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Nigeria: Jonathan Sacks NNPC Boss, Appoints Replacement By Bassey Udo President Goodluck Jonathan on Friday sacked the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Andrew Yakubu. The Special Adviser to the President (Media & Publicity), Reuben Abati, said in a statement that a replacement, Joseph Dawha, was appointed to take over from him immediately. Mr. Abati also said the President also approved the appointment of Anthony Muoneke as the Managing Director, Nigerian Petroleum Development Company, NPDC, more than five months after the seat became vacant. Also appointed for the NNPC were Aisha Abdurrahman as the Group Executive Director, Commercial and Investment, while Attahiru Yusuf, formerly Group Executive Director, Commerce & Investments, takes over from her as Group Executive Director, Business Development, NNPC. Ms. Abdurrahman was, until her appointment Group Executive Director, Business Development. Mr. Abati said all the appointments take immediate effect. Until his appointment, the new Group Managing Director of the NNPC, Mr. Dawha, who hails from Borno state, served as the acting Group Executive Director, Exploration and Production, NNPC. He was also formerly the Managing Director of Integrated Data Services Limited, IDSL, a subsidiary of the NNPC. The new Managing Director of the NPDC, Mr. Muoneke, who hails from Anambra state, is a lawyer, who was called to the Nigerian Bar in 1985. A legal expert with over 29-year experience as oil and gas lawyer, Mr. Muoneke who has practiced at both local and international levels in both the energy and power sectors, was the Executive Director, Finance & Administration, Niger Delta Power Holding Company Limited, NDPHC. Mr. Yakubu, who was appointed in July 2012, succeeded the former GMD, Austen Oniwon. After his assumption of office, Mr. Yakubu was said to have worked to maintain the production capacity at an average level of about 2.3 million barrels per day despite the challenges of pipeline vandalism. Other achievements credited to him include the successful completion of the divestment processes and assignment of equity to the NPDC, the upstream subsidiary of the Corporation and the completion of Seismic Processing Centre in Port Harcourt by the IDSL as well as the successful restoration of operations at the Warri Refining and Petrochemical Company, WRPC, after a two-year closure. Prior to his appointment, Mr. Yakubu served as Group Executive Director, Exploration and Production; Managing Director, WRPC; Executive Director, Operations, NETCO; Executive Director, Operations, Nigerian Gas Company, and General Manager, Engineering Technical Services, Engineering and Technology Division, ETD. He was also Manager, JV Oil Facilities, National Petroleum Investment Management Services, NAPIMS; Manager, East Area Oil Development Project, Mobil Producing Nigeria JV; Manager, Yoho Oil Development Project, Mobil Producing Nigeria JV as well as Manager, Bonny Terminal Rehabilitation Project. Read our earlier post on this story as well as full press release announcing the appointments below. President Goodluck Jonathan has fired the Group Managing Director of the Nigerian National Petroleum Corporation, Andrew Yakubu. Read the press statement announcing the sack and the appointment of a replacement below. STATE HOUSE PRESS RELEASE PRESIDENT JONATHAN APPOINTS NEW CEOs FOR NNPC AND NPDC President Goodluck Ebele Jonathan has approved the following appointments and changes in the management of the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Petroleum Development Company (NPDC): 1. Dr Joseph Thlama Dawha - Group Managing Director, NNPC 2. Mr Anthony Ugonna Muoneke - Managing Director, NPDC 3. Ms Aisha Mata Abdurrahman - Group Executive Director, Commercial and Investment, NNPC 4. Dr Attahir B. Yusuf - Group Executive Director, Business Development, NNPC The new Group Managing Director of the NNPC, Dr. Dawha hails from Borno state. He has served previously as the Group Executive Director, Exploration and Production, NNPC and Managing Director of Integrated Data Services Ltd (IDSL), a subsidiary of the NNPC. Mr Anthony Muoneke, the new Managing Director of the NPDC, hails from Anambra state. Called to the Nigerian Bar in 1985, he has over 29 years' experience at both local and international levels in the oil and gas as well as the energy and power sectors, including serving as Executive Director, Finance & Admin, Niger Delta Power Holding Company Ltd. (NDPHC). All the appointments are with immediate effect. Reuben Abati Special Adviser to the President (Media & Publicity) August 1, 2014 ------------------------------------------------------------------------------------------------------------------------- Petroleum to contribute $108bn to Nigeria’s GDP — McKinsey report on July 29, 2014 BY SEBASTINE OBASI Despite the challenges of insecurity, Nigeria’s ongoing struggle with poverty and withheld investments by the international oil companies, IOCs, the oil and gas sector has the potential to contribute about $108 billion yearly by 2030, up from $73 billion in 2013, a McKinsey Report has stated. The report, which was released recently stated that while the oil and gas sector is expected to grow by 2.3 percent annually, its success is still vital to the Nigerian economy. According to the report, “with the right reforms, oil production could increase from 2.35 million barrels a day on average to a new high of 3.13 million barrels a day by 2030, contributing $22 billion to gross domestic product, GDP by 2030. Natural gas output could grow by as much as six percent per year, adding $13 billion to GDP by 2030. “In total, the oil and gas sector has the potential to contribute $108 billion per year by 2030, up from $73 billion in 2013. However, this assumes that the sector is successful in dealing with current obstacles such as security and can attract fresh investment.” The report also said that Nigeria has the potential to expand its economy by about 7.1 percent annually through 2030, raising GDP to more than $1.6 trillion. This could make Nigeria a top 20 global economy with higher GDP than the Netherlands, Thailand, or Malaysia in 2030. What’s more, it added that a large consuming class is developing in Nigeria, with potentially as many as 160 million members by 2030, more than the current populations of France and Germany combined. This upside scenario is based on a bottom-up analysis of the potential for major sectors of the Nigerian economy, such as trade, agriculture, infrastructure and manufacturing. According to McKinsey, based on an expanding consumer class in Nigeria, it is projected that consumption could more than triple, rising from current $388 billion/year to $1.4 trillion/year in 2030, an annual increase of about eight percent. This would make trade the largest sector of the economy, and provides a particularly good opportunity for makers of packaged foods and fast-moving consumer items such as juices, which could grow by more than 10 percent yearly. As regards agriculture, it stated that improvements on several fronts can help raise both the volume and value of Nigerian agricultural production in the next 15 years. The sector, which is now the largest at 22 percent of GDP, could more than double from $112 billion/year in 2013 to $263 billion by 2030. It however said that this would require raising yields through greater use of fertiliser, seeds, and mechanised implements; shifting the crop mix to more valuable crops; increasing the amount of land under cultivation; reducing post-harvest losses; and raising more livestock and increasing the output of forestry and fisheries. For infrastructure, the report stated that on the average, the value of a nation’s core infrastructure – roads, railways, ports, airports, the electrical system is about 70 percent of GDP. Whereas in Nigeria, core infrastructure is estimated to be about 35 – 40 percent of GDP. It has one-seventh the roads per kilometer as India. On a per capita basis, Nigeria has one-third the residential buildings of Indonesia and one-sixth of the commercial space. Between core infrastructure and real estate, total infrastructure investments in Nigeria could reach $1.5 trillion between 2014 and 2030. This would not only make infrastructure building a major contributor to GDP, but also an enabler of growth across the economy. Also, it reported that manufacturing in Nigeria remains at a relatively early stage of development, contributing $35 billion, or about seven percent of GDP, in 2013. It has, however, achieved strong growth recently, with output rising by 13 percent per year from 2010 to 2013. -------------------------------------------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala - FG Has Adopted Three-Pronged Approach to Stop Boko Haram By Obinna Chima with Agency Report, 3 July 2014 The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said that the federal government has adopted a three-pronged approach to ensure the safety and security of lives and property particularly in the North-east states where Boko Haram attacks have been prevalent. Making this known yesterday in London when she briefed the British parliament on the Safe Schools Initiative, the minister said: "We are taking a three-pronged approach to dealing with the various dimensions of crisis, and this includes security, political and economic solutions. "On the security front, our military men and women are confronting an unprecedented challenge that they were not really trained to confront and so we thank them for their courage and bravery. The President, Commander-in-Chief of the Armed Forces, has increased the number of troops that are in the North-east from 15,000 to 20,000. "Regional cooperation on security has gotten better following a decision by neighbouring countries: Chad, Cameroun, Benin, and Niger, to each contribute a battalion of soldiers, to fight Boko Haram alongside Nigeria. "President Goodluck Ebele Jonathan has accepted offers from the international community for more surveillance, aircraft cover, and equipment that enhances our ability to locate, fight and root out insurgents." These efforts, she assured the UK parliament, were beginning to make a difference, intimating them that Nigeria's security forces busted a Boko Haram intelligence unit only two days ago. "More of these counter-insurgency actions will be forthcoming. We are prepared to do whatever is necessary today, tomorrow and in the future to secure the country," she added. "On the political front, we are working with state governments, traditional and religious leaders within the most affected regions of the country, to encourage dialogue with the sect. "The president set up a Dialogue Committee that is working behind the scenes and also a fact finding committee on the Chibok girls in particular. "And finally on the economic front, given some linkages between the insurgency and high youth unemployment, we are trying various schemes to assist the youth in the region where possible. "Using monies from our Subsidy Reinvestment Programme (SURE-P), we are implementing a Community Services Scheme that engages the youth in public works (we have so far recruited 11,500 youth into this programme - 4000 in Borno, 3500 in Adamawa and 4000 in Yobe State). "We also have YouWin, which is supporting hundreds of young entrepreneurs with grants so they can start up a business or expand existing ones to create jobs for their fellow youth. "Over the longer term, the government will vigorously pursue economic empowerment in the region through a Presidential Initiative for the North East (PINE) which is currently being developed," the minister said. She, however, told the British legislators that the president had instructed her to work with the international community, led by former British Prime Minister and UN Special Envoy for Global Education, Gordon Brown, and the Nigerian business community, led by the Chairman of the Dangote Group, Alhaji Aliko Dangote, and President of the Newspaper Proprietors Association of Nigeria (NPAN) and Chairman/Editor-in-Chief of THISDAY Newspapers, Mr. Nduka Obaigbena, in an initiative to make our schools safer. "Every child is special, every child precious, every child unique. While we will never give up on the effort to locate the Chibok girls, we must also assure parents, pupils and teachers that schools are safe. Children and teachers must be again free to go to school unharmed and unafraid. "So the Safe Schools Initiative is designed as a nationwide intervention programmes that will prioritise schools in states under emergency rule like Borno, Adamawa, and Yobe. "To this effect, the Nigerian private sector has set aside US$10 million for this initiative and the Nigerian government has immediately matched that with another US$10 million. "We are aiming for a fund of US$100 million and we have received indications of support from the World Bank, the African Development Bank, DFID, and the Norwegian and German Governments towards the initiative," she stated. Okonjo-Iweala stressed that schools must never be instruments of war, nor battlefields for terror campaigns, noting: "While we do not aim to turn our schools into fortresses, the Safe Schools Initiative will rely on needs assessments to deploy measures that will either upgrade existing security systems in schools or put in place new systems where they currently do not exist. "These measures could range from the basic, such as perimeter fences, toilet facilities for girls, use of fire retardant materials in reconstructing schools, housing for teachers, community policing and school guards, to more sophisticated measures like alarm systems, communication equipment, and solar power panels to ensure schools are well lit, "Whatever needs to be done to make all our schools safer and more secure we will consider. We will work with state governors, community leaders, teachers and parents to achieve the objectives of this initiative." She thanked the former British prime minister for his support in setting up the Safe Schools Initiative, and for his leadership of the international community on education for children, and indeed his efforts to get all of Nigeria's 10.6 million "out of school" children, into schools. She informed the parliament that the Safe Schools Initiative is just one of a three-part effort the federal government recently launched to deal with the crisis in the short term. The other two, she said, are the Emergency Relief Initiative that will step up support by our National Emergency Management Agency (NEMA) to over 3 million displaced persons and communities through the provision of emergency accommodation, food, basic healthcare and other relief items as needed; and the Reconstruction and Rehabilitation Initiative, that will help rebuild public infrastructure that have been destroyed by the insurgents. Members of parliament who listened to her speech included Brown; Rt. Hon. Harriet Harman MP, Deputy Leader of the Labour Party; Rt. Hon. Sir Malcolm Bruce MP, Chair of the International Development Committee; Rt. Hon. Justine Greening MP, Secretary of State for International Development; Alison McGovern MP, Shadow International Development Minister; and Meg Hillier MP, Chair of the All Party Parliamentary Group on Nigeria. Others present were Baroness Glenys Kinnock, former Foreign Office Minister responsible for Africa; Baroness Sue Nye, former Head of Government Relations to UK Prime Minister Brown; Lord Jim Knight, former Education Minister; Lord Paul Boateng, former Chief Secretary to the Treasury and former High Commissioner to South Africa; David Bull, Executive Director, UNICEF UK; and Rt. Hon. Andrew Mitchell MP, former UK International Development Secretary. Also, Glyn Davies MP, Phil Wilson MP, Sharon Hodgson MP, Dianne Abbott MP, Chi Onwurah MP, Lindsay Roy MP, Jim Sheridan MP, Lord Murray Elder, Ann McKechin MP, Valerie Vaz MP, Anne McGuire MP, Barbara Keeley MP, John Randall MP, Lynn Brown MP, Sandra Osborne MP and Lord Ian Blair, former Metropolitan Police Commissioner, were at the parliament during the minister's presentation. Insurgency to Impact Nigeria's GDP Similarly, the minister on Tuesday revealed that the Boko Haram insurgency will slow down Nigeria's economy again this year, knocking half a percentage point off growth like last year, adding that her 6.75 per cent 2014 growth forecast took this into account. Ngozi Okonjo-Iweala told Reuters that while the violence in the North-east might put off some potential foreign investors, those who are in Nigeria for the long-term seem to be holding their nerve, just like portfolio investors in its government debt. "We are expecting about 6.75 (per cent growth in 2014) and we have accounted for the impact of the insurgency which we think will take half a percentage point off GDP growth," she said in an interview during a visit to Berlin, Germany. Nigeria overtook South Africa as the continent's biggest economy this year, following a rebasing calculation that almost doubled its gross domestic product. The economy grew about 6.4 per cent last year, the minister said, with the Islamist rebels having most economic impact on agriculture in the North-east. The economist and former World Bank managing director said her talks with German Finance Minister Wolfgang Schaeuble emphasised "our strong fundamentals despite the challenges that we face". She sought his support for the creation of a new Nigerian development bank to improve financing to small and medium-sized private enterprises which could become an "engine for growth" as the country seeks to diversify its economy away from oil. Rebasing the country's GDP had revealed hidden strength in sectors such as services and telecoms, which had "gone to 0.7 per cent of GDP to 7 per cent" and was seeing strong growth, said the minister. She said the creation of a secondary mortgage market could help kick off growth in housing, another sector that she hoped could "help to make up for some of the lost growth". The minister cited government bonds yields of 4 to 5 per cent as evidence that financial investors were not panicking: "The prices are quite reasonable which is an objective assessment that investors may be looking at the long-term underlying fundamentals of the economy, which are strong." However, some potential foreign direct investment might be affected negatively by the Islamist insurgency, she said, but existing investors - especially those from emerging powers such as South Africa, China and Brazil - were proving resilient. "Part of our turbulence may also be linked to the upcoming election (in 2015)," the minister said. "Whenever we have elections there is always some increase in violence and disturbance." Boosting the regional economy is part of President Goodluck Jonathan's response alongside counter-insurgency efforts and attempts at dialogue with Boko Haram, which was hampered by the fact that "they have not articulated any political demands". Soyinka: Nigeria's Break-up Unlikely Meanwhile, Soyinka, speaking to Reuters at his home in Abeokuta, Ogun State, has said Nigeria is suffering a greater carnage at the hands of Islamist group Boko Haram than it did during a secessionist civil war, yet this has ironically made the country's break-up less likely. Soyinka said the horrors inflicted by the terrorists had shown Nigerians across the mostly Muslim north and Christian south that sticking together might be the only way to avoid even greater sectarian slaughter. The bloodshed was now worse than during the 1967-70 Biafra war when a secessionist attempt by the eastern Igbo people nearly tore Nigeria up into ethnic regions, he added. "We have never been confronted with butchery on this scale, even during the civil war," Soyinka said in his front room, surrounded by traditional wooden sculptures of Yoruba deities on Tuesday. "There were atrocities (during Biafra) but we never had such a near predictable level of carnage and this is what is horrifying," said the writer, who was imprisoned for two years in solitary confinement by the military regime during the war on charges of aiding the Biafrans. Soyinka, a playwright and one of Africa's leading intellectuals who still wears his distinctive white Afro hairstyle, turns 80 in two weeks. He was awarded the Nobel Prize for Literature in 1986, the first African writer to receive it. A million people died during the Biafra war, though mostly through starvation and illness, rather than violence. Boko Haram's five-year-old struggle to carve out an Islamic state from its bases in the remote northeast has become increasingly bloody, with near daily attacks killing many thousands. The conflict's growing intensity has led Nigerian commentators to predict it may split the country, 100 years after British colonial rulers cobbled Nigeria together from their northern and southern protectorates. "I think ironically it's less likely now," Soyinka said. "For the first time, a sense of belonging is predominating. It's either we stick together now or we break up, and we know it would not be in a pleasant way." Several regional movements have launched low-level independence campaigns that get little national attention. But Soyinka said fewer people were shrugging off Boko Haram's menace. "It's almost unthinkable to say: 'Well, let's leave them to their devices.' Very few people are thinking that way." Attacks spreading southwards, including three bombings in the capital since April, showed it is not just a northern problem. "The (Boko Haram) forces that would like to see this nation break up are the very forces which will not be satisfied having their enclave," he said. "(We) are confronted with an enemy that will never be satisfied with the space it has." Soyinka blamed successive governments for allowing religious fanaticism to undermine Nigeria's broadly secular constitution, starting with former President Olusegun Obasanjo allowing some states to declare Sharia law in the early 2000s. "When the spectre of Sharia first came up, for political reasons, this was allowed to hold, instead of the president defending the constitution," he said. Soyinka sees both Christianity and Islam as foreign impositions. "We cannot ignore the negative impact which both have had on African society," he told Reuters. "They are imperialist forces: intervening, arrogant. Modern Africa has been distorted." He added that while the leadership of Boko Haram needed to be "decapitated completely", little had been done to present an alternative ideological vision to their "deluded" followers, driven largely by economic destitution and despair. -------------------------------------------------------------------------------------------------------------------------- Nigeria: UK Fails to Block Proceeds of Corrupt Nigerian Oil Deal 5 June 2014 press release Campaigners demand explanation from Crown Prosecution Service The Crown Prosecution Service (CPS) has failed to prevent more than US$110 million from a corrupt Nigerian oil deal leaving the UK, even though it had powers to do so, say Global Witness and Re: Common. The anti-corruption watchdogs warn that by allowing such funds to pass through the UK unconstrained, London is acting as a conduit for corrupt money diverted from the citizens of Nigeria. The funds were held in the UK pending the outcome of a case in the High Court in London[i]. Parties in the case disputed[ii] the amounts they should be paid from the proceeds of a deal for the Nigerian oil block, OPL 245. The huge OPL 245 oil concession was awarded in 1998 by the then Nigerian oil minister, Dan Etete, to a company called Malabu Oil and Gas, of which he was a hidden owner[iii]. This took place during the rule of the notoriously corrupt military dictator Sani Abacha. Etete was convicted of money laundering in France in 2007[iv]. The oil block was sold in 2012 to subsidiaries of oil companies Royal Dutch Shell and ENI, by the Nigerian government. Shell and ENI paid $1.1 billion to the Nigerian government, which then paid the same amount to Etete's company, Malabu Oil & Gas. The Nigerian government has been called a "straw man" between Shell, Eni and Malabu[v]. The deal effectively monetised an asset that Etete had illicitly awarded to his own company, depriving the Nigerian State of over a billion dollars. A recent report by a Nigerian committee of the House of Representatives found that the oil deal was "contrary to the laws of Nigeria," "ceded away our National Interest"[vi], and recommended that the government cancel it. A middleman acting for Malabu sued the company in the UK High Court for US$200 million for his part in arranging the deal. Last July, the court awarded the middleman US$110.5 million. The parties appealed but the High Court upheld the decision in March 2014. At the end of the case, Global Witness called for the funds held to be frozen pending the conclusion of investigations under way in the UK, Italy and Nigeria[vii]. Despite these calls to restrain the funds, the CPS does not appear to have acted to freeze the money. According to reliable sources, the money was recently transferred to the Nigerian middleman's company. "This case is extraordinary. The UK courts have been used to divvy up the loot from a highly suspicious and possibly illegal oil deal, and even though there has been plenty of time to intervene, and an abundance of evidence showing the corrupt nature of this deal, the CPS has not acted to freeze the money. If London wants to avoid being labelled the global capital for laundering by state-looters, then the CPS needs to publicly explain its lack of action." said Simon Taylor, Director of Global Witness. Infographic What could Nigerians done with the $1.1bn? http://www.globalwitness.org/shellagm/ Contacts Simon Taylor, Director, Global Witness, +44(0)7957 142 121 Brendan O'Donnell, Oil Campaign Leader, Global Witness, +44(0)7912 517 128 [i] Energy Venture Partners Versus Malabu Oil & Gas, Commercial court, Queen's Bench Division, 2011-13. The case was brought by a broker who alleged that Etete failed to pay him for work he had done in obtaining a buyer for OPL245. Shell and Eni were not part of these proceedings. [ii] For more details on the case see http://www.globalwitness.org/opl245 [iii] In the July 2013 UK High Court case of Energy Venture Partners Versus Malabu Oil and Gas, Lady Justice Gloster of the Queen's Bench Division, Commercial Court ruled, "I find as a fact that, from its incorporation and at all material times, Chief Etete had a substantial beneficial interest in Malabu", Approved Judgement, Case 2011 FOLIO-792 17 July 2013. The Nigerian House of Representatives investigation into the case also found Dan Etete is the 30% owner of Malabu. See also Global Witness, 25 November 2013, "The Scandal of Nigerian Oil Block OPL 245", http://www.globalwitness.org/library/scandal-nigerian-oil-block-opl-245 [iv] Dan Etete, a former Petroleum Minister of Nigeria, was convicted of money laundering in France in 2007. [v] In a US legal case the Honorable Bernard J. Fried described the Federal Government of Nigeria's role in the deal as that of "the proverbial 'straw man'", who was "holding $1.1billion for ultimate payment to Malabu". Order to Show Cause with temporary Restraining Order, "In the Matter of Arbitration between International Legal Consulting Limited and Malabu Oil and Gas Limited and J. P. Morgan Chase and Co and all of its subsidiaries and affiliates, including but not limited to JP Morgan Chase Bank, NA", Supreme Court of the State of New York, County of New York," Index no 651733/2011, 22 July 2011, p.10. Edwards, Angell, Plamer and Dodge on behalf of Malabu to Clifford Chance LLP, 15 July 2011. [vi] On 18 February 2014 the Nigerian House of Representatives voted on the recommendation of an investigation into the deal, calling for the deal's cancellation and criticised the deal for being contrary to the laws of Nigeria, committing the country to unacceptable indemnities and liabilities while acting as an obligor, ceding away the Nigerian national interest and censured and reprimanded Shell and Eni's subsidiaries for their actions; House of Representatives Federal Government of Nigeria, Votes and Proceedings, 18 February 2014, p994 [vii] In March 2014 it was reported that Italian prosecutors in Milan are investigating ENI's role in the OPL 245 deal. The UK's Proceeds of Corruption Unit has also confirmed that it is investigating allegations of money laundering related to the oil block. Following a complaint in February 2012 by Mohamed Sani Abacha (son of former President Abacha) and Pecos Energy limited the Nigerian Economic and Financial Crimes Commission began investigating Malabu Oil and Gas and the OPL 245 deal; Wall Street Journal, 22 July 2013, "UK Investigates Money Laundering Allegations Relating to Nigerian Oil Block", http://online.wsj.com/article/BT-CO-20130722-706581.html;; Report by the Ad-Hoc Committee on the transaction involving the Federal Government and Shell/AGIP companies and Malabu Oil and Gas Limited in respect of the sale of oil bloc OPL 245, 9 July 2013 ------------------------------------------------------------------------------------------------------------------------- Nigeria: House Orders N225 Million Bullet-Proof Cars Returned to Contractor By Lawani Mikairu and Daniel Eteghe, 5 June 2014 The House of Representatives Committee on Aviation, yesterday, ordered the Nigerian Civil Aviation Authority, NCAA, to return the controversial N225 million bullet-proof cars that were purchased during the tenure of former Aviation Minister, Princess Stella Oduah, and recover the money. Chairman of the committee, Nkiruka Chidubem Onyejeocha, said NCAA have no business keeping the cars, stressing that the contract terms between NCAA and Coscharis Motors should be cancelled and the money recovered from the supplier. She made this call while on an oversight visit to the agencies at the Murtala Muhammed Airport, Lagos. She said: "What we said about the bullet proof cars is that the contract should be cancelled and that they do not have any business keeping the cars. It should be returned to the supplier and then recover our money," adding that due process was not followed in the contract. Earlier, the acting Director-General of NCAA, Engr. Benedict Adeliyela, said that the cars were parked at the NCAA's office in Abuja. Fault concession agreement Commenting on the concession agreement entered into by Federal Aviation Agency Nigeria, FAAN, and First Bank, Onyejeocha said the concession agreement was not favourable to FAAN, noting that the bank was not supposed to be doing revenue automation at the airport. She was reacting to the statement of the Managing Director of FAAN, Mr. Saleh Donuma, that FAAN did not have any relationship with Avitech, who is the company responsible for airport automation. According to Donuma, First Bank was the party that partners with Avitech to be collecting money from the airport on behalf of the bank. Onyejeocha said the house was not satisfied with the concession agreements, saying "we have a strong opinion about some concessions, especially the one with Avitech. "They said they were not directly in contact with Avitech, that it is First Bank that they know. They know that we are not satisfied and that is why they said that the zero car park had been terminated, which means their concerns is also our concern. The Bi-Courtney example "On the issue of Bi-Courtney and Meavis, I think it will be better than what we have with First Bank. That was why during the bullet-proof issue, you already access more than N600 million from First Bank because they are collecting your money. So it is wrong. "You said it with your mouth that Avitech is a technical partner to First Bank. The bank collects revenue. Do we need a bank for automation? A bank cannot come and do automation in airport. It simply means you just exist. "You are just sitting here and your money goes somewhere else. So I do not know how you will balance that. If we say Meavis is bad business, First Bank should be the worse. They do not have any business collecting our revenue. "I know that you should have somebody that should be collecting revenue and paying to the bank and that person is answerable to you since you do not have direct relationship with Avitech. It means that something is wrong because you said you do not have a relationship with Avitech that you only have relationship with First Bank. " How will FAAN have a relationship with a bank apart from keeping of your money? There cannot be even proper accounting of the revenue because as they are progressing, you are retrogressing." ------------------------------------------------------------------------------------------------------------------------- Nigeria Loses U.S.$20 Billion Annually to Crude Oil Theft - Rear Admiral Oyagha By Emma Una, 30 May 2014 Calabar — Rear Admiral Oyagha, who spoke yesterday in Calabar, Cross River State, during the Navy Week, on the topic: Harnessing Surveillance Technology in Support of Anti-Crude Oil Theft Operations in Nigeria, said that the aim of the paper was to help explore ways of harnessing surveillance technology towards enhancing Nigerian Navy anti-crude oil theft operations. According to him, Nigeria is an emerging market and one of the world's largest exporters of crude oil with a daily production capacity of 2.5 million barrels currently. His words: "In 2013, losses from crude oil theft were estimated at an average of about 55,210 barrels per day or monthly average of 1,656,281 barrels. Thus, Nigeria oil losses due to crude oil theft translate to almost $2 billion yearly in deficit to Nigeria's economy. "These loses do not only undermine Nigeria's economy in terms of foreign exchange deficit, they also pose a threat to national security for Nigerians." Rear Adm. Oyagha said that the Nigerian Navy in collaboration with the Nigerian National Petroleum Corporation, and the media, had found out that crude oil losses in Nigeria were primarily due to pipeline vandalism and operation of illegal refineries. "The Nigerian Navy anti-crude oil theft operations are particularly demanding and difficult due to thousands of oil pipelines that traverse the swamps and creeks in the Niger Delta region from which crude oil is stolen. Thus, the Nigerian Navy has continued to explore ways beyond the deployment of its ships and helicopters to support her anti-crude oil theft operations," he said. He advocated an integrated surveillance system for anti-crude oil theft operations with features to detect, monitor, track and display activities in all weathers. -------------------------------------------------------------------------------------------------------------------------- Nigeria: World Bank, French Agency Offer U.S.$243 Million for Rural Roads in Four States By Chibuzor Emejor, 29 May 2014 Abuja — The World Bank and the French Development Agency have offered $243 million in grants for construction, rehabilitation and maintenance of rural feeder roads in four Nigerian states. National Co-ordinator of Rural Access sans Mobility Project (RAMP), Ubandoma Ularamu, disclosed this at a three-day workshop on message development, review, testing and harmonisation on RAMP Communications, holding in Osogbo, Osun State. Ularamu listed the four participating states under the agreement as: Adamawa, Enugu, Niger and Osun, which are expected to pay 3 per cent of the total project costs under as counterpart funding. Under the scheme, he said 500 kilometres of rural roads would be constructed in each of the participating states. The RAMP, an agency under Federal Ministry of Agriculture and Rural Development, is saddled with responsibility of constructing, rehabilitating and maintenance of rural feeder roads to enable farmers evacuate their farm produce and enhance time to market. The National Co-ordinator assured that work would soon begin on the selected rural roads in the states, noting that the process of hiring contractors and consultants to execute the projects is already on. He pointed out that the construction of rural roads would greatly complement the efforts of the present administration to transform agricultural sector and ensure food security in the country under the Agricultural Transformation Agenda (ATA). Ularamu equally recalled that under RAMP 1, the construction of rural roads in Cross River and Kaduna States recorded huge success which also was sponsored by the World Bank and African Development Bank. Consequently, he urged the participating States in the RAMP 11 project to pay their counterpart funding for immediate take-off of the projects in the States. Also speaking, the Governor of Osun State, Rauf Aregbesola, commended the management of RAMP for its initiative to providing road infrastructure to rural communities. Aregbesola noted that the RAMP project is a positive contribution towards helping state governments in Nigeria to accelerate the pace of economic growth and development. According to Aregbesola who was represented by Moshood Adeoti, Secretary to the Osun State Government, "any development efforts can hardly be meaningful without positively touching the rural areas in significant ways." -------------------------------------------------------------------------------------------------------------------------- Nigeria: Govt Disburses N130.7 Billion to Defence Sector in Four Months - Okonjo-Iweala 23 May 2014 Abuja — The Minister of Finance, Dr Ngozi Okonjo-Iweala, on Friday said the Federal Government disbursed N130.7 billion to the defence sector from January to April. Okonjo-Iweala made this known while briefing newsmen during breakdown of the 2014 budget signed by the President Goodluck Jonathan in Abuja. She said: "Defence spending is top in everything; you know that military establishment need new things to assist them in their work and ours will not be different. "No budget will be enough to meet their demands but for now, I think the sector takes almost a trillion of the budgets. "To be specific, they have about N968.127 billion and we have disbursed N130.7 billion between January and April 2014," she said The minister explained that N85.9billion out of the amount disbursed was for personnel cost, saying that the military paid its personnel because it was yet to be integrated into the IPPIS. Okonjo-Iweala said that N3.8 billion approved by the President was being processed and would soon be released, adding that there were other additional spending. She said the delay in the passage of the budget would not hamper the running of the economy. The minister said that the law gave the executive the power to spend up to 50 per cent of the budget pending its approval. "That is exactly what we have done and you know we have disbursed N200 billion for the first quarter of the 2014 based on what the law allows us to do. "So the effect of the delay may be relatively minimal", she said. Okonjo-Iweala said the 2014 budget had focused on many policies that would be beneficial to the economy and would drive economic growth and development. The policies, she said, included housing under the Nigeria Mortgage Refinancing Company, the sugar roadmap and the automobile. She added that these policies would help drive positive growth in the economy, adding that the housing mortgage would take off by first week of June. "From June, we will advertise for the people that will benefit in the initial 10, 000 housing scheme. This will give the young ones hope to live. "Again, it also very important to hear that the concept of the Nigeria mortgage refinancing had received award and recognition at the just-concluded African Development Bank meeting. "This is to show that we are going the right way", she said. Okonjo-Iweala explained that the agriculture, aviation and solid mineral sectors would get support in form of duty to buy equipment. The duty, she said, would be basically incentives at zero per cent. Commenting on additional N53 billion to the budget, she said that the Federal Government would look for additional funding to handle it. "If not, it will be added to the N571 billion proposed to be borrowed by the government in the budget", she said. NAN ------------------------------------------------------------------------------------------------------------------------- Nigeria: President Jonathan Signs 2014 Budget As Defence Gets 20 Percent By Bassey Udo, 24 May 2014 The Federal Government on Friday finally released to the public the 2014 budget approved by the National Assembly and signed by President Goodluck Jonathan. The budget was signed by the President on Friday. Presenting the approved figures in Abuja, the Minister of Finance, Ngozi Okonjo-Iweala, said out of a total budget of N4.962 trillion, the allocation to the defence sector took about 20 per cent, totalling N968.127 billion because of the growing insecurity situation in the country. Out of the total provision for the sector, Mrs. Okonjo-Iweala said between January and April, government had disbursed about N130.7 billion to relevant authorities, including the army, navy, air force, police, and civil defence. Of the disbursed figure, about N85.9 billion was to take care of the personnel costs of the agencies, which was handed to the military authorities for direct payment to their personnel. She said based on the president's contingency last year, some money was also used for the payment of additional N24.8 billion, while another approval by the President of N3.8 billion was still being processed. Assuring that government has done its best to disburse as and when due monies to agencies under the defence sector as needed for their operations, the minister said there were other requirements that needed extra allocation, including those for joint task force and special operations against terrorism. "No amount of budgetary provision can be enough for the military," she said. "The military all over the world that engages in war does not always have enough, particularly in this new type of war against terror, which requires equipment to assist them. I don't think the Nigerian military would be different from any other in the world in the same circumstance." Mrs. Okonjo-Iweala said government needs to spend expeditiously to ensure the defence sector receives the right support to prosecute their counter-insurgency operations. On specific policies designed to help create jobs and grow the economy, the minister said the operations of the Nigeria Mortgage Finance Corporation launched early this year by President Goodluck Jonathan would commence in June with adverts inviting the initial 10,000 prospective beneficiaries of the mortgage finance programme. She identified the scheme as some of the direct benefits that would accrue from the budget, and said government deliberately introduced the policy to support mortgage refinancing schemes to promote greater liquidity in the economy for housing. "Government has been working since January to put in place all the relevant institutional frameworks and policies that would support and pick up additional mortgage financing in the economy for housing production. By the beginning of June, government would begin to advertise for people who would benefit from the initial 10,000 mortgages for low income earners," she said. She said other sectors through which the government has introduced policies in the budget to grow the economy and help create jobs include manufacturing, agriculture, automobile, aviation and solid minerals, where there would be lower preferential tariffs on equipment to encourage more participation. She said the delay in signing the budget by the president has minimal impact as it did not hamper the running of the economy. This, she said, was because of the provision in the constitution, which allowed government to continue the implementation of the budget up to 50 per cent based on the previous year's budget before the approval of the new budget. "Implementation of the budget has not impeded the impact of the performance of the economy, as salaries and debt service have been paid as and when due; while N200 billion capital budget has been released for the first quarter, the second tranche is to be released next month," she said. On the N53 billion padding in the budget by the National Assembly, the minister said it was scattered through the capital and recurrent budget to beef up allocations in certain sectors including the police spending, army and other security agencies. The Director General, Budget office of the Federation, Bright Okogu, who provided the details of the revised budget, said the approved Medium Term Expenditure Framework, MTEF, was based on $77.5 per barrel benchmark price for oil as against N79 per barrel last year. He said the exchange rate was left at N160 to the dollar as in 2013, with real gross domestic product, GDP, growth rate put at 6.75 per cent. Mr. Okogu said on the basis of the various assumptions, the aggregate revenue for the three tiers of government before applying the sharing formula stood at N10.88 trillion, with the Federal Government's share at N3.73 trillion, compared to N4.13trillion in 2013. While total expenditure was N4.695 trillion, recurrent non-debt spending, made up of salaries, overheads, and other transfers was about N2.455 trillion; provision for debt service, N712 billion; statutory transfers to identified entities like the National Assembly, Niger Delta Development Commission, Universal Basic Education, National Human Rights Commission and others, N408.69 billion. Provision for capital expenditure is N1.119 trillion as against N1.59 trillion in 2013. When the capital component of the MDAs that got the statutory transfers is added, the figure for capital expenditure rises to N1.287 trillion. Allocation for the Subsidy Reinvestment and Empowerment Programme, SURE-P, activities is N268.37 billion. Mr. Okogu said the fiscal deficit ration of about 2 per cent of GDP before the rebasing was reasonable, as it fell below the 3 per cent rate allowable under the provisions of the Fiscal Responsibility Act requiring government to keep the deficit in the annual budget. -------------------------------------------------------------------------------------------------------------------------- Nigeria: Senate Passes N4.7 Trillion Appropriation Bill - Approves N7 Billion Confab Vote, As Education Gets Lion Share By Johnbosco Agbakwuru, 10 April 2014 President Jonathan signs the budget (file photo). Abuja — THE Senate, yesterday, passed the 2014 Appropriation Bill of N4,695,190,000,000 into law and advised the executive to implement the budget as passed. Out of the total budget passed for the 2014 fiscal year, which is N52,230 billion higher than the initial amount of N4,642,960,000,000 proposed by President Goodluck Jonathan, N2,454,887,566,702 was for recurrent expenditure, N1,119,614,631,407 for capital expenditure, N408,687,801,891 for statutory transfer and N712 billion for debt service. Also in the budget is N268,370 billion, which is for the Subsidy Reinvestment Programme, SURE-P, a component of the budget, which did not form part of the aggregate budget figure of N4,642,960,000,000 as proposed by the executive, which was however captured in the final compilation of the Bill. The Joint Senate Committee on Appropriation stated that in preparing the details of the 2014 Appropriation Bill, the Committee adopted a benchmark price of $77.50 per barrel of crude oil, the executive proposal of crude oil production of 2.3883 million barrels per day, and an exchange rate of N160 to US$1. Education gets largest share A breakdown of the budget indicated that education got the highest figure of N373,532,095,037, closely followed by defence, which got N314,347,339,871, while Police Formation and Commands was allocated N295,561,812,085. Before the consideration and passage of the budget, the opposition party senators, comprising mainly the All Progressives Congress, APC, had voted against its consideration, but the Senate President David Mark ruled against their opposition. The clause by clause consideration of the bill during the plenary was going smoothly until they got to the N7 billion earmarked for the ongoing National Conference. APC Senators attempted to frustrate the approval of the budget for the conference, but it took the maturity and tact of Senator Mark for the clause to pass through. Senator Ahmed Lawan from Yobe had informed the Senate that during the debate on the budget, Senators condemned the N2 billion allocated to the entire North-East for capital expenditure, where it was agreed that something should be done to increase the amount, yet it was still the same in the passed budget. However, Senator Mark appealed to him that something would be done to address the imbalance. Process It will be recalled that President Jonathan had on December 19, 2013, through the Co-coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, laid before both chambers of the National Assembly the 2014 Appropriation Bill, containing the estimates of revenue and expenditure of the federation for the 2014 fiscal year. The Senate subsequently debated the general principles of the Bill and read it the second time on January 23 after which it was referred to the Committees on Appropriations and Finance for further legislative action. They jointly referred the schedules of the bill to the appropriate Standing Committees on money bills in line with Order 92(4) (a) of the Senate Standing Order. The Chairman, Senate Joint Committees on Appro-priation and Finance, Senator Ahmed Maccido, said: "The 2014 to 2016 Medium Term Expenditure Framework and Fiscal Strategy Paper, upon which the 2014 budget was based, just like the previous editions, will require being refined and re-tooled in procedure and process." According to him, "a major issue here is in the planning that required the engagement processes with all stakeholders which will have added effective value to the budget process, with obvious multiplier effect on the economy. "The drop in oil production volume as reflected in the budget estimates of the past two years remains a disturbing phenomenon. The obvious reason has been traced to the obstruction to oil production as a result of pipeline vandalism and crude oil theft." The committees also decried the inability of ministries, departments and agencies to fully implement budgets. According to the committees, the development, which has become a recurring decimal was becoming worrisome. Surplus cash Senator Bukola Saraki observed that the number of daily crude oil production was not indicated in the budget. Although the Senate President did not comment on it, Senator Maccido told journalists that whatever is surplus would go to the Excess Crude Account. Commending the joint committees for their efforts, the Senate President urged the executive arm of government to ensure full implementation of the budget. With the passage at the Senate, the budget Bill now awaits the concurrence of the House of Representatives before it is sent to the President for assent. -------------------------------------------------------------------------------------- Nigeria: Fresh Allegations On Petroleum Minister's Chartered Jet BY MUSA ABDULLAHI KRISHI AND IBRAHIM KABIRU SULE, 27 MARCH 2014 Petroleum minister Diezani Alison-Madueke may have expended up to €600,000 per trip for overseas travels since her assumption of office in 2010, it was learnt yesterday. This was contained in a document before the House of Representatives committee on Public Accounts which is currently investigating the alleged N3 billion plane maintenance fees by the minister. Last week, the House resolved to investigate Diezani following allegations that she spent up to N10 billion for maintaining a private jet, out of which N3 billion was said to be for maintenance alone, while N7 billion was for crew allowances and hanger costs. The House had described the amount as unacceptable and mandated PAC to forge ahead with its preliminary investigation on the matter, in the face of the acute shortage of budgetary allocations to ministries and agencies. However, while this was happening, it was gathered yesterday that the committee had uncovered a new chartered jet being used for foreign trips by the minister. A source told our reporters that the committee received a flight manifest of the chartered jet whose registration number was given as OF-LGX GLOBAL EXPRESS, the number of trips done, dates as well as destinations. The source said that certain names including that of the minister appeared on the document, which raised suspicion about the whole operations. Efforts to get reaction of the committee chairman, Rep Solomon Adeola-Olamilekan (APC, Lagos) were not successful as he was said to be very busy with other legislative matters. But our source maintained that the committee had resolved to summon all the personalities whose names appeared on the manifest. The Nigeria National Petroleum Corporation (NNPC) had on Monday denied operating any private jet for the minister. ---------------------------------------------------------------------------------------- Nigeria: Reps Uncover Another Diezani's State-Sponsored Private Jet BY ADESUWA TSAN AND EDEGBE ODEMWINGIE, 26 MARCH 2014 Barely a week after the House of Representatives raised the alarm that the minister of petroleum, Mrs Diezani Alison-Madueke, had spent about N10billion of public funds on the maintenance of a Challenger Jet for her private use, it has been gathered that she also maintains another jet for international trips only which is estimated to gulp about €600,000 per trip. The House last week, while acting on a motion raised by Hon Samuel Adejare (APC, Lagos), mandated its committee on Public Accounts to investigate whether Diezani actually spent taxpayers' N10billion on maintaining a private jet which costs €300,000 per trip. LEADERSHIP however gathered last night that documents obtained by the Public Accounts Committee (PAC) in the course of its investigation revealed that the minister also allegedly maintains another jet for international flights and it costs as much as €600,000 per trip. The document, according to a source in the committee who spoke on condition of anonymity since the probe is ongoing, said the panel is in possession of a flight manifest of the chartered jet whose registration number is OF-LGX GLOBAL EXPRESS, the number of trips it has undertaken, complete with dates and destinations. He added that the lawmakers have decided to summon people whose names are on the manifest to testify in the investigative hearing on the subject. The Nigeria National Petroleum Corporation (NNPC) yesterday defended the minister on the initial accusation of wasting N10bn on the Challenger jet, saying the corporation reserves the power to maintain such facility in line with its 2004 Act. While denying operating any private jet for private use of Diezani, NNPC spokesman, Dr Omar Farouq Ibrahim, said no law prohibits it from owning or chartering an aircraft, explaining that the corporation engages third parties for the provision of services outside of its core business. In a related development, the committee has summoned the accountant-general of the federation, Mr Jonah Otunla, acting governor of the Central Bank of Nigeria (CBN), Dr Sarah Alade and Director-General of the Budget Office of the Federation, Bright Okogu, to explain why N69.6 billion oil subsidy fund is unaccounted for. In a bid to exonerate itself from any wrongdoing, NNPC officials had told members of the committee that the money in question was never cash-backed and had made efforts to make the Budget Office and AGF write formally to affirm this position to no avail. Responding, chairman of the committee, Hon Solomon Olamilekan Adeola (APC, Lagos) gave the NNPC leave to write a formal letter explaining the non-receipt of the said N69.6 billion subsidy fund. He also summoned the CBN, AGF and Budget office to explain why such sum of money was disbursed without any documentary evidence. ---------------------------------------------------------------------------------------- Nigeria: Abati Clarifies Jonathan's Comment On Unremitted U.S.$10 Billion Oil Money BY GEORGE AGBA, 26 MARCH 2014 The presidency has refuted media report that President Goodluck Jonathan confirmed that $10bn is yet to be remitted by the Nigerian National Petroleum Corporation (NNPC) into the federation's account. Presidential spokesman, Dr. Reuben Abati, who made the clarification in a statement made available to LEADERSHIP yesterday insisted that the president never made such a confirmation. Abati, who quoted the exact words of Jonathan during his meeting with the Nigerian community in The Netherlands, stated as follows: "As at the time, the Finance Ministry was saying they had not been able to reconcile only $10 billion. There are issues in NNPC but we are on it". Abati further claimed that at no time during the well-attended reception did Jonathan also confirm any "irregularities in the NNPC", even as he described reports to this effect as "completely false and a total distortion of the President's comments. The statement further states that , "Sensational reports in the media to that effect are reckless, mischievous and unprofessional misrepresentations of the President's restatement to the Nigerian community of the Federal Government's position on the allegation that $20 Billion is "missing" from the NNPC or the Federation Account, by reporters who were not at the event or even in Holland at all. "President Jonathan's verifiable words while responding to questions from members of the community on the allegation and other domestic issues were clear and unambiguous. After asserting that allegation that various sums - $49.8 Billion, $12 Billion or $20 Billion - were missing are inconsistent and lacked credence, the President's exact words were as follows: "President Jonathan went on to say that to reassure Nigerians of his administration's continued commitment to openness, transparency and probity in the aftermath of the unsubstantiated allegations, the Federal Government had authorised a professional forensic audit of NNPC accounts to clear the air". The presidency further noted that it deplores the mischievous and unethical distortion of the president's comments in the media today, even as it urged "the media to show greater regard for truth and accuracy when reporting on the President". ---------------------------------------------------------------------------------------- Nigeria: How Bankers Stole N3.8 Billion From Customers By NSE Anthony-Uko, 20 March 2014 Despite stricter internal control processes as stipulated by the Central Bank of Nigeria (CBN), bankers in the country still succeed in stealing more money from their customers. Data released by the CBN indicated that the amount stolen by bankers from their customers increased by a whopping 60.8 per cent to N3.8 billion in the first half of 2013 compared to the N2.5 billion stolen in the corresponding period of 2012. This rise in stealing from customers has also reflected in the rising number of bankers arraigned before different courts for alleged stealing of various amounts of money. The data contained in the Economic Report for the first half of 2013 also indicates that the bankers attempted to steal a total of N22.4 billion during the period compared to N7.1 billion attempted theft in the corresponding period of 2012. "There were 2,478 reported cases of fraud and forgery valued at N22.4 billion during the period. "This was higher than the 2,300 recorded cases valued at N7.1 billion in the corresponding period of 2012. Of this amount, actual loss incurred by the banks was N3.8 billion representing 17.1 per cent of the total fraud amount, compared with N2.5 billion in the corresponding period of 2012. According to the CBN, the frauds were carried out through diverse means including fraudulent withdrawals from customers' accounts, suppression and conversion of customers' deposits, theft, illegal funds transfer, cheque defalcations, and fraudulent ATM withdrawals. The apex bank stated that a total of 759 complaints were made by the banking public against deposit money banks (DMBs) in respect of excess charges, conversion of deposit, unauthorised deductions, among others, in the first half of 2013. Out of this, 88 petitions were resolved while the remaining were at various stages of resolution. Total claims from customers against the DMBs at the end of June 2013 in relation to the complaints amounted to N5.73 billion and $1.05 million, while total refunds by the DMBs stood at N1.45 billion and $829.22 respectively. According to the apex bank, measures such as implementation of stricter internal control, improved technology audit to routinely check employees' activities and a more thorough approach to hiring employees for highly sensitive areas of operation have been recommended to the banks to mitigate the increased operational risk as a result of these frauds. It is also expected that the biometrics project also being implemented in the banking system as well as the National Identification Number scheme would help to reduce the level of fraud perpetrated on bank customers' accounts since it would make it very difficult for anyone other than the real owner to have access to an account. Banks have already commenced the registration of customers following the biometrics solution project instituted by the CBN and the Bankers' Committee at the cost of $50 million. The exercise would provide a central database for all bank customers across the country. -------------------------------------------------------------------------------------- Nigeria: Oil Revenue - U.S.$10.8 Billion, Not U.S.$49.8 Billion Unaccounted for By Ndubuisi Francis, Omololu Ogunmade, Chineme Okafor and Alike Ejofor, 19 December 2013 Oil thief cartoon. Findings from a two-day high level reconciliation meeting between the Nigerian National Petroleum Corporation (NNPC), Central Bank of Nigeria (CBN), Ministries of Finance and Petroleum Resources, as well as other revenue agencies of the federal government have established that the bulk of the allegedly unremitted $49.8 billion oil revenue has actually been remitted to the Federation Account. The discovery that of the $49.8 billion the CBN governor, Mallam Sanusi Lamido had alleged in a letter to President Goodluck Jonathan had not been remitted by NNPC, it was $10.8 billion from domestic crude oil receipts that had not been remitted, forced Sanusi to express regret over his letter and an admission that he was wrong. Sanusi in the said letter that NNPC could not account for crude oil receipts to the tune of $49.8 billion between January 2012 and July 2013. The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala; Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke; Sanusi Lamido Sanusi; and Group Managing Director (GMD) of NNPC, Andrew Yakubu, among others, addressed a crowded press conference in Abuja yesterday after a two-day reconciliation meeting. Okonjo-Iweala, who spoke first said: "We are here to talk about the issue of $49.8 billion that has been in the press as an amount missing from the Federation Account. We just said we will come together and talk to you because we have received many enquiries and this has been in the media and topical. "What we have done prior to talking to you is to spend two days with our staff from the Ministry of Petroleum Resources and NNPC, from the Ministry of Finance and the Central Bank and our technical teams have been working and reconciling figures so that we can get to the bottom of the questions that have arisen. "I just want to say that this reconciliation is still an ongoing matter, but we thought at this point in time, after working till last night, that we should share with you some of our thoughts and clarifications on this issue. And that is why we are here to resolve this and get to the bottom of this matter. "What we have done so far shows that for the $49.8 billion and that is the first point we want to make; there are some, perhaps, misconceptions or misunderstandings that led to this figure and we have been able to come to the conclusion that we can account for this amount. "The second point is that within this, there are some shortfalls that both the NNPC and the Ministry of Finance have been working on for quite sometime. Even the CBN knows that it is an ongoing matter and we will come to that through the FAAC (Federation Account Allocation Committee). "But the first point is the $49.8 billion, to clarify that we have been able to account for this amount." She stated that the reconciliation meeting over the unremitted $49.8 billion was done to make sure that Nigerians received answers to their enquiries, adding, "We have been able to get to the bottom of the $49.8 billion that was indicated in the CBN memo." She pointed out that due to the way crude lifting is configured, some were being lifted for other parties to the tune of $25 billion, which was said to be missing but which was actually remitted into the Federation Account. "So the bulk of the sum of $49.8 billion has been accounted for and that is what the reconciliation exercise was about. So it is very clear that this is not missing," Okonjo-Iweala said. Okonjo-Iweala explained that the CBN was moved to raise the issue of an observed gap in expected revenue from crude oil lifting following its interpretation of data from pre-shipment inspection agents, which had reported that a total of 594.02 million barrels of crude oil amounting to about $65.3 billion was lifted by the NNPC over the period between January 2012 and July 2013 with only $15.53 billion paid to the Federation Account. She, however, pointed out that the reconciliation meeting was able to discover observed sources of discrepancies, adding that NNPC's disclosure at the meeting also indicated that CBN underestimated the actual proceeds from crude oil exports over the period by $1.79 billion possibly due to timing differences and lifting by the Nigerian Petroleum Development Company (NPDC), which was not included in the CBN report. At the meeting, the NNPC was said to have noted that the actual proceeds from crude oil exports over the period amounted to $67.12 billion - about $1.79 billion higher than the revenues reported by the CBN. According to the findings from the meeting, NNPC's records showed that total revenues of $67.12 billion comprised revenue which directly accrued from NNPC to the Federation Account of $14 billion, and additional revenues lifted by NNPC on behalf of other parties: for FIRS-$15 billion; for DPR - $2 billion; for NDPC - $6 billion; and for third party financing - $2 billion. In addition, domestic crude lifted by the NNPC amounted to about $28 billion. The domestic crude component was not reflected in the CBN's foreign accounts but rather paid directly in naira into the Federation Account. In Okonjo-Iweala's words: "Taking account of these various exports conducted on behalf of the non-NNPC parties, the total of $67 billion was mostly accounted for. This substantially addresses the issues raised by the CBN." She noted that "the Federation Account indicates that over the period January 2012 to July 2013, a shortfall of $10.8 billion was recorded from domestic crude oil receipts" and had been acknowledged by the NNPC. But the magnitude of the shortfall, she said, was still disputed by NNPC. The shortfall was explained to be the result of subsidy claims, unrecovered crude/product losses and cost of strategic petroleum storage, which is currently not captured in the PPPRA template for refunds," she added. Sanusi, who also spoke shortly after Okonjo-Iweala, noted that the CBN had within the context of its letter to the president called for an investigative audit in revenue from crude oil following consistent drop in revenue in contrast to increasing price per barrel in the international market. He stated that the CBN never sent out any media statement on the development, adding that as the custodian of the federal revenue, it had the responsibility to raise the alarm on possible threats to national finances. "Since it is the first time I am speaking about this matter in the public, I think it is important to give a little context. First of all, it is important to remember that the CBN never issued a public statement or a press statement on this matter. "The CBN wrote a letter to the president, which unfortunately found its way to the press and that letter was at best an invitation to begin investigation. It was not an end or a conclusion of an audit or investigation. Conclusions drawn before investigation were premature," he said. He said the CBN and finance ministry had been concerned at the decline in the Excess Crude Account (ECA) despite the fact that oil price is high, stating, "We were concerned at what we saw as a gap between what we had in our records as the value of crude shipped by NNPC and the amount repatriated as equity to the Federation Account. "What we had in our records was $65 billion shipped by NNPC and about $15 billion returned as equity to the Federation Account. After the letter, the president asked for this meeting and we have discovered the following: that out of the $65 billion that NNPC shipped, $24 billion did not belong to NNPC, it was crude oil that was paid by oil companies as tax and royalties and shipment for them from NPDC and so on. "So that explains half of the sum. Now where the outstanding issues are with is the $28 billion domestic crude which has been taken by NNPC. And from our records, we have received $16 billion, there is a shortfall of $12 billion and we were told that that shortfall has always been part of ongoing discussions with finance and petroleum and NNPC." In her comment, Alison-Madueke revealed that Nigeria's daily crude oil output had risen from a hitherto 2.20 million barrels per day (mbpd) to 2.38mbpd following measures targeted at stemming oil theft and vandalism. She said: "We have held very robust reconciliation meetings over the last couple of days and have come to a very clear understandings and most part of the said amount have been accounted for; there is a shortfall as mentioned but it has been known for quite sometime. It is an open record in FAAC and has been discussed severally. "Let me add quickly that while these concerns on revenue shortfalls issues and so on, the actual base products that produces this revenue for us which is crude production has actually been under a lot of scourge to do with crude oil theft for quite some time. "And it is critical to mention that there have been very aggressive ongoing efforts to increase our production volume and mitigate and minimise this incidence of crude theft since it is the crude that gives us physical returns in the first place. "So I think in terms of our efforts, we have already, over the last two weeks seen an increase from a drop in 2.20mbpd to what is today 2.38mbpd and if we can keep up this level of aggression, we should see it sustained and hopefully increased. "Let me also add that the Ministry of Petroleum Resources and NNPC have always participated in the curtailment and reconciliation meetings along with other stakeholders and that will continue and will hopefully get even more aggressive. "The expectation of course is to ensure that the full benefit of oil is received and sustained for the benefit of all Nigerians." Meanwhile, a large gathering which had come to witness the investigative hearing into the alleged non-remittance of the $49.8 billion was shocked yesterday when Sanusi said the sum was not missing after all. The hearing was organised by the Senate Committee on Finance following the CBN governor's letter written to the president. The allegation had raised eyebrows, resulting in the All Progressives Congress' (APC) call for Jonathan's impeachment early in the week. The weight of the allegation also compelled NNPC to address the press in Abuja at the weekend where it described Sanusi's allegation as baseless and politically motivated. However, while appearing before the committee along with Okonjo-Iweala and Alison-Madueke, Sanusi expressed regret that the letter he wrote to the president on the matter got to the press and admitted that he was wrong. According to him, his concerns over the low rate of money accruing to the federation account resulted in the discovery of $15 billion in the account when he thought that $63 billion actually ought to have accrued to the account. Sanusi claimed that being the federal government's banker, he deemed it necessary to get the president acquainted with the development, thus giving rise to the letter. Speaking without his usual confidence, Sanusi disclosed that following his letter, a technical team was set up and had been meeting to reconcile the books. Following Sanusi's presentation, the chairman of the committee, Senator Ahmed Markafi, who did not allow his colleagues to question Sanusi, adjourned the meeting indefinitely. -------------------------------------------------------------------------------------- Nigeria: Missing U.S.$20 Billion - Government Approves Forensic Audit of Corrupt NNPC By Bassey Udo, 13 March 2014 The Federal Government may soon commence the forensic audit of the accounts of the Nigerian National Petroleum Corporation, NNPC, as President Goodluck Jonathan has approved the engagement of reputable international firms to handle the exercise. The Special Adviser to the President on Media and Publicity, Reuben Abati, who stated this in Abuja on Wednesday, said this was to reassure Nigerians that government was actually determined to unravel the truth and get to the root of the controversy. Mr. Abati said that contrary to claims by the suspended Governor of the Central Bank of Nigeria, CBN, Lamido Sanusi that government was attempting to sweep the allegation of missing oil monies under the carpet, President Goodluck Jonathan was committed to ensuring that the relevant committees of the National Assembly investigated the issues to ensure that the culprits were brought to book. Mr. Abati was reacting to alleged claims by Mr. Sanusi that his recent suspension from office was an attempt by the Presidency to bury his allegation that huge sums of money due to the Federation Account remained unaccounted for by the NNPC. The Presidential spokesman noted that contrary to Mr. Sanusi's claim that his threat to force commercial banks to open up their books to unravel the whereabouts of the "missing" funds led to his suspension, the President had confirmed during the last Presidential media chat that the decision was to pave the way for a proper investigation of the allegations against him by the Financial Reporting Council of Nigeria. The Council in its report had accused Mr. Sanusi of "financial recklessness, gross misconduct and persistent disregard for laid down rules and regulations in the management of the Central Bank of Nigeria." "The Presidency wishes to reaffirm that Mallam Sanusi's suspension has absolutely nothing to do with his unproven and inconsistent claim that $49.8 Billion, $12 Billion or $20 Billion is missing from the national treasury," Mr. Abati said. The Presidential spokesperson criticized Mr. Sanusi for whipping up public sympathy for himself and inciting anger against the Federal Government by deliberately misleading unwary Nigerians and the international community into believing that he is being punished for exposing corruption. He accused Mr. Sanusi of claiming that the government was involved in a scam to divert huge sums of money from the Federation Account through the misappropriation of kerosene subsidy funds, urging him to rather respond to allegations of official misconduct against him. Declaring that the allegations were "patently untrue", Mr. Abati accused the CBN governor of inciting Nigerians over his claims that the alleged missing oil monies may have been diverted by government to fund campaigns for next year's general elections. Condemning Mr. Sanusi for allegedly resorting to "playing politics with serious national issues", Mr. Abati said such claims amounted to cheap blackmail against the government and was clearly made in furtherance of a selfish personal agenda, "most unbecoming of someone who still holds the High Office of Governor of the Central Bank of Nigeria." Such claims, he pointed out, were not only mischievous and irresponsible, but also a design to incite other political parties and members of the public against the Federal Government. The CBN governor had accused the NNPC of failing to account for about $49.8 billion oil revenues, after which the Senate Committee on Finance called for a forensic audit to establish the truth. The Minister of Finance, Ngozi Okonjo-Iweala, had also amplified the need for a forensic audit of the Corporation's account to unravel the discrepancies. Efforts to reconcile the figures between the CBN and the NNPC only ended with a range of more unreconciled figures, from $10.8 billion, $12billion to $20 billion. However, the delay in appointing the auditing firm to handle the assignment, coupled with President Jonathan's decision to send the CBN governor on suspension, had fuelled speculation that the Presidency was keen on suppressing issues about the missing oil monies. -------------------------------------------------------------------------------------- Nigerians Skeptical About U.S.$20 Billion Forensic Oil Audit By Mark Caldwell, 13 March 2014 Nigerians were largely unimpressed by a pledge from President Goodluck Jonathan to order an international forensic audit into some $20 billion allegedly missing from petroleum sales. President Jonathan's announcement of the audit addresses a crisis that has been simmering for several weeks Lamido Sanusi, who was ousted by Jonathan as central bank governor last month, said the money came from sales made between January 2012 and July 2013 by the state-owned Nigeria National Petroleum Corporation (NNPC) that was not remitted to the treasury. It is unclear whether the revenue, being generated at a rate of more than $1 billion a month, was still being diverted. News of the audit came buried in a presidential statement attacking Lamido Sanusi. It insisted that his removal from his post as head of the central bank was not related to whistle blowing about what the statement termed "the phantom missing funds" Jonathan also denied Sanusi's charges that the money has been diverted to fund campaigning for February 2015 elections. The statement also refutes Sanusi's latest charges that the government was trying to bury the mystery of the missing petrodollars. Olaonipekun Adeyemi, founder of the Patriots for New Nigeria Initiative: "We are not going to keep quiet" "In keeping with its avowed commitment to full transparency, openness and accountability in governmental affairs, the Federal Government has authorized the engagement of reputable international firms for the recommended forensic audit of the Nigerian National Petroleum Corporation accounts," it said. Campaigning against corruption Nigerians were largely skeptical. Olaonipekun Adeyemi is the founder of the Patriots for New Nigeria Initiative, an anti-corruption group. He told DW they were not going to "keep quiet" in spite of the investigation. They would be pressing ahead with a protest they were organizing. "We want to know the true situation with the twenty billion dollars missing money, what is happening." he said. Another Nigerian, Abiodun Ayodele told DW in Lagos "It was a good thing that the president had already set up a probe." But Ayodele also thought the government "will start something they will not be able to finish and at the end of the day everything will be swept under carpet." When he was re-elected in 2011, Jonathan promised to fight corruption that keeps an elite fabulously wealthy while the majority of Africa's most populous nation of some 170 million people struggle to survive on less than $1 a day, according to U.N. statistics. President Goodluck Jonathan promised to fight corruption on being elected in 2011 But now Jonathan's administration is seen as shielding the corrupt, most infamously by the pardon issued by the president last year of the ex-governor from his home state of Bayelsa, Diepreye Alamieyeseigha, because he was "remorseful" after being convicted of money-laundering. Alamieyeseigha's properties and funds in the United States and Britain were seized as proceeds of corruption in recent years, and he had jumped bail from Britain in 2005. Previous investigations of billions in missing public funds have ended without resolution, with no one held to account and no money recovered. No one has been prosecuted for a fuel subsidy scam uncovered in 2012, in which some $17 billion was paid to companies for fuel that never was delivered. DW correspondent Sam Olukoya said Nigerians were getting increasingly frustrated about frequent reports of "public officers stealing huge sums of state funds." DW.DE AP, AFP -------------------------------------------------------------------------------------- Nigeria: Missing U.S.$20 Billion - We Can't Carry Out Forensic Audit, Says Auditor General BY JOHNBOSCO AGBAKWURU, 7 MARCH 2014 Abuja — THE Auditor General of the Federation, Mr. Samuel Ukura, yesterday, told the Senate Committee on Finance investigating the alleged unremitted $20 billion to the federation account by Nigerian National Petroleum Corporation, NNPC, that his office lacked the constitutional power to carry out forensic audit on NNPC account. The suspended Central Bank of Nigeria, CBN, Governor, Mallam Lamido Sanusi had raised the alarm that the $49.8 billion, which was supposed to be remitted to the coffers of the Federal Government through the nation's apex bank was nowhere to be found. Sanusi's allegation and petition to the Senate Committee led to the ongoing probe of the missing fund where the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala had told the committee that she was going to hire foreign experts for forensic audit of NNPC. However, the Senate Committee on Finance invited the office of the Auditor General of the Federation to make its own submission as regards forensic auditing. The Ahmad Makarfi-led Finance Committee had asked the Auditor General to explain the link between his routine checks in NNPC and the committee's investigation. The Committee specifically requested Ukura to furnish it with information on whether the periodic check his office was doing in NNPC had to do with the investigation it is currently carrying out. The constitution However, the AGF in his submission before the committee said that the constitution in Section 85 Subsection 2 and 3 barred him from embarking on such an exercise, adding that what he could only do was a routine check of NNPC account. Ukura said that already 20 chartered accountants had been deplored to the corporation to look into the financial records and establish if there were missing funds. He said: "I want to refer you to Section 85 (2) of the constitution which says nothing in this section shall be construed as authorising the Auditor General to audit the account of, or appoint auditors for government statutory corporation, commission, authorities, agencies, including bodies established by the act of National Assembly. "But the Auditor General shall provide such bodies with a list of auditors qualified to be appointed as external auditors and from which the bodies shall appoint their external auditors and guidelines of the level of fees to be paid to external auditors. "Subsection 4 says the Auditor General shall have power to conduct routine checks on all government statutory corporation, com-mission, agencies and so on. "Going by the Section 3 of Subsection 8 (5), the Auditor General cannot do a forensic auditing of any of the government agencies. 'Our checks' "According to Section 4, what we are doing is a periodic check. 20 of my staff are there to do period check. We will provide the checklist. "We are looking at the revenue generated and the expenditure." But Chairman of the Committee, Senator Makarfi asked the Auditor General to submit in writing before close on Friday (today) whether he has the manpower to do the auditing, adding "we will give you further directive if your letter did not cover what we are looking into. "We want you to, in writing, confirm to us what you are checking in the NNPC accounts. Does it cover what we are looking for? "We will only give further directives when you write letter to us to tell us whether or not what you are doing covered our own area of investigation." -------------------------------------------------------------------------------------------------------------------------------------------------------------- Nigeria: Swiss Oil Deals - Group Asks NNPC to Produce Certified True Copies of Documents By Bassey Udo, 5 March 2014 The African Network for Environment and Economic Justice, ANEEJ, on Tuesday asked the Nigerian National Petroleum Corporation, NNPC, to produce certified true copies of the bid tenders, awards and other documents of the controversial multi-billion dollar oil deals with two Swiss firms. A Swiss-based non-governmental advocacy group, Berne Declaration, in a report entitled, "Swiss traders' opaque deals in Nigeria", accused the NNPC of conniving with two Swiss oil trading firms, Vitol and Trafigura, to defraud Nigeria of several billions of dollars in oil deals. The report had indicted the two major oil traders in Switzerland, and seven Nigerian oil importers of creating offshore subsidiaries referred to as 'letterbox companies' to swindle the country of over $6.8 billion in subsidy claims from the Federal Government between 2009 and 2011. Consequently, ANEEJ, a civil society group working on revenue transparency in the extractive industry in the country, said in a Freedom of Information, FOI request to the Group Managing Director of the NNPC, that it required the information urgently for an ongoing project. In the FOI request to the NNPC by its legal counsel, Festus Keyamo, copy of which was obtained by PREMIUM TIMES on Tuesday, ANEEJ said it needed details of those deals to confirm certain information in NNPC's possession in respect of the offshore processing, crude swap and crude lifting contracts executed since January 2010. Giving NNPC seven days ultimatum to respond, pursuant to the provisions of Section 1(1) and 2 and section 4(a) of the FOI Act, ANEEJ warned that failure to comply would result in the initiation of court proceedings for an order of mandamus to compel compliance in accordance with Section 1(3) of the Act. A ten-point demand accompanying the request asked the NNPC to produce the approval by the Board of the NNPC and the pricing template for all the contracts. ANEEJ also demanded records of the advertisements by the NNPC soliciting tenders for crude oil sales as published in at least two national newspapers and the website of the organization in 2011, in addition to all tenders by firms involved in the sale of NNPC owned crude, the result of those tenders and the criteria on which the tenders were awarded. The group also demanded for the minutes of the meeting of the Tenders Board approving the winning tender or tender rejection letter notice issued during the period. Other demands by the group include notice of acceptance of tender by the NNPC to the successful tender immediately the winner emerged; all contracts entered into on crude oil sales, or products purchase and supply with Vital or Trafigura or other traders in respect to NNPC crude sales between 2010 and 2012, including the related lifting operations. The group also asked for the NNPC's financial statements for the period of the contracts, in addition to contract documents in respect of the $6.301 billion dollars domestic crude sales of 2011 sold through crude for products swap contracts, particularly with Trafigura and Sahara Energy, with the back-up documents on how the price of crude oil in such contracts were calculated. When contacted on the request by ANEEJ, the Acting Group General Manager, Group Public Affairs Division, NNPC, Omar Ibrahim, declined comment. He said he was yet to see a copy of the document. However, while appearing before the House of Representatives Joint Committee on Petroleum Upstream, Downstream and Justice investigating the allegation, the Group Managing Director of NNPC, Andrew Yakubu, said Vitol and Trafigura account for only 30.7 million barrels of the total 341.07 million barrels disposed by the Corporation in 2013 liftings. "The lifting of Trafigura and Vitol in 2013 represents 9% of the total lifting as against 36% reported by the Berne Declaration. Additionally, Nigerian traders collectively account for 98.2 million barrels or about 29% during the same period," he told the committee. -------------------------------------------------------------------------------------- Nigeria: Court Refuses Sanusi's Application for Reinstatement By Tobi Soniyi, 27 February 2014 Sanusi Lamido Sanusi Abuja — A Federal High Court in Abuja Wednesday refused an application byMallam Sanusi Lamido Sanusi to be reinstated as the central bank governor. Justice Gabriel Kolawole refused the ex parte motion brought before it by Sanusi on the grounds that it would be unfair to grant such an application without affording the respondents a hearing. Sanusi had filed the application on Monday asking the court to make an order of interlocutory injunction restraining the defendants from obstructing, disturbing, stopping or preventing him in any manner whatsoever, from performing the functions as the governor of the CBN and enjoying in full, the statutory powers and privileges attached to the office. Urging the court to expeditiously grant his interlocutory application, he maintained that any delay might cause irreparable and serious damage and mischief on him in the exercise of his statutory duties as the CBN governor. But Justice Gabriel Kolawole in refusing the application said he was of the view that the court had not only the judicial powers to declare the suspension unlawful, but to order that the plaintiff be returned to perform his duties as the governor of the CBN. He also said the court could also, even where the tenure had lapsed order the defendants to pay the plaintiff such remunerations and allowances on the basis that the plaintiff's suspension also carried with it the stoppage of his remuneration and allowances. According to the trial judge, it is unsafe, judicially speaking, to embark on far-reaching interim orders, which have all the attributes of a mandatory injunction without according the defendants a hearing. Pondering on the reliefs sought, the trial judge said he felt hesitant and constrained to grant the plaintiff's motion ex parte. The judge said another issue he would like to raise when the defendants have been duly served with the originating summons and motion on notice was whether in the light of the third alteration Act number 20 of the Constitution of Nigeria, 1999, as amended, whether the Federal High Court still has the jurisdiction to entertain issues dealing with employment, notwithstanding the questions the plaintiff had set down for determination in his originating summons. In the light of the views expressed and the analysis, the court refused the plaintiff's motion ex parte and directed that the motion be served on the defendants. The judge further ordered the plaintiff to effect service of the originating summons on the defendants together with the motion on notice. The court then adjourned the matter to March 12, 2014. -------------------------------------------------------------------------------------- Nigeria: Minister Demands Urgent Action on Audit 25 February 2014 The Minister of Finance and Coordinating Minister for the Economy Dr. Ngozi Okonjo-Iweala has asked for urgent action with regard to an independent forensic audit of conflicting claims of unaccounted funds made by the Nigerian National Petroleum Corporation (NNPC) and suspended Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamdio Sanusi. "My position on this has been clear from the start. The Ministry of Finance's reconciliation showed a shortfall of $10.8 bn in NNPC remittances to the Federation account. After this, the conflicting claims continued with new figures such as $20 bn being mentioned. "So since 13th February I have called for an independent forensic audit," she said. "President Goodluck Jonathan indeed announced last night that there will be an investigation into whether there are any funds missing from NNPC. He also indicated that the correct process needs to be followed in this investigation and I understand that the entity that has the proper authority to initiate such an investigation is the Auditor-General of the federation," she added. "I therefore want to see the truth from an investigation under the auspices of the Auditor- General, which in my view should be undertaken as a matter of extreme urgency by independent external auditors," said the minister. From: The Office of the Minister of Finance and Coordinating Minister of the Economy, Nigeria -------------------------------------------------------------------------------------- Nigeria: 2014 Budget Already in Deficit - Reps By Emman Ovuakporie and Levinus Nwabughiogu, 25 February 2014 Abuja — THE 2014 budget may run into problems due to lack of synergy between the Budget Office and some revenue generating Ministries, Departments and Agencies, MDAs, as House Committee on Finance raised alarm that the budget was already in deficit. The crux of the matter emerged, yesterday, at the continuation of meetings between the House of Representatives Committee on Finance and some independent revenue generating agencies. Two major agencies, including the Federal Airports Authority of Nigeria, FAAN, and Nigeria Maritime Administration and Safety Agency, NIMASA, presented fiscal projections at variance with that of Budget Office. This is just as the suspension of Sanusi Lamido Sanusi as the Central Bank of Nigeria, CBN, governor did not afford the institution the chance to make its submission before the committee, which pegged the level of presenters as that of directors and above in any of the agencies. Also, the representative sent by the CBN was not able to make any submission as the committee insisted that the acting governor should appear. FAAN and NIMASA had their presentations deferred till today because of lack of clarity and inconsistencies in their submissions. The Nigerian National Petroleum Corporation, NNPC, which was billed to appear before the committee yesterday, did not. Chairman of the committee, Abdulmumini Jibrin, decried the disharmony between the Budget Office and the MDAs, following submissions by NIMASA and FAAN that they did not interface with the Budget Office which submitted revenue projections for them to the committee. -------------------------------------------------------------------------------------- Nigerian Government Disburses N200 Billion for 2014 Capital Expenditure Despite Non-Passage of Budget By Bassey Udo, 20 February 2014 The Minister of Finance, Ngozi Okonjo-Iweala on Wednesday announced the disbursement of N200 billion as capital expenditure for the first quarter of 2014. The money is for the execution of various projects captured in the 2014 Appropriation Act. The spokesperson for the minister, Paul Nwabuikwu, said the release of the other 'approved' appropriations in the budget would follow accordingly. Mrs. Okonjo-Iweala, who is also the coordinating minister of the economy, said the release of the first tranche of the capital vote signposts the determination of the Federal Government to ensure that clear and measurable progress was achieved in the execution of capital projects. The National Assembly is yet to pass the 2014 Appropriation Bill into law, as contending issues underlining the preparation of the fiscal appropriation are yet to be resolved. The release of funds provided for in the budget before they receive the approval of the National Assembly appears to be the practice of the government in the last three years. The consensus between the Legislature and the Executive has been that budgetary allocations could be made by the Executive for any quarter of each year when deliberations on that year's budget is still on at the National Assembly; provided that such releases were not higher than the preceding year's corresponding quarter's disbursements. The criticism that has continued to trail the implementation of the federal budgets and pitched the Legislature against the Executive has been the poor performance of the yearly budgets. The projection has been that if the deliberations on the 2014 Appropriation Bill by the National Assembly are concluded early and the Bill enacted into law, capital budget performance in the budget year, barring unforeseen circumstances, may be better than that of the 2013 budget. The Federal Government had on March 14 last year released N400 billion for first quarter 2013 capital projects implementation as part of its efforts to ensure that ongoing projects and other contracts that may be awarded in the first quarter are sustained. Civil society groups that monitor the implementation of the annual budget have often faulted the practice, pointing out that it always makes adequate tracking of the performance of the budget difficult. -------------------------------------------------------------------------------------- Nigeria: Breaking - President Jonathan Appoints Zenith Bank Chief As New CBN Governor By Ini Ekott, 20 February 2014 Zenith Bank CEO and newly appointed Nigerian Central Bank Governor Godwin Emefiele. President Goodluck Jonathan has appointed Godwin Emefiele, who is the managing director of Zenith Bank, as the new governor of Central Bank. Mr. Jonathan submitted Mr. Emefiele's name to the Senate for confirmation Thursday hours after he announced the suspension of Sanusi Lamido as the CBN governor. The CBN's deputy governor, Sarah Alade, was named early Thursday as acting governor of the bank. Mr. Jonathan said if confirmed by the senate, Mr. Emefiele will take over fully as the substantive governor in place of Mr. Sanusi whose tenure elaspes in June 2014. The president also nominated Adelabu Adebayo as the deputy governor of the bank. Mr. Adebayo is current an executive director at First Bank. He will succeed Tunde Lemo who retired as Deputy Governor of the regulatory bank in late 2013. Below is Mr. Emefiele's profile as published on Zenith Bank's website. "He is the Group Managing Director, Zenith Bank Plc, a position he has held since August 2010. Until then he was the Deputy Managing Director of the bank, having been appointed into that position in 2001. Emefiele has been on the bank's management team since inception and has held various management positions in the bank, including serving as the Bank's Executive Director in charge of Corporate Banking, Treasury, Financial Control and Strategic Planning. "Until he took over as Group Managing Director, Emefiele was directly responsible for all the Group's local subsidiaries, Treasury and Correspondent Banking, and Multilateral, Conglomerates, & Private Banking. He also had responsibilities for direct supervision of majority of the bank's branches in Lagos and Northern Nigeria. "Emefiele has over twenty-six (26) years banking experience and holds a B.Sc and an MBA in Finance both from the University of Nigeria Nsukka. Before commencing his banking career, he lectured Finance, Bank Management, and Insurance at the University of Nigeria and University of Port Harcourt respectively. "He is an alumnus of Stanford University, Harvard and Wharton Graduate School of Business where he took courses in Negotiation, Service Excellence, Critical Thinking, Leading Change and Strategy. "Under Emefiele's leadership, Zenith Bank has strengthened its position as a leading financial institution in Africa, winning recognition and getting endorsement at home and abroad for giant strides in key performance areas like corporate governance, service delivery and deployment of cutting-edge ICT as well as impact in the bank's numerous spheres of operations. "In 2012, Emefiele's visionary leadership saw Zenith Bank receiving acclaim from reputable institutions such as world finance, CFI and FTSE Global Markets that have named Zenith the Best in Corporate Governance, Best Commercial Bank in Africa, and Emerging Global Super brand respectively." -------------------------------------------------------------------------------------- Nigeria: CBN Governor Sanusi Suspended By Augustine Osayande, 20 February 2014 Reserve Bank Governor Lamido Sanusi. President Goodluck Jonathan has ordered the immediate suspension of Central Bank Governor, Mallam Sanusi Lamido Sanusi. This was contained in a press statement issued today by Reuben Abati Special Adviser to the President on Media and Publicity. "Having taken special notice of reports of the Financial Reporting Council of Nigeria and other investigating bodies, which indicate clearly that Mallam Sanusi Lamido Sanusi's tenure has been characterized by various acts of financial recklessness and misconduct which are inconsistent with the administration's vision of a Central Bank propelled by the core values of focused economic management, prudence, transparency and financial discipline; Being also deeply concerned about far-reaching irregularities under Mallam Sanusi's watch which have distracted the Central Bank away from the pursuit and achievement of its statutory mandate; and Being determined to urgently re-position the Central Bank of Nigeria for greater efficiency, respect for due process and accountability, President Goodluck Ebele Jonathan has ordered the immediate suspension of Mallam Sanusi Lamido Sanusi from the Office of Governor of the Central Bank of Nigeria," Abati stated. He said President Jonathan has further ordered that Mallam Sanusi should hand over the reins to the most senior Deputy Governor of the CBN, Dr Sarah Alade, who will serve as Acting Governor until the conclusion of on-going investigations into breaches of enabling laws, due process and mandate of the CBN. "The President expects that as Acting Governor of the Central Bank, Dr. Alade will focus on the core mandate of the Bank and conduct its affairs with greater professionalism, prudence and propriety to restore domestic and international confidence in the country's apex bank. "The Federal Government of Nigeria reassures all stakeholders in Nigeria's financial and monetary system that this decision has been taken in absolute good faith, in the overall interest of the Nigerian economy and in accordance with our laws and due process." -------------------------------------------------------------------------------------- Nigeria: Falana - National Assembly Cannot Investigate Missing Funds By Shola Oyeyipo, 17 February 2014 Human rights lawyer, Mr. Femi Falana (SAN), Sunday said both the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala and the Senate lacked the powers to investigate the allegations of the Governor of the Central Bank of Nigeria (CBN), Mr. Sanusi Lamido Sanusi, that the Nigerian National Petroleum Corporation (NNPC) failed to remit huge funds to the Federation Account. Falana, who referred to the National Assembly probe as "diversionary," said only the Auditor-General of the Federation (AGF) was empowered to audit the Federation Account and submit the report of his findings to the National Assembly pursuant to section 85 of the Constitution. Against this background, he urged that rather than subject Nigeria to further ridicule by the CBN, NNPC and the Federal Ministry of Finance, the AGF should proceed to audit the Federation Account as well as the accounts of the NNPC and the CBN. He chastised Sanusi, whom he said, had created confusion by giving conflicting figures over the actual amount of the alleged missing fund from the Federation Account, which compelled the Senate Committee on Finance to concede that the accounts submitted by the NNPC be subjected to forensic audit. "It is indeed embarrassing that the Finance Minister and the Senate did not know, ab-initio, that they were not empowered to audit any of the accounts of the ministries and agencies of the federal government. "Indeed, it is a shame that the CBN governor does seem to have any rudiment understanding of the operations of the Federation Account, which is kept in the Central Bank. Hence, his figures of the missing fund have varied from $49.8 billion to $12 billion and $20 billion, while the reconciliation carried out by the Finance Minister revealed $10.8 billion!" "In particular, the auditing of the CBN account should cover the illegal payment of over N2 trillion by the CBN to fuel importers in 2011 when the National Assembly appropriated the sum of N245 billion. Before the general strike and mass protests of January 2012 the CBN governor had claimed that the amount involved was N1.3 trillion. "The Auditor-General of the Federation should also examine the legal validity of the several billions of naira withdrawn from the Federation Account without appropriation in the last five years and donated to certain individuals and institutions at the whim of Mr. Sanusi," Falana stressed. According to him, having realised that the National Assembly lacks the legal power and the technical expertise to audit the Federation Account, it is hoped that the Senate and the House of Representatives would henceforth desist from engaging in endless probes and concentrate attention on the business of law making. "If the National Assembly had seriously considered all the reports submitted annually to it by the Auditor-General of the Federation and taken appropriate actions on the findings the nation would have been spared the ongoing shameful accusations and counter accusations credited to senior government officials. For the past 15 years, the National Assembly has carried out diversionary probes of several agencies and departments of the federal government without any concrete results." He added that the powers of investigation conferred on the National Assembly under Section 89 of the constitution are meant to be exercised for the sole purpose of law making. "To that extent, the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigeria Police Force should be allowed to investigate complaints of corruption, fraud and other economic and financial crimes in line with the provisions of the relevant laws. "The practice of usurping the statutory powers of such bodies to carry out investigation by the National Assembly should stop. More so, that reports of the investigation conducted by the National Assembly are usually turned over to the anti-graft bodies which have to commence fresh investigation in appropriate cases," he said. Falana said if the lawmakers are genuinely interested in promoting accountability and transparency in the NNPC and in the entire oil and gas industry this is the time to pass the much delayed Petroleum Industry Bill (PIB). -------------------------------------------------------------------------------------- Nigeria: Economy Rakes in N86 Billion From 4.7 Million Tourists in 2012 17 February 2014 Nigeria earned an estimated N86 billion from the visit of some 4.7 million tourists in the country in 2012. This is contained in a statement issued on Monday in Abuja by the Nigerian Tourism Development Corporation (NTDC). The statement stated that the overall Gross Domestic Product from tourism returns stood at N40.5 million in that year. It said that overnight tourist visits was more than 4.6 million; tourists on a single day visit were 160,544, while transit tourists were 276,788. According to the statement, there had been a steady increase in the number of inbound tourists in the country in the last five years, especially from 2008. The statement said that over 4.6 million tourists visited on personal grounds in 2012 as against over 3.7 million in 2011. It also stated that some 1.4 million tourists came to the country on holidays, leisure and recreation in 2012 as against more than 1.1 million in the preceding year. It also stated that more than 4.6 million tourists were accommodated in 2012 as against 3.7 million in 2011. NAN -------------------------------------------------------------------------------------- Nigeria: Sanusi Insists N3 Trillion Oil Money Missing By Turaki A. Hassan, 14 February 2014 Central Bank Governor Sanusi Lamido Sanusi yesterday said he stood by his claims that the Nigerian National Petroleum Corporation (NNPC) was yet to account for $20 billion oil sales money. He spoke in Abuja at the resumed public hearing held by the Senate Committee on Finance on the alleged missing funds. Last week, the CBN governor revealed that the total oil sales money not remitted to the Federation Account from January 2012 to July 2013 stood at $20 billion (equivalent N3.25 trillion). NNPC insisted all the money had been accounted for and that the unremitted $10.8 billion was for kerosene subsidy, pipeline maintenance, product losses and other operation costs. But in his presentation yesterday, Sanusi said he stood by his last week's submission on the unremitted funds. He added that he still believed that part of the $6 billion the NNPC handed over to the Atlantic Energy and Seggy Energy through a joint venture with the Nigerian Petroleum Development Company (NPDC) belonged to the Federation Account. He, however, said that whereas he accepted the reconciled figures regarding petrol subsidy as presented by the Petroleum Products Pricing and Regulatory Agency (PPPRA), he still contests the money NNPC spent on kerosene subsidy. Sanusi also expressed disappointment over refusal of the NNPC to avail the CBN with relevant documents as directed by the Senate committee. But speaking at the hearing, Petroleum Minister Diezani Alison-Madueke said the NNPC did not violate any law in the deduction at source of $10.8 billion for subsidy on imported petroleum products. 