Business

Rishi Sunak to save billions by counting IMF cash as aid for poor

Rishi Sunak is to save billions of pounds by counting as aid financial assistance to poor countries being provided as a result of a windfall Britain has received from the International Monetary Fund (IMF).

In a move that has been condemned by former Conservative international development secretaries, the chancellor has chosen not to use the UK’s share of a new $650bn IMF global fighting fund to increase the share of national output spent on aid.

Britain received $27.4bn (£20bn) as its share of an allocation of IMF special drawing rights (SDRs) – financial assets designed to help poor countries struggling during the pandemic – months after the government decided to cut aid spending from 0.7% to 0.5% of national income.

Other rich countries are making help provided as a result of the SDRs additional to existing budgets, but the UK will stick to internationally agreed rules that allow 30% of any concessional lending through the IMF to count as aid.

Romilly Greenhill, the UK director of the global anti-poverty campaign group ONE, said she expected the Treasury to recycle about 75% of its SDR allocation and that it was likely to save between £4bn and £5bn over a number of years as a result.

SDRs are an international reserve asset issued by the IMF that can be exchanged for one of five currencies: the US dollar, the euro, the Chinese yuan, the Japanese yen and sterling.

They are given to member states in line with their shareholding at the IMF, but the chancellor said that because poor countries had greater need, the government would recycle its SDRs. In a February tweet, he said it would give “additional financing to low-income countries to help their response and recovery”.

The G7 group of finance ministers, which Sunak currently chairs, will discuss how to recycle SDRs at the IMF’s annual meeting in Washington later this week.

Two former Conservative international development secretaries condemned the decision. Justine Greening said: “Britain has already reduced its aid spend from 0.7% to 0.5% of gross national income. If we are to be a truly global Britain then we should now be focused on having the maximum impact with what remains.

“It would be counter-productive to effectively even further reduce the aid investment that saves lives and keeps fragile states stable.”

Andrew Mitchell, the former international development secretary who led the Commons rebellion against the government’s decision to cut the aid budget from 0.7% to 0.5% of national output, said Sunak should think again.

“The Treasury is quite correct to say the classification of these SDRs falls under the aid budget, but the question is whether in the midst of a pandemic Britain should agree in these exceptional circumstances they should be made additional.”

Mitchell said the money being recycled by the UK to poor countries represented a contingent liability to the UK rather than actual spending. “This underlines the benefit of making it additional to the aid budget,” he added.

Greenhill said Sunak should reverse the decision in the spending review at the end of the month.

“It’s shocking that the Treasury is planning on classifying part of our SDR allocation as overseas development assistance,” she said. “It’s yet more evidence that they’re planning further cuts to the aid budget and are not being transparent about how they’re going about it, all of which will mean the loss of yet more life-saving programmes for the world’s poorest.

“It’s even more outrageous that we are the only rich donor to be considering counting this money as aid. Because of the way SDRs work, this money comes at barely any cost to the UK taxpayer. It’s literally taking charity away from those most in need.”

A UK government spokesperson said: “The UK is one of the leading international aid donors and this year we provided over £10bn towards poverty reduction, climate change, and global health security. We will return to the 0.7% target when the fiscal situation allows.”

Business

Tinubu increases 2025 budget to N54.2tn

President Bola Tinubu has raised the proposed 2025 budget from ₦49.7 trillion to ₦54.2 trillion, citing additional revenues generated by key government agencies.

The President conveyed the budget adjustment in separate letters sent to both the Senate and the House of Representatives, which were read during plenary today by the Senate President, Godswill Akpabio.

According to President Tinubu, the increase was driven by ₦1.4 trillion in additional revenue from the Federal Inland Revenue Service (FIRS), ₦1.2 trillion from the Nigeria Customs Service (NCS), and ₦1.8 trillion generated by other government-owned agencies.

Following the announcement, the Senate President has referred the President’s request to the Senate Committee on Appropriations for urgent consideration.

He assured lawmakers that the budget would be finalised and passed before the end of February.

With this development, the National Assembly is expected to fast-track deliberations to ensure timely approval and implementation of the 2025 budget.

Business

NMDPRA seals off 19 illegal LPG depot in Delta

The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, has sealed 19 illegal Liquified Petroleum Gas, LPG, and category D cooking gas outlets in Delta State.

