The Nigerian Government has come into an agreement with the World Bank group to scale up disbursements for critical projects in the country.
Finance Minister, Mrs Kemi Adeosun told journalists in Washington at the end of the World Bank/IMF Spring Meetings that the power sector in particular, has received the backing of the World Bank and other development partners.
“If there is one thing that would really drive growth in Nigeria, its power. If we had to choose just one thing, it would be power because of the number of jobs it would create, the number of opportunities and amount of wealth it would create. So we have said getting power right is non-negotiable.”
She further stated that all the projects are contained in the economic recovery and growth plan adding that while the foundation has been laid, implementation is what is left.
“This phase we are now, is about implementation. We’ve put the foundations in place, now it’s about really accelerating the implementation in certain key areas and we are quite confident that we are going to get back to growth and hopefully, would be sustainable growth that would be less volatile so that even if the oil price falls in future, Nigeria would not be as vulnerable as we have found ourselves in the last few years.”
The Federal Government has commenced the verification of its monthly Budget Support Facility to the states.
The importance of the exercise is to ensure that benefiting state governments comply with the mutually agreed Fiscal Sustainability Plan prescribed by the National Economic Council (NEC).
The resolution was reached at the first NEC meeting in 2017, presided over by Vice President Yemi Osinbajo on Thursday at the Presidential Villa in Abuja, Nigeria’s capital.
The Minister of Finance, Mrs Kemi Adeosun, said that eight accounting firms have been appointed and had already begun the audit process.
She also told the council that the balance in excess crude account stands at $2,458,382,844.03 as at February 15, 2017.
The minister hinted that the National Sovereign Investment Authority (NSIA) plans to increase domestic infrastructure investment in 2017, as there are compelling opportunities in the environment.
She explained that the focus would be on social infrastructure, including affordable housing and healthcare through the development of specialist hospitals and to this end, the council has decided to inject a fresh $250 million into the Sovereign Wealth Fund sourced from the excess crude account.
On agriculture, the council was informed of the massive wheat production in Jigawa, Kano, Kebbi and Zamfara states among others.
The State Governors at the meeting, however, appealed to the Federal Government to make plans for the purchase of excess wheat to ensure price stability and sustainable production.
The council subsequently agreed to discuss and make adequate buy-back arrangements in order to support price stability.
After a brief presentation on foreign exchange policy options by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, members of the council generally expressed concern over the current situation of the exchange rate.
They called for an urgent review of the current policy, especially the gap between interbank and the parallel market rates.
In his response, Mr Emefiele sued for patience and understanding, assuring the council that the situation was being closely managed.
The federal allocation committee says monthly allocation to the three tiers of government has increased by 13 billion naira from the month of December, 2016.
Speaking with journalists after the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja, the Minister of Finance, Mrs Kemi Adeosun, said that a total of 400 billion naira has been disbursed to the federal, state and local government level for the month of December.
Mrs Adeosun said that the sum of 248 billion naira gross statutory revenue received, is higher by 8 billion naira compared with the 240 billion naira received in the month of November, 2016.
The Minister further explained that there was a revenue decline of 65 million dollars in federation export sales due to a drop in the volume of crude oil export of 1.390 million barrels.
The Minister of Budget and National Planning, Senator Udo Udoma, says the Federal Government is working hard to ensure that Nigeria’s exchange rate is stabilised in 2017.
The minister made the assertion at an interactive meeting on the 2017-2019 Medium Term Expenditure Framework and Fiscal Strategy Paper with a joint committee of the House of Representatives.
The Minister of Finance, Mrs Kemi Adeosun, who was also part of the executive team at the meeting, noted that the government was also committed to improving the supply of the dollar in 2017.
She expressed optimism that the current black market exchange rate would eventually collapse, stressing that it was based on speculation.
Mrs Adeosun asked agencies in charge to investigate the mystery behind people’s motives of buying up the dollar, while seeking to address concerns raised over the implementation of the Treasury Single Account.
After a short presentation by the ministers, the lawmakers stated their concerns regarding the various exchange rates in Nigeria and their effects.
The Chairman of the legislative committee, Honourable Babangida Ibrahim, however, said that the documents being considered must be ready as soon as possible.
He observed that the agreements reached must have implications for the 2017 budget proposal which is before the National Assembly.
Mr Ibrahim believes both executive and legislature would focus on the documents once they were passed by the lawmakers.
The Federal Government has approved a reduction in the import duties of 115 items in different sectors of Nigeria’s economy.