'Presidential directive not law' In his submission last week, Sanusi said NNPC's deductions for kerosene subsidy were illegal because President Umaru Yar'Adua issued a presidential directive to stop kerosene subsidy in 2009. However, Mrs. Allison-Madueke said that presidential directive was ineffective because it was not gazetted. "When a presidential directive or order is given, it is not a law until it has been gazetted. There was no gazette to that effect. Also, the Appropriation Act has deduction at source as first line charge," she said. She added that two previous GMDs of the NNPC had separately written to the Finance Ministry to clarify position on the presidential directive but there was no response. Senate Finance Committee chairman Senator Ahmed Mohammed Makarfi (PDP, Kaduna) asked her to produce copies of the memos to the committee. Mrs. Alison-Madueke said both the petroleum ministry and the NNPC were propelled by patriotic instincts when they began import of kerosene between 2009 and 2010 because most petroleum marketers had stopped following the "confusion" on subsidy. She further contended that when the presidential directive was issued, there was an inter-ministerial meeting which sought to ratify it and it was then agreed that there should be "stay of action" because of the sensitive nature of kerosene to the Nigerian masses. She said if subsidy is removed on kerosene its price will triple thereby putting it above the reach of ordinary Nigerians. "There would have been economic crisis," she added. Mrs. Alison-Madueke said the corporation will have no problem stepping out of kerosene importation if Nigerians wanted that to happen. But she added that if this was done, Nigerians would have been subjected to "untold hardship" and it would plunge the entire West African region into an unprecedented economic turmoil. She also advised the committee and the finance ministry to extend the proposed forensic audit of the NNPC kerosene subsidy to 2004 when it first commenced. For his part, the Group Managing Director of the NNPC Mr. Andrew Yakubu told the lawmakers that the Petroleum Act has empowered the minister to determine the price of petroleum products including subsidy deductions at source. Yakubu insisted that the corporation was not sitting on any money as was being alleged. At this stage, Finance Minister Ngozi Okonjo-Iweala was asked by the committee if money was provided in the 2013 and 2014 budgets for kerosene subsidy, to which she said "No". Okonjo-Iweala said the only way to know the truth on the unremitted funds matter was by conducting an independent forensic audit. Senator Makarfi warned that expenditure outside the federal budget must be stopped. Senator Isa Galaudu (PDP, Kebbi) accused Mrs. Alison-Madueke of usurping the powers of the National Assembly by deducting monies at source instead of remitting to the Federation Account. Senator Adamu Gumba (PDP, Bauchi) said, "This illegality must be stopped. NNPC should have gone back to the president to reverse the directive. If we stop the subsidy nothing will happen. Why are you saying that the country will collapse if we stop the subsidy? Stop it, let's see what will happen. NNPC is also usurping presidential powers." Makarfi told the finance ministry to, within one month, conduct an independent forensic audit of the NNPC's kerosene subsidy claims. He also said next Thursday, Attorney General of the Federation Mohammed Bello Adoke will appear before the committee to give legal opinion on the controversies over the $6 billion and the agreement involving the NPDC. Meanwhile, the NNPD GMD gave details of how the corporation spent the $10.8 billion it deducted at source. He said of the amount, $8.76 billion was amount spent on subsidy of petroleum products, $0.76 billion spent on crude oil and products losses, another $0.46 billion spent on national strategic reserve, while $0.91 billion was the cost for pipeline maintenance. -------------------------------------------------------------------------------------- Nigeria: Missing U.S.$20 Billion - Senate, Okonjo-Iweala Can't Vouch for NNPC Documents, Opt for Forensic Examination By Ini Ekott, 14 February 2014 The Nigerian Senate on Thursday ordered a forensic review of documents presented by the Nigerian National Petroleum Corporation, NNPC, purporting to show how a huge chunk of alleged missing $20 billion oil money was spent. The Senate's directive was made after finance minister, Ngozi Okonjo-Iweala, declined to vouch for the documents' validity. Mrs. Okonjo-Iweala said her ministry lacked the "capacity and expertise" to guarantee the authenticity of documents, and will prefer an independent forensic review to "satisfy Nigerians". "These are extraordinary times. These are not ordinary times," the minister told the senate finance committee investigating the missing sum. "We believe in transparency. That is why we are seeking an independent forensic team for this to satisfy Nigerians." The review should be completed within a month, the chairman of the senate committee, Ahmed Makarfi, said. The documents the NNPC put forward purport to show how more than $8 billion-from the total $20 billion- was cleared in favour of NNPC as subsidy payments on kerosene and petrol between 2012 and 2013. The Central Bank governor, Lamido Sanusi, who has accused the corporation of diverting the money, said while petrol subsidy may be reconciled, that of kerosene was a clear illegality as a presidential directive had ordered the stoppage of such payments since 2009. The Senate committee confirmed Thursday that even where the NNPC spent the money on kerosene as claimed, it did so illegally as no mandate had overturned the presidential directive. Mr. Makarfi said it was "confirmed to the whole world" that the more than N800 billion which the NNPC said accounted for kerosene subsidy between January 2012 and July 2013, was claimed without any authorization, or budgetary allocation. "We have all agreed here that no appropriation was made for kerosene. All agencies that have spoken have confirmed to the whole world that this money was not appropriated," he said. The NNPC initially claimed it did not receive the presidential directive. At the hearing Thursday, petroleum minister, Diezani Alison-Madueke, claimed the directive lacked the force of law because it was not gazetted. She claimed that after the order was released by late President Umar Yar'Adua in 2009, a ministerial committee met and decided to suspend the directive as it considered Nigerians would have had to purchase kerosene at very exorbitant rate. Regardless of the claims, the finance ministry is to commission an independent forensic audit of the documents the NNPC said it obtained from the Petroleum Products Pricing Regulatory Agency, PPPRA, within a month, the senate committee ruled Thursday. Missing Oil Billions Mr. Sanusi has accused the state-run oil firm of failing to pay $20 billion in oil proceeds to the federal government, triggering investigations by the senate. The CBN governor's claim emerged in a leaked letter to President Goodluck Jonathan in September 2013. He pegged the amount owed by the NNPC at $49.8 billion, and called for investigations. Mr. Sanusi revised the figure to $20 billion last week, while the NNPC and the finance ministry admitted $10.8 billion was unaccounted for. At a meeting with the committee in December 2013, the two offices assured that the outstanding $10.8 billion would be reconciled immediately. It failed to do so for more than two months, with officials complaining of lack of documents detailing specific expenditure. On Thursday, the NNPC and the petroleum minister, Diezani Alison-Madueke, provided their first official analysis of how the $10.8 billion was purportedly expended on subsidy on petroleum products, crude oil and products losses, national strategic reserves and pipeline maintenance. "The impression many Nigerians have is that $10.8 billion is seated in the four towers of the NNPC," group managing director of NNPC, Andrew Yakubu, said in reference to the corporation's office in Abuja. "Nigerians believe NNPC is sitting on money. But I want it known that these monies we are talking about are not realizable flows." Mr. Yakubu said out of the $10.8 billion, "unpaid petroleum products subsidy" took $8.76 billion; crude oil and products losses gulped $0.76 billion; national strategic reserve holding cost took $0.46 billion; while pipeline maintenance and management cost consumed $0.91 billion. He said the subsidy claims was "non-realizable" as it merely amounted to what the NNPC was due, but was not paid by the government as subsidy. He said the subsidy claims were signed off by the PPPRA. But finance minister, Mrs. Okonjo-Iweala, said an independent forensic examination of the documents, will be required to "satisfy Nigerians". Balance of $8 billion Mr. Sanusi had earlier said he would accept $1.2 billion as extra subsidy payment, if the NNPC so claims, to raise the outstanding figure to $12 billion. On the balance of $8 billion, he insisted Thursday he had not received any document showing the spending of $2 billion on what is called "Third Party financing"; and another $6 billion which he accused the NNPC of dubiously cornering into private pockets, through the National Petroleum Development Company, NPDC. The petroleum ministry and the NNPC did not defend that concern. Mr. Sanusi, however, said he acknowledged that only a part of the $6 billion should go to the federal government. The decision on whether the government is entitled to the proceeds of that NPDC partnership, as the CBN governor claimed, and how much the government should have received, will require a separate legal opinion, finance minister, Mrs. Okonjo-Iweala, said. The senate finance committee said it will seek the advice of the Attorney General of the federation, Mohammed Adoke, on the matter next week. -------------------------------------------------------------------------------------- Nigeria: U.S.$20 Billion Oil Revenue - Act Now, 30 CSOs Tell Jonathan By Juliet Alohan, 12 February 2014 As the controversy over the alleged missing oil revenue continues to rage, a coalition of 30 civil society organisations (CSOs) including the "Say No Campaign-Nigeria" have called on President Goodluck Jonathan to immediately take appropriate action over the missing $20 billion oil revenue and the continuous stealing of Nigeria's oil and gas money as shown by the myriad of reports. The development came just as the Nigeria Extractive Industries Transparency Initiative (NEITI) has said the poor implementation of its independent audit reports in the oil and gas sector was the greatest challenge that confronts prudent management of the nation's oil revenue. Addressing a joint press conference organised by the Say No Campaign with the support of 29 CSOs in Abuja, yesterday, the executive director of Civil Society Legislative Advocacy Centre (CISLAC), Mr Auwal Rafsanjani, said it was time the president showed genuine concern and anger over the impunity with which public funds were stolen. He cited revelations made by the various NEITI audit reports -- KPMG report, Aig-Imoukhuede-led Committee report, the House of Representatives Ad-Hoc Committee report on fuel subsidy regime and the Nuhu Ribadu-led Petroleum Revenue Task Force report, all of which showed massive stealing of oil revenue -- as the reason the president should show genuine anger. The CSOs' position comes on the heels of the controversy over the alarm raised by the governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, that the Nigerian National Petroleum Corporation (NNPC) has failed to remit $20 billion oil revenue to the federation account, a claim the corporation has since dismissed as false. Rafsanjani said: "The Say No Campaign-Nigeria and its undersigned partners wish to extend this conversation beyond the ongoing probe by the Senate Committee on Finance by placing demand on President Goodluck Jonathan to act in a manner that demonstrates genuine anger for the open stealing of oil and gas money in Nigeria as shown by the myriad of reports on this critical sector of the economy." Condemning the seeming failure of institutions named in the alleged missing oil revenue to responsibly address the concerns raised, the coalition called on the Senate Committee on Finance currently sitting on the matter to thoroughly investigate the issues and establish the truth about the allegations. Rafsanjani stressed that beyond the investigation, the Senate Committee should institutionalise interfaced and automated system among revenue-collection agencies of government on how best to deal with challenges of non-remittance of revenue to the federation account. The group also demanded the speedy passage of the Petroleum Industry Bill (PIB) currently before the National Assembly with a view to achieving sustainable reforms in the oil and gas sector. Meanwhile, the chairman of NEITI, Ledum Mitee, has stated in Lagos, while declaring open a workshop that marks the commencement of NEITI comprehensive audit of the oil and gas sector for the year 2012, that if NEITI reports are given the attention they deserve confirmation remittances of funds to the federation account will not be a subject of controversy. Mitee said: "A properly resourced NEITI whose audit recommendations are promptly addressed remains vital not only to our economic wellbeing but enabling citizens derive needed benefits from our extractive resources. "Granted that by the very nature of our processes these audits are historical and thus unable to clear the current allegations by the Central Bank of Nigeria (CBN), yet we have consistently made the point that with adequate funding and support, we could automate our data collection processes to enable us get real time data which could be resorted to in the event of controversy. "I shudder to hope that one useful outcome of the current controversy over allegations of unremitted funds would be the realisation of the need by all relevant agencies and institutions to give NEITI and its audit recommendations the deserved seriousness and support." Giving assurance that the ongoing audit is critical to providing reliable information and data required for the proposed massive reforms, Mitee said the audit circle was coming at a critical time that the nation was embroiled in a very unfortunate allegation of non-remittance of oil revenues to the federation account. "I find the controversy unfortunate, for there are issues that ordinarily fall under the NEITI statutory mandate that would have been needless and unnecessary had relevant agencies, officials and institutions taken the NEITI audit recommendations more seriously," Mitee said. -------------------------------------------------------------------------------------- Nigeria: Cashless Policy to Start Nationwide By Obinna Chima, 12 February 2014 The Bankers' Committee Tuesday resolved to extend the cashless policy to all states in the country from July 1, 2014. Speaking to journalists at the end of a meeting by the committee in Lagos, the Head, Shared Services, Central Bank of Nigeria (CBN), Mr. Chidi Umeano, said the decision was taken as a result of the success recorded in states where the policy had been implemented. The cashless policy aims at reducing the dominance of cash in the system. It was initially introduced in Lagos in 2012 and thereafter, was extended to Ogun, Rivers, Anambra, Abia, Kano states as well as the Federal Capital Territory last July. Throwing more light on the decision to extend the policy to other states, Umeano explained: "A decision was reached today that the cashless initiative would now be deployed nationwide. From the success we have recorded in those areas, we have now decided as an industry to move it to other states in the country. "In other words, by July 1, we are going live in all the states of the federation. As you well know, this is a critical part of the payment system modernisation and the success registered so far has been very impressive." According to Umeano, statistics have shown that there been a significant improvement in electronic banking channels. He put the daily value of transactions on the Nigerian Electronic Fund Transfer at N123 billion and N50 million for Point of Sale (PoS). Also speaking at the media briefing, the Chief Executive Officer, First Bank of Nigeria Limited, Mr. Bisi Onasanya while responding to questions on the recent 75 per cent Cash Reserve Ratio (CRR) imposed on public sector deposits by the Monetary Policy Committee (MPC), said the resolution of the crisis in Iran as well as the impact of the tapering and investment outflow from Nigeria, were major factors that led to the indirect monetary tightening measure. In fact, the First Bank boss revealed that the central bank informed the committee that it may further hike the CRR to 100 per cent if it does not see improvement in foreign exchange earnings. "Once you move from 50 per cent to 75 per cent, there is only a limit to how far you can go and the worst case scenario is to move to 100 per cent," he said. According to Onasanya, given the dwindling revenues from oil and the impact on foreign reserves, it was apparent that the options available to the central bank and the MPC were reduced. "The measure was taken in order to ensure that we continue to address the exchange rate problem in Nigeria. We also agreed that there is a need to do a lot more to ensure that there is accretion to external reserves as a basis for defending the currency which is a major focus of this regime. "There is no country that will just allow its exchange rate to be left and not managed. The mere fact that those actions have been taken also indicates the fact that the central bank is willing to do everything within its power to ensure that the currency is not devalued," he explained. On his part, the Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe,said the Bankers' Committee would launch a biometric solution by Friday. The Access Bank boss stated that the committee over the years, been working on improving Know-Your-Customers (KYC) in the industry. This, he said would fight money laundering and encourage consumer lending. "Hopefully with this, all the banks would be able to strengthen their KYC and to combat money laundering and of course prevent fraud," Wigwe said. In order to promote financial inclusion, the Deputy Managing Director, Guaranty Trust Bank Plc, Mrs. Cathy Echeozo said the committee agreed that on March 13th, the CBN governor, the deputy governors of the CBN and bank chief executives would go round schools across the country to campaign on the need for every one to have a bank account. -------------------------------------------------------------------------------------- Nigeria: Why Jonathan Sacked Oghiadomhe By Donald Ojogo and George Agba, 11 February 2014 Mike Oghiadomhe Uncertainty and anxiety have pervaded the seat of power, Aso Rock, following the removal of Mike Oghiadomhe as chief of staff by President Goodluck Jonathan yesterday. The once-powerful presidential aide's removal has been attributed to reports linking him with some alleged shady deals in the nation's cash cow, the Nigerian National Petroleum Corporation (NNPC). His removal is interpreted in many quarters as the commencement of a cleansing exercise in the Presidency ahead of the 2015 elections. Presidential aides and ministers, LEADERSHIP gathered, have embarked on lobby moves to save their jobs. It was learnt that Oghiadomhe was asked by the president to resign, following a series of official lapses that have been going on in the presidency, which were linked to the office of the former chief of staff. The latest among the sins allegedly committed by Oghiadomhe was that he attempted to sideline the Sokoto State governor, Aliyu Wamakko, when President Jonathan visited the state last Saturday. A source at the presidency told our correspondent that Oghiadomhe deliberately refused to write officially to Wamakko informing him that the president was visiting the state for a rally organised by the Peoples Democratic Party (PDP). Rather than write to alert the governor to the visit as had been the practice, Oghiadomhe was said to have chosen to deal with the deputy governor, Alhaji Mukhtar Shagari, using his own discretion to keep Wamakko away following the governor's recent defection from the PDP to the opposition All Progressives Congress (APC). Shagari had refused to follow his boss to the APC, which automatically makes him the leader of the PDP in the state. According to the presidency source who pleaded anonymity, even though Wamakko openly expressed dismay over the manner in which he was kept in the dark over the presidential visit, the governor "still proceeded to do the needed preparations for the president's visit by providing accommodation and other necessary logistics for the presidential advance team. "Jonathan was visibly angry but tried to control his emotion when he was told and apparently resolved that Saturday to take a drastic action against his CoS," the source added. Another of Oghiadhome's many sins, the source further told LEADERSHIP, was his failure to acknowledge a request by Niger State traditional rulers to pay the president a "thank-you" visit following the flag-off of the Zungeru power project in the state late last year. Jonathan had also expressed his displeasure at the development at the time when the state governor, Dr Muazu Babangida Aliyu, told him that months after the royal fathers wrote a letter requesting the visit, the office of the CoS had refused to acknowledge their letter. Signs that Oghiadomhe had fallen out of favour with the president started to manifest in 2012 when the presidential delegation that went to Edo State for the grand fianle of the governorship campaign was shunned by the Oba of Benin. Rather than receive the delegation, the royal father insisted on having a private audience with President Jonathan owing to what a source linked to the short notice given to the palace. The source said Oghiadomhe did not write officially to the Oba until two days to the visit. LEADERSHIP also gathered that when Oghiadomhe was informed about the termination of his service on Saturday, he quickly went to his office at the presidential villa, Abuja, to clear it of his personal belongings including photographs. He was said to have attended a meeting with the president and his aides after which he tendered his resignation letter on Monday. The Presidency also clarified that his decision to quit was to enable him engage in other political ventures. Special adviser to the president on media and publicity Dr Reuben Abati refuted online reports suggesting that Jonathan fired Oghiadomhe following his involvement in alleged corruption and financial crime in the NNPC. He said that the president has not named any replacement for Oghiadomhe yet. Abati described speculations that the former CoS was fired as "callous and completely unreasonable", even as he noted that Oghiadomhe had diligently served the Jonathan administration without blemish. The presidential spokesman explained that Oghiadomhe's resignation was in line with the directive by the president to his cabinet members that those who may wish to get involved in politics to contest for political offices should resign their appointments. He said: "I can confirm to you that the chief of staff to the president has resigned his appointment and that it has nothing to do with the speculation that one online portal was trying to do out. The president received the letter this morning and he says he wishes to pursue other political necessities within our great party. "You will recall that about two weeks ago before the president travelled to Ethiopia, he had announced in Council that if there was any member of the cabinet or an major political appointee who wanted to pursue some political endeavours, that he had been hearing rumours that some people wanted to pursue some other political interests in whatever capacity, that if such were going to be engaged heavily in political activities, they should let him know. "And if they saw that they were going to be really busy that it would occupy their time, ordinarily, they should please step aside or let him know, or they should come and see him for discussion. It happened on the open floor of the Council. And you can see what I have pointed out as the reason for the chief of staff's resignation. It is in line with that." Faulting online reports that the former CoS was sacked over corruption, Abati said, "So, we find the speculation, particularly by some of the online platforms as callous and completely unreasonable, considering that this is the man who has served and who has given time and energy to the pursuit of the good interest of our country. "Mr. President appreciates his contributions and he would like to put on record that, indeed, he was a man who discharged his responsibilities diligently and the country is very grateful to him, and the president personally would like to wish him well in his future endeavours." Dokpesi may emerge Jonathan's chief of staff Meanwhile, indications emerged last night that President Jonathan may appoint Chairman of DAAR Communications limited as his new Chief of Staff (CoS). A presidency source told LEADERSHIP that the choice of Dokpesi may not be unconnected to the fact he is from Edo State where the former CoS hails from and would be the appropriate son of the state in the South-east who is politically fit to take the appointment. Besides, the source recalled that Dokpesi was the one who was tipped for the job before political consideration tilted the position in favour of Oghiadomhe. Also, the state governor, Comrade Adams Oshiomole was also at the presidential villa where he met with the president for about 40 minutes and left shortly before it was confirmed that Oghiadomhe had resigned. The mood at Aso Rock yesterday evening was that of excitement, following news that the erstwhile Chief of Staff to the president had resigned, as staff of the place were seen in groups according to their departments gossiping over the development. Some of them expressed delight that sudden exit of the Chief of Staff who oversees the day to day running of affairs at the villa would change things for the better in terms of their welfare. Anyim, Gulak's jobs shaky as president mulls more changes The sack of the presidential aide, it was learnt, would herald some more changes. President Jonathan was said to have made up his mind to effect "needful changes in the system". In the impending re-structuring, President Jonathan is said to be considering the appointment of a politician from the south-west as secretary to the government of the federation (SGF). The implication is that the current holder of the office, Senator Anyim Pius Anyim, will give way if this thinking was implemented by the president amidst pressure coming from a section of Yoruba leaders who have complained about the absence of one of theirs in the Presidency. Also being contemplated, according to findings by LEADERSHIP, is that a former governor from one of the northern states who recently joined the ruling party might be approached to take up the job of President Jonathan's political adviser. If the deal was sealed between the former governor and the president, it would see to the exit of the current political adviser, Ali Ahmed Gulak. LEADERSHIP gathered that a few hours after the announcement of Oghiadomhe's exit as chief of staff to the president, close allies of the president outside government started to receive phone calls from presidential aides and ministers. "Well, the only permanent thing in life is change; that is the situation on ground and I think more and more changes are likely to follow because most of the ministers, advisers or assistants have become more of liabilities than assets to the president and this has to stop. "We have seen some ministers or advisers not helping enough to propagate the ideals of the government they serve; rather, they promote themselves in all questionable manner. If we allow this to continue, then, we can as well forget this talk about 2015," a source close to the president said on the telephone. -------------------------------------------------------------------------------------- Nigeria: Oil Revenue Controversy - Falana Demands Federation Accounts Audit By Bassey Udo, 11 February 2014 Mr. Falana, a Senior Advocate of Nigeria, said if in two weeks the AGF fails to heed to his demand, he would have no option than to proceed to the Federal High Court to seek an order of mandamus to compel him to carry out his lawful responsibility. The former President of the National Association of Democratic Lawyers, NADL, said the demand followed the spate of conflicting claims between the Central Bank of Nigeria, CBN governor, Lamido Sanusi, the Minister of Finance, Ngozi Okonjo-Iweala, and the Nigerian National Petroleum Corporation, NNPC, on the alleged missing $49.8 billion (about N82 trillion) oil revenue in the Federation Account. He said initially when Mr. Sanusi made the allegation that the NNPC failed to remit the money, the agency denied, accusing him of ignorance about the workings of the oil industry and an attempt to politicize the issue to ridicule the corporation. The one-time Chairman of the West African Bar Association, WABA, however, noted that after the reconciliation of the their claims to determine the actual state of the Federation Account, Ms. Okonjo-Iweala had claimed the missing amount was about $10.8 billion, as against Mr. Sanusi's $12 billion. Following public outcry for the NNPC to account for the $10.8 billion, the CBN governor said the national oil company claimed that the money was spent on pipeline repairs and fuel subsidy. Though Mr. Sanusi now claims the money illegally withheld from the Federation Account by the NNPC was $20 billion, the Group Managing Director, GMD NNPC, Andrew Yakubu, dismissed such claims saying the CBN was never a professional auditor. He recalled that during the January 2012 anti-fuel hike, the CBN had claimed that about N1.3 trillion was paid out to fuel importers from the Subsidy Account in 2011, while one of the CBN deputy governors told the House of Representatives probing the fuel subsidy scandal said that the amount was N1.6billion. "At the end of the public inquiry, the committee confirmed that the actual amount paid out by the CBN was over N2.3billlion, despite the appropriation of only N245 billion in the 2011 budget. In the light of the controversy, Mr. Falana said it is obvious that the CBN, which keeps the Federation Account, cannot produce a reliable statement of the Account into which all revenues collected by the Federal Government was paid by the NNPC and other agencies of government. Mr. Falana described the NNPC's accounts as being shrouded in secrecy, blaming members of the National Assembly for abdicating their responsibility of monitoring the activities of the various revenue agencies. Since the restoration of civil rule in May 1999, both chambers of the National Assembly have subjected the NNPC to several investigations of its finances. They have also embarked on oversight functions to scrutinize the financial records without any positive result. The lawyer said he wondered why the Petroleum Industry Bill, PIB, which could have helped end the regime of secrecy in NNPC affairs, has not been passed into law. He also said that neither the Finance Minister nor the Finance committee of the Senate was empowered to reconcile conflicting figures in government finances. In line with the provisions of Section 85 of the Constitution, which mandates the Auditor-General to submit its report to the National Assembly, Mr. Falana urged all the parties concerned to ensure that the audit was conducted without delay. -------------------------------------------------------------------------------------- Nigeria: Marking Okonjo-Iweala's Answer Script - in for Re-Sit or Revenge? By Emmanuel Aziken, 7 February 2014 Ngozi Okonjo-Iweala, Given the globally acknowledged intellectual fecundity of Dr. Ngozi Okonjo-Iweala, it was a shock that the House of Representatives Committee on Finance scored her a miserly 20% when it marked her answer script on the 50 questions on the state of the Nigerian economy. Does the minister deserve a re-sit or is it political retribution? A former managing director of the World Bank, an alumnus of two institutions with global reckoning, Harvard University and the Massachusetts Institute of Technology, Mrs. Okonjo-Iweala's cerebral prowess has never been in doubt, not even to her detractors. It was on account of her brainy quotient that President Goodluck Jonathan took the unprecedented step of adding the responsibility of coordinating the economy to her duty as finance minister. Many have on that account dubbed her Nigeria's Prime Minister. It was perhaps in that respect that she got the unique honour of representing the president in laying the 2014 budget proposal of the Federal Government before the National Assembly on December 19, 2013. Hours after that unique honour, members who had been peeved with the failure of the president to physically lay down the budget as has been the practice with all healthy Nigerian rulers under democratic rule, got their retribution on his hapless senior minister. The minister had been invited days earlier to a hearing on the state of the economy being conducted by the House Committee on Finance. After all the stress of presenting the budget, the minister when she appeared before the House committee, informed the legislators that she was a little unwell, but was prepared for the hearing. Her assertion, however, did not please the committee which asked her to go and take care of her health and respond to the 50 questions raised on the economy by the committee. The arrowhead of the attack on the minister was the chairman of the House Committee on Finance, Rep. Abdulmumin Jibrin, himself an equally brainy man who has laced his cerebral endeavours with entrepreneurial success. Jibrin who according to sources, had some good working relationship with the minister was sympathetic but insisted on the minister returning to look after her health. But she was to go with 50 questions which he insisted should be answered in written form. Mrs. Okonjo-Iweala, however, insisted on giving verbal answers to the 50 questions dwelling on facts and figures of the circumstances of the economy, job growth and leakages in the economy right there. Her insistence on answering immediately created a scene at the committee hearing leading to a verbal spat between Jibrin and the minister. "I must tell you that I'm feeling sick. For the past one week I've not had sleep, so I'm not feeling fine. But I had to come because I respect the parliament and the committee. I'll try my best to respond to your questions as much as possible, and my other colleagues who are also here with me will contribute," she said. Responding, Jibrin said: "We're not insensitive to your situation as human beings, and if you had told us this before now, we would have given you some time. We have 50 questions for you, and we can give you time to respond in writing," he said. The insistence of the minister to be heard was overruled by Jibrin turning the hearing into a scene as the committee, as if working on a script, refused to hear her and insisted that the minister should leave. As she reluctantly exited, the minister told journalists: Tone of the conversation "I don't understand. We came to give a testimony and I said I wasn't feeling well and I was treated with the courtesy by the chair of the committee that I deserve. And you were all witnesses to it. That's all to it. I have utmost respect to the committee members who have been very kind. But the tone of the conversation for someone who is not feeling well was not very good." Faced with the seeming hostility of the House, Mrs. Okonjo-Iweala proceeded to answer the questions and eventually submitted them on January 15. Her 102 page response gave a point by point answer to the 50 questions noting number of jobs created, the impact of some key government programmes such as the SURE-P, You Win among others.The clerk of the House committee on finance, Mr. Farouq Yakubu Dawaki confirmed the receipt of her answer scripts and even commended her for answering the challenging questions in reasonable time in a statement titled: "The Search for Truth Begins". "The House Committee on Finance acknowledges receipt of the 102-page response from the Honourable Minister of Finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, to the 50 questions on the state of the economy given to her to answer by the Committee on December 19, 2013. "The Committee commends the Honourable Minister for responding to the questions within reasonable time. "The Committee will commence work immediately on the response. However, if in the process the need arises for further explanation, information or additional document the Minister will be promptly informed. "The Committee will also call for memorandum on the state of the economy and 50 questions from professionals, academics, civil society and all well meaning Nigerians. This will be followed by a public hearing. "Finally, the process will be concluded with the presentation of a report on the true state of our economy to the House. Given the tone of the acknowledgment it was not surprising that the committee would subsequently raise issues with Okonjo-Iweala's answers. However, few expected the committee to score the minister a miserly 20%. In a statement detailing the committee's observations on her answers, Jibrin demanded for additional information on 40 of the 50 questions. "Having gone through your responses, the Committee noted that some questions were either not answered, partially answered, out rightly ignored or completely misunderstood". "The Committee further noted glaring missing gaps in the responses, absence of supporting proofs to assertions and lack of relevant documents to back up the presentation as is the practice in any legislative oversight or investigation". "Also noted were the wide ranging comparison you made with other advanced and developing countries while responding to some questions but failed to apply the same in some cases that obviously require such approach". "In some instances, you abruptly referred the Committee to relevant agencies for clarification". "The Committee is surprised at that because of its conviction that if all the questions raised are beyond the competence of the Minister of Finance, it is certainly not beyond the competence of the Coordinating Minister for the Economy to the extent of information you must have in your possession unless you say otherwise". "In view of the above and ahead of the investigative hearing on the State of the economy, the Committee is obliged to forward to you additional observations and requests to be submitted to the Committee not later than 20th February, 2014". Whether the minister is preparing for the re-sit or makeup exam could not be ascertained as at press time. But what is clear to almost all is that the issue has navigated to the political terrain and two of the sharpest minds in Nigerian government, Okonjo-Iweala on the executive side and Jibrin on the legislative side have been taken in by the atmospherics of the charged political ambience. Many regret that the legislature has picked one of the few seemingly clean and altruistic ministers in the proxy political war as a target. But in war, nothing really is fair. -------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala to Senators - Your 2014 Budget Allegations Are Unfounded By Hamisu Muhammad, 7 February 2014 Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria at the World Economic Forum on Africa 2013. The Minister of Finance, Dr. Ngozi Okonjo-Iweala, has described the recent attacks on her person by some senators during the 2014 Budget debate as unfortunate and needless. In her reaction yesterday, contained in a statement issued by her spokesperson, Paul C Nwabuikwu, the minister refuted several allegations made against her by some of the Senators, saying they were unfounded. The statement thanked the "majority of the Senators" who, it said, understood the issues at stake, adding that the accusations made against the minister were not based on fact. The statement said: "Though government is continuous and the Minister has no desire to shirk her responsibilities, the effort to personalize these issues on the basis of inaccurate information is unfortunate and must be roundly refuted. The first point made by some Senators is that she is responsible for the rising recurrent expenditure, which, according to them, rose "from 69 percent in the 2013 budget to 76 percent in the 2014". This is inaccurate. "The fact is that during 2010, the government awarded salary increases of 53 percent across the board to the public service, which increased the wage bill from N856.9 billion in 2009 to N1.36 trillion in 2010. At the time, finances were inadequate to back this award, and the government had to increase domestic borrowing significantly to cover the shortfall. "This rise in government domestic borrowing, from N524 billion in 2009 to N1.36 trillion in 2010, is clearly shown in Figure 2, and is also the singular cause of the country's rising domestic debt profile, from 14.83% of our Gross Domestic Product (GDP) in 2009 to 17.98% of GDP in 2010. The rise in salaries is also reflected by the sharp increase in the recurrent expenditure to 74.4% in 2011." It said that Okonjo-Iweala was not in government when these events took place, adding, however, that President Goodluck Jonathan has focused on reversing this trend. It added: "Since 2011, various measures have been introduced, leading to a steady decline in recurrent expenditure from 74.4% in 2011, to 71.47% in 2012, and then to 67.5% in 2013." However, the statement said it was important to note that under the proposed 2014 budget, the recurrent expenditure will rise to 74%, for two reasons, firstly: "Total expenditure of N4.64 trillion in the proposed 2014 is about a 7% decline from the 2013 budget level of N4.98 trillion. From a mathematical standpoint, this reduction in the budget base will result in a slight increase in the weight of the recurrent expenditure in the budget, which in absolute terms, has increased from 2013 levels." And, secondly, it noted:"The country is yet to fully absorb pension's implications of the 2010 wage increases. Starting in 2013 budget, this Administration commenced tackling the payment of outstanding military pensions, and Budget 2014 will further address civilian pensions. We have been under pressure from many quarters, including Senators, to integrate the civilian component of pension, and doing so will further increase the recurrent budget. Will the Senators blame Okonjo-Iweala for this?" On the issue of excessive borrowing, the statement said it was noteworthy to mention that the flow of domestic borrowing has actually reduced, from N852 billion in 2011 to N588 billion in 2013, as shown in Figure 2, a borrowing of N572 billion proposed in the 2014 budget. It added that for the first time in the history of our domestic debt, the Finance Minister ensured the repayment of N75 billion of our domestic bonds. It said: "While it is important for us to debate the budget, it is also behoves us not to misinform Nigerians, demonise individuals based on false information and mischaracterize the nature of budget development in the country. A large number of lies are being told against the budget by those who do not care about the impact of their falsehood on the economy and the image of the country. "While acknowledging that the budget has some imperfections which we are working hard to fix, the large number of positives in terms of policies and resources must not be forgotten." -------------------------------------------------------------------------------------- Nigeria: Lamido Sanusi Opens Up: How NNPC Is Robbing Nigeria Blind By Ini Ekott, 6 February 2014 Reserve Bank Governor Lamido Sanusi Long before his shocking letter to President Goodluck Jonathan exposing massive diversion of government oil revenues became public December 2013, Nigeria's Central Bank Governor, Sanusi Lamido Sanusi, said he did what many have accused him of failing to do: acting early as the losses escalated. Accompanied by all of CBN's deputy governors sometime in 2010, he said he drove to the Nigerian National Petroleum Corporation, NNPC, to ask for an answer to a simple math: why Nigeria's reserves had failed to rise in the face of unprecedented high oil prices internationally. Mr. Sanusi said NNPC official lectured his team that the trouble arose because much of Nigeria's oil production came from deep offshore wells; and that the Sani Abacha government had scandalously agreed with oil companies to peg such oil earnings at $10 dollar per barrel -- the prevailing price at the time. The arrangement was fixed to run for 30 years. Officials of the corporation explained that only the Petroleum Industry Bill, PIB, the voluminous government-sponsored oil sector reform legislation, could reverse that agreement, according to the governor. But while he obtained a legal opinion from a Senior Advocate of Nigeria, SAN, debunking that claim and demonstrating the contract can be re-negotiated without the PIB, Mr. Sanusi said he and his colleagues however shifted focus to other possible avenues of revenue leakages. In the years that followed, they established how government fuel subsidy had been massively abused, and how the Pipelines and Product Marketing Company, PPMC, had sustained a notorious racketeering in the administration of the government's oil swap deals- an arrangement in which Nigeria gives out crude oil to foreign companies in exchange for refined product. "By 2011, it was already clear to us that these transactions were not properly structured, monitored and audited," the CBN governor wrote in a comprehensive submission to the Senate Finance Committee, obtained exclusively by PREMIUM TIMES. "For example, companies in swap agreements with PPMC would lift crude oil for free, sell at the international market, repatriate the funds and sell at the autonomous rate, trade with the proceeds and at their own time, establish letters of credit (LCs) to import PMS using the funds purchased at the official window." In one shocking revelation, the PPMC signed oil swap agreements with companies with a clause allowing the destruction of vital documents after one year. Mr. Sanusi called the clause "troubling", and said on account of that, he did not believe an ongoing, but separate attempt by the National Assembly to probe the swap deals, will yield any result. At multiple meetings with lawmakers, the CBN governor said he raised the alarm on the findings, particularly about the subsidy fraud, long before the House of Representatives and the federal government finally, in 2012, launched investigations that proved grounding fraud in excess of N2 trillion. But Mr. Sanusi's biggest haul yet as part of his team's investigation, is his allegation that the NNPC, Nigeria's state-run oil behemoth, has for years, illegally diverted several billions of dollars of oil revenues to unknown accounts, through a systematic practice that defrauded the nation of over 70 per cent of its due oil proceeds. The scandal, first exposed in his first letter to Mr. Jonathan, has shocked Nigerians, but has barely received sufficient action from the government. On Tuesday, at a meeting of the Senate Finance Committee which is probing the missing funds, Mr. Sanusi revised his earlier claim that nearly $50 billion was missing, and insisted that while part of that amount had been accounted for, as much as $20 billion (N3.3 trillion) - more than half of Nigeria's entire budget this year- remains unaccounted for. The ministry of finance and the NNPC claim unreconciled amount stands at $10.8 billion, while, the NNPC claims the outstanding $10.8 billion was paid out as subsidy on kerosene and petrol, and the balance was used for pipeline maintenance. But Mr. Sanusi's submissions to the Senate committee, obtained by PREMIUM TIMES, offer a firm argument on why the $10.8 billion claim is untenable, and challenges the NNPC's claim that the outstanding $10.8 billion was used as purported. Subsidy fraud While the government, as well as the CBN, have admitted the total crude oil lifting from January 2012 to June 2013, stood at $67 billion, Mr. Sanusi said only $47 billion of that amount was paid into government coffers. According to the CBN, the $67 billion is made up of $14 billion for the Federation; $15 billion for the Federal Inland Revenue Services, FIRS; $2 billion for the Department of Petroleum Resources, DPR; $28 billion for Domestic Crude; $2 billion for Third Party financing; and $2 billion for the Nigerian Petroleum Development Company, NPDC. Of that total, the CBN said only $47 billion had been paid into the government's account, leaving a balance of $20 billion. Mr. Sanusi said the NNPC's claim that 80 percent of the $10.8 billion was incurred on petrol and kerosene subsidy should not be accepted since a presidential directive had in 2009 barred payment of subsidy on kerosene. The directive, from former President Umar Yar'adua, remained in force long after the president's death, Mr. Sanusi said, citing a letter to him from the Petroleum Products Pricing Regulatory Agency, PPPRA, in December 2010- long after Mr. Yar'adua's death- which confirmed that the agency had "ceased to grant subsidy on HHK(kerosene) through a presidential directive since July 2009". "This may explain why NNPC waited till 2011 to claim its 'arrears' for 2009-2011," Mr. Sanusi wrote. "So the first question here is: on what basis did NNPC pay itself billions of dollars as 'subsidy' for kerosene, in view of this directive." On petrol subsidy, the CBN governor said documents showed the NNPC did not make any deductions from the domestic crude sales for subsidy payment between April 2012 and 2013. In the document attached as appendix, the row showing "adjustment for subsidy" consistently shows "NIL" within the period. Mr. Sanusi said there are two possibilities here: either the NNPC was lying to the government that it was not making deductions, or it is now lying that is made when it never did. "Either way, this shows we cannot trust NNPC or its management to tell us the truth," he said. Phoney companies sharing the booty Part of the missing $20 billion, is a $6 billion worth of crude which the NNPC said it lifted on behalf of the NPDC, the upstream operating arm of the NNPC. Mr. Sanusi said the amount involved should constitutionally belong to the federation account by has been methodically diverted into private hands. The two companies involved are Seven Energy and Atlantic Energy. The CBN said it found out the two companies are owned secretly by the same persons. The companies were meant to act as financial and technical partners to NPDC in respect of the development of eight oil blocks sold by Shell Petroleum to indigenous companies. In the end, Mr. Sanusi said the bank found out the companies did not provide any funding beyond using their affiliation to the oil titles to obtain loans from Nigerian banks. But when it came to oil proceeds, they were entitled to all of the earnings, based on a fraudulent agreement the companies signed with the NPDC, with the approval of the NNPC. Mr. Sanusi said details of the entire transaction has remained secretive, and no one exactly knows how much the companies make. But earnings that go the private companies should ordinarily belong to the government. In the voluminous submissions, Mr. Sanusi said he believed his effort was already yielding results as the NNPC, which has denied for years withholding government funds, had admitted this time to the tune of $10.8 billion. "Before I wrote my letter to the president in September, 2013, there had been several allegations against NNPC for non-remittance of funds to the federation account," he said. "NEITI had raised the issue in its various reports. The KPMG audit ordered by Minister Aganga when he was in the finance ministry had raised the same issues." "The Nuhu Ribadu committee set up by Petroleum Minister Allison-Madueke also made the same claims. It is also a regular subject of dispute between NNPC and FAAC. "NNPC dismisses all such allegations as false and spurious, and claims in fact that the federation owes it money. In a sense, we have made progress since NNPC has now for the first time acknowledged that it did not remit to the federation a sum of $10.8 billion and has gone public with an attempt to render account." -------------------------------------------------------------------------------------- Nigeria: U.S.$20 Billion Oil Money - Leakages in NNPC May Ground Economy - Sanusi 6 February 2014 Reserve Bank Governor Lamido Sanusi Governor of the Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi has stated that his decision to take part in the joint press briefing called by the minister of finance, Dr Ngozi Okonjo-Iweala, last December was in order to avert a crisis and calm nerves in the polity. Sanusi also insisted that the persistent leakages in the amount of oil revenue remitted to the federation account if not stopped on time would ultimately bring the entire economy to its knees. In an executive summary of his presentation to the Senate Committee on Finance, obtained by LEADERSHIP yesterday, the apex bank governor regretted that his letter to the president which was leaked last year was published in a highly politically-charged atmosphere leading to the Central Bank being practically accused of involvement in politics. "In December it was clear to me that no tempered and positive discussion would take place. In order to calm nerves and avert a major crisis, I agreed to the joint press conference with the Finance Ministry, the Petroleum Ministry, and also to present a common front at the National Assembly." At the said press conference which held on December 18, 2013, jointly addressed by Okonjo-Iweala, Sanusi, and minister of petroleum Mrs Diezani Alison-Madueke, Sanusi had said he was wrong in his earlier allegation that $49.8 billion was missing and that the actual unremitted amount was $12 billion. Okonjo-Iweala said her record indicated that only $10.8 billion could not be accounted for. The CBN governor stressed that Nigeria cannot sustain the current trend in oil revenue leakages, adding that if not stopped it is capable of bringing the entire nation to its knees. "The amount in 19 months may be $10.8 billion or $12 billion or $19 billion or $21 billion; we do not know at this point. But if we extend the period the amount will increase anyway, since this has been going on for a long time. The first priority is to stop it. It is unsustainable, and it will ultimately, if not stopped, bring the entire economy to its knees." Sanusi who appealed to Nigerians not to disregard the alarm he raised as spurious or baseless also noted: "Since December, however, there has been an orchestrated campaign aimed at undermining our credibility and misleading Nigerians into believing that all monies due to the federation account have been either remitted or adequately accounted for." He said that the decision on what to do with the situation at hand rests entirely with the government. "My task is limited to raising an alarm over what I think is a development that is harmful to the economy, and establishing that the alarm was neither spurious nor baseless. I still insist that an investigation is needed to establish the extent of the losses and nature of offences committed." In related development, Sanusi also spoke at an investors' dinner in Lagos on Tuesday night, saying the revelation of the missing and unaccounted monies would help in ensuring good governance and accountability in the governing of the country. Sanusi, who had made fresh allegations at a public hearing organised by the Senate, said that the NNPC was yet to account for $20 billion oil proceeds, an amount higher than the initial $10.8 billion that was in contention. He stated that "a lot of the noise that is happening in the country today around me and the oil sector is good for the country because, at the end of the day, if it leads to improved governance over oil revenue, if it leads to increased transparency or people having to be called to explain what they have done with the money, that is good for the system. People must not see controversy and noise as necessarily bad. I love controversy". "If you think there has to be change and if you think a system needs to be improved and if you get too comfortable in a system, you should ask yourself what has happened to you. You need to step on a few toes, annoy a few people, have your own toes stepped on; you will be annoyed once in a while. Of course, they will slap you once in a while," he stated. Stressing that the current market price of oil is in favour of the country, the CBN governor noted that revenue shortfalls arising from oil theft and illegal bunkering are the major challenge for the country, noting that if the problem of oil theft and illegal bunkering was solved, issues around reserves, currency stability and fiscal deficit would be a thing of the past. "We have tried to build a stable environment, and, for us at the Central Bank, we have been very lucky to have had a very good partner in finance. If you look at government spending in 2013, it really wasn't much higher than in 2012 and fiscal policy is not in itself loose on the basis of government spending. The real challenge is that there are things that we can do to block some of the revenue shortfalls that are causing the problem - oil theft and bunkering -- because we've good oil price, we've got the output and if you fix that, the issues around reserves, around currency stability, around fiscal deficit would simply disappear." He also blamed lack of fiscal discipline on the part of the government, saying "government spending itself has not been the problem. It is largely because of the fiscal discipline in the last few years that our tight monetary policy has been able to work. We have been able to bring down inflation to single digit and it has been below 10 per cent since January 2012. It would remain 10 per cent throughout 2014. "I know there is speculation about how much money will come into the economy during elections, but how much money is there anyway? It's $2.5 billion in the Excess Crude Account. So even if people want to spend money, the money won't be available. So the risk from that end is not as high as people might think. The greater risk is if we continue to have deterioration in the revenue profile, and that can be addressed because it is really in our control." Senator urges Nigerians to be vigilant on Sanusi's revelation Reacting to Sanusi reveletion, Senator Olubunmi Adetunmbi (APC, Ekiti) has urged Nigerians to be vigilant. Sanusi had alleged that $20bn oil funds from the federation account was still unaccounted for by the Nigerian National Petroleum Corporation (NNPC). Adetunmbi said Sanusi's action was proper and urged Nigerians "to be vigilant in ensuring that the ongoing investigation into the allegation gets to its satisfactory conclusion". The senator, who is the vice chairman, Senate Committee on Interior, said "time has come for Nigerians to be more interested in issues of public finance". The ongoing controversy, he said, was a vindication of his position when he first raised the motion of urgent public importance on the unremitted funds on the floor of the Senate. Adetunmbi said his action led to the sequence of events that uncovered the controversial issue of missing funds. Nonetheless, he described as mischievous insinuations that the CBN boss was acting the script of the opposition with his action. -------------------------------------------------------------------------------------- Nigeria: House Committee Rejects Okonjo-Iweala's Answers to 50 Questions, Asks Her to Reanswer By Idris Akinbajo, 3 February 2014 More on This Nigeria Finance Minister's 50 Answers, Questioned Nigeria: House Seeks Further Clarification From Okonjo-Iweala On 50 Questions By Muhammad Bello, 3 February 2014 The House of Representatives Committee on Finance remains on a collision course with the Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-iweala, as it has raised issues over her 100-page reply to the 50 questions on the state of the economy that were handed to her last December. Chairman of the committee, Dr. Abdulmumini Jibrin, in a letter to the minister titled, "State of the Economy: Observations, Request for Additional Information and Invitation to investigative Hearing", dated January 31, 2014, noted that the minister did not answer some questions, partially answered some, ignored some or failed to comprehend some. According to him, there were "glaring missing gaps in the responses, absence of supporting proof to assertions and lack of relevant documents to back up the presentation as is the practice in any legislative oversight or investigation." Observing that a chunk of the data and statistics the CME provided did not fit the information she submitted while answering other questions, Jibrin also criticised the minister's comparative analysis in answering some questions, noting that she "failed to apply the same in some cases that obviously require such approach". "In some instances, you abruptly referred the committee to relevant agencies for clarification. The committee is surprised at that because of its conviction that if all the questions raised are beyond the competence of the Minister of Finance, it is certainly not beyond the competence of the Coordinating Minister for the Economy to the extent of information you must have in your possession unless you say otherwise," he added. Giving a copious appraisal of the minister's response to the 50 questions, the committee provided clarification of what was expected of her by stating, "Your responses this time and submission of the supporting document are expected to put issues in a clearer perspective to enable the committee conclude preparation for the hearing." For the umpteenth time, the House summoned the minister to appear before it and gave her a deadline of March 3 to do so. The committee also painstakingly catalogued the areas in which her response failed to answer questions posed to her. These comprised 39 out of all 50 questions. However, while it did not fault 15 other questions, it pointed out that they would be subjected to additional scrutiny at the hearing. Specifically, the committee wants the minister to give supporting documentary evidence of requisite facts and figures of government's claims regarding its economic achievements, provide documentary evidence to support claims on the role of the manufacturing, real estate and housing sectors, answer the question on where exactly expenditure cuts were made in order to reduce recurrent expenditure for the years in question, specify why the economy is growing but not creating enough jobs and present a comparative and alternate scenario of what the possible outcomes for the country might be of a higher debt-GDP ratio assuming a diligent focus on infrastructure development financing, using the borrowed funds. On the Global Competitiveness Report of the World Economic Forum for 2013-2014, the committee wants the minister to provide the probable economic consequences of the country's ranking, provide the official figure of Nigerians in abject poverty, and the provisions of the repayment dates of loans collected for the execution of projects. Other issues to which the committee sought clarifications are: the guidelines on which the borrowed funds were based upon; percentage of loanable funds that went to the agricultural sector,; the manufacturing sector and the capital market; a detailed performance report, including disbursement schedule and levels of implementation for each of the projects for which external borrowings were made; the specific economic disadvantages of a much higher external debt vis-à-vis a much lower domestic debt; corresponding human development indices (such the UNDP's HDIs) for Nigeria in comparison with these economic growth ratings as those of Fitch, Standard and Poor's and Moody's; and information about her conclusions based on these comparisons. It also demanded to have names of persons/companies who benefited from exemptions and waivers, and an answer as to whether Nigeria needs the services of a foreign company to analyse and improve its tax system. On the Sovereign Wealth Fund (SWF), the committee also sought to know the present cumulative value of Nigeria's pension fund, which is similar to Norway's Government Pension Fund; required clarification on Mastercard; and the multiplicity of public funds being sunk into the establishment of different identification systems by the National Identity Management Commission (NIMC), the National Population Commission (NPC), the Independent National Electoral Commission (INEC), Nigerian Police Force, the Federal Road Safety Commission, etc. It also asked for the minister's assessment of the conditions of mass transit buses/ taxi cabs provided since 2012; government's reason for the persistent poor implementation of the Subsidy Reinvestment Programme (SURE-P); provide documentary evidence on the disbursements of the FGN's N200 billion intervention fund to the SMEs she referred to with the Central Bank of Nigeria (CBN). On crude oil sale, the committee demanded information on how much Nigeria had made in excess of the average benchmark price for the years 2011 to 2013, and wanted specific information on the management issues surrounding the Excess Crude Account (ECA), and all the other observations and requests it raised in the letter to the minister. The chairman drew the attention of the minister to how the committee "went the extra length to defend" her in public where it was convinced that she bore no direct fault, stressing, "Now that we have turned to places where you have questions to answer, the least we expect from you is maximum cooperation as we enter the critical legislative process of asking questions to know the true state of our economy." He said the committee would not be frustrated or distracted from doing its work and shall remain focused on the issues, as doing so "is a sacred service to our fatherland". -------------------------------------------------------------------------------------- House Seeks Further Clarification From Okonjo... The Finance Minister, Ngozi Okonjo-Iweala, failed to answer many of the questions sent to her by members of the House of Representatives Committee on Finance on the 'true state' of Nigeria's economy, the lawmakers have said. In a review of Mrs. Okonjo-Iweala's response to the 50 questions issued to her by the committee, the lawmakers said some of the questions were "either not answered, partially answered, outrightly ignored or completely misunderstood." The lawmakers' response is contained in a letter addressed to the minister, dated January 31, and signed by the Chairman of the Committee, Abdulmumin Jibrin. The committee also said it observed several lacuna in the minister's response. "The Committee further noted glaring missing gaps in the responses, absence of supporting proofs to assertions and lack of relevant documents to back up the presentation as is the practice in any legislative oversight or investigation. "Many data and statistics provided were inconsistent with subsequent information provided while answering other questions," the committee said. The 50 questions The 50 questions were issued to the finance minister on December 19, 2013by the committee. The questions bordered on the state of Nigeria's economy. Though the committee gave her two weeks to respond, the minister sent her response and made it public on January 16. The presentation of the questions to the minister had sparked controversy between her and the House committee on December 19, 2013, when she appeared before the lawmakers. A disagreement occurred during the minister's appearance as a video sourced by PREMIUM TIMES showed the minister initially making jest of the lawmakers after they informed her of their decision to hand her the 50-question homework. The video indicates that the controversial meeting started on a warm note with exchanges of pleasantries between the executive team, led by Mrs. Okonjo-Iweala (and including the Director General of the Budget Office, Bright Okogwu) and the lawmakers led by the committee chairman, Mr. Jibrin. Despite starting on a good note, the meeting degenerated when the lawmakers told the finance minister not to respond to their questions on that day after she said she was 'feeling ill'. Mrs. Okonjo-Iweala said she came to the meeting 'out of respect' to the lawmakers as she was not healthy enough to attend. After the presentation of the questions, however, the minister insisted she would answer the questions on that day, a request refused by the lawmakers who said they wanted her to come back when she was 'strong and energetic.' After studying the minister's response for two weeks, the lawmakers have now said the response falls short of their expectations. Committee expresses dissatisfaction The House committee stated its disapproval at the minister referring it to other government agencies for details of the responses to some of its questions. "... if all the questions raised are beyond the competence of the Minister of Finance, it is certainly not beyond the competence of the Coordinating Minister for the Economy to the extent of information you must have in your possession unless you say otherwise," the lawmakers said. The committee, not satisfied with her responses, then resent what it described as "additional observations and requests" on about 40 of the 50 questions it earlier sent the minister. It said those should be provided on or before February 20. "The observations and requests are made on questions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 20, 21, 22, 23, 24, 25, 26, 27, 30, 31, 32, 33, , 35, 36, 37, 39, 41, , 43, 44, 45, 47, and 48 while further details on the following questions will be taken at the hearing: Questions 7, 18, 19, 21, 2, 8, 29, 34, 38, 40, 42, 44, 46, 49 and 50. "Your responses this time and submission of the supporting document are expected to put issues in clearer perspective to enable the Committee conclude preparation for the hearing. "The Committee has scheduled an investigative hearing to give you the opportunity to explain and defend your submission before the Committee and enable Nigerians to participate and make their contributions to this issue," it said. The public investigative hearing is scheduled to hold between March 3 and 6. -------------------------------------------------------------------------------------- Nigeria: House Summons NNPC, 499 Firms Over N1.4 Trillion Waivers By Muhammad Bello, 2 February 2014 The House of Representatives Committee on Customs and Excise will soon commence investigations of the Nigeria National Petroleum Corporation (NNPC), Oando Plc and 498 companies allegedly granted waivers totalling N1.4 trillion by the federal government between 2009-2013. All the companies have been summoned via a letter, dated January 27 and signed by the committee chairman, Sabo Nakudu (PDP, Jigawa), a copy of which was obtained by THISDAY. Nakudu also in a separate letter to the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonko-iweala, which was dated January 23, told the minister that as his committee was poised to carry out a comprehensive investigation into the granting of waivers and exemptions within the same period, the finance ministry should desist from such practice not favoured by law. In its preliminary investigation, the committee had revealed that some of the companies had engaged in cases of round tripping the waivers granted them by making photocopies of such and using same multiple times. In some instances, they even imported other items that were not approved in the waivers. The committee also discovered that about 900 companies, many of them oil companies, were granted waivers between 2011-2013. It stated that as investigation continues, there is every likelihood that more alleged offenders may be uncovered. The Customs records show that Conoil Plc, which enjoyed N53 billion, was the largest beneficiary of the concession in 2013 followed by Oando with N22 billion. Others were NIPCO Plc (N19 billion), Sahara Energy (N14 billion) and Folawiyo Energy (N12billion). The documents show that in 2012, the NNPC was the biggest beneficiary. It got N80 billion in concessions, and Sopon Nigeria Ltd was the highest non-oil beneficiary in 2011, netting about N33 billion. In 2011, the oil firm that benefited most was still Oando with N83 billion, followed by Capital Oil and Gas (N47 billion), Integrated Oil and Gas (N20 billion), Folawiyo Energy (N18 billion) and Sahara Energy (N14 billion). Additional categories of beneficiaries were Coscharis Motors, which supplied Aviation Minister Stella Oduah's controversial bulletproof cars and supplied 200 cars to the African First Ladies summit in 2012, received waivers of N400 million in 2011 and N698 million in 2013. Dangote Group, the African First Ladies Peace Mission (AFLPM), Inspector General of Police, Chief of Army Staff, Central Bank of Nigeria, Bayelsa State government, Minister of Police Affairs, Nigerian Police Force, Sokoto State Government, Akwa Ibom State Government and the Watchtower Society also benefitted. According to a document released by the Customs, a total of N1.435 trillion was lost through import duty waivers and concessions since 2011. In the same year about N480 billion was lost, through waiving N389 billion under the fuel, lubricants and similar products category for 149 beneficiaries, and N91 billion through other concessions to 290 companies. The same amount was lost the following year, with N288 billion going to companies trading in oil and similar products and the remaining N191 billion being lost through other concessions. Another N474 billion was lost in 2013. The breakdown of the figures shows that N359 billion went to 80 oil firms while N114 billion was lost through concessions to another 287 companies. The Customs documents indicate that about 65 percent of beneficiaries received the waiver/concessions for goods not approved by the government, which ordinarily should be limited to raw materials, machinery and spare parts. The inclusion by the Finance Ministry of "other goods" in the categories eligible for concessions, according to the Customs, enabled finished goods that add no economic value to the country to be imported. These goods include fish, bullet-proof vehicles, kola nut, palm oil and others. -------------------------------------------------------------------------------------- Nigeria: Govt to Spend N1.35 Trillion On Police Reform By Hope Abah, 31 January 2014 Makurdi — President Goodluck Jonathan yesterday said in Makurdi, Benue State that N1.35 trillion would be spent on police reform in the next six years. He said 60 per cent of the amount would be provided by the Federal Government while the remaining 40 per cent will be generated from stakeholders and other sources. Jonathan, who was represented by the Federal Capital Territory (FCT)'s minister, Senator Bala Mohammed at a four-day Police Service Commission (PSC) retreat, added that the National Economic Council has approved the deduction of one per cent from the federal allocation for funding of the police force. The president further reiterated his administration's commitment to restructure the police by implementing recommendations of several police reform committees set up by past administrations. Earlier, the Inspector General of Police (IGP), Mohammed Abubakar, who also stood in for the Minister of Police Affairs, Caleb Olubade, decried the non implementation of police reforms reports. Abubakar noted that the present police under his watch have accomplished many feats, including the establishment of 500 housing units in Lagos, among several others in some states of the federation. Similarly, chairman of the PSC, Dr. Mike Okiro, assured that the retreat will help the commission to re-energise and refocus for effective strategic planning. He maintained that the police exercise enormous powers which need to be checked and balanced in order to prevent it from becoming an instrument of abuse, exploitation and repression. -------------------------------------------------------------------------------------- Nigeria: 2014 Budget - PDP, APC Senators Unite Against Okonjo-Iweala By Johnbosco Agbakwuru and Joseph Erunke, 30 January 2014 Nigeria Finance Minister Ngozi Okonjo-Iweala. Abuja — Senators elected on both the PDP and APC platforms, yesterday, united against the Co-ordinating Minister of the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, blaming her for the country's economic woes. They specifically accused the minister of imposing the economic policies of the International Monetary Fund, IMF and the World Bank on Nigeria. The senators also accused themselves of being part of the problem in the non-implementation of previous budgets in the country, pointing out that this was because they had not been living up to their constitutional responsibilities in the discharge of their oversight functions. Deputy Senate Leader, Abdul Ningi, PDP, Bauchi Central, cautioned against Nigeria depending on the policies of the IMF, the World Bank and other advanced economies of the world, adding that the country should evolve indigenous economic policies that would impact positively on the people. He hinged his argument on the premise that western economies were collapsing, unlike the home-grown economies of India and China, which according to him were waxing stronger by the day. Similarly, Senator Smart Adeyemi, PDP, Kogi West, said that Okonjo-Iweala should be told in clear terms that the economic policies of the IMF and the World Bank would not work in Nigeria. According to him, "the policy must be reviewed. The IMF and World Bank policies cannot work 100 per cent in Nigeria. We don't need IMF commendations. What we need is what will impact on the lives of Nigerians. We need to concentrate on key areas such as power and other sectors as well as work on budget management." Also, in his contribution, Professor Sola Adeyeye, APC, Osun Central, accused the Finance Minister of confusing Nigerians with foreign economic jargons, which he described as 'Okonjonomics', adding that they would not impact positively on the domestic economy and lives of Nigerians. Adeyeye called on the PDP and the APC to unite so as to terminate any rascal in government. He also asked the Senate to find a way of terminating waivers to companies that have no direct impact on the country. Senator Odion Ugbesia, PDP, Edo Central, in his contribution said: "This budget proposal may not be the best and cannot satisfy everybody but it can be seen as a working paper that will guide towards a budget that will satisfy everybody. "It could be used to find some solutions to our problems. My worry is the concept of envelop that comes with it annually. To me, it is an impediment. We should use the opportunity of this budget process to redefine the roles of the executive and legislature as it relates to designs and implementation of budgets," he said. Senator Ganiyu Solomon, APC, Lagos also advised the executive to change policies that had not been yielding results, saying, "we should increase the ratio of capital expenditure to recurrent." Commenting on the ratio of the capital votes to recurrent, most of the Senators observed that the 76 per cent recurrent expenditure and the 24 per cent capital components of the budget were rather lopsided, and therefore far from meeting the needs and aspirations of the people. According to Senator Kabiru Gaya (APC, Kano South), the distribution of the allocation in the budget is worrisome and unacceptable. He called on the executive to swap the figures for capital with the recurrent. "The Federal Government budget is the reverse of the Rivers State budget. I wish the budget will be 74 per cent capital and 26 percent recurrent," Gaya said. Senator Gbenga Ashafa (Lagos East, APC), in his contribution, pointed out that capital expenditure in the last three years had witnessed some downward swing. Presenting a statistical analysis of capital votes in the last three years, he said, "the capital allocation for 2012 was 31 per cent; in 2013, it came down to 23.7 per cent while 2014 is 23.4 per cent. Observing that the 2014 budget estimates negated the requirements of the Fiscal Responsibility Act, Ashafa described the document as an illegality, calling for its return to the 'sender', (Executive). Majority of the APC, senators, in their contributions, insisted that the Appropriation Bill should be returned to the executive for lacking necessary indices for rapid socio-economic development. The Senate President, David Mark renewed his appeal to his colleagues to make their contributions from a nationalistic stand point, and not from party leanings. "Let us look at this budget from a national perspective, rather than political party perspective", Mark appealed. The debate would continue to today. -------------------------------------------------------------------------------------- Nigeria: Senators Fault Okonjo-Iweala Over Deficits in 2014 Budget By Turaki A. Hassan, 30 January 2014 Nigeria Finance Minister Ngozi Okonjo-Iweala. More Senators yesterday took a swipe at Finance Minister and Coordinating Minister for the Economy Mrs. Ngozi Okonjo-Iweala for implementing policies pushed by western financial institutions to strangulate Nigerians. The lawmakers who spoke at the continuation of debate on the merits and general principles of the 2014 budget bill in Abuja yesterday maintained that policies being pursued by the International Monetary Fund (IMF) and the World Bank cannot fit into Nigeria. Senator Smart Adeyemi (PDP, Kogi) said: "let us not throw the baby and the bath water away; the minister of finance must be told that economic policy of the World Bank and IMF are not good for Nigeria; we need infrastructural facilities for growth; we don't need the commendation of the IMF, what we need is the commendation of the local people". Adeyemi further argued that oil firms in the country should be encouraged to participate in the energy sector, through gas to power programme and that more money should be provided for the insurgents prone North East, completion of Lagos-Ibadan Express Way and the Second Niger Bridge. Senator Olusola Adeyeye (APC, Osun) called for the termination of what he called "financial rascality and criminal enjoyment of politicians" to enable Nigeria prosper. He regretted that the finance minister who had championed Nigeria's debt repayment during the regime of former president Olusegun Obasanjo was now leading the country back to the IMF and World Bank debt traps. In their contributions, Senators Mohammed Danjuma Goje and Babayo Gamawa lamented the meager allocation to the agricultural sector and advocated for a better funding of the sector which employs over 70 percent of Nigerians. Senator Ita Enang (PDP, Akwa Ibom) yesterday alleged that the Central Bank of Nigeria (CBN) allegedly expended N98 billion to purchase the Nigeria Telecommunications Limited (NITEL) building at the Central Area, Abuja, five star hotel and convention center among others. -------------------------------------------------------------------------------------- Nigeria Mobilises U.S.$700 Million for Trans-Sahara Gas Project - Jonathan 29 January 2014President Goodluck Jonathan on Wednesday in Addis Ababa announced that Nigeria has mobilised 700 million dollars to support the completion of Nigeria-Algeria gas pipeline project. Jonathan made this known in a report on the status of the Trans-Saharan gas pipeline project, presented at the 30th meeting of the NEPAD Heads of State and Government Orientation Committee. Represented by the Acting Minister of Foreign Affairs, Prof Viola Onwuliri, Jonthan renewed the special commitment of Nigeria to jump start the project, which has an estimated cost of 20 billion dollars. He said the immediate focus for Nigeria was to connect major gas supply sources in the Niger Delta region through pipeline infrastructure that traverses the northern half of the country and delivers gas to the Nigeria/Niger border. "We have raised $450 million in Eurobonds and an additional direct equity contribution of about $250m in support of this project. "The NNPC, which is the executor of this project has completed the concept design for the pipeline, which is an important milestone since I last provided an update on this project to the committee". The report by the president noted that work had begun in the acquisition of Rights of Way survey of key segments of the pipeline, while work on the environmental impact assessment study of the pipeline would soon commence. Jonathan informed the NEPAD meeting, chaired by President Macky Sall of Senegal, that the front end design of the pipeline would be completed by the end of the third quarter of 2014. "This will be followed closely by major construction activities on the Trans-Nigeria segment. "It is our expectation and aspiration that work on the Trans-Nigeria segment will be completed, as planned, by 2018". The News Agency of Nigeria (NAN) reports that the $20 billion trans-saharan project, when completed will transport about 30 billion cubic metres of natural gas from Warri through Niger Republic to Algeria and to Spain and Europe. The gas pipeline when completed will be operated by the NNPC and Sonatrach of Algeria, both of which will hold 90 percent shares of the equities of the project. The national oil company of Niger Republic, SONIDEP, will hold ten per cent equity. Jonathan also told the committee that NNPC, SONATRACH, SONIDEP, have engaged a reputable consultant to carry out the revalidation of the 2006 feasibility study of the project. This, he said, was necessitated by recent developments in the environment and the study would be concluded by March. "This study is part of our collective determination to ensure that robust gas supply sources and gas marked windows still exist for the project. "Preliminary results indicate some uncertainty around the market opportunities in Europe and this is due mainly to possible intra-European gas pipeline projects from Russia that may compete with supplies from Africa". The project is intended to integrate the economies of the region in line with NEPAD's vision to boost GDP of participating countries, create wealth and improve the living standards of people in the region. (NAN) -------------------------------------------------------------------------------------- Nigeria: U.S.