact of the administration in the council area.

“What you see here is that the crowd is organic. You can see old women coming out in their various uniforms and various groups coming here to say it is Peter Mbah.

“This is about the Smart Green Schools, the hospitals, human capital development and scholarships,” he said.

Anyaegbudike further disclosed that more than 123 indigenes of Oji River were currently benefiting from the state government’s scholarship programme for students in higher institutions.

The Commissioner for Children, Gender Affairs and Social Development, Mrs Ngozi Enih, urged the women to sustain their support for Governor Mbah and the APC.

Enih said the governor had demonstrated commitment to improving infrastructure, human capital development and the welfare of residents across Enugu State.

She also commended Madueke for bringing the women together and creating a platform for them to celebrate womanhood, highlight government interventions and discuss further development in Oji River.

The Chief of Staff to the Governor, Barr. Victor Udeh, was among other dignitaries who attended the event.

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