The federal government’s use of compressed natural gas, or CNG, offers a chance for private sector players, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.
Edun made this claim during the Afrinvest 2023 Nigerian Banking Sector Report Launch Ceremony, which was held on Wednesday in Lagos. The title of the report was “Getting Nigeria To Work Again!”
Speaking on behalf of the finance minister, Dr. Armstrong Takang, Managing Director of the Ministry of Finance Incorporated, said that a greater use of CNG will result in lower production costs for both consumers and companies. Still, he underscored the need to increase capital expenditure.
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He remarked, “I’m not sure whether any of you have been following the battle to replace CNG with PMS. We are starting out in the right direction. CNG can cost as little as half of PMS, and in certain cases, as little as a quarter, as compared to the cost of fuel.
Since petrol is cleaner than PMS and we live in a gas-dominated nation, we think that if we actively move in that direction, the cost of fueling our cars, mass transit, and even companies that run on fuel and diesel will be significantly reduced. In that direction, we are moving. When it comes to the actions being taken to create demand in that value chain, you will eventually see some announcements. A significant amount of money needs to be invested in conversion kits, refuelling stations, midstream infrastructure transportation, and upstream. That requires a significant financial outlay. We think it offers a chance for collaboration with the commercial sector.
It was also disclosed that the FG’s goals of having a 25% revenue to GDP ratio and an 18% tax to GDP ratio by 2026 are still in place.
“Successful implementation of the ongoing reforms is expected to deliver meaningful improvements across several key revenue and debt metrics by 2025,” stated the minister when discussing the prognosis.
During the event, Ike Chioke, the Group Managing Director of Afrinvest Group, emphasised the importance of cooperation in restoring Nigeria’s functionality.
“I would like to remind you that last October, we launched the 2022 banking sector report, aptly titled ‘Brace for Impact.’ On the cover, passengers on an airline were bracing for impact, believing that the plane would crash at any moment.” the speaker stated. The plane crashed later this year. We realised that no matter who won—Bola Tinubu, Peter Obi, or Abubakar Atiku—politicians could not continue operating in the same manner for an extended period of time, and that is why we are all feeling the effects of the removal of the subsidy and the depreciation of the Naira. All of these events were anticipated last year.
He continued, saying, “We think that some of the early steps that the current government has already made indicate a new direction for the economy. However, a great deal of thorough work is still needed. The reason for the title of this paper, “Getting Nigeria to Work Again,” is our conviction that more work has to be done.
“It will take a lot of cooperation from both the public and private sectors to get Nigerians back to work. When you try to stimulate the economy, you are looking at many circles that are operating independently of one another, and these circles need to be synchronised from the perspectives of monetary policy, fiscal policy, revenue when you look at NNPC, the oil and gas sector, the desk side, and financing. As we can see, the Central Bank has been printing money for the government. Therefore, even with the recently passed N2tn supplemental budget, nobody has explained to us how the money is coming in. Given that the Management Office is dealing with these issues and that the revenue has ended, how were we able to create a supplementary budget without knowing the source of income?