$10.8 Billion - Leadership Faults Auditor-General's Reply By Ezra Ijioma, 27 January 2014 In its determined effort to uncover the truth over the non-repatriation of crude oil revenue by the Nigerian National Petroleum Corporation (NNPC) to the federation account as claimed by the governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, LEADERSHIP has again written to the auditor-general of the federation (AuGF), Mr Samuel Ukura, for copies of the external auditor's report in his possession on audited accounts of the NNPC in the last five years (2009 to 2013). LEADERSHIP had written to the AuGF over audited accounts of the NNPC in his possession, but he replied that his office does not audit NNPC's accounts in line with Section 85 (3) of the 1999 Constitution (as amended). He, however, claimed that he could provide a list of qualified external auditors from which NNPC and other statutory corporations, commissions and bodies created by an Act of the National Assembly shall appoint their external auditors. Ukura disclosed that his office faces "professional and ethical threats" in discharging its constitutional role of "carrying out the vetting and periodic checks of the accounts of government statutory corporations, commissions etc including the NNPC operations". But, apart from the reports of NNPC's external auditors in AuGF's possession, LEADERSHIP is requesting the reports of the last five periodic checks of the NNPC accounts conducted by the AuGF in accordance with Section 85 (4) of the 1999 Constitution and the last five external auditors that submitted to him reports of the audited accounts of NNPC. The request made by LEADERSHIP is anchored on the Freedom of Information (FOI) Act, 2011. Also, LEADERSHIP had written to the NNPC, CBN and the National Assembly requesting relevant information from these institutions that would help ascertain the correct position on the repatriation or non-repatriation of crude oil sales by NNPC to the federation account. So far, none of the institutions has replied LEADERSHIP's request made over a month ago. The development is contrary to the provision of the FOI Act, 2011, which says in its Section 4 (a) that any public institution that receives an application for information has seven days to respond but can seek an extension not exceeding seven days, if it transfers the request to another public institution or the volume of document requested is large and extra time is needed to gather it. So far, NNPC, CBN and NASS have exceeded the legally required timeframe to respond and they have not consulted LEADERSHIP on how to respond to its request as specified by law. Sanusi had in a letter dated September 25, 2013, drawn the attention of President Goodluck Jonathan to the "Non-repatriation to the Federation Account by the Nigerian National Petroleum Corporation (NNPC) of $49.8billion representing 76% of the value of crude oil lifting in 2012 and 2013". In the private letter, which later found its way into the public sphere, Sanusi told Jonathan that out of 594,024,107 barrels of crude valued at $65,332,350,514.57 lifted between January 2012 and July 2013, only $15,528,410,098.77, representing 24 per cent of the value, was remitted to the Federation Account by the NNPC, leaving $49.804 billion or 76 per cent of the value of oil lifted in the same period yet to be accounted for. NNPC's action, Sanusi said, "constitutes not only a violation of constitutional provisions but also of both the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No. 17 of 1995 and the Pre-Shipment Inspection of Exports Act No. 10 of 1996". However, NNPC denied Sanusi's accusations. First, it accused Sanusi of playing politics over the issue and said he lacked knowledge of the "workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account". NNPC spokesman Omar Farouk Ibrahim said the 24 per cent of total crude oil revenue receipts which Sanusi is reported to have acknowledged that NNPC remitted represents the proceeds from the equity lifting which NNPC is directly responsible for. The alleged unremitted 76 per cent was paid to the agencies that are statutorily empowered to receive them for onward remittance into the Federation Account. Later, in a reconciliation meeting with the coordinating minister for the economy and minister of finance, Ngozi Okonjo-Iweala, and representatives of CBN, NNPC, Department of Petroleum Resources (DPR), the Federal Inland Revenue Service (FIRS), the Office of the Accountant General of the Federation, the Budget Office of the Federation, and the ministries of Finance and Petroleum Resources, the amount of $10.8 billion (about N1.74trillion), being revenue shortfall recorded between January 2012 and July 2013 for domestic crude receipts, could not be reconciled. Weeks later, NNPC said the amount was part of the subsidy payments and security for oil installations. Not satisfied with the responses and reconciliations, LEADERSHIP has continued to push for the true picture of the issue in fulfilment of its constitutional role as a media organisation as enshrined in Section 22 of Chapter 2 of the 1999 Constitution of the Federal Republic of Nigeria (as amended). -------------------------------------------------------------------------------------- Financial haemorrhage: Nigeria bleeds as $1.7bn goes out weeklyon January 27, 2014 … $18.3bn paid out in 12 weeks A total of $88.4 billion left the shores of Nigeria to foreign lands through official channels in 2013 of which $18.3 billion was remmitted in three months thus giving an average foreign exchange outflow of $1.7 billion weekly. This is just as the Excess Crude Account (ECA) component of foreign reserves has now fallen to just $2.5 billion, compared to $11.5 billion a year ago. The $18.3 billion went out of the country in the form of capital flight, which Nigerians indulged in. According to figures captured by the International Remmittance unit of CBN, the amount was remitted through banks, Bureau De Change, Travel agencies and debt payment to foreign creditors to which Nigeria owes some money. This and the monthly withdrawals from the Federation Account have resulted in the depletion of the nation’s foreign reserves. The financial haemorrhage, which has been plaguing the nation for years due to the low productivity of the economy, has resulted in blame games in political and financial circles. Nigeria foreign reserves, according to CBN, is made up of dollar proceeds from oil earning which the CBN monitises and pays the naira equivalent into the Federation Account for allocation to the three tiers of government and then holds the dollars in reserves for those who intend to buy abroad. The second component is the proceeds from the Excess Crude Account which is the amount realised from sale of crude oil in excess of the budget benchmark that is held on behalf of the three tiers of government by the CBN. According to Sanusi Lamido Sanusi, the CBN Governor, the Excess Crude Account (ECA) component of foreign reserves had now fallen to just $2.5 billion, compared with $11.5 billion a year ago. It is the depletion of this component of the reserves that has become a major concern to the handlers of the nation’s finances. However, the foreign exchange out flows, according to Financial Vanguard’s findings, has resulted in an average of $1.7 billion leaving the shore of Nigeria every week as payment on travels, cash purchased from banks and bureau de change, letters of credit, direct remittances on behalf of expatriates working in Nigeria, Wholesale Dutch Auction and debt service payment. In twelve weeks a total of $89.647million was spent by Nigerians in foreign travels. Cash sales in dollars by bureau de change and banks to small scale businesses and individuals amounted to $2.665 billion. In the twelve weeks, amount attributed to dollars sales through letters of credit opened on behalf of Nigerians for business purchases amounted to $365.810 million, while a total of $1.159billioin went out of the country as direct remittances. According to the CBN figures, within the twelve weeks, foreign exchange purchases through the official market of the Wholesale Dutch Auction sales stood at $13.906 billion and payment of interest on foreign loans by the Federal Government took out the sum of $144.83million from the nation’s coffers. A break down of the foreign exchange out flows from the CBN showed that in the week ending 20th September 2013, the sum of $38.93 million was spent on travels, while cash sales to bureau de change and banks took out the sum of $263.575 million out of the nation’s foreign reserves. In the same vein, within the same week, the sum of $96.05million went out through letters of credit and the sum of $1.26billion was sold by CBN at the foreign exchange market to Nigerians, who apply to buy goods and service abroad. This resulted in the depletion of Nigeria foreign reserves by a total of $1.708 billion in this particular week. In the week that ended on the 6th of September 2013, the sum of $3.2 million went out through travels while cash sales to bureau de change during the week stood at $240 million. The value of the Letters of Credit opened on behalf of several Nigerian’s businesses amounted to $19.71 million and direct remittances stood at $79.491million. Wholesale Dutch Auction during the week sold a total of $1.122billion to those who applied for foreign exchange to the CBN. Government interest payment on foreign loans that fell due during the week amounted to $14.444million. At the end of 6th September 2013, a total sum of $1.479 billion was paid out from the foreign reserves. The story is the same for the rest of the ten weeks surveyed by Financial Vanguard. Nigeria’s foreign reserves peaked at $48.2billion in August 2013 before it moderated to $43.9 billion at the end of 2013. Nigerians penchant for foreign made goods, the insistence by political actors in the country on the sharing of the proceeds of the excess crude account, the falling receipt from the nation’s mainstay oil and gas are largely responsible for declining level of the nation’s foreign reserve. But Minister of Finance, Dr Ngozi Okonjo-Iweala, says the present amount in Nigeria’s external reserves should not be seen as declining. Addressing reporters in Abuja before she left the country, Tuesday, to attend the World Economic Forum in Davos, Switzerland, Dr Okonjo-Iweala attributed the role of the accountability of the fund to the Central Bank of Nigeria. She said that Nigeria’s external reserve was in a robust condition. “When the reserves decline by few million dollars, there is a big headline. The external reserve of the country is really robust compared to what is really needed,” she said. Her statement is expected to clear the air on reports that the external reserves of the country was declining. Reacting to the depletion in foreign reserves, Sanusi expressed concern about Nigeria’s dwindling Excess Crude Account, saying that its ability to successfully protect the naira will be based on the amount in the Excess Crude Account and the Foreign Exchange Reserve. According to him, a stable currency is absolutely critical for price stability and financial stability in general, adding that it is not in the interest of the country to devalue the naira, because it will not have impact on the country’s current account balance, given the highly inelastic nature of imports and the dominance of oil. He said that the Excess Crude Account (ECA) has now fallen to just $2.5 billion, compared with $11.5 billion a year ago, noting that until it is replenished, there would be little room for a reduction in the Monetary Policy Rate, MPR, below the current 12 percent benchmark. He said, “We should continue to seek a stable exchange rate for as long as the reserves and monetary conditions can support this.” Sanusi said he has no fears of tightening monetary policy further to keep inflation down and to stabilise the currency, noting that, if needed, the CBN will increase its Monetary Policy Rate from 12 percent and the Cash Reserve Requirement on public sector funds to 100 percent. President of Lagos Chamber of Commerce and Industry, Alhaji Remi Bello, had said “We are satisfied with the apex bank’s efforts at ensuring exchange rate stability and we hope that this is sustained in 2014. Our concern is the continued protection of the exchange rate on the back of high interest rate with the attendant negative outcomes for businesses, output, employment and growth. The naira exchange rate also fluctuated within the set bound of N160 per dollar plus and minus five percent throughout the year. Managing Director/Chief Executive, RTC Advisory Services Limited, Mr. Opeyemi Agbaje, said, “There are some significant negatives that we would also be taking into 2014. Most importantly is the management of the oil sector, vis-a-vis the absence of Petroleum Industry Bill, PIB, divestment of multinationals, and the general state of uncertainty in the industry, oil theft, oil piracy, and declining production. “Now if you go into 2014, I see several levels of uncertainty, and for me, that is the defining concern for 2014. We have uncertainty in the foreign exchange market because oil sector outlook is not clear. Two, our domestic oil sector is not settled because of issues I mentioned earlier, and that is where we get 85 percent of our foreign exchange earnings. So, there is doubt over our foreign exchange. I see a very high probability of naira devaluation, and the pressure is already building. In the financial sector, there is also some uncertainty around liquidity; the CBN’s CRR policy and expectation in some sectors that they are going to raise the CRR. With CBN’s determination to curtail inflation in the face of political spending in 2014, so there is going to be further squeeze in liquidity and pressures on inflation. Samuel Durojaiye, President, Finance House Association of Nigeria, said, “Then for the economy in general, the challenges we foresee has to do with revenue generation and the expenditure profile. In terms of revenue generation, you will discover that over the last two years, we have been losing between 300,000 and 400,000 barrels of crude oil per day to oil theft and breakage of pipeline. So, how will the government be able to curb all these, knowing that we have a deficit of almost N1 trillion. Also is the fact that this is an election year, the expenditure pattern is likely going to be above the budget. The deficit will go beyond the budgeted N1 trillion. And oil prices, you will find out that, because of shale oil in United States and discovery of oil in other places, and peace in the Middle East, and Iran threatening that it would go beyond its OPEC quota; this might flood the market with oil and this might force down the price. If you look at our budget price, which is above $70 per barrel, if oil price falls to $90 per barrel, we would have serious problem with the budget. These are the things I am looking at, and I am saying I only hope that things will not get worse in terms of foreign exchange generation and the rate of the naira.” -------------------------------------------------------------------------------------- Why we are shutting down government— Osagie APC House Whipon January 27, 2014 / in Politics 12:18 am By Emmanuel Aziken, Political Editor The All Progressives Congress Whip in the House of Representatives, Rep. Samson Osagie has pledged the readiness of the party members in the House to heed the directive of the party in shutting down the affairs of the Federal Government. He said: I AM a member of a political party and I cannot disagree with my party. All I can say right now is that even the deaf can hear, the blind can see that this government is not only rudderless, it is involved in huge illegalities and unconstitutionalities, it has no respect for the rule of law, neither does it have respect for the right of citizens. It is only reminiscent of events of the military days and a case in point is what is happening in Rivers State. It is so sad that we have found ourselves in a democracy under a regime that cherishes unconstitutional acts. $10.9 billion is missing and that is about two years budget of the Federal Government of Nigeria, it is no joke. Let nobody deceive anybody, it is equivalent to two years budget of this government. Between the Central Bank Governor, the minister of finance, they cannot account for it. Is that not farce? Never in the history of this country, even under military rule have we found this type of lack of transparency of government. It is obvious and clear that under the PDP, Nigerians have suffered a lot and that even at that they want to continue to hold on. The choice really is for Nigerians -------------------------------------------------------------------------------------- Jonathan’s administration creating jobs, building infrastructure, Okonjo-Iweala replies Reps on January 16, 2014 / in For the record, News, Reps vs Okonjo-Iweala 11:08 am The Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala has responded to the 50 questions posed by the House of Representatives Committee on Finance during the 2014 budget presentation. In a 102-page document obtained by Vanguard, the Minister said, in spite of the many challenges facing the government, the Nigerian economy has shown real and measurable progress in many areas, including increase in job creation, improvement in roads, rail and other infrastructure. She added that the country is also saving for the future and planning better for the present. On job creation, the minister said a total of 1.6 million jobs were created in 2013, according to the National Bureau of Statistics (NBS), of which 250,000 were seasonal jobs created in dry season farming in 10 northern states. The document reads: ” In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The SURE-P Community Services prgramme has also created 120,000 job opportunities. “The improvement in federal highways has been confirmed by many Nigerians who travelled over the Christmas and New Year holidays. Key highways which have witnessed significant progress include Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road. Preliminary work has commenced on Lagos-Ibadan road and the Second Niger Bridge. “The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional while work on the Eastern line linking Port Harcourt to Maiduguri is about 36% complete. The Abuja-Kaduna Standard Gauge line has attained 68% completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77% completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013.” Power ” We have completed one of the most comprehensive and ambitious power sector privatization and liberation programmes globally. We have privatized 4 power generation companies and 10 power distribution companies, and have virtually settled all claims and entitlements of PHCN workers. Some major cities get an average of 16-18 hours of electricity per day in 2013. This however dropped in November and December during the transition we expect some teething problems and then power supply should pick up. In 2013, we also mobilized $1.5 billion in financing from multilateral sources for investment and upgrade of the transmission network in 2014 and beyond. To promote clean energy, we also commenced construction of the 700MW Zungeru Hydro-Power project in 2013. We have strengthened relevant power market intermediaries such as the Nigerian Bulk Electricity Trading Plc (NBET), and backed them with financing to stimulate greater private investments in the sector.” Manufacturing “We launched the National Industrial Revolution Plan (NIRP), which focuses on industrializing Nigeria and diversifying our economy into sectors such as agro-processing, light manufacturing, and petrochemicals. In the 2013 fiscal year, Nigeria was named the #1 destination for investments in Africa by UNCTAD (the UN Conference on Trade and Development), attracting over $7 billion in FDI. There were a large number of both foreign and domestic investments in the economy, such as by: $250m investments by Procter and Gamble in Ogun State; $40 million in agricultural projects by Dominion Farms. To further support the manufacturing sector, the Government successfully negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners, which would enable us to protect our strategic industries where necessary. The Nigerian Enterprise Development Programme (NEDEP) was initiated in 2013 to address the needs of small businesses. Some key interventions by NEDEP include supporting small companies with access to affordable finance, access to markets, capacity support, business development services, youth training, and support in formalizing their operations. In addition, in 2013, we reduced business registration costs for small businesses by 50%, to help them conserve capital. Finally, as a result of our backward integration policies, Nigeria is now a net exporter of cement and expanded cement output capacity from 2 million metric tonnes in 2002 to 28.5 million metric tonnes in 2013.” #Read the 102-page document -------------------------------------------------------------------------------------------------------------------------- Nigeria’s economy in danger without CBN autonomy — sanusi on January 24, 2014 / in News 1:43 am / Says successor’s challenge ‘ll be maintaining independence Rules out further devaluation of Naira BY MICHAEL EBOH, WITH AGENCY REPORTS Governor of the Central Bank of Nigeria, CBN, Mr. Lamido Sanusi, yesterday, warned that Nigeria’s economy will be greatly endangered if the independence of the apex bank was undermined. In an interview with Bloomberg Television Africa, on the sidelines of the World Economic Forum in Davos, Switzerland, Sanusi said maintaining the independence of the bank will be a major challenge that his successor will have to contend with, saying that it is important for a strong individual to be appointed to head the bank, due to the critical role it plays in the development of the country. He said, “Any undermining of the CBN’s independence may hurt the economy. If anyone tampers with it, the markets would punish the economy. “The CBN is a very strong institution that needs a strong leader and I think one of the things we have achieved over the last four or five years is to show that we can have an independent Central Bank in Africa. “It is extremely important from the fiscal side, it is extremely important from the governance side, that the governor of the Central Bank is able to speak independently of political authority and raise an alarm and concerns, and give constructive criticism and advice.” In another interview with Reuters Global Markets Forum, Sanusi ruled out further devaluation of the currency, saying that the apex bank would continue to pursue a stable exchange rate policy as long as the foreign reserves can support. He further expressed concern about Nigeria’s dwindling Excess Crude Account, saying that its ability to successfully protect the naira will be based on the amount in the Excess Crude Account and the Foreign Exchange Reserve. According to him, a stable currency is absolutely critical for price stability and financial stability in general, adding that it is not in the interest of the country to devalue the naira, because it will not have impact on the country’s current account balance, given the highly inelastic nature of imports and the dominance of oil. He said the Excess Crude Account, ECA, had now fallen to just $2.5 billion, compared with $11.5 billion a year ago, noting that until it is replenished there would be little room for a reduction in the Monetary Policy Rate, MPR, below the current 12 per cent benchmark. He said: “We should continue to seek a stable exchange rate for as long as the reserves and monetary conditions can support this.” Sanusi said he has no fears of tightening monetary policy further to keep inflation down and to stabilize the currency, noting that, if needed, the CBN will increase its Monetary Policy Rate from 12 per cent and the Cash Reserve Requirement on public sector funds to 100 per cent. He added that: “I don’t think we are at the end of possible tightening cycles, but I do think that the scope for further tightening is getting narrower and narrower. We do need to rely more on other instruments.” He said the CBN will maintain inflation within a band of six per cent to nine per cent this year, controlled majorly by monetary conditions. He said, “Government spending has not been huge, the real challenge has been on the revenue side and on the foreign exchange side. I see no reason why from 2015, Nigeria cannot move to within the range of South Africa’s three percent to six percent, or four percent to seven percent for inflation.” Sanusi further stated that he was unconcerned by personal relationships, saying that, “We meet at work and people should do their job. I do hope that the president will be happy if I do the job very well.” Sanusi had over the years as CBN Governor, made a number of controversial statements, drawing the ire of the members of the National Assembly and the executive arm of government, when he commented on the pay package of the legislators and asked questions on the finances of the country, respectively. It came to an head, when in September last year, he wrote a letter to the Presidency, alleging that about $49.8 billion of the country’s crude oil money has not been remitted by the Nigerian National Petroleum Corporation, NNPC, to the Federation Account over a 19-month period. The NNPC denied insinuations made by the CBN Governor in the letter, saying Sanusi is ignorant of the operations of the oil and gas sector and also playing politics with the issue. The Minister of Finance and Coordinating Minister of the Economy, Mrs. Ngozi Okonjo-Iweala, called a joint press conference with the Minster for Petroleum Resources and the CBN to explain the controversial figure and it was established after a reconciliation meeting that it was not $49.8 billion that had not paid into the Federation Account but $10.8 billion. However, a few days into 2014, it was reported that the Presidency, angered by Sanusi’s decision to allegedly leak contents of his letter to former President Olusegun Obasanjo, asked him to resign, a request that he turned down, saying that he can not be forced out of office until June, when his tenure is expected to elapse. - See more at: http://www.vanguardngr.com/2014/01/nigerias-economy-danger-without-cbn-autonomy-sanusi/#sthash.6Wx8U6nP.dpuf -------------------------------------------------------------------------------------------------------------------------- Nigeria: How Country Lost N1.4 Trillion to Waivers By Nuruddeen M. Abdallah and Turaki A. Hassan, 22 January 2014 Nigeria lost N1.4 trillion through import duty waivers and concessions given in the last three years, according to documents from the Nigerian Customs Service, contradicting claims by the Finance Minister that N170.7 billion was lost in the period. Mrs. Okonjo-Iwela had said in her response to the 50 questions by the House of Representatives that a total of N170.7 billion was conceeded through import duty waivers and exemptions in 2011-2013. She said the amounts were N55.965 billion in 2011, N55.345 billion in 2012 and N59.4 billion in 2013. But documents from the Customs, obtained by Daily Trust on Friday, reveal that a total of N1.435 trillion was lost through import duty waivers and concessions since 2011. In 2011, about N480 billion was lost, through waiving N389 billion under the fuel, lubricants and similar products category for 149 beneficiaries, and N91 billion through other concessions to 290 companies. The same amount of N480 billion was lost in 2012, with N288 billion going to companies trading in oil and similar products and the remaining N191 billion being lost through other concessions. Another N474 billion was lost in 2013. The breakdown of that shows that N359 billion went to 80 oil firms while N114 billion was lost through concessions to another 287 companies. The Customs documents indicate that about 65 percent of beneficiaries received the waiver/concessions for goods not approved by the government, which ordinarily should be limited to raw materials, machinery and spare parts. The inclusion by the Finance Ministry of "other goods" in the categories eligible for concessions, according to the Customs, enabled finished goods that add no economic value to the country to be imported. These goods include fish, bullet-proof vehicles, kola nut, palm oil and others. A spokesman for the Finance Ministry did not respond to questions emailed by Daily Trust yesterday, but he had said previously that, under the existing policy, import concessions are given as incentives to critical sectors for the greater good. The Customs records show that the concessions in 2011-2013 were granted mostly to fuel dealers, with Conoil being the biggest beneficiary among them in 2013, with N53 billion. Oando was next with N22 billion, followed by NIPCO Plc (N19 billion), Sahara Energy (N14 billion) and Folawiyo Energy (N12billion). In 2011, the oil firm that benefited most was still Oando with N83 billion, followed by Capital Oil and Gas (N47 billion), Integrated Oil and Gas (N20 billion), Folawiyo Energy (N18 billion) and Sahara Energy (N14 billion). The documents show that in 2012, the Nigerian National Petroleum Corporation (NNPC) was the biggest beneficiary, getting N80 billion in concessions, and Sopon Nigeria Ltd was the highest non-oil beneficiary in 2011, netting about N33 billion. Coscharis Motors, which supplied Aviation Minister Stella Oduah's controversial bulletproof cars and supplied 200 cars to the African First Ladies summit in 2012, received waivers of N400 million in 2011 and N698 million in 2013. Other beneficiaries of import tax concessions include companies in the Dangote Group, the African First Ladies Peace Mission (AFLPM), Inspector General of Police, Chief of Army Staff, Central Bank of Nigeria, Bayelsa State government, Minister of Police Affairs, Nigerian Police Force, Sokoto State Government, Akwa Ibom State Government and the Watchtower Society. N/Assembly to check abuses When contacted on Monday, chairman of the Senate Committee on Finance, Senator Ahmed Mohammed Makarfi (PDP, Kaduna), said they were aware that waivers that do not have any significant benefit to the ordinary man were being granted. "We are aware of waivers based on returns made to our committee sometime last year. About 60 percent of it went to a single businessman and his business empire... . I don't believe that the ordinary man derived significant benefit from (such waivers)," he said. Makarfi said "there is also a bill that if promptly considered can be expanded to curtail such waivers. The way to deal with this issue is through legislation and it's our collective responsibility to do so, not continuing investigations and investigations." He said documents from Customs show that in 2013 they had collection shortfall of N243.69 billion due many factors including waivers, concessions, duty exemptions and other policies. Daily Trust sought to get the Finance Ministry's reaction to the revelation in the Customs documents yesterday, but Mrs Okonjo-Iweala spokesman Paul Nwabuikwu did not respond to emailed questions. However, Nwabuikwu had issued a statement on Friday in response to a story done by Sahara Reporters which said the minister understated the amounts lost to the import waivers in 2011-2013. The statement said "the waivers and exemptions policy is a direct government intervention whose objective is to provide incentives to improve industrial competiveness and support job creation in the economy. "This policy, also implemented by other emerging economies such as South Korea and Malaysia, was misapplied in the past through implementation in a manner that created an unlevel playing field and gave unfair advantage to some individuals. "The policy was revised and strengthened starting 2012 and is now largely applied on a sectoral basis. "Saharareporters arrived at the conclusion that the country has lost $9 billion because it considers every waiver granted by government to critical sectors such as manufacturing, agriculture, power, gas etc as fraudulent and as a loss to the nation. "This implies that Saharareporters doesn't understand government policy and the importance of giving incentives to industries. We do not share that view and there is no question of loss to the country when it is government policy. The policy choice is between customs revenue and incentive revenues for industries. The government chose the latter because we believe the country stands to gain more from the incentives." -------------------------------------------------------------------------------------- Nigeria: U.S.$49.8 Billion Oil Fund - House C'ttee to Probe Okonjo-Iweala, NNPC By Muhammad Bello, 20 January 2014 It appears the resumption of the House of Representatives is going to be a season of probes for the Coordinating Minister for the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, who the Finance Committee of the House said it will probe over the alleged non-remittance of $10 billion to the Federation Account by the Nigerian National Petroleum Corporation (NNPC). Also to be investigated by the committee, which last week and over the weekend raised eyebrows over the answers provided to the 50 questions on the state of the economy it handed to the minister last year and the waivers her ministry allegedly granted, is the NNPC. Last year, the Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, had hinted that the sum of $49.8billion was 'missing' bit later said only $10billion was unaccounted for.. However, the committee Chairman, Hon. Abdulmumini Jibrin, yesterday said it was interested in finding out the true amount of money that was not remitted. A discrepancy of $2billion became evident after Sanusi and Okonjo-Iweala addressed a joint press conference, where the former reduced the unremitted figures to $12billion and the latter said it is $10billion. It was against the backdrop given the differences in figures, a source said, that the finance committee said it was venturing into a full investigation with a view to coming up with the actual missing money by the NNPC. One of the issues in the 50 questions handed to the finance minister by the lawmakers in December bothers on this matter. It asked the minister: "Is any money missing from our anticipated revenue from the NNPC in particular and oil industry in general. If there is, how much? If not, how come such issues emanate from high offices in the executive arm of government." Unsatisfied with the 102-page answers Okonjo-Iweala gave recently, the lawmakers were said to have insisted that they wanted to know what was the true position of things regarding the unremitted funds, $10.8billion of which the NNPC explained had been spent on subsidies and repairs of vandalised petroleum pipelines across the country. Only last Wednesday, Governor Rotimi Amaechi-led Nigerian Governors' Forum (NGF) demanded an independent audit to probe the National Assembly over the alleged missing $49.8billion, which they said, couldn't be duly traced in the Federation Account. -------------------------------------------------------------------------------------- Nigeria: N-Assembly Approved NCAA's Budget to Purchase 2Two Armoured Cars, Group Insists 29 October 2013 Stella cars Lagos — A group, Concerned Independent Aviation Observers, CIAO, has said that there was budgetary allocation for the purchase of two armoured vehicles by the Nigerian Civil Aviation Authority, NCAA, which was approved by the National Assembly. According to the group, the purchase of the controversial cars, which is now a subject of the administrative panel of enquiry by the Federal Government, followed due process as it was captured in the 2013 Capital Expenditure budget of the NCAA approved by the National Assembly. The group said the Chairman, Senate Committee on Aviation, Senator Hope Uzodima, and his counterpart in the House of Representatives, Hon. Nkiruka Onyejeocha, signed the NCAA's capital expenditure, which contained the request for the Operational Vehicles. The National Coordinator of CIAO, Dr. Michael Aburime, in a statement explained that the National Assembly approved the purchase of 25 operational vehicles for N240,000,000, out of which the controversial armoured cars are only two. Aburime said the armoured cars are not for the Aviation Minister par se, but for the "operational and safety/security needs of NCAA, especially for hosting international regulatory aviation officers on official visits to Nigeria." He also said that due to paucity of funds, the NCAA did not engage in outright purchase of the vehicles like other government agencies but adopted lease financing to procure 52 vehicles. According to him, "the lease financing in the NCAA was financed by First Bank Plc at monthly payment of N23,249,181. And for the 2013 expenditure, about N116,245, 905 would be paid. From the brief detail above, it becomes obvious that the NCAA did not actually pay such bogus amount of money being alleged and bandied about in public discourse by uninformed people. "In fact, the transaction NCAA entered into is N123,754,095 less than the approved amount, as contained in 'NCAA Capital Expenditure for 2013'." He argued that rather than being vilified, the NCAA should be commended for demonstrating understanding of project financing and management. "It is standard practice for public agencies like NCAA to purchase operational and administrative vehicles. So, what the NCAA did is not something exceptional. All public agencies do purchase operational vehicles and NCAA has only done the statutory thing by following due process in getting the National Assembly approval and making the process transparent by spreading the payments over time through lease financing." Aburime said the lesson from the purported purchase scandal is for the whole truth to come to the public glare. "We do not see any act of impropriety in the NCAA car purchase that should warrant the volley of indignation and vituperations that have erupted in the public space. NCAA is also an important member of various global aviation associations whose members do visit Nigeria periodically to verify and approve our civil aviation standards," he added. -------------------------------------------------------------------------------------- Nigeria: N255 Million Cars - Reps, Aviation Minister Head for Showdown 29 October 2013 Stella cars The House of Representatives and the Minister of Aviation, Princess Stella Oduah are now heading for a showdown over the summons of the House Committee on Aviation requesting the minister to appear before it tomorrow as it commences investigative into an alleged purchase of N255 million bullet proof cars for the Minister by the Nigerian Civil Aviation Authority, NCAA. While the minister, who is still in Israel told the committee that she would not be available until November 4 after she must have concluded her national assignment in Israel, the committee insisted that if she fails to appear tomorrow sanctions will be imposed on her. The House Committee on Aviation, in a statement by its Clerk, Abubakar Chana directed the minister to appear before it tomorrow and explain her role in the controversial armoured cars. The minister, in a letter dated October 25, however, told the committee that she would be unavoidably absent tomorrow and that she would create time to appear on November 4 after she must have concluded her national assignment in Israel. In the letter, which read in part, the minister said, "you will recall my sincere and utmost regret conveyed to you at my inability to personally appear before your committee on Thursday due solely to my on-going official assignment in Israel on behalf of our country. "The official schedule for the signing of the Bilateral Air Services Agreement, BASA, including the travel logistics from Israel back to Nigeria physically prevent me from arriving in time to appear before you as scheduled in your current invitation." Also, the Permanent Secretary of the ministry in a letter with reference number PS/FMA/PC/2013/Vol.1/70 written on same date pleaded with the committee to allow the minister appear on Nov 4 or 5 in view of her flight schedule. However, in a counter letter dated October 28 and signed by the committee's clerk, the Reps insisted that if she fails to appear necessary sanctions would be imposed on her. The letter titled: Re: Invitation to public hearing and request to submit documents, read in part "I am further directed to inform you that your inability to appear before the committee has become a serious constraint to the committee as the House of Representatives has mandated the committee to submit its report within one week. "More so the committee has been utterly gracious for postponing the hearing to Wednesday. "It is the directive of the House of Representatives that you should appear on the scheduled date of which failure to do so will leave the committee with no option but to enforce the appropriate laws and apply necessary sanctions." Meanwhile, the House committee Chairperson in a chat with newsmen said the Minister of Aviation risks being jailed 5 years based on the provision of the Public Procurement Act. She said: "Section 58 (5) of the Public Procurement Act states that 'Any persons, who, while carrying out his duties as an officer of the Bureau or any procuring entity who contravenes any provision of this Act, commits an offence and is liable to a conviction of cumulative punishment of (a) a term of imprisonment of not less than five calendar years without any option of fines and (b) summary dismissal from government services. "I did not put this law there, but the will to implement it is key to sanity in this country and check excesses. "Argument of lease purchase does not hold as long as they are going to pay with public funds and to say that NCAA is within the threshold makes it look like splitting the budget, which is another case on its own under the Procurement law." According to the Committee Chairman, the Minister of Aviation, Stella Oduah has issues bordering on procurement with her committee which the minister has ignored more than 12 times. "Our committee has the responsibility to carry out oversight on BPP and since the core objective of public procurement is to ascertain value for money, we have been having issues with the Ministry of Aviation and agencies under it for sometimes now. "It might interest you to know that we have issued not less than 12 invitations to the Minister of Aviation but she has not deemed it fit to respond even for once. She has always been giving us one excuse or the other. "Apart from the fact that there are issues on the rehabilitation of airports around the country over issues of value for money which Nigerians are not getting, if she had taken her time to honour our invitation, maybe she would have been able to avoid this issue of threshold. "What these heads of agencies don't realize is that when we send out letters like that, it wasn't to intimidate or witch-hunt them but to rub minds and enlighten them on the nitty-gritty of the provisions of the Procurement laws. "If she has been honouring our invitations, by now a lot of things would have been known to her and she would not be finding herself in this situation. When we invite these ministers, my advice is that they should not see it as a personal thing but a way of forging a working relationship. "There is no doubt that she has a case to answer with the BPP Committee". She however blamed the Presidency for deliberately weakening the BPP as well as refusing to comply with the Procurement law on the issue of the Bureau's Board. "The issue of the constitution of the Board of BPP is embarrassing as it has not been constituted till date. Sometimes we need the cooperation of the Executive. When we go out there, we want people to adhere to the provisions of the law." "The impropriety that we are witnessing in this country is embarrassing to the nation. and if you don't take care of a particular aspect of the law but go ahead and implement another aspect it means you do not wish the law to succeed or be effective. "The law must be implemented holistically for sanity to prevail in a nation. We have pushed for the implementation of that particular clause along the other parts they are implementing but they are not willing to apply that particular clause. "We are pushing for the implementation of the Council of Board as contained in the Act but if they are not doing it, then they have their reasons, not that we are not doing anything about it. "The job of the Board is to formulate policies for the agency and the DG is the Secretary of the Board but the idea is that more people will be able to contribute better than just one or two people especially when we are talking about trillions of Naira of appropriated funds," she added. According to Committee Chairman, the government can not absolve itself in the weakening of the powers of the BPP as the agency lack capacity to execute its duties. Saying that BPP should not be blamed for lacking capacity to monitor all government agencies, the lawmaker added, "Even the BPP can not capture all the agencies in this country because they do not have the technological capacity to do so. they do not have the software I am talking about. "So, if we really want to beat corruption in our procurement sector, then we must have the will to put in place those things that are necessary to facilitate investigation, which I believe we are lacking. "Ministry of Finance is able to do its work excellently just because they have the capacity and the facilities that simplify their job. "I believe BPP needs assistance in that direction, but the point is, if the BPP is not aware of procurement going on in such places, and being the agency feeding us with information, then there is no way we as a Committee can. "If the BPP is not aware of such procurements, it's because the agency involved has spent more than their threshold", Also, Chairman on Bureau for Public Procurement, BPP, Rep OlaJumoke Okoya-Thomas, APC, said the NCAA overshot its threshold. -------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala Responds to House Committee's 50 Questions 16 January 2014 Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria at the World Economic Forum on Africa 2013. Finance Minister, Okonjo-Iweala, has now responded to the 50-question homework given her by the House committee on finance. On December 19, 2013, members of the House of Representatives Committee on Finance gave Nigeria's Finance Minister, Ngozi Okonjo-Iweala, 50 questions on Nigeria's current economic situation. The committee asked her to respond within two weeks. That ultimatum expired on January 2. This Thursday morning, she made public her answers to the questions. The presentation of the questions to the minister had sparked controversy between the minister and the House committee. There was drama with an exclusive video, sourced by PREMIUM TIMES showing the minister initially making jest of the lawmakers after they informed her of their decision to hand her the 50-question homework. The video indicates that the controversial meeting started on a warm note with exchanges of pleasantries between the executive team, led by Mrs. Okonjo-Iweala (and including the Director General of the Budget Office, Bright Okogwu) and the lawmakers led by the committee chairman, Abdulmumini Jibrin. Despite starting on a good note, the meeting, which centred around the 2014 budget earlier presented by the minister to the House and the Senate, degenerated when the lawmakers told the finance minister not to respond to their questions on that day after she said she was 'feeling ill'. Mrs. Okonjo-Iweala said she came to the meeting 'out of respect' to the lawmakers as she was not healthy enough to attend. After the presentation of the questions, however, the minister insisted she would answer the questions on that day, a request refused by the lawmakers who said they wanted her to come back when she was 'strong and energetic.' Read Mrs. Okonjo-Iweala's response to the questions below: FEDERAL MINISTRY OF FINANCE News Release. January 15, 2014 HOUSE FINANCE COMMITTEE'S 50 QUESTIONS: OKONJO- IWEALA PROVIDES DETAILED 102-PAGE RESPONSE The Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala has provided a detailed 102-page documented response to the 50 questions posed by the House of Representatives Committee on Finance. The document provides, in extensive detail, including tables and graphs, answers to the committee's well publicized questions. In her response, the Minister stressed that, in spite of many challenges which government has acknowledged, the Nigerian economy is showing real and measurable progress in many areas. This can be seen in the fact that more jobs are being created; roads, rail and other infrastructure are being improved; the country is saving for the future and planning better for the present. The Jonathan administration, contrary to the impression given by some critics, is making impact in the areas that, according to credible opinion polls, Nigerians are most passionate about. For instance, on job creation which is a central focus of the administration, a total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS) of which 250,000 were seasonal jobs created in dry season farming in 10 northern states. In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The SURE-P Community Services prgramme has also created 120,000 job opportunities. The improvement in federal highways has been confirmed by many Nigerians who travelled over the Christmas and New Year holidays. Key highways which have witnessed significant progress include Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road. Preliminary work has commenced on Lagos-Ibadan road and the Second Niger Bridge. The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional while work on the Eastern line linking Port Harcourt to Maiduguri is about 36% complete. The Abuja-Kaduna Standard Gauge line has attained 68% completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77% completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013. One of the issues the Coordinating Minister dealt with is the charge, made by the Chair of the Committee in the media that the country is racking up debts under Dr Okonjo-Iweala's watch as Finance Minister. As shown in her response, there is no substance to the charge. In fact, the opposite is true. Right from her Senate confirmation hearing in 2011, the Minister had identified rising debt as a major challenge which the country needs to confront. Under the leadership of President Jonathan and working with the Debt Management Office and the Budget Office of the Fedration, the Minister followed through with a robust approach which includes progressive reduction of borrowing, quick settlement of due debts and the retirement of N75 billion of maturing bonds via a Sinking Fund dedicated to paying off substantial bonds. These measures have produced clear results as shown in the reduction of borrowing from N852 billion in 2011 to N571.9 billion this year. It is important to note that many of the 50 Questions had been adequately answered at various fora, including meetings and open hearings organized by the House Committee. The Minister's detailed response in spite of this, is a reflection of her well known high regard for the National Assembly as an institution. Please see below some highlights of the Coordinating Minister's answers to the 50 questions. Paul C Nwabuikwu Special Adviser to the Coordinating Minister for the Economy and Minister of Finance HIGHLIGHTS OF SOME ANSWERS TO THE 50 QUESTIONS JOB CREATION A total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS). In agriculture for instance, the provision of inputs in 10 Northern states enabled dry season farming and created over 250,000 seasonal jobs. season. In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The Sure-community Services has also created 120,000 job opportunities. INFRASTRUCTURE Progress has been made on construction of the Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road, among others. Preliminary work has also commenced on the Lagos-Ibadan road, as well as on the Second Niger Bridge. The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional while work on the Eastern line linking Port Harcourt to Maiduguri is about 36% complete. The Abuja-Kaduna Standard Gauge line has attained 68% completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77% completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013. INLAND WATERWAYS We have dredged about 72 km of the lower River Niger from Baro in Niger State to Warri in Delta State; and completed the construction of the Onitsha inland port; while the Baro port is nearing completion. The result of all these is that we now have year round navigation around the lower Niger; and we are already witnessing an increase in cargo volume from below 2.9 million metric tons in 2011 to over 5 million metric tons on the inland waterways. As in the case of the rail transport, the number of passengers travelling via our inland waterways has increased fourfold from 250,000 in 2011 to over 1.3 million. WATER RESOURCES Key milestones recorded in 2013 include the construction of 9 dams, which resulted in an increase in the volume of the nation's water reservoir by 422MCM. Progress was made on major projects such as the South Chad Irrigation Project, the Bakolori Irrigation Project, and the Galma Dam. Implementation of irrigation and drainage programme resulted in increase of the total irrigable area by over 31,000Ha, job creation for about 75,000 farming families and increased production of over 400,000Mt of assorted irrigated food products. AVIATION: The 22 airports across Nigeria are being remodeled and upgraded: in 2013, we completed the upgrade of 11 airport terminals and work on the remaining 11 terminals is in progress. The Enugu Airport is now operational as an international airport with a new terminal under construction. We have also commenced work on the construction of three new international airport terminals: in Lagos, in Kano, and in Abuja. Modern navigational and meteorological systems were installed at our airports to improve air safety. In addition, 6 airports namely: Jos, Markurdi, Yola, Jalingo, Lagos and Ilorin which are strategically located in proximity to food baskets have been designated as perishable cargo airports and international standards perishable cargo facilities are being developed at these airports. A new Cargo Development Division has been established in FAAN to give focus to this effort. POWER We have completed one of the most comprehensive and ambitious power sector privatization and liberation programmes globally. We have privatized 4 power generation companies and 10 power distribution companies, and have virtually settled all claims and entitlements of PHCN workers. Some major cities get an average of 16-18 hours of electricity per day in 2013. This however dropped in November and December during the transition we expect some teething problems and then power supply should pick up. In 2013, we also mobilized $1.5 billion in financing from multilateral sources for investment and upgrade of the transmission network in 2014 and beyond. To promote clean energy, we also commenced construction of the 700MW Zungeru Hydro-Power project in 2013. We have strengthened relevant power market intermediaries such as the Nigerian Bulk Electricity Trading Plc (NBET), and backed them with financing to stimulate greater private investments in the sector. MANUFACTURING: We launched the National Industrial Revolution Plan (NIRP), which focuses on industrializing Nigeria and diversifying our economy into sectors such as agro-processing, light manufacturing, and petrochemicals. In the 2013 fiscal year, Nigeria was named the #1 destination for investments in Africa by UNCTAD (the UN Conference on Trade and Development), attracting over $7 billion in FDI. There were a large number of both foreign and domestic investments in the economy, such as by: $250m investments by Procter and Gamble in Ogun State; $40 million in agricultural projects by Dominion Farms. To further support the manufacturing sector, the Government successfully negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners, which would enable us to protect our strategic industries where necessary. The Nigerian Enterprise Development Programme (NEDEP) was initiated in 2013 to address the needs of small businesses. Some key interventions by NEDEP include supporting small companies with access to affordable finance, access to markets, capacity support, business development services, youth training, and support in formalizing their operations. In addition, in 2013, we reduced business registration costs for small businesses by 50%, to help them conserve capital. Finally, as a result of our backward integration policies, Nigeria is now a net exporter of cement and expanded cement output capacity from 2 million metric tonnes in 2002 to 28.5 million metric tonnes in 2013. AGRICULTURE: There have been many achievements in the agricultural sector following the launch of the Government's comprehensive Agricultural Transformation Agenda program. In October 2013, inflation fell to 7.8%, its lowest since 2008, partly due to higher domestic food production. The Government's Growth Enhancement Scheme (GES) is providing subsidizing inputs to farmers via an e-Wallet program. In fiscal year 2013, an estimated 4.2 million farmers received subsidized inputs via the Government's Growth Enhancement Scheme. As a result, in 2013, we produced 1.1 million metric tonnes of dry season rice across 10 Northern states; and over 250,000 farmers and youths in these States are now profitably engaged in farming even during the dry season. The Federal Government launched Staple Crop Processing Zones to support investments in the entire agricultural value chain. At present, there are over $8 billion of private investment commitments from agribusiness ventures such as: Flour Mills of Nigeria, the Dangote Group, Syngenta, Indorama, AGCO, and Belstar Capital. In 2012, 2.2 million metric tonnes of cassava chips were exported, exceeding the ATA's target by over 100% while the 40 percent substitution of cassava for wheat has been achieved through research and collaboration with the IITA and Federal Institute for Industrial Research. Similarly, there has been a decline in wheat imports to Nigeria from an all-time high of 4,051,000 MT in 2010 to 3,700,000 MT in 2012. HEALTH To further invest in the human capital of our population, we are building strong safety nets and improving access to primary health care using the Saving One Million Lives programme. In the 2013 fiscal year, we recruited 11,300 frontline health workers who were deployed to under-served communities across the country. We have reached over 10,000 women and children with conditional cash transfer programmes across 8 States (Anambra, Bauchi, Bayelsa, Ebonyi, Kaduna, Niger, Ogun, Zamfara) and the FCT and we intend to scale up this successful initiative. As a result, over 400,000 lives have been saved through our various interventions. Nigeria's national immunization coverage has now exceeded 80% and is yielding demonstrable results. The Type-3 Wild Polio virus has been contained in 2013, with no recorded transmissions for more than one year; while Guinea worm that previously affected the lives of over 800,000 Nigerians yearly has been largely eradicated. Facilities at various medical centers across the country - such as the University of Nigeria Teaching Hospital in Enugu, and the University College Hospital in Ibadan - have also been upgraded. Finally, Nigeria has also been honoured as Co-Chair of the fourth replenishment of the Global Fund to fight AIDS, TB and Malaria, and I shall be co-chairing this initiative with other selected world leaders. EDUCATION To improve access to education at all levels, a number of priority investments were made in 2013. These include the construction of 125 Almajiri schools and establishment of 3 additional Federal Universities, to bring the total number of new Federal Universities to 12. Additionally, special girls' schools were constructed in 13 States of the Federation. In fiscal year 2013, we rehabilitated 352 science and technical laboratories while 72 new libraries have been constructed in the Federal Unity Schools. Furthermore, the laboratories of all 51 Federal and State Polytechnics have been rehabilitated and micro-teaching laboratories are being constructed in 58 Federal and State Colleges of Education. The Presidential Special Scholarship programme for first class graduates has commenced with an initial set of 101 beneficiaries. Over 7,000 lecturers from Universities, Polytechnics and Colleges of Education are benefitting from scholarships to support their doctoral training in Nigerian and overseas institutions. COMMUNICATIONS TECHNOLOGY: We continued our strategic focus on investing in modern ICT technologies. We constructed 500km of fibre-optic cable to rural areas; 3,000km targeted for deployment in 2013/2014. A total of 266 Public Access Venues were established in 2013 - 156 Rural IT Centres, 110 Community Communication Centres. We facilitated the deployment of mobile communications base stations in rural areas of Nigeria. A total of 59 Base Stations have been installed thus far, with an additional 1,000 planned for 2014. In addition, we also provided wholesale internet bandwidth to Internet Service Providers, Cyber cafes, and ICT centres like Community Communication Centres (CCC) in rural communities - connectivity to 12 out of 18 pilot sites completed. In 2013, we deployed a fibre-optic high-speed internet network to connect 27 Federal universities, and provided computing facilities to 74 tertiary institutions and 218 public schools across the country. Finally, we established innovation centers to support entrepreneurs in the ICT sector, and also launched a Venture Capital fund of $15 million for ICT businesses. -------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala in 100-Page Reply to House On Economy By Ndubuisi Francis, 16 January The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has provided a detailed 100-page documented response to the 50 questions posed by the House of Representatives Committee on Finance on the state of the economy. In a statement issued by her Special Adviser on Media, Mr. Paul Nwabuikwu, the minister said the document provides, in extensive detail, including tables and graphs, answers to the committee's well-publicised questions. The minister confirmed to THISDAY that the document was delivered to each of the members of the finance committee Wednesday evening. In her response, Okonjo-Iweala stressed that in spite of the many challenges which government had acknowledged, the Nigerian economy is showing real and measurable progress in many areas, adding, "This can be seen in the fact that more jobs are being created; roads, rail and other infrastructure are being improved; the country is saving for the future and planning better for the present." According to her, "The Jonathan administration, contrary to the impression given by some critics, is making an impact in the areas that, according to credible opinion polls, Nigerians are most passionate about. "For instance, on job creation which is a central focus of the administration, a total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS) of which 250,000 were seasonal jobs created in dry season farming in 10 northern states. "In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The SURE-P Community Services programme has also created 120,000 job opportunities." The statement added that Okonjo-Iweala also pointed to the improvement in federal highways, which she said had been confirmed by many Nigerians who travelled during the Christmas and New Year holidays. "Key highways which have witnessed significant progress include Kano-Maiduguri Road, the Abuja-Lokoja Road, the Apapa-Oshodi Road, the Onitsha-Enugu-Port-Harcourt Road and the Benin-Ore-Shagamu Road. Preliminary work has commenced on Lagos-Ibadan road and the Second Niger Bridge. "The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional, while work on the Eastern line linking Port Harcourt to Maiduguri is about 36 per cent complete. "The Abuja-Kaduna Standard Gauge line has attained 68 per cent completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77 per cent completed, will be completed next year. "The annual passenger traffic on our railways has increased steadily, rising from 1 million in 2011 to 5 million in 2013," the minister's spokesman said. One of the issues Okonjo-Iweala dealt with was the charge made by the Chairman of the Finance Committee, Hon. Abdulmumin Jubrin, in the media that the country is racking up debts under her watch as finance minister. On this issue, the statement said Okonjo-Iweala dismissed the allegation, stating there was no substance to the charge. "In fact, the opposite is true. Right from her Senate confirmation hearing in 2011, the minister had identified rising debt as a major challenge, which the country needs to confront. "Under the leadership of President Jonathan and working with the Debt Management Office and the Budget Office of the Federation, the minister followed through with a robust approach which includes progressive reduction of borrowing, quick settlement of due debts and the retirement of N75 billion of maturing bonds via a Sinking Fund dedicated to paying off substantial bonds. "These measures have produced clear results as shown in the reduction of borrowing from N852 billion in 2011 to N571.9 billion this year," the minister was said to have explained in her document to the House committee. Nwabuikwu further pointed out that the minister drew the attention of the committee to the fact that many of the 50 questions had been adequately answered at various fora, including meetings and open hearings organised by the House committee. "The minister's detailed response in spite of this, is a reflection of her well known high regard for the National Assembly as an institution," he added. Also, in her preamble to the 100-page response to the committee, the minister informed the committee that most of the responses to the 50 questions were already in the public domain and had been extensively debated by the government, journalists, civil society organization and the private sector. She said: "We would have thought that honorable members of this committee, which focuses on our nation's finances, would have been adequately informed on these topics." She further informed the committee that a lot of the questions were repetitive in several instances, and in some cases, were directly contradictory, adding, "It is therefore unclear if the House committee has a coherent policy agenda for our nation's development, or whether these questions are simply meant to stir confusion and detract us from the Transformation Agenda of the current administration." Okonjo-Iweala also accused the committee of personalising most of the questions by focusing on her instead of focusing on the economy, saying, "This is disappointing and trivialises important discussions needed for Nigeria's development. In our responses, we choose to do otherwise. We focus instead on policy issues and provide empirical data to support our discussions where necessary." For the reasons above, the minister said: "We believe such protracted exchanges are a distraction to the executive and ultimately a disservice to Nigerians. "We would recommend more measured and civil exchanges in the future, which are informative for Nigerians and also enable the executive to focus on its goal of implementing programmes and projects across our nation." In spite of these concerns, Okonjo-Iweala concluded the preamble by stating that she was pleased to provide the responses to the various questions and hoped that they will be informative for the committee members and for all Nigerians. Last December, the finance committee had presented the 50 questions to the minister and asked her to respond to them during a public hearing. However, she had informed the committee that she was unwell and would not be able to address the issues raised in the posers given to her by the committee. But her response did not go down well with Jubrin who then asked her to go with the questions and return in two weeks time with the answers. At this juncture, Okonjo-Iweala's changed her mind and insisted on attempting to address the question on that day with the assistance of her aides who were present at the public hearing. But this again was rejected by Jubrin and degenerated into a heated altercation between her and the committee chairman. Ever since then, the House and the committee had made it clear that they would not consider the 2014 Appropriation Bill until the minister responds to the questions. -------------------------------------------------------------------------------------- Nigeria: Reps to Hold Public Hearing On Okonjo-Iweala's Response to 50 Questions By Bassey Udo, 17 January 2014 Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria at the World Economic Forum on Africa 2013. The Committee commends Okonjo-Iweala for answering the questions, but says there will be a public hearing to dissect her responses vis-a-vis the true state of the economy. The House of Representatives Committee on Finance on Thursday acknowledged receipt of the response provided by the Minister of Finance, Ngozi Okonjo-Iweala, to the 50 questions it recently posed to the government on the state of the country's economy. The Clerk of the Committee, Farouk Mustapha, said in a statement in Abuja shortly after the 102-page response from the Minister was received by the lawmakers that a timetable of activities would soon be released on how to address the issues raised in the document. The Coordinating Minister on the Economy, who stirred a controversy after accusing the Committee Chairman, Abdulmumini Jubrin, of highhandedness when she appeared before the House on December 19, responded Thursday to the issues raised by the lawmakers. While commending the Minister for responding to the questions "within reasonable time", Mr. Mustapha said the committee would commence work immediately on the document. He, however, noted that the Minister would be promptly informed if in the process of reviewing the responses the need arose for further explanation, information or additional document. Mr. Mustapha said the Committee would also call for memoranda on the state of the economy from professionals, academics, civil society groups and all well-meaning Nigerians. "This will be followed by a public hearing," Mr. Mustapha said. "The process would be concluded with the presentation of a report to the House on the true state of our economy." While thanking Nigerians for their patience and understanding, the Committee urged them to continue to support it in its search for the truth regarding the country's troubled economy. -------------------------------------------------------------------------------------- Nigeria Lost N797.8 Bilion to Waivers, Tax Exemptions in Three Years, Says Okonjo-Iweala By Bassey Udo, 17 January 2014 Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria at the World Economic Forum on Africa 2013. The Federal Government lost about N170.74billion to waivers and tax concessions granted to various government and private businesses in different sectors of the economy between 2011 and 2013, the Minister of Finance, Ngozi Okonjo-Iweala, disclosed on Thursday. That disclosure is contained in her 102-page response to the 50 questions posed by the House of Representative Committee on Finance on the state of the country's economy. The document also showed that about N627.07billion was lost by the Nigeria Customs Services, NCS alone, as shortfall in budgeted revenue projections for the three years. According to the minister, a total of N55.97billion, made up of N23.422billion (import duty exemptions) and N33.543billion (waivers), was lost in 2011, while about N55.345billion, consisting N46.789billion (exemptions) and N8.556billion (waivers) was lost in 2012. A total of N59.417billion, composed of N33.319billion (exemptions) and N26.097billion (waivers), was lost in 2013. Although the minister did not state how much benefits accrued to the economy in terms of returns as a result of the exemptions and waivers during the period, she noted the negative impact of the policy on the efforts by the revenue generating agencies to meet their targets. Out of the budgeted revenue target of about N450billion for 2011, she said the customs service only realized N429.13billion, leaving a difference of about N20.87billion, while about N475.15billion was realized in 2012 out a revenue target of about N600.58billion, a shortfall of about N125.43billion. Equally, the customs also fell short of its target by about N480.77billion in 2013, after the minister said it realized only N433.59billion out of the total revenue target of N914.36billion. The minister said the NCS blamed its poor performance for the period on the reduction in imports due to government policies, particularly due to revenues forfeited from various concessions and waivers. Mrs. Okonjo-Iweala had said that waiver and exemption policy was adopted to support government objective to enhance the capacity of the beneficiaries to produce their goods locally, making the country more self-reliant and reduce dependence on imports. Apart from serving as one of the instruments to support the country's industrial policy, as in other emerging and advanced economies - such as South Korea, Malaysia and China - she said the fiscal policy incentives were also intended to support the private sector, in view of the regulatory challenges they face in the domestic business environment. Mrs. Okonjo-Iweala listed the aspects of business covered by the policy to include reduction in import duty rates or waivers for equipment and materials for the hospitality, power and aviation sectors; agricultural machinery; solid mineral equipment and gas-using equipment. Others include the steel sector; specific manufacturing sub-sectors, including imports of completely-knocked down parts; automobiles and tyres. She said the policy, which covered sectors seen as strategic areas capable of stimulating growth, supporting diversification of the Nigerian economy, and creating jobs for Nigerians, also covered additional programmes, such as the Export Expansion Grants, EEG, Scheme designed to promote Nigeria's non-oil exports. The sectors of the economy that benefited from the policy include agriculture, aviation, health, mines and steel, water resources, gas, power, as well as donations to states, education and related ministries, departments and agencies, MDAs. Some of the legal instruments the minister cited that permitted the various categories of exemptions to businesses include the provisions of Schedule 2 of the Customs and Excise Tariff (Consolidation) Act: 1995 - 2001, Common External Tariff: 2008-2012 (as extended); the Customs and Excise Tariff etc. Act No. 16, 1997; and the Finance Miscellaneous Act 39 of 1990. She said following the discovery that the discretionary approach adopted in granting waivers to individual businesses had resulted in various abuses, government resorted to the sector-wide waiver policy to provide specific incentives for some strategic, job-creating sectors. Describing as "reprehensible" observed abuses by some local car suppliers granted waivers to import vehicles for institutions hosting sporting events to fill the gap for the absence of car leasing business in the country, Mrs. Okonjo-Iweala said government has adopted more stringent monitoring to curb such malpractices. -------------------------------------------------------------------------------------- Nigeria: 50 Questions - Reps Accuse Okonjo-Iweala of Grandstanding 17 January 2014 Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance of Nigeria at the World Economic Forum on Africa 2013. The House of Representatives yesterday acknowledged receiving from the minister of finance, Dr NgoziOkonjo-Iweala, answers to the 50 questions on the economy posed to her by the House Committee on Finance, but noted that rather than address the critical issues raised by the committee, she chose to play to the gallery. Deputy chairman, House Committee on Media and Public Affairs, Hon Afam Victor Ogene (APGA, Anambra) said a preliminary look at her responses revealed that they did not touch on the key issues raised by the House; rather she tried to divert attention from the real indices that indicate growth of the economy. Ogene said: "In this season of government by letter-writing,the House of Representatives would not allow itself to be entangled in a gutter brawl; rather it will remain focused on one of its core mandates of exposing corruption, inefficiency or waste in the execution or administration of laws within its legislative competence, as guaranteed by Section 88 (2) b of the 1999 Constitution, as amended. Indeed, whosoever is unable to take the heat in this regard is free to honourably leave the kitchen." He further explained that no interpretation should be alluded to the questions other than an effort at ensuring accountability in governance. "As a House, we have always insisted that we will not bow down to any kind of grandstanding aimed at derailing us from our set goals. The set goal is simply to hold government accountable to the governed and we will not shy away from doing that. "But even from her response, you would see who clearly is playing to the gallery. If a committee of the House has requested you to provide information which, in most cases, ought to be handled with circumspection; the first thing you did, while the House is still on recess, is to publicize it. Then the Nigerian people should now know that they have a finance minister who is more interested in political drama than in the reality of addressing the Nigerian economy," he said. On the 102-page response of the minister, the lawmaker said: "For instance, she talks about the fact that some of the issues raised by the committee are already in the public domain and have been extensively debated by the government, journalists, civil society organisations and the private sector. And the simple question to ask is: do you run government on the basis of debate on the pages of newspaper in the mass media. The answer is clearly no!" Meanwhile, the Abdulmumini Jibrin-led House Committee on Finance, yesterday, commended the minister of Finance for responding to the 50 questions on the economy in 'reasonable time' while disclosing that it would soon organise a public hearing on the answers and summon the minister to appear when necessary. A statement issued by the clerk of the committee, Mr. Farouk Mustapha, disclosed that the lawmakers would commence work immediately on the minister's response. -------------------------------------------------------------------------------------- FG, states, LGs shared N581bn allocations for December Written by Gbola Subair-Abuja Friday, 17 January 2014 00:00. The Federal Government, States and the 774 local government councils in Nigeria shared the sum of N581.498 billion allocations among themselves for December, 2013. The sharing was carried out by the Federation Accounts Allocation Committee (FAAC) at a meeting in Abuja. Briefing the media at the end of the meeting which ended in the early hour of Thursday, Minister of State for Finance, Dr Yerima Ngama said the money shared was inclusive of the Value Added Tax. “The distributable statutory revenue for the month is N473.607 billion, which is N150.161 billion less than the N623.768 billion that was budgeted for the month of December. “Also distributed is the sum of N7.617 billion refunded by the NNPC to be shared to states and local governments. In addition, the sum of N35.549 billion is proposed for distribution under the SURE-P Programme. “The total revenue distributable for the current month is N581.498 billion, including the value added tax of N64.725 billion,’’ he said. A breakdown of the distribution showed that the Federal Government received N221.161billion, representing 52.68 per cent, States N112.176 billion, representing 26.72 per cent, while Local Governments received N86.483 billion representing 20.60 per cent. He said that a total of N48.461 billion representing 13 per cent derivation revenue was shared among the oil producing states. On VAT, the minister said that the gross revenue collected in December was N64.725 billion as against N91.730 billion distributed in November. He noted that there was a decrease of N27.005 billion from December revenue and that of November. ADVERTISEMENTHe said that out of the amount collected in December as VAT, 4 per cent of it, that is N2.589 billion was removed as cost of collection, leaving N62.136 billion to be shared by the three tiers of government. -------------------------------------------------------------------------------------- Nigeria: Jonathan, Okonjo - Iweala Must Explain Flaws in 2014 Budget - - Analysts 5 January 2014 President Goodluck Jonathan and finance minister and coordinating minister for the economy Dr Ngozi Okonjo-Iweala have been asked to account for the frivolous allocations to some ministries departments and agencies (MDAs) in the 2014 budget now before the National Assembly. Also, the National Assembly has been charged to scrutinise the budget and correct the flaws to prevent Nigerians from being defrauded by those who prepared the budget. The admonition came from a lecturer with Kaduna State University and a social critic, Dr John Danfulani; chairman of the Kaduna Salvation Movement (KASMO) Mr Mohammed Musa Soba; and Olufemi Awoyemi, a chartered accountant and chief executive of Proshare Nigeria, an online economic and financial portal. Among the curious allocations in the budget, which the analysts want the government and the National Assembly to correct are: for the State House, captured under capital budget - the purchase of one sewage truck for N67 million, two benches for N2 million, embalming machine for N1.65 million, x-ray machine for N34.1 million, purchase of mammography machine N41.1 million, a post-mortem table for N4 million, oxygen generating plant for N70 million, massage bed worth N2.1 million, handcraft rowing machine worth N1.2 million as well as two of sauna bath sets worth N6 million, as well as the N37.5 billion allocation for wildlife conservation - comprising items like two animals worth N14.5 million, upgrading and maintenance of the State House zoo for N8 million, renovation of the horses' stables/paddock for the zoo for N15 million and purchase of wildlife capture equipment valued at N5 million. Others are allocations in the capital budgets of MDAs for intangible assets, that is, assets without physical substance which unnecessarily shoot up the cost of governance through administrative capital instead of developmental capital projects. Over N47.2 billion of such capital projects were identified in 76 MDAs analysed in the 2014 budget proposal. Besides these, a major budgeting error was noticed with the Investments and Securities Tribunal where N7.88 million was budgeted for maintenance of aircraft, sea boats and railway equipment which the agency does not have. They lamented that at a time Nigerians were calling for a cut in the cost of governance, MDAs were injecting unjustified allocation into the document. According to Danfulani: "What is new, yet constant, is additions and subtractions in certain areas. Defence still tops the budgets. There isn't any improvement in critical areas like health, education and the revamping of decaying infrastructure. "That is however not the worst problem associated with budgets in the country since the lowering of the Union Jack on October 1, 1960. It is lack of faithfulness in the implementation of budgets that is the main problem. Ordinarily, revenue expected should be the trouble, but in our case, that isn't, but corruption and lack of implementation. "This menace has been going on for long because of lack of strong oversight functions by the lawmakers at the state and federal levels. If we must witness improvement and development in this country, lackadaisical implementation of the budget must be treated as a constitutional infraction which must be prosecuted." Soba expressed disappointment on the insincerity of both the federal and Kaduna State government in addressing the socio-economic problems facing the people. Awoyemi stated that it was adequate allocation of the national budget to capital expenditure in agriculture, roads among others that can create jobs. -------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala Deceiving Nigerians On State of Economy - Reps 13 January 2014 The House of Representatives has said that the minister of finance, Dr Ngozi Okonjo-Iweala is deliberately avoiding providing answers to the 50 questions posed to her by its Committee on Finance to keep Nigerians in the dark about the true state of the economy. In a press statement signed by the clerk of the Finance committee, Farouk Dawaki, which was made available to LEADERSHIP yesterday, the lawmakers urged Nigerians to take keen interest in the attitude of the minister concerning the nation's economy if they do not want to wake up one day to a crashed economy like that of Greece which was shrouded in secrecy and deceit till the end. The statement said that the statement credited to Okonjo-Iweala that the questions represented an examination "is an attempt to divert attention from the economy. Nigerians need to beware of an attempt to divert attention from the state of the economy presentation and 50 questions we demanded from the honourable minister. "We call on well-meaning Nigerians to support this effort by the Committee on Finance so that we can know the true state of our economy in order for us not to end up like Greece whose genesis of economic problem was the concealment of the true state of her economy. "The committee seizes this opportunity to remind Nigerians that it remains focused and committed to its legislative responsibilities as it awaits the response of the minister to the 50 questions". The legislators said her statement that she would need time to respond to some of the questions raised in their enquiry rightly proves their point during the controversial meeting when they asked her to go and return at a later date with answers to the questions because she was not prepared for the answers they would need. "Isn't it curious then that when she was not feeling well the minister was prepared to address 50 questions in a session that was to last just about two hours, and now that she is hale and hearty, she is saying she would need more time? Nigerians would have expected her, in her present re-invigorated state of health, to tell them she would tackle the questions in 30 minutes! "For a minister who sneakily avoided the committee for 11 months, who relishes dropping the President's name at every opportunity, 50 questions are even to us rather moderate, if not lenient. In a committee of 31 members, each member would have asked no less than four questions, and that would have been over 100 questions, if she had been allowed to address the committee as she had insisted when she appeared. "It is a good thing that Dr Ngozi Okonjo-Iweala sees the task before her as an examination. The minister is nonetheless reminded that exams have duration, and they are meant to be passed or flunked. However, we would not neglect to also remind her that there are consequences either way. There is reward for passing and reward for failure. One way or the other, we would decide how she performs". ‎Going further, the committee added that it is regrettable that while talking to reporters after the presentation of the report of the 15-year strategic partnership on debt management between UK and Nigeria, the minister accused critics of the huge domestic debt profile under her stewardship of lacking information. "Interestingly, that is why the committee invited her to share such information with Nigerians. It would also be an opportunity to let her know some of the things we know. "The DFID whose collaboration with Nigeria she is so enthusiastic about has published a report on the 2014 Medium Term Expenditure Framework. We strongly recommend that the Honourable Minister enrich her knowledge with that report. We also call on the DFID to present the report to the general public for the good of this country. "Additionally, rather than all the speeches, why has the minister failed to heed our call for her to present an exit plan (timetable) for domestic borrowing three years after taking over as Minister of Finance? "It is high time the minister realised that we do not need any other country to tell us that our economy is doing well, the least of which is Great Britain with its deep economic problems and huge domestic debt profile. Nigerians will positively feel the impact if their economy is really doing well as the minister claims", the statement noted. ------------------------------------------------------------------------------------- Nigeria: Okonjo-Iweala - I Need Time to Answer Lawmakers' Questions By Jaiyeola Andrews, 11 January 2014 Minister of Finance and the Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, yesterday in Abuja said the 50 questions House of Representatives members recently asked her to answer before the 2014 budget could be considered was akin to writing an examination. The minister who fielded questions from State House correspondents, shortly after she attended a presentation of a report on "14 Years of Strategic Partnership between the DFID, UK anryd the Debt Management Office - Nigeria" presided over by Vice President Namadi Sambo, said some of the issues raised were weighty, and as such, she needed some time to be able to tackle them. The House of Representatives had threatened not to consider the 2014 budget until the minister provides answers to their 50 questions on the management of the economy. "You know I am taking exams. They have given me exams and I am sitting it and at some point, we have to come out of the exams room. Some of the questions are very weighty and you know some of us will need a bit of time to be able to tackle them," Okonjo-Iweala said. She however noted that Nigeria had the best Debt Management Office in the whole of sub-sahara Africa. "We are here to talk about the wonderful things that has happened to the Nigerian economy; which is that a partner is saying that we have one of the best DMO in Africa; that we should now be advising other countries even beyond Africa. I think we are here to talk about something different," the minister said. She noted that yesterday's meeting was a celebration of the end of the Technical Assistance of the United Kingdom to DMO, because the partners came to conclusion that DMO now has the wherewithal to stand on its feet without foreign assistance. "I think it is a wonderful day because this is the first time a partner says that now an institution that they helped to build is mature and we don't need anymore help. Instead, we are now being asked to help other African countries to establish debt management institutions because our DMO is being recommended by the British as one of the best debt management institutions in Africa. So, we are helping other countries now. I think it is a wonderful thing. "Contrary to the idea that we are piling up debt, this administration, with the strong support of Mr. President, has embarked on a policy of trying to reduce the borrowing particularly the domestic borrowing. You know the major part of our debt is domestic. External debt is only two per cent of what we owe and 98 per cent domestic debt. So, we want to reduce that so that the private sector can have chance to borrow so that interest rate can come down. "From 2011 till now, we have gone from about N852 billion in borrowing down to N571 billion. It is a very big reduction. So, I beg to differ from those who say we are piling up debt. We actually have very good strategy. In addition, for the first time ever, we actually retired N75 billion in bond last year, filled it up completely, " he said. She however declined to comment on the rift between President Goodluck Jonathan and the Central Bank of Nigeria Governor, Sanusi Lamido Sanusi. -------------------------------------------------------------------------------------- Economy in 2014:Apprehension over 2015 elections, crude oil price stifles optimismon January 06, 2014 BY BABAJIDE KOMOLAFE, PETER EGWUATU, NKIRU NNOROM, GODFREY BIVBERE, FRANKLIN ALLI, ROSEMARY ONOUHA AND JONAH NWOKPOKU Optimism of improved economic activities in 2014 among economic operators is been stifled by apprehension over political activities in preparation for the 2015 elections, as well as possibility of decline in crude oil price and the impact on government revenue, external reserves and exchange rate of the naira. In separate interviews by Financial Vanguard, operators across the various sectors said that they expect the economy to perform better in 2013. They however identify pre-election campaign activities as the greatest risk to the performance of the economy. “The most important uncertainty of all is political uncertainty. Because we would face severe political challenges in 2014, it is obvious, we are going to have a national confab, and we are going to have an election. Though the election will take place in 2015, all the work will happen in 2014. So 2014 will be a year of political campaign and there would be more focus on policy than on governance”, said Opeyemi Agabaje of RTC Advisory Services Limited The Lagos Chamber of Commerce and Industry also identified tension generated by pre-election activities as a threat to investors’ confidence and progress of the economy. President of the Chamber, Alhaji Remi Bello told Financial Vanguard, “The Chamber is concerned about the growing tension in the political space as pre- election activities gather momentum and heating up the polity. We wish to stress that political stability is critical for the sustenance of investors’ confidence and the progress of the economy. The omens in the outgoing year are not good enough and have created some discomfort among investors.” Wale Abe, Executive Secretary, Financial Market Dealers Association of Nigeria (FMDA) on his part identified pre-election spending as a challenge to efforts to curb inflation. He said, “The challenges will actually come from curtailing inflation, given the fact that this year is a year preceding election, which means that electioneering campaign will actually start in 2014. Given the fact that the ruling party is in a kind of crises and the opposition party, in terms of numeracy is increasing. This might create some serious attrition between the ruling party and the opposition. It boils down to the fact that a lot of money will find its way into the economy, money that will not pass through the official banking industry, by way of corruption and others trying to get position to win election. That might be the biggest challenge that we might likely face. Then if that happens, the expectation is that the interest rate will likely increase because the central bank will have to tighten more, in anticipation of fiscal injection into the economy.” According to Haruna Kebira of APT Securities and Funds limited uncertainty over the outcome of the 2015 election could trigger withdrawal of funds from the capital by foreign investors and cause the stock market to shrink. Victor Ogiemwonyin, Managing Director/Chief Executive of Partnership Investment Plc, however said that the risk associated with elections in Nigeria cannot be worse what was seen in the recent past and therefore, exaggerated. -------------------------------------------------------------------------------------- Nigeria: 2013 - Foreign Reserves Drop By U.S.