Business

British households will be £1,000 worse off next year, thinktank warns

British households will be £1,000 worse off next year from a cost of living squeeze created by rising energy prices and shortages of workers and supplies caused by Covid and Brexit, a leading thinktank has warned.

The Resolution Foundation said higher levels of inflation would weigh down workers’ earnings next year, contributing to a hit to the average household income in Britain at a time when the government is cutting benefits and raising taxes.

It said the average household disposable income, after adjusting for inflation, would be about 2% lower by the end of 2022 relative to forecasts made in March by the Office for Budget Responsibility (OBR), before the surge in shop and energy bill prices.

Although the OBR had predicted that household disposable income would rise in 2022, the Resolution Foundation said soaring inflation would mean households would have £1,000 less than originally forecast.

“Higher inflation reduces the amount of goods and services that households are able to afford, eroding the real value of incomes,” it said.

The warning comes amid mounting concern over the impact of the rising cost of living this autumn, as surging wholesale gas and electricity costs feed through into higher energy bills, and as the price of a weekly shop climbs.

In an intervention before Rishi Sunak’s post-lockdown budget next week, the Resolution Foundation said that, on top of the hit from inflation, many households would also have to reckon with cuts to universal credit, while workers and businesses must budget for planned national insurance tax increases.

The government slashing universal credit by £20 a week from early October will cost those households £1,040 a year, including for millions of working families, in the biggest overnight cut for social security benefits on record.

Issuing the chancellor a warning that a “cost of living crunch” was brewing from the combined impact of inflation, tax rises and cuts, the thinktank said: “Together with a £13bn raid on household incomes from increases in NICs [National Insurance contributions], and sharp cuts to universal credit, there will be major headwinds to families’ spending power in the coming months.”

Official figures show inflation, as measured by the consumer prices index, had its biggest monthly jump on record in August, hitting an annual rate of 3.2%, the highest rate in nearly a decade after a sharp rise in the cost of energy, food and drink.

The Bank of England has warned rising household energy bills will cause inflation to peak above 4% this winter, with the gauge for the rising cost of living forecast to stay at elevated levels until at least the summer before gradually fading again.

Sunak has warned the sharp jump is a key risk being closely monitored by the Treasury for the potential impact it could have on the government finances, with the cost of servicing the national debt linked to inflation and interest rates.

The Resolution Foundation said the chancellor was on course for an improvement in the government’s finances worth about £30bn next year, compared with earlier forecasts for the budget deficit. However, it said this was smaller than some economists assumed because rising inflation was pushing up borrowing costs.

The thinktank also warned that Sunak had little wriggle room over coming years because of huge uncertainties over the economic outlook.

Britain’s economy is expected to grow by 7.5% this year, the fastest peacetime annual growth rate in nearly a century, after the largest contraction over the same period in 2020.

However, growth has slowed to just 0.3% in July and August, while fears are mounting over rising inflation and a possible need to raise interest rates to compensate.

James Smith, research director at the Resolution Foundation, said: “The backdrop to the budget will be a strong recovery from the pandemic that risks being derailed by rising inflation and economic disruption that will squeeze both the chancellor’s borrowing windfall and family budgets.

“The decisions that Rishi Sunak will take next Wednesday will help to define the rest of the parliament, and the type of chancellor he’ll be remembered as.

“But amid such long-term and legacy-defining announcements, he must not forget the cost of living crunch facing families up and down the country right now.”

The Treasury said: “We are supporting people with the cost of living, including through a new £500m support fund to help vulnerable households, the energy price cap, and support with energy bills through the winter.

“Our Plan for Jobs is also helping people across the country to find great work and progress in their careers.”

Business

Fuel scarcity looms as IPMAN issues 21-day notice

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has called on Gov. Chukwuma Soludo to protect operations of marketers in the state from the plague of multiple taxes and harassment by different agents.

IPMAN which made the call at an emergency general meeting with members in Awka on Wednesday issued a 21-working days notice to shutdown operations if the grouses were not addressed.

The ultimatum was a unanimous decision of the no fewer than 700 marketers in attendance.

The meeting was presided over by Mr Chinedu Anyaso, Chairman of IPMAN Enugu Community Depot and members of his executive and Chief Linus Mgbakaogu, a national ex officio.

The marketers said they had an agreement of harmonised revenue agreement approved by Soludo and had been keeping their part of the bargain by paying as and when due.

They expressed dismay that some local government officials and agencies were coming up with different type of demand notices, arresting members and extorting money from them.

Anyaso said members were asked by the House of Assembly to produce some operational documents but IPMAN was of the position that only the Nigeria Midstream and Downstream Petroleum Regulatory Agency had such powers under the Petroleum Industry Act.

According to him, marketers agreed on annual fees/levies of N120,000 with the Anambra government which Gov. Soludo approved and we had been complying fully with the terms.

“But now we have different demand notices general purpose fee, Land Use Charge, fire, Signage, waste management and worse if it is that Local Government Councils are arresting and extorting our members under different guise.

“We are appealing to Gov. Soludo to protect our members in Anambra, we have an existing agreement, if that is no longer applicable they should sit with us for renegotiation, that is why we are asking that this harassment and extortion should be addressed.

“So we are giving a 21 days strike notice within which the state government, Local government and marketers would meet for discussion on revenue and we expect that all court cases are withdrawn and all arrested members freed,” he said.

Anyaso also called on the Federal Government to address the issue of unpaid bridge claims by members in the zube and pay them so they could remain in business.

Also Chief Linus Mgbakaogu, a national ex officio of IPMAN described the business environment for members in Anambra as hostile.

