FG denies reintroducing fuel subsidy

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Africa Headlines

• Nigeria’s government denies it has reintroduced fuel subsidies –

  Following pockets of queues at filling stations yesterday, the Nigeria government through Mele Kyari denied that the government has reintroduced fuel subsidies. He argued that they fully recover their costs, though it is only the Nigerian National Petroleum Corporation (NNPPC), the State’s oil company that can import petrol now due to foreign exchange constraints. Fuel now sells for about N600 (about US $0.80 – 0.85) per litre. Crude oil prices have increased by about 2% this year, trading for over US $90 last week. Since the removal of subsidy end of May 2023, fuel prices have increased at Nigerian pumps by about 300%, raising costs of living and escalating inflation. The President has said that the price should go up no further.

• Eskom’s Mpho Makwana quits after one year in job – Eskom, South Africa’s power giants’ problems multiplied yesterday after Mpho Makwana, the company’s chair quit after just a year on the job. He was appointed September 2022 and the resignation came after the government failed to follow the recommendation of the board for a new CEO. Eskom is South Africa’s main supplier of electricity and it is owned by the government. As part of its reforms, the government is seeking to restructure the industry along the lines of Nigeria’s generation, transmission, and distribution components. Eskom has been in crisis for few years now, unable to meet South Africa electricity needs. While the country has capacity for 60,000 MWs, the ageing coal powered stations in the country have posed serious investment, financial and embarrassing challenges for the government.

• Absa to launch its 2023 Africa Financial Markets Index in Marrakech – Absa’s 2023 edition of its Financial Markets Index will be launched Thursday in Marrakech on the sideline of the annual meetings of the World Bank and the IMF. The index, now in its 7^th year, assesses African countries financial development based on measures of “market accessibility, openness, and transparency”. It provides international investors into Africa resources to gauge Africa market infrastructure. The index now covers 28 countries on the continent, including data analysis and surveys of over 50 organisations.

Global Headlines

• Fight continues in Israel – As expected, Israel continued its retaliatory attacks on Gaza yesterday. It is now the third consecutive night and day of air strikes and shelling by Israel on Gaza. The Israelis have called on about 300,000 reservists in the operation. It has mounted a complete siege on Gaza and there is now a growing humanitarian crisis in the occupied region. Meanwhile, most of those abducted by Hamas on Saturday are still in captivity, with Hamas suggesting that those captured will be used as exchange for Hamas imprisoned in Israel and in the US. This is the worst crisis in the region since 2014, going by the number of people that have been displaced – already about 200,000, a tenth of the population, have fled their homes. There are now diplomatic ramifications from the attack on Saturday and Israeli response. Saudi Arabia has suspended all peace talks. On economics, the Bank of Israel says it will sell US $30 billion to shore up the Shekel.

• Claudia Goldin awarded Nobel Prize for Economics – The American economic historian and currently the Harvard Lee Professor of Economics at Harvard University became the third woman to be awarded the Nobel Prize in economics yesterday. She won the award for her work advancing “understanding of women’s labour market outcomes”, the committee said in its announcement. Through her research covering the last 200 years, Claudia has shown how there have been shifts in women’s participation in the labour market and what drove those shifts, comprehensive accounts of women’ earnings overtime and explained gender gaps in earnings.