$5.2 Billion in Seven Months 3 January 2014 The reserves, which had immense opportunity for growth during the last year, in view of the mostly favourable oil prices, however could not, as a result of the drop in government revenue occasioned by crude oil theft and pipeline vandalism; increased government spending from the Excess Crude Account; and increase in the amount spent in defending the naira by the Central Bank of Nigeria (CBN) among others. According to the latest figure released by the CBN on its website, the reserves dropped to $43.6 billion on December 31, 2013, approximately $500 million below the $44.1 billion recorded on December 28, 2012. The $43.6bn also shows that the reserves fell by about $700m below the $44.3bn it recorded on January 2, 2013. The reserves, which started the year at $44.3bn, began rising through the year and peaked at $48.857bn on May 2. However, the foreign reserves started falling gradually since May. The reserves had fallen to a nine-month low at $45.08bn on October 14. Between May 2 and August 5, 2013, the foreign reserves dropped by $1.8bn from the peak of $48.85bn to $46.98bn. The Governor, Central Bank of Nigeria, Mr Lamido Sanusi, said in May that the outlook for the country's foreign reserves this year was mixed. Sanusi told Reuters that the reserves would probably keep expanding, while facing risks from lower-than-projected oil output and falling prices. According to analysts, the performance of the reserves is driven mainly by proceeds from crude oil, gas exports and crude oil-related taxes as well as reduced funding of the Dutch Auction System on the account of huge inflow of foreign portfolio investments. However, the CBN governor recently dismissed claims that the reserves were experiencing a sharp decline. He also allayed fears about the uncertainties in the Nigerian economy and stressed that the reserves could finance about 11 months of importation. -------------------------------------------------------------------------------------- Nigeria: Budgets - FG, 34 States to Spend N10.67 Trillion By Clifford Ndujihe, 3 January 2014 BARRING adjustments by the legislature and supplementary appropriations, Federal Government and 34 of the 36 states of the federation will spend at least N10.67 trillion this year, Vanguard checks have revealed. In other words, they will be spending at least N889.231 billion a month or N29.235 billion a day. The hefty sum is the summation of budget proposals of the two tiers of government for 2014. Rivers State, Jigawa State and the Federal Capital Territory, FCT, Abuja, are yet to release their 2014 budget proposals. The crisis in Rivers State House of Assembly may have taken its toll on the presentation of the state's 2014 budget. There are indications that the National Assembly may ask Governor Rotimi Amaechi to bring his budget proposal. President Goodluck Jonathan is expected to present the FCT budget to the National Assembly Of the N10.67 trillion proposals, only N4.48 trillion or 42.26 per cent is allocated to capital expenditure (infrastructure, amenities, among others), while N6.123 trillion or 57.74 per cent is to be spent on recurrent expenditure (salaries, emoluments of public servants and political office holders, running costs, among others). In 2013, the federal and state governments spent N11.512 trillion. -------------------------------------------------------------------------------------- My plans for this year — Jonathanon January 01, 2014 * More jobs for youths in 2014 *To cut official travels, speed up National confab *100 yrs of Amalgamation, time for sober reflection BY CLIFFORD NDUJIHE & BEN AGANDE ABUJA—PRESIDENT Goodluck Jonathan yesterday promised Nigerian youths more jobs this year and improved well-being for the citizenry through focused implementation of the Transformation Agenda. In a six-page, 2896-word New Year message, the President, who restated that the amalgamation of the country exactly 100 years ago was not a mistake but a blessing, however, said that the centenary of the country’s nationhood was a moment for sober reflection. Enumerating the achievements of his administration last year, the president said he would this year “diligently carry forward the purposeful and focused implementation of our agenda for national transformation in priority areas such as power, the rehabilitation and expansion of national infrastructure, agricultural development, education and employment generation.” Jonathan also called on Nigerians to place the higher interests of national unity, peace, stability and progress above all other considerations and work harder in their various fields to contribute more significantly to the attainment of our collective aspirations. The message read: Dear Compatriots, I greet and felicitate with you all as we enter the year 2014 which promises to be a momentous one for our country for several reasons, including the fact that it is also the year of our great nation’s centenary celebrations. I join you all in giving thanks to God Almighty for guiding us and our beloved nation safely through all the challenges of the outgoing year to the beginning of 2014. PRESIDENT GOODLUCK JONATHAN Exactly 100 years ago today, on January 1, 1914, the British Colonial authorities amalgamated what was then the separate Protectorates of Southern Nigeria and Northern Nigeria, giving birth to the single geopolitical entity known as Nigeria. For us therefore, today is not just the beginning of a new year, but the end of a century of national existence and the beginning of another. It is a moment for sober reflection and for pride in all that is great about Nigeria. Whatever challenges we may have faced, whatever storms we may have confronted and survived, Nigeria remains a truly blessed country, a country of gifted men and women who continue to distinguish themselves in all spheres of life, a country whose diversity remains a source of strength. We pay tribute today, as always to our founding fathers and mothers, and all the heroes and heroines whose toil and sweat over the century made this country what it is today. As I noted, a few days ago, the amalgamation of 1914 was certainly not a mistake but a blessing. As we celebrate 100 years of nationhood, we must resolve to continue to work together as one, united people, to make our country even greater. I assure you that our administration remains fully committed to the progressive development of our country and the consolidation of peace, unity and democratic governance in our fatherland. Despite several continuing domestic and global challenges, for us in Nigeria, the year 2013 witnessed many positive developments which we will strive to build upon in 2014. We have diligently carried forward the purposeful and focused implementation of our agenda for national transformation in priority areas such as power, the rehabilitation and expansion of national infrastructure, agricultural development, education and employment generation. You may recall that our 2013 Budget was on the theme, “Fiscal Consolidation with Inclusive Growth”, and I emphasized the need for us to “remain prudent with our fiscal resources and also ensure that the Nigerian economy keeps growing and creating jobs”. I am pleased to report that we have stayed focused on this goal. Our national budget for 2014 which is now before the National Assembly is specifically targeted at job creation and inclusive growth. We are keenly aware that in spite of the estimated 1.6 million new jobs created across the country in the past 12 months as a result of our actions and policies, more jobs are still needed to support our growing population. Our economic priorities will be stability and equitable growth, building on the diverse sectors of our economy. In 2013, we commenced implementation of the National Industrial Revolution Plan (NIRP) aimed at industrializing Nigeria and diversifying our economy into sectors such as agro-processing, light manufacturing, and petrochemicals. We have also negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners which would enable us to protect our strategic industries where necessary. I am pleased to note that as a result of our backward integration policies, Nigeria has moved from a country that produced 2 million metric tonnes of cement in 2002, to a country that now has a capacity of 28.5 million metric tonnes. For the first time in our history, we have moved from being a net importer of cement to a net exporter. Foreign direct investment into Nigeria has also been strong. In fact, for the second year running, the UN Conference on Trade and Development has named Nigeria as the number 1 destination for investments in Africa. We are witnessing a revolution in the agricultural sector and the results are evident. We have tackled corruption in the input distribution system as many farmers now obtain their fertilizers and seeds directly through an e-wallet system. In 2013, 4.2 million farmers received subsidized inputs via this programme. This scheme has restored dignity to our farmers. Last year we produced over 8 million metric tonnes of additional food; and this year, inflation fell to its lowest level since 2008 partly due to higher domestic food production. Our food import bill has also reduced from N1.1 trillion in 2011, to N648 billion in 2012, placing Nigeria firmly on the path to food self-sufficiency. The sector is also supporting more jobs. Last year, we produced 1.1 million metric tonnes of dry season rice across 10 Northern states; and over 250,000 farmers and youths in these States are now profitably engaged in farming even during the dry season. This Administration is also developing our water resources which are key for both our food production and job creation goals. In 2013, we completed the construction of nine dams which increased the volume of our water reservoirs by 422 million cubic metres. Through our irrigation and drainage programme, we have increased the total irrigated area by over 31,000 hectares creating jobs for over 75,000 farming families while increasing production of over 400,000 metric tons of assorted irrigated food products. Fellow Compatriots, I have always believed that the single greatest thing we can do to ensure all Nigerians realize their potential and play a full part in our nation’s future, is to invest in education. The education of our young people is a key priority for this Government. We take this responsibility very seriously and I urge all other stakeholders in the sector to recognize the national importance of their work, and to help advance the cause of education in our nation. Between 2007 and 2013, we have almost tripled the allocation for education from N224 billion to N634 billion – and we will continue to vigorously support the sector. We have improved access to education in the country with the construction of 125 Almajiri schools, and the establishment of three additional Federal Universities in the North, bringing to twelve, the number of universities established by this administration. In 2013, we rehabilitated 352 laboratories and constructed 72 new libraries in the Federal Unity Schools; and also rehabilitated laboratories of all the 51 Federal and State polytechnics across the country. In the Health sector, we are building strong safety nets and improving access to primary health care under the Saving One Million Lives programme. In 2013, we recruited 11,300 frontline health workers who were deployed to under-served communities across the country. Over 400,000 lives have been saved through our various interventions. We have reached over 10,000 women and children with conditional cash transfer programmes across 8 States and the FCT and we intend to scale up this successful initiative. Our national immunization coverage has exceeded 80%. And for the first time in the history of the country there has not been any transmission of the Type-3 Wild Polio virus for more than one year. We have also eradicated the guinea worm that previously affected the lives of over 800,000 Nigerians yearly. In tertiary health care, we upgraded medical facilities across the country. Two of our teaching hospitals – the University of Nigeria Teaching Hospital in Enugu, and the University College Hospital in Ibadan – commenced open heart surgeries this year after the installation of new facilities. Fellow Nigerians, I have dwelt on some of our administration’s achievements in 2013 to reassure you that we are working and results are being achieved on the ground. As we enter our Centennial year, there is still much work ahead. We are determined to sustain our strong macroeconomic fundamentals, to strengthen our domestic institutions, and to invest in priority sectors. These investments will create more jobs for our youth. Government will at the same time, continue to scale-up investments in safety nets and the MDGs to take care of the poor and the vulnerable so that they too can share in our growth and prosperity. In 2014, we will continue to prioritize investments in key sectors such as infrastructure development, power, roads, rail transportation and aviation. In the past year, the Federal Government completed the privatization of four power generation companies and 10 power distribution companies. We are also in the process of privatizing 10 power plants under the National Integrated Power Projects (NIPP). We shall boost investments in transmission to ensure power generated is properly evacuated and distributed. In this regard, we have already mobilized an additional $1.5 billion for the upgrade of the transmission network in 2014 and beyond. Government will also strengthen regulation of the sector, and closely monitor electricity delivery to increase this beyond 18 hours per day. We will complete the privatization of the NIPP projects, accelerate work on our gas pipeline infrastructure and also continue to invest in hydro-electric power and clean energy as we monitor the effects of climate change on our economy. Our administration believes that the cost of governance in the country is still too high and must be further reduced. We will also take additional steps to stem the tide of corruption and leakages. We have worked hard to curb fraud in the administration of the pension system and the implementation of the petroleum subsidy scheme. We have introduced a Pensions Transition Arrangement Department under a new Director-General. This department will now ensure that those of our pensioners still under the old scheme receive their pensions and gratuities, and are not subjected to fraud. Prosecution of all those involved in robbing our retired people will continue. The Petroleum Subsidy Scheme is also now being operated under new strict guidelines to tackle previous leakages in the scheme and prevent fraud. Foreign travel by government personnel will be further curtailed. This directive shall apply to all Ministries, Departments and Agencies of the Federal Government. Our strategy to curb leakages will increasingly rely on introducing the right technologies such as biometrics and digitizing government payments. I am therefore pleased to inform you that we shall complete the deployment of the three electronic platforms in 2014 – namely, the Treasury Single Account (TSA), the Government Integrated Financial Management Information System (GIFMIS) and the Integrated Payroll and Personnel Information System (IPPIS) – which are all geared towards improving efficiency and transparency in our public finances. Through these reforms, we have already saved about N126 billion in leaked funds and intend to save more. To sustain Nigeria’s ongoing agricultural transformation, we have planned further investments in the sector. We will provide input subsidies to five million farmers nationwide using the e-wallet system. This Administration recently launched a self-employment initiative under the Youth Employment in Agriculture Programme (YEAP), called the Nagropreneur programme. This scheme would encourage our youth to go into commercial agriculture as entrepreneurs and we plan to develop over 750,000 young Nagropreneurs by 2015. We will also establish new agro-industrial clusters to complement the staple crop processing zones being developed across the country. In 2014, this Administration will continue to work with the private sector to improve financing in the agricultural sector. For example, we will launch the Fund for Agricultural Finance in Nigeria (FAFIN) which will serve as a private equity fund to invest in agri-businesses across the country. Our Small and Medium scale enterprises (SMEs) will be the bedrock of Nigeria’s industrialization. We have about 17 million registered SMEs, and they employ over 32 million Nigerians. When our SMEs grow, more jobs will be created for our youth. Therefore, in 2014, this Administration will focus strongly on implementing the Nigeria Enterprise Development Programme (NEDEP) to address the needs of small businesses. Our interventions will include helping SMEs with access to affordable finance, business development services, and youth training. In addition, our new CET policies will enable us to support our emerging industries. We will also intensify our investment promotion efforts abroad, to ensure we bring the biggest and best companies from around the world to invest in Nigeria. Dear Compatriots, the housing and construction industry is a critical sector in most developed economies. When the housing sector booms, it creates additional jobs for architects and masons, for electricians and plumbers, forpainters and interior decorators, and for those in the cement and furniture industries. Today, I am pleased to inform you that this Administration is reinvigorating our housing and construction sector. We have established the Nigeria Mortgage Refinance Company (NMRC) which will increase liquidity in the housing sector, provide a secondary market for mortgages, and thereby increase the number of people able to purchase or build homes at an affordable price in the country. In 2014, we will work in a number of pilot states where the State Governors have agreed to provide fast-track land titles, foreclosure arrangements, and serviced plots. This new institution will enable us to create over 200,000 mortgages over the next five years at affordable interest rates. In addition, those at the lower end of the economic ladder will not be left behind as this new initiative will expand mass housing schemes through a re-structured Federal Mortgage Bank and other institutions to provide rent-to-own and lease-to-own options. I am confident that very soon, many more hardworking Nigerian families will be able to realize their dream of owning a home. In this our centenary year, we will continue our efforts, through the Saving One Million Lives initiative to strengthen primary health care services. We will scale up interventions in reproductive, maternal, newborn and child health, nutrition, routine immunization, HIV/AIDS, malaria elimination, tuberculosis, neglected tropical diseases, and non-communicable diseases. We will pay greater attention to the provision of universal health coverage. Besides the implementation of new initiatives such as my comprehensive response plan for HIV/AIDS, we shall continue to collaborate with global health partners to deliver our health sector transformation agenda. I am glad that the issues responsible for the long-drawn ASUU strike have been resolved and our children are returning to their campuses. We are committed to making our tertiary institutions true centers of learning for our young people. We will therefore focus on upgrading hostels, laboratories, classrooms, and halls. As the 2015 deadline for the Millennium Development Goals approaches, we will continue to expand access to basic education for all Nigerian children. Working with State Governments, we shall decisively tackle the problem of the large numbers of out-of-school children in this country. We will also invest in technical and vocational education to promote skills development for our youth across the country. Nigerian entrepreneurs still lack access to affordable financing, with medium-to-long-term tenors. To address this gap, a new wholesale development finance institution will be established in 2014 to provide medium-to long-term financing for Nigerian businesses. We are working with partners such as the World Bank, the Africa Development Bank, the BNDES Bank in Brazil, and KfW in Germany, to realize this project. Our existing Bank of Agriculture and Bank of Industry will be re-structured as specialized institutions to retail financing from this new wholesale development bank. In addition to the foregoing, our administration will also do all within its powers to ensure the success of the forthcoming National Conference. The report of the Presidential Advisory Committee on the Conference is undergoing urgent review and the approved structure, guidelines and modalities for the conference will soon be published as a prelude to its commencement and expeditious conclusion. It remains our sincere hope and expectation that the success of the national conference will further enhance national unity, peace and cohesion as we move ahead to the 2015 general elections. In keeping with our avowed commitment to progressively enhancing the credibility of Nigeria’s electoral process by consistently upholding the principle of one man, one vote, our Administration will also ensure that the Independent National Electoral Commission (INEC) receives all required support to ensure that it is adequately prepared for the next general elections. As peace and security remain prerequisite conditions for the full realization of our objectives, we will also do more in 2014 to further empower our security agencies who are working in collaborative partnerships with our friends in the international community to stem the scourge of terrorism in our country and enhance the security of lives and property in all parts of Nigeria. The allocation of over N600 Billion to Defence and Policing in the 2014 Budget attests to this commitment. Fellow compatriots, the task of making our dear nation a much better place for present and future generations cannot be left to government alone. I therefore urge you all to be ready and willing to do more this year to support the implementation of the Federal Government’s Agenda for National Transformation in every possible way. Let us all therefore resolve as we celebrate the new year, and Nigeria’s Centenary, to place the higher interests of national unity, peace, stability and progress above all other considerations and work harder in our particular fields of human endeavour to contribute more significantly to the attainment of our collective aspirations. I urge all Nigerians, no matter their stations in life, to rededicate themselves to contributing meaningfully to further enrich our national heritage. The time for that re-dedication is now, not tomorrow. I wish you all a happy and rewarding 2014. God bless Nigeria. Happy New Year. -------------------------------------------------------------------------------------- Nigeria: Jonathan Reduces Aso Rock's Billion Naira Feeding Bill By N494 Million By Ini Ekott, 31 December 2013 With the economy in a bind and a growing public anger over his administration's management of the economy, President Goodluck Jonathan has taken a rare decision to spend less on food and consumables at the presidential villa in 2014. As the budget comes under an increasingly intense media scrutiny, President Jonathan has given up nearly half of the presidency's giant feeding bill of N1 billion, a proposal, two years ago, that shocked Nigerians and stirred public anger. The feeding cost has been lowered by N494 million or 45.5 percent in the 2014 budget proposal sent to the National Assembly by the president. The 2014 request, if approved by lawmakers, will be the lowest amount of naira spent by the State House on feeding and allied costs in two years. In the 2012 budget presented in late 2011 by the president, his office and residence as well as those of Vice President Namadi Sambo were allocated an obscene N993 million for refreshments, catering services and purchase of kitchen equipment. That year, approximately N477million was assigned for foodstuffs and "catering materials supplies" for the president's office, while an additional N293 million was to provide "refreshment and meals" for the president's comfort at his home and office. An extra N45.4 million was earmarked to buy canteen and kitchen equipment for the president's household, although similar purchases were made the previous year. For the vice president's office in 2012, foodstuff, catering and materials supplies were scheduled to cost N104 million, while cooking gas and cooking fuel was to consume N6.2 million. Refreshments and meals at Mr. Sambo's office and home were estimated at N20.8million, and another N45.4 million was allocated for purchase of kitchen and household equipment at the state house headquarters. The funds allocated to feed Aso Rock in 2012 were sufficient to pay about 1,200 of the nation's growing unemployed graduates a monthly salary of N70, 000 for a year. That revelation at the time, published by PREMIUM TIMES, aggravated public anger and revved up resistance to government's plan, within the same period, to remove petrol subsidy, and jack up the pump price of petrol. A terribly embarrassed presidency quickly scrambled a review of the budget, cutting down the proposed feeding bill by N147 million. But in the two years that have followed, the government has significantly lowered the feeding bill for the first and second families and their offices, raising the question how the huge 2012 bill may have been utilized, since the same purpose is now being served at a cheaper rate. In 2013, the presidency's feeding was put at N717.3 million. For 2014, the figure has been scaled downward to N542.8 million, the new budget shows. In 2014, for the president's office and residence, food stuff and catering materials supplies will cost N200.8 million, while refreshment and meals will gulp N162.6 million. Cooking gas and fuel will be purchased at N 9.4 million while a new set of canteen and kitchen equipment-the same purchase that has consistently occurred for years-will cost the nation N131.8 million. For the Vice president's office, food stuff and catering materials supplies will cost N23.9 million, refreshment and meals N10.8 million, while cooking gas and fuel cost would be N3.6 million. The figures are subject to National Assembly's approval. Federal revenues have dwindled during the past year with the government so terribly cash-strapped that it is unable to pay university teachers and execute key developmental projects. "It's all gimmicks" Analysts however believe the presidential belt-tightening, by a regime known more for wasting billions on servicing the exotic tastes of administration officials and outright stealing of scarce public funds, is not an enough indication that the government is committed to fiscal responsibility. "The reduction in the feeding cost was done specifically to hoodwink the public due to last year's public outcry," Olanrewaju Suraju, chairman of the Civil Society Network Against Corruption, CSNAC, told PREMIUM TIMES Tuesday morning. "There are lots of other outlandish spendings proposed in the budget and I'm sure that what he reduced in the feeding cost, he has smuggled it into the budget elsewhere." Yomi Ogunsanya, an Abuja-based lawyer spoke along the same line. "It's a good development that he (President Jonathan) has reduced his feeding bill but that is not enough," Mr. Ogunsanya said. "If he wants to be taken seriously, he should cut down on the size of his delegations to foreign trips, and reduce outrageous allowances for his aides and other officials. "He should learn from Malawi President Joyce Banda, who is selling her country's presidential aircraft to feed the poor. It is unacceptable that he (Jonathan) is planning to buy a new aircraft at a time more than half of our people are hungry. "It is even irritating that he plans to spend several millions to feed the animals in his zoo when more than half of Nigerians don't have food to eat. "Then he should tackle corruption headlong. He should stop sitting on reports indicting his key ministers for corruption. That's only when we can begin to take him seriously." -------------------------------------------------------------------------------------------------------------------------- Nigeria: Sustained Gains Lift Capitalisation to Historic N12.9 Trillion 31 December 2013 A day to the end of the year, the market capitalisation of the Nigerian Stock Exchange (NSE) yesterday inched to a historic high of N12.962 trillion as Nigerian equities advanced further. Even at the 2008 peak of the market before the crash, the capitalisation stood at N12.6 trillion. However, a sustained gains by oil and gas stocks led by Oando Plc and other stocks in the banking sub-sector propelled the market capitalisation to a historic level of N12.962 trillion yesterday. Similarly, the NSE All-Share Index closed at 40,472.13, bringing the year- to-date (YTD) growth of the ASI 44 per cent. However, the ASI is yet to hit its 2008 pre-crash peak of 63,000. At the close of trading yesterday, 42 stocks appreciated while 14 depreciated. Oando Plc led the price gainers gaining the maximum 10 per cent to close at N22 per share. The equity has been enjoying a renewed demand following its successful raising of N30.7 billion from the capital market via a special placing. The raising of the fresh capital has brightened the hope of Oando concluding the acquisition of ConoCo Phillips Nigerian assets, which has a scheduled completion date of January 31, 2014. An elated Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu had said: A significant portion of the proceeds will be used to finance the closure of our upstream asset acquisition process; a transaction we believe will transform us into a major indigenous producer of oil in Nigeria. The inherent value to our esteemed shareholders is evident, as we look to grow our asset base and income streams, whilst at the same time enlarging the portion of revenue we are able to declare as profits, through the increased margins the upstream business offers us." Market activity level, measured by volume and value increased by 12.4 per cent and 60.3 per cent to 432.7 million shares and N3.85 billion respectively compared with last Friday's performance -------------------------------------------------------------------------------------------------------------------------- Nigeria: Macro Economic Instability Blamed for Nigeria's Poor Industrial Growth in 2013 By Crusoe Osagie, 31 December 2013 As the United Nations Industrial Development Organisation (UNIDO) released statistics indicating that Nigeria and other African nations only managed a 0.1 percent industrial growth in the third quarter of 2013, stakeholders in the Organised Private Sector have blamed macro economic instability for the poor result in Nigeria. Vice President of the Nigerian Association of Chambers of Commerce and Industry Mines and Agriculture (NACCIMA) Mr. Dele Oye noted that the nation's economy for most part of 2013 was characterised by considerable vulnerability to external shocks, which in turn dampened its prospects for sustained growth. The NACCIMA boss explained that macroeconomic stability is essential to buffer the economy against currency and interest fluctuations in the global market but stressed that with all indices of stability going awry in the Nigerian economy mostly in the latter half of the year, the industrial sector came against too much odds that prevented significant growth from taking place. Director General of the Lagos Chambers of Commerce and Industry (LCCI), Mr Muda Yusuf who also commented stressed that all the variables of economic stability showed severe signs of volatility during the year, with inflation being relatively high and unstable; interest rates soaring and currency exchange rate largely unstable. UNIDO reported that World manufacturing output increased modestly at 2.4 per cent during the third quarter of 2013 amid a continued recovery in industrialised countries, but manufacturing growth rates in developing and emerging industrial economies have slowed. Manufacturing output in the United States of America grew by 2.3 per cent and in Japan by 2.0 per cent in the third quarter. However, the recovery in eurozone countries remained fragile and could not maintain the recently observed growth trend. Manufacturing output again dropped in France and Italy. Outside the eurozone, manufacturing output in Norway grew by 3.9 per cent and in Switzerland by 9.4. However, in the Russian Federation it plunged by 7.0 per cent. Among developing and emerging industrial economies, China maintained an exceptionally high manufacturing growth rate of 9.3 per cent. The combined growth rate of other developing and emerging economies was just 2.0 per cent in the third quarter. The slow pace of manufacturing growth has become a common phenomenon for developing and emerging industrial economies. The major obstacles are related to high input prices, including energy costs, low demand and a reduced outflow of capital from industrialized countries. In the third quarter, the manufacturing output of Brazil grew by just 0.4 per cent, India by 1.2 per cent and Mexico by 1.0 per cent. From the analysis of output growth figures by sector, some early signs of a return of manufacturing activity in industrialized countries were observed. For the first time in many years, production of wearing apparel and consumer electronics showed notable growth in industrialised countries. -------------------------------------------------------------------------------------------------------------------------- Nigeria: House to Probe Okonjo-Iweala Over Import Duty Waivers 27 December 2013 The House of Representatives has mandated the Cordinating Minister for the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, to produce a detailed report on the exact amount of money Nigeria lost to import duty waivers between 2011 and 2013. She was also directed to provide the full names of the beneficiaries; what the waivers were used to import; and the justification for granting such duty exemptions. The directive was contained in the 50 questions on 'state of the economy', which the House Committee on Finance handed over to the minister during a session with the committee in Abuja on Thursday last week, after the 2014 budget was laid down by her in both chambers of the National Assembly. The committee Chairman, Abdulmumin Jibrin, had exchanged hot words with the Finance minister, leading to the abrupt end of the session with the minister. The details of the questions showed that the committee was worried over the federal government's commitment towards the anti-corruption war and the dwindling non-oil revenues as a result of the duty waivers approved by the minister. The question on waivers was number 15 on the list, where the committee asked: "How much exactly has been the amount of money lost in government revenue as a result of import duty waivers in 2011, 2012 and 2013? "In your opinion as the Minister of Finance, who oversees the economy, what are the implications to the country's economy? What efforts have you made to stop this waiver policy, which is distorting the economy? "Our non-oil income has dropped in 2013, a case where increased tariffs on various items effectively reduced importation to zero in some sectors. "However, those items now find their way into Nigeria through our borders. "Does it make any sense to increase these tariffs when we have such porous borders? As an example, officially, Togo imported more rice this year than Nigeria." Under question number 16, the minister is to explain why the Federal Inland Revenue Service (FIRS) planned to engage foreign consultants to collect tax for the agency, beginning from 2014. Okonjo-Iweala was, therefore, asked thus, "Could the minister clarify this position and what Nigeria stands to gain? Has the FIRS not been working effectively?" Question number 30 dealt with corruption, where the committee expressed doubts over the federal government's commitment to fight corruption and queried why the Economic and Financial Crimes Commission (EFCC)should be starved of funds. The committee asked, "Do you believe in the fight against corruption? If you do, why has EFCC not been properly funded? Without properly funding the commission, how should it be expected to carry out its duties effectively?" The committee also queried the choice of Chevrolet cars for the SURE-P taxis as against Asian and European brands. It noted that the vehicles were not fuel-efficient and not durable on Nigerian roads. The document read, "Who is in charge of the management of Subsidy Reinvestment Empowerment Programme (SURE-P) and who takes responsibility for its success or failure?" Okonjo-Iweala was also taken to task over the bloated recurrent component of successive national budgets in the country. The committee recalled that she had boasted to reduce recurrent spending, but failed to keep the promise. For example, the 2014 budget of N4.6 trillion has a recurrent lion's share of 72 per cent. The committee observed: "Since your arrival as Minister of Finance in 2011, you have publicly announced the need to reduce the recurrent expenditure so that more money will be made available to capital spending, which is critical to growing and diversifying the country's economy. "How far has government succeeded in making these necessary cuts; and where exactly have these cuts been made in the effort to reduce recurrent expenditure?" -------------------------------------------------------------------------------------- Nigeria: 2014 Budget - Presidency to Spend N2.3 Billion On Travels By Soni Daniel and Babajide Komolafe, 25 December 2013 The proposal is contained in the 2014 appropriation bill submitted by President Goodluck Jonathan through the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to the National Assembly last week. A breakdown of the figure showed that the State House would require the sum of N1, 219, 612, 417 for what it called Local Travels. International travels and transportation will gulp N1, 159, 240, 600 . For the whole year, the Presidency intends to spend N200 million for the provision of foodstuffs/catering supplies while it also plans to expend another N162,556,500 on meals and refreshments. For honorarium and sitting allowances, the Presidency has budgeted a princely sum of N320 million for that purpose just as it has set aside the sum of N33.8 million for the office of the Vice-President to take care of his foodstuffs and catering supplies as well as meals and refreshments in the year. Under the arrangement, N23.8 million will go for foodstuffs and catering supplies while the balance of N10 million will be spent on meals and refreshments in the office of the second in command. In the same vein, the Minister of Finance and Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, is expected to spend the sum of N568,859,940 on honorarium and another N51, 403,464 on meals and refreshments within the fiscal period. A scrutiny of the budget proposals however showed that the Presidency shied away from making any provision for the controversial Security and Exchange Commission, SEC, whose head, Arunma Oteh, has been embroiled in a ceaseless war with the National Assembly. The lawmakers had vowed not to approve any budget for the commission until Oteh was removed but President Jonathan ignored them and their resolution. In the same vein, the Federal Government made the same yearly provision of N150 billion for the National Assembly but did not give any breakdown of the sum. It is not clear if the NASS would be in a hurry to pass the budget given the furore that attended the presentation of the document. Controversy had mounted to the extent that President Jonathan had to back out of the presentation and later sent the Finance Minister to represent him. -------------------------------------------------------------------------------------- Nigeria: FG Commences Recovery of U.S.$9.6 Billion From Oil Firms By Juliet Alohan, 26 December 2013 The federal government has inaugurated an Inter Ministerial Task Team (IMTT) primarily tasked with the responsibility of recovering all outstanding revenue due to the federation from the oil and gas sector according to findings of the various Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports. The outstanding revenue comprises under payments and unreconciled differences identified in the various NEITI audits put at about $9.6 billion. Previous efforts by NEITI and FIRS had resulted in the recovery of $2 billion. A statement issued yesterday by the NEITI secretariat informed that the inauguration of the IMTT was performed by the Secretary to the Federal Government, Senator Anyim Pius Anyim on behalf of President Goodluck Jonathan. Members of the reconstituted IMTT which is chaired by NEITI Chairman, Ledum Mitee, include the Director, Department of Petroleum Resources, Group Managing Director, NNPC, Governor, Central Bank of Nigeria, Chairman, Revenue Mobilisation, Allocation & Fiscal Commission, Permanent Secretary, Ministry of Mines and Steel Development and Permanent Secretary, Ministry of Petroleum Resources. Others are the Accountant General of the Federation, Chairman, Federal Inland Revenue Service, Auditor General of the Federation, Chief Economic Adviser to the President, Permanent Secretary, Federal Ministry of Finance and the Managing Director, Pipelines and Products Marketing Company. Also in the task team are the Managing Director, Niger Delta Development Commission, Executive Secretary, Petroleum Products Pricing and Regulatory Agency, President, Nigeria Miners Association, Director General, Mining Cadastral Office, Chairman, Oil Producers Trade Section of the Lagos Chamber of Commerce. The terms of reference given to the IMTT include "to work closely with NEITI and ensure prompt recovery of all outstanding revenues due to the Federation from NEITI audit findings, examine the findings and recommendations in NEITI audit reports and give advice to affected relevant agencies on appropriate steps to address the issues," the statement informed. The IMTT is also to identify any bottlenecks to the realisation of their mandate and make necessary recommendations to government through the Secretary to the federal government as well as to advise the Federal Executive Council on any issue in NEITI audit report findings that needs the Council's intervention. -------------------------------------------------------------------------------------- Nigeria: U.S.$49.8 Billion Oil Revenue - Leadership Writes CBN, NNPC, NASS By NSE Anthony-Uko, 24 December 2013 As the drama over the unremitted crude oil revenue by the Nigeria National Petroleum Corporation (NNPC) continues to unfold, LEADERSHIP has invoked the provisions of the Freedom of Information (FOI) Act 2011, to obtain information from the National Assembly (NASS), the Central Bank of Nigeria (CBN) and the NNPC, to clarify the position of things. LEADERSHIP, in the letter to the president of the Senate of the Federal Republic of Nigeria, also requested copies of reports of all previous public hearings on the oil and gas industry by the Upper House. The request was made in view of the fact that several committees of the House of Representatives had in the past conducted public hearings into various aspects of the NNPC operations. In a related letter to the speaker of the House of Representatives, LEADERSHIP requested copies of reports of all previous public hearings on the oil and gas industry by the Honourable House. The media house also commended the Senate for steps already taken to commence a public hearing on the issue, and the House of Representatives for inaugurating a 17-member ad-hoc committee, chaired by Hon. Bashir Adamu, to probe oil theft in the country. From the CBN Governor, Sanusi Lamido Sanusi, LEADERSHIP has asked for a copy of his correspondence with the NNPC and President Goodluck Ebele Jonathan, as well as to have him (Sanusi) confirm whether or not he is still standing by his original position. In the letter written to the NNPC, which was received on Thursday December 19, 2013, LEADERSHIP requested such documents as the audited group accounts of the corporation in the last five years, audited accounts of all subsidiaries of NNPC over the last five years and details of remedial measures taken by the NNPC in response to all audits of the oil and gas sector conducted under the auspices of the Nigerian Extractive Industries Transparency Initiative (NEITI) since 1999. LEADERSHIP also sought to know steps that the NNPC is taking to improve transparency and accountability to stakeholders. Recall that a letter to President Jonathan by the CBN governor alleged the non-remittance of $49.8billion to the Federation Account by the NNPC. In view of the public outrage that greeted the claim, LEADERSHIP devoted a front-page comment to the issue in its Monday, December 16, 2013 edition, in which it promised its readers that it would not relent until satisfactory explanations were in the public domain. In addition, the media house called on the NASS to commence impeachment proceedings against President Jonathan, if there was no satisfactory response by him one week after publishing the editorial. While all the letters have been received by the various institutions, LEADERSHIP is still awaiting their responses and hopes that they will comply within seven days, as stipulated by the FOI Act 2011. "We look forward to your response to this letter to facilitate the discharge of our constitutional role as a media organisation, as enshrined in section 22 of chapter 2 of the 1999 Constitution of the Federal Republic of Nigeria (as amended)," the newspaper wrote. -------------------------------------------------------------------------------------- How FG allegedly lavished N4.7trn in 8yrs, by Repson December 23, 2013 / in News 2:58 am / -Say Obasanjo spent N250m a year on Charles Tailor BY EMMAN OVUAKPORIE ABUJA—The Public Accounts Committee, PAC, of the House of Representatives revealed at the weekend that over N4 trillion was spent from 2004 to 2012 by the Federal Government from Service-wide Vote without the approval of the National Assembly. The committee said due process was not followed in the manner such a huge sum was lavished, noting that it contravened Section 80 of 1999 constitution. House of Representatives during plenary The committee also alleged that between 2005 and 2006, the government of former President Olusegun Obasanjo spent N250 million to feed former President of Liberia, Charles Taylor and his family, who were on an asylum in the country. Chairman of PAC, Adeola Olamilekan (APC-Lagos), who disclosed these at a briefing of journalists, said the expenditure was made without parliamentary approval, starting from the government of President Obasanjo to that of President Goodluck Jonathan. Olamilekan explained that “most of the expenditures to which the Service-wide Vote releases were deployed are routine in nature and did not qualify for emergency funding. “For instance, between 2004 and 2012, a total of N1, 284,853,731.20 was spent on publicity and publication of various government programmes. “Between 2004 and 2005, N250 million was spent on the upkeep of the former Liberian President, Charles Taylor, another N14,006,494.847.57 was also released from the Service-wide Vote for the payment of judgement debts against the Federal Government. “The office of the Accountant-General of the Federation, Budget Office and the Ministry of Finance released to their various offices a total of N2, 267,002,101 to a few auditors as audit fees and in 2011 alone, the Office of the Accountant-General of the Federation paid out N809,358,504 as audit fees to some external auditors carrying out audit of the Federal Government financial activities instead of the Office of the Auditor-General of the Federation.” He also alleged that over N160 million was released for the Budget and Accountant General’s offices. He said further: “The expenditure of N162million from the 2011 Service Wide Votes releases tagged; “Closing Accounts” incurred jointly by the Office of the Accountant-General and the Budget Office of the Federation. “An expenditure of N1,059,177,589.31($6,619,859.93 at the rate of $1=N160) in 201 and 2011 said to payment of outstanding tax on Nigeria House in New York. “Successive governments have from 2004 to 2012. Spent a whopping N4.17 trillion as against N1.8trillion approved by the National Assembly as Service Wide Votes component of the budgets of those years, translating to N2.27trillion extra budgetary spending or 220% above the Service Wide Votes as approved in the budget for the period.” He explained that “such extra-budgetary expenditures constitute a breach of Section 81 of the Constitution of the Federal Republic of Nigeria, 1999(as amended) and an illegality.” Olamilekan also said PAC discovered in the course of its oversight that the Service-Wide Vote was converted to a recurrent fund by the government, instead of an infrastructure vote. “Such releases were mainly used to finance recurrent expenses not targeted at critical and strategic sectors of the economy and the releases were random and did not follow any clear pattern. “The Service Wide Votes had become an alternative budget which government prefers to patronize than the annual budget, leading to poor implementation of the annual budget as approved by the National Assembly,” he added. The report was earlier last Thursday presented by Olamilekan to the House which resolved that the committee should do more on its findings and present another report within two weeks. The Service Wide Wide is the fund set aside for emergency purposes. -------------------------------------------------------------------------------------- Nigeria: 2014 Budget - Presidency to Spend N33.4 Billion As Reps Pose 50 Questions for Okonjo-Iweala By Adesuwa Tsan, 20 December 2013 Budget 2013 There was a war of words between members of the House of Representatives committee on finance and the coordinating minister for the economy and minister of finance, Dr. Ngozi Okonjo-Iweala Thursday, which ended with an order by the lawmakers for her to walk out. The House Committee on Finance had invited Okonjo-Iweala along with the accountant-general of the federation, Jonah Ogunniyi Otunla, to a parley where they were to speak on the state of the nation's economy, the budget performance and other related issues. The disagreement between the two parties started when the minister, who had laid the 2014 budget estimates earlier in the day before both chambers of the National Assembly, informed the committee that she could not present much to the lawmakers, because she was not feeling very well and had only shown up for the meeting out of respect for them. "I must tell you that I'm feeling sick. For the past one week I've not had any sleep, so I'm not feeling fine. But I had to come, because I respect the parliament and the committee. I'll try my best to respond to your questions as much as possible and my other colleagues, who are also here with me, will contribute," the minister said. Chairman of the committee, Hon Abdulmumin Jibrin, while responding, told the minister that the committee had intended to engage her with 50 questions and due to her state of health, she would not be able to respond as elaborately as they would want. He therefore gave her the option to leave, respond to the questions in writing and report back at a later date. "We're not insensitive to your situation as human beings, and if you had told us this before now, we would have given you some time. We have 50 questions for you and we can give you time to respond in writing," he said. Apparently not satisfied with the response of the committee, the minister said she was going to stay and answer the questions with the assistance of her aides, adding that, "Since I'm here now, I want to respond to the questions in person." But the chairman insisted that she leave, saying, "Provide written answers within two weeks and we'll invite you in January to appear before us. The 50 questions capture all at stake on the state of the economy." The minister responded, "I know you have ruled, but you have to hear me out. You haven't allowed me to say something and everybody is here seeing what is happening. With all due respect, I will not tell your committee that I'm feeling fine when I'm not. We have had a good working relationship with your committee. I thought we'd be treated with courtesy, but the way you're starting is a bit disturbing," she said. Jibrin insisted, "You know I have ruled and if you don't mind, please excuse us. Members should stay behind for executive meeting. We don't want any haphazard answers, so you can go Honourable Minister." The exchange continued as Okonjo-Iweala maintained that she could "manage to answer the questions". "I won't answer you haphazardly. I know my health and I assure you that I can answer you well, along with my other colleagues here," she persisted. Now visibly angry, Jibrin said, "I'm sorry Honourable Minister. You can only decide what happens in the finance ministry and not in the House." Before leaving, Okonjo-Iweala said, "I have uttermost respect for the committee and expect same from you. I'm a minister of the Federal Republic. When you invite ministers, you should treat them with respect. We can't be invited and be abused." -------------------------------------------------------------------------------------- Nigeria: 2014 - FG Targets Jobs in N4.6 Trillion Budget By Johnbosco Agbakwuru and Joseph Erunke, 20 December 2013 Abuja — The Federal Government yesterday presented a budget proposal of N4.6 trillion for the 2014 fiscal year to the National Assembly. The proposed budget christened 'Budget for Job Creation and Growth' represents N100 billion reduction from the N4.7 trillion that was budgeted for this year. Capital expenditure is projected at N1.1 trillion representing 27.29 per cent, down from 31.9 per cent in the current year. The reduction in capital expenditure was attributed to increased allocation to pension and high wage bill. The N4.6 trillion expenditure is to be financed from budgeted revenue of N3.37 billion, while the balance will come from N571 billion debt. The budget is based on oil price of $77.5 per barrel and crude oil production of 2.38 million barrels per day(bpd) with an average exchange rate of N160 per dollar. The budget was presented by the Minister of Finance and Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala who represented President Jonathan. Though she did not give details of the budget and the amount for the recurrent expenditure, highlights of the proposed budget were however later released by the Ministry of Finance. Speaking to Journalists after presenting the budget, Dr. Okonjo-Iweala said that the aggregate expenditure of N4.6 trillion excludes the Subsidy Reinvestment Expenditure Programme, SURE-P. She said, "I felt very privileged, it's an honour that Mr. President has asked me to carry out this task in conjunction with my colleagues in the cabinet, and of course, the Director General of the Budget Office supported me to do this great honour. "This budget is the Budget for Job Creation and Inclusive Growth, meaning that it's a budget which will continue the President's transformation agenda for several sectors of the economy. The budget is going to support the push in agriculture. "It will kick-start the housing sector where we can create more jobs, it is designed for our policies that would support manufacturing because jobs would be created there. Industries will also be created in solid minerals sector. All these support will continue to be unleashed. Job creation is the key to really solving the problems of the Nigerian economy. "Aggregate expenditure excluding SURE - P funds is about N4.6 trillion and the revenue is about N3.73 trillion. The capital is about N1.1 trillion and makes up about 27 percent of the budget, the balance of course is the recurrent, and it is about 72 percent of the budget." The Minister explained that the distinguishing feature between the 2013 budget and that of the 2014 budget was the focus the government had in continuation of the 2013 budget especially on the area of job creation for the youths and promised that the government was not going to relent in pushing forward. She said, "All the programmes that create jobs are very well supported, the SURE -P is also part of it, community services programmes would be pushed, the You-Win programme would be pushed." The Minister further said that the government would pursue vigorously infrastructural development. "The infrastructure development is part of it, the Hon Minister of Transport is here, we have been working on rail development. Ministry of Niger Delta is also part of the infrastructure development, Water resources, FCT development and so on. "We have privatised power but we will be working on the transmission to direct resources there. The distinguishing thing is that it's a continuation of what we have done before but with more emphasis on really pushing out jobs and also supporting safety nets that can further redistribute income to poor people in the country." HIGHLIGHTS: Baseline Assumptions Baseline Assumptions *Benchmark Oil Price: $77.5pb *Budgeted Oil Production: 2.3883mbpd *Average Exchange Rate: N160/$, same as in 2013 *Real GDP Growth Rate: 6.75% Revenue Projections *Gross Federally Collectible Revenue: N10.88 trillion *Gross Federally Collectible Oil & Gas Revenue: N7.16 trillion *Total deductions, including cost of crude oil production, subsidy payments, and domestic gas development is N2.15 trillion, same as in 2013. *Subsidy payments were maintained at the 2013 level of N971.1 billion. *Gross Federally Collectible Non-Oil Revenue: N3.29 trillion *FGN Budget Revenue: N3.73 trillion Expenditure Projections *Aggregate Expenditure (Net of SURE-P): N4.642 trillion *Aggregate Expenditure (Inclusive of SURE-P): N4.910 trillion *Statutory Transfers: N399.7 billion *INEC's expenditure is to increase from the N32 billion provisioned in 2013 to N45 billion. This is to enable the Commission intensify preparations towards the 2014 elections. *National Assembly's allocation is to be maintained at the 2013 level of N150 billion. *The provision for debt service is N712 billionfrom the 2013 level of N591.8 billion. *Recurrent (non-debt) Spending: N2.43 trillionfrom N2.80 trillion in 2013 *Personnel cost increased slightly from the 2013 amendment Budget provision of N1.718 trillion to N1.723 trillionfor 2014. *Capital Expenditure: N1.100 trillion lShare of Capital in total Expenditure: 27.29%down from 31.9% in 2013 reflecting the increased allocation to pension as well as high wage bill *Share of Recurrent in total Spending: 72.71% *Provision for SURE-P: N268.37 billion Fiscal Balance *Fiscal Deficit: N911.96 billion *Fiscal Deficit as share of GDP: 1.90 *New Borrowing Requirement: N571 billion, a decrease from N577 billion in 2013 -------------------------------------------------------------------------------------- Nigeria: AfDB Approves U.S.$184 Million Loan for Power Sector By Obinna Chima, 20 December 2013 Electricity pylons. The African Development Bank (AfDB) Thursday disclosed it had approved $184.2 million loan to encourage private investments in the Nigerian power sector. The approval was contained in a statement issued by the institution which was made available to the News Agency of Nigeria (NAN) in Addis Ababa. The facility is under the bank's Partial Risk Guarantee (PRG). The AfDB also said it had approved $3.1 million loan to enhance capacity building in power generation and distribution to meet the country's 40,000mw target by 2020. "The board of directors of the AfDB group approved an African Development Fund (ADF) Partial Risk Guarantee (PRG) program of $184.2 million and an ADF loan of $3.1 million for capacity building, to support the Nigerian power sector privatisation programme. "The board's decision will allow the AfDB to support the Nigerian government's efforts to reform the power sector and position the country for sustainable and inclusive growth," the statement added. According to the bank, the PRG program in Nigeria was aimed at increasing the country's electricity generation by catalysing private sector investment and commercial financing in the power sector. "The PRGs will mitigate the risk of the Nigeria Bulk Electricity Trading Plc (NBET), a Federal Government of Nigeria entity established to purchase electricity from independent power producers (IPPs). "It will also prevent the risk of not fulfilling NBET's contractual obligations under its power purchase agreements with eligible IPPs. "This in turn will increase the comfort level of private sector financiers and commercial lenders investing in the Nigerian power sector privatisation programme," it added. According to the AfBD, available data from the Nigerian government showed that power outages cost the country about three per cent of its Gross Domestic Product annually. It anticipated the IPPs eligible for coverage under the programme could generate additional 1,380mw of power by 2016. This would in turn increase the country's access to more reliable and affordable electricity from 41 per cent currently to 50 per cent by 2016. The institution also explained the potential impact of the programme would ensure effective and steady power supply, which is critical to the sustainability of Nigeria's development path. Meanwhile, the Director for Energy, Environment and Climate Change, AfDB, Alex Rugamba noted that the Nigerian PRG programme was expected to improve productivity, economic activity and growth that would reduce poverty. "In the short to medium term, the project will yield an increase in the maximum electricity supply and consumption per capita", he stated. NAN -------------------------------------------------------------------------------------- Okonjo-Iweala presents N4.6tr budget to National Assembly December 19, 2013 by Sunday Aborisade, Abuja 35 Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala | credits: File copy Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, on Thursday presented the 2014 budget estimate of N4.6tr to the National Assembly. She laid the document on the table before the senators during their plenary, presided over by Senate President David Mark. Mark said the action was in conformity with section 81 of the 1999 Constitution as amended, which empowered the President to communicate the budget to the National Assembly. Iweala, who was accompanied to the Senate by some of her colleagues in the cabinet and the Director-General of the Budget Office, explained to journalists after her assignment that the aggregate expenditure of N3.73tr was expected as revenue. She, however, said the SURE-P fund was not part of the estimated budget. She put the capital expenditure at about N1.1tr, which according to her, is about 27 per cent of the budget. The balance, she added, was the recurrent expenditure, “which is about 72 per cent of the budget.” She said, “This budget is the budget for job creation and inclusive growth; meaning that its a budget which will continue the president’s transformation agenda for several sectors of the economy. “The budget is going to support the push in agriculture; it will kick-start the housing sector where we can create more jobs; it is designed to promote our policies that would support manufacturing because jobs would be created there. “Industries will also be created in solid minerals. All these support will continued to be unleashed. Job creation is the key to really solving the problems of the Nigerian economy.” -------------------------------------------------------------------------------------- Arguments as CBN confronts NNPC over missing $49.8on December 17, 2013 / in News 1:03 am / By Soni Daniel, Regional Editor, North and Chris Ochai Attempt by the Federal Government to douse the tension generated by the claim by the Central Bank Governor, Sanusi Lamido Sanusi, that the sum of $49.8 billion had not been remitted by the Nigerian National Petroleum Corporation to the Federal purse ended in deadlock last night. The meeting, which was summoned on the orders of the Presidency following a strong letter by Sanusi to President Goodluck Jonathan to probe the missing sum, started at about midday and did not end until about 8pm. It was presided over by the Permanent Secretary of the Ministry of Petroleum Resources, Mr. Dandali Kifasi and attended by officials from the Central Bank of Nigeria, Ministries of Finance and Petroleum, Federal Inland Revenue Service and the NNPC and some presidential aides. Vanguard learnt that the meeting was characterised by heated arguments between officials of the CBN on one hand and those of the NNPC and its subsidiaries, who are involved in oil production and sales for Nigeria. CBN, it was learnt, had presented data, which it claimed emanated from the NNPC subsidiary and insisted that the missing amount had not been remitted to the Federation Account, a claim that infuriated NNPC officials present. A source at the meeting hinted that the arguments were so fierce that the Permanent Secretary of the Petroleum Ministry, who presided, had to storm out of the venue in anger but was later persuaded to return. In a deft move to calm down frayed nerves, the meeting went on break for about an hour and reconvened later in the day but the contentious issue of the actual amount remitted by the NNPC to the Federation Account since the beginning of the year, could not be agreed upon between its officials and those of CBN. Unable to resolve their differences over what has been generated and remitted, the meeting was called off at about 8p and a decision taken to reconvene today with a view to finding out where the missing link in the lingering faceoff must have occurred. The NNPC insists that the amount claimed by the CBN is not missing; adding that the economy would have collapsed if the said amount was withheld or withdrawn from the system. NNPC’s Executive Director in charge of Exploration and Production, Eng. Abiye Membere, who addressed the media on Saturday on the issue, insisted that the corporation had paid in full to the CBN the proceeds from oil within the period under review. ------------------------------------------------------------------------------------- Imo: The story of Okorocha’s betrayal, by Agbasoon December 17, 2013 / in Politics 4:21 am By Emmanuel Aziken, Political Editor Economist and politician, Chief Martin Agbaso is one of the leading lights of politics in Imo State. He was the governorship candidate of the All Progressives Grand Alliance, APGA in the 2007 gubernatorial elections following which he made claims of victory. Agbaso who passed over the 2011 contest in favour of Owelle Rochas Okorocha in this interview faults the actions and attitude of Governor Okorocha especially in the controversial impeachment of his own junior brother, Sir Jude Agbaso as deputy governor. Excerpts: The accusation If you recall in the third week of March this year, my brother, Mr. Jude Ikechukwu Agbaso then deputy Governor of Imo state, was accused to have received N458 million bribe from a Lebanese contractor. Then, I in very clear terms said that my brother had nothing to do with the money that was alleged to have been taken as bribe money. It was Rochas Okorocha who approved the contract, awarded it, paid the said contractor N1.3 billion of Imo State money without due process, without even an award letter or any form of advance payment guarantee. So the curious thing at the point was, why would a man who did all this, who got all the benefits that were unprecedented from the governor, go to the deputy governor who was away in India on official assignment, and give him a bribe of almost 40% of the money collected? That didn’t make sense to me. And I said that we as a family would do every thing humanly possible to get to the crux of the matter; we would do everything to find out who took this money, where the money is domiciled and who the beneficiaries we. Last week, the news broke. EFCC, after putting us through grueling, painful, eight months of investigation finally cleared my brother or any Agbaso for that matter of any wrong doing, of any involvement whatsoever in the alleged bribe scandal. Again, this man who went to the Imo state house of assembly and said to them: “I am a Lebanese journey man, criminal contractor. I have taken 458 million naira of Imo state money and given to the deputy Governor.” They kissed this man and told him to walk away. A man who said: “I have committed a crime against this state, against this nation,” they turned around and let him walk away, and began hunting a deputy governor who knew nothing. Okorocha’s beef He said that I, the deputy governor’s elder brother, tried to impeach him, so he was trying to retaliate. Later on, he said that as long as Jude Agbaso remained the deputy governor, his life was at risk, that Agbaso could kill him. This is someone whose deputy governor was impeached, someone who got into office on the same ticket as you, was impeached in the most brazen manner, malicious and mischevious manner, in a show of shame that this country had never seen before. Before the impeachment panel could even sit to look at the papers, a report had been sent to the House of Assembly, before the House of Assembly could finish the process, a deputy governor nominee had been selected. Before the man could say Jack Robinson, a new deputy Governor was sworn in and yet he said he didn’t know anything about it. Agreement on one term There has been a catalog of anomalies committed by the administration of Rochas Okorocha. They are all documented here. You are just determined to destroy my name in the eyes of the Imo people and of Nigerians. You had an agreement with me that you were going to be governor for four years and we both signed this agreement witnessed by the national chairman of APGA. And you made this pronouncement in churches, in halls, in stadia, everywhere you said to people that you had an agreement with Martin Agbaso that you would be governor for one term, and after that the governorship would go to Owerri Zone who rightfully should produce the next governor. Instead of doing that, you’re looking for a way to tarnish my image. But it’s not going to work because there is a God out there who rules in the affairs of men and women. You can’t continue to mislead the people, and lie your way through life as if it’s business as usual. Rochas Okorocha, it is no longer going to be business as usual, every step you make will be checked. On EFCC Clearance of Jude Agbaso For the first time in this country, somebody was accused of something and the person wrote to EFCC, ICPC to come and investigate him. He said: “If you find me guilty, jail me. But if you find me innocent, say it so I can clear myself. Now the job of EFCC is to investigate the matter. When they are through with investigation, if they find you wanting on any of the allegations, then they take you to court for prosecution. EFCC has concluded this investigation and found nothing. The money was said to have been given to you as bribe was lodged in two accounts, one in Dubai and one in Lebanon. We know where these monies are. EFCC has confirmed that he did not commit the crime. Joseph Dina himself has said in a written statement that he did not give him bribe. If Jude Agbaso committed any crime, EFCC would be prosecuting him in court. Apology to Ndi Imo First of all, I owe the people of Imo state a big apology. I was misled by Gov. Rochas Okorocha. I did not know his antecedents before I went into an agreement with him. By everything he has done in Imo state, he has shown that he is a person who does not honour his word. What I saw was a philanthropist who trains other people’s children. And I believed that if he could do that, when he gets into a position of authority, our people would be better off. Everything I did was to put Imo State forward. Because I was already in court for three and half years, fighting a legal battle over elections I won in 2007, I was not prepared to go into an election in 2011. This guy came and with his normal talk-talk I thought we had a good candidate. Please Ndi-Imo, I am sorry for bringing this man. He brought himself and I helped him. I thought it was the best thing to do at the time. But that is the limit of a human being. I could not see tomorrow. Now, he is saying that he (Jude Agbaso) was incompetent. How can you say that a man is incompetent when his boss, the governor was the one who brought the contractor, paid him, awarded the contract without any advance payment guarantee or letter of award. This money, N1.3bn of Imo State money that is still at large was not paid through the ministry, but on the directive of the governor, issued (through) to the principal secretary to the governor, commissioner for finance and to the accountant general. This payment did not go through the ministry at all. By the time the commissioner who was the deputy governor knew what was happening, the money had been paid. In fact, the first N200 million that was given to that man was paid in cash. So how do you say that such a man is incompetent? Apology from Okorocha I expected an apology from Rochas Okorocha? Yet instead of apologizing to someone who invested heavily in his campaign, and to the young man who has worked with you, you try to destroy him. Instead of apologizing, you’re even undermining the letter which exonerated him. The most shameful thing that has come out of Rochas Okorocha’s mouth is that he paid Martin Agbaso for APGA ticket. I gave Rochas Okorocha my word that I would help him become governor. I funded his campaign. I brought people to give money. I don’t want to mention their names so I do not embarrass them. How can someone who he is now owing money for funding the campaign be the same person he gave money for ticket? Everybody saw me canvass through every village canvassing for votes. My house was the command headquarters for the elections, everything was done in my house. What thank you do I get? You try to destroy my family name. And you see him singing church choruses and quoting the bible. When it’s convenient, he quotes the Qu’ran. Who is he to keep trying to mislead Nigerians and assume that we are foolish? -------------------------------------------------------------------------------------- Nigeria: 13 Percent Oil Derivation - FG, States May Clash Over Fund By Donald Ojogo and Kingsley Alu, 25 November 2013 A battle for the management of the 13 per cent derivation fund may ensue between the federal government and the states anytime soon. There has been growing discontent among stakeholders over the delay by the federal government in correcting its implementation error that resulted in the payment of 13 per cent derivation fund through state governments. The oil-producing states have also faulted such calls, threatening to go to court instead if the federal government should succumb to pressure. A statement obtained by LEADERSHIP at the weekend said female activists in the nine oil/gas producing states now demand that President Goodluck Jonathan create a national derivation committee (NDC) to disburse the funds, as was done during the tenure of former President Shehu Shagari. In a letter to the federal government dated October 18, 2013, the female activists under the aegis of 13% Derivation Amazons and 13% Derivation Women Foundation articulated their grievances. First, they argued that since oil/gas remained on the Exclusive Legislative List, only the president could put a stop to what they described as illegal and unconstitutional payment of the fund through state government accounts. According to them, the practice is a violation of two mandatory provisions of the 1999 Constitution of the Federal Republic of Nigeria. These are provisions of the Separation of Powers which put oil and gas on the Exclusive Legislative List. Also, they submitted that section 162(2) of the 1999 Constitution makes 13 per cent derivation fund a first charge on the Federation Account. "As a first charge, 13 per cent derivation fund must not be paid through a third party or any state government account," they stated. The women group led by a frontline activist from Oben flow station in Edo State, Princess Nomwen Uhunmwangho, called on the president to discontinue the current practice and establish a national derivation committee (NDC) and state implementation committees (SICs). The women reaffirmed that, from the two mandatory provisions, 3 per cent derivation fund was not part of any consolidated fund of any tier of government. They further affirmed that 13 per cent derivation fund does not form part of the fund to be included in the Joint State/Local Government Account. Other affirmations include: - 13 per cent derivation fund is a benchmark of revenue allocation to oil and gas-producing communities. - There is no need for RMAFC to send any submission on 13 per cent derivation fund to National Assembly for implementation as it has been constitutionally provided for. - What is necessary is administrative implementation of the mandatory provision of section 162 (2) of the 1999 Constitution. The women's group recalled the series of consultations with the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) on the matter and their submissions at zonal public hearings in Enugu, Ibadan and Yenagoa where they demanded direct payment of 13 per cent derivation fund through administrative committees. The group further noted that by Act 1 of 1982 when derivation fund was 1.5 per cent of total oil receipts, the then president Alhaji Shehu Shagari established Presidential/State Implementation committees to disburse the 1.5 per cent derivation fund for the oil-producing areas. Under the 13 per cent regime, Delta State collected N120.6billion in 2010, N178.4billion in 2011, and N156.6 billion in 2012. Akwa Ibom and Rivers states top the chart in allocation, while Bayelsa is 4th on the collection chart. Sometime in September last year, the chairman of the RMAFC, Engr. Elias Mbam, at a press conference in Abuja, submitted that the 13 per cent derivation from monthly allocation extended to oil-producing states ought to be exclusively spent on oil-producing communities who suffer most from the impact of environmental degradation occasioned by oil exploration in their domains. Mbam said the clarification became necessary in view of the fact that a larger percentage of the 13 per cent derivation fund meant for the development of host communities was unjustifiably spent on the development of state capitals and other urban centres, thus negating the principle behind derivation which serves as reparation to the host communities whose land and water resources are devastated by oil exploration activities. In a telephone conversation with LEADERSHIP last night, spokesperson for RMFAC Mr Ibrahim Mohammed confirmed that the position of the commission has not changed. Ibrahim said that the right thing to do was to amend the constitution so that the money would be paid directly to the oil/gas-producing communities. He also said that the same should apply in the case of solid minerals. But the oil-producing states have faulted such calls and, indeed, any moves to amend the rules governing the disbursement of the 13 per cent derivation fund. The Ondo State governor, Olusegun Mimiko, who spoke through his chief press secretary Eni Akinsola, described such moves as mischievous. "I can quickly say that any person or persons canvassing such do not have the facts regarding federation or federalism as it applies to us in Nigeria. "States only contribute to the federal government from revenues accruing to the states and the other way round. Any suggestion in that direction is utmost mischief and cannot be sustained by any law. It is an unacceptable suggestion from any quarters," Akinsola said. His Bayelsa State counterpart, Iworiso Markson, was of the same position, saying RMFAC may have been misquoted. "I don't want to believe RMFAC made such position that 13 per cent should go to the oil-producing communities; the proposal has always been canvassed by the host communities. "But the question is: under what law will the communities be involved in the disbursement or otherwise of the fund. Only the law can determine the status of oil-bearing communities," Markson said on telephone Also reacting to the development, the Delta State government said it would challenge the legality or otherwise of the move, if taken, in the court of law. Delta State commissioner for information and strategy, Mr Chike Ogea, told LEADERSHIP that only the court could determine the matter. "That cannot happen because there is a law in place. RMFAC cannot just shift the goal post the way it wants .What we can say is that only the court will determine this because we shall challenge the move if it is taken. "For instance, there is nothing more than what we in Delta State give to the oil-bearing communities. We give as much as 50 per cent of the 13 per cent to the oil communities and this is novel in the Niger Delta region." But the special adviser to the Edo State governor on media, Mr Kazeem Afegbue, declined to comment on the issue, saying: "This is a very sensitive issue, as you know. I need to get across to my boss to be able to respond to this matter, please." -------------------------------------------------------------------------------------- Nigeria: How State Lawmakers Collect Billions in Salaries By Nuruddeen M. Abdallah, 25 November 2013 Lawmakers in the 36 State Houses of Assembly have received about N12 billion in salaries and allowances in the first two years of their tenure and passed 601 bills, most of which were initiated by the governors. There are 978 members in the state legislatures, soaking up about N6 billion per annum in emoluments. A state legislator receives about N6 million per annum, comprising basic salaries and other perquisites, according to a Daily Trust analysis based on records obtained from the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC). The RMAFC documents were obtained officially through a Freedom of Information Act request filed by this newspaper. With these emoluments, a state lawmaker earns more than 24 times the country's Gross Domestic Product per person (GDP). This means the legislator's package is 24 times what each Nigerian citizen is worth when the nation's total wealth is shared by the population. According to RMAFC records, a state legislator receives an annual basic salary of N1.34 million; accommodation, N802,335; vehicle maintenance, N267,445; and recess allowance, N133,772. The lawmaker also receives, once in four years, a vehicle loan of N5.3 million, furniture allowance of N2 million and N2.6 million as severance gratuity. Other yearly emoluments are N334,306 for constituency allowance; N334,306 for domestic staff; N133,772 for utilities; and N66,861 as newspapers allowance. In addition, the state lawmaker is entitled to N25,000 as duty tour allowance (DTA) per night and 600 US dollars estacode while on foreign trips per night. Principal officers of the assemblies are entitled to responsibility allowance, while the speaker and his deputy are entitled to security and robe allowances as well as special assistants and legislative aides. Each lawmaker is also entitled to medicals and special assistants. The cost of maintaining the state lawmakers is coming to light four months after Daily Trust published details of similar fat-cat emoluments enjoyed by their counterparts in the Senate and House of Representatives, who are on top of the global MPs' salaries chart. Executive bills Daily Trust investigations revealed that despite receiving over N12 billion from June 2011 to June 2013, the lawmakers only passed 601 bills into law. They appear to be merely waiting to rubber-stamp bills forwarded to them by the executive, as most of the bills passed in the two-year period were annual appropriation bills and supplementary budget bills submitted by the state governors. Also, there are many states whose assemblies did not pass a single individual member's bill into law within the period. In the two years from June 2011 to June 2012, the 202 state lawmakers in the North West passed 122 bills (Katsina State not included as details are not available) and collected N2.424 billion; while 176 legislators from South West received N2.112 billion and passed 107 bills into law (with the exception of those from Ekiti, whose records could not be obtained). The 158 lawmakers from the South-South, with the exception of Edo where records have not been obtained, had passed 69 bills into law and received N1.896 billion as salaries and allowances. The North East has 156 state assembly members, who passed 130 bills (with the exception of Borno) after collecting N1.872 billion as emoluments. The North Central zone, with 158 legislators had collected N1.896 billion and passed into law 125 bills; while the 128 lawmakers from South East had passed 48 bills (with the exception of those from Anambra and Abia states whose records could not be obtained) and received N1.536 billion as emoluments. 'Stooges of governors' Commenting on story, Malam Auwal Musa Rafsanjani, the Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), said the lawmakers lack capacity to perform their functions. "In Nigeria, the state Houses of Assembly have turned themselves to be the stooges of their state governors as a result of their weaknesses," he said. "The state legislatures have failed to ensure full implementation of budgets passed by them by the governors. After reviewing the performance of state Houses of Assembly in the current dispensation, human rights activists, civil society organisations, eminent lawyers and leaders of some political parties, have declared them 'dead'". The CISLAC boss said also that "it is very unfortunate that the doctrine of separation of powers enshrined in the amended 1999 Constitution only exists on paper as the state legislatures have become mere extensions of the executive arm of government, because they are more of toothless bulldogs. Some speakers of the states legislatures and other lawmakers have turned themselves to rubber-stamp to the governors. "For instance, in many states lawmakers have failed to call their governors to order over their shoddy implementation of the state's budgets, unbudgeted spending, misconduct, abandonment of capital projects, looting and stealing of public fund etc... . "It on record that most of the state assemblies they don't hold public hearing, debates and deliberation on key vital important issues that affect their people due to fear of the governors and their incapacitation and inexperience in legislative work." Daily Trust contacted the chairman, Conference of Nigerian Speakers, who is also the Speaker of Gombe State House of Assembly, Alhaji Inuwa Garba, for comments, but he said he had no time to answer questions on this story. He asked our reporter to direct his questions to individual speakers of the state Houses of Assembly. {Additional reporting from Rakiya Muhammed (Sokoto), Christiana T. Alabi (Kaduna), Ismail Mudashir (Kano), Abdullahi Anako & Abdulkadir Badsha Mukhtar (Dutse), Garba Muhammed (Birnin Kebbi), Shehu Umar (Gusau), Hamisu Kabir Matazu (Damaturu), Adamu Saleh (Gombe), Kabir Anwar (Yola), Ahmed Muhammed (Bauchi), Usman A. Bello (Lokoja), Abdullateef Aliyu (Ilorin), Lami Sadiq (Jos), Hope Abah (Makurdi), Hir Joseph (Lafia), Victor Edozie (Port Harcourt), Chris Eze (Yenagoa), Eyo Charles (Calabar), Patrick Odey (Uyo), Johnkennedy Uzoma (Owerri), Nabob Ogbonna (Abakaliki),Tony Adibe (Enugu), Bola Ojuola (Akure), Dele Ogunyemi (Ibadan), Kehinde Akinyemi (Abeokuta), Hameed Oyegbade (Osogbo), Femi Akinola (Lagos) and Beatrice Onuchukwu (Awka).} -------------------------------------------------------------------------------------- Nigeria: N500 Billion SURE-P Funds Not Missing, Okonjo-Iweala Says By Bassey Udo, 19 November 2013 Nigerian corruption hearings. The Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, said on Monday that reports alleging that N500 billion Subsidy Re-investment and Empowerment Programme, SURE-P, fund was missing were untrue. "Contrary to some recent media reports, there is no missing N500 billion from SURE-P funds. The claim is completely false," the minister said in a statement in Abuja through her Special Adviser on Media, Paul Nwabuikwu. Mr. Nwabuikwu said the portion of the SURE-P fund misconstrued to be missing actually belonged to the 36 states of the Federation, 774 Local Governments and the Federal Capital Territory, FCT, Abuja. The total expected funds for SURE-P from subsidy savings for the Federal, state and local governments, Mr. Nwabuikwu said, was N816billion from February 2012, when the savings began, to December 2013. From the total figure, Mr. Nwabuikwu said, the Federal Government's portion managed by the Presidential Special Committee headed by former Managing Director of Cadbury Nigeria PLC, Christopher Kolade, between February 2012 and September 2013, was N300 billion; after deductions for Stabilisation and other Special Accounts. Mr. Kolade recently confirmed to the National Assembly committee that total amount received by the SURE-P at the Federal level from the Federal Government was only N300 billion. "The balance of N500 billion went to the states and local governments, which also have their own SURE-P programmes," the minister said in the statement."This is the amount that is wrongly described as missing," the statement added. The Senate ad-hoc committee investigating the operations and finances of the SURE-P had raised the alarm over the alleged missing money. The committee, headed by Deputy Senate Leader, Abdul Ningi, had claimed that from enquiries at the Ministry of Petroleum Resources, about N500 billion out of the total of N834.33 billion that accrued to the SURE-P between January 2012 and September 2013, was missing. The committee arrived at the figure after Mr. Kolade, the Chairman of the SURE-P committee, informed the Senate ad-hoc committee that only N300 billion was released to it within the period. -------------------------------------------------------------------------------------- Nigeria: FG Replies Amaechi On 'Missing' U.S.$5 Billion 19 November 2013 Nigerian corruption hearings. The Federal Ministry of Finance yesterday denied making secret withdrawals from the Excess Crude Account (ECA) without the knowledge of state governments. It was reacting to Rivers State Governor Rotimi Amaechi who claimed at the weekend in Sokoto that $5 billion was missing from the account. In a statement in Abuja yesterday, the ministry said the monies were shared over a period of months among the three tiers of government with the express approval of state governors. "Governor Amaechi... has been closely involved and actively participated in making requests to the Presidency for the ECA to be shared for the purpose of augmenting the regular allocations from the Federation Account whenever there is a shortfall," the statement said. "The $5 billion in the ECA which Governor Amaechi referred to in his statement has been shared to the three tiers of government to make up for the revenue shortfalls during the Federation Accounts Allocation Committee process. Part of this fund also went for SURE-P payments and the balance for subsidy payments to oil marketers." It said Rivers State received N56.2 billion, the second highest share among the states, for January to September from the account. "It is therefore curious that Governor Amaechi seems not to know the whereabouts of the N56.2 billion which Rivers State has received from the ECA this year," the ministry said. Amaechi had also accused Finance Minister Ngozi Okonjo-Iweala of refusing to sign the African Development Bank (ADB) loan for a water project in Port Harcourt. In its reaction, the ministry said, "The loan in question has been appraised but it is yet to be negotiated. Before the minister can sign it, it has to go through the negotiation process and be considered and cleared by both the Board of the African Development Bank and the Federal Executive Council. So the issue of the minister refusing to sign it simply does not arise." -------------------------------------------------------------------------------------- Excess crude account drops to $3bn •$1bn withdrawn for Oct allocation augmentation Written by Gbola Subair-Abuja Friday, 15 November 2013 00:35 FOLLOWING the withdrawal of one billion dollars for October allocation augmentation , the Excess Crude Account has dropped to three billion dollars. Minister of State for Finance, Dr Yerima Lawan Ngama, speaking after the Federation Accounts Allocation Committee (FAAC) meeting, in Abuja, Thursday, said that October revenue was short of the budgetary allocation of N465.057 billion . “In the month of October 2013, the total mineral revenue that accrued to the federation account is 443.052 billion. This is a little short of N465.057 billion that is in the budget for the month of October 2013 hence we have a negative variance of N22.005 billion” he said. However, he said, the amount collected in October exceeded the amount collected in the previous month by N11.979 billion, adding that for non-oil mineral revenue, a total of N96.501bn was collected which is also below the budgeted N158.711 billion that is in the budget by N62.21 billion. “We have the total actual collection of total revenue N539.553 billion which is less than the N623.768 billion that is in the budget by N84.215 billion. “The total funds available for distribution have been adjusted with transfers to excess crude. And this month we transferred N80.651 billion to excess crude. Thus leaving N458.901 billion after cost of collection to Federal Inland Revenue Service (FIRS) of N2.097 billion and cost of collection to Nigerian Customs Service of N3.085 billion. “There is also a refund to NCS of N0.713 billion. So, after these deductions we had N453.006 billion left for distribution to the three tiers of government which was done as follows: Federal Government, N213.825 billion; all the states put together are going to share N108.455 billion. Then the local governments are going to share N83.614 billion. The oil-producing states will get their 13 per cent derivation which amounts to N47.112 billion,” the minister said, stressing that the three tiers of government shared N525.247 billion this month, “in addition, we have the normal SURE-P amount of N35.5 49 billion which will be shared amount the three tiers of government. Again, this month also, NNPC has made good its promise to pay N7.617 billion which will be shared to the states and local governments as the repayments due to the outstanding amount to from the NNPC,” he added The Minister also noted that the sum of $1 billion was withdrawn from the Excess Crude Account (ECA) to be distributed among the three tiers of government. The amount, it was learnt, was approved by President Goodluck Jonathan to shore up the dwindling oil revenue. -------------------------------------------------------------------------------------- Senate querries disbursement of N8.9bn SURE-P fund •Seeks explanation over 807 mass transit buses Written by Dapo Falade - Abuja Thursday, 14 November 2013 00:00 THE Senate, on Wednesday, raised an eye-brow over the disbursement of the sum of N8.9 billion meant for nationwide mass transit buses under the Subsidy Reinvestment and Empowerment Programme (SURE-P). This was as it also asked the Managing Director and Chief Executive Officer of The Infrastructure Bank (TIB), Mr Abdulrazak Oyinloye, to explain how the 807 buses bought so far under the scheme were distributed as well as who the beneficiaries were. The issue came up when Mr Oyinloye appeared before the Senate adhoc committee on SURE-P. The amount was given to TIB in July 2012 to acquire high capacity buses under the SURE-P Public Mass Transit Revolving Fund Scheme (PMTF). The chairman of the committee, Senator Abdul Ningi, specifically asked the TIB Managing Director to shed more light on how the money was spent. Oyinloye, however, told the committee that the money, which had been released to TIB, was judiciously used. “TIB received this amount on the 26th of July 2012 for payment to vehicle providers who had supplied vehicles since January 2012. “It is interesting to note that TIB, as the fund manager, has been able to judiciously utilise and recycle the N8.9 billion received in July last year and make disbursements in the form of vehicles worth over N9.06 billion,” he said. He said the size of the fund cannot grow beyond the N8.9 billion because interest rate is zero per cent. He further explained that of the 807 buses, ABC Transport Plc, representing the South-East, got 20 buses valued at N247 million; Afenmai Line Transport Limited (South-South) received 10 buses worth N118.75 million Other beneficiaries, he said, included Ajetunmobi Integrated Services Limited (South-West) which got 20 buses at N205.936 million, Ani B. Barak Nigeria Limited (North-East), five buses worth N42.54 million, and Annasai Nigeria Limited (FCT) fives buses worth N42.54 million. He said Abuja Urban Mass Transport Company Limited (FCT) got 200 buses worth N2.47 billion, Autostar Travels and Tourism Limited (South-East) got 32 buses valued at N373.44 million, Dabo Motors Limited (North-West) got 25 buses worth N302 million and Mallam Madalla Enterprises (North-East) which got 10 vehicles valued at N85 million. Others were the Nigerian Association of Road Transport Owners (NARTO- Nationwide) which got 42 buses at the sum of N403 million, LAGBUS Operators (Lagos) got 100 buses valued at N1.235billion, Shaanxi Auto Limited (FCT) received 20 buses worth N247 million and Abuja Transport Cooperative Society (ATCS -FCT) got 20 buses worth N247million. The beneficiaries also included the National Union of Road Transport Workers (NURTW Nationwide) which got 234 buses worth N2.335 billion, Road Transport Employers’ Association of Nigeria (RTEAN- Nationwide) received 42 buses worth N370.73 million, Safetrip Limited (North Central) got 13 buses worth N227.62 million, while Dash Gold Nigeria Limited, A.M.D Nigeria Limited and Dabo Motors Limited all in the North-West received three vehicles each at the cost of N35.625 million respectively. Oyinloye noted that the phase one of the PMTF Scheme had been successful so far with vehicles distributed across the six geo- political zones. -------------------------------------------------------------------------------------- Nigeria: Excess Crude Account Intact, Says Okonjo-Iweala 6 November 2013 Corruption in Nigeria The Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, on Wednesday dispelled allegations that about $1.03 billion (about N161.7 billion) was missing from the Excess Crude Account, ECA. The Special Adviser to the Minister on Media, Paul Nwabuikwu, described the allegations as "totally inaccurate", saying the report was a misrepresentation of what actually transpired during the appearance of the Minister before the joint Finance Committees of the National Assembly. "The Minister had responded forthrightly to questions on the current level of the ECA and there was no disagreement as such. The balance in the account as stated by the minister is $4.3 billion, and it's intact," Mr. Nwabuikwu said. The Minister's rebuttal was coming, just as the management of the Nigerian National Petroleum Corporation, NNPC, denied involvement in the management of funds under the Subsidy Reinvestment and Empowerment Programme, SURE-P. The Senate Committee on SURE-P, had on Tuesday, raised alarm that more than half of the fuel subsidy savings raised by the Federal Government since 2012, totaling about N500 billion, may be missing. The Committee said the money was part of the amount that should have accrued to the government as a result of the removal of fuel subsidy component of the fuel pricing mechanism between January 2012 and September 2013. The Federal Government increased petrol pump price to N97 per litre from the former price of N65, thus saving N32 per litre that would have been paid as subsidy for each litre of petrol bought. A member of the Senate committee, Kabiru Marafa (APC, Zamfara) had alleged that about N800 billion had been generated so far from the removal of subsidy, with only N300 billion released for the SURE-P, with the balance not accounted for by the NNPC. The NNPC, in a statement by the Acting Group General Manager, Group Public Affairs Division, Tumini Green, described reports linking the corporation with the management the SURE-P budget as "comprehensive falsehood", as NNPC has nothing to do with the disbursement and appropriation of funds under the programme. Mrs. Green said the SURE-P budget was managed by a Committee made up of eminent Nigerians, saying the NNPC was neither a member nor pays any money into the SURE-P account. "The budget is the responsibility of other requisite statutory authority. The committee superintends over the disbursement and the execution of the various social welfare projects," Mrs. Green said. ------------------------------------------------------------------------------------- NNDC presents N315.8bn budget to National Assembly November 5, 2013 by Sunday Aborisade, Abuja The Niger Delta Development Commission on Tuesday presented its 2013 budget estimate of N315.8bn to the National Assembly. ‘Budget for sustainable development of Niger Delta region’, the acting Managing Director of the NDDC, Dr. Patricia Atako, told the Joint Committee of the National Assembly on Niger Delta that the 2013 budget estimate showed an increase of N65bn over that of 2012 which stood at N250.8 bn. Atako explained the 2013 budget was based on the commission’s “determination to maintain prudence and stay focused in the development of the Niger Delta region despite the daunting challenges it is facing.” She said, “The N315.8bn estimate was based on the revenue brought forward from 2012 budget of an internally generated revenue and the Federal Government contribution to the Commission for 2013. “The budget estimate also comprised provision for Excess Crude arrears, oil and contributions from oil and gas companies, and contributions from the Ecological Funds.” Atako said total estimated recurrent cost for 2013 was N27.2bn, comprising N15.2bn for personnel cost and N11.9bn for overhead cost. She put the Development Projects and Programmes Expenditure for 2013 at N286.4bn representing 90.7 per cent of the total revenue of N315.8bn. She added, “This is to provide for vital logistics necessary for monitoring and evaluating the numerous on-going projects and provision for additional furniture and other working tools required for envisaged new employees. “The NDDC acting boss said the 2013 budget was an instrument for the promotion of economic growth, wealth creation, poverty reduction and effective and efficient service delivery of the Niger Delta. “It is our desire to that the region should continue to experience sustainable development by providing gainful employment to our people.” -------------------------------------------------------------------------------------- Oby Ezekwesili blasts politicians -Says ‘Nigerian masses are like abused wives’ Written by Kate Ani Saturday, 02 November 2013 00:00 FORMER Minister of Education and former World Bank Vice-President Africa Division, Dr. Obiageli Ezekwesili, has said the relationship between Nigerian citizens and their political elite is like that between an ‘abused wife’ and her husband. But in what looks like a veiled call to action, the former minister seems to attribute Nigerians’ governance-induced suffering to their docility. “The relationship between citizens of Nigeria and their political elites is like the one between an abused wife and her husband. A people that too quickly forget and move on to the next salacious exploits of their political elite are their own nemesis!” She said. In separate tweets on her Twitter handle, Mrs. Ezekwesili expressed her disdain for how the present crop of leaders run the Nigerian economy, saying: “Not even grocery shops run their affairs like this… such vagrant public finance management is contemptuous of citizens. “All those fellows that deceitfully reacted to my factual caution on the frittered 5th oil boom should get ready now. At least five years of high oil prices holding firm- no major productive investments, no increase or reserves/saving.” Still on what she considers a slipshod economic management being run by Nigeria, Ezekwesili tweeted: “A structurally faulty public finance system zealous for spending on consumption rather than production DEMANDS BOLD action! “Now, oil prices are on a downward slope. Imagine, we are asked to be comforted that we merely have ‘cash flow problem’. Ha!” She also faulted what she described as Nigeria’s ‘consumption spending’ at the expense of capital spending, saying “We must BOLDLY discuss, agree and begin to REDUCE consumption spending (80 per cent) of budget and INCREASE capital spending (20 per cent).” In what appears a subtle indictment of government officials, Ezekwesili added that the call for reduction in the unusually high cost of governance in Nigeria has never been supported by any member of the National Assembly because they are benefiting from the status quo. “The MUST HAVE debate on reducing cost of governance suffers a lack of champions among the ‘ruling elite’ because NASS is in too,” she tweeted. But she is even angrier with the politicians, whom she accused of literally living on ‘public corruption and distortion of politics’. She tweeted: “A true national dialogue should be between the citizens and the consumption-loving political elite in all capital parties, a pseudo-private sector creating nothing but making filthy profits from the public corruption and distortion of politics.” On the N255 million armoured BMW car scam in the aviation sector and apparently faulting the policy that made such mind-boggling purchase scam possible, Ezekwesili recalled that the administration under which she served introduced monetisation policy in the civil service. “We introduced monetisation policy. Ask why they canceled it. It will take a RADICAL RE-BALANCE of public spending for the budget to have any positive effect on the lives of the poor,” she wrote. Generally, she blamed pervasive indiscipline for why the country is failing in all regards – especially its economy. “I am immensely irritated by indiscipline. Cumulative indiscipline is the root of that failure that now stares us in the face as a people. Sadly, Nigeria slides from spot 138 in 2013 to 147 in the newly released 2014 World Bank Doing Business ranking,” she tweeted. -------------------------------------------------------------------------------------- Nigeria: Fashola Presents N489.7 Billion 2014 Budget By Olasunkanmi Akoni, Ebun Sessou and Monsuru Olowoopejo, 31 October 2013 Lagos — Governor Babatunde Fashola of Lagos State, yesterday, presented a budget proposal of N489.690 billion for the 2014 fiscal