Business
Old Tax Laws Made Nigerians Poor — Tinubu Defends New Reforms
BY NKECHI NAECHE-ESEZOBOR—The Central Bank of Nigeria (CBN) has warned that reckless borrowing, uncontrolled spending and poor fiscal coordination by State Governments could frustrate efforts to curb inflation and stabilise the economy.
Speaking during a stakeholder engagement organised in collaboration with the Nigerian Governors’ Forum (NGF), the Deputy Governor in charge of the Economic Policy Directorate, Dr. Muhammad Sani Abdullahi, said the success of Nigeria’s planned Inflation Targeting (IT) framework depends heavily on fiscal discipline at both federal and state levels.
He explained that inflation targeting is a transparent and forward-looking monetary policy system designed to keep prices stable, but stressed that the framework can only succeed if State Governments avoid excessive borrowing and spending that injects too much liquidity into the economy.
According to Abdullahi, state fiscal activities such as rising domestic debt, uncontrolled wage bills, heavy reliance on overdrafts, delayed salary payments, unplanned expenditures and weak debt management can all fuel inflationary pressures.
“In an inflation-targeting regime, persistent, unpredictable or expansionary fiscal behaviour at the subnational level can significantly undermine price stability,” he warned.
The Deputy Governor noted that one of the key conditions for successful inflation targeting is the absence of fiscal dominance, a situation where government borrowing forces the central bank to finance deficits by creating excess money supply.
He therefore urged State Governments to adopt more responsible fiscal practices by reducing dependence on short-term financing, aligning borrowing with debt sustainability limits, improving budget planning and strengthening internally generated revenue.
Abdullahi further identified four major responsibilities for states under the inflation-targeting system: maintaining fiscal discipline, ensuring responsible borrowing, improving cash and debt management coordination, and boosting revenue mobilisation.
He cautioned that excessive supplementary budgets, rising debt burdens and uncontrolled spending could trigger liquidity shocks capable of worsening inflation across the country.
Also speaking at the event, the Director of the CBN Monetary Policy Department, Dr. Victor Oboh, described inflation targeting as a “win-win framework” that would help households, businesses and governments by reducing uncertainty and strengthening confidence in economic policies.
Oboh said inflation control cannot be achieved through monetary policy alone, especially in a federal structure like Nigeria’s where state-level spending and borrowing decisions significantly affect liquidity and inflation trends.
Representatives from more than 20 states, including Commissioners of Finance, Economic Planning officials, Accountant Generals and State Statisticians, attended the engagement and pledged support for the CBN’s reform agenda and transition to inflation targeting.
The post CBN Warns Against Rising State Debt appeared first on Business Today NG.
The National Association of Aircraft Pilots and Engineers (NAAPE) on Sunday urged the Federal Government, the Nigerian Civil Aviation Authority (NCAA), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and fuel suppliers to urgently address the ongoing Jet A1 fuel crisis, warning that the situation is posing growing risks to airline operations and passenger safety.
In a statement issued in Abuja, the union said persistent fuel supply disruptions have continued to affect flight operations nationwide, forcing airlines to adjust schedules, delay departures and reduce route frequencies amid mounting operational costs.
NAAPE President, Bunmi Gindeh, said the situation has become a major safety concern, particularly for flight crew members facing extended duty hours due to operational disruptions linked to fuel shortages.
“The persistent disruptions to flight schedules occasioned by the Jet A1 supply shortfall have resulted in significant extensions of crew duty time beyond planned parameters,” he said.
“Fatigue impairs cognitive function, slows reaction time, and, most dangerously, erodes situational awareness,” he added.
According to the union, fatigue management remains a critical global aviation safety issue because prolonged work cycles can affect judgement, communication and emergency response capacity during flight operations.
NAAPE also warned that the economic impact of the fuel crisis is placing additional strain on airlines and aviation workers.
“Grounded or delayed aircraft generate no revenue, yet fixed operational costs persist. The strain often filters down to aviation workers through delayed salaries, reduced welfare conditions, and rising workplace stress,” Mr Gindeh noted.
The warning comes amid growing pressure across Nigeria’s aviation industry over rising Jet A1 prices and supply constraints.
PREMIUM TIMES has reported extensively on how the aviation fuel crisis continues to affect airline operations and passenger experience across the country through delays, cancellations, schedule disruptions and operational adjustments by carriers.
Most recently, on 8 May, Rano Air announced the temporary suspension of some of its routes, citing the more than 300 per cent increase in Jet A1 prices and worsening operational costs.
ALSO READ: Jet A1 crisis disrupts Air Peace flights as passengers decry delays, rescheduling
The airline said the development had placed “enormous pressure” on its operations, forcing it to scale back services on affected routes because some routes had become “extremely challenging and commercially unsustainable.”
Other domestic operators, including Air Peace, United Nigeria Airlines and Ibom Air, have also repeatedly raised concerns over rising aviation fuel costs, warning that the situation is threatening the sustainability of airline operations.
Industry operators say aviation fuel remains the single largest cost component for airlines in Nigeria, accounting for as much as 40 per cent of operating expenses in some cases, significantly above global averages.
Although the Federal Government previously intervened after airlines threatened operational shutdowns over soaring fuel prices, operators say the underlying supply and pricing challenges remain unresolved.
-
News20 hours agoMikang Stakeholders, Youths Rally Behind Plateau Speaker Naanlong and Gov Mutfwang for 2027
-
News4 days ago
Trump should take ‘forceful action’ in Nigeria; Tinubu ignoring ongoing Christian genocide: U.S. Lawmaker
-
News4 days ago
‘Nigeria govt quelled coup in Benin, can’t end Christian genocide’ – US lawmaker
-
Events4 days ago
Stakeholders Meet in Jos to Drive Implementation of Nigeria’s Human Rights Action Plan