Speaking with newsmen on Tuesday in Warri, Coordinator, NMDPRA in Delta, Victor Ohwodiasa said the illegal gas outlets were sealed within the past two weeks.

He said they were shut in Orerokpe, Ogwashi-Ukwu and Warri and its environs of the state.

The category D class of LPG operators are the ones within localities that refill gas from licensed gas plants for customers to pick up from them.

Ohwodiasa said the illegal gas outlets were shut over offences ranging from lack of prerequisite approvals to operating such facilities in unsafe locations.

“During the operations, about 28 illegal outlets were spotted by the authorities. We tried to see if it is possible to have them regularised as they were wrongly sited.

“The outlet that was sealed in Ogwashi-Ukwu was a five metric tonnes refilling plant constructed on a roadside closed to a high tension cables.

“The authority looked at the environment, it was wrongly sited on a right of way and has no approval. It was sealed and a relocation order issued immediately.

“Other offenders were the ones doing what we called, “decanting”, meaning bottle to bottle transfer. We do not allow that.

“What they are expected to do is “bottle swap”, bring your empty cylinder and go with a filled one,” he said.

The coordinator said the essence of the exercise was not to frustrate the small scale gas business owners but to ensure they operate in a safe and secured environment.

Ohwodiasa appealed to landlords not to allocate portions to the LPG category D operators who want to do illegal business on their premises or properties.

According to him, the essence is to prevent possible fire outbreak that could destroy lives and properties of the operators and the neighbours.

He said that NMDPRA was committed to ensuring lives and properties were adequately protected.

“Imaging someone storing cooking gas close to where welding operation is taking place or where a woman is frying beans cake or roasting corn. Once there is a leakage, the resultant effect will be catastrophic.

“If the operator of the illegal outlet does not appreciate his life, it is our duty to ensure he does not kill himself and others by illegally operating such a facility,” he said.

Ohwodiasa said the regulatory authority would continue to sustain the exercise in the state and assured that anybody found wanting would face the full wrath of the law.

He also said that any offender that refused to relocate his facility would be handed over to the relevant security agencies for prosecution.

The coordinator appealed to the public to report anyone transferring cooking gas from one cylinder to another to the NMDPRA for prompt action, “help us to serve you better”.

Ohwodiasa while assuring that the regulatory body would continue to sensitise the operators, said the authority had annual stakeholders engagement with the gas plant owners and the category D operators.

He also said the regulatory authority organised jingles on Radio and Television stations to educate people on the best ways to handle cooking gas because of its volatility.

The coordinator thanked the Chief Executive of NMDPRA, Ahmed Faruok for his consistent support for the state’s operations.

Business

FG bans export of crude oil allocated to domestic refineries

The Federal Government has banned the export of crude oil meant for domestic refineries in the country.

About 500,000 barrels of crude oil per day meant for domestic refining have been finding their way to the international market as producers and traders shortchange the policy for quick foreign exchange proceeds.

Acting through the upstream sector regulator, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, the government warned that it will henceforth deny export permits for crude oil cargoes intended for domestic refining.

The commission in a statement in Abuja, insisted that any changes to cargoes designated for domestic refining must receive express approval from its chief executive.

In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the commission’s Chief Executive Officer, Engr. Gbenga Komolafe said diverting crude oil meant for local refineries is a violation of the extant laws of the country.

At a meeting last weekend, attended by more than 50 critical industry players, both refiners and producers blamed each other for inconsistencies in the implementation of the Domestic Crude Supply Obligation, DCSO, policy.

While refiners claimed that producers are not meeting supply terms and preferred to sell crude outside, forcing them to look elsewhere for feedstock, producers countered that refiners hardly meet commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks.

They, however, agreed that the regulator has put in place appropriate measures for effective implementation of the law.

The regulator cautioned against any further breaches from either party, and advised refiners to adhere to international best practices in procurement and operational matters.

The commission reminded producers not to vary the conditions stated in the DCSO policy without obtaining express permission from the chief executive before selling crude outside the agreed framework.

Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure stable supply of crude to domestic refineries and strengthen the nation’s energy security.

He said NUPRC would, henceforth, strictly enforce the policy regarding implementation and defaults by oil companies.

He stated that significant regulatory actions had already been taken by the commission, in line with enabling laws to enforce compliance with the DCSO.

These actions, according to him, include development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the creation of the DCSO framework and procedure guide for implementation.