year to the state House of Assembly for consideration and eventual ratification. Fashola, however, faulted the recent approval of $200 million World Bank loan by the Federal Government for the state to fund capital projects, saying, "it slowed down the state government activities for two years." The 2014 budget comprises of a recurrent expenditure of N234.665 billion and capital expenditure of N255.025 billion. While the total personnel cost/total revenue is 19 per cent, total personnel cost/IGR, 27 per cent, and personnel cost, as percentage of recurrent expenditure is 37. The 2014 proposed appropriation is N9.587 billion less than this year's budget, which was said to require a zero deficit financing. The capital to recurrent ratio is 52:48 for next year as against 58:42 in 2013. Fashola, while presenting the budget before a large audience of stakeholders, party chieftains and captains of industry at the House of Assembly, explained that the drop in the figure was because, "this is the last full year budget that my administration will be implementing. "It represents a slight reduction in size when compared with the 2013 budget. Its focus will be to complete on-going projects, and consolidate on the gains we have made." The event was also witnessed by the former Governor, Alhaji Lateef Jakande, Senator Olorunimbe Mamora, a former speaker and a serving Senator; Joko Pelumi, also an ex-speaker; members of the State Executive Council, the Head of Service, Permanent Secretaries, among others. Zero deficit The governor noted that the budget would require a zero deficit financing. Fashola, while reading the sectoral allocation of the budget said: "The sector with the largest share is the Economic Affairs which takes N160,046,436,169 representing 32.68 per cent of the total budget. "It is immediately followed by the General Public Service which received slightly over N100.2billion, representing 20.47 per cent." Other sectors include: Education, N77,423, 827, 872 or 15.81 per cent, Environmental Protection, N39,727,711,248 (8.11 percent); Recreation, Culture & Religion, N3,482,081,806 ( 0.71 percent); Housing & Community Amenities, N50,537,201,984 (10.32 per cent); Health, N37,812,553,057 (7.72 per cent); Public Order and Safety, N17,977,368,027, (3.67 per cent); Social Protection, N2,466,309,939, (0.50 per cent) Justifying the Economic Affairs' lion share, Fashola said: "This sector consists of implementation of various Independent Power Projects, IPPs, projects, Development of Enterprise Zone in Gberigbe, Ikorodu and Upgrading of Yaba Industrial Park, Advancement of Ten-Lane Lagos-Badagry Expressway/Blue Rail Line Corridor, completion of other on-going road construction projects and pedestrian bridges and Agric-YES, Accelerated Food Expansion Programme: Rice, Animal Husbandry, Root Crops." "The General Public Service will provide for Pensions, Residents Registration and Issuance of permanent residents' cards by LASRRA, and Implementation of Public Procurement Law." Clarifying further, he said from December 1, 2013, LASRRA Identity Card, ID, would be a requirement in terms of information needed to enable us provide service to Lagosians or process requests from them. Meanwhile, the governor said that the central government's guaranteed loan for the state, was meant to fund capital projects such as the Light Rail, Adiyan Water Works, among others. According to him: "While I thank them for finally giving the approval, it is instructive to contextualise the timing of the approval. "You might all re-call that in 2010 when I presented the year 2011 budget, I announced that we had negotiated a World Bank loan for $600m to fund a three-year medium term expenditure framework for years 2011, 2012 and 2013 which required Federal Government's approval. "Although the approval for the loan was given then and the year 2011 first tranche for $200m was released in that year, the year 2012 and 2013 tranches were frustrated by Federal Government agencies. "It is the year 2012 component and year 2013 component that is now being approved in the last quarter of 2013. "Our state's development was held up and slowed down for two years. The progress on the rail was held back, supply of additional 70 million gallons from Adiyan Water Works was slowed down, progress on Lagos Badagry Expressway was slowed down. Improvement in the quality of life of Lagosians was slowed down. "But painfully we have had to borrow money at shorter tenures of seven years and higher interest rates of 17 per cent and 14 per cent, instead of one per cent and 40 year tenure which the delayed World Bank loan offered," he said. Speaker reacts The Speaker of the House of Assembly, Adeyemi Ikuforiji, in his reaction, noted that the presentation of the budget was a constitutional matter under the 1999 Constitution of the Federal Republic of Nigeria in section 121 (1). He observed that members of the legislative arm were saddled with the responsibility to look into the budget presented by the Governor and determine how the state would maximise its benefit to the generality of the people and addressed the issues of poverty and deprivation. According to him: "We will apply our utmost best within our legislative powers to give this budget proposal the detailed attention it deserves for its transformation into appropriation bill for the benefit, prosperity, growth and development of Lagos State and Lagosians." -------------------------------------------------------------------------------------- NIGERIA CASH-STRAPPED -FG •Jonathan to present N4.49trn 2014 budget to NASS Nov 12 Written by Jacob Segun Olatunji, Chris Agbambu, Dapo Falade and Kolawole Daniel -Abuja Wednesday, 30 October 2013 00:00 THE Director-General of Budget Office of the Federation, Dr Bright Okogwu and the Accountant General of the Federation (AGF), Mr Jonah Ogunniyi Otunla, have acknowledged that Nigeria is cash-strapped, though not broke. The duo made the declaration in Abuja, on Tuesday, while speaking at a meeting with federal revenue generating agencies, organised by the National Assembly Joint Committee on Finance and Appropriation. The committee had organised the meeting to consider the 2012-2014 Medium Term Expenditure Framework (MTEF) earlier forwarded to the National Assembly by President Goodluck Jonathan, preparatory to the 2014 budget presentation in November. According to Otunla, “Nigeria is not broke, but it is currently having cash flow problems. We may have cash flow problem, but we are not broke. “Countries like Greek and Spain are broke, they are now approaching their international neighbours for bail out, but Nigeria has not done that and we are nowhere near that situation.” Deputy Governor of the Central Bank of Nigeria (CBN), Mrs Maria Alade, who represented the governor, Mallam Lamido Sanusi, at the joint sitting, said since the AGF and the DG of the Budget Office had said Nigeria was not broke, that was also the position of the CBN. “As bankers of the Federal Government, it is not our duty to tell the nation whether it is broke or not. But we can tell the amount in accounts at anytime,” she said. Defence ministry broke The Ministry of Defence is broke, owing to limited budgetary allocation and arbitrary reduction of proposed budgetary appropriation by the Budget Office of the Federation, which has left the ministry with liabilities and unpaid debts. The Permanent Secretary in the ministry, Aliyu Ismaila, disclosed this on Tuesday, during the visit of the Head of Civil Service of the Federation, Bukar Goni Aji and the Peer Review Team of Permanent Secretaries, at the Ministry of Defence headquarters in Abuja, to assess their level of implementation. The permanent secretary said there was the need to reconsider the importance and strategic role of the ministry, by increasing capital and overhead allocations. According to him, over N19 billion was approved for the ministry in the 2013 appropriation, adding that so far, only about N13 billion had been released. He explained that the ministry was burdened with over N194 million unpaid hotel bills, N14 million outstanding burial and death expenses and over N108 million outstanding repatriation allowance. Aji, in his remark, noted that the Peer Review was to understand the feeling of staff, through the union headship and an assessment of the performance of the permanent secretaries. He disclosed that the issue of ghost workers would be resolved with the implementation of the Integrated Personnel and Payroll Information System (IPPIS), which, he said, would solve delays in the payment of salaries. Aji said the Federal Government was working to complete the IPPIS exercise and capture all ministries, departments and agencies (MDAs) by February 2014. Jonathan presents N4.49trn budget Nov 12 President Jonathan will, on November 12, present to the joint session of the National Assembly the proposed 2014 budget estimates valued at N4.49 trillion. The president, in a letter dated October 23, 2013 and addressed to the Speaker of the House of Representatives, Honourable Aminu Tambuwal, was read on the floor of the House by the Deputy Speaker, Honourable Emeka Ihedioha, on Tuesday. “I write to crave your kind indulgence to grant me the slot of 12.00 noon on Tuesday, November 12, 2013 to enable me to formally address a joint session of the National Assembly on the 2014 Budget. “While thanking the honourable members of the House of Representatives of the Federal Republic of Nigeria for the constancy of their support, please accept, Honourable Speaker, the assurances of my highest consideration,” the letter read. Nigerian Tribune recalled that President Jonathan had presented the 2014-2016 Medium Term Expenditure Framework and Fiscal Strategy Paper to the National Assembly for consideration and approval, where it was indicated that the aggregate sum of N4.49 trillion would be proposed as 2014 budget, as against N4.98 trillion budget of 2013. -------------------------------------------------------------------------------------- Nigeria: Oduah's N255 Million Cars - FG, National Assembly Evade Comments 18 October 2013 Nigeria's Aviation Minister Under Fire Aviation Minister Stella Oduah The federal government yesterday fenced off enquiries over the purchase of two BMW armoured cars worth N255 million for the Minister of Aviation Stella Oduah. United States based online publication, Sahara Reporters recently reported that the aviation minister had compelled the Nigerian Civil Aviation Authority, NCAA, to purchase two BMW cars worth N255 million for her. The story went viral on the internet for days before the Ministry of Aviation confirmed to a national newspaper yesterday that the cars had been bought for the minister because her life is under real and imminent threat. The newspaper quoted Mr. Joe Obi, Special Assistant on Media to the Minister, as saying that the two armoured BMW cars were to protect his boss from "imminent threats." "Yes, it is true that some security vehicles were procured for the use of the office of the honourable minister in response to the clear and imminent threat to her personal security and life following the bold steps she took to reposition the sector. "When she came on board as the minister, she inherited a lot of baggage in terms of concession and lease agreements in the sector, which were clearly not in the interest of the government and people of Nigeria "And so, she took bold steps and some of these agreements were reviewed and some were terminated, and these moves disturbed some entrenched interests in the sector, and within this period, she began to receive imminent threats to her life; therefore, the need for the vehicles," he added. When Daily Trust sought to know from the ministry since when the minister's life has been in danger and if the threat had been reported to security agencies; what measures the agencies took to mitigate the threat; on whose advice the vehicles were purchased and who approved the purchase and if the purchase was appropriated in the budget, Mr. Joe Obi failed to return calls or text messages sent to him. When contacted last night, spokesman for the Secretary to the Government of the Federation Anyim Pius Anyim, Mr. Sam Nwaobasi, said he cannot say anything on the matter because he had already left the office and the department he could have channeled our questions to, had also closed. "I can't respond to that now. I can only give you an answer if I get to the office and make consultations. Please look at the time now. I have no answers for your questions," he said. The Senate has said that it was not aware that the aviation minister Stella Oduah has purchased two armoured vehicles. Speaking to Daily Trust yesterday, Senate spokesman Senator Eyinnaya Abaribe (PDP, Abia), said "we don't have any information about that. I only comment on what is before the Senate and there is no such thing before the Senate as far as I am concerned before we went on vacation. I don't have any comment to make." Senator Mohamed Maccido (PDP, Sokoto), who chairs the appropriation committee did not answer calls put to his mobile line and also did not respond to text message sent to him. Also, the chairman Senate committee on aviation Senator Hope Uzodinma (PDP,Imo), whose committee was mandated to probe the aviation sector, did not respond to text messages sent to him and also did not answer calls put to him. Also efforts to contact the House of Representatives' aviation committee chairman, Nkiruka Onyejiocha (PDP, Abia) for reaction to this development last night proved unsuccessful, as the law-maker could neither responded to the written text message nor did she answer the numerous phone calls. Francis Okeke, Turaki A. Hassan, Musa Abdullahi Krishi, Ibrahim Kabiru Sule and Daniel Adugbo -------------------------------------------------------------------------------------- Ministry confirms purchase of N255m vehicles for Oduah October 17, 2013 by Udeme Ekwere Minister of Aviation, Ms. Stella Oduah The Ministry of Aviation has confirmed that the Nigerian Civil Aviation Authority bought two bulletproof vehicles worth $1.6m (N255m) for the Minister of Aviation, Ms. Stella Oduah. An online news medium, SaharaReporters, had reported on Tuesday that the armoured vehicles were delivered to the minister in August. The medium reported that documents in its possession showed that the transaction for the purchase of the two BMW cars started in June, but the request for the delivery of and payment for them was fast-tracked between August 13 and 15, 2013. The transaction involved the NCAA, First Bank of Nigeria, and Coscharis Motors Limited, according to the report. The two black BMW 760 Li HSS vehicles had chasis numbers WBAHP41050DW68032 and WBAHP41010DW68044, and were reportedly delivered to the NCAA on August 13, 2013. They were received by two store managers, F. Onoabhagbe and Y. A. Amzat, who is also the agency’s head of transport. Meanwhile, two major air crashes have occurred under Oduah’s watch. These were the Dana Air crash in Lagos on June 3, 2012, in which 163 people died; and the Associated Airlines crash of October 3, 2013, also in Lagos, which claimed 15 lives. A day after the Associated Airlines’ crash, a Kabo Airlines’ Boeing 747-400 plane carrying 512 pilgrims made an emergency landing at the Sokoto airport with deflated tyres and damaged the airport’s Instrument Landing System. On Sunday, an IRS Airlines Fokker 100 plane carrying 99 passengers also made an emergency landing at the Kaduna airport, after developing hydraulic problems mid-air. Four days after the tragic crash involving Associated Airlines’ Embraer 120 plane, Oduah described air accidents as God’s will that were inevitable. She said notwithstanding this reality, the Federal Government would continue to ensure that there were no accidents. The minister made the submission while fielding questions from State House correspondents on investigations into the crash. The minister said, “We do not pray for accidents but they are inevitable. But we will continue to do everything to ensure that we do not have accidents. But an accident is an act of God. “Again, we do not speculate on the causes of accidents. Until they happen, you cannot say this is the cause or that is not the cause. But what is obvious and is the truth is that in aviation, there are shared responsibilities, starting from the man that carries your luggage to the man that makes sure that your boarding pass is issued to you. “And so, the regulatory agency, the operators, the management, everybody has his/her responsibility and all must work in tandem for there to be an optimal, secure and safe aviation sector in the country. And that is what we have been working on.” Oduah described those saying that she left the issue of safety in the airspace to dwell on money-making ventures as ignorant. However, much criticism had since followed her comment. She had explained that security and safety could not be achieved without proper funding. However, the Special Assistant (Media) to the Minister of Aviation, Mr. Joe Obi, who confirmed the development on Wednesday, said the vehicles were purchased to protect the minister from some external threats. He said in a telephone conversation with our correspondent, “Yes, it is true that some security vehicles were procured for the use of the office of the honourable minister in response to the clear and imminent threat to her personal security and life following the bold steps she took to reposition the sector. “When she came on board as the minister, she inherited a lot of baggage in terms of the concession and lease agreements in the sector, which were clearly not in the interest of the government and people of Nigeria. “And so, she took bold steps and some of these agreements were reviewed and some were terminated, and these moves disturbed some entrenched interests in the sector, and within this period, she began to receive some imminent threats to her life; therefore, the need for the vehicles. “It should be noted that these vehicles are not personal vehicles and were not procured in the name of the honourable minister; they are utility vehicles and are for the office of the minister, and if she leaves the office, she will not be taking the vehicles along with her.” On his part, the spokesperson for the NCAA, Mr. Fan Ndubuike, feigned ignorance of the development. “I am not aware of anything like that,” he told our correspondent at 8.05pm on Wednesday. The NCAA is the agency charged with ensuring the airworthiness of commercial planes flying within the country’s airspace. The agency has been under fire lately over a series of mishaps and near crashes involving planes being operated by domestic airlines that were certified fit for flight operations by the NCAA. There have also been rumours that the NCAA does not have enough funds to upgrade its equipment, send its employees for critical training and hire enough qualified hands, while questions are also being raised by industry watchers on the ability of the cash-strapped agency to procure such expensive vehicles. However, the Director-General, NCAA, Capt. Fola Akinkuotu, had on Monday denied the claims of being cash-strapped, saying that the agency was buoyant. He said, “We are not broke, we have been carrying out all our responsibilities and have been undertaking the training of our staff as and when due. “I can tell you that right now, some of our staff members are undergoing training abroad and we still have others that are waiting for approval; we do not joke with training here and I challenge anyone to come up with anything otherwise to that effect.” -------------------------------------------------------------------------------------- Federal, state governments owe N9tn October 7, 2013 by Everest Amaefule, Abuja Nigeria’s total public debt rose from N6.25tn ($40.1bn) in 2010 to N9.04tn ($58.04bn) by the end of December 2012, the Debt Management Office has said. The DMO, in its 2013 Report of the Annual National Debt Sustainability Analysis, released in Abuja on Sunday, also said it would issue $100m Diaspora bond in 2014. The total public debt stock includes both external and domestic debts owed by the federal and state governments as well as the Federal Capital Territory. Over a period of three years – 2010 to 2013 – the nation has had to part with N2.21tn ($14.17bn) in debt service payments. “Nigeria’s total debt stock – domestic and external for the federal, states and the FCT as of end-December 2012, stood at $58,044.58m, representing an increase of $8,624.72m or 17.45 per cent over the amount recorded as of the end of December, 2011,” it stated. For the first time, the DMO, which had been helping states to reconstruct their debts put the domestic debt profile of the states and the FCT at N1.47tn ($9.45bn). The DMO said the Federal Government’s contingent liabilities totalled N3.67tn. Furthermore, it disclosed that the N15.58 ($100m) Diaspora bond would help Nigerians based abroad to identify with the development strides in the nation. As of December 31, 2012, the nation’s total public debt stood at N9.04tn ($58.04bn), the DMO said. This represented an increase of N1.3tn ($8.62bn) or 17.45 per cent over the amount recorded at the end of December 2011 N7.47tn ($49.42bn). The external debt component increased by $860.49m or 15.19 per cent over the amount recorded in 2011 to reach $6.53bn in 2012. The breakdown of the total public debt showed that the Federal Government accounted for N6.5tn ($41.97bn) or 72.43 per cent, while that of the states and the FCT stood at N1.47tn ($9.45bn) or 16.31 per cent. A further breakdown showed that the share of the domestic and external debt stood at 88.74 per cent and 11.26 per cent, respectively. The Debt Sustainability Analysis report stated, “The share of the domestic debt has continued to dominate the trend in the total public debt since 2008. The total debt stock of the Federal Government and the states, as a percentage of the Gross Domestic Product, maintained an upward trend from 10.47 per cent to 22.43 per cent in 2012. “However, compared to the global threshold of 40 per cent (which relates to only external debt sustainability) set for medium performers, Nigeria’s total public debt still remained within sustainable limits. The total public debt/GDP ratio was below the country-specific threshold of 25 per cent.” The DMO said that the debt service payments of the Federal Government, the states and the FCT rose to N864.47bn ($5.55bn) or 24.25 per cent in 2012 from N685.34bn ($4.47bn) in 2011. The debt service payment stood at N638.62bn ($4.15bn) in 2010. Of the total debt service in 2012, the Federal Government and the states’ domestic debt service accounted for 94.72 per cent, while the balance of 5.28 per cent went to external debt service. The total domestic debt service at the end of December 2012 stood at N720.55bn, indicating an increase of 34.08 per cent over the level in 2011. The total domestic debt service of the Federal Government as a percentage of the total domestic debt stock outstanding was 11.02 per cent in 2012, which was higher than the 9.56 per cent recorded in 2011. According to the DMO, the significant rise in 2011 and 2012 was due to the increase in the cost of borrowing occasioned by the contractionary monetary policy regime, particularly the upward review of the benchmark Monetary Policy by the Central Bank of Nigeria from 6.25 to 12 per cent. The DMO stated, “The external debt service showed a downward trend, while that of the domestic debt increased significantly. “The decrease in the external debt service was largely attributable to full redemption of some IBRD (International Bank for Reconstruction and Development) and ADB(African Development Bank) loans over the period and the reliance on the domestic bond market to largely meet the Federal Government’s borrowing requirements since 2002.” The DMO reported that the Federal Government’s contingent liabilities rose from N2.59tn in 2010 to N3.48tn in 2011. The liabilities further increased to N3.67tn in 2012. Contingent liabilities are obligations that may be incurred in the future depending on the outcome of certain events. The DMO listed the contingent liabilities of the Federal Government as pension liabilities, N1.32tn (2012); local contractors, N233.94bn; pending litigation, N92bn; federal mortgage, N32bn; guarantee on agriculture, N249.58bn; and AMCON guaranteed bonds, N1.74tn. The DMO said, “As part of the efforts to address the issue of contractors’ arrears, the Federal Government had set up a private sector driven Special Purpose Vehicle to issue a five-year split coupon bond with a face value of N233.94bn, which was guaranteed in favour of the bondholders. “There is an arrangement by the Federal Government to redeem the bond at maturity through annual budgetary provisions.” At a workshop on Friday, the Director-General, DMO, Dr. Abraham Nwankwo, said that the organisation would issue a special bond in the first quarter of 2014. The bond, which has been approved by the National Assembly as part of the 2013–2015 Medium Term Expenditure Framework Strategy, will enable Nigerians based abroad to invest in projects they can identify with in the country. Explaining the attractiveness of the Nigerian bond market, Nwankwo said by the end of 2012, 19 per cent of the bonds issued by the country were held by foreign investors. He also justified the need to garner resources from all available sources to close the huge infrastructure gap, adding that the country required about $35bn to fund development in the next 10 years. -------------------------------------------------------------------------------------- FG, states can’t share revenue as cash crunch deepens . Tuesday, 24 September 2013 00:00 From Mathias Okwe, Assistant Business Editor, Abuja News - National IS Nigeria broke? Notwithstanding the vigour with which officials of the Federal Government may respond with a no, they would not have the support of finance commissioners who returned to their states from Abuja Monday empty-handed. They were in the federal capital to get their statutory revenue allocation from the Federation Account. But a shortfall of N75 billion from the last month’s revenue which could not be remedied by the Nigerian National Petroleum (NNPC) aborted this. The commissioners and their accountants-general who were gathered for the second time this month to share revenue for September on the instruction of their governors, turned down the N548.393 billion revenue for the month, insisting that NNPC must clear the outstanding N75 billion before they could settle down for the distribution of the current revenue. This came as the Ministry of Finance Monday announced the payment of N46.971 billion of petroleum subsidy claims to verified oil marketers. This brought the total payments so far in 2013 to N287.351 billion. The rejection of the N548.393 billion by the states was against an appeal by the Accountant-General of the Federation (AGF), Mr. Jonah Otunla, who presided over the second Federation Accounts Allocation Committee (FAAC) meeting. He had assured that the outstanding N75 billion would be provided by the NNPC soon. Otunla said the September’s revenue was an improvement on that of August and told the commissioners: “The Office of the Accountant-General of the Federation has received assurances from the NNPC that the issue will be dealt with with dispatch and a positive outcome is expected soon.” This explanation did not go down well with the commissioners. Their Chairman, Mr. John Odah, expressed disappointment and said the Federal Government was treating the states with contempt. He told journalists after the botched meeting: “We told them not to invite us until all issues are settled. Today by 8.00 a.m., the AGF called me that the minister asked him to preside. He said I should come with the commissioners. I made calls to some of them; we are just coming back from him. He said he wanted to let us know that there was no change. We asked him the need for the invitation and he said the minister asked him to invite us. He was reminded that he had always been asked by the minister to chair the meeting when there was any problem. He could not proffer any solution. “The minister said they could not dip hands in the reserve which made us to believe that NNPC has brought in something. “Today, we have come for the second time within the month of September and the FAAC session ended in a stalemate. We were invited by Minister of State for Finance who is the chairman of FAAC but we have not seen him. The AGF had addressed a few of our executives and told us nothing was available. We appreciate the efforts of the AGF but the minister has chosen the path of treating our case with levity. We have been slighted, to the extent that the interests of our states and local councils are suffering. He has treated us with contempt and treated our states and local councils with contempt. One condition we gave was that we should not be invited again until the situation improves. But right now, there is no improvement. We have demands, augmentations and differentials in benchmark which we listed. “We agreed that there would be no further augmentation in order to clear the backlog. But up till now, no augmentation, no clearing of the backlog. The worst effect of this is that it is having a retrospective effect on the states and local councils. The states rely on the budget in order to secure financial commitment and handle security issues and issues of contractors. Just clear the backlog and we get along. But today, nothing. It is the reason the commissioners of finance, accountant-generals with directive of the governors cannot review our positions. To have called us without any improvement on our demands is a great slight and has shown that the minister does not brief the President. We know the President as a good leader with listening ears who would have attended to this problem immediately if he was aware, but it is like Ngama goes to tell him he will control us. We do not support this situation. The minster should be competent enough and show that level of competency. The minister is running FAAC as his own show; FAAC is degenerating into a different thing. “It is like the states are being starved by the minster,… handle the dog with great starvation and whichever way you want him to turn he will turn. We are not dogs; we respect the President and are calling on him to hear this.” Meanwhile, the Federal Government reduced public spending on oil subsidy payments from N2.2 trillion in 2012 to N971 billion . This represents a reduction of over N1.2 trillion or 56 per cent. Speaking on the issue, the Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, recalled the background to the issue which generated immense public concern. “In 2011, there was a huge public outcry. As a result, this administration has worked hard to clean up the process of subsidy payments. In response the ministry set up the Aig-Imoukhuede committee which investigated the subsidy payments. The committee was later elevated to a presidential committee by the President. “We also hired new auditors and we put in place different checks and balances. As a result, last year, we brought subsidy payment down to about N950 billion, and we expect that this year, we will pay about N971 billion. “I believe this is a huge achievement for which the Jonathan administration deserves some credit, something that should make Nigerians proud of their government.” -------------------------------------------------------------------------------------- Increased Dollar Supply Strengthens Naira 24 Sep 2013 By Obinna Chima The naira appreciated significantly against the United States dollar at the interbank segment of the forex market Monday, where it closed at N159.40 to a dollar. The naira had closed at N161.20 to a dollar at the interbank last Friday. Dealers revealed that the performance of the nation’s currency was buoyed by the Central Bank of Nigeria’s (CBN’s) secondary market forex intervention, in addition to the sale of the greenback at the Wholesale Dutch Auction System (WDAS). The CBN offered a total of $300 million to dealers at the WDAS yesterday, even as the naira maintained its value of N155.76 to a dollar. A total of 17 banks participated in yesterday’s auction. The Monetary Policy Committee is expected to announce the outcome of its two-day meeting today. The Ecobank Group argued in a report that in the immediate term, forex demand at the bi-weekly window is likely to fall by about 25 per cent. This, it said, would likely reduce pressure on the naira and may lead to some moderate appreciation of the nation’s currency towards the upper end of the +/-3% band, to the N155/$1 level. “CBN efforts to support the naira will be positive in the short-term, however, recent funding restrictions could be counter-productive by creating a liquidity squeeze and exposing some banks’ low liquidity levels. “It could also undermine market confidence in expectations of what the CBN will do, which in turn could destabilise market development.” However, Afrinvest Securities Limited in a report noted that given recent developments in the naira exchange rate space, “we are of the view that the naira will slide further in the near term towards N166/$1 in the interbank market by December 2013.” According to the firm, a key contributor to the anticipated downward trend would be the seasonally waning oil receipts, due to the lingering oil theft. This, it argued, may be compounded by the yuletide as seasonal higher domestic demand fuels imports. “In addition, foreign investors might exit positions to close their books for the year as well. While we expect mild stability come first quarter of 2014 supported by Foreign Portfolio Investments (FPIs) inflows, we are somewhat cautious due to the anticipation of a new CBN governor next June and upcoming elections in 2015. “The inflow of foreign capital into the economy should constitute a buffer for the naira. Approximately $2 billion in form of FDI is expected to be injected in the economy through the power sector privatisation exercise. While this is expected to place more dollars in the coffers of the CBN, we also do not foresee significant near term upside effect on the naira,” the report stated. According to Afrinvest, to reduce the pressure on the naira, an inward looking policy (tax incentives, infrastructure development and production subsidy) should be emphasised to reduce the dependence on imported goods. -------------------------------------------------------------------------------------- Nigeria: Alison-Madueke - FG Saved N879 Billion From Fuel Price Increase, Reforms By Ejiofor Alike, 23 September 2013 Nigeria The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has stated that the federal fovernment saved N879,billion in 2012 as a result of the increase in the price of petrol from N65 to N97 per litre and the reduction in national consumption of petrol. This is just as the Nigerian National Petroleum Corporation (NNPC) has credited the minister with the proactive measures that led to the restoration of the Trans-Niger Pipeline, Nembe-Greek Pipeline and Tebidaba-Brass Pipeline, which according to the corporation, has helped to ramp up the country's crude oil output. NNPC's statement came two days after Shell announced that it had yet again shut down the Trans Niger Pipeline following its discovery that the pipeline had been vandalised. Speaking shortly before her departure to the United States at the weekend, the minister said N467.20 billion was saved from the N32 per litre mark-up in the pump price of petrol in January 2012, while an additional N412.30 billion was saved from the reduction in national consumption of petrol from 60 million litres per day in 2011 to 40 million litres per day. The minister, who attributed the success to President Goodluck Jonathan's Transformational Agenda in the downstream sub-sector, said the savings were made possible by a number of strategic reform initiatives in the management of petroleum products supply and distribution. "In spite of these savings, we have also been able to maintain stability of products supply, while putting in place, stringent regulatory conditions which would make it difficult for dubious marketers to short change the system," she said. The minister said the federal government had done extremely well in the area of halting fuel subsidy scams in the country, stressing that government's efforts at transparency and accountability were yielding positive results. She said the reforms were carried out to address the issue of pervasive malpractices in the oil and gas sector, so as to engender public trust and belief in government's sincerity in the downstream operational activities. She identified some of the reform initiatives to include, restoring credibility in the process of products supply and distribution, and the conduct of a prequalification exercise for traders/suppliers initiated in the form of technical audit of suppliers of petrol into the Nigerian market. She enumerated other measures to include the conduct of monthly and mid-quarter Import Performance Review meetings with stakeholders and resolution of marketers' complaints through effective mediation. According to her, these measures have stemmed the erosion of marketer's confidence in the fuel importation regime, with its attendant payment uncertainties occasioned by budget approval delays. "Over N50 billion of private investment was realised in the downstream sub-sector supply and distribution infrastructure alone, in 2012, employing thousands of Nigerians and contributing to our economic growth. "Such a staggering net flow of investment has also led to the rolling out of private mega filling stations across the country renewed investment in modern vessels and information technology-driven depots all along the coastal areas of the country from Lagos to Calabar," she said. The minister further disclosed that the Pipeline and Products Marketing Company (PPMC), a subsidiary of NNPC, had not only completed the repair of the Port-Harcourt-Aba, Warri-Benin and Jos-Gombe pipeline networks to ensure pumping of products to the depots in those areas, but had also commenced the process of upgrading some of its rehabilitated depots from analogue to digital loading meters. She noted that the government had further promoted and popularised gas, resulting in the drastic increase of the nation's Liquefied Petroleum Gas (LPG) consumption to 250,000 metric tonnes (MT), from 100,000MT in 2011. She said the government's gas revolution agenda had begun to yield dividends with plans for the establishment of a number of new fertilizer plants at advanced stages of construction. "The landmark pioneering efforts of NIPCO Plc in Benin for LPG and Compressed Natural Gas (CNG); the Oando and Techno popularisation of small gas cylinders for low income earners are all good examples," she added. In a related issue, NNPC has lauded the minister for the proactive measures she took in the wake of pipeline vandalism and crude oil theft which resulted in the shutdown of three major trunk lines - Trans Niger Pipeline, the Nembe Greek Pipeline and the Tebidaba-Brass Pipeline - accounting for the shut-in of 400,000 barrels per day According to a statement issued by the corporation's acting Group General Manager, Group Public Affairs Department, Ms. Tumini Green, "Part of the measures taken by the minister included escalating the issue to the highest level leading to the setup of a Security Strategy Committee headed by the Delta State Governor, Dr. Emmanuel Uduaghan, which has resulted in the restoration of the three lines. "The feat recorded by the minister will enhance increased production and shore up the revenue accruing to the country." NNPC added that the rise in crude oil production in the country to 2.4 million barrels per day was as a result of the recent action taken by Alison-Madueke, adding that the recent approval of N15 billion by the National Economic Council (NEC) for adequate policing of oil and gas installations in the Niger Delta region to stem crude oil theft would go a long way in curbing the menace. -------------------------------------------------------------------------------------- Nigeria: FG Budgets N4.77 Trillion for 2014 By Turaki A. Hassan, 19 September 2013 Nigeria's Govt Sets 2014 Budget Proposal The Federal Government is proposing a budget of N4.77 trillion for the 2014 fiscal year. This is contained in the 2014-2016 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) document submitted to the Senate by President Goodluck Jonathan on Tuesday. According to the document, the daily crude oil production by the Nigerian National Petroleum Corporation (NNPC) for 2014 is pegged at 2.3883 million barrels per day (mbpd) which is lower than the 2013 figure of 2.526 mbpd. In the same vein, the crude oil bench mark is put at $74 per barrel while the exchange rate between the United States' dollar and the Naira remain steady at N160 to $1. Government is also retaining subsidy on petroleum products in 2014 and is budgeting the sum of N273.14 billion for Subsidy Re-Investment Programme (SURE-P) which is part of the N4.77 trillion estimates. In the budget, N1.45 trillion is for capital expenditure, representing 30 percent, while the remaining will go for recurrent and overhead expenses. According to the document, as at March 2013, Nigeria's external debt stood at $6.67 billion, in which the Federal Government's share is 63.5 per cent while the 36 states and the FCT accounted for the balance of 36.5 per cent. Domestic debt for the same period stood at N6.49 trillion bringing the total to N7.53 trillion representing 17.75 percent of the Gross Domestic Product (GDP). In 2014, the government intends to borrow N572 billion to finance the budget deficit. Meanwhile, the Senate will today debate a motion seeking to institute an investigation into reports that the Federal Government said the 2013 budget was not implementable. Coming under Order 42 of the Senate standing rules, Deputy Senate Leader Abdul Ningi (PDP, Bauchi) said his curiosity arose from the fact that the crude oil price is still $107 USD as at Tuesday, meaning that there was no shortfall of revenue beyond the $79 per barrel. "There is nothing wrong with the economy, we won't seat here in the Senate and allow some people to send dangerous signals," Ningi said. The Senate unanimously adopted the motion allowing him to bring the matter for discussion today. -------------------------------------------------------------------------------------- Amaechi’s NGF calls for Okonjo-Iweala’s resignation September 18, 2013 by Olusola Fabiyi, Abuja Members of the Nigerian Governors’ Forum have called on the Minister of Finance, who is also the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, to resign her appointment if she knew she would not be able to adhere strictly with the Appropriation Act 2013. They said the non-compliance with the revenue projections of the Federal Government 2013 Budget was also a direct breach of the provisions of the Appropriation Act, 2013. These decisions were part of the resolutions of the Governor Rotimi Amaechi-led NGF, which met in Abuja on Tuesday evening. States which were represented by their governors at the meeting were those of Rivers, Niger, Kwara, Osun, Ekiti, Ogun, Adamawa, Oyo, Lagos, Sokoto, Jigawa, Kano and Zamfara while deputy governors of Edo, Borno and Nasarawa states represented their governors. The governors also called for the immediate dissolution of the Economic Management Team. Reading the communique of the meeting, Amaechi, who was flanked by other members said, “Members expressed concern in the management of the economy by the Minister of Finance and Co-ordinating Minister of the Economy and called for a strict adherence to the Appropriation Act, 2013, failing which she should resign. “Forum observed that the National Economic Council is constitutionally responsible for the management of the economy and should be used for that purpose as opposed to the Economic Management Team constituted by the Presidency.” The governors also called on the National Assembly to separate the office of the Accountant-General of the Federation from that of the Accountant-General of the Federal Government for the purpose of accountability and better management of the economy. On polio eradication war, the governors said they noted that some progress had been made in 2013 compared to 2012. They, therefore, enjoined all governors to remain focused and continue to drive the programme in their irrespective states until polio was completely eradicated in the country. The governors also expressed condolence to the wife of President Goodluck Jonathan, Patience, for the loss of her foster mother and also condoled with the Governor of Lagos State, Mr. Raji Fashola (SAN) over the death of his father. They also expressed their condolence to the family of a former Governor of Ondo State, Dr. Olusegun Agagu. Amaechi also announced that the governors would hold a retreat in November, but he did not state where it would hold. The notice of meeting sent to the governors for the meeting showed that money by the Federation Account Allocation Committee topped the agenda at the meeting. Also on the agenda was the Excess Crude Account, which had been a major disagreement between the governors and the Federal Government. The Sovereign Wealth Fund was also discussed. Amaechi’s opening remark, which kick-started the meeting, dwelt on fresh and subsisting litigations, state peer review mechanism and publication of inaugural speeches by the chairman. A source at the meeting, said that Amaechi’s speech also covered the capacity building meetings in Galilee Institute, Israel, and investment in the United States of America and Russia. The source added that oil theft was also part of the issues the governors discussed. The parallel forum is being led by the Governor of Plateau State, Mr. Jonah Janng. Jang and those in his group were not at the meeting. -------------------------------------------------------------------------------------- Execution of 2013 budget faces hitches . Tuesday, 17 September 2013 00:00 From Azimazi Momoh Jimoh, Mathias Okwe (Abuja) and Chijioke Nelson (Lagos) News - National .• Fund shortage threatens implementation • FG, states agree to share actual revenue • Senate awaits 2014 fiscal plan A FEW months to the end of the year, the implementation of N4.987 trillion 2013 budget may be facing hitches, following inability of the government to get revenue to match its highly expansionary fiscal plan. In fact, meeting the monthly statutory commitment of N623.786 billion revenue to be distributed to the three tiers of government at the Federation Accounts Allocation Committee (FAAC) has become a difficult task for the panel headed by the Minister of State for Finance, Dr. Yerima Lawal Ngama. He has to be sourcing revenue outside the Federation Account to augment the required budgetary sum of N623.786 billion outlined in the budget, as revenue has consistently fallen below the mark. The crisis heightened at the weekend in Abuja when a meeting of FAAC to share the August federally-collected revenue became inconclusive, as states insisted that the N140 billion outstanding budgetary revenue shortfall for the preceding month of July must be produced by the Federal Ministry of Finance before they could consider the August account. State finance commissioners reportedly protested, but they were calmed down by Ngama, who explained the situation, pointing out that the 2013 fiscal assumptions were highly politicised, over-bloated and not realistic and that this had put the FAAC under austere condition to raise the budgetary estimates. Following the mature handling of the situation by the minister and to avoid bickering, the federal and state governments mutually agreed that from September, only the actual statutory revenue generated and not the budget estimates would be shared. This development notwithstanding, the states insisted that the statutory revenue shortfall for July and that of August must be sought and pooled. Consequently, the minister assured that before the end of this week, FAAC would meet again, as efforts had been made to source the shortfall demanded. Speaking with journalists after the aborted meeting, he said: “The reason we adjourned is to give us time to reduce the gap for July. NNPC is supposed to bring N75 billion and we are to bring N40 billion. Everything is normal. We don’t have new issues because over time, as you work with people, you would get to a level of understanding. Yesterday, the technical session took place and everything was done. “There was a significant improvement in collection over last month. In fact, the improvement is over N100 billion of oil mineral revenue alone. They decided to leave some of the substantive issues to be discussed at plenary session. There is nothing wrong with the report of FAAC this month. We have all agreed that from this month (September), we will be sharing actual value, because there is no law in Nigeria that says you have to share what is in the budget and not what you have actually collected. “If you go by the constitution of Nigeria, it talks about putting revenue in the Federation Account and sharing it. It didn’t say we should look at the budget before sharing, whether you raise the money or not. So, we have reached this understanding that from this month, we shall be sharing the actual revenue. “The last time, NNPC told us that Nigeria is producing 2.4 million barrels per day. We have seen the improvement, but oil contract is a 90-day period. So, if you get improvement today, the real impact on your finance will come after 90 days, because you have to wait for the payment in 90 days. We are expecting everything to normalise. Meanwhile, we have to be sharing the actual collection and this we have agreed with the governors. “But last month, we have to go and do something to ensure that the shortfall was reduced. Last month, the shortfall was over N140 billion and we came out to see if we could provide anything that we have to reduce the shortfall. So, they were all expecting the money today, but we are still working towards reducing that shortfall for last month. NNPC is doing its best and for us (Federal Ministry of Finance), we have almost completed most of what we want to do. We now asked FAAC to give us the approval (I and the Chairman of Finance, Commissioners’ Forum) to go and look at the sources we could get. “We have agreed that we are not going to draw down savings from ECA. We are making efforts from our own side. We have non-oil surpluses and NNPC is expected to produce N75 billion and N40 billion from the Federal Ministry of Finance. From our own N40 billion, we have already brought our share, but we are waiting for NNPC to bring its own share.” Commenting further on the difficulties being faced, Ngama said the development had arisen because the 2013 budget was ‘over-bloated.’ His words: “You all would recall when we were talking about the benchmark last time. We said this is what the model says and all over the world, benchmark is a technical issue. You have a model, whether a 10-year moving average or a 15-year moving average and whatever that budget throws, you use it as a benchmark, because budget is expectation. I think everybody in the country now agrees that you don’t over-politicise the benchmark, such that you put it so high above the revenue expected, because the production was taken as a given, but it faultered. That is the problem that we are having. But now, we have learnt something. We believe that this year’s budget, there won’t be much argument because it’s better you have a budget that you would out-perform, so that you would have excess to be sharing rather than have a budget that is not attainable. “We have learnt serious lessons from this and next year’s budget, we hope we would see reality, particularly in fixing production level such that no matter what happens, it would be realistic. Even the Customs, we will give them a target that is realistic so that we won’t have much difference between actual and the budget, because this is the root cause of everything that is happening.” Meanwhile, the Senate, Monday, said that it was awaiting the Medium Term Expenditure Framework (MTEF), which would set the tone for the preparation of the 2014 budget. The MTEF, which is expected to cover the period of 2014-2016 fiscal years, has the essential features of oil production quota, oil benchmark and revenue projection. Briefing journalists at the National Assembly, the Chairman, Senate Committee on Rules and Business, Ita Enang, said the National Assembly explained that there could be no budget presentation until MTEF was received from the Executive arm of government. Enang said: “After receiving the MTEF, lawmakers will deliberate on the content with the intention of drawing conclusion on which of the components of the frame-work will serve as benchmark for the budget. After fruitful deliberation, the frame-work will be passed and sent back to the Executive, thus clearing the coast for budget presentation.” He also hinted that attention would equally be paid to the constitution amendment. According to him, both chambers will constitute a conference committee that will harmonise the positions of both legislative houses before transmitting them to state houses of assembly. He also said the Senate would give due consideration to the confirmation of ambassadorial nominees from the Executive, as well as other executive appointments like nominations into the Federal Character Commission (FCC). Meanwhile, eight names of ambassadorial nominees were sent to the Senate for confirmation in July before the chamber proceeded on vacation. But on the much-awaited Petroleum Industry Bill (PIB), Enang said the Senate was awaiting the report of the Joint Committee on PIB for consideration and passage. Other issues to be attended to by the upper chamber as contained in the Senate’s schedule of business obtained by The Guardian on Monday, made no mention of anything relating to the People’s Democratic Party’s (PDP) crisis. The document showed that for today, the upper chamber would consider the President’s request for the confirmation of some career ambassadorial nominees. It would also debate and consider the Bill for an Act to amend the Nigeria Social Insurance Trust Fund Act. The Senate, according to the document, would tomorrow consider the National Health Bill on which a report had been submitted by the Senate Committee on Health before it went on recess in July. The Senate’s notice paper also showed that the upper chamber would on Thursday debate on the report of its Police Affairs Committee regarding the strange corpses found in Ezu river of Anambra State earlier this year. The Senate President, David Mark, will also today host the Head of Chinese Parliament, Mr. Zhang Dejiang. Dejiang is the current Chairman, National People’s Congress of China and doubles as the President of the country’s parliament. ------------------------------------------------------------------------------------- Nigeria: FAAC - 2013 Budget No Longer Implementable - FG By NSE Anthony-Uko, 16 September 2013 Nigeria The federal government on Friday declared that the benchmark revenues estimated in the 2013 budget were over-bloated and no longer realistic to implement as actual revenues have consistently failed to meet the initial estimates. As a result, the government said it would no longer augment allocations to the three tiers of government: they will henceforth share only the actual collections to the federation account and not what was initially budgeted Speaking on the botched August 2013 FAAC meeting, the minister of state for finance, Dr Yerima Lawan Ngama, said Friday's deadlocked meeting was cordial but that all the parties decided to henceforth distribute only actual collections and not what has been budgeted. The minister said while the nation's production of crude oil has appreciated to around 2.4 million barrels, it will take 90 days before the impact of the increase in production is felt in the country. Ngama said this month's FAAC meeting had to be adjourned so that more money could be sourced to fund the shortfall in the July 2013 allocation. So far, he said, it had taken the committee two months to fund the July shortfall and it is still looking for money to make up the difference. The Federal Ministry of Finance, he said, has brought its share of the shortfall funding which was shared to the states on Thursday. However, this was not enough as the share of the Nigerian National Petroleum Corporation (NNPC) was still being awaited. The minister of state for finance assured that the difficulties encountered with the 2013 budget with regards to federation account disbursements will not be experienced in 2014 as plans are also on to work with the National Assembly to come up with a realistic budget benchmark, as both the executive and the legislature have learnt from their lessons in 2013. For example, N467 billion was the total revenue shared in 2012 whereas in 2013 N623 billion has so far been shared and more is still being expected to be shared, thus forcing the government to always source for funds to make up for the monthly shortfalls constantly experienced this year. Ngama lamented that, from January 2013 to date, the actual revenue shared by the three tiers of government are "far higher than last year's". He said, "This year's budget is over-bloated; what we are collecting is far in excess of even what was budgeted for last year, but because the budget this year has been taken to a level that it is not supposed to be, that's why when there is a little hiccup the gap shows." He said the government was making efforts. "From our own side, we have some non-oil surplus and that of excess crude we have already paid. NNPC also will contribute ... we (Ministry of Finance) we have already paid our own," he said. The July shortfall, he said, is still being shared but the meeting for August disbursement will hold next week. "The reason we adjourned today is to give more time to make up the difference for July. NNPC is supposed to bring 75 and we are supposed to bring 40," he said. The federal government is working to set up a committee to harmonize the remittances to the Consolidated Revenue Fund (CRF) account and, if deemed necessary, may recommend amending the Fiscal Responsibility Act. Ngama noted that "what operates now is fluid and it is not scientific so we can harmonize the remittances of these agencies". Ngama noted that, based on his suggestion, the federal government has given the go-ahead to set up that committee and find a way forward and even amend the Fiscal Responsibility Act. The minister of state for finance said they identified three types of agencies of federal government who pay their revenue to the Consolidated Revenue Fund (CRF) that the federal government invested in and they are supposed to render surpluses. These agencies, he said, "are agencies of government that collect revenue for federal government and take cost of collection and then that revenue is available to the federal government; there are also agencies of government that collect revenue, use the revenue for certain activities that the Act establishing those agencies said they should use that money for; so it is the surplus that remains that they will pass to the federal government and there are also agencies of government that collect revenue, they remit 25 per cent to federal government and use the rest for their activities and the question there is how about if the 75 per cent is too much for them or too little for them?" Based on these separate remittance operations of different government agencies, Ngama said he made the "suggestion to set up a committee to look at all the laws establishing all the revenue-earning agencies of government and also look at the actual operations of those agencies so that we can come with a framework because we don't know which agency will give 25 per cent and keep the rest. If it suits them to give me 25 per cent and keep the rest, they will opt for that using their money for statutory duties and giving me the surplus and if it suits them to collect revenue for government, collect their cost of collection and give the rest to government they will do that, and for others if it suits them if there is a surplus they will remit to government. If not, then nothing for the federal government." Right now, Ngama said, some legislators believe that every agency of government should remit everything they collect and then bring their cost of operation to the National Assembly to appropriate as a budget. However this argument by the legislators, he said, has its advantages and disadvantages because there will be no incentives to motivate the revenue-earning agencies to put in their best and earn more for the CRF. -------------------------------------------------------------------------------------- Nigeria: 'New' PDP Replaces Treasurer, Says Former Holder of the Position a Mole 16 September 2013 Nigeria The PDP faction says the former secretary is a contractor to government who was blackmailed to abandon his camp. The "New" Peoples Democratic Party, PDP, has appointed Abubakar Gambo Umar to replace Tamko Gwamna who resigned on Sunday. A statement by the National Publicity Secretary of the splinter group, Chukwuemeka Eze on Monday, also said that Mr Gwamna did not resign but was sacked. The former treasurer announced his resignation via a statement on Sunday barely a week after his appointment. He also pledged loyalty to the National Chairman of the PDP, Bamanga Tukur. The splinter group accused Mr Gwamna of being a mole hence he was relieved of his position. It said that the report on the true status of the former treasurer was tabled during the inaugural meeting of the National Working Committee, NWC, of the "New" PDP on September 15. The statement said that the National Secretary of the group, Olagunsoye Oyinlola, submitted the "damning report' on Mr Gwamna exposing him as a mole who could sabotage its activities. Mr Eze had told Premium Times via a text message on Sunday night that the Presidency forced Mr Gwamna to resign because of a contract he was promised. "We have read with dismay the purported resignation of our erstwhile National Treasurer, Alhaji Tanko Isiaku Gwamna, while the fact is that he was sacked by the party," the statement said in the statement on Monday. "This unprincipled politician was sacked after being discovered to be a mole and has since been replaced by a seasoned and principled politician, Engr. Abubakar Gambo Umar, who has been an active grassroots politician and mobiliser in his native Taraba State since 1999. "Alhaji Gwamna's fate became sealed when a report on his true status was tabled before the National Working Committee of PDP during its inaugural meeting held at the residence of the party's National Chairman, Alhaji Abubakar Kawu Baraje, in Abuja on 15th Sept, 2013. "The damning report on Alhaji Gwamna was submitted by the PDP National Secretary, His Excellency, Prince Olagunsoye Oyinlola. "According to the report, it was found that Alhaji Gwamna was a mole planted by the Tukur faction of PDP to monitor our activities and report back to it with a view to sabotaging our activities. "Prince Oyinlola's report further indicted Alhaji Gwamna as one of those executing contracts for the Federal Government and under threat to have all his contracts terminated should he fail to spy on us as directed. "Like the Judas that he is, Alhaji Gwamna agreed to mortgage his conscience in his mistaken belief that he could successfully sabotage our mission to bring sanity to our party being hijacked by hawks whose aim is to destroy a party that they do not know how it was formed." The New PDP said Mr Gwamna hurriedly resigned when he got wind of his impending sack, adding that he rushed to the Presidency to alert it of his fate. The statement said, "When Alhaji Gwamna got wind of his impending sack, this false democrat rushed to the Presidency to alert his paymasters that he had been discovered to be a mole and was at the verge of dismissal. "To save his ugly face, the Presidency quickly drafted a press statement announcing his resignation and gave him to sign and immediately release to the press last night. "To us, Alhaji Gwamma is rubbish meant for the dustbin and we sincerely thank all those who assisted us to discover on time this undemocratic personality only meant for a fading group like Tukur's faction of the PDP." The group said Mr Umar was better qualified for the position of treasurer just as it apologised for not properly investigating before he was appointed. "We are happy to announce the better qualified and more principled Engr. Abubakar Gambo Umar as his replacement with immediate effect. Unlike Alhaji Gwamma, Engr. Umar, who was twice nominated by his constituency to run for the House of Representatives, is a staunch believer in the rule of law, a democrat to the core and a man known for upholding justice and fair play. "To Nigerians, we apologise for not properly investigating Alhaji Gwamma, a fellow who is ready to sell his conscience for a mess of porridge, before giving him such an exalted position of National Treasurer of a great party like PDP. "As we bid him goodbye to his journey to political perdition and wilderness, we wish to urge all Nigerians to keep faith with us as we are very determined to flush out all the undemocratic elements that have constituted themselves a nuisance to our rescue mission." -------------------------------------------------------------------------------------- Nigeria: Dangote Signs U.S.$9 Billion Deal to Build Oil Refinery, Petrochemical Complex By Emma Ujah and Ben Agande, 5 September 2013 More on This Nigerian Tycoon Signs Deal to Build Oil Refinery Dangote Is Continent's First U.S.$20 Billion... Aliyu Dangote Abuja — The Dangote Group Wednesday made history by signing of a combined $ 9.05 billion facility agreement with a consortium of local banks and international investors for the establishment of a refinery, and petrochemicals cum fertilizer complex in Nigeria. Agreement Under the agreement signed at a crowded ceremony in Abuja, a $ 3.3 billion medium term loan will come from local banks and international finance organizations; $2. 25 billion from the Economic Commission for Africa, ECA, and Dangote's equity contribution of $3.50 billion. The Central Bank of Nigeria, CBN, also made a contribution of N50 billion with interest rate of 7 per cent to be repaid in 15 years. Chairman of the group, Alhaji Aliko Dangote, described the complex to be located at the OK-LNG Free Trade Zone, between Ogun and Ondo states, as the largest industrial complex in Nigeria's history and that he embarked on the project as a demonstration of his confidence in the Nigerian economy. His words: "As an investor who believes in Nigeria, knows Nigeria well and whose prosperity was made in Nigeria, we have responded to the challenge with our decision to invest $9 billion in a refinery/petrochemical and fertilizer complex to be located at the OK-LNG Free Trade Zone. This complex will be the largest industrial complex project ever in the history of our great nation." Lauds Jonathan He commended President Goodluck Jonathan's administration for creating the enabling environment for businesses to thrive in the country, saying "We are happy to inform your excellences that because of the improvement in the enabling environment for investment created during this present government's tenure we have had excellent response from the international finance organizations and today we are here to sign the agreement for the medium term loan of $ 3.3 billion." Dangote said the project had effectively taken off, with the award of the Engineering, Procurement and Construction, EPC, contract to Saipem of Italy for the fertilizer plant, noting that the Basic Engineering Design and optimization for the refinery had also been awarded. When completed, the chairman said, the fertilizer plant would produce 2.75 metric tons per annum of Urea and Ammonia; while the refinery would process 400,000 barrels of crude oil per day. We 'll produce high grade petrol --Dangote He said the refinery would produce a higher grade of Premium Motor Spirit, PMS, popularly known as petrol, compared to imported ones, saying "in addition to high grade petrol, the refinery will produce: diesel, aviation fuel, household kerosene, slurry as raw material for carbon black, as well as 650,000 metric tons of polypropylene per annum. Our mission is to through industrialization, reverse the historical trend of the export of foreign exchange and jobs and replace it with foreign exchange conservation and job creation." Dangote added that the recent discovery and development of the shale oil and gas in "our traditional markets has further stressed the urgent need for us to diversify our economy on a fast track to avoid a reversal of the current steady improvement in all indices of economic performance." FG's transformation agenda working--Sambo Speaking, Vice President Namadi Sambo, called on other rich Nigerians to emulate Dangote who had invested in several sectors of the Nigerian economy as a demonstration of its confidence in the Nigerian economy. Sambo said: "Let me use this medium to call on other prospective investors to take a que from the Dangoste group by seizing the opportunities offered by our various investment incentives; our economic policies, adequate market size, vast natural resources, arable land, labour capital and friendly environment to invest massively in Nigeria. We remain the number one investment destination in Africa and indeed all over the world. We are resolute in our effort to offer all the necessary support and encouragement for the private sector to thrive. The transformation agenda and the Vision 20:2020 cannot be actualized without the active participation of the private sector. "The administration of President Goodluck Jonathan has made significant inroads in the creation of the enabling environment for private sector investment. This ceremony underscores and it is indeed a testimony of the positive mark our policy measures and directives are making in stimulating private sector investment both from within and outside our country." The vice president said that the Dangote complex would go a long way to reduce products costs , increase industrialization and improve the general well-being of the people, particularly farmers who had been yearning for fertiliser to boost outputs. He said with the coming on stream of the refinery and the petrochemical plant, "Nigeria will reclaim its place of pride as one of the largest exporters of fertilizer, refined products and other petrochemical products, to consolidate on its efforts in ensuring the rapid development and the contribution of Africa to the global economy." CBN to subsidise refineries The CBN Governor, Sanusi Lamido Sanusi, who announced that the N50 billion cheap loan had been made available to Dangote for the complex, said that the institution was prepared to support the real sector of the economy by providing subsidies to create wealth across various sectors. He said that the complex deal was made possible through "the culmination of the results of the various reforms that the CBN carried out under Professor Charles Soludo and himself to strengthen Nigerian banks to make them big enough to finance mega projects. Sanusi addede that the the facility was "a demonstration that Nigerian banks are lending to the real sectors of the economy", adding, "lending to the agricultural sector has jumped by about 600 per cent since 1999." Petroleum Minister speaks On her part, Minister of Petroleum, Mrs. Diezani Alison-Madueke expressed satisfaction with Dangote's decision to establish one of the largest private refineries in the country and called on other investors to move into the sector as "Nigeria has the capacity to take more of these." In the same vein, the CEO of Standard Chartered Bank in Nigeria, Ms Bola Adesola, said: "Standard Chartered is proud to support the Dangote Group in a project which will significantly boost Nigeria's economic productivity and create valuable jobs with specialist skills from key growth sectors. This project is an historic example of self-empowerment and leadership for the continent as a whole - and is made possible through effective partnerships between the Nigerian private sector, Government and international financial institutions. Standard Chartered remains committed to being here for good in Nigeria, and the region." Largest syndication by banks --Agbaje The Managing Director of Guaranty Trust Bank Plc, Segun Agbaje said: "This is the largest syndication by Banks in Nigeria and it is being undertaken with the knowledge that the successful implementation of Dangote Refinery and Fertilizer project will have far reaching implications for Nigeria's economic growth." Other participating banks are Access Bank Plc, Zenith Bank Plc, Ecobank Nigeria Limited, Fidelity Bank Plc. First Bank Nigeria Limited, Standard Bank of South Africa Limited, UBA Plc, FirstRand Bank, First City Monument Bank Plc and Diamond Bank Plc. Jonathan lauds Dangote Meanwhile, President Goodluck Jonathan pledged that his administration will continue to implement policies that will continuously improve the operating environment for entrepreneurs and investors in the Nigerian economy. Speaking at an audience with the President of the Dangote Group and leading Nigerian investors and bankers, President Jonathan said that his administration was fully committed to progressively removing all impediments to investment in Nigeria such as inadequate infrastructure and unsteady power supply. The President lauded plans by Dangote Group to build Africa's largest refinery, petro-chemicals and fertilizer manufacturing complex in Nigeria and thanked the consortium of banks who are providing a $3.3 billion credit facility for the project. According to him, "we are pleased that you are now investing in refining, petro-chemicals and fertilizer production. It is the downstream sector of oil and gas that can really create many jobs. Your interest and investment in that area will help in the area of job creation which we had been emphasizing. You are also helping us to move away from being a mere producer of raw materials by adding value to our natural resources." Alhaji Dangote who led the team from his company, the Manufacturers Association of Nigeria, MAN, and Nigeria's leading banks had earlier told the President that they were at the Presidential Villa to thank him for his administration's policies which have greatly encouraged further investments in Nigeria. Alhaji Dangote was accompanied by Chief Executives of participating banks including First Bank of Nigeria, UBA, Stanbic-IBTC, Zenith Bank, Access Bank, Ecobank, Fidelity Bank, Guaranty Trust Bank and Rand Merchant Bank. Speaking with State House correspondents after the meeting, Alhaji Dangote reiterated that Nigeria's current fuel importation would end by 2016 when the proposed Dangote Petrochemical project come on stream Alhaji Dangote said the project would create about 85,000 jobs for Nigerians at the initial stage and 8,000 engineers. Others on his delegation included Chief Kola Jamodu, Mr. Femi Otedola, Mr. Jim Ovia and management executives of the Dangote Group. Jobs prospect thrills Labour Meanwhile, African region of Industril Global Union, representing 50 million workers in Nigeria and other part of the globe has commended the Dangote Group for the $9 billion loan agreement to set up an oil refinery and petrochemical complex in Nigeria. ------------------------------------------------------------------------------------- Nigeria: Government Borrowing Is Good, Necessary - Finance Minister Ngama By Premium Times, 15 August 2013 Related Topics Nigeria The Minister of State for Finance, Yerima Ngama, said on Wednesday that there was nothing wrong with states borrowing funds as long as they would be used for development purposes. Ngama said this at a two-day National Council for Economic Development (NACOFED) conference in Minna. According to the minister, there are different kinds of loans which can be financially, economically, socially and politically viable. "If you have a chance to get resources from development partners who are there to help us, we should do so as long as you have a clear vision that is socially viable, while taking your time to repay. "So, any government that beats its chest to say that it is not borrowing, it is not right because borrowing is good; it facilitates you to do what you cannot do with your resources. "That is why it is called leverage. So by borrowing, you are leveraging yourself, though there are some borrowing that are frowned at," Mr. Ngama said. Citing an instance, he said if a state government raised bond domestically to undertake projects that were not financially viable and it paid about 18 to 19 per cent interest, "what you are going to use the money for cannot pay for itself". "This is what we are trying to discourage." He urged other states to emulate Gombe State where the government, instead of borrowing directly, stood in as a guarantor for small and medium entrepreneurs to benefit from loans. "Gombe State got N1 billion from Bank of Industries and these funds were shared to small and medium entrepreneurs in the state based on the government's guarantee. "And these entrepreneurs have done a lot with the funds, going into yoghurt production and so on, so if you do not want to borrow directly, you can develop the private sector. "Then give the guaranty to the loan as a government so that when they grow and produce, you can now come and tax them," he said. The minister said by doing so, states are indirectly building the private sector so that they provide the basis of taxation, to determine revenue generation for the future. Earlier, the Managing Director, Infrastructure Bank Plc, Adekunle Oyinloye, said Nigeria was truly in need of an overall economic transformation. Mr. Oyinloye emphasised on the need for government to curtail its expenditure because it had not translated to meaningful development. "There is need to examine the legal and regulatory framework conditions with a view to encouraging the emergence of fresh sources of capital and news business models for the construction, maintenance and operation of infrastructure. "Above all, tapping the capital of Nigeria's N3 trillion pension fund pot is key and provides a win-win solution for both pension fund managers looking for long-term steady investments," he said. Mr. Oyinloye said that if all these were achieved, they would turn around the expenditure pattern at the state level and bring investments that would generate revenue in the future. (NAN) -------------------------------------------------------------------------------------- We can’t meet ASUU’s N92bn demand – FG August 14, 2013 by Enyioha Opara and Friday Olokor Finance Minister, Dr. Ngozi Okonjo Iweala THE Federal Government on Tuesday said it did not have the resources to meet the N92bn financial demand by the Academic Staff Union of Universities. Minister of Finance, Dr. Ngozi Okonjo-Iweala, at the opening of a two-day meeting of Commissioners of Finance and Accountants-General of states, said the N92bn being demanded by the university lecturers was not within the reach of the Federal Government. She said, “At present, ASUU wants the Federal Government to pay N92bn in extra allowances, when the 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. “Since I assumed office, the share of recurrent expenditure in our total budgets had increased astronomically. In fact, recurrent expenditure accounted for about 77.2 per cent of the federal budget and we are now working to re-balance this ratio.” The minister added, “The country is still suffering from the effect of the 2010 increase in salary. Do we want to get to a stage in this country that all the money we earn is used to pay salaries and allowances?” The theme of the meeting is ‘Restructuring Nigeria’s Finances.’ She said, “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 minister also lamented that Nigeria’s over-dependence on oil had resulted in deterioration of the nation’s non-oil tax. She said that non-oil taxes accounted for 74 per cent of Nigeria’s Government revenues in 1970 but by 2012, it had declined to only 30 per cent. She said many states and local governments were also dependent on monthly revenue allocation from the central government. “On the average only 11 percent of sub-national revenue was obtained from internally-generated sources,” she added. Meanwhile, the negotiation between the Federal Government and striking members of the ASUU ended in a deadlock as both parties rescheduled the meeting to Monday next week. The Chief Mediator on behalf of Federal Government and Governor of Benue State, Dr. Gabriel Suswam, who spoke with journalists on Tuesday after a marathon meeting, said “tremendous progress” has been made in the negotiations, particularly on the NEEDs Assessment and Earned Allowance issues raised by ASUU. Suswam, who also serves as chairman of the Universities Needs Assessment Committee, expressed optimism that the issues would soon be resolved going by the progress made so far. -------------------------------------------------------------------------------------- Nigeria’s 2012 petroleum exports valued at N15.1 trillion . Monday, 12 August 2013 21:21 By Roseline Okere Business Services - Business News .THE Organisation of Petroleum Exporting Countries (OPEC) has put the value of Nigeria’s petroleum exports in 2012 at $94.64 billion (N15.1 trillion). OPEC in its Yearly Statistical Bulletin for 2012 released at the weekend put the country’s value of export at $142.52 billion and value of import at $35.71 billion. According to OPEC: “Nigeria’s natural gas exports increased from 25,941 million standard cubic feet in 2011 to 28,266 million standard cubic in 2012, representing nine per cent increase from the previous year. It disclosed that Nigeria’s natural gas gross production increased from 84.004 million standard cubic feet (mscf) in the previous year to 84.845 mscf in the year under review. The country marketed gas production was put at 42.571 mscf; flared 13.182 mscf; re-injected 20.520 mscf and had shrinkage of 8.573 mscf in 2012. The report said that the country produced 1.954 million barrels per day of crude oil in 2012, representing a decrease of one per cent from the 1.974 mpd it recorded in the previous year. Also, in its August monthly report released at the weekend, Africa’s oil production is anticipated to increase by 80 tbpd in 2013 to 2.39 mbpd, unchanged from the previous month. It added that despite the steady state, there were minor upward and downward revisions that offset each other.” In Africa, oil production from South Sudan and Sudan and Ghana is seen to experience yearly growth while supply from other countries is seen to either remain flat or decline”. The report added: “Total OPEC crude oil production averaged 30.31 mbpd in July, was down by 0.10 mbpd from the previous month. Crude oil output from Libya and Iraq fell, while production increased from Saudi Arabia. According to secondary sources, OPEC crude oil production, not including Iraq, stood at 27.34 mbpd in July, a drop of 0.05 mbpd over the previous month. “Preliminary figures indicate that global oil supply increased by 0.08 mbpd in July to average 89.95 mbpd. Non-OPEC supply saw growth of 0.17 mbpd, while OPEC crude production decreased by 0.10 mbpd. The share of OPEC crude oil in global production remained steady at 33.7 per cent. “The demand for OPEC crude in 2013 is forecast to average 29.9 mbpd, almost unchanged from the previous report and 0.4 mbpd lower than in the year before. In 2014, demand for OPEC crude has experienced a slight change since the previous report to stand at 29.7 mbpd. This represents a decline of 0.3 mbpd compared to the year before. Meanwhile, the International Energy Agency (IEA), trimmed its outlook for oil demand over the next 18 months and highlighted threats to the dominance of OPEC. The IEA said that new data on the difficulty the global economy is having in picking up speed meant that demand for oil would grow by slightly less than it had foreseen in July. The agency said that it was trimming its forecast for growth of global oil demand this year by 30,000 barrels per day to 895,000 barrels per day because the International Monetary Fund had lowered its forecast for growth of the global economy from 3.3 percent to 3.1 percent. The IEA also reported that output by Iraq fell below three million bpd for the first time for five months and exports were expected to plunge by about 500,000 bpd from September owing to work on infrastructure at southern ports. It also spotlighted violence, unrest or tension in Algeria, Nigeria, Egypt and Syria. The IEA said. “Many commentators are questioning its implications for the future of OPEC. It would have to cut its supplies under pressure from shale oil “unless falling prices curb shale oil production first. “But at the moment, Opec’s main problem is “in bringing production to market”. Opec’s production last month “was down 1.1m bpd on the year” mainly owing to “domestic developments in some member countries” “In an effort to reduce oil theft and pipeline damage that has led to an estimated annual loss of 60 kbpd and caused massive environmental problems, Nigeria’s largest producer Shell plans to invest $1.5 billion on a new pipeline. “Shell was forced to close the Nembe Creek pipeline for repairs after discovering more than 50 break points along the near 100 km trunkline. In 2010, Shell spent $1.1 billion to replace the Nembe Creek pipeline due to damage. The new pipeline, called the TransNiger Pipeline Loop?line, should help reduce oil spills in the Niger Delta because it will circumvent the Ogoniland region of Nigeria, where a large volume of bunkering and pipeline damage takes place”, it added. ------------------------------------------------------------------------------------- Nigeria Not Responsible for U.S.