Even 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.
The 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.
The 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.
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.
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.
The Coordinating Minister of the economy and Minister of Finance, Ngozi Okonjo-Iweala on Monday said that the cost-cutting of the Goodluck Jonathan’s administration has helped restore Nigeria’s Excess Crude Account (ECA) to some $9 billion in oil savings, or more than double what it was a year ago. Mrs Okonjo-Iweala was addressing delegates in Abuja at the annual Nigerian Economic Summit, whose themes include reducing the high cost of governance in the country.
“Before you can even look at the centres of the economy and trying to change them and create jobs, you must have macro-economic stability,” the Minister said. “We have introduced a measure of fiscal discipline.”
“The fact that (forex) reserves are climbing now is not a miracle. It happened because of proper fiscal management. We have about $9 billion in the excess crude account. Last year it was $4 billion, so it’s more than doubled,” she added.
The figure is still lower than the $20 billion it had in it in 2007, but this was reduced to $3 billion when Mr Jonathan took office in early 2011, despite a year of record high oil prices.
And some of it would have to be used to pay for the latest round of Nigeria’s costly fuel import subsidies, she said.
Economists have cautiously welcomed Nigeria’s improved savings level, but caution that there is nothing in place to stop it being reversed, as in the past.
“There’s been some modest accumulation of fiscal savings, but put it in context: even $9.6 billion, as we estimate it, is only 3.7 percent of GDP,” said Standard Bank’s Samir Gadio.
“Compared it with UAE (Emirates) or Saudi Arabia, where it’s 65 percent. It may be improving but its well behind the curve.”
The Sovereign Wealth Fund (SWF) launched this year would in theory help Nigeria better manage its oft squandered oil funds, by putting them out of the reach of its political elites, but powerful state governors who want more money to spend are blocking attempts to transfer the ECA into the fund.
“Without the SWF there’s no sustainable basis for savings. The risk is that as we approach elections in 2015, the ECA could be depleted quite rapidly,” said Mr Gadio.
The finance minister also faces a showdown in parliament over the government’s latest budget, with some lawmakers saying too much money is being set aside as oil savings when the country needs more spending on things like infrastructure.
President Jonathan’s N4.93 trillion budget plan for 2013 assumes oil prices at $75 a barrel oil prices, but many legislators want this inflated – especially with prices now hovering around $112 a barrel.
Oil earnings over the benchmark price get deposited into the ECA, which is used to save for future generations.
Critics say running Nigeria’s government still saps too much of the budget – Mrs Okonjo-Iweala said the share of such recurrent expenditure had been reduced to 68.8 percent in next year’s budget, from its current 71.47 percent in this year’s.
Investors and rating agencies have welcomed Mrs Okonjo-Iweala’s austerity drive, with Standard & Poor’s the latest to upgrade Nigeria’s debt to BB-, with a stable outlook.
One major fiscal headache remains the motor fuel subsidy.
President Jonathan attempted to scrap it in January, but a week of strikes and protests forced him to partially reinstate it.
Since then, a parliamentary inquiry has uncovered multi-billion dollar fraud in the subsidy’s administration, and the government has exposed subsidy claims to stronger checks.
Mrs Okonjo-Iweala said that N232.2 billion of claims had been rejected so far. There is speculation President Jonathan will try to remove the subsidy – which many Nigerians see as the only benefit they get from living in an oil-rich state – next year.
Speaking at a panel in the economic summit, Vice President Namidi Sambo said it would depend on what Nigerians thought.
“We’re a democracy. Our economic policies, however well designed, have to be accepted by the public,” he said. “I believe Nigerians will come to see that deregulation is right.”
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 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.
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.
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.
Minister of Finance, Dr. Ngozi Okonjo-Iweala commended the decision of Labour leaders to call off the nationwide strike and is assuring that with the crisis of the subsidy removal over, the government can now focus on tackling the issue of corruption and ensuring Nigerians rip the benefits of subsidy removal.
She said government is hard at work putting palliatives in place that will cushion the removal of subsidy on petrol.
In an exclusive interview with Channels Television’s Amarachi Ubani, the finance minister says corruption in other sectors of the country’s economy will be addressed as well, evidenced in the ports and reduction of recurrent expenditure.
According to the finance minister, it will not be business as usual.
Defending the government’s decision to deploy soldiers in key protest areas in Nigeria, especially Lagos and Abuja, Okonjo-Iweala says soldiers were to protect the ordinary Nigerians from miscreants who had hijacked the peaceful protest.
Minister of Finance Dr. Ngozi Okonjo Iweala says rail projects, social programmes, refineries, dams and key roads will be completed from subsidy proceeds.
She reiterated the promises during a town hall meeting with staff of the ministry convened to discuss deregulation and the removal of petroleum subsidies.
The finance minister urged Nigerians to be patient, saying “we must succeed because Nigerians must not suffer in vain”. Okonjo-Iweala promised that Nigerians will derive “clear and measurable benefits from the ongoing deregulation of the downstream sector of the petroleum industry in the form of focused, timely and well thought out programmes.”
Such projects will include the construction, completion and rehabilitation of rail, refineries, key federal highways, hydro stations, information technology and water.
These promises and reassurances already sound familiar to Nigerians, but has done little to appease them. The removal of the fuel subsidy on 1 January led to the immediate rise of the fuel prices at filling stations and transport fares at bus stops.
Millions of disgruntled Nigerians, nationwide and cities around the world, have taken to the streets in protest of the fuel subsidy removal, venting their frustration at a government they consider unjust and insensitive, with some calling for an end to the Jonathan administration.
The minister told the staff that she decided to speak to them because the ministry is a front line one and “charity should begin at home”. The minister also fielded very frank questions on aspects of the subsidy reallocation policy.
In addition, the Subsidy Reinvestment and Empowerment Programme (SURE) under which the projects will be executed also provides for the implementation of short term social welfare programmes to alleviate the impact of subsidy removal on Nigerians.
These programmes will include mass transit, public works including training in artisanship for unskilled youth and social services to reduce high maternal and infant mortality rates. The projects will be funded from the Federal Government portion of the savings from ending fuel subsidies which comes to an estimated N478 billion in 2012.
She explained that subsidy removal is, strictly speaking, not an accurate description because what government is doing is subsidy reallocation into areas that will have the most impact on Nigerians and the future generations.
Acknowledging the harsh impact of the removal of subsidy on Nigerians especially on food and transport costs as well as school fees, she says that government feels the pain of Nigerians but sincerely believes that it is in the best interest of the country to take the decision.
The finance minister said the plan to introduce 1,600 buses into the country’s transportation sector as well as other measures being taken on mass transit were designed to ameliorate the impact in the short term, while assuring that the current high prices will not endure.
She said that the appointment of the Kolade Committee of eminent Nigerians to oversee the projects under the SURE programme was meant to boost public confidence in the process and assure Nigerians that “this will not be business as usual”.
Staff of the ministry who asked questions at the forum emphasised that the effects of subsidy removal are biting hard on them and asked the federal government to look into ways of reducing the suffering of ordinary Nigerians. Some expressed doubt that government will keep its promises, citing the previous governments who failed to do what they promised.
Responding the minister said: “We feel your pain. We are human beings like you. That is why this must succeed. The suffering of Nigerians will not be in vain”.