The Minister of Finance, Mrs Kemi Adeosun, said that the reduction was approved by President Muhammadu Buhari as part of dovish fiscal policy measures.
Mrs Adeosun revealed in a statement on Wednesday that the move was in line with the provisions of the Economic Community of West African States’ Common External Tariff (ECOWAS CET).
“This is to confirm that His Excellency, Mr President, has approved the 2016 fiscal policy measures made up of the supplementary protection measures for implementation together with the ECOWAS CET 2015-2019, with effect from 17th of October, 2016.
“Consequently, all transactions prior to the effective date of this circular shall be subjected to the tariff rates applicable before the coming into effect of this 2016 fiscal policy measures,” she said.
A breakdown of the import adjustment list of 173 items showed that the government approved the reduction of 26 items from 10% to 5%.
Similarly, the import duties of 89 items were reviewed downwards to 5% from a national list of 91 products.
The government, however, reinforced the ban placed on the importation of some items including refined vegetable oil, cocoa butter, and fruit juice in retail packs among others.
Federal civil servants have appealed to authorities to fast track the payment of their salaries to enable them celebrate the Christmas.
Those who spoke to Channels Television in Abuja said the delay in the payment of their salaries had brought them untold hardship.
It is few hours to Christmas and while preparations for some Nigerians are in top gear, some civil servants are deprived because they have not been paid their December salary.
They said it would be marked like any other day.
Finance Minister, Mrs Kemi Adeosun, had blamed the delay on the breach of the Integrated Payroll and Personnel Information System by some ministries and parastatals.
But for the civil servants, the non-payment of their salaries has not afforded them the opportunity to travel or prepare for Christmas.
They spoke on what they expected from the government before the year runs out, among which was demand for prompt payment of their salaries and other outstanding benefits.
During the weekly Federal Executive Council meeting, the Minister of Finance told reporters that Ministries, Departments and Agencies which were yet to receive salaries were those that had exhausted their budget.
She, however, said that the virement submitted to the National Assembly by the presidency was expected to address the challenges faced by workers.
The Nigerian government has assured citizens that Nigeria would be out of recession and bounce back stronger in 2017.
The government, however, cautioned the people to ensure money is spent prudently and on the right things.
The Minister of Finance, Mrs Kemi Adeosun, made the remarks while addressing a gathering of youths at a town hall meeting in Abuja, the Federal Capital Territory.
She noted that several economic palliatives have been provided in the 2017 budget designed to pull Nigeria up through improved partnerships.
Mrs Adeosun asked Nigerians not to lose hope amidst the hardships, stressing that the budget would bring recovery and growth to the nation.
The inter-sectoral meeting, which took place at the Presidential Villa, was the first of its kind where youths were invited to ask questions on the economy and development at the federal level.
Seven ministers including the ministers of information, Mr Lai Mohammed; agriculture, Audu Ogbeh and that of works and housing, Mr Babatunde Fashola, among others briefed the younger generation on steps taken by the government to ease the economic hardships.
Mr Ogbeh, who heads the foremost sector in Nigeria’s economic diversification plan, said $22 billion has been earmarked to support Nigerian youths interested in agriculture to make a good living in the coming year.
In his remarks, Mr Fashola noted that sabotage of the economy must stop and stressed that recovery was eminent with better labour relations, better infrastructural development plans, improved electricity supply and improved well-being of Nigerians.
President Buhari said: “We are optimistic that the external factors that partly contributed to push our economy into recession will ebb in 2017. Until then, I regret that the resources available to fund our missions abroad will not be as robust as we would like.
“We are working hard to turn around our national economy by effectively reforming our macroeconomic environment through measures, some of which were outlined in my budget speech to the National Assembly last week”.
The Nigerian government on Wednesday approved the appointment of five transaction advisers to run handle issuance of the proposed one-billion-dollar Eurobond in the International Capital Market which will commence in January 2017.
Nigeria Citigroup, Standard Chartered Bank, Stanbic IBTC Holdings PLC, White & Case LLP, Banwo & Ighodalo and AfricaPractice are the five parties approved by the Federal Executive Council during its weekly meeting in the nation’s capital, Abuja.
Before the approval, the Minister of Finance, Mrs Kemi Adeosun, told the Council members that the companies were expected to run all issuance programmes for the country for the next three years.
$1-Billion-Dollar Euro Bond
The minister said that the one-billion-dollar Euro Bond was part of the funding for capital projects in the 2016 budget which runs till March 2017.