$700 Million Revenue Loss, Shell Admits By Juliet Alohan, 8 August 2013 Related Topics Nigeria Oil giant Shell has admitted that impact of operating environment in Nigeria was not responsible for the company's $700 million revenue loss in second quarter (Q2) 2013. The clarification which was made yesterday by a spokesperson of Shell Nigeria, Precious Okolobo, in an email statement to LEADERSHIP, informed that bulk of the loss resulted from impact of weakening Australian dollars on deferred tax liability. According to Okolobo, only $250 million of the total $700 million loss was due to operational challenges in Nigeria including crude oil theft and blockage of Nigeria NLG. He said: "We wish to correct some wrongful interpretation of aspects of Shell Group earnings in Q2 earnings as announced on August 1, by our CEO, Peter Voser. "It was disclosed that Q2 Current Cost of Supplies (CCS) earnings excluding identified items were reduced by around $700 million. Of the amount, $250 million was due to operational challenges in Nigeria including crude oil theft and blockade of Nigeria LNG." The rest of the figure, $450 million, he said, was caused by the impact of the weakening Australian dollar on a deferred tax liability. Okolobo added that "at no time did Peter Voser refer to Nigerian production outages costing it $700 million in the second quarter, as some media organisations have wrongly reported." This is coming after the Nigerian National Petroleum Corporation (NNPC) challenged Shell Group over claims that it lost $700 million in Q2 to operating environment in Nigeria. "With regard to claims by Shell that it lost $700Million by the second quarter of 2013 to crude oil theft and other disruptions in Nigeria, NNPC posits that the loss claims are not localised to Nigeria as reported," acting spokesperson of the NNPC, Tumini Green said in a statement Tuesday. ------------------------------------------------------------------------------------- Okonjo-Iweala queries NNPC GMD over unremitted funds • $11bn lost to crude theft, pipeline vandalism – NEITI July 30, 2013 by Okechukwu Nnodim, Abuja Minister of Finance, Dr. Ngozi Okonjo-Iweala The Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Monday verbally queried the Group Managing Director, Nigerian National Petroleum Corporation, Mr. Andrew Yakubu, over the non-remittance of about N8bn into the Federation Account. The minister, who was the keynote speaker at the public presentation of the 2009 to 2011 oil and gas physical and process audit report by the Nigerian Extractive Industries Transparency Initiatives in Abuja, wondered why the corporation owed the Federal Government such huge amount of money. This is coming as NEITI, in the report, indicted the NNPC, Petroleum Products Pricing Regulatory Agency and two other companies over non-remittance of N272.9bn into the Federation Account. The minister, who came in when the event was about rounding up, turned to the NNPC boss during her presentation and said, “Just to cite one or two examples because I know that the people here are the right stakeholders involved with respect to some of the issues; I am looking for the NNPC GMD.” She was then told that Yakubu had just stepped out. Okonjo-Iweala, however, continued, “Some of the things that they (NEITI) pointed out, they stated that about N4.48bn was received by the NNPC but has not been remitted, and another about N3.9bn that was received was not also remitted.” While she was still speaking, the NNPC boss walked in and immediately Okonjo-Iweala said, “GMD, you are welcome back. I was (speaking) on some of the works of NEITI and I said that the right people are assembled here because they (NEITI) pointed out that non-remittance by the NNPC was amounting to about N8bn over a period of time and I think we need to discuss.” The minister was interrupted by delegates at the event as they cheered her remarks, but she went further, “As the Minister of Finance, I don’t want to put you (Yakubu) so much on the spot here for we are all in it together, but we need to know how this fund is managed.” Okonjo-Iweala gave an assurance that the findings and recommendations of NEITI would be implemented and indicted firms would be brought to book. Reacting to the minister’s statement, Yakubu said he was pleased that the corporation had made some progress within the period under review. “I am glad that the chairman (of NEITI), in his remark, clearly stated that there is a remarkable improvement between the past and today. So, we will get there,” he said. Meanwhile, NEITI said the country lost over $11bn to crude oil theft and pipeline vandalism between 2009 and 2011. The Chairman, NEITI, Mr. Ledum Mitee, said this at the public presentation of the organisation’s audit reports for the oil and gas sector for the period, 2009 to 2011, and the solid minerals sector audit for the period, 2007 to 2010. The report, which was compiled by NEITI auditors, highlighted the transaction and revenue flows between government agencies and international oil companies operating in the country. According to the report, more than 136 million barrels of crude oil estimated at $10.9bn have been lost to theft and sabotage within the period under review. Mitee said, “This amount, which was 7.7 per cent of the total revenue accruing to the federation in the audit period, is considered significant. “This was in addition to a loss of about 10 million barrels valued at $894m as a result of pipeline vandalism in downstream operations.” The report said that the nation recorded over 2.5 billion barrels of crude oil production amounting to total revenue of $143.5bn from equity crude sales, royalty, signature bonuses and taxes within the period under review. The report also noted that the Federal Government paid N3tn as subsidy to marketers of refined petroleum products during the period. It said that the NNPC accounted for N1.4tn of the subsidy claims, while other marketers claimed the remaining N1.60tn. Mitee said, “From the findings of the report, the subsidy payments made through the NNPC increased from N198bn in 2009 to N416bn in 2010, and nearly doubled in 2011 to N786bn. “During the same period, subsidy paid through the PPPRA increased from N208bn in 2009 to N278bn in 2010, and astronomically to N1.12tn in 2011.” The report also uncovered a disparity of N175.9bn between the subsidy claims paid from the Federation Account and the one made by the Petroleum Product Pricing Regulatory Agency. The NEITI chairman said, “The Office of the Accountant-General of the Federation reported to NEITI auditors a total subsidy payment of N2.825tn, while the PPPRA disbursed N3tn to marketers during the same period. “Some marketers disagreed with the amount ascribed to them by the PPPRA, especially in 2010, when a marketer claimed N2.56bn as fuel subsidy. The PPPRA recorded payment of N1.5bn, leaving an un-reconciled difference of N1.04bn.” Mittee said findings by the audit indicated that N8.173bn, being over-recovery collected from some oil marketers, had yet to be remitted to the Federation Account by the NNPC and two other companies. There was also a revenue loss by the Federal Government of over $1.7bn (N264.79bn) following the non-renewal of Memoranda of Understanding between the Joint Venture companies and the NNPC. This, he said, made the JVs to transact businesses with expired MoUs since 2008. The total unremitted fund, according to Mittee, stands at N272.9bn. He said, “The report noted that the amount of N4.423bn, being over-recovery collected from some marketers, has yet to be remitted to the Federation Account, while the NNPC and two other companies have yet to refund N3.715bn, being over-recovery for the period under review. “The audit report also revealed revenue loss by the Federal Government of over $1.7bn following the non-renewal of MoUs between the Joint Venture companies and NNPC, which made the JVs to transact business with MoUs, which had expired since 2008.” Mittee said NEITI also discovered a worrisome situation where there was no agreed pricing methodology between NNPC and the companies for the determination of fiscal values for royalty and Petroleum Profit Tax computations. According to the report, all refineries are operating below their name plate capacities, resulting in a situation whereby 80 per cent of crude oil allocated to local refineries are being exported for off-shore processing, crude oil and product exchange. Mittee announced that the oil and gas industry recorded a total crude oil production of over 2.5 billion barrels, an increase of 4.8 per cent over the figures for the 2006 to 2008 period. This, he said, was made up of 780.9 million barrels in 2009, which rose to 894.5 million barrels in 2010 and declined to 866.2 million barrels in 2011. He added that the federation earned a total revenue of $143.5bn from equity crude sales, royalty, signature bonuses and taxes, among others, adding that Nigeria made total payments of N3tn to importers of refined petroleum products during the period under review. ------------------------------------------------------------------------------------- .Nigeria: National Assembly Passes 2013 Budget Amendment Bill By Omololu Ogunmade and Onwuka Nzeshi, 26 July 2013 Related Topics Nigeria The two chambers of the National Assembly - Senate and House of Representatives - Thursday passed the 2013 Appropriation Act Amendment Bill ending the eight-month controversy surrounding the 2013 budget. The passage of the bill came the same day the presidency reiterated its commitment to its pledge of submitting the 2014 Appropriation Bill early enough to enable the National Assembly pass it before the end of the current fiscal year. The total budget of N4,987,220,425,601, as passed by both chambers, consists of N2,415,745,972,812 as recurrent expenditure and N1,591,657,252,789 as capital expenditure. While presenting the report on the budget amendment bill to the Senate Thursday, Chairman, Appropriation Committee, Senator Ahmed Maccido, said all the personnel costs earlier diverted by the National Assembly had been restored but added that the bill did not have any significant difference from the 2013 Appropriation Act passed earlier and assented to by President Goodluck Jonathan. This implies that the National Assembly only restored the budget cuts from the N4.987 trillion approved by the National Assembly on December 20, 2012 but failed to approve the additional budget of N72 billion said to have been included in the amendment bill by the president. "The amendment bill as worked on by the Appropriation Committee of both chambers did not increase the aggregate expenditure from that contained in the 2013 Appropriation Act," Maccido said. The report urged the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, to ensure that funds appropriated under this Act are released to the appropriate agencies and or organs of government as and when due. "The department of government charged with the responsibility of certifying that due processes have been complied with in the process of implementation of projects shall ensure that all processes of approval are completed within the specified period as provided for in the Public Procurement Act," it said. The report added, "that all accounting officers of ministries, parastatals and departments of government who control heads of expenditures shall upon the coming into effect of this Act furnish the National Assembly on quarterly basis with detailed information on all foreign and or domestic assistance received from any agency, person or organisation in any form whatsoever." The House also gave expeditious passage to the budget amendment bill as it scaled the final hurdles yesterday after the report of the House Committees on Appropriations and Finance was presented and considered by the lawmakers. Chairman, House Committee on Finance, Hon. John Enoh, set the stage for the speedy passage of the bill when he appealed to his colleagues to consider the exercise as a duty they owe the country. Enoh explained that the amendment was essentially the same figures that they had earlier passed in the original budget except for the adjustments requested by the executive. He also explained that the relevant committees of both chambers of the National Assembly had already harmonised the figures and restored the allocations that were initially cut from some critical projects. The report on the N4,987,220,425,601 budget was subsequently considered, adopted and passed through the third and final reading. Special Adviser to the President on National Assembly Matters, Senator Joy Emodi, has however asked the lawmakers to get ready to work with the executive to re-enact the historic feat of last year by also passing the 2014 budget estimate into law before the start of the new fiscal year. Emodi, who hailed the passage of the 2013 Appropriation (Amendment) Act, said it was an indication of the high level of understanding and cooperation between the executive and the legislature. "This is indeed a boost for national development, as it will go a long way to keep the targets of the 2013 budget on track and facilitate the actualisation of the overall transformation agenda of this administration. Both the executive and the legislature have proven, once again, that they are both on the side of the people, working for their common good and national interest. The eventual passage of the amended 2013 budget is the triumph of constructive dialogue. It underlines the virtue and virility of dialogue and cooperation in the management of executive-legislature relations in a presidential democracy," she said. Emodi also commended members of the National Assembly for successfully passing the Constitution Amendment Bills for their "remarkable patriotism" in seeing the exercise to a logical conclusion. She said many of the proposed amendments would go a long way in consolidating democracy in the country and facilitating good governance. She added that despite public scepticisms on the feasibility of the amendment, the National Assembly has put its experience to good use and accomplished the feat. Meanwhile, Chairman, House Committee on Finance, Hon. Abdulmuminu Jibrin, has said the federation experienced a revenue shortfall of N700.879 billion in the first five months of the year. Jibrin, who presented a report on the state of the revenue collected vis-a-vis the revenue projections in the budget, said the gross revenue budget for 2013 was N11.453 trillion, which gives a monthly average of N954.458 billion. According to him, by the initial projection, the collectible revenue should have been N4.772 trillion as at the end of May. The House had earlier in July, asked its Committee on Finance to brief it on the status of government revenue generation and collection for the first five months of 2013. According to Jibrin, the committee encountered many obstacles in the course of obtaining information from revenue generating and collecting agencies with the exception of the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS). "The NNPC and other agencies continue to make things difficult for the committee with all sorts of flimsy excuses. The latest, which in the opinion of the committee, is pure blackmail, is the excuse that the relevant House committees have directed them not to relate with the Committee on Finance, even on the statutory issue of revenue generation and collections, which has traditionally been the job of the finance committee in preparing and monitoring the revenue framework for the federal budget," Jibrin said. -------------------------------------------------------------------------------------. Senate probes missing $27m from sale of foreign mission assets . Thursday, 27 June 2013 01:00 From Bridget Chiedu Onochie and Azimazi Momoh Jimoh, Abuja News - National . THE controversies surrounding the $27 million proceeds from the sale of Nigerian property in New York may have resonated, as the Senate Thursday began inquiry into the matter following a petition by Daniel Elombah. The petition, on behalf of the non-governmental Transform Nigeria Citizen Initiative, notified the Senate President, David Mark, of the alleged misappropriation and embezzlement of funds by then Nigerian Ambassador to the United States (U.S.), Dr. George Obiozor. Elombah wrote that the events of the past three years demanded that the lawmakers investigate what happened to the funds realised from the sale of certain Nigerian property in the U.S. between 2004 and 2007. He stated: “Available records showed that between year 2004 and 2007, the Embassy of Nigeria sold four prime property of the Nigerian Government located in Washington DC and Maryland. It also commenced sale of a fifth property located in San Francisco, California. “For the sale of those properties, the government of Nigeria retained the services of ECULAW Law Firm; out of those sales, Nigeria realised approximately $27 million. All funds realised from these sales, except those set aside as fees, were remitted to the Embassy of Nigeria in Washington DC.” As of June 2007 when the law firm that advised the embassy on the sale of the properties met with embassy officials at the premises in Washington, he alleged, all those funds and transactions were duly confirmed. He added: “M&T Bank had been the bank the embassy used for other transactions and had about three different accounts with that bank. “It was confirmed in clear terms that their bank was holding huge deposits comprising the proceeds of the sales of these properties. This remained the position after Ambassador George Obiozor had returned to Nigeria upon completing his service in Washington. “Those huge funds were lodged in Washington rather than being remitted to Nigeria. Surprisingly, the embassy left that money in Washington partly because it yielded substantial monthly interests, which the officials would never account for.” However, he alleged that between the time Ade Adefuye became ambassador until March 2012, the money in the accounts mysteriously disappeared. According to him, “this became clear when the M&T Bank was forced to close the bank accounts of Nigerian Embassy and terminate all banking relations with the embassy at the beginning of 2012.” Appearing before the Matthew Nwagwu-led Senate Committee on Foreign Affairs to explain the issue were Dr. Obiozor, Prof. Joy Ogwu and Adefuye, as well as the Minister of Foreign Affairs, Prof. Gbenga Ashiru. Before journalists were ordered out of the Senate hearing for the second time, Nwagwu agreed that there were allegations of embezzlement of funds in Washington. Addressing the minister and ambassador, he said: “It is alleged that the resources were squandered by embassy officials. Ours is to give you a chance to address the committee, to tell us what you know about the administration and management of the fund within your tenure from 2004 till date.” -------------------------------------------------------------------------------------- Nigeria’s debt rises to N7.93tn July 22, 2013 by EVEREST AMAEFULE Nigeria's Finance Minister, Okonjo Iweala The nation’s appetite for borrowing to finance critical development projects has been growing in recent times with both the domestic and foreign indebtedness rising by $13.91bn in the last two years, EVEREST AMAEFULE writes The country currently owes local and international creditors a total of $50.91bn (about N7.93tn), the Debt Management Office has said. Statistics obtained from the DMO website showed that as of June 30, 2013, the nation’s external debt stood at $6.92bn (about N1.08tn), while the domestic debt component stood at N6.85tn ($43.99bn). The external debt component comprises debts owed by both the Federal Government and the 36 states of the federation and the Federal Capital Territory. However, the domestic debt of $43.99bn is owed by the Federal Government alone. The domestic debt of the states could not be obtained as at press time. By June 2011, the total debt of the country stood at $37bn. This means that in the last two years, the debt stock had risen by $13.91bn. This shows a growth rate of 37.59 per cent. In terms of instruments, FGN Bonds accounted for N4.03tn or 58.87 per cent of the Federal Government’s domestic debt stock as of June. Nigerian Treasury Bills accounted for N2.48tn or 36.25 per cent of the domestic debt component of the Federal Government. On the other hand, Treasury Bills accounted for N334.56bn or 4.88 per cent of the total domestic debt owed by the Federal Government. Multilateral sources such as the World Bank and African Development Bank accounted for $5.54bn or 80 per cent of the external debt. Bilateral debts made up of money borrowed from China and France accounted for $845.4m or 12.22 per cent of the nation’s external debt profile. Commercial debts, including Eurobond and debts owed to Chinese firms, accounted for $536m or 7.75 per cent of the external debt stock. The Director-General, DMO, Dr. Abraham Nwankwo, had recently said that compared to the level of foreign debt, the Federal Government had over-borrowed from domestic sources. While unfolding the details of the nation’s Middle Term Debt Management Strategy, which was approved by the Federal Executive Council, Nwankwo said there was an urgent need to rebalance the structure of the nation’s debt because the interest rate payable on domestic debt was too high. He said the ratio of the Federal Government’s domestic debt stood at 88, while the ratio of the foreign debt stood at 12. Nwankwo said the appropriate ratio should be 60 for domestic debt and 40 for foreign debt, adding that the newly approved Medium Term Debt Management Strategy would seek to achieve this ratio. One of the ways of doing this is through the establishment of a sinking fund for retiring matured local debts. The second is by borrowing more from foreign sources. Our correspondent had reported that with the assumption of office of former Managing Director of the World Bank, Dr. Ngozi Okonjo-Iweala as Minister of Finance and Coordinating Minister of the Economy, the nation would see a reduction in local debts and an increase in foreign debts. As managing director of the World Bank, Okonjo-Iweala had criticised Nigeria’s debt structure on the grounds that the Federal Government was crowding out private sector borrowers from the debt market. Although she had championed the exit of the country from the Paris Club of Creditors during her first tenure as Minister of Finance, she is now insisting that the nation’s ballooning domestic debt is not healthy for the economy. Okonjo-Iweala had reasoned that the Federal Government could do with more foreign sources than borrowing from the domestic market. It is this scenario that is now playing out under the new Medium Term Debt Management Strategy. Nwankwo had said, “The main objective of the medium term debts is to develop a strategy that will meet the financing needs of the government at minimum cost, maintain risk at a prudent level and support the development of the market. “The exercise reflects and addresses, among other realities, the disproportionate reliance on the domestic bond market to fund government deficits – the ratio of domestic and external debt stock as of the end of 2011 was 88:12, whereas the appropriate ratio will be 60:40.” Other issues addressed by the strategy, he said, included high rate of domestic debt accumulation; and rising debt service payments occasioned by growing debt stock coupled with upward pressure on the average cost of funds and the risk of crowding out the private sector. The DMO boss said the time of high borrowing from the domestic had served its purpose, which included developing a market structure and culture for long term savings and investment. He said the new strategy had the capacity to reduce the rate of public debt in general and domestic debt particular to ensure debt sustainability and make budgetary provisions for the repayment of part of maturing FGN Bond obligations instead of refinancing them by creating a sinking fund. It will also reduce the amount spent on debt service by achieving an optimal mix between the relatively more expensive domestic debt and less expensive foreign debt. At present, Nwankwo said the difference between the domestic and external average cost of borrowing was about eight per cent per annum. ------------------------------------------------------------------------------------- N65.1bn subsidy debt: Mobil, Total, others threaten to stop fuel importon July 15, 2013 / in News 12:04 am / By Clara Nwachukwu LAGOS—Major Oil Marketers Association of Nigeria, MOMAN, has threatened to stop the importation of Premium Motor Spirit, PMS or petrol, if the Federal Government did not pay its outstanding N65.1billion subsidy claims. The outstanding sum is the combination of the following: *import claims from 2011 – N49.5billion *bank interest payments – N13.10billion *foreign exchange claims – N2.5billion The majors, comprising Mobil, Total, MRS, Forte Oil and Conoil, however said that only about N9.4billion of the total sum had been paid after much pressure on government, still leaving a huge outstanding of N55.7billion unpaid. The marketers noted that some of these claims have remained outstanding since 2011, with huge implications on their operations. The Executive Secretary, MOMAN, Mr. Obafemi Olawore, told journalists in Lagos weekend that “The implication of the non-payment of our claims is that it is affecting our bottom line, and this will lead to a reduction in petrol importation, and eventually the downsizing of workers.” He noted that one of the six-member group has not been paid since 2011, while the burden of the foreign exchange losses of N2.5billion are being borne by three of the marketers and still counting as long as the claims remain unpaid. Olawore argued that the majors were not trying to blackmail the government as suspected, noting that the banks were no longer willing to extend credit facilities for members to continue to import fuel due to the high interest rate of over N13.10billion that have accrued since 2011. “If the banks don’t give us the facility, and government is not paying us, what else can we do? Of course importation will stop because our ability to continue with the process has been weakened. Also, interest charges have eaten deep into our meager reserves, and there may be no other option than to start staff rationalisation,” he said. Products importation Petrol and kerosene are the two refined petroleum products approved for subsidy by the federal government, to enable marketers sell the products at regulated pump prices. However, because of the politics involved in kerosene importation, all other marketers abandoned the process, leaving only the Nigerian National Petroleum Corporation, NNPC with the burden of importing, and selling at N50/litre prescribed by government. Other marketers sell kerosene at between N100 and N170/litre depending on location and outlet. Currently, the majors are the second largest importers of petrol second to the, NNPC, while the independent marketers merely complement imports with whatever quantity they could bring in. However, in view of the clamp down by banks, many of the independents have been run-over, while some are placed under receivership. The developments resulted in significant drop in the level of imports done by the independents, while the majors, using their international affiliations have been able to remain afloat. How the claims accumulated In the wake of nationwide crisis on account of the pump price increase of petrol and subsequent probing of the subsidy regime, government froze further payments of subsidy claims until the conclusion of the probes. “At the peak of the crisis, government promised to pay us as soon as the probes were over. But it took a long time before they started to pay, and this led to the accumulation,” Olawore said. Furthermore, to check galloping interest charges, government and the marketers agreed on a 45-day payment scahedule from when the claims were compiled to the point of payment. Olawore disclosed: “But they (government) are not following the 45-day agreement. From January 2011, when the subsidy crisis started up till early June, nothing was paid to us, until we started making noise and they started paying from mid-June.” In all of these, he noted that the banks are the happiest because of the interests accruable, such that one of the majors paid as much as N4.04billion as interest in 2012, and will pay another N605.8million in 2013. ------------------------------------------------------------------------------------ Nigeria: Finance Ministry Clarifies Payment of N80.97 Billion for Power By Obinna Chima, 11 July 2013 Related Topics Nigeria The Federal Ministry of Finance Wednesday said it had so far paid about N80.97 billion to the Federal Ministry of Power this year. The amount, according to the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, was to cover various items in line with the implementation of the power sector roadmap. For instance, she said N8.27 billion was specifically released last week to the power ministry for the distribution companies (DISCOs) and generating companies (GENCOs), following approval by President Goodluck Jonathan. She revealed that her ministry had on May 23, this year announced the payment of N72.7 billion to the ministry of power. The amount included the sum of N45 billion paid to Power Holding Company of Nigeria (PHCN) workers as part of the power privatisation programme. It also included the sum of N5 billion paid for the Multi Year Tariff Order (MYTO). Other beneficiaries were the power ministry headquarters, PHCN, National Rural Electrification Agency, National Electricity Regulatory Commission, National Power Training Institute, National Electricity Liability Management Limited/GTE (NELMCO) and Bulk Trader. A breakdown of the figures, according to her, showed that N59,089,522,721 billion was paid in the first quarter, while N13,733,822,832 was paid in the second quarter. Therefore, the minister frowned at media reports that quoted the Chairman of the House of Representatives Committee on Power, Mr. Patrick Ikhariale, as criticising her for allegedly failing to release funds meant for the power sector. Okonjo-Iweala, according to a statement from her Special Adviser, Mr. Paul Nwabuikwu, said: "The statement, if it was truly made, is not only completely wrong but tends to personalise an important national issue. "It also betrays a limited understanding of the current status of power sector financing which the administration of President Jonathan has made a key priority in the implementation of the power roadmap." Against this background, she argued that the notion that she was personally responsible for current power supply challenges facing the country was "absolutely wrong and cannot be justified by the facts." ------------------------------------------------------------------------------------- Nigeria: The Deepening Budget Crisis By Omololu Ogunmade, 8 July 2013 Related Topics Nigeria The nation is currently witnessing a budget crisis; no thanks to the long-drawn battle between the executive and the legislature over the 2013 budget amendment. Omololu Ogunmade explores the various phases of the crisis that the 2013 budget has undergone and outlines the underlying issues and effects the situation is having on the nation. The Preamble In the annals of Nigeria's fiscal years, 2013 will not be forgotten in a hurry. It is to say the least, one year that witnessed a dramatic irony. Dramatic irony, because the year ordinarily ought to set the pace both in budget appropriation and implementation being the first time that the Appropriation Bill was passed ahead of the new fiscal year. But despite this, the year appears to be the worst in terms of budgeting experience and implementation as barely five months to the end of the year the implementation of the budget has been mired in a crisis. Till date, ministries, departments and agencies (MDAs) are still waiting for the release of funds for the execution of projects for which money has been appropriated in the 2013 budget. Only recently, Minister of Power, Professor Chinedu Nebo, accompanied by the Minister of State for Power, Mrs. Zainab Kuchi, sought the help of the Senate Committee on Power for the release of first quarter allocation to the ministry to enable them carry out the responsibilities imposed on them. Nebo practically told the committee that the ministry was handicapped by the non-availability of funds to execute necessary projects, saying it has had to depend on last year's allocations to run the challenging power sector. According to him, even though a little sum of money had been budgeted for operations in the sector in the first quarter of the year, nothing had been released to the ministry. The experience is undoubtedly the same in every MDA and for many hapless Nigerians; it has remained a mystery waiting to be unravelled. This is moreso that almost eight months after the budget was passed, the government is still waiting for another document that will guarantee its full implementation, thereby holding the nation hostage. This is no thanks to a costly game by both the executive and the legislature. Hence, it looks incredible that in July when the government ought to be tidying up the preparation of a new budget for the next fiscal year, it is still confused on how to implement the appropriation for the current year. The Genesis of the Face-off On December 20, 2012, the National Assembly made history when it passed the N4.987 trillion 2013 appropriation bill presented by President Goodluck Jonathan in September last year. Jonathan had proposed N4.92 trillion but the legislature jacked up the figure to N N4.987 trillion. Both the early presentation and attendant passage were hailed by the general public which looked up to a robust and more beneficial fiscal year. But signs that the early passage would turn out a bomb wrapped in aesthetic parcel began to surface when it was discovered that two weeks after the passage, the budget had not been transmitted to the president by the federal parliament. However, the curiosity of the Nigeria media, championed by THISDAY, forced lawmakers to eventually transmit the budget to the executive on January 15, 2013, almost a month after its passage. The National Assembly blamed the delay in the passage on what it described as purely mechanical and bureaucratic problems. Whereas reliefs had swept through many that the implementation of the budget would soon begin following the transmission of the bill to the president preparatory to his giving his assent, the end of that phase only heralded yet another arduous chapter of the budget story as it soon became public knowledge that the president would not assent to the bill because the National Assembly had allegedly introduced into the budget almost additional N100 billion. This sum was aside the N150 billion appropriated for the operations of the legislature in the budget. This discovery did not go down well with the executive which felt the huge sum would not make the budget implementable. But when confronted with the question on the additional budget, the lawmakers denied it and described those who raised the alarm as mere attention seekers. The alarm was first raised by an unnamed presidential aide in far away Switzerland who blamed the legislature for Jonathan's inability to sign the budget. There was a claim at the time that the National Assembly opted to raise the budget following the executive's decision not to include constituency projects in the budget as it had been the case in the past. Therefore, the controversial N100 billion which allegedly delayed the presidential assent to the bill was earmarked for the implementation of projects in various constituencies of the lawmakers. It was alleged that the decision of the executive to omit appropriation for constituency projects in the 2013 budget was the deliberate decision of the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who reportedly felt that after a whopping N150 billion had already been earmarked for the running of the legislative institution in the year, budgeting for their various constituencies again would be a misplaced priority. Thus, despite the required statutory 30 days within which the president must sign the budget as stipulated in the 1999 Constitution, Okonjo-Iweala told the nation several days after the transmission that signing the budget during the time was not feasible because there were grey areas that needed to be thrashed out between the executive and the legislature. Against this background, there was a parley between the executive and principal officers of the National Assembly where it was said that the president should sign the budget first while he could propose amendments to it in order to address the identified grey areas. It was on this premise that Jonathan signed the budget on February 26. The Amendment Debacle Assenting to the bill however ended the second phase of the budget squabble, leading the nation into yet the third and toughest chapter which has till date presented no hope of resolution. Indeed, on March 14, Jonathan submitted the 2013 budget amendment proposal to the National Assembly and urged the lawmakers to treat the proposal with urgency. In the amendment bill, the executive made slight addition to the earlier budget passed by the National Assembly last year. It replaced the earlier N4,987,220,425,601 contained in 2013 Appropriation Act with N4,987,382,196,690 in the (Amendment) Bill 2013. Jonathan also sought to appropriate a total sum of N2.4trillion as recurrent expenditure as against the N2.3trillion passed on December 20, 2012. The president further sought approval for N1.588 trillion as capital expenditure as against the N1.6 trillion approved by the parliament last year. Of the total N4.987 trillion in the new proposal, N388 billion was earmarked for statutory transfers while N591.7 billion was meant for debt servicing. Jonathan also made references to certain clauses inserted into the budget by the National Assembly which in his own opinion transferred the powers of the executive to the legislature and therefore sought correction to them. Among his concerns in the amendment was the zero appropriation for the Securities and Exchange Commission (SEC) as well as a clause in the Act that prohibits the commission from spending any revenue it generates. He described the move as dangerous and capable of crippling the operations of SEC. He also rejected clauses in the budget which ordered the executive to brief the legislature every quarterly on the budget performance. But since March 14, when the president proposed fresh amendments to the budget, the National Assembly has not hidden its determination to play around the budget until the year eventually comes to an end. While both the Senate and the House of Representatives had at different times, suspended debates on the bill; the House finally showed its hand last week, when it formally threw out the amendment proposal 24 hours after Jonathan returned the State of the Nation Address Bill passed by the National Assembly on May 13. In throwing out the bill, the House claimed that presenting amendments to budget after passage was unconstitutional and hence it would be unconstitutional for them to consider and pass the bill. Both Jonathan and Okonjo-Iweala cried foul, saying the action could be detrimental to the nation's interest. In doing this, members of the House put into consideration a point of order raised on June 5 by Hon. Yakubu Dogara where he said it would be unlawful for the House to consider the proposal. Following the point of order, the Speaker, Hon. Aminu Tambuwal, asked the House Committee on Rules and Business to examine the issues contained in Dogara's point of order and report back to the House. While presenting its report to the House on June 26, Chairman of the Rules and Business Committee, Hon. AlbertSam-Tsokwa, noted that though the Appropriation Act could be amended, the way the executive prepared the amendment bill fell short of the nation's extant laws. He argued that instead of the amendment bill, Jonathan's purpose could have better been served by a supplementary budget. "The purported amendment bill, a five-clause bill, is completely and totally silent on what and which sections of the 2013 Appropriation Act it seeks to amend or repeal or enact. So, it was silent on the schedules or what aspects to the 2013 Act it seeks to amend or repeal. Honourable members may wish to note that while the 2013 Appropriation Act appropriates the total sum of N4,987,220,425,601 for the 2013 fiscal year, the purported 2013 Appropriation Act (Amendment) Bill 2013 seeks to appropriate a total sum of the N4,987,382,196,690. "Clearly, what the Amendment Bill 2013 seeks to appropriate is more than what was appropriated for the 2013 fiscal year in the 2013 Appropriation Act. That is to say, the executive would appear to be seeking additional funds. Obviously, this cannot be achieved through an amendment bill. The answer lies in a supplementary appropriation under Section 81 (4) of the constitution. At best, the Appropriation Act 2013 Amendment Bill of the president, for want of a better description or expression, is in the words of Hon. Dogara a '2013 Appropriation Bill N0 2,' an alien, a stranger or indeed and interloper in our constitutional arrangement," Sam-Tsokwa submitted. As though the submission of Sam-Tsokwa fulfilled the yearning of the entire House, members opted to breach parliamentary rule which ordinarily prohibits clapping in the chamber or committee rooms as the presentation was accompanied by a resounding applause. And with the submission apparently securing the overwhelming support of members, Tambuwal hit the gavel in acknowledgement of members' desire and forthwith, the bill was thrown out. Enters the Newest Amendment After the rejection of the amendment bill, Jonathan prepared a fresh amendment, which Senate's spokesman, Enyinnaya Abaribe, described as a more voluminous document than even the original 2013 Appropriation Bill itself. Whereas, the president had been diplomatic in his earlier amendment proposal, he opted to go to the specifics this time with a view to letting the entire public know what the issues really are as far as the 2013 Appropriation is concerned as he opted to spell out the details of the acts of the lawmakers which in his view impede any meaningful implementation of the 2013 budget unless the amendment is passed. Without mincing words, Jonathan enumerated a number of projects designed for execution through the 2013 budget but which he insisted could not be implemented because the lawmakers had diverted original appropriations to places of their own interests. He therefore appealed for their co-operation by restoring such funds so that such projects could be implemented. In his avowed commitment to appeal to the lawmakers to consider the amendment, Jonathan opted to label some projects with such words as "critical", "important", and others in the perceived order of importance. In a letter addressed to both Tambuwal, and the Senate President, Senator David Mark, dated June 26 and entitled: "Re: 2013 Amendment Budget," Jonathan said: "You will recall that I had transmitted the 2013 Amendment Budget proposal to the National Assembly on 14th March, 2013. However, following further consultations, I am forwarding a new version of the categorised 2013 Amendment Budget proposal indicating changes proposed across the expenditure categories. The capital projects have now been designated as follows: 'critical' is designated as (i); 'important' is designated as (ii) and 'others' designated as (iii)." The president then proceeded to list some capital projects whose allocations he said were reduced by the lawmakers and therefore appealed to them to restore the original appropriations "so as to promote national development." Such projects included major roads such as the Lokoja - Abuja highway for instance, whose appropriation, he said, was reduced by N4 billion, thus implying that unless such money is restored, the Abuja -Lokoja highway, which often records fatal accidents resulting in loss of many lives, will remain a death trap for a long while. In the same vein, Jonathan listed Kano-Maiduguri Road whose appropriation he said was reduced by the National Assembly by N3.5 billion; dualisation of Ibadan-Ilorin Section 2 reduced by N5.5 billion; rehabilitation of Jebba bridge reduced by N1.25 billion; rehabilitation of burnt marine bridge and Iddo bridge reduced by N1 billion; special intervention fund for emergency roads and bridges washout across the country reduced by N6.28 billion as well as the dualisation of Obajana junction to Benin reduced by N4 billion, among others. Also listed by the president was millennium development goals/ Human Immunodeficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS) ARV drugs allocation reduced by N1 billion; routine immunisation vaccines reduced by N1.75 billion; malaria programme procurement and distribution of insecticides reduced by N0.8b; payment of pledge for onchocerciasis recertification cut by N0.12b; National Trauma Centre, Abuja reduced by N0.1 billion. On power, Jonathan also disclosed that the National Assembly cut N16.3 billion from the votes earmarked for various power projects, including the 215 mega watts dual fired plant, which he said was reduced by N2.25 billion. Other cuts he mentioned were second Kaduna-Kano 33kv DC lines reduced by N1.5 billion; Gombe-Yola-Jalingo 330KV SC line reduced by N0.6b; Maiduguri 330/132 KV sub-station reduced by N0.3b; Kaduna-Jos 330 KV DC reduced by N0.5 billion and Omotsho-Epe-Ajah 330 KV DC line reduced by N0.8 billion. On rail transportation, Jonathan informed the legislature of the reduction by N1.4 billion construction of Abuja-Kaduna rail; Jebba-Kano rail line rehabilitation by N0.5b; procurement and rehabilitation of wagons/locomotives reduced by N1 billion and insurance of locomotives reduced by N0.2b. On education, he said allocations to various projects were reduced to the tune of N5.64, including allocations to national library project which was cut by N2 billion, while on Subsidy Reinvestment Programme (SURE-P), Jonathan said: "We all appreciate the fact that unemployment is one of our major concerns in this country today. Considering the gravity of the situation, I would like to bring up the issue of the budgetary allocation to the community services, women and youth employment programme under the SURE-P. "Against our proposal of N27 billion, the National Assembly allocated N9 billion. This cut will have adverse effect of severely undermining our capacity to create the jobs needed for our teeming unemployed youths, women and physically challenged citizens. In this regard, I crave your co-operation to restore the SURE-P budget. "You will further recall that the personnel cost was cut across all MDAS which will make it difficult to meet government's obligations to its workers. I therefore seek your kind understanding for the restoration of the said cuts in order to maintain industrial harmony. It is my hope that this submission will help the work of the Senate to consider and pass 2013 amendment budget proposal expeditiously," Jonathan pleaded. Now, the Crux of the Matter With Jonathan's last letter to the leaders of the National Assembly, he had put the legislature on the spot by the fresh revelation contained in the letter which gave clear insight into the budget controversy. The face-off between the two arms of government over the budget has been generating reactions from members of the public. This reporter listened to one of the programmes on a broadcasting station where people reacted to these disclosures with annoyance. Speakers and callers on the programme said the lawmakers should have rather used their positions to address problems on roads, power, education, transport and unemployment instead of reducing their appropriations. Some individuals even submitted that if the lawmakers travel by road and witness the tragedy and agony that befall Nigerians on a daily basis, on the Abuja-Lokoja highway for instance, they would have increased its appropriation instead of diverting it. Others also said the lawmakers ought to be bothered that there is no standard road leading to the federal capital where they operate. But in defence of its action, the National Assembly said there was nowhere it is done that budget would be returned to the executive without tinkering with it. This came even as Okonjo-Iweala cried out last week that unless the National Assembly promptly passed the amendment proposals, payment of workers' salaries would be difficult as from September. This notwithstanding, Abaribe had said the amendment bill was not part of Senate's agenda now even though the House had said it might reconsider the fresh version sent again by the president. According to Abaribe, before the National Assembly can have time to consider the amendment, it will not be earlier than September when it will return from its long vacation which will commence in August. Nevertheless, what the face-off between the executive and the legislature on the 2013 appropriation portends, according to watchers, is that the year 2013 may end up a wasted fiscal year with the total sum contained in the signed budget not be used to uplift the well-being of the people. This is more so that such monies are now withheld under the guise that appropriations in the budget are not implementable unless the amendment is passed. But the legislature holds the opinion that with the already signed budget, the nation can drive growth across the country unimpeded. Already, the current budget stalemate has begun to take its tolls on various programmes and projects across the country. For instance, the proposed realisation of 10,000 mega watts of power by the executive in December this year has now been postponed as Nebo had in May announced that the vision could not be achieved earlier than December 2014. There are also notions that if both the executive and the legislature fail to shed their egos and put the interest of the nation that they were elected to serve into consideration by mutually doing what is right on the budget, it would be an affront to the people for the executive to later come up with another budget for the year 2014 if it doesn't implement the 2013 budget. Also, there are views that it would be unpatriotic of the legislature to later roll up its sleeves to legislate on a new budget if fails to play its role well on the 2013 budget. The vast majority of opinions on the matter now are that the two arms of government are sitting on a keg of gun powder by holding the nation to ransom and failing in their statutory responsibilities to the nation. This notion became popular as reports last week tied the legislature's refusal to consider the appropriation to the alleged refusal by Okonjo-Iweala to release N100 billion constituency projects' funds to members. The matter appears to have gone out of hands now to the extent that a national affair is allegedly being handled as personal matters as reports had said government had planned to use the delay in releasing the constituency funds as a weapon to whip the lawmakers into action. On the other hand, the legislature is said to have exploited the delay in the release of constituency funds as a weapon to hold down the amendment bill until constituency funds are released. This has literally become the case of "do me, I do you" while the nation groans under the pains of the non-implementation of the budget and virtually everything may soon be at a standstill if the trend continues. Besides, this unhealthy development in experts' perspectives will further take its toll on the next fiscal year as projects for the current fiscal year will be pushed into next year while fresh funds will be appropriated. By and large, it is noted that given this confusion, the already worsened infrastructural problems will be aggravated while the economy may begin to witness stunted growth. How long shall this game last? This is now one question seeking an answer. ------------------------------------------------------------------------------------- Nigeria Ministry of Finance (Abuja) Nigeria: Finance Minister Okonjo-Iweala Presents Mid-Term Review 11 June 2013 More on This Nigerian Government's Mid-Term Report Nigeria: Mixed Reactions Trails Jonathan's Report President Jonathan taking his oath of office. Abuja — Transcript of the Speech of Dr. Mrs. Ngozi Okonjo-Iweala, Honourable Minister Of Finance And Coordinating Minister Of The Economy, Nigeria, at the Ministerial Platform Held at Radio House, Abuja On Monday, June 11, 2013 Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event. For my colleague, the Honourable Minister of Sports, I don't think it's coincidental that Sports and Finance are together today, because I'd always joked that if I was not the Minister of Finance, I'd love to be the Minister of Sports. So, I totally envy him in his job, especially now that we're winning. And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we're going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can't start this without first acknowledging the support of the President to the Ministry of Finance. It's not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance - the budget office, the Accountant-General's office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I'm going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information. I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation's finances in an open, transparent, accountable and efficient manner that delivers on the country's development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It's the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there's no stability, if things are moving, exchange rate is volatile, inflation is high - we have experienced it in this country before - what happens? You cannot even begin to think of development of the economy. So, that's one of our jobs. The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we're going to talk about what the Ministry of Finance does and has achieved in those four areas. Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it's strong; and that stability provides the platform on which we can use to solve the other problems. What do I mean? We talked before that if you notice - everybody follows the exchange rate between the dollar and the naira - it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion - we're at $48 billion now. It's very important because the reserves are what make the exchange rate stable. When the reserves are going down, that's when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank - I also want to give them credit for good monetary policy - to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability. We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we're about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money - the IMF in particular to shore up the economy, to shore up our balance of payments (that's what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself - with the existence of this Excess Crude Account - in a position where in the event of any shock, we can go there to stabilise ourselves. That's why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don't go around begging, you can stabilise yourself with your own savings. That's what we manage to do. The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing - I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we're being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we're higher than them. And you can see Brazil, China, South Africa - South Africa at 2.8%, we at 6.75% et cetera - so we are doing well! The GDP Illustration Now, I want to spend one minute on something very important, because after we talk, people will say, "GDP growth, what is GDP growth? It's not important; that's not what we will eat." But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country - the amount of cake you have to eat; you and your wife and children - the same with a country. So, let's say this is the amount of cake we have to eat. Now, these are four people sharing this cake - four people: a man, his wife and two children, or Nigeria with a population of let's say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn't mean that your income can now take care of all your relatives in the family who still have problems. It doesn't mean that in your household, you don't have problems of people not being employed, but you have this cake that you're sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now? (Answer: Seven). This is the cake. What will happen if this cake doesn't grow? All of you will be suffering. Isn't it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow - right? So, this is the first cake. What happens if the cake doesn't grow is that all of you will start suffering. [She takes up another cake]. Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: "give me all the people, give them to me, all of them will be there"]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn't it? If it is not growing, you will suffer even more. Now, Nigeria has a cake - our GDP - and our population is growing at 2.5% per annum. If we don't grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn't say growing the cake solves all the problems; but if we don't grow the cake, we are going to suffer. So, don't listen to those who say, "What is GDP growth - it doesn't matter." It is not true; it matters tremendously. It's with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn't it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don't have this challenge of, "What is GDP?" In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I'm sorry I spent some time on this, but it's about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy. Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We've had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital - 400 billion; didn't we? And work is going on. We released second quarter capital - 200 billion - so we will continue to implement to the best our ability, and it's the job of Finance to make sure that we get that money in. But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don't manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they're feeling very stressed out that there's not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses. Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we've managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we'll continue to take it down to the best of our ability. We have the envelope system. People don't understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we've put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we're happy because we want to diversify this economy. Nigerians don't want to keep importing. So, non-oil imports have decreased - things like textiles, plastic, rubber - things we're making here; and those things have even increased in terms of exports. I'm sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we've done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy. Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government - neither Mr President nor the Ministry of Finance, the debt management office and the legislature - we don't support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once. Now, I'm not against increase of salary, so don't let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It's not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we're doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we'll continue to bring it down. That's part of the new strategy. At the same time, we're slowing down the growth of the debt stock. So, it's not that the debt stock won't grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I'm very proud to say that in 2013 we retired 75 billion in bonds and that's the first time we've done it in so many years. That is part of the overall strategy. The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard - Federal Inland Revenue Service, the Customs Service - to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year. The objective is that we shouldn't only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done. I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven't done all MDAs; we've done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That's a lot of money. Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we've looked and we've found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that's what we're looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That's what Finance is doing. We still have to complete the rest of the MDAs by the end of this year. We've also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way. Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions - the defined benefit systems - under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway. The contributory pension scheme is fine, we have more than N3 trillion there, it's working well and I want to reassure Nigerians of its good health. So, it's only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God's grace, we'll have everything together with biometric systems in place so we can also pay our pensioners directly. So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we're doing, which amalgamate to underpin a stable economy have been validated outside. You don't have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you're critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we've solved all the problems of our economy - no country ever does that - but it says that we've got the platform with which to do it. Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we've kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it. And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefited from this scheme. So, for those who say, "Ah, no one in my place has benefited" you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefiting and they're getting cash transfers. When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women's lives and children's lives have been saved through the money used by SURE-P. In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we'll be happy to give you all the information. Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector. Minister of State Takes Over Courtesies. I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we're also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3-4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year - N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances. The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That's why we're now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture. Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they've also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing. From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don't have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders. When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector. Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that's why we're just introducing the IPSAS - the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now - at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria. We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem. Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue. CME Okonjo-Iweala Continues OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we're also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I'm not going to go through all that I wrote; they can quickly roll it through the screen. I'm very proud to announce that we have been very active to mobilise - sometimes zero interest - very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace - the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture - from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we're doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge - we're now working on a private-public partnership arrangement where we're going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they're already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen. So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that's what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that. And the education sector - we've also raised money for states that have challenges: Bauchi, Ekiti, Anambra - so many of the states to benefit from that. In ICT we've raised resources. And aviation, housing - I can just say almost every sector of the economy - I'm proud to say we've done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources - 3 billion naira - to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing. Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It's the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know - we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President - this is his program - and I'm happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 - that's almost 30,000. The second round we just launched for women only and the third round we're going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable. This program is surpassing our expectations in terms of job creation and we're very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we're working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We've moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they're there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on. We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors - I haven't even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results. Thank you very much. ------------------------------------------------------------------------------------- Nigeria Ministry of Finance (Abuja) Nigeria: Clarifying Nigeria's Debt Position 9 June 2013 Related Topics Nigeria Abuja — There has recently been a lot of misinformation and misconception in our public debate on debt. My goal in this article is to shed some light on the public debt, to clarify the real state of Nigeria's debt position, and hopefully, provide a knowledge platform for constructive debate. Let me say at the outset that no one in government is supportive of a Nigeria that returns to a high state of indebtedness. On a personal note, having gone through tremendous stress during the quest for Paris Club debt relief, I am committed to a Nigerian economy that is fiscally prudent, balances its books and remains at a low state of indebtedness. To begin, Nigeria's overall debt is comprised of external and domestic debts. The external debt is typically owed to foreign creditors such as multilateral agencies (for example, the Africa Development Bank, the World Bank, or the Islamic Development Bank), to bilateral sources (such as the China Exim Bank, the French Development Bank or the Japanese Aid Agency), or to private creditors such as investors in our Eurobonds. The domestic debt, however, is contracted within Nigerian borders, usually through bond issues which are then purchased by Nigerian banks, local pension funds, and other domestic and foreign investors. The resources raised typically go to help fund the budget or other domestic expenditures, such as infrastructure projects. We also have some contractor arrears, and other local liabilities which are normally handled through the budget. Both federal and state governments borrow domestically and externally. However, no state government can borrow externally unless guaranteed by the Federal Government. Similarly, state governments' domestic borrowing is subject to federal government analysis and confirmation – based on clear criteria and guidelines that a state can repay based on their monthly FAAC allocations and internally generated revenues (IGR). As a nation, we have had a difficult history with debt. As such, no one can forget the challenging times we went through from 2003 to 2005 trying, in the end, successfully to get relief on our large external debt. Neither the government nor any Nigerian wants a repeat of the country's past history of large debts. That is why the current President Goodluck Jonathan administration, the Legislature, the Ministry of Finance, and the Debt Management Office, are very focused on a conservative and prudent approach to managing the national debt. Our current approach balances Nigeria's needs for investment in physical and human infrastructure with a strong policy to limit overall indebtedness in relation to our ability to pay. Above all, any debts incurred must go for directly productive purposes which yield results that Nigerians can see. First the numbers: a. In 2004, prior to the Paris Club debt relief, Nigeria's overall debt stock was very high. External debt stood at US$35.9 billion while the stock of the domestic debt amounted to US$10.3 billion resulting in a total of about US$46.2 billion or 64.3% of GDP excluding contractor and pension arrears. b. After the successful debt relief initiative, Nigeria's stock of foreign debt declined dramatically. Indeed, in August 2006, when I left office, Nigeria's foreign and domestic debts amounted to US$3.5 billion and US$13.8 billion respectively – a total of US$17.3 billion or 11.8% of GDP. c. By August 2011, when I resumed for the second time as Finance Minister, the domestic debt stock had grown substantially to US$42.23 billion, while the external debt was still a modest US$5.67 billion. This implied a total debt stock of US$47.9 billion or 21% of GDP. Note that while the debt stock grew, our national income also grew so that debt to GDP ratio (the parameter used globally to measure a country's debt sustainability) remains modest and manageable. d. Thus, the key noticeable change in Nigeria's indebtedness in recent years has been the growth of domestic debt. There were two main reasons which resulted in this outcome. First, the initial growth of the domestic debt stock was because the federal government wanted to deepen the domestic debt markets and generate a yield curve for Nigeria which ultimately could help our corporate bodies to access the capital markets and borrow funds at more affordable rates. The DMO through its work has been successful in doing this. Nigerian corporates can now raise money at reasonable rates at home and abroad, helping them secure resources to invest in the economy. Secondly, however, domestic debt was also raised to finance increased budget expenditures including consumption. For example, in 2010, the 53% salary increase for civil servants was financed by raising domestic bonds. Borrowing for recurrent expenditure or consumption, as was the case here is a practice that is less than ideal and one that we should endeavour not to repeat. We must learn that domestic debt should be incurred sparingly at modest and manageable rates so that government is able to service it and pay back domestic creditors. Failure to do so would severely undermine the finances of our private and institutional creditors to the detriment of the economy. It is with this background in mind that we have put in place several measures to limit and manage the national debt. There are a number of specific policies we have introduced in the current administration to slow down the increase in our overall debt stock. a. First, we have brought expenditures and revenues much more in line, through a low fiscal deficit of 1.81% GDP, to reduce the need for domestic borrowing. For example, we reduced annual domestic borrowing from N852 billion in 2011, to N744 billion in 2012, and to N577 billion in 2013. Our objective is to reduce government's domestic borrowing to below N500 billion in the 2014 budget. b. Second, for the first time, we have paid down part of our domestic debt rather than rolling all of it over. Beginning in February 2013, we successfully retired N75 billion worth of maturing domestic bonds. And we will continue with this practice in the coming years. c. Third, we have established a sinking fund with an initial capitalisation of N25 billion. This fund will enable the government to retire maturing bond obligations in the future. d. Fourth, we are working increasingly with states to get a clearer picture of domestic debts acquired by state governments, thanks to the comprehensive review recently completed by the DMO. Our particular concern is that state governments limit borrowings in line with their incomes and put any borrowings made to work on specific projects and programmes that bring direct beneficial results to their citizens. e. Fifth, instead of the previous practice of contracting foreign loans in an ad hoc manner, we have streamlined the process for federal and state governments and made it transparent through the Medium Term Rolling External Borrowing Plan, which is reviewed and approved by the National Assembly. This plan presents the anticipated loans to be contracted by the government over a three-year time window, so that we can target funds to priority projects, and also make trade-offs where necessary. Notice that this covers planned foreign borrowing by both the federal and state governments for projects that will yield results in infrastructure, education, health, etc. Most loans contracted are on concessional or very favourable terms. For example, many of the multilateral loans are at zero interests, 40-year maturity, and 10 years grace. Others are at less than three per cent rate of interest. f. And finally, we have put forward a Medium-Term Debt Strategy with a mix of limited external and domestic borrowing that is appropriate for the economy. But let me repeat that we shall never be complacent about our national debt. We need to be constantly vigilant to limit the amount of debt and create room for the private sector instead to borrow. As such, we need to stay focused on three main priorities. First, we should continue to monitor our external borrowing and ensure that we do not slip back to our high indebtedness prior to the debt relief programme. As I mentioned earlier, the External Borrowing Plan, helps to address this concern by ensuring that we always have a comprehensive, transparent view of our foreign borrowing. As at now, our external indebtedness is low at $6.67 billion or about three per cent of GDP. Second, we should closely continue to monitor and limit our domestic debt, and ensure that it stays within a prudent and conservative range. We should pay off debt that is due to the extent of our ability. And third, we should also continue to closely monitor borrowing by states to ensure that the debt burdens of our state governments remain within manageable levels and that borrowings are applied to specific projects that yield results for citizens of the state. In that regard, we enjoin banks and other lenders to be careful and prudent when lending to ensure that this is done within the existing rules, regulations and guidelines. Former UN Secretary-General Kofi Annan once said: "Information and knowledge are central to democracy – and they are the conditions for development." That is precisely why I have gone to some length to throw light on the real facts and the real issues regarding our debt situation and what the federal government is doing to address them. We need to create the basis to have a healthy and constructive public conversation on this issue, not a distorted and partisan battle. ------------------------------------------------------------------------------------- Nigeria Owes $6.67 Billion External Debt, Says Okonjo-Iweala By Emma Ujah, Abuja Bureau Chief, 8 June 2013 Related Topics Nigeria The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday, put the nation's external debt at $6.67 billion, (about N1.035 trillion). Nigeria spent $8.0429 billion to service debt in 2006 and $10. 1072 billion in 2005 before the debt relief of 2006. However, the Minister said that the clarification became necessary in view of the various figures being quoted in the debate over the nation's indebtedness. Her words, "as at now, our external indebtedness is as low as $6.67 billion or about 3 percent of Gross Domestic Product, GDP." According to her, "the external debt is typically owed to foreign creditors such as multilateral agencies [like the Africa Development Bank, World Bank, the Islamic Development Bank], as well as other bilateral sources [including the China Exim Bank, the French Development Bank or the Japanese Aid Agency], or to private creditors such as investors in our Eurobonds." The Minister said that most external loans were contracted on concessional terms. "Many of the multilateral loans are at zero interests, 40 years maturity, and 10 years grace. Others are at less than three percent rate of interest." Okonjo-Iweala assured that the Federal Government would continue to closely monitor the nation's debt stock to keep it low. Her words, "we shall never be complacent about our national debt. We need to be constantly vigilant to limit the amount of debt and create room for the private sector instead to borrow. As such, we need to stay focused on three main priorities. "We should continue to monitor our external borrowing and ensure that we do not slip back to our high indebtedness prior to the debt relief programme. As I mentioned earlier, the External Borrowing Plan, helps to address this concern by ensuring that we always have a comprehensive, transparent view of our foreign borrowing. "We should closely continue to monitor and limit our domestic debt, and ensure that it stays within a prudent and conservative range. We should pay off debt that is due to the extent of our ability. We should also continue to closely monitor borrowing by states to ensure that the debt burdens of our state governments remain within manageable levels and that borrowings are applied to specific projects that yield results for citizens of the state. In that regard, we enjoin banks and other lenders to be careful and prudent when lending to ensure that this is done within the existing rules, regulations and guidelines." ------------------------------------------------------------------------------------- Fiscal operations: Nigeria’s record in first quarter . Wednesday, 22 May 2013 00:00 Editor Business Services - Money Watch . .AVAILABLE data showed that total federally-collected revenue during the first quarter of 2013 stood at N2,425.30 billion, representing a decline of 2.4 and 17.9 per cent below the receipts in the preceding quarter and the corresponding period of 2012, respectively. However, relative to the proportionate budget estimate, federally-collected revenue rose by 3.1 per cent. At N1,849.51 billion, gross oil receipts, which constituted 76.3 per cent of the total, exceeded the proportionate budget estimate and the receipts in the preceding quarter by 15.5 and 1.4 per cent, respectively, but declined by 22.2 per cent below the receipts in the corresponding period of 2012. The rise in oil receipts relative to the preceding period was attributed to the increase in the receipts from crude oil/gas exports, domestic crude oil/gas sales and “other” oil revenue during the period. Non-oil receipts, at N575.80 billion (23.7 per cent of the total), were below the proportionate budget estimate and the receipts in the preceding quarter by 23.3 and 12.8 per cent, respectively. The decline in non-oil revenue relative to the preceding quarter, reflected, largely, the fall in Corporate Taxes, Federal Government Independent Revenue, Education Tax and Customs and Excise duties during the review period. As a percentage of estimated nominal GDP for the first quarter 2013, oil and non-oil revenue were 19.1 and 5.9 per cent, respectively. Of the gross federally-collected revenue during the review quarter, the sum of N1,366.70 billion (after accounting for all deductions and transfers), was transferred to the Federation Account for distribution among the three tiers of government and the 13.0 per cent Derivation Fund. The Federal Government received N643.79 billion, while the states and local governments received N326.54 billion and N251.75 billion, respectively. The balance of N144.62 billion went to the 13.0 per cent Derivation Fund for distribution by the oil-producing states. Also, the Federal Government received N26.72 billion from the VAT Pool Account, while the state and local governments received N89.06 billion and N62.34 billion, respectively. In addition, the sum of N333.81 billion was drawn from the Excess Crude Account (ECA) to bridge the short-fall in revenue for the period and was shared as follows: Federal (N152.99 billion), state (N77.60 billion), local governments (N59.83 billion) and oil producing states (N43.40 billion). An additional N106.65 billion was also distributed among the tiers of government and oil producing states from the Subsidy Re-investment and Empowerment Programme, (SURE-P) Fund. Thus, the total allocation to the three tiers of government in the first quarter of 2013 amounted to N2,008.12 billion. This exceeded the 2013 quarterly budget estimate by 9.3 per cent. The Federal Government At N908.14 billion, the Federal Government retained revenue for the first quarter of 2013 was lower than both the proportionate budget estimate and receipts in the preceding quarter by 11.0 and 1.6 per cent, respectively. Relative to the receipts in the corresponding period of 2012, Federal Government retained revenue also declined by 10.6 per cent. Of this amount, the Federal Government share from the Federation Account, VAT Pool Account and FGN Independent Revenue were N643.87 billion, N26.34 billion and N35.42 billion, respectively, while “Others” accounted for the balance of N202.51 billion Total estimated expenditure for the first quarter stood at N1,192.92 billion and was lower than the proportionate budget estimate by 8.0 per cent, but higher than the levels in the preceding quarter and corresponding period of 2012 by 5.5 and 8.3 per cent, respectively. The development (relative to the quarterly budget estimate) was attributed to the delay in capital releases during the review period. A breakdown of the total expenditure showed that the recurrent component accounted for 65.5 per cent, capital component 27.0 per cent, while statutory transfers accounted for the balance of 7.5 per cent (Fig. 10). Further breakdown of the recurrent expenditure showed that the non-debt component accounted for 77.4 per cent, while debt service payments accounted for the balance of 22.6 per cent. Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N284.78 billion or 2.9 per cent of the estimated nominal GDP for the quarter, compared with the 2013 benchmark and the preceding quarter deficits of N276.11 billion and N207.32 billion, respectively. The deficit was financed mainly from domestic sources. Statutory Allocations to State Governments Total allocation to state governments (including the Federation Account, 13.0 per cent Derivation Fund and share of VAT receipts) stood at N734.07 billion in the first quarter 2013. This represented a decline of 1.0 per cent below the level in the preceding quarter, but an increase of 4.0 per cent above the level in the corresponding quarter of 2012. Further breakdown showed that, at N645.01 billion, receipts from Federation Account constituted 87.9 per cent of the total, indicating a decline of 0.2 and 0.5 percentage point relative to the levels in the preceding quarter and the corresponding period of 2012, respectively. At N89.06 billion, receipts from VAT constituted 12.1 per cent of the total, indicating an increase of 0.2 and 0.5 percentage point relative to the levels in the preceding quarter and the corresponding period of 2012, respectively. On a monthly basis, the sum of N205.22 billion, N207.49 billion and N321.36 billion was allocated as statutory allocations and VAT receipts to the 36 state governments in January, February and March 2013, respectively. Statutory Allocations to Local Government Councils Total receipts by the Local Governments from the Federation and VAT Pool Accounts during the first quarter of 2013, stood at N401.68 billion. This amount was below the levels in the preceding quarter and corresponding period of 2012 by 3.8 and 2.4 per cent, respectively. Of the total amount, allocation from the Federation Account was N339.34 billion (84.5 per cent), while VAT Pool Account accounted for the balance of N62.34 billion (15.5 per cent). On a monthly basis, the sum of N113.61 billion, N116.49 billion and N171.58 billion was allocated to the 774 local governments in January, February and March 2013, respectively. Domestic Economic Conditions Provisional data showed that aggregate output measured by the real gross domestic product (GDP) grew by 6.6 per cent, compared with 6.9 per cent in the preceding quarter. The development was attributed, largely, to the decline in the contribution of the non-oil sector, during the review period. Crude oil production was estimated at 2.05 million barrels per day (mbd) or 184.5 million barrels for the quarter. The end-period inflation rate for the first quarter of 2013, on year-on-year basis, was 8.6 per cent, compared with 12.0 and 12.1 per cent in the preceding quarter and the corresponding quarter of 2012, respectively. The inflation rate on a 12-month moving average basis was 11.4 per cent, compared with 12.2 and 10.9 per cent in the preceding quarter and the corresponding period of 2012, respectively. Aggregate Output Aggregate output (estimate) in the first quarter measured by gross domestic product (GDP) at 1990 basic prices grew by 6.6 per cent, compared with 6.9 per cent recorded in the preceding quarter. The lower output growth rate in the review quarter was attributed to the decline in the contribution of the non-oil sector. Real non-oil GDP was estimated to have grown by 7.9 per cent and accounted for 85.2 per cent of the total GDP in the review quarter. Real oil GDP, comprising crude petroleum and natural gas was estimated to have declined by 13.3 per cent, compared with the decline of 0.2 per cent in the preceding quarter and accounted for 14.8 per cent of the total real GDP A total of N1,892.9 million was guaranteed to 10,324 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in the first quarter of 2013. This represented a decline of 41.6 per cent below the level in the preceding quarter, but an increase of 125.1 per cent above the level in the corresponding period of 2012. A sub-sectoral analysis of the loans guaranteed indicated that the food crops sub-sector received the largest share of N1,105.2 million (53.6 per cent) for 7,734 beneficiaries, while the livestock sub-sector got N672.9 million (35.5 per cent) for 2,081 beneficiaries. Also, 275 beneficiaries in “others” sub- sector obtained N69.8 million (3.7 per cent), while N47.9 million (2.5 per cent) was guaranteed for 89 beneficiaries in the mixed crops sub-sector. Furthermore, 86 beneficiaries in the fisheries sub-sector received N46.2 million (2.4 per cent), while 59 beneficiaries in the cash crops sub-sector received N41.0 million (2.2 per cent). Further analysis showed that 34 states benefited from the scheme during the quarter, with the highest and lowest sums of N261.1 million (13.8 per cent) and N2.2 million (0.1 per cent) guaranteed to beneficiaries in Katsina and Plateau states, respectively. At end-March 2013, the total amount released by the CBN under the Commercial Agriculture Credit Scheme (CACS) to the participating banks for disbursement stood at N199.2 billion (for two hundred and seventy one projects). The beneficiaries included thirty state governments Industrial19a.5ctivities during the first quarter of 2013 indicated a decline relative to the level in the level in the preceding quarter. At 136.35 (1990=100), the estimated index of industrial production declined by 0.9 per cent below the level attained in the preceding quarter. It however, showed an increase of 0.7 per cent compared with the level attained in the corresponding period of 2012. The development reflected the decline in the contribution of all sub-sectors. The estimated index of manufacturing production, at 106.35 (1990=100), declined marginally by 0.9 per cent below the level attained attained in the preceding quarter, but increased by 0.4 per cent over the level in the corresponding period of 2012. The manufacturing capacity ut5ilization Also declined by 1.3 percentage points below the level in the preceding quarter to 57.39 per cent. The deve1opment was attributed to the decline in electricity supply. Petroleum Sector Nigeria’s crude oil oil production, including condensates and natural gas liquids, was estimated at 2.05 million barrels per day (mbd) or 184.5 million barrels during the first quarter of 2013, compared with 2.00 mbd or (184.0 million barrels) in the preceding quarter. This represented an increase in production level of 0.05 mbd or 2.5 per cent. Consequently, crude oil export was estimated at 1.60 mbd or (144.0 million barrels) in the review period, representing an increase of 3.2 per cent over the 1.55 mbd or (139.5 million barrels) recorded in the preceding quarter. The development was attributed to repairs on damaged oil installations and improved security surveillance. Allocation of crude oil for domestic consumption was 0.45 mbd or 40.5 million barrels during the period under review. At an estimated average of US$115.34 per barrel, the price of Nigeria?s reference crude, the Bonny Light (37o API), rose by 2.3 per cent, over the level in the preceding quarter. The average prices of other competing crudes, namely the U.K Brent at US$113.68 per barrel and the Forcados at US$116.89 per barrel also exhibited similar trend as the Bonny Light. However, the West Texas Intermediate declined to US$91.07 per barrel during the review period. The average price of OPEC?s basket of eleven crude streams also rose by 2.0 per cent from the level in the preceding quarter to US$109.48 per barrel but declined by 6.7 per cent when compared with the level in the corresponding period of 2012. The development was attributed, largely, to improved industrial activities and consumers? increased demand for heating oil in Europe. ------------------------------------------------------------------------------------- Reps tackle NNPC again over alleged N142 billion unremitted IGR Written by Jacob Segun Olatunji and Kolawole Daniel -Abuja Friday, 24 May 2013 04:36 THE House of Representatives Committee on Finance, on Thursday, tackled the Nigerian National Petroleum Corporation (NNPC) over what it called deliberate action to delay its conclusion on investigation of the corporation’s refusal to remit about N142 billion to Federal Government’s coffer as its internally generated revenue (IGR). According to the committee’s record, the corporation made about N6 trillion between 2009 and 2012 as IGR, but refused to remit N142 billion to the Consolidated Revenue Fund (CRF) as prescribed by the Fiscal Responsibility Act (FRA) 2007. Chairman of the committee, Honourable Abdulmumin Jibrin, on seeing four senior officials of the corporation, led by the Group Executive Director (Finance), Mr Bernard Otti, said the NNPC was wasting the time of the committee in concluding its investigation. According to him, “this exercise is not about the NNPC but the subsidiaries that are generating the revenue and have been making profit. “Out of the 17 subsidiaries, it is only five that have not been making profit and we want to know how the profit of the others are being spent, since NNPC has been saying that it has never operated on surplus. “Unfortunately, this delay is affecting the submission of the report of this investigation. We investigated 60 agencies and all of them have responded, it is only the NNPC that is delaying.” He added that “it is the opinion of this committee that the wrong impression the NNPC is having is that they forgot that the committee is constitutionally empowered to request for documents to aid its investigation from any entity considered necessary. “We can decide to request for information even from a unit within the NNPC and they must oblige as stipulated by the constitution.” He equally noted that “Nigerians even need to know the workings of the NNPC and all we are doing is to see how we can assist the corporation in blocking all leakages, so that the revenue base of the government can be lifted.” Mr Otti had earlier pleaded with the committee over the corporation’s delay in coming up with its presentation, saying that it was as a result of the absence of the officer in charge, whom he said had been out of the country for about a week. ------------------------------------------------------------------------------------- Govt’s debt stands at N8.7 tr, inflation rises by 9.1 % . Thursday, 16 May 2013 00:00 From Mohammed Abubakar and Karls Tsokar, Abuja News - National THIS is official: The country’s debt profile stood at N8.7 trillion as at December 2011. Out of the sum, N6.85 trillion is for domestic stock while N1.217 trillion represents the external stock, which is 21.5 per cent of the country’s Gross Domestic Products (GDP) ratio. Thursday too, it was disclosed that the inflation in the country rose to 9.1 per cent in April as against the 8.6 per cent rise in March, while the GDP expanded to 6.56 per cent in the first quarter of the year 2013. Nwankwo briefed the NEC where he highlighted the gains recorded by his office on public debt management, including the successful completion of Debt Data Reconstruction (DDR) in all the 36 states and the Federal Capital Territory (FCT) last December. Some of the decisions taken by NEC, which was chaired by the Vice President, Namadi Sambo, included the establishment of a sub-committee to facilitate easier accessing of funding for critical infrastructural development by both federal and state governments. The committee is charged with the responsibility of harmonising the projects with a view to quickening the pace of draw down. The committee, which is chaired by Gombe State Governor, Ibrahim Dankwambo, also has six other state governors representing the six geo-political zones, Finance Minister, National Planning Minister, Chief Economic Adviser to the President and Special Adviser to the Vice President on Economic Matters. The governors on the team include Gabriel Suswam of Benue representing North-Central; Peter Obi of Anambra (South-East); Isa Yuguda of Bauchi (North-East); Mukhtar Ramalan Yero of Kaduna (North-West); Emmanuel Uduaghan of Delta (South- South) and Olusegun Mimiko of Ondo (South-West). While briefing State House correspondents on the decisions taken at the council, Kwambo said the raising of the sub-committee followed a presentation at the last NEC meeting in April by the Co-ordinating Minister of Economy and Finance Minister, Ngozi Okonjo-Iweala, on concessionary facilities being offered to both federal and state governments by different international funding agencies to fund high impact projects in such vital areas as infrastructure, housing, water supply, erosion control and employment generation. According to him, “the establishment of a NEC sub-committee is to follow up and work with interested states towards a better harmonisation and co-ordination of the processes to enhance easier and quicker draw down.” Also, Edo State Governor, Adams Oshiomhole, briefed the council on the decision of the state governors to purchase the 78,701 pieces of the Direct Data Capture (DDC) machines by the Independent National Electoral Commission (INEC) used during the last voters’ registration at subsidised rates. He said if purchased, the computers would be distributed to secondary schools all over the country in pursuance of the determination to expose the younger generation of Nigerians to computer applications at an early age. According to him, “INEC has surplus machines and they are updating their systems and they thought rather than waste the huge numbers, they offered to sell them to states. We are all in agreement that it will be useful to have these machines and have them distributed to our various secondary schools across the country. “The Council agreed that states are going to buy the machines and INEC should give discount of 25 per cent for the old machines and 10 per cent for the new ones. Further negotiation on the mode of payment will be finalised by the committee with INEC,” he said. Niger State Deputy Governor, Musa Ahmed Ibeto, also briefed the media on the acceptance of the recommendations arrived at during the recently-concluded national conference on corruption, which took place in the state and agreed that because of the seriousness attached to corruption matters, the report would be deliberated on during the NEC July meeting. A statement yesterday in Abuja by the National Bureau of Statistics shows that “in April 2013, the Consumer Price Index (CPI), which measures inflation, rose by 9.1 per cent year-on-year (compared to 8.6 per cent in March). This is the fourth consecutive month of single digit year-on-year rates being recorded, and the first time this has occurred since the movement to the new CPI base period.” While manufacturing, hotels and restaurants, and construction performed very well by contributing 7.89 per cent from January to March as against the 8.14 per cent in the previous year, though a decline comparatively, the non-oil sector was the major driver of the economy in the first quarter. “On an aggregate basis, the economy, when measured by the Real Gross Domestic Product (GDP), grew by 6.56 per cent in the first quarter of 2013 as against 6.34 per cent in the corresponding quarter of 2012…The nominal GDP for the first quarter of 2013 was estimated at N9,493,779.44 million as against the N9,142,858.51 million during the corresponding quarter of 2012.” The Statistician-General of the Federation Yemi Kale who made the statement available to the media, indicated that industrial high scale theft and unresolved issues of legislations contributed to the poor performance of the oil sector in pushing the GPD forward. ------------------------------------------------------------------------------------- Nigeria: FG to Increase Foreign Borrowing, as Debt Hits N6 Trillion - Finance Minister By Talatu Usman, 15 May 2013 Debt Africa: Governance Gets New Emphasis At Econ... The Federal Government will increase its foreign borrowing using part of the loans to offset its domestic debt, the Minister of State for Finance, Yerima Ngama, has said. Mr. Ngama who briefed journalists after the weekly Federal Executive Council meeting said the Council approved a medium term debt management strategy. The strategy is expected to free more cash for domestic lending for the private sector in the country. He said part of the new policy is to reduce the domestic borrowing as well as access concessionary windows and raise foreign loans which will be used to actually pay the more expensive domestic debts. The minister said the policy was put together by the Debt Management Office, Central Bank, Ministry of National Planning, the World Bank, and the National Bureau of Statistics. The new government strategy is expected to follow the restructuring of the high domestic debt profile, which makes it less expensive to service . The strategy will also through a comprehensive plan exit the corridors of high domestic debts. Low foreign debt, High domestic debt The finance minister explained that Nigeria's current foreign debt was insignificant and could not create problems for the country as it is just 12 per cent, with the remaining 88 per cent as domestic debt. "We had four options. One option is to continue as we are doing. Option (two) is to say ok, we are not going to do much but let us borrow more of the twenty year bonds where we raise them and use them to pay down the one year, two years and five year debts so that space will be left for the private sector to operate, which means we are reliving ourselves, giving ourselves time in order to retire the bonds that will actually free some resources for us. "The third option is to see how we can access concessionary windows or raise cheaper foreign loans and use them to actually pay down the more expensive domestic debts. "Once we tilt the structure, from 84% to 16% , 84 is concessional while the 16% is non concessional, then the domestic and foreign will also tilt to that. So we can have maybe 40 percent foreign debt and 60 percent domestic debt. "If we do that after we play it out we are going to reduce out total debt burden to .5% by the year 2015 and we think that is better than the level we are today which is just 2.2%," he said. The minister explained that contrary to fears being expressed about increased foreign borrowing, it would help the country. He said the foreign borrowings would be gradual. "When we do that we can bring a lot of benefits to the country and we will manage the finances free and also reduce the cost of borrowing and that mixed option is the one that the federal government approved and we are happy for that approval. "One thing is that we are not just going to do it overnight we won't just start taking loans from abroad or selling bonds we will do it very gradually. We are going to have a smooth transmission so that everything is well managed and that there is no shock to the system," he said. N6 trillion debts not high The Finance Minister said at N6 trillion, Nigeria's debt was not too high, but for the cost of servicing the debts. "Nigeria has one of the highest interest rates in the developing world and if you have high level of debt, then the debt servicing will become very expensive". He also announced that the government was working to reduce the cost of domestic debt servicing to bring it to as low as 0. 5 % of the Gross Domestic Product, GDP from the current level of 2.5% of the GDP. He listed the major factor that increased domestic debt as wage increase to civil servants in 2010 which increased wages by as high as 54 % forcing government to borrow N 3.6 trillion to pay salary; adding that since then, federal government budget had incurred deficit of N1 trillion annually. He gave other reasons for the high domestic debt to include non-payment of local contractors who have executed contract not captured in the budget, and the payment of the pension and gratuity to former staff of the Nigeria Telecommunications Limited, NITEL. N699 n to service debts in 2012 Mr. Ngama further disclosed that in 2012 alone, the federal government had spent the sum of N699 billion to service debts. "Government had no choice but to borrow to sustain the level of funding. The new objective is now to reduce growth of such funds and ensure that the rate at which the debt is increasing is decreasing". "So, we think that the position as its at the moment is not good for us. We have high interest rate, high debt servicing, last year alone, we paid about N699 billion to service the debt and that compared to the other budgetary provision for our capital expenditure which just over a Trillion, then you realized that we are having a disproportionate cost of debt financing," he said. He explained that when government borrows that much, the private sector's main source of fund will have part of its portfolio in government securities, which means that there is little money left for the private sector to borrow from because government has borrowed most of the money and this will affect the rate at which the economy is growing. "Intact the entire sector had a liquidity ratio of over 50 per cent which means that there is little money left to the private sector to borrow because government has borrowed most of the money and this is affecting the rate at which our economy is growing," he said. Foreign Reserve increases Mr. Ngama also disclosed that Nigeria's reserve is now above $53 billion. This, he said, is made up of foreign reserve of $45 billion; excess crude of $7 billion and Sovereign Wealth Fund of $1 billion. ------------------------------------------------------------------------------------ IMF Forecasts U.S.