According to him, the agreement we reached with other states as we did with Anambra is still subsisting but I do not know why the governor’s order is being disregarded by various agents of state.

“Mr Governor is our person, the buck stops on his table and we expect that he should protect us,” he said.

In his speech, Mr Greg Ezeilo, Chairman of the Anambra Internal Revenue Service, blamed the misunderstanding on Local Government chairmen, who wished to assert their autonomy but promised to intervene and ensure that the areas of concern were addressed.

Ezeilo said Soludo was keen on improving Ease of Business in Anambra and would not condone anything that would jeopardise businesses.

“I will create environment for, constructive dialogue is held, I am aware you are open to negotiation and I will tell them to come to negotiate with you.

Business

Speaker Abbas laments shipping bottlenecks, revenue loss to Nigeria’s West-African neighbours

The Speaker of the House of Representatives Rt. Hon. Abbas Tajudeen, Ph.D., GCON, has called for reforms in the economy, especially with the bottlenecks in the import and export chain in the maritime sector.

While addressing a delegation of the Presidential Enabling Business Environment Council (PEBEC) at his office on Wednesday, the Speaker decried that Nigeria is losing huge revenue to the neighbouring West-African countries due to administrative issues at the borders.

Speaker Abbas assured PEBEC that the House will attend to the reforms sought by the council, especially regarding the Financial Reporting Council of Nigeria (FRCN) Act enforcement and the fate of investors at the Free Trade Zones under the Tax Reform Bills.

The Speaker said: “I feel really sad that we in Nigeria, in some areas, are doing things differently. Even from our neighbours here in West Africa, I hear complaints about customs bureaucracy, clearance… I hear about the shipping industry, ports regulatory authorities… all these are taking so long to provide… and the costs of even bringing in products to Nigeria – in some instances doubling what they collect (as duty) in our neighbouring countries.

“I think those are serious and major areas that your agency (PEBEC) needs to actually pay attention to. There is so much you can do by looking at our regulatory bodies, particularly those that are responsible for international businesses and trade, and see what you can do to make the Nigerian environment more competitive.”

Speaker Abbas raised the alarm of reports that countries are avoiding shipment to Nigeria, noting that some reports say over 75 percent of imported goods offloaded in Benin Republic are actually meant for Nigerian destinations.

The Speaker also recalled his recent visit to Morocco, where officials of the North African country criticised the bureaucracy and delay in the import and export chain between Nigeria and Morocco.

While stating that addressing the issues in the shipping system will be a win-win for the Nigerian Government and foreign investors, Speaker Abbas said the House would look at the issues raised by PEBEC and “we will take action immediately.”

The Speaker noted that the presentation by PEBEC was timely as the Senate and the House just constituted a Conference Committee on the Tax Reform Bills to harmonise the versions passed by the two chambers. He said the House would invite the council and chairman of the committee to review the proposals.

Speaker Abbas stated that the reviews would be done to enable Nigeria to respect the previous agreements signed with foreign investors in the Free Trade Zones.

He said: “You (PEBEC) have come to the right place. This is the House where we have been reforming the way we do things from Day 1. That is why our Legislative Agenda is the best working document ever crafted in the history of the parliament.”

While noting that every ministry, department and agency (MDA) has an issue that begs for attention, especially of the parliament, Speaker Abbas thanked PEBEC for finding the House worthy to present its challenges in solving problems.

He disclosed that he receives complaints “every day from the private sector, foreign investors complaining of bottlenecks” in every facet of the nation’s economic life.

The Speaker commended PEBEC for monitoring the MDAs towards creating an enabling environment for businesses in the country. He noted that the business environment is challenging while the areas of concern are many as “every sector and every agency has issues that beg for attention.”

He said: “I want to assure you on behalf of all the members that we are ready and willing to do everything humanly possible to support you so that you can succeed,” he said.

Speaker Abbas said he was excited by the youths dominating PEBEC, with most members of the delegation being under 40.

Earlier, the Director-General of PEBEC, Princess Zara Mustapha Audu, said the visit to the Speaker was on behalf of the Vice-President, Senator Kashim Shettima, GCON, who is the chairman of PEBEC.

She noted that PEBEC supervises 69 MDAs with mandates relating to the economy.

While she presented a letter from the Office of the Vice-President to Speaker Abbas, Audu sought legislative intervention of the House regarding the Financial Reporting Council of Nigeria (FRCN), saying there have been pushbacks in the economic environment over implementation of the new FRCN Act.

She particularly noted a stand-off between the FRCN and operators in the private sector.

Business

NSIB faults US assessment on safety of Nigeria airports

The Nigerian Safety Investigation Bureau, NSIB, has faulted the assessment of the US State Department, suggesting that Nigerian airports are generally unsafe.

The Director General of NSIB, Capt. Alex Badeh, in a statement on Wednesday, said regarding the recent incident in Asaba, where an aircraft was reported to have encountered animals on the runway, that the aircraft was fine and continued its journey to Abuja without any damage.

He noted that such occurrences involving animals on runways are rare in Nigeria, adding that these are not unique to Nigeria and occur at airports globally, including in the United States.

He noted: “It’s unfair to generalise that our airports are totally unsafe. We recognise the need for continuous improvement, and we commend the efforts of the Federal Airports Authority of Nigeria, FAAN, in implementing upgrades.”

Badeh said, “It’s crucial to consider the context and metrics used in such evaluations and acknowledge that challenges such as perimeter fencing and instances of wildlife intrusion exist at some airports.”

”The incident was reported to the Nigerian Civil Aviation Authority (NCAA). Since there was no significant issue, it was not reported to the NSIB.

“However, we plan to reach out to the private entity managing the airport to discuss best practices.”