Nigeria Must End Habitual Addiction To Free Oil Money – Ezekwesili

EzekwesiliFormer World Bank Vice President, Dr. Oby Ezekwesili, says the Federal Government of Nigeria and the states need to have a proper conversation on the structure of Nigeria’s economy for there to be a way out of its current economic challenges.

Ezekwesili was speaking on Channels TV’s Politics Today and the conversation bordered on the economic crisis across Nigeria where many state governments are unable to pay their workers’ salaries and blaming this on the drop in their monthly allocation from the central government.

She stated that a conversation has become important because the decisions the government would have to make in order to fix the economy are very difficult ones that would not make the government popular among its expectant masses.

Ezekwesili was of the view that it has become critical for Nigeria to break away from an old pattern of “habitual addiction to free oil money”.

“The kinds of policies that will make us break out of this will be forced on us. We have no choice,” she said, adding that “there is no easy solution” for the situation Nigeria is in.

The former Education Minister expressed disgust at the manner in which the country failed to respond to warning signs few years ahead, despite the knowledge of the impact the volatile global oil market could have on its economy.

While commenting on the roles played by past governments in the country’s current economic situation, she acknowledged the former Finance Minister, Dr. Ngozi Okonjo-Iweala for her consistency in drawing attention to the challenges of eroding the excess crude account.

She, however, berated the Federal Government for doing “exactly the same thing as what the states did”.

“If the Federal Government could show that (from) its own portion of the distribution of federation money, it has put away some significant savings, then it will have the moral pedestal on which to stand and say the governors were completely reckless and therefore were not seeing that the signs were clear.”

She went further; “If anything I saw in some of the states is anything to go by, there were some of these frivolous projects that they embarked upon. Why do they need that?

“At a time they have those kinds of resources, those were the times to really invest in the things that drive economic growth. They could have invested in those critical infrastructure that would enable the diversification of their states’ economy.

“Every state has an economy, we haven’t treated them that way. What we have currently in our nation is that the state levels are revenue distribution units – revenue expenditure levels and that shouldn’t be so.”

She also identified the cost of governance as one of the reasons why there must be a conversation on restructuring the economy as she maintained that there are no easy options available.

“The productivity of the public sector needs to be questioned. We need to look at how to achieve efficiency of governance and policy making with resources enough to give us the space for capital investment,” she said.


FG’s Annual Budget For Fuel Subsidy Is Not Sustainable – Budget Historian

Fuel subsidyA Budget Historian, Tunji Ogunyemi, believes that the amount of money budgeted for fuel subsidy annually is not sustainable as the Nigerian economy is being stressed.

The Finance Minister, Dr. Ngozi Okonjo-Iweala, had said that the Federal Government had made a provision of 100billion Naira for the subsidy of PMS and 45.2billion Naira for kerosene subsidy in the 2015 budget.

Mr Ogunyemi, on the Thursday edition of Sunrise Daily, said that the continued budgeting of monies for regulating the pump prices of petroleum products has only enriched few Nigerians.

While admitting that removing the subsidy would cause end users some pains, he noted that the real beneficiaries of the subsidy have never been the masses but the middlemen.

He believes the Nigerian Government needs to “permit a situation in which importers face the full risk of the oscillating (oil) prices mechanism in the world” such that their prices are also dependent on happenings in the global oil market.

“This zero-risk system in which importers will be pressuring the Federal Government to pay subsidies and they do not just take any risk should be eliminated,” he said.

Speaking on the need to control the influence of middlemen in Nigeria’s oil sector, Mr Ogunyemi advised that government needs to permit some conglomerates or states to build and operate their own refineries in Nigeria, in order to cut off the need to import fuel.

“Establishing refineries need not be rocket science. It can be done by groups of states within Nigeria and it can be done perfectly in such a way that it will cut the need for importing fuel.”

He said that the reason Nigeria seemed to find it hard to manage the building of its refineries and regulate the issuance of licences to operate them is the lack of political will to sanction those who try to sabotage the Nigerian system.

Mr Ogunyemi also provided recommendations on the revitalisation of Nigeria’s power sector. The best solution, according to him is to ensure transparency.

He also said that there was a need to develop a legal framework to liberalise the sector and remove the total control of Government.

Rice Importation: Reps Summon Finance, Agric Ministers Over Waiver

Reps summon finance and agric ministersThe House of Representatives in Nigeria has summoned the Coordinating Minister for the Economy and the Minister of Finance, Dr Ngozi Okonjo-Iweala, and the Minister of Agriculture and Rural Development, Mr Akinwumi Adesina, over the alleged 21 billion Naira waivers granted some rice importers.

Chairman of an ad-hoc committee of the House, Honourable Leo Ogor, said the investigative hearing on ‘rice import quota and duty payments’ was geared towards uncovering “fraud and exposing the endemic corruption in the importation of rice, with a view to stemming the tide and boosting employment generation.

He said the investigation would  further help in strengthening the nation’s depleting foreign reserves and local production of rice.