$80 Billion in Foreign Reserves Accretion By James Emejo, 10 May 2013 Abuja — The International Monetary Fund (IMF) is expecting Nigeria's foreign reserves to increase to about $80 billion in the next four years. IMF Senior Resident Representative, Mr. Scott Rogers, said its projection was based on expectations that export diversification and continued capital in-flows would be sustained because of improvement in the country's investment climate. Noting that export diversification was critical to long-term growth, it added that interest rate spread would also remain for a few more years. Speaking to journalists in Abuja during a briefing to present highlights of the Staff Report on the 2012 Article IV Consultation, which is expected to be published soon, he said the IMF was in support of the agitation for complete removal of fuel subsidy. The Fund also recommended that the current tight monetary policy be maintained until signs of durable reduction of inflationary pressure are achieved. He said: " The principle factor is that oil prices would be coming down on a very high level, so you have that starting point. Meanwhile oil exports now are about a $100 billion a year. So that would fall a little bit. What that means is that your balance of payment surplus would be getting smaller but it's still going to be positive and that's how you build reserves." On its recommendation for the removal of fuel subsidy amid its social implication, the IMF country representative said the Fund believed it was the right step in the right direction. He said: "We are not saying it should be done on friday...removal of fuel subsidy will definite have impact on the poor but the benefit is overwhelmingly to be better off in every society because it is the middle class and upper classes that are consuming most of the energy and not the very poor people. "The main one is the fuel subsidy because that's a lot of money: The fuel subsidy alone in 2011 was about three times the capital budget; it's a lot of money...We are basically supporting what almost everyone in Nigeria has been saying at least, in terms of the policy makers and we think it's the right way to go." Continuing, he noted that: "There are other forms of subsidy-there's the budget subsidy to power company (PHCN) and it's supposed to be in place for the next two years: and that is suppose to stop. And that's something that is important." He said the right way to go was to subsidise consumers within the power sector instead of the whole industry. He said the present controversy over the passage of the Petroleum Industry Bill (PIB) had continued to delay huge investment in the power sector. However, he said the economy was expected to continue to post strong growth in the non-oil sectors. According to him, tighter fiscal monetary policy is easing inflationary pressures, although government's medium-term expenditure framework required substantial fiscal adjustment. Rogers added however that the success of such expenditure framework would largely depend on the use of the Excess Crude Account (ECA) and the Sovereign Wealth Fund (SWF) as well as the ability to contain recurrent expenditures. He explained that international reserves would continue to rise, helped by the relatively high interest rates in short-term. He noted that macroeconomic performance and policies in 2012 had been largely positive adding that fiscal targets for 2013 and medium term were consistent with macroeconomic stability although additional measures were required. He added that the elimination of subsidy would help fiscal adjustment. He said there was need to strengthen oil-price rule and oil savings mechanism as well as implementation capacity of public investment. He, however, warned that the overall success could be limited by negative oil price shock arising from weaker global recovery as well as weaker fiscal stance arising from spending pressures. ----------------------------------------------------------------------------------- Alleged N36bn fraud: EFCC declares ex-Gov Turaki wanted May 4, 2013 by Kamarudeen Ogundele, Abuja EFCC Chairman, Ibrahim Lamorde The Economic and Financial Crimes Commission on Friday declared former Jigawa State Governor, Alhaji Saminu Turaki wanted in connection with an alleged N36bn fraud. The anti-graft agency declared him wanted following an order of a Federal High Court, Dutse, Jigawa State, which issued a warrant against him. A statement by the commission’s spokesperson, Wilson Uwujaren, said Justice Yahuza ordered the Inspector-General of Police and the EFCC to arrest Turaki, and bring him to court. It quoted the judge as saying, “You are hereby commanded to arrest the said Ibrahim Saminu Turaki and bring him before me at the Federal High Court, Dutse, Jigawa State without delay.” Turaki is wanted for his failure to attend trial in the N36bn case of theft and money laundering slammed against him by the commission. Born on July 14, 1963, Turaki served as Jigawa Governor from May 29, 1999 to May 29, 2007. Turaki was first arraigned by the EFCC before a Federal Capital Territory High Court in 2007 on 32 counts of misappropriating N36bn while in office. The case was later transferred to the Federal High Court, Dutse after he challenged the jurisdiction of the FCT court. He was subsequently re-arraigned on 32 counts at the Federal High Court, Dutse, Jigawa State. According to the EFCC, Turaki’s last known address was No. 16, Dennis Osadebe Street, Asokoro Villa, Abuja. The commission implored anyone having useful information about the whereabouts of the former governor to notify its offices in Kano, Gombe, Abuja, Port Harcourt, Enugu and Lagos or report at the nearest police station. ------------------------------------------------------------------------------------- Private jet: EFCC probes Amaechi over missing $10m May 4, 2013 by Fidelis Soriwei, Chukwudi Akasike, Okechukwu Nnodim and Kamarudeen Ogundele RIVERS State Governor, Mr. Rotimi Amaechi The crisis over an aircraft owned by the Rivers State Government deepened on Thursday, as the Economic and Financial Crimes Commission commenced a discreet probe to determine Governor Rotimi Amaechi’s link to the alleged inflation of the cost of the plane by $10m. The aircraft has been the subject of a row between the Rivers State Government and the Nigerian Civil Aviation Authority. It was learnt that the anti-graft agency is looking into the ‘high possibility’ of alleged money laundering in relation to the purchase of the aircraft. A source said on Thursday that while the state government claimed to have purchased the Bombardier aircraft with $57m, records available to the EFCC showed that it may have been bought for $47m, thereby creating room for suspicion on how $10m was spent. It was learnt that the state House of Assembly approved the purchase of the controversial aircraft within 24 hours. It was further gathered that operatives of the EFCC might also be looking into how two aircraft purchased by the Rivers State Government under former Governor Peter Odili were managed. One of the aircraft was sold to the Cross River State Government while the other aircraft manufactured by a Brazilian firm, an air ambulance, was said to have been phased out. Investigations further revealed that the company wrote the Rivers State Government to say it was longer manufacturing the spare parts of the aircraft and so it was returned. A source said the anti-graft agency was probing the management of the aircraft because rather than just phasing it out, it should have been traded in for another aircraft. It was learnt that a focus of the investigation was to find out if there was any link whatsoever between the new aircraft and the aircraft in the area of cost. Contacted, EFCC spokesman, Wilson Uwujaren, said he had not been briefed on the matter. “I’m not aware of this,” he said on the telephone. Meanwhile, the Nigerian Civil Aviation Authority has said that the aircraft it grounded does not belong to the state government. The General Manager, Public Affairs, NCAA, Mr. Fan Ndubuoke, told our correspondent on Thursday that the aircraft belonged to a private firm, contrary to claims by the Rivers State Government that it owned the controversial plane. He said, “The document we have does not show Rivers State Government as the owner of the aircraft. The registration is saying that the plane is owned by a company and not Rivers. So it is you people that will ask Amaechi how he came in contact with the aircraft. What is his relationship with the owner of the aircraft? That is his own business and I cannot answer that question for him. “From the records we have, we have told you the owner of the aircraft. So whether it is from his friend or whoever, is it for me to know? It is not for me to know. Because from our records there is nowhere Rivers State Government is stated as the owner of the aircraft.” He admitted that the aircraft was registered in the name of Bank of Utah in the United States, stressing that the governor should tell the public what he knows about the controversial plane. Ndubuoke explained that the plane, before it was grounded, only had approval to move from Accra to Port Harcourt. He wondered why the crew decided to fly to other destinations outside the aircraft’s approved routes. He said, “The clearance for the aircraft was sought by Caverton Helicopters on March 27. Amaechi did not seek clearance and the Rivers state government did not seek clearance. The route they were given the clearance to fly was Accra-Port Harcourt-Accra. “That does not mean it is the only place that they can fly. But that was the route with which they applied for the clearance. So if they now want to fly to Owerri or Akure, they need to reapply for another clearance. That is just the true matter, nothing more, nothing less. Their movement to Akure was illegal because it was not captured in the clearance.” The Nigerian Airspace Management Agency had last Friday refused to grant approval to the governor’s aircraft to leave Akure airport. According to NAMA, the development was due to the failure of the pilot of the plane to submit the required manifest of passengers on board. The airspace agency also said it was untrue that the aircraft was grounded by the airspace manager at the Akure airport. The Managing Director, NAMA, Mr. Nnamdi Udoh, argued that contrary to the politicisation of the incident, the agency carried out its functions in line with the global aviation standard. He was reported as saying, “By regulation, the manager has no power to clear any aircraft at that time of the day because Akure Airport operates day light operations. Approval must be given through the manager to the tower.” On Saturday, NCAA had declared that the controversial aircraft operated illegally in the country. As a result, the civil aviation authority grounded the Bombardier-BD 700 Global Express aircraft with registration number N565RS. It said the plane had an expired clearance approval effective April 2, 2013. The Director, Airworthiness Standards, NCAA, Mr. Benedict Adeyileka, explained that while the aircraft was still operating illegally, it had been sighted in several places, including Owerri and Akure. The NCAA also stated that the grounding of the aircraft had nothing to do with the President. Ndubuoke said, “The media always say that government grounded the aircraft because of issues with Amaechi. Reports have it that it was because the President and Amaechi are having problems, and that that was what may have led to the grounding of the aircraft. “But I don’t know how the President will come from Aso Rock and say ground this airplane. In fact, I don’t how that will happen and I wonder why he will do that in the first place. So what we are trying to say that it is not true.” Contacted, the governor’s Chief Press Secretary, Mr. David Iyofor, said he would not react to speculations about the state government’s aircraft. “I have no comment on the issue because I cannot react to speculations,” he stated. However, the Rivers State Commissioner for Information and Communications, Mrs. Ibim Semenitari, in a statement on Friday faulted claims by the Ministry of Aviation that the aircraft was flown into Nigeria with forged documents. The statement reads in part, “No aircraft can fly into Nigerian airspace illegally and land at various airports within the country unchallenged. The Rivers State Government-owned aircraft has been in operation since October 2012; “The allegation that a state government would use the name of Caverton Helicopters to obtain various clearances is preposterous and embarrassing; “The claim that the aircraft insured is owned by Acass Canada Limited of 6700 Cote de Liesse, Suite 206,Montreal, QC H4T 2B5, Canada is a deliberate distortion of facts. An insurance issued to Acass was used for entry into service while flying between Canada and the USA for pre-delivery tests. Rivers State Government took delivery on 5th October, 2012 and duly insured the aircraft and the certificate of insurance duly states this. Please note below: “The Rivers State Government has been flying this aircraft since October 2012 with this same certificate and with the knowledge of the Ministry of Aviation. The ownership of the aircraft is not in question as we have clearly explained the relationship between the Rivers State Government and the Bank of Utah. “This is a verifiable relationship and is common place in the aviation sector as practitioners and stakeholders know. The Deed of Trust is proof that the aircraft is held in trust by the Bank of Utah on behalf of the Rivers State Government. “We believe that all administrative procedures should and must be complied with. However, the state government is worried at what is beginning to seem like a witch-hunt of it and related parties that have conducted business with it. We will continue to engage with aviation officials and follow through with all administrative requirements and processes as is most appropriate.” Also, the Majority Leader in the Rivers State House Assembly, Mr. Chidi Lloyd, explained on Thursday that the current administration traded off two aircraft it met on the ground because they were not durable. Lloyd added that the state house of assembly approved the purchase of the aircraft based on the durability of the new one. “When this state government came on board, it met two aircraft on ground. It also discovered that the two planes were not durable. Even the manufacturing company said that particular type had been phased out. “The current administration decided to trade off the two planes and bought a more durable aircraft currently being used. The aircraft had been on the ground for almost a year, why is it being talked about now?” Lloyd wondered. -------------------------------------------------------------------------------------- FG misappropriated N1.5tn in Special Funds Accounts –Senate May 1, 2013 by Oluwole Josiah, Abuja Finance Minister, Dr. Ngozi Okonjo Iweala The Senate on Tuesday considered the report of its Committee on Public Accounts, which detailed how the sum of N1.51tn in the Special Funds Accounts mismanaged by the Federal Government between 2002 and 2012, concluding that poor legislative oversight was partly responsible for the abuse. The accounts comprised the three per cent Natural Resources Fund, the 1.46 per cent Derivation and Ecology Account and the 0.72 per cent Stabilisation Account. Presenting the report for consideration, the Chairman of the committee, Senator Ahmed Lawan, said the money accrued to the three accounts as of June 30, 2012, of which N1.24tn was paid out. He said a total of N580bn was also paid out to various organisations and individuals as loans contrary to the objectives of the funds, even as N348bn of the borrowed fund had yet to be refunded. Giving a further breaking down of the loans, the report stated, “The operation of the National Resources Account is grossly abused because several releases under this account were not related to the intendment of the account. “A total of N329,329,745,916 was granted as loan, out of which N200,585,790,991.64 is still outstanding under the National Resources Account. “Under the Derivation and Ecology Account, a total of N61,000,000,000 was granted as loan out of which N30,000,000,000 is still outstanding.” One notable observation of the committee was the 100 per cent abuse of the Development of Natural Resources Account. It revealed that of the N701.5bn, which accrued to the account, not a naira was used for the development of natural resources. Instead, the amount was used either as loans to other agencies and organisations to finance deficits and shortfalls, or were paid out to finance other government projects. For the Derivation and Ecology Account, out of the total N329.9bn paid out, N149.9bn was allegedly diverted to other uses outsides its mandate. The same observation was made on the Stabilisation Account, where a total of N191.8bn was allegedly misapplied out of the N255.5bn that accrued to the account. Some of the inexplicable loans granted from the accounts, according to the committee, include the N87.7bn granted to the Independent National Electoral Commission in 2010 to commence fresh voters’ registration even though the exercise was provided for in the budget; N2bn granted to Gitto Construction Company; N1bn granted to the Edo State Government under the leadership of Mr. Lucky Igbinedion; N12bn granted to Ghana and Sao Tome and Principe in 2004 and 2007, respectively; and the N200m released to the Presidential Research and Communication Unit in 2002. The committee observed that “several approvals of funds from the Special Funds Accounts do not conform to the purposes for which the funds were established. There are no operational guidelines for the administration, regulation, approval and procedures for the release of money from the funds.” The committee stated in its report, “The funds are practically being operated as loan granting pools. Several beneficiaries of the funds utilise the funds for purposes that are not contemplated by the intendment of the funds. “The socio-economic development and environmental integrity of Nigeria are threatened by the continuous misapplication of the money from the Special Fund Accounts to unrelated purposes. Loans granted from the accounts have not been paid back several years after such loans were granted.” It also added that there were no regular reconciliation between the Accountant-General of the Federation and the Central Bank of Nigeria. The Senate, however, resolved that the committee would need to return to determine the actual beneficiaries of the loans that had not been paid back to the accounts as well as determine the details of what was outstanding. President of the Senate, David Mark, said, “I think our problem here is how these funds have been utilised, but like Victor Ndoma-Egba rightly pointed out, I was going to ask if we have any guidelines at all on the Special Fund Accounts or is it just at the discretion of the President of the federation? “The problem we have with these funds is that, apart from not having guidelines for them or any Act guiding the disbursements and the utilisation, we also, at the various committees or the committee responsible, are not taking enough pain, we just take it for granted that these funds exist and we can use them in any way and manner that whoever operating it decides. “I think that is truly an indictment on the National Assembly. You brought this up now; this is a wakeup call for the National Assembly to its work properly because if we have been following this …it started in 2002. Since the Presidential order came into effect on the accounts, we have never really bothered about it. “I think that overall, we share in the blame – both the legislature and the executive – in these disbursements and my contribution at this point will be that the committee should go back and look at those who have paid back and those who have not paid back their loans. The report has not stated that. Those who have taken loans should be asked to pay back. All of us are displeased with what has happened here.” The Deputy President of the Senate, Ike Ekweremadu, said in an event where the money was not recovered, the Senate should invite the Economic and Financial Crimes Commission and Independent Corrupt Practices and other related Offences Commission to wade into the matter, as failure to do so would be interpreted by the public as the National Assembly abdicating its responsibilities. He said, “Section 8(82) of the Constitution states that no money shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure. In this situation, we have seen where money meant for the Ecological Fund is being used to develop airports, to build malls and to build abattoir. “So, that is the crux of the matter. Most of them, according to the report of the committee, indeed all of them, have not been recovered. “I will like to ask this committee whether it made contacts with the beneficiaries of these loans just to hear their own side to be sure that these loans were not repaid. Because if they were repaid, it becomes another kettle of fish what became of the money.” The Deputy Majority Leader, Senator Abdul Ningi, who is also the Deputy Chairman of the Committee on Public Accounts, said, “This is sheer crass executive recklessness and the National Assembly is indifferent to it. We must not under any guise sweep away these findings. Going forward, this chamber must have to add a committee to make sure that the loans, which were collected, are refunded, and where there is a breach, people must be brought to book by being prosecuted. “This impunity is ongoing; it has not stopped because even in 2011, we could see the impunity by the coordinating minister. That means the trend continues.” A bill is already before the Senate seeking to make provisions for the administration of the accounts, it has passed first reading. ------------------------------------------------------------------------------------- Globacom’s 2013 network investment hits $1.25 billion . Monday, 29 April 2013 20:34 By Adeyemi Adepetun Business Services - Business NATIONAL operator, Globacom, has signed a new $500 million contract with another Chinese firm, ZTE for network upgrade, bringing its network investment for 2013 to a whopping $1.25 billion. Recalled that Globacom had signed a $750 million pact with Huawei, a global telecommunication infrastructures provider for the same purpose last Thursday. The latest contract, which is for a four-month period is to enable Globacom to “massively expand its current huge capacity.” Globacom’s Group Chief Operating Officer, Mr. Mohamed Jameel, who spoke at the contract-signing ceremony held at the company’s head office in Lagos, yesterday explained that the network enhancement project was part of the plan to enhance the experience of millions of subscribers on the Globacom network. He said the contract with ZTE was to enable the network operator upgrade its facilities to the very latest technology in global telecommunications. The massive expansion project will involve network upgrade and overhaul of infrastructure across the country as well as expansion and densification projects that will on completion in four months enable the network to cater more for its existing and potential subscribers. Under the partnership, Globacom will build new switches, increase mobile switching centres to ease congestion and construct additional 4,000 km of optic fibre cable, which will complement the existing fibre optic facility, which is the most extensive fibre coverage of Nigeria. Glo has state-of-the-art IP/MPLS and TDM technologies (30 gigabyte capacity) to meet requirements of enterprise customers, video, voice and data services. The TDM network will also be upgraded to a fully integrated Generalised Multi-protocol Label Switching (GMPLS). Jameel said part of the upgrade will also include installation of new base stations and densification of existing ones; setting up of three new mini call centers across the country to take care of vast increase in subscriber figures and upgrade of the radio access network which will ensure that data customers enjoy unparalleled speed and reliability. The GCOO said ZTE of China was chosen to do the job because of their track record of delivering quality service across the globe. Consequently, ZTE will assist Glo to upgrade its network for enhanced network quality and capacity. The Managing Director of ZTE, Mr. Zheng Yong, said his company was glad to be collaborating with Globacom on the modernisation of its network. He said when the project is completed Nigerians on the Glo network will benefit immensely from this partnership.”This is a special partnership that the whole Nigeria will benefit from in the long run” he said. ---------------------------------------------------------------------------------- Govt lost N191bn to oil theft in Q1 –NNPC April 18, 2013 by Dayo Oketola Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke | credits: Nigeria lost N191bn ($1.23bn) to oil theft and vandalism in the first quarter of the year as crude theft continued to threaten the country’s revenue base. The Nigerian National Petroleum Corporation, in a statement on Wednesday, also said there had been a significant drop in crude oil production for the first quarter of 2013. The corporation said in the statement by the Acting Group General Manager, Public Affairs Division, NNPC, Ms. Tumini Green, that incessant crude oil theft and vandalism along the major pipelines within the Niger Delta had been responsible for the drop in oil production. The NNPC said daily crude oil production during the period fluctuated between 2.1 million and 2.3 million barrels per day compared with the projected estimate of 2.48mbpd. “Expectedly, this fall between actual production and forecast in first quarter 2013 has resulted in a drop in crude oil revenue of about $1.23bn (N191bn) that should have accrued to the Federation Account,” Green said. She further explained that the NNPC/Shell Petroleum Development Company Joint Venture recently declared a force majeure on Bonny Crude due to incessant crude oil theft, which had resulted in the shutting in of 150,000bpd. She said, “Investigations showed that 53 break points were discovered along the 97-kilometre Nembe Creek Trunkline. Repair work is expected to last about six weeks. “This will further reduce our April and May monthly average to about 2.2mbpd and further decrease crude oil revenue by about $554m (equivalent to N83bn) that should have accrued to the Federation Account.” Green, however, assured that the maintenance work would have minimal effect on gas supply to the domestic market. “We shall continue to work with relevant government agencies, both at the federal and state levels, to end this incessant crude oil theft and pipeline vandalism. We have the potential to meet the national target of 2.48mbpd if this menace is eliminated,” she said. The NNPC spokesperson maintained that crude theft and pipeline vandalism would continue to degrade the environment, increase operational costs, impact negatively on the image of the country and reduce revenue accruable to the nation. She appealed to all stakeholders to cooperate with the corporation as it strived to eliminate the menace. Meanwhile, SPDC said it had since Monday, April 15, 2013, shut down the NCTL to remove crude oil theft connections and investigate suspected leaks. The Managing Director, SPDC and Country Chair, Shell Nigeria, Mr. Mutiu Sunmonu, said, “We’re concerned that the NCTL has been targeted by crude oil thieves repeatedly since we installed the new line in 2010 at a cost of $1.1bn. “The current exercise aims to remove a significant number of oil theft connections and repair any leaks on the pipeline. We recognise efforts by the security forces to contain the crime, and SPDC will work with them during the shutdown to clear illegal connections on the NCTL.” The 97-kilometre NCTL has been closed several times as a result of crude oil theft leaks and fires between December 2011 and May 2012. “Crude theft continues to affect people, the environment and the economy, and urgent action is needed by all stakeholders to tackle the problem,” Sunmonu added. The International Energy Agency had, last year, said that Nigeria was losing about $7bn annually to oil theft. “Oil bunkering, or theft, costs the government an estimated $7bn in lost revenue per year,” the agency had said, adding that theft and sabotage often led to pipeline damage, causing oil firms to cut output. The Federal Government had been said to be jittery over the possibility of not meeting its N11.34tn revenue target for the 2013 fiscal year due to crude oil theft by pipeline vandals, failure of revenue generating agencies to fully remit what they generate into the Federation Account and inefficiency in tax collection. The Director-General, Budget Office of the Federation, Dr. Bright Okogu, confirmed the government’s anxiety about the likely revenue shortfall. Okogu, in a document entitled, ‘FGN 2013 budget: Fiscal consolidation with inclusive growth,’ a copy of which was obtained by our correspondent, highlighted the challenges as well as other growth-promoting initiatives of the budget. “Revenue challenges facing the budget are independent revenue non-full remittance by revenue generating agencies; taxes collection efficiency issues (Federal Inland Revenue Service, Nigerian Custom Service); pipeline vandalism and oil theft,” he said. ------------------------------------------------------------------------------------- Ex-minister misappropriated N3bn contract fund –EFCC April 18, 2013 by Agency Reporter An operative of the Economic and Financial Crimes Commission, Mr. Chike Nwibe, on Wednesday told the Federal High Court, Abuja that a former Works Minister, Hassan Lawal, misappropriated N6.4bn for Brutu and Bagana bridges contracts. The EFCC, on May 11, 2011, had arraigned Lawal, alongside 14 others, for alleged fraudulent award of contracts, money laundering and embezzlement of funds for projects in Kogi and Nasarawa states. Lawal is standing trial on charges of N24.3bn contract scam. Charged with him are Adeogba Ademola, Digital Toll Company Ltd; Swede Control Interlink Ltd; Proman Vital Ventures Ltd; Nairda Ltd; Siraj Nigeria Ltd; and Wise Health Services Ltd. Others are Dave Enejoh, Okala Yakubu, Thahal Paul, George Elzogbi, Abbey Ayodele and GIS Transport Ltd. Nwibe, during cross-examination, said an investigation carried out by the EFCC showed that N6.4bn was the actual figure received by the contractors of the N24.3bn contract sum. He alleged that of the figure, Lawal authorised the payment of N3bn in 2009. He said, “I do not think it is correct to say that payment of over N4.5bn was made before 2009 when Lawal became a minister. “We went on-the-spot assessment of the contract site and found that the extent of work was not commensurate with the amount paid. “The work done was about 30 per cent of the sum collected. The assessment was based on our projection and according to experts.” ----------------------------------------------------------------------------------- CBN after Lamido Sanusi April 16, 2013 by Oludare Mayowa CBN Governor, Sanusi Lamido Sanusi A few weeks ago, the Governor of Central Bank of Nigeria, Lamido Sanusi, said he would not be seeking a second term in office at the country’s apex financial institution at the expiration of his first five-year tenure in June 2014. Sanusi was appointed to replace Chukwuma Soludo, a professor of economics whose tenure was as eventful as it was controversial in many ways, in June 2009. On assumption of office, as if his briefing was to dismantle his predecessor’s legacies, Sanusi’s first major move was to expose the decay in the nation’s banking sector triggered by non-performing loan portfolio and reckless lifestyle of many operators, which had eroded the gains of the immediate past consolidation of the sector. The dismissal of the hitherto powerful chief executives of seven banks and the bail-out of eight financial institutions were seen by many as critical interventions in the sector, which saved hundreds of depositors’ funds from going down the drain. The move readily conferred on Sanusi the toga of a reformer both within and outside the shores of the country. The exposure of the weakness and the large scale fraud in the banking sector were an eye-opener to many who had been made to believe that our banking system was immune to the ferocious financial melt-down ravaging the world financial system during the period. By the way, only a few months earlier, Soludo, whose tenure witnessed a major reform of the banking sector that saw the number of banks reduced from 89 to 24 with the 25-fold jacked up in banks capital base, had assured the whole world that the Nigerian banking sector was safe and secure. Soludo had told whosoever cared to listen then that his banking consolidation process was a well-thought out policy that foresaw the future of the world financial system and protected Nigeria’s financial sector ahead of the disaster. Apart from his stride in exposing the rot in the financial sector, his singular devotion to combating inflation, using monetary policy instrument, had received worldwide acclaim, Sanusi’s fiercely independent view on issues beyond the purview of the central bank, including politics has earned him a reputation of an opposition within the government and endeared him to those who view this as a refreshing difference from the known position of people in government. But Sanusi’s constant penchant to dabble in politics through his public outbursts may have been his undoing, perhaps the reason for his unwillingness to seek a second term in office. A number of analysts have said even if he desired a second term, the government of President Goodluck Jonathan would not oblige him due to his consistent criticisms of the growing corruption in government and the techniques and methods of tackling the nation’s many problems. From available records, no central bank governor since the late Abdulkadir Ahmed, whose nine years tenure was the longest, has spent more than a term in office. Despite the intense lobby by Joseph Sanusi to renew his term, President Olusegun Obasanjo gave it to Soludo, same with President Umaru Yar’Adua, who discountenanced the mounting pressure from Soludo and appointed Sanusi to replace him. Also, Sanusi’s reform of the banking sector has failed to impress a number of locals, especially shareholders in some of the rescued banks who lost billions of naira in investments when some of the rescued banks were nationalised. Besides, the acquisitions of Intercontinental Bank by Access Bank and Finbank by First City Monument Bank were seen not to have conformed strictly with his public view on transparency. The massive loss of job in the banking industry due to the manner the reform was managed was also showcased as the evidence that his reform was a mere fluke to deceive the world in pursuance of a perceived regional agenda. Sanusi was accused of vendetta against former chief executive of Intercontinental bank, Erastus Akingbola, over the issue of rivalry in the industry, while his decision to spare some banks whose books were considered worse than the ones rescued was also seen as a minus to his intervention in the industry. Nonetheless, Sanusi’s performance in the saddle has be rated excellent and his landmark achievement in the banking industry will remain for a long time a reference point. However, top on the list of the contenders jostling to replace Sanusi are the outgoing chief executive officer of Access Bank, Aigboje Aig-Imoukhuede, and chairman of Stanbic-IBTC, Atedo Peterside. Analysts are of the view that whoever the President chooses next year to take over from Sanusi must equally gird his loins for some drastic change in the industry. Against the backdrop of declining loan portfolio and inability of the financial sector to assist Small and Medium size businesses in terms of financing, the incoming CBN governor should direct his energy on policies to redress this. Equally of importance is the need to ensure monetary policy stability and a safe and sound financial sector through constant monitoring of operators ensuring that the experience of 2009 does not repeat itself. Nigeria needs a central banker who will be firm and ensure that government is discouraged from destabilising the system with reckless spending, especially as we approach a general election in 2015. The choice of a successor to Sanusi should also be devoid of ethnic or political consideration to promote confidence in the financial system. While the need to choose someone with clear experience in the banking industry is compelling, the government should avoid the pitfall of choosing someone with vested interest in order to protect the credibility of the system and prevent the sector from being hijacked to the detriment of the larger society. •Mayowa, an international financial journalist with a foreign news agency, wrote in via daremayo@yahoo.com +234 803 396 4138 ------------------------------------------------------------------------------------ EFCC arrests NSPMC ex-MD April 15, 2013 by Kamarudeen Ogundele, Abuja Economic and Financial Crimes Commission has arrested a former Managing Director of the Nigerian Security Printing and Minting Company, Ehi Okomoyon. The Nation learnt that his arrest was in connection with the controversial contract awarded for the printing of polymer currency notes to an Australian firm. The contract was awarded when Prof. Charles Soludo was governor of the Central Bank of Nigeria, between 2006 and 2008. There were reports that Okomoyon resigned from the NSPMC after several billions of N1000 banknotes worth N2.1 billion suddenly disappeared under his watch. Confirming the arrest, EFCC spokesperson, Wilson Uwujaren said, “it is true that we arrest him. He is being interrogated in respect of the polymer contract. He was arrested yesterday (Sunday). Uwujaren, however, did not say if he Okomoyon would be charged to court. ------------------------------------------------------------------------------------- Diversion of N450m Bribe to Lebanon, Dubai Okorocha Breaks Silence “I Expect Imo Assembly, Not Traders to Query Me” . As Group Petitions Gov’s Aide, Akanno to Code of Conduct, EFCC Posted by admin on Apr 8th, 2013 and filed under Frontpage, News. Another dimension is beginning to emerge in the controversy surrounding the alleged N548m bribe which led to the impeachment of the Imo State Deputy Governor, Sir Jude Agbaso and his replacement with Prince Eze Madumere. It would be recalled that Agbaso was impeached for allegedly collecting N458m bribe from Joseph Dina of JPross, a firm handling road project in Imo. However, recent developments like the discovery that the N458m is in Dina’s account and has been transferred to his personal accounts in Lebanon and Durbar, continue to generate public reactions without the State Governor, Owelle Rochas Okorocha and members of his cabinet making an official reaction and statement. However, the State Governor was forced to speak on the matter by traders at the popular New Market on Douglas Road when one of them ask Okorocha during his visit to the market to react on the latest discovery that the N458m for which his former Deputy, Agbaso, was removed, has been traced to foreign account said to be owned by JPros. Okorocha while responding to the poser by the trader replied that he expects members of the Imo State House of Assembly to ask him such questions and not a trader in the market. The response sent shivers down the spines of the traders who were jolted by the response in New Market on Douglas Road, Owerri Meanwhile, concerned Imo citizens under various platforms have petitioned one of the JPross board directors and shareholders, Prince Macdonald Akano to the Code Conduct Bureau and Economic and Financial Crimes Commissions, EFCC. According to the details of the petition, the concerned Imolites are asking the Code of Conduct to prosecute Akano, who is Okorocha’s aide appointed to take charge of Project Monitoring and Implementation, for alleged perjury and failing to declare his shares in JPross in his Code of Conduct form for last year and this year. The petition requested Code of Conduct to verify why legal sanctions will not be visited on Akano for the alleged criminal act. The group also petitioned EFCC to investigate the involvement of the Governor’s aide taking into consideration the fact that Akano as a political appointee is also a shareholder and board member of a company that allegedly defrauded Imo State Government to the time of N900m, considering the value of the contract executed so far by JPross. While the group is worried that Akano has not denied his involvement in the whole affair, the concerned Imolites who petitioned EFCC and Code of Conduct Bureau, also accused the State Governor for keeping mute and maintaining incriminating silence over the involvement of his aide and disappearance of the N458 said to have been a bribe allegedly collected by his sacked Deputy Governor. ------------------------------------------------------------------------------------- Nigeria’s ruling class has grown worse – Sagay April 10, 2013 by Simon Ejembi Professor Itse Sagay Renowned legal practitioner, Prof. Itse Sagay, on Tuesday criticised the country’s ruling elite for failing to provide good governance for the nation. Sagay said this in Lagos while delivering a lecture ‘Good Governance and Enforcement of Law and Order’ at the Nigerian Institute of Management’s 2013 Management Day. He said, “The most remarkable characteristic of the Nigerian ruling class is its complete and total insensitivity to the public outcry and outrage over the percentage of our resources that the members appropriate to themselves for their own consumption.” He explained that while Nigerian Senators and House of Representative members earn $1.7m and $1.4m respectively per annum, American Senators earns about $174, 000 with UK parliamentarians earning £65,738 per annum. He noted that income per capita for the US and UK is $46,350 and $35,468, respectively, while that of Nigeria is $2,248. Sagay said, “Nigerian legislators pay themselves the highest salaries of all legislators in the world, even though their country is amongst the least developed in the whole world. “One fact is clear, the Nigerian political and public service elites have been exhibiting a devastating level of value deficiency since the end of the First Republic, which has grown progressively worse. With a few exceptions, the quality of our ruling elite has degenerated with each successive Republic.” Sagay also lamented the role corruption had played in contemporary Nigeria, describing it as ‘Grand Commander’. “No day passes without the disclosure of one fresh set of financial scandals or the other. The financial blood of the country is simply being drained away by a kleptomaniac political and public service elite,” he said. Some notable scandals according to him, include the 2008 House of Representatives Committee on Electrical Powers investigation into the $16bn expenditure in the power industry, that was overtaken by the arrest and prosecution of the chairman of the committee for corruption relating to contracts in the same industry. ------------------------------------------------------------------------------------ Oil subsidy scam prosecution, a deceit - NLC Written by Sam Nwaoko- Ado Ekiti Monday, 01 April 2013 00:00 The Nigeria Labour Congress (NLC) has said it is not impressed by the ongoing prosecution of oil subsidy fraud in courts in the country, alleging that the Federal Government had “left the big thieves and went after those who took small money.” President of the NLC Comrade Abduwaheed Omar, who said this in Ado Ekiti at the weekend, said the prosecution amounted to deceit on the part of the Federal Government, saying the Federal Government should go after the big thieves. The NLC President said the difference between the N1.3trillion and N270 billion actual subsidies paid should be traced and all those found wanting in the scam brought to book. He said if President Goodluck Jonathan could deal decisively with the oil subsidy thieves and clear the alleged mess in the sector, there would not be the need to contemplate total removal of fuel subsidy, saying the president would have little to worry about over the cost of subsidising petroleum products as the N270 billion would be manageable. Omar said: “Labour is dissatisfied with the way the alleged looters are being prosecuted. When you talk of punishment of these looters, we mean the major actors. Those who took the larger chunk of the N1.3 trillion oil subsidy money should be punished to save this nation from embarrassment.” Omar also warned states that were yet to implement the N18,000 minimum wage to brace up for a battle with the workers, saying the labour unions would soon fine-tune arrangements on how to compel the concerned states to commence implementation. On the proposed removal of the oil subsidy, Comrade Omar posited that out of the N1.3trillion declared to have been expended on oil subsidy in 2011, only N270 billion was discovered to have been appropriated while the rest slipped into the hands of oil cabals. --------------------------------------------------------------------------------- Worry over poverty as govt spends N18tr in one year . Wednesday, 27 March 2013 00:00 From Mathias Okwe, Assistant Business Editor, Abuja News - National .AT least, N18.844 trillion was generated and spent between 2011 and last year in Nigeria by the Federal and State governments, according to figures by the Budget Office of the Federation. The Budget Office also declared that the country recorded real growth, the Gross Domestic Product (GDP) of seven per cent in 2011 and 6.28 per cent in 2012. Apparently, these are impressive numbers and really support the classification of Nigeria by the Breton Wood Institutions as a medium income country. But stakeholders are worried that though the country is rich, a vast majority of her citizenry continue to live in abject condition as the recently-launched United Nations Development Programme (UNDP) Human Development Index (HDI) has indicated, signifying that most of the Nigerian people are excluded from the “impressive growth.” The UNDP report places Nigeria amongst the least countries of the world that recorded achievement in the upgrade of the welfare of their citizens - the Low Human Development category, where mostly poor nations or low-income countries as they are called belong. Overall, Nigeria on the rating table is placed number 153 out of a total of 186 countries around the world where the survey was conducted. The countries are classified into four categories, namely: Very High Human Development; High Human Development; Medium Human Development and the least, Low Human Development. The indications as contained in the report on Nigeria are frightening as they are disturbing. For instance, the report says 143 under-five children die yearly of preventive diseases out of every 1000 births; 630 women die out of every 100,000 deliveries in the country; the population of people living under one United States dollar and twenty five cent per day (an average of N170) is 68 per cent while life expectancy is 52.3 years, meaning the majority of Nigerians die before even the public service’s retirement age of 60 due apparently to deprivation. This is so, according to the report, because Nigeria’s public spending on health yearly, relative to the size of her GDP, is just 1.9 per cent, which earned the country a score of less than one per cent - at 0.510 per cent. The report says: “The HDI represents a push for a broader definition of well-being and provides a composite measure of three basic dimensions of human development: health, education and income. Nigeria’s HDI is 0.471, which gives the country a rank of 153 out of 187 countries with comparable data. The HDI of Sub-Saharan Africa as a region increased from 0.366 in 1980 to 0.475 today, placing Nigeria below the regional average. The HDI trends tell an important story both at the national and regional level and highlight the very large gaps in well-being and life chances that continue to divide our interconnected world.” Perhaps, it is this worrisome human development numbers that informed the World Bank’s latest intervention in the country where it is expected to commit $300 million on a social safety net programme aimed at attacking poverty by directly identifying the vulnerable in the society with the sole aim of addressing the sharp inequality in the country where a few are stupendously rich while the majority continue to wallow in abject want. As a prelude to the commencement of this new initiative, which is a partnership between Nigeria and the Breeton Wood Institutions, its Director for Human Development Group, Dr. Ritva Reinkka, was in Nigeria penultimate week on an assessment and on the spot analysis visit. At the end of the country tour, Reinkka explained that the new initiative known as Youth Employment and Social Support Operation was the World Bank’s new strategy of combating poverty through prosperity sharing and cash transfer by critically identifying the core vulnerable in the society and empowering them, as opposed to the several social safety net programmes in the country that may have been hijacked by the privileged few and directed at the wrong people, thus widening the gulf between the haves and the have-nots. Already, Reinkka assured that the board of the bank is to give approval for the release of the credit before the end of March to enable the project to kick off next month. Although she said 20 states in the country had indicated interest to participate in the project, the pilot scheme is to start in seven states: Bauchi: Niger; Cross River; Ekiti; Osun; Oyo and Kwara. Under the scheme, the vulnerable will be identified and selected for the purpose of conditional cash transfer under the social safety programme like public works and skilled acquisition programmes as an empowerment tool to give them a lift in life. Reinkka expressed concern that though Nigeria was recording growth, it was not inclusive as there was still wide disparity between the haves and the have-nots in the country with even a large population of about 10 million Nigerian children dropping out of school because of funding. She said: “There is a lot more that needs to be done to have inclusive growth in Nigeria and scale up on child and maternal mortality rate and the quality of education. It is disturbing that about 10 million kids are dropping out of schools in Nigeria. Nigeria does have a special challenge in this regard because it is one of the countries in the region with the biggest challenge in this regard. There is a big issue concerning the quality of education. There is a concern that your education leaders and leaders in finance are doing well but a lot still needs to be done. “In health, what we see in Africa is that under-five death is reducing. We are hoping that Nigeria will join other 14 countries that have halved the under-five mortality rate. “We are also concerned about the growing inequality and the different income and human development indicators between the North and the South of Nigeria. That is why under our social protection and safety now a reality in Africa, we are going to the Bank’s Board for approval of a $300 million next week for social safety in Nigeria. “This is in line with the thinking of our President, a medical doctor who sees himself as a civil society activist as he is shifting emphasis from inputs and consultancy to results and output. He has been shaping our thinking to accelerate the speed to poverty reduction,” the visiting director further said. Present at the briefing were the Nigerian World Bank Country Director, Madam Marie Francoise Marie-Nelly and the Sector Leader of Human Development for the World Bank Country Office Nigeria, Prof. Foluso Okunmadewa, among others. Each year since 1990 the Human Development Report has published the Human Development Index (HDI) which was introduced as an alternative to conventional measures of national development, such as level of income and the rate of economic growth. ---------------------------------------------------------------------------------- CBN, oil firms intervene to bail out naira Written by Odidison Omankhanlen - Lagos Monday, 25 March 2013 00:00 The Central Bank of Nigeria (CBN) and two oil companies intervened directly at the interbank market through dollar sales to assist the falling naira. As a result of the development, the naira closed at a two-week high against the dollar on Friday at the interbank market, as a result of direct intervention through dollar sales by As a result, the naira closed at N158.30 to the dollar, a level last seen on March 11, and firmer than Thursday’s close of N158.90. The naira has faced selling pressure in recent months from foreign investors exiting local bonds due to falling yields and from importers buying the dollar. CBN sold $580 million to banks last week at two regular foreign-currency auctions, the most since the week through July 4, 2012. The apex bank uses the sales to stabilize the naira as the cost of importing refined fuel, which accounts for 70 percent of the local fuel market, boosts dollar demand and puts pressure on the currency. The bank cut total sales by 6 percent the previous week to $360 million. On the other hand, Total Nigeria sold $80 million while Agip sold $8 million, helping boost the naira. It was the central bank’s second direct intervention in the market in just over a week to calm the volatile naira and drain liquidity to check inflation, traders said. Prior to intervening last Friday the central bank had been absent from the market for nearly a year as the currency had been relatively stable. Only last week, the CBN Governor, Sanusi Lamido Sanusi, said the apex bank could sell more dollars to ensure the stability of the naira after the bank’s Monetary Policy Committee (MPC) meeting on March 19, where it kept its benchmark interest rate at a record high of 12 per cent for a ninth consecutive meeting. Foreign investors have been pulling out of local bonds as yields fell close to inflation levels after JP Morgan added Nigeria to its emerging debt index last October, putting pressure on the naira which has increased recently. Traders expect the naira to strengthen further next week on the back of more dollar supply from oil companies as part of their month-end sale of hard currency to fund domestic obligations. ------------------------------------------------------------------------------------- Fed Govt starts 2013 budget implementation’ Posted by: Nduka Chiejina on March 15, 2013 in Business, The Federal Government has started the Implementation of the 2013 budget, with the release of N400 billion first quarter capital vote, the Accountant-General of the Federation (AGF), Jonah Otunla, has said. In a statement, the Special Adviser to the Coordinating Minister for the Economy and Minister of Finance, Paul Nwabuikwu, said the N400 billion capital was released “to give fresh impetus to the execution of projects captured in Budget 2013.” He said: “Of this amount, N120 billion had been frontloaded to cater for two important initiatives: N75 billion for retiring bonds which have come due. This is in line with the new debt management strategy which focuses on reducing the stock and flow of debt in a proactive manner and N45 billion for the payment of Power Holding Company of Nigeria’s (PHCN) workers.” Otunla, who spoke at the end of the monthly Federation Account Allocation Committee (FAAC) meeting in Abuja, yesterday, said that the implementation of the 2013 budget was triggered after the FAAC meeting where the three tiers of government collected their cheques from the Federation Account. Last week, the Minister of Finance Dr. Ngozi Okonjo-Iweala, had hinted that the implementation of this year’s budget would take off after the FAAC meeting this week. At the end of the FAAC meeting for last month, N886.402 billion was shared among the three tiers of government. This amount comprises N450.263 billion statutory disbursements to the federal, state and local governments; N62.707 billion as Value Added Tax (VAT); N173.505 billion augmentation for the month; N35.549 billion from SURE-P; N7.617 billion refund by the Nigeria National Petroleum Corporation (NNPC) and N156.761 billion arrears of January, 2013 augmentation (December, last year account). From the statutory allocations, the Federal Government received N209.856 billion or 52.68 per cent of the net sum, states on their part, got a cheque of N106.442 billion or 26.72 per cent, while the 774 local governments received N82.062 billion or 20.60 per cent on the net statutory allocation. However, the House of Representatives said it has uncovered a plot by the Executive to undermine the implementation of the budget. The Director-General, Budget Office of the Federation (BOF), Dr Bright Okogwu, allegedly instructed Ministries, Departments and Agencies (MDA) to ignore the 2013 Appropriation Act and work in accordance with a yet-to-be-seen amended Act. The House has, however, summoned the Budget Office chief to appear before the Appropriation and Finance Committees and explain the content of the memo. Minority Whip, Mr Samson Osagie (ACN, Edo) who raised the issue under a matter of urgent public importance, said MDAs were directed by Okogwu to implement only the amended part of the Act. “The action of the DG of Budget Office is an infraction on the powers of the National Assembly, as well as an attempt to stop at nothing, but to blackmail the legislature. “We must sound a note of warning here that no proposed amended budget shall be implemented by the MDAs, other than what was passed by the National Assembly and assented to by the President,” he said. budget implementation ------------------------------------------------------------------------------------- Govt releases N400b Q1 capital funds for MDAs, shares N886.402b . Thursday, 14 March 2013 00:00 From Mathias Okwe, Abuja News - National .• PHCN workers to get N45 billion severance pay SHORTLY after the distribution of N886.402 billion federation revenue Thursday by the Federation Accounts Allocation Committee (FAAC) to the three tiers of government, the Federal Ministry of Finance announced the release of N400 billion as first capital budget to give fresh impetus to the execution of projects captured in the 2013 budget. This is contained in a statement by Mr. Paul Nwabiukwu, the Senior Special Assistant to the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala. Of this amount released, according to the statement, N120 billion has been frontloaded to cater for two important initiatives, namely: N75 billion for retiring bonds which have come due, which is in line with the new debt management strategy that focuses on reducing the stock and flow of debt in a proactive manner and secondly, N45 billion for the payment of Power Holding Company of Nigeria (PHCN) workers. Meanwhile, the Accountant-General of the Federation (AGF), Mr. Jonah Otunla, Thursday said “the gross revenue of N571.67 billion received for the month was lower than the N651.26 billion received in the previous month by N79.58 billion. Production was equally hampered by pipeline vandalism at Bonny, Forcados and Brass Terminal.” Giving a summary of the distribution, he said N445.84 billion was shared under statutory allocation; N62.707 billion was allocated under Value Added Tax (VAT) while N173.595 billion was used to augment the shortfall in revenue. Others are N35.549 billion for Subsidy Reinvestment and Empowerment Programme, N7.617 billion being refund of debt owed the Federation Account by the Nigerian National Petroleum Corporation (NNPC), as well as arrears of N156.76 billion for the month of January owing to the late implementation of the budget. The AGF further explained that of the N445.26 billion statutory allocation, the Federal Government got N209.86 billion representing 52.68 per cent; the 36 states got N106.44 billion or 26.72 per cent while the 774 local councils were given N82.06 billion or 20.6 per cent. He said N47.48 billion was shared to the nine oil-producing states based on the 13 per cent principle of derivation. Out of the Value Added Tax distribution of N60.19 billion, Otunla noted that the Federal Government got N9.03 billion or 15 per cent, states got N30.1billion or 50 per cent while local councils were given N21.07 billion. -------------------------------------------------------------------------------------- The laundering of $182 billion March 15, 2013 by Punch Editorial Board NIGERIA has been financially haemorrhaged by some corrupt leaders, as a report from the United States-based Global Financial Integrity indicates. The agency recently said a total of $182 billion was stolen and laundered offshore between 2000 and 2009. Nigeria is ranked eighth out of 20 countries notorious for illicit financial outflows, just as it is placed 135th out of 176 in the Transparency International’s Global Corruption Perception index. The plundering of our commonwealth by just a few goes against the grain of prevailing crippling poverty, unemployment and decrepit socio-economic infrastructure. The GFI described Nigeria as “the leading source of illicit financial outflow from sub-Saharan Africa.” This is a huge paradox as the theft happened under a democracy. Since 1999, the country has been under civil rule. According to the GFI, it relied on analysis of data from the World Bank and International Monetary Fund to reach its conclusion, stressing that developing countries lost a total of $903 billion in 2009. Even now, the trend is accelerating as graft is worn as a badge of honour. What fostered this heist is not difficult to fathom. Ours is a government being run by narrow minds, and harder hearts. Mismanagement of oil wealth and illegal oil bunkering have strewn a cobweb of corruption, making slush funds easily available for pillaging. However, the seemingly industrial scale of the looting, despite the operations of the Economic and Financial Crimes Commission and the Independent Corrupt and other Related Offences Commission, should arouse some curiosity. Is it that the anti-graft bodies were deficient, complicit or looked the other way while the looters had a field day? And what role did the banks play? These are genuine concerns. The Nigerian Financial Intelligence Unit and the Special Control Unit against Money Laundering were established to strengthen the performance of the EFCC. Under the act, through automation, banks alert the EFCC on transactions that fall within the “suspicious thresholds.” From periodic revelations of how public funds are looted by public officials, with banks as conduits, it is obvious that extant laws on money laundering are observed only in the breach. Annually, the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation audit the books of these banks; yet the humongous illicit transactions that pass through their systems in violation of extant financial regulations are not made public. Nevertheless, the only oasis was the CBN’s hammer of 2009, which fell on some corrupt bank chief executives who were not only relieved of their jobs but were prosecuted. Money Laundering Prohibition Act (2011) as amended prescribes limits of financial transactions in banks by individuals and bodies corporate, beyond which a bank must alert the EFCC or make transaction reports. The MLPA increased the threshold for reporting transactions by individuals from N1 million to N5 million and between N5 million and N10 million for corporate bodies. Abuse of this regulatory regime was evident in the pension funds looting spree uncovered by the Senate in a recent investigation. The political leadership is not sincerely committed to the eradication of corruption. As the chairman of the ICPC, Ekpo Nta, once put it, “there is no political will to fight corruption in Nigeria.” Key public officials do not demonstrate exemplary conduct such as adopting a modest lifestyle, and avoiding corruption themselves. People found guilty of corruption are not punished because of their position or status in the society. The “big fish” are not only protected from being prosecuted for corruption, the unlucky few that are prosecuted get light sentences. Besides, spurious state pardons are remedial measures for the few that get convicted. It is this vacuous moral compass that led the administration of the late President Umaru Yar’Adua, in cahoots with corrupt politicians, to hound the pioneer chairman of the EFCC, Nuhu Ribadu, out of office. In the corporate sphere, the scourge is as corrosive and devastating as it is in the political arena. A disgraced former bank executive reportedly acquired 12 homes in the United States, 28 shops and seven residential houses in Dubai, and four houses in South Africa, all bought with laundered funds. Indeed, the rot in the banks is very deep. Since successful money laundering is largely a product of either connivance of, or negligence of, bankers, the Chartered Institute of Bankers of Nigeria Act 2007 has a redemptive role to play here. Striking out names of its members aiding and abetting money laundering from its register has become imperative. By so doing, such elements become professionally prostrate and are seen as lepers who should never be employed by other banks. But, the situation is becoming hopeless. The former US Secretary of State, Hillary Clinton, described the level of corruption in Nigeria as “unbelievable.” Fighting corruption requires a strong political leadership. The basic requirement of civilised democracy is that everyone plays by the rules and that the rules command public confidence. Brazen stealing of public funds will continue until laws aimed at fighting corruption are strictly and consistently applied. ----------------------------------------------------------------------------------- Reps query CBN, NCS, FIRS about missing N7.9bn March 12, 2013 by John Ameh, Abuja Deputy Governor (Operations) of the CBN, Mr. Tunde Lemo The House of Representatives on Monday uncovered a N7.935bn discrepancy in the remittance of revenue generated by the Nigeria Customs Service to the Federation Account in 2007. A report of the House Committee on Public Accounts indicated that Customs generated and remitted N233.430bn to the Federation Account during the year, but found out that only N241.366bn was released to the Federation Accounts Allocation Committee for sharing between the three tiers of government. This left a difference of N7.9bn, which the committee said was not accounted for. The committee queried the Central Bank of Nigeria, the NCS and the Federal Inland Revenue Service about the development. It directed them to explain what led to the discrepancy. The Chairman of the committee, Mr. Solomon Olamilekan, gave the directive in Abuja during a meeting with officials of the three agencies. They were asked to either reconcile the discrepancy or report back to the House on Wednesday (tomorrow) what happened to the N7.9bn. According to an audit investigation conducted into the operations of the Federation Account, the committee noted that while the NSC claimed that it remitted the N2334.430bn, records at the CBN indicated that only N241.366bn was made available to FAAC. “This implies that the actual amount of revenue generated and remitted by the NCS was less than the amount presented to FAAC for sharing as indicated by the CBN”, Olamilekan stated. The committee immediately set up a sub-committee headed by one of its members, Mr. Pally Iriase, to liaise with the Acting Chairman of the FIRS, Alhaji Mashi, the Deputy Governor (Operations) of the CBN, Mr. Tunde Lemo, and the Accountant-General of the Federation, Mr. Jonah Otunla, to find answers to the discrepancy. The committee also found out that in another case, N14.210bn generated as import duty was not remitted to the Federation Account for five months. Rather, it was paid into the CBN’s Port Harcourt account by the Port Harcourt Customs Area Command. The committee noted that while the money was generated in August 2006, it was not until January 2007 that it was transfered to the Federation Account. While Mashi informed the committee that the CBN and FIRS had tried to do some reconciliation of figures over time, Lemo observed that some of the issues were not exactly the fault of the CBN. However, both officials could not convince the committee. Among others, a sub-head captured in the records showed that the Nigerian Governors’ Forum was paid N450m for its secretariat project from the Federation Account in 2007. Furthermore, the committee pointed out what it termed “other irregular deductions” from crude oil sales and other revenue windows in 2007. For example, it pointed out Joint Venture Cash Calls of N549bn and Excess Crude money of N1.168tn were deducted without justifiable reasons from the Federation Account. In the same vein, it said petroleum product subsidy of N236.641bn was deducted from crude oil sales. The apex bank was also queried for allegedly deducting another N124.673bn from the Federation Account under a sub-head it called “Funding of FAAC.” The committee expressed surprise that the details of such an expenditure were not captured in the books by the bank. There were another payments of N210m and N13.341m in March and April 2007 respectively under the name of “contractual obligations of states”, where Anambra State in particular benefitted in 2007. The committee resolved that this particular payment was a breach of the 1999 Constitution. It added, “The payment is contrary to the provisions of Sections 162 (1), 162(3) and 120(3&4) of the Constitution of the Federal Republic of Nigeria, 1999( As amended). “The Accountant-General of the Federation has been informed of these irregular payments from the Federation Account and he was advised to ensure that henceforth payment of contractual obligations from the Federation Account should cease.” On the governors’ forum project, a report of the office of the Auditor-General of the Federation considered by the committee, stated, “Another case of irregular payment from the Federation Account was the sum of N540m paid for the governors’ forum secretariat project and upkeep of the Federation Account secretariat.” ----------------------------------------------------------------------------------- Oil theft, pipeline vandalism may mar 2013 budget - Okonjo-Iweala Written by Gbolahan Subair- Abuja Friday, 08 March 2013 01:54 OIL theft, pipeline vandalism and intense competition from newly emergent oil producing countries in Africa are some of the factors that may hamper the oil revenue projection in the 2013 budget. The Coordinating Minister for the economy and the Minister of Finance, Dr Ngozi Okonjo-Iweala and the Director General, Budget Office, Dr Bright Okogu made this revelation Thursday in Abuja at a press briefing on the 2013 budget recently signed into law by President Goodluck Jonathan. The minister, giving an overview of the 2013 budget stated that the country remained vulnerable to shocks as a result of external and internal shocks in the Nigeria oil Industry. Highlighting some of the factors that may hamper the country’s oil revenue projection, the minister stated that some African countries such as Ghana, Liberia Cote d’ivoire and Uganda that normally buy the Nigeria crude oil are now oil producing countries while the United States of America is now self sufficient in oil and would no longer have the need to import oil from Nigeria. Besides this, the Coordinating Minister for the economy also stated that oil theft and pipeline vandalisation were capable of making nonsense of the oil production projection of 2.63million barrels per day. The Director General of the Budget Office, Dr Bright Okogu, who also affirmed threat to oil earnings in 2013 stated that widening oil supply-demand gap for crude oil in Nigeria has negative implications on sales, stressing that the government had already taken steps to foreclose any negative effects the low demand for Nigerian oil can have on the economy. The mitigating measures as announced by Dr Okonjo-Iweala included the reduction in the cost of governance and the restructuring of the budget in favour of capital expenditure with a view to generating growth and development. Another measure was the need to increase Internally Generated Revenue in the 2013 budget. To this end, a riot act has been read to all revenue generating agencies like the Nigeria National Petroleum Corporation, the Nigeria Customs Service and the Federal Inland Revenue Service to ensure proper remittance of all revenues collected on behalf of the government by the agencies. Dr Okonu, who identified non full remittance of revenue collected by the agencies by the Chief Executive Officers of such agencies as a factor that would affect the revenue profile in the 2013 budget said the government has , beginning with the 2013 fiscal year adopted a zero tolerance for non full remittance of federal government revenue by the agencies . To ensure that agencies comply with full remittance directive, the DG Budget said the government would hold session with CEOs of all revenue collection agencies to drum it into their hears the need to ensure full remittances. Dr Okonjo-Iweala also stated that the government would support the Federal Inland Revenue Service this year to embark on further reforms such as improving audit checks and increasing control on exemptions. ------------------------------------------------------------------------------------- EFCC re-arraigns Nnamani, others for laundering N5bn March 8, 2013 by Ade Adesomoju Economic and Financial Crimes Commission on Thursday re-arraigned former Enugu State Governor Chimaroke Nnamani at a Federal High Court Lagos, for allegedly laundering N5bn. EFCC lawyer, Mr. Kelvin Uzozie, said the accused laundered the money, believed to be proceeds of crime. The anti-graft agency had charged Nnamani, his former aide, Sunday Anyaogu, and seven companies, including a school and a hospital, on an amended 105 counts of fraud. The accused firms are Rainbownet (Nig) Ltd, Hillgate (Nig) Ltd, Cosmos FM, Capital City Automobile (Nig) Ltd, Renaissance University Teaching Hospital and Mea Mater Elizabeth High School. The accused pleaded not guilty to all the counts filed before Justice Justice Mohammed Yunusa. The charges were first preferred against the accused in 2007. Their arraignment was before Justice Charles Archibong (now retired) before his transfer out of Lagos last year. Justice Tijani Abubakar was the first judge to preside over the case before its transfer to Archibong. Yunusa acceded to the request by the accused persons’ counsel, Mr. Ricky Tarfa (SAN), to allow his clients to continue enjoying the earlier bail granted them by Archibong. The judge adjourned till May 28 for trial. The accused allegedly lodged the N5bn laundered by them, in a secret account, with the aim of concealing the source of the proceeds. The accused also allegedly failed to comply with the lawful inquiry of the then EFCC Director of Operations, Mr. Ibrahim Lamorde, (now the commission Chairman). The offences allegedly contravened the provisions of the Money laundering (Prohibition) Act, 2004 and the EFCC Act, 2004. ------------------------------------------------------------------------------------- Huge foreign reserves amidst decay misplaced –Tinubu March 8, 2013 by Simon Utebor Former Governor of Lagos State, Asiwaju Bola Tinubu, has said the Federal Government is operating a voodoo economy. The National Leader of Action Congress of Nigeria said this during a presentation of a book, Financialism – Water from an Empty Well, which he co-authored with a former United States Consul-General to Nigeria, Mr.. Brian Browne, in Lagos on Thursday. Tinubu said the Federal Government’s accumulation of money in foreign reserves at a period of infrastructural deficit and hunger among Nigerians was a misplaced objective. The presentation was attended by prominent Nigerians, among whom were President, Dangote Group of Companies, Alhaji Aliko Dangote; former Managing Director, Zenith Bank Plc, Mr. Jim Ovia; former Governor of Lagos State, Alhaji Lateef Jakande, and former Minister of Finance, Idika Kalu. Governors that attended the occasion were Babatunde Fashola (Lagos); Rochas Okorocha (Imo); Adams Oshiomhole (Edo); Rauf Aregbesola (Osun); Abiola Ajimobi (Oyo) and Ibikunle Amosun (Ogun). Former Chairman, Economic and Financial Crimes Commission, Alhaji Nuhu Ribadu; book reviewer, Prof. Osaghae Eghosa; Senator Olorunimbe Mamora and many others were in attendance. Tinubu said unfortunately the Nigerian government was earning two per cent of its savings on the foreign reserves, whereas it was paying 16 per cent to service loans from foreign countries. He said, “Our development rests with us. Foreign investment is welcome but will not lead us to prosperity. Foreign investment may repair a room or two, but it can never build the mansion we seek.” Tinubu described the book as a product of his love for Nigeria and for the best future of the continent. While taking exception to the theory of financialism, Tinubu said the principle had grown too large in comparison to capitalism, saying, “Instead of feeding funds to the real sector, it now chokes the real sector.” In his remarks, the Chairman of the occasion, Kalu, regretted the failure of successive administrations to leverage on the groundwork investment done by the nation’s founding fathers in the real sector. He said, “We are filled with slogans, copied lifestyles and values, thinking it will be a substitute for real hard thinking, sacrifice and investment. “Nigerians are tired of factions, parties and mergers. There has to be a coming together to bridge the divisive gap of inequality in the country.” Reviewing the book, the Vice-Chancellor of Igbinedion University, Prof. Osaghae Eghosa, praised the courage of the authors, saying the book would revamp the financial system of the country. Oshiomhole, in his remarks, said for Tinubu to think of writing a book with all his engagements was a lesson for all leaders. “A mind that is no longer thinking cannot provide a good leadership. There are a lot of contradictions in Nigeria. Poverty is not an act of God but a product of socio-economic and political mismanagement. I commend Tinubu and Browne for this thought-provoking book,” Oshiomhole said. Fashola, on his part, described Tinubu as an astute leader and a thinker. “Tinubu is a leader with whom I can go to war blindfolded. He is a crusader whose size is bigger than his size,” Fashola said. ------------------------------------------------------------------------------------- Reps probe alleged misuse of $67 billion by two govts . Wednesday, 30 January 2013 22:04 From Azimazi Momoh Jimoh, Terhemba Daka and Nzeh Ezeocha, Abuja News - National .• Urge EFCC, AGF to appeal verdict on pension fraud • CNPP gives govt ultimatum over Ezekwesili AN investigation that may reveal if the administration of the late President Musa Yar’Adua and that of his successor, Dr. Goodluck Jonathan, actually splurged $67 billion is set to be carried out by the House of Representatives. The probe is coming on the heels of an allegation by former Vice President of the World Bank, Dr. Oby Ezekwesili, that the two administrations mismanaged $45 billion in Nigeria’s foreign reserve as well as another $22 billion excess crude fund left by the government of former President Olusegun Obasanjo. Also, apparently reacting to public criticisms of the judgment by the Federal Capital Territory (FCT) High Court, Abuja, in the case of Mr. John Yakubu Yusufu and others undergoing trial for over N38 billion Police Pension Fund fraud, the House of Representatives has urged the Economic and Financial Crimes Commission (EFCC) and the Attorney-General of the Federation (AGF) to immediately appeal the decision. Besides, the Conference of Nigerian Political Parties (CNPP) Wednesday handed the Federal Government a seven-day ultimatum to either organise a public debate between the Minister of Information, Mr. Labaran Maku or any other official and Ezekwesili as demanded by her or issue a public apology to her in acceptance of her allegation. Ezekwesili made the allegation during her convocation lecture of the University of Nigeria, Nsukka. The former Minister of Solid Minerals and later Education lamented the “squandering of the significant sum of $45 billion in foreign reserve account and another $22 billion in Excess Crude Account being direct savings from increased earnings from oil that the Obasanjo administration handed over to the successor government in 2007.” She stated: “Six years after the administration I served handed over such humongous national wealth to another one, most Nigerians but especially the poor, continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions.” She then queried: “One cannot but ask what exactly does government symbolise with this level of brazen misappropriation of public resources? Where did all that money go? Where is the accountability for the use of both these resources and the additional several hundred dollars realised from oil sale by the two administrations that have governed our nation in the last five years? How were these resources applied or more appropriately misapplied? Tragic choices.” In adopting a motion sponsored by Umar Bature (PDP, Sokoto), the House directed its Committees in charge of Finance and Appropriation to jointly investigate the allegation. Defending his motion, Bature said the House needed to conduct the investigation because of the background of Ezekwesili as Special Adviser to the President on Public Procurement as well as Minister of Education. The Presidency has, however, dismissed the allegation as false. The Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, said that as at May 2007, a total of $43,130,301,995.21 was left behind in the Foreign Exchange Reserve (FER) account by former President Obasanjo. According to Okupe, between June 2007 and December 2008, the FER stood at $53,000,355,063.51, and in 2009, the account came down to $42,382,493,319.69 due to the global economic meltdown. In 2010, the account was $32,339,252,389.10 after the commitment of the Federal Government to the Independent Power Project (IPP) and the Niger Delta crisis, which caused a drop in oil export. In 2011, the figure was N32, 639,777,078.09 while in 2012 the FER rose to $43,830,418,364.91 as at December and then rose again to $45.3 billion as at January 22, 2013. Okupe added: “I regret to say that Mrs. Oby Ezekwesili should show dignity and character by letting the Nigerian people, whom she sought out to fool, to know the source of her figures otherwise, she should be honourable enough to retract her statement and apologise to the government and people of Nigeria.” The House said the monumental fraud in the Police Pension Fund had resulted in untold hardship for police pensioners who had had their pensions unpaid for many months. Adopting a motion on the urgent need to revisit the case brought by the House Minority Whip, Samson Osagie and nine others, the House also called on the National Assembly to set a machinery in motion to review the provisions of the penal and criminal codes to provide stricter punishment in such cases. “The EFCC and AGF should, as a matter of urgency, appeal the judgment of Justice Abubakar Talba of the FCT High Court in the case of the State Vs Mr. John Yusufu and others, with a view to seeking stricter punishment for the offence under Section 309 of the Penal Code Act Cap 532 Laws of the Federal Capital Territory Abuja, 2007,” it said. Leading debate on the motion, Osagie had faulted the decision of the FCT High Court and urged the parliament to intervene, adding that pension was a matter that ought to be treated with utmost respect. “As the people’s representatives, we cannot keep quiet over the matter. This is not good for our criminal justice system, especially as it borders on the fight against corruption. “It is repugnant and unacceptable to good conscience. Stiffer punishment should be meted out else others will toe the same line. It is not good for our democracy. “This sort of judgment of a court can only serve as an incentive for public officers entrusted with management of public fund to commit more acts of corruption as the judgment in this case did not meet the justice of the matter, given the huge amount of fraud committed by Mr. John Yusufu in the Police Pension Fund. “This judgment has been widely criticised by both lawyers and civil society groups. It has been a slap on the wrist as the sentence ought to be stricter to deter other public officers from meddling with public funds,” the lawmaker said. The majority of other members, including Emmanuel Jime, Femi Gbajabiamila and Jerry Manwe, also spoke on the motion. However, members, including Ali Madaki, Khamil Akinlabi and Dan Abia, cautioned the parliament against dabbling in a matter that, according to them, was clearly outside the purview of the chamber. In their separate submissions, the lawmakers argued that the decision of the high court was within the ambit of the extant laws of the country. When the Speaker, Aminu Waziri Tambuwal put the question on the motion, the resolution was overwhelmingly adopted in a voice vote. The House also has mandated its Committee on Federal Capital Territory (FCT) to investigate the alleged inhuman activities of the companies commissioned by the FCT Administration to enforce motor parking regulations and parking fees collection in Abuja . The companies commissioned by the Bala Mohammed-led FCT administration for this purpose in the Federal City include Integrated Parking Services Ltd and Platinum Parking Management Services Ltd. But adopting a motion introduced by Odebunmi Olusegun Dokun on the matter yesterday, the House expressed worry over the inability of motorists to identify the particular company or agent overseeing a particular area because different companies seem to be at war over who is in charge. The parliament noted that Abuja as the capital city of Nigeria should be managed in such a way that it would become a source of pride for every Nigerian. The CNPP’s ultimatum was sequel to the challenge to public debate thrown by Ezekwesili in connection with her allegation of monumental corruption. The CNPP noted that it was alarmed that instead of responding to the grave allegation made by the former minister, the Presidency tepidly avoided the public debate challenge. In a statement issued yesterday in Abuja, the CNPP National Publicity Secretary, Osita Okechukwu, described as unjustifiable, the Federal Government’s reactions to Ezekwesili’s allegation and challenge as a deliberately calculated albeit unsuccessful effort to bring the Jonathan administration to disrepute He noted that for the avoidance of doubt, many public commentators and anti-corruption crusaders, as well as the CNPP had severally bemoaned the pervasive corruption in the land, which included the culture of impunity which had existed in the country in the last 13 years. The CNPP said that this debate was absolutely necessary and a matter of urgent national importance based on the fact that Ezekwesili was not only a former vice president of the World Bank, but she also served as a minister of the Federal Republic of Nigeria and once headed the Bureau of Public Procurement in the country. The CNPP also noted that the fact that Maku had also levelled allegations of monumental corruption against the former minister had added more urgency to the debate. “It is our view that a public debate challenge of this nature must not be overlooked by the Federal Government, especially bearing in mind that even the ex-president, Chief Olusegun Obasanjo under which Mrs. Ezekwesili served, had serially labelled the President Goodluck Jonathan regime as incurably corrupt. We are deeply concerned that the splash of mud on the image of the country can only be wiped out if the government musters the political will to convoke the public debate as requested. “To do otherwise will further tarnish the image of the country and discourage direct foreign investment, which we badly need. For us, corruption is a major contentious issue and there is no better time than this for the Jonathan administration to use the public debate to erase the epitaph of engraving its name in the hall of infamy as the most corrupt regime in the annals of the country. “Now that the opportunity has offered itself for the government to cleanse itself or allow the good people of Nigeria to go home with the impression that the regime is absolutely corrupt, it will be regrettable if the government denies us, indeed itself this golden opportunity “Also, there is no better platform for Mrs. Ezekwesili to disclose her source and substantiate her grave allegations than the debate. “In sum, we challenge President Jonathan to convoke this debate within seven days or we stand on Mrs. Ezekwesili’s allegation to prosecute the government for unbridled and wanton looting of the national treasury,” CNPP charged. -------------------------------------------------------------------------------------- Foreign reserves up by $2.17bn –Presidency Foreign reserves up by $2.17bn –Presidency January 30, 2013 by Olusola Fabiyi, Abuja 19 Comments Minister of Finance, Okonjo-Iweala The Federal Government has added $2.17bn to the Foreign Reserves since former President Olusegun Obasanjo left office in 2007, the Presidency said on Tuesday. The disclosure was contained in a document released by the Special Assistant to President Goodluck Jonathan on Public Affairs, Dr. Doyin Okupe in Abuja. Okupe said the document showed that there was no truth in the claim by a former Education Minister, Mrs. Oby Ezekwesili that the administrations of the late President Umaru Yar’Adua and Jonathan squandered $67bn which she alleged was left in the Foreign Reserves by the Obasanjo administration. The document presented by Okupe showed that Obasanjo left $2,182,457,958.35bn in the Federal Government Reserve; $31,517,490,922.57bn in the Central Bank of Nigeria Reserve and $9,430,353,114.29bn in the Federation Account. Though details of the amount in the document were not specific, it however indicated that there was $45.3bn in the account as at January 22, 2013. In 2008, the documents indicated that Nigeria had the highest amount in its reserve in September when it had $60,201,735,067.21bn while it had the lowest in the year in December with $53,000,355,063.51bn. A year later, the document obtained from the Reserve Management Department of the Central Bank of Nigeria, showed that the amount the country had in its reserve had reduced. It had the highest amount in January with $50,108.653, 696.18bn while it recorded the lowest amount in August with $41,754,314,413.02bn. In 2010, the reserve was depleted as the country recorded its highest amount in January with $42,075,655,941.40bn while it had the lowest amount in its account in December with $32,339,252,389.10bn. The situation did not improve in the following year as the account continued to depreciate. February was the best month in the year as the balance in the account stood at $32,246,072,142.47bn while September was the worst with $31,740,230,675.36bn. December 2012 was the finest month for the country as the balance in the account stood at $43,830,418,364.91bn. The account had $33,857,370,517.77bn in February. On Ezekwesili’s allegation, Okupe said it was unfortunate that the former minister refused to be pacified after the Minister of Information, Mr. Labaran Maku, debunked her accusation. He said rather than citing the sources and establishing the credibility of her claims, she decided to divert attention by calling for a national debate on issues that were not in contention. Okupe said the Federal Government would have ignored her call for a national debate, but said it was “compelled to respond in view of the penchant by some highly placed Nigerians, who use government offices to build up their reputations and later turn on the same government to denigrate it”. -------------------------------------------------------------------------------------- Senate probes unspent funds in 2012 budget . Thursday, 24 January 2013 00:00 From John-Abba Ogbodo (Abuja) and Lawrence Njoku (Enugu) News - • Ezekwesili decries squandering of $67b by Yar’Adua, Jonathan govts IRKED by what it considers the poor performance of the Federal Government in 2012, the Senate plans to investigate and recover unspent votes for last year before the implementation of the 2013 budget. The Upper Chamber of the National Assembly said only 40 per cent of the capital budget for last year was utilised. Besides, former Vice President (Africa) of the World Bank, Dr. Oby Ezekwesili, has described the squandering of $45 billion in the Foreign Reserve Account and $22 billion in Excess Crude Account by the two administrations of the late President Musa Yar’Adua and the incumbent President Goodluck Jonathan after Chief Olusegun Obasanjo as “the most egregious” instance of Nigeria’s failure to make the right developmental choices. She stated that Nigerians had lost dignity because of ravaging poverty arising from poor choices of the elite, corruption and lack of investment in education. Disclosing the position of the Senate to journalists at the National Assembly before the Eid-el-Maulud break, the Chairman of the Senate Committee on Appropriation, Ahmad Muhammad Maccido, said that the chamber would carry out a comprehensive oversight with a view to recovering all unspent funds. He stated that so far, the Executive had not said anything about funds that were not utilised from the 2012 budget and that the Senate would not leave the matter in that manner. “Well, in time past, there used to be issues of unspent funds in the budget but this year, so far, the Executive has not come with any figure or informed us that these are unspent funds for 2012. However, one thing I know is that we would be going out on our statutory oversight duty. Until such a time when we come back from such oversight duty, I would not be able to tell you anything about unspent funds because, normally, it is the Executive that comes up with its figure; to inform us that these are the unspent funds for the preceding year. If they don’t do that, we will go out on oversight and find out actually what has been spent and what has not been spent. That is when we will know but for now, there is no such figure.” The lawmaker put the level of implementation of the capital budget for last year at 40 per cent, noting: “The precise percentage we were given was 40 per cent. When I say 40 per cent, I am referring to the capital expenditure; the capital budget. As you know, the recurrent budget, which encompasses the overheads, payment of salaries and allied matters, they are always implemented 100 per cent. Therefore, we discount that when we talk of budget implementation. We always talk of capital budget when we ask for the level of implementation. As far as the capital budget for 2012 is concerned, the implementation was not more than 40 per cent”, he said. On the fate of the balance of the capital budget for last year, Maccido said: “That is exactly what we plan to find out now because as I told you earlier, unspent funds have not been brought to us. It has not been announced by anybody and we know that the capital budget has not been spent 100 per cent. We need to find that out. We are going out on oversight to find that out and rest assured, whatever we find out, we will tell Nigerians that this is where their monies are, or this is what has been done with their monies.” He also explained why the Legislature tinkered with the $75 per barrel benchmark forwarded by the Executive in October, last year. His words: “In as much as the budget is an economic document, we should also know that a little bit of politicking comes into it. However, the House of Representatives raised their oil benchmark to $80, while we at the Senate increased by just $3, bringing it to $78 from the original $75 brought by the Executive. This was as a result of the alarming figure we’ve always seen as budget deficit. We’ve always had the deficit in the budget and in the 2013 budget, we had over N1 trillion as deficit. So, based on the figure we saw as the deficit from the Executive, we sat down and decided that we had to do something because, honestly, that figure was quite alarming to us. We knew we had only one alternative; to raise the benchmark so that we can get funds to offset the deficit. That was the only reason we did that and if you look at the budget of 2013, we have reduced the deficit with the fund that has been saved from raising the oil benchmark. However, before then, it was the House which first raised its own to $80 and we settled for $78. We had to sit down again, at the committee level to deliberate on this issue comprehensively. After that, we went into executive sessions in both chambers and the Senate agreed that a committee should be raised for conferencing with the House of Representatives. It was at this conferencing that we agreed on a final figure of $79.” The chairman disclosed that some measures had been worked out to ensure full implementation of the 2013 budget. “This time around, the National Assembly, not just the Senate, sat down and deliberated on this issue of implementation and our leadership also deliberated at their own level and came back to us, giving us details and telling us that there is going to be comprehensive oversight this year by all the standing committees in the Legislature. They’ve told us how to go about this job. Each committee has been made to understand that they would be answerable to the Committee of the Whole in both houses. Every committee would be given a tentative time as to when they are expected to present reports of the oversight they have done. It’s this report that we will now compile and find out, which ministry is performing and which is not. We also plan to have a data bank that would give us an instant insight into the workings of the budget itself by the Ministries, Departments and Agencies (MDAs). The final report may not be ready this year but I can assure you that it is going to be very comprehensive as it would tell us immediately which MDA is working and which is not. The data bank would definitely be collated this year; all you need do is to refer to it and find out who did what”, he disclosed. The National Assembly passed a total budget of N4.97 trillion for 2013. At the 42nd convocation lecture of the University of Nigeria, Ezekwesili noted that Nigeria had enjoyed five cycles of oil boom, lamenting, however, the failure to convert oil incomes to renewable assets through the training of human capital, development of other sectors or investment in foreign assets as other resource-rich countries did with their oil income. The former minister said: “The present cycle of boom of the 2010s is, however, much more vexing than the other four that happened in the 70s, 80s, 90s and 2000s. This is because we are still caught up in it and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures.” She continued: “The squandering of the significant sum of $45 billion in foreign reserve account and another $22 billion in Excess Crude Account being direct savings from increased administration handed over to the successor government in 2007. Six years after the administration I served handed over such humongous national wealth to another one, most Nigerians but especially the poor continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions. Resource wealth has tragically reduced your nation – my nation – to a mere parable of prodigality.” She added: “Nothing undignifies nations and their citizens like self-inflicted failure. Our abundance of oil, people and geography should have worked favourably and placed us on the top echelons of the global economic ladder by now.” Ezekwesili said that it was up to the younger generation to restore the dignity of Nigeria by making the right choices to lift the nation out of poverty. The former World Bank executive described Nigeria as “a paradox of the kind of wealth that breeds penury” noting “the trend of Nigeria’s population in poverty since 1980 to 2010 suggests that the more we earned from oil the larger the population of poor citizens.” According to her, the figures of the poor in Nigeria grew from 17.1 million in 1980, 34.5 million in 1985, 39.2 million in 1992, 67.1 million in 1996, to 68.7 million in 2004 and 112.47 million in 2010. According to her, the resurgence of entrepreneurial spirit based on hard work and sound education are critical factors to changing Nigeria. “For Nigeria’s dignity to be restored your generation must build a coalition of young entrepreneurial minds that are ready to ask and respond to the question, what does it take for nations to become rich? Throughout economic history, the factors that determine which nations became rich and improved the standard of living of their citizens read like a Dignity Treatise in that they all revolve around the choices that ordinary citizens made in defining the value constructs of their nation”, she asserted. The 42nd convocation ceremonies of the University of Nigeria started yesterday with the Convocation Lecture and the Prize and Awards night for distinguished graduands. First degree holders, numbering 18,150, would receive their certificates today while higher degrees and honorary awards would be conferred on 1,730 recipients tomorrow. ----------------------------------------------------------------------------------- Nigeria owes China $6.2bn – Investigation January 9, 2013 by Everest Amaefule, Abuja 22 Comments Governor, Central Bank of Nigeria, Lamido Sanusi | With over $6.2bn credit facilities to Nigeria, the People’s Republic of China has emerged as the country’s highest creditor, investigations have shown. Although the Debt Management Office listed on its website the nation’s total external debt as at September 30, 2012 as $6.29bn, investigations showed that the country’s indebtedness to China alone stood at over $6.2bn. This means that most of the country’s debts to China have not been officially captured in the DMO database. This is because most of the debts were sealed recently by the Federal Government, while the drawdown on some of the recent has yet to begin. The DMO put Nigeria’s bilateral and commercial loans as of September 30, 2012, under which category the Chinese loans fall, at a paltry $679.22m, but the Chinese loans to the country exceed the amount by over 1,000 per cent. Encouraged by a generous Chinese attitude towards lending to the country, many ministries, departments and agencies of the Federal Government had in recent times scrambled for Chinese loans in an uncoordinated manner. This could double or even triple when ongoing negotiations for fresh facilities are finalised in the next one or two years. Some of the earliest loans obtained by the Federal Government from China included $200m for the rural telephony project and another $200m for the Nigeria Communications Satellite project. The most recent ones include $500m for the Abuja Light Rail project; $500m for four airport terminals; $100m for the Galaxy Backbone network expansion; $1.04bn for the Zungeru Hydropower project, $2.56bn for the Mambila Hydropower project; $1bn for the modernisation of the Lagos-Kano rail project; and $100m for expansion of connectivity in the MDAs. The Federal Government had in 2001 signed a Memorandum of Understanding with the Chinese government for the take-off of the rural telephony project aimed at providing connectivity to 218 local government headquarters across the country. Apart from the $200m loan provided by the Chinese government, the Federal Government also provided 15 per cent counterpart funding. The project was divided into sections that were executed by two Chinese firms, ASB and ZTE. The second phase of the project expected to cover the local government areas that were left out in the first phase had been billed to gulp $300m, but the controversy that mired the first phase had hampered its take-off. The Nigerian Communications Satellite project, on the other hand, was executed by the China Great Wall Industry Corporation. The satellite, which was put in the orbit in May 2007 just before the exit of former President Olusegun Obasanjo, failed 18 months after but was replaced in December 2011. Chinese firms have been known to come to Nigeria to initiate projects and help the MDAs to obtain financing from their home government through the China Export Import Bank. However, the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, while in China to negotiate a $3bn facility alongside some top government functionaries in August 2012, said the Federal Government had taken steps to stop the scramble for Chinese loans and provide a united front in negotiation for loans with the Chinese government. She had said, “We have noticed a phenomenon where a lot of Chinese companies come to different ministries and agencies with particular projects they are interested in, and when the MDAs say yes, they sometimes go and help negotiate the credit. “But we want to change this because this approach does not always take into account our priorities. When I say systematisation, it means that we outline what our priorities are and we try to negotiate the same beneficial rate for all our projects so that we have a systematic approach.” Explaining the attraction of Chinese loan for the airport projects, the Minister of Aviation, Ms. Stella Oduah, had said the facility came with 22-year tenure, a moratorium of five years and an interest rate of two per cent per annum. Oduah had said in September 2012, “Mobilisation to site by the contractors is expected to commence within 90 days. What this means is that before the end of the lifespan of this administration, we would have been able to bequeath to Nigerians the airports of their dreams. This is a giant and bold step by the present administration to provide Nigerians and the travelling public with airports that truly tell the story of who we are as a nation. “What we have today is not befitting of us as the giant of Africa; so, we are quite privileged to be given the opportunity to be part of this epoch-making transformation in the aviation sector in Nigeria.” Similarly, the Minister of Transport, Senator Idris Umar, explained that the Federal Executive Council had approved the $1bn Chinese facility for the modernisation of the Lagos-Kano rail line on July 18, 2012. The first phase involves the modernisation of the Lagos to Ibadan standard gauge double track, covering a distance of 156.65 kilometres to be executed by a Chinese firm, CCECC Nigeria Limited. At the signing of the Memorandum of Understanding for the project, Umar had explained, “Under the arrangement, the loan facility to the tune of $1bn is going to be provided by the China EXIM bank. However, negotiation has been concluded with China EXIM bank. The Managing Director, CCECC, Mr. Cao Bao Gang, said the project would provide 5,000 jobs. The Zungeru Hydroelectric project will generate 700 Megawatts of electricity; while the Mambilla Hydroelectric project will generate 3,050MW. In the interim, Mambilla has been projected to cost $3.2bn. The cost of the Zungeru project is put at $1.3bn. However, officials of the Ministry of Power have given indication that the cost of the Mambilla plant will be reviewed upwards before the project would begin. Our correspondent learnt that the cost of the project could be between $5bn and $6bn. When the final cost of the project is determined, the Chinese financing arrangement will be reviewed upwards as the Federal Government’s involvement is limited to 15 per cent of project cost. Other sectors of the economy where negotiations are currently going on for the procurement of additional Chinese loans include agricultural technology, communication technology and road construction in the Niger Delta. The nation’s growing indebtedness to China represents the Asia giant’s growing influence in the global arena. With huge foreign reserves and a growing economy, China recently replaced Japan as the second largest economy in the world and has the ambition of displacing the United States from the topmost position. Unlike Nigeria’s huge domestic debt of N6.34tn that was mostly procured to finance budget deficits; all Chinese loans to Nigeria are tied to projects. The concern of some experts is the quality of some of the projects as well as the Chinese reputation for corruption. Some of the projects such as the rural telephony project have been ill-conceived, enmeshed in controversy and have had no impact on the citizens. China, on the other hand, has been using its generosity to wield global influence, create employment opportunities for its huge population of 1.34 billion people and sell its technologies to the global community. ---------------------------------------------------------------------------------- NNPC’s $1.5bn loan fraudulent –NLC January 10, 2013 by Fidelis Soriwei and Josiah Oluwole 31 Comments President of the NLC, Mr. Abdulwahed Omar | Organised labour on Thursday said the $1.5bn syndicated loan deal by the Nigerian National Petroleum Corporation was a conduit for looting the nation’s treasury. The Nigeria Labour Congress accused the NNPC of perpetrating a “fraudulent” dependence on fuel importation and looting of the treasury, saying the loan the government’s oil corporation said it needed to pay debts had further exposed the fraud in the management of fuel subsidy. The Labour’s stance came on a day that the Senate insisted that approval by senators was required for the NNPC to secure such a loan. “Under the law, no government agency can borrow money without the approval of the National Assembly. Our position still stands that the National Assembly