Mrs Adeosun told the Council that the team of five advisers, would run all Euro Bond issuance programmes until 2019, to cut out the cumbersome process of re-tendering and selection for the programme which is already generating significant investor interest.
She stated that the selection was based on an open and competitive bid process in line with the Public Procurement Act, 2007 and a certificate of “No Objection” was received from the Bureau of Public Procurement (BPP) to award contracts to the recommended Parties.
“We have so far, received strong commitment from the international community. Investors believe in the long-term economic outlook for Nigeria, as we continue with our structural reforms and increased focus on infrastructure development to diversify the economy and grow the non-oil sector.
“Stable oil prices and steadying foreign reserves will support our plans and we expect high demand for this issue to further push down yields. We are confident that this will be a successful outing in January, 2017,” she stated.
The approval was part of two memos that were discussed and approved at the Federal Executive Council meeting presided over by President Muhammadu Buhari.
The other memo was for the amendment to the gazette for the establishment of the Hydrocarbon Pollution Restoration Project (HYPREP).
On the hydrocarbon pollution project gazette amendment, the Minister of Environment, Amina Mohammed, pointed out that it was necessary to establish crucial government structures to manage the clean-up of the Niger Delta region is reason for council’s approval.
According to him, the government’s intention is to rollout a training plan for women on livelihood in the contaminated areas in Ogoni, recruit young people in the area for the clean-up process.
The Nigerian government and the World Bank have signed a Partial Risk Guarantee agreement for the supply of gas to the Calabar Gas Plant to boost energy supply by 500 megawatts.
Vice President Yemi Osinbajo, who supervised the signing of the agreement at the Presidential Villa on Thursday, said the event was very significant for the country, as it would encourage investment in gas infrastructure.
He pointed out that going by the current power situation, the investment was worth celebrating.
The agreement for a Partial Risk Guarantee (PRG) between Niger Delta Power Holding Company (NDPHC) and the World Bank was signed to secure the supply of about 130 million cubic feet per day of gas to NIPP Calabar Plant by Seven Energy, an integrated gas company in Nigeria.
The company is investing about $500 million in the construction of gas processing facility at the Uquo Field in Akwa Ibom State.
“It will encourage investment in the gas infrastructure and we are certainly looking forward to the multiplier effects that will come from this.
“This is a very significant event for us and as we all know this is the first PRG for gas that we are signing
“Given the current power situation, we expect that this gas that will go into the Calabar plant will provide about 500 megawatts of power which is very significant given our current situation.
“The gas pipeline itself is a feat of some sort. I am told that it traverses five rivers. So, that by itself is worth celebrating. Even if all we get from social media this evening is an engineering feat, we will be quite pleased with that,” Professor Osinbajo stated.
The Vice President then commended the World Bank and other partners for the confidence in the present administration, especially in guaranteeing investment worth about $500 million.
The Minister of Finance, Mrs Kemi Adeosun, signed the agreement for the Nigerian government while the World Bank was represented by its Country Director, Rachid Benmessaoud.
The Managing Director of the NDPHC, Mr Chiedu Ugbo, told reporters that the development was significant in the development of Nigeria’s gas to power programme.
He expressed optimism that the guarantee would go a long way in addressing liquidity challenges experienced by the gas supplier for the Calabar Power Plant.
“We have had gas supply issues in the Calabar plant. But now the gas supplier is supplying the gas molecules there and they just concluded a pipeline from their field in Akwa Ibom State to the Calabar power plant,” he stated.
Explaining the role of the World Bank in the agreement, Mr Ugbo said, the Bank would back NDPHC up to make the payment “in the event that we are unable to pay and as we have time, we pay back.”
Also commenting, the Chief Executive Officer of Seven Energy, Mr Philip Iheanacho, stated that the signing of the agreement was very significant because “it is the first gas to power guarantee that the World Bank has provided for, encouraging investment in the gas sector in Nigeria”.
The Minister of Finance, Mrs Kemi Adeosun and Minister of National Planning, Senator Udo Udoma have appeared before the Senate committee on Appropriation, to give a breakdown of the level of implementation of the 2016 budget in terms of releases.
The Minister of National Planning, Udo Udoma, says so far 753 billion has been released for capital expenditure while 1.2 trillion is for personnel cost.
He said that the Federal government is short of funding and has not been able to release 100% funds for overhead.
Senator Udoma stated that the Federal Government has only released up to eight months for overhead cost.
Mrs Adeosun said that although the government is recovering looted funds almost on a daily basis, it has been facing legal constraints in recovering looted funds stacked abroad.