Nigeria is the second largest importer of rice globally with an annual consumption requirement of about six million metric tons, while its domestic supply is estimated at three million metric tons yearly, with a shortfall of three million metric tons of milled rice per year.

To reduce the importation of rice, the Nigerian government through its agriculture transformation agenda is encouraging rice farming to boost local production and meet the demand.

On Tuesday, the Minister of Agriculture and Rural Development said that the alleged rice import duty scam that was widely reported to be 21 billion Naira was actually 36 billion Naira, which needed to be paid into federal coffers.

At a public hearing of the ad-hoc Committee on Rice Quota and Duty Payments on Rice Imports Quota and Duty Payments, the minister denied granting any waiver to a rice importing company, contrary to allegations that certain foreign rice investors enjoyed the minister’s relief in duty payment liabilities.

Adesina said he was the one that first raised the issue of monies owed the Federal Government by the importers, which is to the tune of 36 billion Naira even though he was not in a position to receive the monies.

FG To Pay Petroleum Marketers Outstanding N185B

OPEC Diezani-Alison-Madueke-Minister-of-Petroleum-ResourcesEven as the Petroleum Product Pricing Regulatory Agency (PPRA) claims the inability of petroleum marketers to get letters of credit is a major challenge, the Federal Government said it had paid a total of 320 billion naira to petroleum marketers in December 2014.

Addressing newsmen in Abuja, the Minister of Finance, Dr. Ngozi Okonjo-Iweala said that it had also issued a sovereign debt note to the marketers for the payment of an outstanding 185 billion naira.

The Finance Minister also said that as part of the agreement, the government would not only pay the costs that the marketers had incurred, but also the interests payment and foreign exchange differentials.

EU Aid To Guinea-Bissau To Resume After Poll

European UnionThe European Union will resume giving direct development aid to the Guinea-Bissau government after it held presidential elections rated as “free and credible,” the EU said in Monday.

The EU suspended aid to the government in July 2011 after a military mutiny. The bloc continued to give some money through international organisations and charities.

A May presidential run-off election won by former Finance Minister, Jose Mario Vaz, opened the way for a resumption of direct development aid to the government.

The decision would allow the EU to support the authorities in ensuring vital state functions and providing basic social services, an EU official said, without providing any figures.

Guinea-Bissau’s last election in 2012 was abandoned after soldiers stormed the presidential palace.

Weak state institutions, along with Guinea-Bissau’s maze of islands and unpoliced mangrove creeks, have made the former Portuguese colony a paradise for smugglers of Latin American cocaine destined for Europe.

The country would have been in line to get about 100 million euros ($136.41 million) under the previous aid program, covering 2007-2013, but it was only allocated around 40 million euros of that sum because of the EU’s restrictions.

FEC Approves $170 Million Loan To Strengthen Power

FECThe Federal Executive Council (FEC) has approved $170 million loan from the French Development Agency to strengthen power infrastructure in Abuja, the Federal Capital Territory (FCT).

The loan which is concessionary has a moratorium of 7 years period and an interest rate of 1.56 percent with repayment period of 20 years.

Finance Minister, Ngozi Okonjo-Iweala who threw light on the loan agreement which was signed by the leaders of both countries last week, on the side-lines of the Centenary celebrations, said the fund is to assist in increasing transmission base in Abuja.

The Co-ordinating Minister for the Economy noted that what has been done already is the sale of the distribution and generation companies in the power sector which does not relate to transmission that the government still hold in regulation.

The Federal Government has also agreed to float diaspora bonds to the tune of $300 million. The project, according to the federal government, will enable Nigerians abroad to invest in economic rewarding ventures in the country.

Okonjo-Iweala said the bonds were pegged at $200 million until studies showed increase in interest by subscribers abroad.

Okonjo Iweala Says FG Can’t Meet Financial Demands Of ASUU

There appears to be no end in sight for the on-going strike embarked upon by members of the Academic Staff Union of Universities as the Federal Government has declared that it does not have the resources to meet the financial demands of the University lecturers.

The Minister of Finance, Dr. Okonjo Iweala indicated this in her speech at the opening of a two-day meeting of Commissioners of Finance and Accountants Generals of states ministries of Finance in Minna.

She noted that the N92 billion being demanded by the University lecturers is not within the reach of the Federal Government.

‘At present, ASUU wants the federal government to pay N92bn in extra allowances, when resources are not there and when we are working to integrate past increases in pensions. We need to make choices in this country as we are getting to the stage where recurrent expenditures take the bulk of our resources and people get paid but can do no work’.

She stated that if the demands of the university lecturers are met and ‘we continue to pay them salaries and allowances we will not be able to provide infrastructure in the universities.’

The resumed talks between the federal government and the representatives of the striking lectures (ASUU) which was held yesterday in Abuja ended in a deadlock, recounting the last meeting before yesterday also ended in a deadlock.

However, both parties will be meeting on Monday the 19th of August, we hope that the parties will be able to reach agreeable conclusion with the recent revelation by the Minister of Finance.

