Ngozi Okonjo-Iweala Briefs House Committee on Fuel Subsidy Removal

The Minister of Finance and Co-ordinating Minster of the Economy, Dr Ngozi Okonjo-Iweala, says reducing the country’s recurrent expenditure and developing its infrastructure is a major focus of the nation’s economic agenda.

The minister gave this outline when she appeared before House of Representatives’ committee on finance on Thursday.

Explaining further, she said the executive will also ensure that revenues accruing to the federal government do not get diverted, revealing that the government is aware that “there may have been ‘mago-mago’ (shaddy deals) in the payment of fuel subsidy to major oil marketers”.

She, however, said the discovery cannot be a justification for the refusal to reimburse the contentions figures and the major marketers used their funds to finance imports and needed to be paid.

Speaking on questions on subsidy payments and debt buy back by Asset Management Corporation of Nigeria (AMCON), Iweala said: “To get petroleum products into the country, the methodology has always been to engage the marketers to go and use their money to bring the oil after which it is verified and reimbursed.

“I am not trying to hold brief for anybody or say that everything is perfect, that there is no magomago inside. But what I am saying is that that money was what people spent to bring in products. So, that when you see N138billion you say hey, the government has just dished out N138billion to somebody. We are not that irresponsible. We actually have auditors who look at these amounts and advise us.

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“So, I am not saying it is perfect, don’t get me wrong, what I am saying is that the money is for transacted business. For instance, if N10billion is spent on behalf of government and the oil is being used and then you come for your N10billion to be paid back plus X for profit, if it is reasonable that I pay just even the N10billion considering that you have taken loan from a bank, does that mean that the N10b is dished out for free?

“If we don’t pay you, then you owe the bank and eventually becomes a bad loan that is taken up by AMCON. It is just a principle of doing business. This does not mean that we should allow Nigerians to be cheated, some of that money is genuine.”

While speaking on the transformation agenda of the Federal Government, the minister explained that the policy is to trim down fiscal deficit from 2.96 per cent in 2011 to 2.77 per cent in 2012, domestic borrowing down from N852.27 billion in 2011 to N794.44 billion in 2012, overhead reduced from N17.81 billion, transfers by N13.48 billion, capital vote reduced by N60.40 billion while unspent fund from 2011 fiscal year was reviewed upwards to N233.79 billion.

Chairman of the committee, Honourable Abdulmumini Jibril, tasked the minister to work on ensuring that government agencies remit what they should to government’s coffers.