Jonathan Can’t Sign 2013 Budget This Week – Okonjo-Iweala

The Coordinating Minister for the Economy and Minister of Finance, Ngozi Okonjo-Iweala has denied media reports stating that President Goodluck Jonathan is likely to sign the 2013 budget into law this week.

In a press statement signed by her Special Adviser, Paul Nwabuikwu, the Minister said, “whereas discussions between the Executive and the National Assembly are on-going in a cordial atmosphere, it is not yet clear when they will be concluded as much work remains to be done.

“Against this background, reports stating that the President will sign the budget this week are therefore not realistic.”

A local newspaper had reportedly quoted Mrs Okonjo Iweala as saying “We are working very well on the budget and we hope that within a week, we would be able to come to some kind of agreement. But I can’t say exactly.

“What we are finding now is that there are some grey or problematic areas that we need to iron out between us, in order for us to have a budget that is in the interest of the Nigerian people and that can be implemented and both sides would be satisfied.”

The Federal Government had presented N4.92 trillion on September 19, 2012 as the proposed 2013 budget to the National Assembly but the lawmakers in the twin Chambers passed N4.987 trillion on October 4, 2012, causing a disagreement between the two arms of government.

Senate confirms presentation of 2013 Budget for next week

The 2013 Budget presentation by President Goodluck Jonathan, to the national assembly may hold next week, as confirmed by the leadership of the Senate.

President Jonathan present the 2012 budget to a joint assembly in 2011

President Jonathan had earlier planned to present the 2013 budget on Thursday, the 4th of October, but the date was turned down by the House of Representatives, which claimed it is yet to conclude work on the medium term fiscal framework which is the basis for the 2013 budget.

However, Senate leader, Senator Victor Ndoma-Egba, on Wednesday announced that the president will now present the budget next week, but he did not specify the exact date next week when the budget will be presented.

Meanwhile a Senate panel has summoned the Finance minister, the Accountant-General of the Federation as well as the Governor of the Central Bank of Nigeria (CBN) over the non-release of the PTDF fund.

FG debunks claim of retrenching electricity workers without gratuity

The ministry of power has responded to the allegations of the National Union of Electricity Employees (NUEE) of federal government’s intentions to kick them out of the system without gratuity.

A statement signed by the special adviser to the Minister of Power, Anikwe Ogbuagu states that “a hand full of workers has in the last three days used all manner of force to prevent conscientious and law-abiding TCN employees from not only carrying out their legitimate duties but even gaining access to their offices. These misguided workers who are purportedly acting under the auspices of the National Union of Electricity Employees (NUEE) allege that security forces have been unleashed on them, that the TCN has been privatized and consequently handed over to Manitoba International to retrench the company’s entire workforce without their severance benefits being paid.

Mister Ogbuagu described the allegations as false and that security has since September, 2011, been enhanced at all PHCN installations and facilities across the nation because of the obvious security challenges in some parts of the country.

The statement attempts to clarify that the Transmission Company of Nigeria (TCN) has not been privatized, and will not be privatized. Since the enactment of the Electric Power Sector Reform Act in 2005, the Federal Government has always made it clear that the TCN will not be privatized, but rather managed by a company with a requisite record in this field.

Furthermore Manitoba International is coming with only eight expatriate workers. The Nigerian employees of the TCN, including the top management staff, will not leave their current positions but will stay on as deputies and “shadows” to understudy the new managers and all gratuity payments will be made.

Meanwhile the Nigeria Labor Congress has also reacted to this issue in a statement calling for more dialogue between the Federal Government and the NUEE instead of this show of force.

African Finance Ministers support Okonjo-Iweala for World Bank top job

South Africa is throwing its support behind Nigerian Finance Minister Ngozi Okonjo-Iweala as the African candidate for the World Bank presidency. The country, which chairs one of the three African seats on the 25-member World Bank board, is expected to announce this at a news conference on Friday, sources close to the discussion said on Thursday.

Sources said Okonjo-Iweala’s candidacy was proposed after meetings between South African President Jacob Zuma and Nigerian President Goodluck Jonathan.

A statement from South Africa’s Treasury said the Finance Ministers of Angola, Nigeria and South Africa would hold a news conference in Pretoria on Friday, although it did not disclose details of the agenda, Reuters reported.

Since the bank’s founding in 1946, its Presidency position has been held by U.S. citizens. Okonjo-Iweala and former Colombian Finance Minister Jose Antonio Ocampo are set to make the first concerted challenge to the U.S. grip on the top job at the World Bank.

Brazil said this week that both Okonjo-Iweala and Ocampo would be “great” candidates to replace Robert Zoellick as head of the Washington-based development institution, the latest sign of emerging nations wanting more say in how it is run, Reuters reported.

Despite the push by developing nations, it is likely that an American will succeed Zoellick as the United States has the bank’s largest voting share and is expected to win the support of other developed nation.

The United States is yet to put forth a nominee.