is not aware of the purported foreign loan and position of the law is clear,” spokesman for the Senate, Eyinnaya Abaribe, said on Wednesday. The NLC, in a statement by its Deputy General Secretary, Chris Uyot, said, “It (the loan) shows the kind of fraudulent way in which they manage this subsidy thing because if they required more money to handle importation, they should have gone into appropriation. “It all goes to show us that the NNPC does not want us to get out of the so-called import of fuel. It is clear that individuals benefit from this fraudulent importation and that it should stop. Government should do everything possible to stop it. The whole idea of fuel importation is a conspiracy to loot public funds through other ways.” As a way of checking the fraud in the oil sector, the Trade Union Congress urged the National Assembly to fast-track the process of passing the Petroleum Industry Bill, saying politicians preferred continued existence of the NNPC with its shortcomings. The oil corporation had reportedly secured $1.5bn loan from both local and international banks. The loan was said to have been brokered by Standard Chartered with the NNPC putting up its daily 15,000 barrels of oil production as collateral. The corporation said the $1.5bn loan was needed to pay back older loans to big commodity traders and keep them from indebtedness with painful multi-million dollar write-offs. The NNPC said it owed major commodity trading houses, including Glencore and Mercuria, about $3.5bn in unpaid fuel supply bills, according to a report commissioned by the Nigerian oil ministry last year. The NLC recalled that the NNPC was indicted by the House of Representatives ad hoc committee on fuel subsidy. The NLC stated, “That (the loan) is a most irresponsible action for a government agency to carry out, especially when the agency is one of those indicted by the probe carried out by the House of Representatives. “It becomes apparent that government agencies like the NNPC and the Petroleum Product Pricing Regulatory Agency don’t want Nigeria to get out of the fuel importation trap.” Also, the TUC president, Peter Esele, urged the National Assembly to put up a legal framework to prevent such a reckless borrowing by the NNPC. He said, “NNPC is a business; they will borrow when they need to. NNPC is a business organisation that sells 2.4 million barrels of crude oil per day. So what is $1.5 bn to them? “What have they (lawmakers) done about the PIB? You see politicians don’t want NNPC to go because that is where they make their money. “The National Assembly should work on the PIB. We must find a lasting solution to this type of situation. We should let the company be, and put a law in place that would make the company to pay dividend to Nigeria.” Abaribe, in an interview with one of our correspondents in Abuja on Wednesday said the law required that any loan by a federal agency must be approved by the National Assembly. Media reports had quoted an NNPC source as saying that the loan did not require the approval by the National Assembly since it was purely on a business merit. The NNPC had reportedly obtained the approval of President Goodluck Jonathan before obtaining the loan. Chairman, Senate Committee on Petroleum (Downstream), Senator Magnus Abe, had also distanced himself from the loan, saying his committee would investigate the loans. “We are still trying to confirm the loan from the NNPC,” Abe said. Efforts to get the NNPC reaction to the latest development on the controversial loan did not succeed as calls to the General Manager, Government Relations of NNPC, Ms Tumini Green, did not go through. Also, a text message to her phone on the subject was not acknowledged as of the time of this report. ---------------------------------------------------------------------------------- Why fuel subsidy account is empty —Okonjo-Iweala January 9, 2013 by Ifeanyi Onuba, Abuja 66 Comments Minister of Finance, Dr. Ngozi Okonjo-Iweala The Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Tuesday confirmed The PUNCH’s story that the Federal Government’s subsidy account with the Central Bank of Nigeria was empty, blaming the situation on technical hitches in the documentation with the CBN. Okonjo-Iweala, while briefing journalists in Abuja, said the transfer of funds meant for fuel subsidy payments from the excess crude dollar account to its naira equivalent accounted for the empty account. She explained that the documentation and conversion process, which is between the Ministry of Finance and the CBN, usually takes between four to five days to accomplish. She said if the amount had been in the naira excess crude account, the process of payment would not have been delayed for that long. She said, “It doesn’t normally take very long if there was already money in the domestic excess crude account to honour it and this takes effect immediately. “Sometimes we have to shift money from one account to the other and usually if the money is in the dollar account for the excess crude and we have to shift it to the naira account. That means, it will be converted into naira by the CBN and we have to authenticate the amount and so on. “So between the Central Bank and the Ministry of Finance, it takes between four to five days to accomplish and the Central Bank is of course very strict because it has to have all the documentation, but I have been informed just before I came in that the money is being credited to the account now as we speak.” She said “as soon as the account is credited on Tuesday”, marketers that had completed their paper work should go for their claims. She said, “You know the conversion is being done and it is being credited to the account so marketers who have not been able to access their money should go today (Tuesday) and they will be paid. “So it is not something that takes a long time, it normally takes less than a week to finish that procedure. The Accountant-General of the Federation is crediting the account now and they should go and check.” Her explanation confirmed the exclusive story published in the Tuesday’s edition of The PUNCH that the Federal Government’s subsidy account was empty. The PUNCH’s investigations had shown that oil marketers who went to the CBN on Monday were turned back on the grounds that the subsidy account with the bank had not been credited. But the Minister said that the N161bn fuel subsidy supplementary budget had been released, and that of this amount, paper work for a total of N94bn to 23 oil marketers had been concluded. She said, “We are appreciative for the approval by the National Assembly for the N161bn supplementary budget for fuel subsidy. “This money was meant to take care of oil marketers and as of December 31 the Ministry of Finance had approval for this money to be made available in the central bank account where they can be accessed by the marketers once they have presented their papers and their Sovereign Debt Notes have been issued. “So the money was made available as of December 31 and I understand that what is being done at this moment is that the money is being converted from dollars into naira and this process is being completed.” ------------------------------------------------------------------------------------- FG fuel subsidy account empty January 8, 2013 by Ifeanyi Onuba 96 Comments Minister of Finance, Dr. Ngozi Okonjo-Iweala Three weeks after the National Assembly approved a N161.6bn supplementary budget for payment of fuel subsidy for 2012, the subsidy account with the Central Bank of Nigeria has yet to be backed by cash by the Minister of Finance, Dr Ngozi Okonjo-Iweala. The PUNCH’s investigations showed that oil marketers, who went to the CBN on Monday, were turned back on the grounds that the subsidy account with the bank had not been credited. Our correspondent learnt that the oil marketers had been issued Sovereign Debt Notes from the Debt Management Office following the passage of the N161.6bn supplementary bill by the National Assembly. The Federal Government normally issues oil marketers with SDNs as security against any delay in payment of subsidy for imported cargoes. SDN, which is another name for government borrowing, is like Treasury Bills and can be discounted for cash, though while the former is a short-term borrowing, the latter is for long term. The issuance of the SDNs by the DMO, it was learnt, was to allow the CBN quickly fund the marketers’ accounts with their respective Deposit Money Banks. A top official in one of the oil marketing companies confirmed to our correspondent during a telephone interview that they were turned back by the CBN. The source, who pleaded not to be named as he was not officially permitted to speak on the issue, said accounts of all oil marketers who had been issued with DMBs could not be credited because the subsidy account with the CBN was empty. He said, “There might be another round of scarcity because most of us are still being owed by the Federal Government. “This is because the subsidy account in the CBN has not been credited. When the supplementary budget was passed, the Ministry of Finance said they are going to pay us so they asked the DMO to issue us with SDNs. This is a note that would enable the CBN to credit our accounts with commercial banks. “We took it to the CBN but we were surprised at what happened. They told us that the subsidy account has not been credited because the N161bn has not been converted to cash by the ministry of finance. “It is the Minister of Finance that usually tells the Accountant General of the Federation to fund the account; but as I speak to you, this has not been done. So we are still being owed.” When contacted on the issue, the Director, Corporate Communications Department of the CBN, Mr Ugochukwu Okoroafor, said the issue of fuel subsidy payment was the role of the Ministry of Finance and not that of the bank. He said, “It is not our responsibility. Our own job is that of a banker and customer relationship and that confidentiality must be respected. Let them (marketers) check with the Ministry of Finance.” Efforts to get the Special Assistant, Communications, to Okonjo-Iweala, Mr. Paul Nwabuikwu, were not successful as he did not pick calls sent to his phone. A text message sent to his mobile phone had also not been acknowledged as of the time of filing this report. President Goodluck Jonathan had on December 11 sent a request to the National Assembly to approve an additional N161.6bn to ensure steady supply of petroleum products during the festive season. The development had reportedly brought a relief to oil marketers who had not been able to import petroleum products owing to the huge debt burden from the Federal Government. Scarcity of petrol had started with the Yuletide, but assurances by the authorities had raised hopes of a quick solution. But despite the assurances, there were fuel queues in many parts of the country, a development the Petroleum Products Marketing Company blamed on panic buying by Nigerians as well as the fire outbreak at Ijeododo, Lagos. The company had attributed the scarcity in Lagos area to the fire outbreak, while it said the one in Abuja was a result of normal panic buying during festivities. ----------------------------------------------------------------------------------- Nigeria’s financial system in 2012: Motion without movement? . Wednesday, 02 January 2013 00:00 By Chijioke Nelson Business Services - Money Watch .JUST like the development stages of a baby from conception to adulthood, Nigeria’s financial system has evolved many steps in its quests to develop. But, in the development processes, sometimes genetic causes, lack of care for the baby, lack of courage on the part of the baby and/or sudden sickness may retard, stall or slow each stage. This is also true of the nation’s financial system. Reform in the financial system across the globe is trending now, especially with the advances in technology and processes, which demand updates in knowledge, to ensure efficiency. But the germane issue in reform is the outcome, which in our system, has not been in tandem with declared objectives. In 2012, reforms in the financial system were sustained in an unusual tempo, but the similarities were underscored on the fact that it was the same issue being treated over the years- financial system stability, banking reforms, e-payment system, financial inclusion, high interest rates, unethical practices, rising suspicion in the system, among others. The terrain has not been too unfamiliar for at least in the last decade. The Central Bank of Nigeria (CBN), at the last count, reeled out growth figures in our nation’s third quarter Gross Domestic Product (GDP). Though marginal improvement was recorded, it also released forecast for the fourth quarter, with a better growth projection for the overall fiscal year 2012. But, we are yet to know how these figures have impacted positively on over 160 million people, with over 45 million jobless and another significant number not gainfully employed. The nation’s Gross Domestic Product (GDP) in real terms, in the third quarter of 2012, stood at N243.26 billion, representing 6.48 per cent growth, against 6.39 per cent it recorded in the second quarter of the year and 7.37 per cent in the corresponding period of 2011. This showed 0.09 per cent quarter-to-quarter increase and 0.89 per cent decrease when compared with the third quarter of 2011. CBN has projected an improved GDP growth of N263.93 billion for fourth quarter, representing 7.09 per cent growth and 0.61 per cent increase over the third quarter, which will translate to the overall GDP growth of 6.61 per cent in 2012. Also in the front burner in the year was the nation’s foreign reserve, which goes back and forth. At the last count, $80 million has depleted from the new high of over $45 billion. The CBN Governor, Lamido Sanusi, had at the last Bankers’ Nite, said, “it is important not to be complacent and it is important also to recognise that there are dark clouds in the horizon and it is extremely important to start building and continue building the fiscal buffers, go into a period of strong restraints and serious fiscal restraints and consolidation. “We must continue to build up the external reserves and protect the economy from external shocks to oil prices and focus on the strength and resilience of the banking system. Banks are not set up to invest in government bills alone, banks are not set up to use depositors’ funds to bet on the capital and real estate markets, banks are set up primarily to mobilise savings and move these savings into the real economy where real production, real jobs and real income are created.” Last year, Sanusi said the e-payment system had recorded a remarkable improvement. This included increase in the number of Point of Sale terminals and other e-payment channels, which created transactions worth billions of Naira. However, he did not fall short of pointing many challenges facing the scheme. “There have been some improvements in the move to drive financial inclusion in Nigeria, however, we still have a lot of issues to cover, such as access to financial services and to the right financial product. “In addition, consumer protection and financial literacy are critical issues that are paramount to making financial inclusion work. The Central Bank has, therefore, set a target to reduce the percentage of financially excluded adults to 20 per cent by 2020, as stated in the National Financial Inclusion Strategy.” Also, Enhancing Financial Innovation and Access (EFInA), said the absence of relevant and reliable data, analysis about how individuals and households manage their finances, the right financial products, consumer protection and financial literacy, among other critical issues, were the biggest hurdles to improving access to financial services in Nigeria. The Chief Executive Officer, EFInA, Ms. Modupe Ladipo, while unveiling the 2012 survey, said, “only 37.8 million Nigerians, representing 43 per cent of the adult population, have access to and/or use formal financial services, while 34.9 million Nigerians representing 39.7 per cent of the adult population, are financially excluded. The good news is that between 2008 and 2012, the number of adults that are financially excluded decreased by 10.5 million. Highlighting the major threats being posed to the economy by high levels of financial exclusion, EFInA, said the nation is presently losing opportunities for business growth. In the absence of finance, people, who are not connected with the formal financial system lack opportunities to maximise their income and expand their businesses. It also noted that the country’s economic growth could be stifled. Vast unutilised resources, in the form of money in the hands of people who are in the informal sector could limit a country’s economic growth potential. The body said the opportunity for the private sector in providing financial products and services to the low-income population represents a large business opportunity for it. Providers of financial products and services should develop innovative products and services that better suit the needs of the low income unbanked and under-banked population. Also in 2012, Nigeria’s Monetary Policy Rate- the benchmark interest rate, sustained the plummeting investment and development profile of the country, even as it could not rank among the first 50 low interest rates in the world. Even in the continent, over 10 countries are ahead. The countries are Kenya, seven per cent, Burkina Faso, 4.2 per cent, South Africa, five per cent; Rwanda, seven per cent; Egypt, 9.5 per cent, Central African Republic, Chad, and Equatorial Guinea, 5.8 per cent each, Democratic Republic of Congo, six per cent, Mali, Cot d’Ivoire, Niger, Togo, Senegal, and Libya, 4.25 per cent respectively, with Ghana trailing behind Nigeria’s 12 per cent at 15 per cent. The benchmark interest rate is the rate at which central bank lends to money deposit banks, which in turn determines how much individual borrowers pay for the use of money they borrow from lenders (banks). Interests rates are fundamental to a capitalist society and are normally expressed as a percentage rate over the period of one Gregorian year. It is also a vital tool of monetary policy and are taken into account when dealing with variables like investment, inflation, and unemployment. Some analysts said, “the problem is that the regulators are focusing only on money supply (price stability), which is only one aspect of the macro-economic variables. Certain level of inflation is needed to drive economic activities. What is bad is high-level inflation. The monetary policy rate of the country and the growth projections are contradictory. If small-scale enterprises cannot get facilities at lower single digit rates, the development and growth projections are just mere talks. “How can employment be generated without SMEs and subsequent industrial growth, coupled with with infrastructure development? How can these be attained when borrowing costs are beyond the reach? Even government that is preaching the development is borrowing at the same high rate. Is this not counter-productive? The CBN and Nigeria Deposit Insurance Corporation (NDIC) recently gave the nation’s money deposit banks a mixed clean bill of health, courtesy of the ongoing reforms in the sector, adding that they are on the path of profitability now. However, the commendations were greeted with another warning from the NDIC, that only five banks were sound, 13 were satisfactory, while two were marginal, warning the financial institutions not to let down the guard on corporate governance, which caused the near collapse of the nation’s financial system recently, pointing out that its 2011 report showed that lapses in corporate governance may have started again in some banks. The warning may have raised another poser over the sustainability of their respective profits so far declared and the end to persistent rounds of banking reforms, which would always weed out the weak links in the system, leaving few that would eventually dominate the rest. The apex bank in its ongoing reform in the sector, recently released a circular, insisting on April 30, 2013, deadline for the enforcement of the revised operational guidelines for all Primary Mortgage Banks (PMBs) in the country, an indication that the nation’s banking reform is still ongoing. The apex bank, which considered the deadline as sacrosanct, also reeled out additional information and guidance that will help PMBs meet the prescribed capital requirements of N5 billion for national operations and N2.5 billion for state, including documentation requirements for regulatory approval in either option. CBN, had in a circular earlier this year, notified all the mortgage institutions about compliance with the revised guidelines and the April 30, 2013 implementation deadline, saying, “it cannot be extended.” Specifically, it advised the PMBs to shore up it capital base through rights issue, private placement, public offer, mergers and acquisition, takeover and downscaling, saying that the mortgage firms should conduct due diligence and seek professional, legal and financial advice for any decision. According to a statement from the apex bank, it also suggested timelines that could help PMBs that might opt for rights issue, private placement, or public offer, to complete the process and submit the documentary requirements for verification on or before March 31, 2013. Reiterating its stance on the issue, it warned that it was practically impossible, at this time, to complete the process for a public offer, given the remaining timeline, unless the process had commenced much earlier adding that PMBs that are unable to scale-up to the new capital requirements may choose the downscaling option, that is, to surrender the existing licence. Asset Management Company of Nigeria (AMCON) also defended the N2.3 trillion loss it recorded this year, saying it was used to bail out the three acquired banks from liquidation. The Managing Director, Mustapha Chike-Obi, said that despite the loss, the institution was still “healthy and stronger than ever”, adding that the loss was incurred in the effort to rescue Mainstreet, Keystone and Enterprise banks from total liquidation. “AMCON derived it’s N2.3 trillion loss from the purchase of banks assets and total intervention is zero after 10 years, because the banks are going to give us money in sinking fund. The total amount of money we put into the banks, as intervention was N5.6 trillion. “If you look at our cash flow position, you will see that it is very strong, we have a lot of cash. And I will tell you that by 2013, we would probably have about N2 trillion in cash when the bonds mature. “So, this concern whether we can finance our bonds in 2013, it’s a little bit overblown. We would have plenty of cash at that point for refinancing of our bond. We will not have N5.4 trillion in cash, I can tell you that, but the fact remains that there is no financial crisis in December 2013, if we chose to refinance our bonds completely from cash. But again, is a restructuring exercise, which we cannot move into right now. That is how we do it. So it’s not really that there will be a crisis in December 2013,” he said. The 2013 fiscal year is has come. As with other fiscal years, it would soon begin with unended issues, pending ones, perhaps uncharted ones and at least, create its own along the way. The AMCON boss assured Nigerians that the corporation would continue with its refinancing operations without any hitch, despite the huge loss in its financial statement results because of the need to boost investors’ confidence in the nation’s banking system. “When we take you through our figures this year, it is important to note that N2.3 trillion was the money we used to fill up depositors fund this year and it’s a non recurrent. What we reoccurred was the finance cost and the interest on bond issue, but the way our accountants make us to understand it is that you must take the interest as expense in the year, because it’s a non-performing loan. So, when the loan start performing again then we will restructure the loan and we can now take it,” he said. He said that the corporation would recover all monies that are owed by people, adding that it has so far recovered N83 billion in cash from debtors. “As at now in terms of restructuring, we have restructured 11 per cent of our loans. And in terms of cash, which has come in, we have recovered N83 billion in cash, while other cash received from our assets is N49 billion. For example, only last month, the asset we foreclosed was over a N100 billion from a single debtor.” The 2013 fiscal year is around the corner. As with other fiscal years, it would soon begin with unended issues, pending ones, perhaps uncharted ones and at least, create its own along the way. Next > Author of this article: By Chijioke Nelson -------------------------------------------------------------------------------- Tagged: Business•Governance•Nigeria•West Africa Nigeria First (Abuja)Nigeria: President Jonathan's 2013 Budget Speech 10 October 2012 More on ThisJonathan's Promises More Jobs in 2013 BudgetJonathan to Present 2013 Budget to National... Jonathan, Reps Cut Deal On 2013 Budget Nigeria's Assembly Rejects 2013 Budget2013 Budget to Wait Until...,Say Reps President Jonathan to Present 2013 Budget... Nigeria's Jonathan Submits a N4.9 Trillion Budget for 20132013 Budget - Jonathan Submits N4.9 Trillion... FG Projects N1.03 Trillion Deficit for 2013 Ads by GoogleCIA - Intelligence DegreeEnroll in AMU's Intelligence DegreeProgram. Online Courses. Apply Now.www.AMU.APUS.edu/IntelligenceThe "Fiscal Cliff" HoaxDiscover the Real Story You're NotHearing from the Mainstream Presswww.DailyWealth.comRelated TopicsNigeriaNigeria: Gunmen Kill 25 in Adamawa, Borno GovernanceEgypt: Mursi Places Priority on Economy BusinessSomalia: Puntland Returns Pirate Hostages document President Goodluck Jonathan Delivering 2013 Budget Speech 2013 Budget Speech "Fiscal Consolidation with Inclusive Growth" Delivered by: His Excellency, Goodluck Ebele Jonathan, GCFR President, Federal Republic of Nigeria Before: A Joint Session of the National Assembly, Abuja Wednesday, 10th October 2012 PROTOCOL 1. It is my pleasure and honour to present the 2013 Federal Budget Proposal before this esteemed Joint Session of the National Assembly. I am particularly delighted to present this Proposal to you earlier in the year, and soon after the commemoration of our national independence, to signal our commitment to evolving a new Nigeria. This Proposal is the product of extensive consultations with key stakeholders and would further translate the Government's development plans into concrete actions. 2. When I presented the 2012 Budget, you will recall, I emphasized the fact that it would be "a stepping-stone to the transformation of our economy and country in our walk to economic freedom ...". I am glad to report that we have made progress in this regard. Today, in the face of critical resource constraints, the defining moment of our work is in actualizing our promises to Nigerians. We need to create a structured economy where everybody plays by the same rules, and contributes their fair bit. That is the Nigeria our heroes past craved for; that is the Nigeria we believe in; and that is the Nigeria we are building together. GLOBAL ECONOMIC DEVELOPMENTS 3. As we build this nation and walk the path of development, we must be mindful of the realities of our circumstances and those of the changing global economy. This Budget Proposal was therefore designed against the backdrop of global economic uncertainty. By the end of the second quarter of this year, the global economy was recovering but at a very slow pace. Growth in a number of major emerging market economies, has been lower than forecast. Overall, global growth is projected at 3.3% in 2012 and 3.6% in 2013. 4. The uncertainty surrounding the global economy, which could have adverse effects on commodity prices, highlights the downside risks for our economy. The oil market is well known for its volatility. We recall the 2008 experience at the height of the global economic downturn when oil prices fell almost overnight from $147 per barrel to $38 per barrel. This threat of oil price volatility remains constant and underscores the need to rely on a robust and prudent methodology to estimate the benchmark price. 5. The global economic slowdown can also have far-reaching implications for the demand for our export commodities, given that the Euro zone and the USA account for over 50% of the nation's crude oil exports. These global developments are also being transmitted to our economy through a dampening effect on foreign capital inflows and remittances by Diaspora Nigerians. Fellow Nigerians, these are uncertain times in the world economy, and my Administration is taking necessary steps to mitigate possible adverse effects of the global economic slowdown on Nigeria. I assure you that we are going to build up the necessary savings to protect the economy against a possible global recession or a slow recovery. DEVELOPMENTS IN THE DOMESTIC ENVIRONMENT 6. In spite of the foregoing, our economy has done relatively well. Over the past nine months, through a number of initiatives, we have created new jobs directly and supported many young entrepreneurs running SMEs to create jobs. Nigeria is looking to become more self-reliant again in food security, and we are increasing local content in our manufacturing processes and the oil and gas sector. 7. As at the end of the second quarter, the economy recorded an impressive growth of 6.28% compared to 5.4% forecast for sub-Saharan Africa. It is gratifying to note that the non-oil sector remains the main driver of growth. There are also improvements in other macroeconomic indicators. Inflation has dropped from 12.9% in June 2012 to 11.7% in August 2012, and our goal is to reduce it further. Our foreign reserves now stand at US$41.6 billion – the highest it has been in over 2 years. We intend to continue with our programme of fiscal discipline and prudent monetary policy in order to continue to improve our country's macroeconomic environment. 8. Furthermore, in addition to being upgraded last year by Fitch and S&P rating agencies, Nigeria has now been included in the JP Morgan Emerging Markets Bond Index, signifying increasing investor confidence in our economy. In addition, the World Economic Forum has upgraded our ranking from 127 to 115 in the global competitiveness index. 9. Here in Nigeria, we do not join the debate on fiscal consolidation versus growth because we believe in the need to do both; hence, we are continuing our focus of fiscal consolidation with inclusive growth. The fiscal consolidation policy has helped to strengthen our finances with a programmed budget deficit of about 2.85% of GDP in 2012, now projected to drop to 2.17% in 2013. Moreover, the share of capital expenditure in the total budget is increasing as we gradually reduce recurrent expenditures and also develop non-oil revenue sources. REVIEW OF THE 2012 BUDGET IMPLEMENTATION 10. Fellow Compatriots, the 2012 Budget was focused on achieving Fiscal Consolidation with Inclusive Growth using the budget balance as a fiscal anchor. In that respect, while investing in key priorities, the budget also ensured that the deficit followed a downward trend over the medium term. This is being done through a more aggressive revenue collection drive and prudent management of available resources. 11. On the expenditure side, the implementation of the 2012 Budget is on track, having commenced effectively in April when it became law. We have so far released N711.6 billion to MDAs for the implementation of their capital budgets while further releases are to follow shortly for the fourth quarter. The continued implementation of the 2011 capital budget in the first quarter of 2012, clearly affected the implementation of the 2012 Budget. 12. I have taken a personal interest in the budget implementation since May by chairing weekly sessions with Ministers and Heads of parastatals on their progress in this regard. We are determined to use the instrument of the budget to improve the welfare of Nigerians. You would recall my assurance to Nigerians that subsequent budgets will be presented earlier to the National Assembly. It is in this spirit that I lay this Proposal before this Assembly today, to give sufficient time for deliberation on the Proposal and approval of the budget, and to enable us commence implementation from January 1st 2013. 13. Let me stress that Government remains focused on the tangible outcomes from the implementation of the Appropriation Acts, not just the amounts spent. In this respect, I have signed Performance Agreement Contracts with my Ministers with a view to ensuring delivery of projects and programmes in their respective budgets. The Ministers in turn, are signing similar agreements with their Permanent Secretaries, Heads of parastatals and Directors to cascade down the need for responsibility and accountability. Key government officials with responsibility for implementing different aspects of the budget will be appraised based on these performance agreements. My goal is to ensure optimal implementation of our annual budgets. 14. Government is also determined to reduce the cost of governance. We are reviewing the recommendations aimed at rationalizing Agencies of the Federal Government with overlapping functions. This has been taken into account in the preparation of the 2013 Budget, and we expect some modest cost savings from this exercise in the course of the 2013 fiscal year. However, more significant progress will be made in 2014, as we work with the Legislature to harmonise those Agencies that have enabling laws, but which also have duplicative mandates. Subsidy Reinvestments and Empowerment Programme (SURE-P) 15. You will recall that we had assured Nigerians that the proceeds of the partial withdrawal of petroleum subsidies will be applied to implementing the Subsidy Reinvestment Programme (SURE-P). The implementation of this programme is continuing over the medium-term. 16. In the 2012 fiscal year, we had voted N180 billion for the implementation of social safety net programmes, road and rail infrastructure projects. So far, N36.5 billion of this amount has been utilized to support maternal and child health programmes as well as mass transit, roads and rail projects and job creation through the Community Services and Public Works programme. The SURE-P Board under the able chairmanship of Dr. Christopher Kolade is presently working hard to ensure the successful oversight of the implementation of this programme. We are grateful to them for their hard work and patriotism. KEY ACHIEVEMENTS IN THE 2012 FISCAL YEAR 17. In the 2012 Budget, Government outlined some projects and programmes that were to be implemented in key sectors of the economy in order to improve the livelihood of Nigerians. We have numerous activities in various sectors such as: Power, Health, Agriculture, Education, Housing, Transport, Aviation, etc. Let me highlight a few of these sectors. Power 18. The Power Sector Reform is on course. Our efforts have begun to pay off as we have improved power supply to various parts of the country. Our gas-to-power and other initiatives are making this possible, but I acknowledge the fact that we still have a long way to go. As you may be aware, the ongoing privatisation of the generation and distribution companies has reached an advanced stage. In some cases, Preferred Bidders have already emerged. When completed, the programme will bring into the sector significant private investment, along with the requisite power output. 19. We have accomplished a number of goals in the Power sector reform programme in line with the Roadmap, including: a. Completion of new units at our thermal power stations, to increase generation; b. Rehabilitation of existing power infrastructure, which has yielded up to 1,000 mega watts of additional electricity; c. Fast-Tracking 3 NIPP projects, which will bring an additional 1,055 mega watts by the end of the year; and d. Facilitating a power and gas financing package, which includes Government Guarantees, proposed Infrastructure Bonds of about $1billion, and $150 million of external funding from the African Development Bank to support continued gas supply and the liberalization of the power sector. Agriculture 20. My Administration has instituted key policy reforms to establish staple crop processing zones aimed at attracting the private sector into areas of high production, reducing post-harvest losses, and adding value to locally produced commodities. So far we have succeeded in attracting $7.8 billion investment commitments to the agricultural sector. These investments and the value chain approach being used to transform the sector have the capacity to create 3.5 million additional jobs in the medium term by 2015. • You will recall that Government provided incentives to support cassava value chains, including zero duty on machinery and equipment to process high quality cassava flour. Cassava bread is increasingly commercially available with 20% cassava flour content. In addition, a total of one million metric tonnes of dried cassava chips, are being exported to China this year. • Achieving self-sufficiency in rice production in 2015 remains our target. In response to our new fiscal measures, 13 new private sector rice mills with a capacity of about 240,000 metric tonnes have been established. These mills buy and process local paddy and create employment for Nigerians. Housing 21. Fellow Nigerians, the provision of affordable housing is one of the Administration's strategic imperatives for guaranteeing our citizens' productivity and well-being. We are creating an enabling environment for the private sector to produce much needed housing, whilst creating jobs in the process. To facilitate this, I will be holding a presidential retreat on Housing in early November, to discuss policy and modalities for dealing with land titling issues, developing an affordable mortgage finance system and reducing the high cost of housing construction. 22. In the meantime, under various social housing programmes, close to 2,000 housing units have been completed, while over 24,000 housing units are at various stages of completion. This is outside housing being constructed for the use of the Armed Forces and Paramilitary services. The Federal Government has entered into Partnership Agreements with several States for the provision of 6,000 housing units. Another 600 housing units have already been completed under the direct construction scheme of the Federal Housing Authority in these States. Gradually, we are ensuring that more Nigerians enjoy the benefits of having their own homes. Transport 23. You are already familiar with the improvement in the functioning of our ports, the details of which I provided in my 52nd Independence Anniversary Speech. With regard to Rail transport, in our continuing effort to boost infrastructure development in the country, work is ongoing to rehabilitate the rail system across the country. These include the Lagos-Kano line as well as the Port Harcourt-Maiduguri line. Our people have started enjoying rail service again. 24. Our railway modernisation programme is progressing with the Abuja-Kaduna line now at 46% completion, while work on the Lagos-Ibadan line is to commence soon. We also expect to complete the Itakpe-Ajaokuta-Warri line in 2013. In the same vein, we are fast-tracking the implementation of the mass transit Abuja Light Rail system. When completed, it will improve transportation for all residents in the FCT, especially workers living in the satellite towns. 25. Inland Waterways: Our inland waterways programme is on track to boost commerce in the surrounding communities, and I had the pleasure of commissioning the Onitsha Inland Port on 30th August 2012. Aviation 26. We are working hard to improve the regulatory regime and safety of the Aviation sector and will continue to look for ways to support its development. This Administration identifies this sector as a key part of the Transformation Agenda. As such, we have embarked on a comprehensive programme to transform our airports to world-class standards and improve air travel safety standards across the country. 27. For instance, the remodelling of airport terminals and the upgrading of airport runways are presently at advanced stages of implementation across virtually all our airports. In addition, we have just concluded arrangements to commence the construction of five brand new terminals in Kano, Port Harcourt, Lagos, Abuja and Enugu, and six perishable cargo terminals, early next year. In line with international best practice, these new terminals will be private sector-managed. 28. Roads: We know that Nigerians are disturbed about the state of our major highways. We are addressing this issue frontally. With the rains receding, the Ministry of Works will intensify the construction and rehabilitation of major roads in the country, for example, the dualization of the Abuja-Lokoja road, the Benin-Ore-Shagamu road, and the Kano-Maiduguri road. Also, the Enugu-Port-Harcourt road rehabilitation has been awarded to four contractors in order to fast-track its completion. It is gratifying to note that resources from the Petroleum Subsidy Reinvestment Programme are being used to supplement the regular budget for these projects. The Petroleum Sector 29. The petroleum sector continues to play a crucial role in our economy, even as we seek diversification. In this regard, we are taking steps to modernise the sector. A robust Petroleum Industry Bill (PIB) has been delivered as promised to the National Assembly for consideration. When passed into law, the Bill will provide the new legal framework that will govern Nigeria's Oil and Gas industry. This Bill, which encompasses major reforms, will encourage additional investments in the sector, create accountability and transparency, and ensure that the management of our petroleum sector is commercially driven. 30. Our gas to power initiatives are moving firmly ahead, with the 12-month gas supply emergency plan already yielding more than the targeted volumes of gas for power generation. 31. With respect to the Petroleum Subsidy Programme, Government is succeeding in substantially cleaning up the management of the petroleum subsidy regime. We are tightening up the payment regime, to weed out corruption while working hard to recover monies fraudulently obtained from the subsidy regime. The EFCC is prosecuting those found wanting and the efforts to crack down on corruption in this sector will continue. 32. On Frontier Exploration, the Government's drive to build up the nation's oil reserves through exploration of new frontiers for oil and gas production is beginning to yield results with news of the discovery of crude oil in some inland sedimentary basins in the country. These include the Chad Basin, Benue Trough, Yola Basin and Anambra Basin amongst others. We are determined to further develop on these findings and expand the scope of such explorations. To support this, we have raised the provision for frontier exploration services from N12 billion in 2012 to N16 billion in 2013. Job Creation 33. Fellow Compatriots, in spite of the economic growth noted earlier, it is clear that as a nation, we still face economic disparities across the country. This constitutes an obstacle to sustainable development as it limits improvement in living standards, output and social cohesion which are key factors for achieving inclusive growth. Our challenge therefore, transcends how to achieve growth. Our objective is to achieve inclusive growth by identifying and developing job creation opportunities. We have mentioned the 3.5 million jobs we aim to create in agriculture and more jobs in the housing and construction sectors, solid minerals sector, aviation and the creative industry. 34. In my Independence Day Speech, I spoke of the 80,000-110,000 jobs we are supporting young entrepreneurs to create through the YouWin programme. We have received numerous testimonies from young men and women who have been able to expand their businesses through the programme. We have just launched a second round of the competition targeting only women entrepreneurs. Across the country, our youth are developing new ideas and enterprises, and we must support them. 35. I launched the Community Service, Women and Youth Empowerment Programme (CSWYEP) under the SURE-P in February 2012. This is now working in pilot phase in 14 states, and to be replicated in other states in 2 weeks. We also have the Graduate Internship Programme, in which participating private companies provide one-year internships to 50,000 graduates, paid by the Federal Government. So far, 700 firms, and 20,000 young graduates have applied to participate in this scheme. 36. Fellow Nigerians, even as we review our achievements in 2012, we are also conscious of the unprecedented floods, which have ravaged many parts of our country, displacing tens of thousands of fellow Nigerians, and causing massive destruction of property, farmlands, and infrastructure across the country. My heartfelt sympathy goes to the affected families and communities. 37. Yesterday, I made a broadcast on the Federal Government's actions to deal with the situation. I authorized the disbursement of N17.6 billion to States and MDAs to help bring succour to our fellow citizens affected by the floods. This will complement ongoing efforts by Federal and State agencies, and private initiatives. 38. A Presidential Technical Committee to properly assess the extent of the impact, and propose a rehabilitation strategy, has submitted an Interim Report and is continuing to visit all the affected communities. I have also set up a National Committee on Flood Relief and Rehabilitation to assist the Federal Government to raise funds to mitigate the pains and ensure effective post-impact rehabilitation of victims. 39. I have also directed that the Ministry of Agriculture and Rural Development put in place a flood recovery food production plan. This will include the provision of early maturing varieties of maize, which mature in 60 days, to several flood affected areas. In addition, flood-tolerant rice varieties are being procured for flooded rice growing areas. We will also accelerate dry season production of major food crops. Security 40. Fellow Compatriots, we are conscious of the fact that without security, no meaningful development can take place in our land; and our collective efforts at building the nation would only amount to little. This is why we channelled a great deal of resources to security in the 2012 Budget. We remain conscious of the impact of security challenges facing the country and are determined to bring the situation under control. 41. I commiserate with all our citizens who lost loved ones in the recent Mubi killings and all the other acts of senseless destruction of lives and properties in the country. We have already made arrests in the Mubi case, and I want to assure Nigerians that all the culprits will be made to face the full weight of the law. I want to thank our brave men and women of the security services for their commitment. I also want to acknowledge and thank the various state Governors for their cooperation and untiring effort to ensure peace in their domains. The unity of Nigeria is not negotiable THEME OF THE 2013 BUDGET Theme 42. Distinguished Ladies and Gentlemen, you will recall that in furtherance of my Administration's efforts to transform our economy, the 2012 Budget was established on four main pillars - Macroeconomic stability; Structural reforms; Governance & institutions; and Investing in priority sectors. The 2013 Budget promotes continuity of these pillars and is designed with the theme: fiscal consolidation with inclusive growth. We will remain prudent with our fiscal resources but also ensure that the Nigerian economy keeps growing and creating jobs. To this end, the government will continue with the medium-term theme and interventions that are consistent with the objectives of the Transformation Agenda. Macroeconomic Stability 43. One key plank upon which our economic transformation is based is the achievement of macroeconomic stability. My Administration has made significant progress in putting the finances of the nation on a sound footing and laying the foundation for rapid and sustainable growth. We will stay focused on maintaining macroeconomic stability in Nigeria. Budget Structure 44. Now let me turn to the structure of the 2013 Budget. In recent years, recurrent expenditure has tended to crowd out capital expenditure in the national budget. Over the 2013-2015 medium-term, my Administration will continue to implement measures aimed at correcting this imbalance in the budget structure in a viable and sustainable manner. 45. In the 2012 Budget speech, I noted that Government was going to focus on cutting recurrent expenditure to sustainable levels through reduction of waste, corruption and duplication in the functions of government agencies. In this respect, the biometric verification of employees is being extended to all agencies of Government, while the process for rationalizing public agencies and reducing duplication of mandates among different government agencies has begun, following the Report of the Oronsaye Committee. 46. I am therefore pleased to announce that the share of recurrent spending in aggregate expenditure is set to further reduce from 71.47% in 2012 to 68.7% in the 2013 Budget, while capital expenditure as a share of aggregate spending is set to increase from 28.53% in 2012 to 31.3% in 2013. Public Debt Management 47. Government will continue to exercise fiscal prudence and limit its borrowing requirements in compliance with the Fiscal Responsibility Act, 2007. Consequently, we have developed a responsible domestic debt management strategy that, for the first time, seeks to start paying off our domestic debt rather than rolling it over. In this respect, a sinking fund of N100 billion is being established in the 2013 fiscal year to be used for repaying Government's maturing debt obligations and to curb the rising domestic debt profile. We have further reduced our annual domestic borrowing from N852 billion in 2011, N744 billion in 2012, and to N727 billion in 2013. THE 2013 BUDGET 48. The 2013 Budget is underpinned by the following parameters which reflect Government's prudent economic policies in an uncertain global economic environment: • Oil production of 2.53 million barrels per day, up from 2.48 million barrels per day for 2012. • Benchmark oil price of US$75/barrel, a modest increase from the US$72/barrel approved in the 2012 Budget. This benchmark price is based on a well established econometric methodology of estimating oil price moving averages. • Projected GDP growth rate which is now estimated at 6.5% compared to 6.85% in the Fiscal Strategy Paper. The revision is underpinned by the fact that the severe floods experienced over large parts of the country are expected to impact on economic activity in 2013, especially agriculture. However, the growth prospects may improve with the plan to boost dry season farming. Revenue 49. Based on these assumptions, the gross federally collectible revenue is projected at N10.84 trillion, of which the total revenue available for the Federal Government's Budget is forecast at N3.89 trillion, representing an increase of about 9% over the estimate for 2012. Non-oil revenue is projected to continue to grow in 2013 as the ongoing reforms in our revenue collecting agencies, and the implementation of initiatives to further develop the non-oil sector continue to yield results. Expenditure Proposals 50. An aggregate expenditure of N4.92 trillion is proposed for the main budget of the 2013 fiscal year, representing a modest increase of about 5% over the N4.7 trillion appropriated for 2012. This is made up of N380.02 billion for Statutory Transfers, N591.76 billion for Debt Service, N2.41 trillion for Recurrent (Non-Debt) Expenditure and N1.54 trillion for Capital Expenditure. 51. Based on the above, the fiscal deficit is projected to improve to about 2.17% of GDP in the 2013 Budget compared to 2.85% in 2012. This is well within the threshold stipulated in the Fiscal Responsibility Act, 2007 and clearly highlights our commitment to fiscal prudence. We are determined to further rein in domestic borrowing, and this way, ensure that our debt stock remains at a sustainable level. 52. Our focus on critical economic and social sectors continues. Some of these sectors are largely driven by private sector activity, while others require a great deal of public sector support. Some key allocations are as follows: Works – N183.5 billion; Power - N74.26 billion; Education – N426.53 billion; Health – N279.23 billion; Defence – N348.91 billion; Police – N319.65 billion; and Agriculture & Rural Development – N81.41 billion. 53. The power and gas sectors require a lot of investments to sustain our supply improvements. We shall therefore complement available resources with a proposed Infrastructure Euro Bond of about $1 billion in order to complete gas pipelines and other infrastructure investments. We have also programmed other grants and soft credits critical to infrastructure and other sectors in our medium term external borrowing plan. 54. The SURE-P will continue with the expected resources of N180 billion in 2013 augmented by the projected 2012 unspent balances bringing the total to about N273.5 billion. We hope to make further progress in the programme, providing additional infrastructure investments and social safety net schemes for Nigerians. I am pleased to also lay before this esteemed Assembly, the 2013 Budget for the SURE-P. Fiscal Policy 55. To promote Nigerian agriculture and industry, we will continue to implement supportive fiscal measures for some priority areas. You will recall that in my 2012 Budget speech, I announced fiscal measures on rice, cassava, wheat, and machinery for the agriculture and power sectors. In this regard, I am pleased to announce the following additional measures which will be effective from 1st January 2013: a. Sugar: Machinery and spare parts imported for local sugar manufacturing industries will now attract 0% duty; there will also be a 5-year tax holiday for "sugarcane to sugar" value chain investors. Furthermore, import duty and levy on raw sugar will be 10% and 50% respectively, while refined sugar will attract 20% duty and 60% levy; b. Rice: A 10% import duty and 100% levy will be applied to both brown and polished rice; c. Aircraft: All commercial aircraft and aircraft spare parts imported for use in Nigeria will now attract 0% duty and 0% VAT. This will appreciably improve safety in our skies as newer fleet and less onerous maintenance will prevail; d. Solid Minerals: Machinery and equipment imported for use in the solid minerals sector will now attract 0% import duty and 0% VAT; and e. Public Mass Transit: In order to encourage the production of mass transit vehicles in Nigeria, duty on Completely Knocked Down components (CKD) for mass transit buses of at least 40-seater capacity, will now be 0%, down from 5%. Government is desirous of supporting green growth and, in this regard, will explore options for providing incentives for energy efficient vehicles from the 2014 fiscal year. Gender Empowerment 56. This administration is gender friendly and has worked to improve the position of women in society and empower them economically. Nevertheless, to further integrate women in the various sectors, we have developed an innovative approach to mainstreaming gender issues starting with 5 pilot ministries – Agriculture, Health, Communication Technology, Water Resources and Works. These ministries are signing MOUs with the Ministry of Women Affairs to deliver on specific services for women. a. The Ministry of Agriculture, for example, will work with the Ministry of Communication Technology to ensure that 5 million women farmers and agricultural entrepreneurs receive mobile phones to be able to access information on agro-inputs through an e-wallet scheme. b. The Ministry of Health, in addition to scaling up its ongoing "Save a Million Lives" initiative, plans to give back health and hope to one-third of the pool of young girls and women who have been waiting a long time for V.V.F repairs through surgery and economic rehabilitation. In addition, we are up-scaling routine immunization. c. For 2013, the Ministry of Works plans to increase the number of women that are employed in public works programmes as contractors, workers and project evaluators, setting itself a target of 35% for women in FERMA rehabilitation work. In every geopolitical zone, at least 3 roads leading to areas where women's socio-economic activities are concentrated, will be prioritised and completed. 57. To support these activities, we have set aside the sum of N3 billion to be disbursed to participating MDAs as incentives for them to deliver on these targets. Our focus on empowering women is part of our agenda for improving the country's human development indicators. In this regard, we shall not relent in our efforts to improve access and quality in our health and education sectors. Sports 58. The performance of our sportsmen and women continues to strike an important chord for all Nigerians across the country. We want to take our sports to great heights again. We all recall our disappointment with our performance in the recent Summer Olympics games in London. At the same time, we were very delighted with the success of our Paralympics athletes. 59. My Administration is committed to addressing the challenges faced by our sports men and women. Later this month, I will be hosting a Presidential retreat on sports in order to strategise on ways to support our sports sector to achieve greater heights. CONCLUSION 60. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of this esteemed Assembly, Fellow Nigerians, the Budget Proposal I lay before you today represents our continued drive for real and sustainable growth for the wellbeing of Nigerians. 61. It is a budget that gives priority to our concerns for security, infrastructure, food security and human development sectors. It is a Budget that introduces a series of innovative features. This Budget is a push in the right direction borne out of our well thought-out and articulated developmental policies. 62. This is a budget for every Nigerian. It belongs to the farmer, the investor, the entrepreneur, the youth and the elderly. Yes, we have challenges, but also incredible opportunities. Ours is the task of transforming these opportunities into real, tangible outcomes which all our people can experience and call their own. We need the cooperation of everyone to make it work, to grow the economy, and to create jobs for our people. I continue to call on all Nigerians to act. Making Nigeria work begins with you and me. 63. Finally, I must restate my appreciation of the contributions and cooperation of the Legislature in discharging our collective responsibility to build the nation of our dreams. 64. I look forward to an expeditious consideration and passage of this Proposal, as we strive to guarantee positive socio-economic transformation for the benefit of our people. 65. May God bless the Federal Republic of Nigeria. 66. I thank you. ----------------------------------------------------------------------------------- Nigeria’s Q3 GDP up by 6.48 per cent . Thursday, 27 December 2012 00:00 By Chijioke Nelson Business Services - Business News .CBN forecasts 6.61 per cent overall growth for 2012 THE Central Bank of Nigeria (CBN) said the nation’s Gross Domestic Product (GDP) in real terms, in the third quarter of 2012, stood at N243.26 billion, representing 6.48 per cent growth, against 6.39 per cent it recorded in the second quarter of the year and 7.37 per cent in the corresponding period of 2011. This showed 0.09 per cent quarter-to-quarter increase and 0.89 per cent decrease when compared with the third quarter of 2011. Also, CBN has projected a better GDP growth of N263.93 billion in fourth quarter, representing 7.09 per cent growth and 0.61 per cent increase over the third quarter, which will translate to the overall GDP growth of 6.61 per cent in 2012. The forecast was based on projected increase in lending activities by banks, favourable oil sector indicators, improved power supply across the country and increased consumer demand during the year-end festivities. The marginal improvement in this year’s third quarter GDP report over the second quarter was attributed to increase in the contributions of the wholesale/retail trade sub-sector and the industrial sector, which rose from 1.45 per cent to 1.76 per cent and 0.23 per cent to 0.33 per cent respectively. According to CBN’s third quarter Bulletin, the available data from the National Bureau of Statistics (NBS), showed that the improvement was however constrained by the slowdown in relative contributions of other sectors like agriculture, services and building and construction, when compared with the second quarter performance. A further breakdown of the sectoral analysis showed that the agricultural output declined, as its relative contribution to the growth in real GDP decreased from 1.75 per cent in the second quarter to 1.70 per cent in the third quarter. “The decline in activities in this sector was attributable to the decrease in the relative contribution of livestock and fishing from 0.20 and 0.08 per cent in the preceding quarter to 0.13 and 0.07 per cent in the third quarter. “The contribution of the crop production sub-sector however, increased from 1.44 per cent in the preceding quarter to 1.47 per cent in the third quarter, while the contribution of forestry remained the same,” according to the Bulletin. Activities in the industrial sector rose in the third quarter of 2012, with a relative contribution of 0.33 per cent from 0.23 per cent recorded in preceding quarter. The rise in industrial production was attributed to increases in the crude oil and natural gas sub-sector from –0.11 in the preceding quarter to 0.01 in the quarter under review. Also, the solid minerals sub-sectors rose from 0.04 per cent in the preceding quarter to 0.05 per cent in the third quarter of 2012. The contribution of the manufacturing sub-sector however, dropped the same. The Bulletin noted that the decrease in manufacturing production was caused by a number of factors, including unfavorable business climate, decline in agricultural output, which forms a major source of raw materials, among other things. Taking the lead in the sliding fortunes of manufacturing production were the food and beverages and tobacco sub-sector, non– metallic product and motor vehicle and miscellaneous assembly, which declined from 0.11, 0.07 and 0.01 per cent in the preceding quarter to 0.10, 0.04 and 0.004 per cent in the current quarter. The services sector recorded a drop in activities as its relative contribution to GDP growth decreased from 2.69 per cent in the second quarter to 2.51 per cent in the current quarter . The lull in the performance of this sector was largely driven by the decrease in the relative contributions of all the sub – sectors, except transport and utilities, which was attributable to drop in patronage, especially the communications sub-sector, where poor quality of network hampered the delivery of telecommunication services. The contribution of building and construction sector to real GDP relative to the preceding quarter decreased from 0.27 to 0.19 per cent in the current quarter. The drop in the activities recorded in the sector was attributable to increased rainfall, which slowed down construction activities across the country during the quarter. Next > Author of this article: By Chijioke Nelson ----------------------------------------------------------------------------------- QUESTION: IS OKONJO-IWEALA LECTURING HIGH SCHOOL KIDS ON HOW "HOUSEHOLD AND BUSINESS FINANCES" ARE MANAGED? ----------------------------------------------------------------------------- 2013 BUDGET: OKOROCHA PROPOSES N197.7B TO IMHACategory: Special Announcements | Date Added: 2012-12-06 06:31:39 GOVERNOR ROCHAS OKOROCHA Imo State governor, Owelle Rochas Okorocha has presented a budget proposal of N197,743,684,031(one hundred and ninety-seven billion, seven hundred and forty-three million, six-hundred and eighty-four thousand and thirty-one naira) to the Imo State House of Assembly(IMHA) for the 2013 fiscal year. The amount represents 34.4% recurrent expenditure or N63,550,209,564 and 67.53% capital expenditure which represents N132,183,474,467. An estimated revenue projection from recurrent sources for the year and capital receipt stand at N93,889,888,530 and N101,853,795,501 respectively. In the budget christened 'Rescue Budget 2', Governor Okorocha said an expenditure of N59,171,065,600 representing 47.29% of the total capital receipt will be allocated to the economic sector which comprises agriculture, petroleum and environment, housing, lands, commerce and industry, works, transport, public utilities and rural development. The governor explained that the 2013 budget is anchored on the 2012-2015 Medium Term Expenditure Framework otherwise known as ‘Imo Rescue Development Plan’ earlier approved by the State House of Assembly as the capital allocations and projects in the budget remain part of the entire package. He said that government would pursue policies and programmes aimed at revamping the agricultural sector after several decades of negligence to ensure that Imo contributes to Nigeria's food security agenda. According to him, such step will lead to an increased productivity in the areas of rice, livestock, fish, vegetable and fruits, poultry, cassava and oil pal production. Governor Okorocha also projected a grant 2.3million dollars equivalent to 378,958,400 naira which will be attracted within the year under the United Nation Development Assistant Framework (UNDAF), while 1000 housing units of various categories will be constructed to address the housing need of Imolites. He said that government will partner effectively with a foreign company to build a pre-cast concrete factory while vocational centers will be established in Orlu and Okigwe for artisans. In the transport and aviation sector, Governor Okorocha said his administration would continue to explore the possibility of setting up an airline in partnership with private sector with new commuter buses and cars purchased to complement the services of Imo Transport Company (ITC) and Imo Municipal Transport Services (IMTS). He added that government will purchase new road construction equipment to reinforce the technical capacity of the ministry of works, procure four new fire fighting engines for the three zones of the State and for the Government House, install micro water schemes for regular water supply and establish a Fire Training School and a new Fire Service Station in Owerri. In the education sector, Governor Okorocha said that beyond implementing the free and qualitative education programme at the primary, secondary and tertiary levels, government would provide technical equipment for full accreditation of the four technical colleges in the State and complete ongoing construction and renovation projects in primary and secondary schools. Other highlights of the Rescue Budget 2 include the completion and equipping the ultra-modern diagnostic dialysis center as well as the 27 new general hospitals under construction, developing a pharmaceutical warehouse, construction of a new House of Assembly complex that will be equipped with e-library, Internet facilities and general networking system and completion of the Orlu and Okigwe ultra-modern stadia. ------------------------------------------------------------------------------ Abacha loot: Switzerland has returned $700m to Nigeria – Swiss envoy On December 5, 2012 · In News 9:43 am BY SONI DANIEL & CLIFFORD NDUJIHE ABUJA—Nearly 15 years after the death of General Sani Abacha, Nigeria’s former military ruler, the Swiss Government has said that it has so far returned to Nigeria the sum of $700 million stolen by the late dictator and deposited in several Swiss banks. The Swiss Ambassador to Nigeria, Dr. Hans-Rudolf Hodel, announced the figure at a media briefing in Abuja, yesterday. Hodel also hinted that his country had begun proceedings in Geneva against one of Abacha’s sons -Abba, for allegedly sponsoring a criminal organization but did not give further details. The envoy explained also that in the last 15 years, Switzerland has returned about $1.7 billion of illicit money to their countries of origin including Angola, Peru, Nigeria and the Philippines. The briefing was in respect of an international seminar by the Switzerland embassy and the Inter-Governmental Action Group against Money Laundering in West Africa, GIABA, and Combating the Financing of Terrorism. The envoy however used the forum to deny the existence of fresh $1 billion being alluded to by former President Olusegun Obasanjo as still being held by the Swiss banks. Hodel stated that the Abacha’s case in particular compelled his country to adopt more stringent measures to combat illicit dealings in its financial sector. He said: “Swiss banking secrecy does not give any protection against criminal prosecution, neither within Switzerland nor regarding international legal assistance. Additional measures prevent assets from being withdrawn before foreign authorities and law enforcement agencies submit a formal request for legal assistance or information for investigative purposes.” He expressed the hope that the repatriated funds would not be embezzled by corrupt officials of the benefitting nations. He also spoke on the bilateral relations between Nigeria and Switzerland noting that $225 million was invested by Swiss businesses in the Nigerian economy in 2010 up from $201 million in 2009. It will be recalled that a Geneva court had two months ago confirmed the sentence handed down on the son of the former Nigerian dictator Sani Abacha for belonging to a criminal organisation linked to looted assets charges. ------------------------------------------------------------------------------ Nigeria is 35th most corrupt in the world -Transparency Int’l report On December 5, 2012 · In News 1:33 pm The much talked about fight against corruption by the federal government may not have started yielding the desired result as Nigeria is ranked the 35th most corrupt country in the world, according to a 2012 report by Transparency International on global corruption. The report released at 6 a.m. Wednesday, Nigeria scored 27 out of a maximum 100 marks to clinch the 139th position out of the 176 countries surveyed for the report. It shared that position with Azerbaijan, Kenya, Nepal and Pakistan. Countries such as Togo, Mali, Niger and Benin fared better than Nigeria. President Jonathan It will be recalled that Nigeria placed 143rd in the 2011 ranking, making it the 37th most corrupt country. However, when compared with this year’s result, It is difficult to say whether Nigeria has recorded any improvement because 182, six more than this year’s, were ranked in 2011. According to the report, this year’s index ranks 176 countries/territories by their perceived levels of public sector corruption. The index draws on 13 surveys covering expert assessments and surveys of businesspeople. The Corruption Perceptions Index is the leading indicator of public sector corruption, offering a yearly snapshot of the relative degree of the corruption problem by ranking countries from all over the globe. TI described this year’s report as an indication that “corruption is a major threat facing humanity. Corruption destroys lives and communities, and undermines countries and institutions. It generates popular anger that threatens to further destabilise societies and exacerbate violent conflicts.” The organization added, “Corruption translates into human suffering, with poor families being extorted for bribes to see doctors or to get access to clean drinking water. It leads to failure in the delivery of basic services like education or healthcare. It derails the building of essential infrastructure, as corrupt leaders skim funds.” It however, encouraged governments to integrate anti-corruption actions into all aspects of decision-making. “They must prioritise better rules on lobbying and political financing, make public spending and contracting more transparent, and make public bodies more accountable.” --------------------------------------------------------------------------- Okonjo-Iweala to explain cash squeeze Posted by: Onyedi Ojiabor, and Sanni Onogu Posted date: November 30, 2012 WHY is there little cash to run the budget? Is Nigeria broke? These were the questions yesterday when Petroleum Resources Minister Mrs Diezani Alison-Madueke appeared before a joint committee of the Senate and the House of Representatives to defend her ministry’s 2013 budget proposal. Finance Minister Mrs. Ngozi Okonjo Iweala is to explain why ministries and agencies are not adequately funded. Six committees of the National Assembly were involved in the budget defence. They include Petroleum Upstream, Downstream and Gas of both the lower and upper chambers. Though some of the lawmakers, apparently out of frustration, murmured that the session was a “jamboree” and left; others, especially committee chairmen, stayed till the end of the exercise. The Minister told the lawmakers that of N2.2billion capital appropriation for the ministry’s 2012 budget, only N820million or 41 per cent was released. She added that of the N820million, the ministry spent N759million, representing 93 per cent performance. The lawmakers wondered what was going on about release of funds to ministries from the 2012 appropriation. Senator Danjuma Goje was particularly worried that something was wrong with the manner the Federal Government releases funds to MDAs. He was worried that if the “goose that lays the golden egg” received less than half of its approved budget as at November 2012, then it meant that something was amiss with the running of the economy. He said he was aware that most MDAs had been complaining of poor release of funds. Goje said: “If your ministry that produces the petroleum, which is a major source of income for the country, is being poorly funded, then it is very disappointing and discouraging. “Is it that you are no longer producing? Is it that what you have produced is not being sold? Or is it that the buyers are refusing to pay for the products? “I am aware that the crude oil benchmark in the 2012 Appropriation Bill is far lower than the current market price for oil in the international market. “So if the money is not there to be released to the ministries, like your own for capital projects, where do they get the money they pay into the excess crude account? “The question is, where is the money? Maybe Nigerians need to ask the Minister of Finance where she kept the country’s money. It is necessary that Nigerians, through the parliament are told where their money is.” The chairman of the joint committee, Senator Emmanuel Paulker said it was unacceptable for only 41 per cent of the ministry’s budget to have been released close to end of November. Paulker said: “Production of 150 million barrels of crude oil a day is not a mean figure. We don’t see how you can meet up. “We only have December left for 2012 and that is why we are worried. The Senate has adjourned for one week today to enable Committee Chairmen prepare the 2013 budget for passage before the end of the year. We are not pleased at all.” The chairman of the Senate Committee on Gas, Nkechi Nwaogu, noted that the problem is that of the Minister of Finance, who she said did not release funds to the MDAs. She added that the Minister should be asked to explain where the money is, especially now that the year is coming to an end. Mrs. Alison-Madueke, spoke to reporters on persistent fuel scarcity, She said: “We will try and ensure that now that verifications in terms of subsidy, the Aig-Imhokuede report has been completed, and payments are beginning to go out to the marketers, you can see already that petrol queues are lessening around the country. “We will again begin to push…you will recall that before these period of strikes and fuel subsidy problems, we had ensured that Nigeria was wet all around the country with petrol. “So, it was not on our instance. There have been issues that all Nigerians know. We cannot eat our cake and have it. If we have exposed issues in the payment of fuel subsidy and manipulations in that system, then it has to be adequately investigated. ----------------------------------------------------------------------- Okonjo-Iweala, Alison-Madueke stall $1.092bn OPL 245 probe Posted by: Victor Oluwasegun and Dele Anofi, Abuja Posted date: October 05, 2012 Attempts by the House of Representatives to probe alleged shady transaction involving the Federal Government, Shell/Agip and Malabu Oil and Gas Limited on OPL 245, was truncated yesterday. The inquisition involving about $1.092billion was stalled by the non-submission of relevant documents by the Minister for Petroleum Resources, Mrs Diezani Alison-Madueke and the Finance Minister, Dr. Ngozi Okonjo-Iweala The Deputy Leader and Chairman of the ad hoc committee investigating the transaction, Leo Ogor, said the investigation could not continue because the two ministries, which are central to the investigation, made no presentations. The House had on May 31 mandated the committee to investigate the allegation of fraudulent payments. The lawmakers described the payment of $1.1billion out of court settlement between the Federal Government and two multinationals, Agip and Shell, concerning OPL 245 to Malabu Oil and Gas Limited, as “shady”. The committee flayed the Minister of State for Finance, Yerima Ngama, who represented Mrs. Okonjo-Iweala, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke and the Accountant General of the Federation, Jonah Otunla, for not living up to their responsibilities. Mrs. Alison-Madueke, said she was not aware of the demands of the committee as she did not get any letter demanding for specific information from her ministry. She urged the committee to deal with the Department of Petroleum Resources. “We have a Department of Petroleum Resources that holds all the licences, and they can make the documents available to the committee,” she said. But committee members were not happy with her response. Ogor said a letter dated 1st of July was dispatched to her office. He said: “We need a clear position from the ministry on this issue; we need to hear from you on this transaction.” He asked a clerk to give the letter to the Minister. Mrs Alison-Madueke went through the letter and said: “The letter I have was dated September 19th. I apologise. I would ensure that the documents get to you by next week at the latest. We have the documents.” Ogor said the Ministry of Finance and and the Perroleum Resources Ministry are “the engine room of the investigation”, adding that the Minister of Finance, was also sent a letter. He said the Accountant General’s Office has not responded to “our letter on Signature Bonuses. The Accountant General should wake up to his responsibilities.” On his part, Ngama said the details the ministry was to present to the ad hoc committee just came in yesterday (Wednesday) morning and hence they would require more time to prepare a proper document to present to the committee. A member of the committee, Jagaba Adams Jagaba, suggested that in the absence of the documents, the committee should adjourn. He said: “The Ministry of Finance and the Ministry of Petroleum Resources are key and it’s obvious we can’t continue with this investigation.” Ogor read a letter from the Attorney General and Minister of Justice, Mohammed Adoke, which stated that he would not attend the hearing because he was attending to the issues concerning the review of the ICJ judgement on the Bakassi Peninsula. Speaker Aminu Tambuwal said the investigation was necessitated because the House had “been inundated with petitions and reports” on the transaction. He was represented by the Deputy Speaker, Emeka Ihedioha. ------------------------------------------------------------------------ Subsidy claims: FG pays additional N56.7bn to marketers. Posted by: Lekan Posted date: September 21, 2012 In: Dr Ngozi Okonjo-Iweala, the Coordinating Minister for the Economy, on Friday said that the Federal Government had paid additional N56.75 billion to oil marketers out of the 2012 subsidy claims. While briefing newsmen in Abuja, Okonjo-Iweala, also Nigeria’s Minister of Finance, said that the payments were made to 14 companies after being screed by the committee on oil subsidy claims. She said that the companies were Bovas and Company Ltd., Folawiyo Energy Ltd., Forte Oil Plc, Ibafon Oil Ltd. and Integrated Oil and Gas Ltd. Others include M.R.S Oil Nigeria Ltd., Nipco Plc, Oando Plc, Northwest Petroleum and Gas Ltd, Rainoil Ltd., Shorelink Ltd., Swift Oil Ltd., Tecno Oil Ltd. and Total Nigeria Ltd. “The ministry of finance has been making payments and screening the activities of the marketers,’’ she said. The minister said that the sum of N56.755 billion was paid this week to the marketers that had been screened successfully. According to her, the ministry has been on a mission to carefully screen and verify the oil marketers. “We are preparing to continue this new system where we carefully screen marketers of petroleum products. “We will carry out the screening before and after any payment is made,” she said. The News Agency of Nigeria (NAN) recalls that the Federal Government said it had paid N78.9 billion to 43 oil marketers for 2012 subsidy claims as at Aug. 24. (NAN) --------------------------------------------------------------------------- Okonjo-Iweala in Senate: Nigeria not broke, cash problems normal Okonjo-Iweala in Senate: Nigeria not broke, cash problems normal August 3, 2012 by Oluwole Josiah and John Alechenu, Abuja 237 Comments Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala | credits: The Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Thursday, tried to douse the controversy set off by the implementation of the budget by the Goodluck Jonathan administration. Okonjo-Iweala spoke at the Senate when she appeared before the special joint committee on the performance of the 2012 budget. Asked if the country was broke, she said, “The country is absolutely not broke. And I want to repeat that again, because there are those who would want to push that idea. The country is not broke, (though) the country may have cash flow problems from time to time. That is normal and is to be expected because a person may be very wealthy, he may have a lot of assets but at a particular point in time the stream of income may delay. “You are running a business, you can be assets rich therefore you cannot be broke but you may have a temporary month when the flow is not as it should be because the price of that product may be lower. The time for you to collect money from that product may take a little longer because you extended credit to people by selling to them and then telling them you will collect later. So, sometimes there may be temporary cash flow issues, but the country broke? The answer is no.” The House of Representatives on July 19 had berated the Federal Government for alleged poor implementation of the 2012 budget and gave President Goodluck Jonathan a September 18 deadline to achieve 100 per cent performance of the budget or face impeachment proceedings. The Senate also on Tuesday had condemned what it described as the non-impressive execution of the budget and summoned the finance minister to appear to brief it on the budget performance on Thursday (yesterday). Okonjo-Iweala, however, faulted the claim that the budget performance had been “abysmal.” The minister explained that her position on the 56 per cent budget performance ratio was based on funds actually utilised from the releases as of July 2012. According to Okonjo-Iweala, the 2012 budget implementation actually started in April 2012 and had only been operated for four months after it was signed into law. She said, “The first thing to note is that this year’s budget implementation started in April after the budget was signed. For the knowledge of all Nigerians, we have been implementing this budget for just four months, starting from April, and that is the way we have been following the budget. We talk about the utilisation of resources since April and from April to July, what have been released and what has been utilised. “Out of the total capital budget of N1.3tn for capital…we have been implementing for four months, we have released so far, N404bn, we have cash backed N324billion, meaning that we have actually made cash available to the tune of N324billion for Ministries, Departments and Agencies to use. “So out of the amount we have cash-backed, they have used 56 per cent of the amount we have cash backed, that is what we talked about.” She added that the proper way to look at implementation was to consider it in terms of the money spent. She said, “If you know how much has been used of the resources that has been released, then you will know how much more room there is. “Out of the amount that has been cash-backed, N324bn, 56 per cent has been used meaning that there is still 44 per cent of resources not used, so there is room for implementation to progress. So we are working very hard to ensure that the 44 per cent is used.” She denied allegations that the Ministry of Finance had withheld money from ministries and other government agencies. She added that the finance ministry had released all the funds available to it on a quarterly basis, saying that she was not withholding funds meant for the execution of the projects. She said, “Since this budget started in April, how much should we have released from then to July of the N1.3tr appropriated for capital projects? If we look at that pro-rated for those four months, N446 bn should have been released for capital, but we have released 404billion, and you look at the cash-backing, the utilisation as a percentage of that. “If we look at that ratio, you will see that we should have released 446 bn from April to July, we cashed-backed N324bn; N184bn has been utilised and this gives you, if you want to look at the execution part of the budget, 41.3 per cent. I have not talked about budget implementation before, I only spoke about the utilisation of the resources, but now in terms of the budget, this is the way we will present it.” Okonjo-Iweala also appealed to the lawmakers to “give us up to the end of the year before saying that the performance of the budget is low.” She also noted that she had heard that MDAs were coming to the National Assembly to complain of the non- release of funds. The minister urged senators to take a look at the project-by-project releases already published by the ministry to determine those agencies that had received funds but that had not utilised the funds. Earlier, the Leader of the Senate, Senator Victor Ndoma-Egba, representing the President of the Senate, David Mark, at the session, had said that Nigerians needed to know what the problem was with budget implementation. He urged the minister to clarify if the addition of the constituency projects which amounted to about N60bn were responsible for the poor implementation of the budget. Ndoma-Egba noted that the meeting was to address the concerns of Nigerians who were wont to blame the National Assembly for “every lapse in budget implementation.” ---------------------------------------------------------------------------------- FG retracts 56% budget implementation claim • Okonjo-Iweala’s absence at session enrages Deputy Senate President August 1, 2012 by John Ameh and Oluwole Josiah The Federal Government has retracted an earlier claim by government that it has achieved 56 per cent implementation of the 2012 budget. The retraction is contained in documents submitted to the Senate Committee on Appropriations by officials of the finance ministry during an interactive session called by the Senate on Tuesday. The officials were not allowed to make any presentation because of the absence of Mrs. Ngozi Okonjo-Iweala. The documents clearly show that the 2012 budget implementation is 12.6 per cent. The documents show that a total of N324.56bn was cash backed, but only N184.84bn was released as at July 20. According to the documents, the N184.84bn when calculated against the total capital budget of N1.519tn is 12.16 per cent of performance. The ministry also clarified that the capital budget when subtracted from the SURE-P allocations, totaled N1.34tn and the final percentage implementation with N184.8bn utilisation was 13.79 per cent. The distribution of the releases, as shown on the table presented to the Senate, indicated that the percentage implementation was calculated against the level of utilisation. The table shows the Code of Conduct Bureau as having the highest level of utilisation with 98.93 per cent, closely followed by Federal Civil Service Commission and the Niger Delta Ministry with 98.93 per cent and 96.03 per cent respectively. The Ministry of Communication Technology posted the lowest performance level of 16.45 per cent, having been able to utilize 136.5m out of a total cash backed N829.4m. The Ministry of Justice also performed poorly with 16.93 per cent, as it was only able to spend N18.22m out of a total N107.65m within the period. Meanwhile, the pressure on President Goodluck Jonathan to fully implement the budget grew on Tuesday as the Senate knocked the Executive for poor implementation. The Senate said the Federal Government had no reason not to effectively implement the budget given the fact that the National Assembly expeditiously approved what the government asked for without any major alteration. The upper legislative chamber also took umbrage at the absence of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, at the interactive session. Okonjo-Iweala was specifically invited to the session to discuss the implementation of the budget. Deputy President of the Senate, Ike Ekweremandu, who attended the session at the behest of Senate President, David Mark, warned that the session should not be treated as “a family affair.” Ekweremadu said, “I recall that when the 2012 budget was presented to us as a draft bill, we in the National Assembly decided that we are going to do everything possible to send it back to the Executive the way it came, so that there will be no argument on whether it will be implemented or not, because over the years we have had this issue of non-implementation of the budget. ”We had to do that to ensure that they received the budget the way and manner they wanted it so that the implementation would be much easier. Unfortunately the level of implementation has been anything less than commendable and that is why we are worried. “One of the excuses we have read from the pages of newspapers for non-performance of the budget is what they considered as the tinkering of the budget by the National Assembly. And so what we had wanted to do today is to hear from the executive what this tinkering is.” The appearance of the Secretary to the Government of the Federation, Pius Anyim; and the Minister of State for Finance, Yerima Ngama, was rejected by the lawmakers who insisted that Okonjo-Iweala was central to the discussion at the session. The Deputy Senate President expressed his dismay at the absence of the finance minister from such an important meeting scheduled to deal with the nation’s fiscal problems “on the excuse that she travelled to London for an event.” He noted that the minister’s presence was needed for her to tell Nigerians the areas where the National Assembly had padded the budget so that chairmen of the relevant committee could respond. He further said that it was not enough for the Executive or the Minister of Finance to accuse the National Assembly of tampering with the budget as an excuse for its poor implementation. He said the accusation by the Executive was not correct. While calling for adjournment, Ekweremadu said, “It will be absolutely impossible for us to do this dialogue in the absence of the coordinating minister of the economy.” He added that a new date should be scheduled while a summons should be issued for her to appear. “Even if it means summoning her to ensure that she appears before the committee to tell Nigerians the degree of releases and of course for the SGF to tell Nigerians the degree of utilisation by MDAs. It’s not just enough that releases were made and then utilisation. We want to see whether those releases and utilisation are impacting on Nigerians,” Ekweremadu said. He then stated that the meeting had been adjourned till Thursday, August 2, and urged the Chairman of the Senate Committee on Appropriation, Senator Ahmed Maccido, to ensure Okonjo-Iweala’s compliance. “The Minister for Finance is expected to be there no matter the circumstance. So we have to do everything possible to get her to be here on Thursday by 1pm,” he declared. Earlier, Maccido said the nation had reached the third quarter of its fiscal year when the compilation of the 2013 budget ought to have started, but Nigerians are still talking about poor implementation of the 2012 budget. He disagreed with the position of the executive that the budget had been implemented up to 56 per cent, noting that records available to the committee showed that only 21.5 per cent of the budget had been implemented. The controversy over the implementation of the budget has been raging since July 19 when the House of Representatives asked Jonathan to ensure 100 per cent implementation by September 18 or face impeachment proceedings. While the Reps said the government had only achieved 34 per cent implementation, Okonjo-Iweala had insisted that 56 per cent implementation had been achieved. The finance minister had said on Monday that the government’s love for Nigerians had informed its slow release of funds for capital projects. She said that the budget was being implemented in a manner that would enhance the best interest of Nigerians. The Reps however told the minister on Tuesday that she did not love the citizens more than they (lawmakers) did. The House spokesman, Zakari Mohammed, asked Okonjo-Iweala to “stop sending wrong signals” that the House was wasteful by directing her to release capital votes to Ministries, Departments and Agencies of government to execute projects. Mohammed said, “Her (Okonjo-Iweala’s) utterances are not addressing the issue at stake. Funds have been appropriated for capital projects, we are saying release the money for work to go on. “We are representatives of the people, elected by the people. She is a government appointee and cannot pretend to love Nigerians more than us. “We are representing the interests of Nigerians; we do not know about her. If she is representing other interests, let her tell Nigerians.” Mohammed stated that the House stood by its position that about 34 per cent of the budget had been implemented so far. “The capital provision in the 2012 budget is N1.5tn. The minister, by her own words, told Nigerians that N324b of releases had been cash-backed. That is 34 per cent of N1.5tn. Her 56 per cent claim is referring to the N404bn they released out of the N1.5tn. “They cash-backed N324bn; that is not 56 per cent of N1.5tn”, he stated. ----------------------------------------------------------------------------- Senate queries NNPC, Okonjo-Iweala over secret account . Tuesday, 03 July 2012 00:00 From Bridget Chiedu Onochie (Abuja), Obiora Aduba and Sulaimon Salau (Lagos) News - National . .Govt spends N451b on fuel subsidy in six months MEMBERS of the Senate panel probing the management of fuel subsidy regime yesterday sought explanations from the Finance Minister, Dr. Ngozi Okonjo-Iweala and the Nigerian National Petroleum Corporation (NNPC) on the secrete foreign account allegedly managed by the Corporation. Okonjo-Iweala, who responded to other issues, disclosed that the Federal Government had paid N451 billion as fuel subsidy in the first half of this year. The government also paid N1.7 trillion as subsidy arreas for 2011, bringing the total amount paid as subsidy this year alone to N2.19 trillion. The minister, however, declined to speculate on the total amount the country would pay as subsidy by the end of the year, saying it was the Petroleum Products Pricing Regulatory Agency (PPPRA) that handles fuel allocation to marketers. The Joint Committee comprising Petroleum Downstream, Appropriation and Finance Committees alleged that NNPC had been paying proceeds from the sale of crude first to JP Morgan account, which was opened and managed before the money is returned to the Federation Account. The Magnus Abe-led Committee, which cited sections 80, 84 and 162, sub-section 1 of the 1999 Constitution as amended, which prohibits withdrawal of public funds without the approval of the National Assembly, maintained that the said account lacked legitimacy and should be closed. The lawmakers stated that any amount due to the country should be paid directly to the Federation Account. According to them, the NNPC does not have the mandate to withdraw public funds and remit whatever it considered appropriate to Federation Account at a later date. Although the Minister of Petroleum Resources, Diezani Alison-Madueke was not at the session, the legitimacy of the account was sought from the Group Managing Director of NNPC, Mr. Andrew Yakubu. The committee also demanded identities of the signatories to the account. Yakubu confirmed knowledge of the fact that the NNPC sells crude and pays the proceeds into an account managed by the Central Bank of Nigeria (CBN). His answer was faulted by the lawmakers, who insisted that CBN cannot manage such account. The NNPC boss, who said he had spent 32 years in the system, rising to the office of Group Executive Director (Exploration) before his appointment as the corporation’s GMD, however insisted that the account was not managed by NNPC, adding that the CBN was a signatory to it. Okonjo-Iweala, in her submission said she knew of the account but insisted that it was not maintained by the Finance Ministry. “I know that since NNPC deals with the marketing of petroleum products, it has external account and I also know that it has an account with JP Morgan but I don’t have the details. I am not aware of that specific account.” The minister explained that revenues of the government were generated by three main agencies including NNPC, Nigeria Customs Service (NCS) and Federal Inland Revenue Service (FIRS). According to her, there is an estimated amount expected to be remitted by the agencies on monthly basis. “The Minister of Finance does not go abroad to collect money from the sale of crude on behalf of NNPC. We only cross-check to see that they remit exactly what they are expected to do; although, sometimes it could be less or more. And when the remittance is done, the states get their monies,” she said. Okonjo-Iweala further said while she might have access to accounts within her jurisdiction in CBN, she cannot give details of JP Morgan’s account as she was not a signatory to it. However, the amount to be remitted is cross-checked through the quantity of crude exported “and that is how it was discovered that there was going to be 17 per cent shortfall this month due to oil theft and bunkering,” she stated. According to her, proceeds could actually be paid directly to CBN but there was also need for commercial account, where dollars received from sales are changed to Nigeria’s naira account being remitted to the Federation Account. “As long as the accurate amount is remitted, it is no longer an issue. The job of the Ministry of Finance is to ensure that there is a Federation Account into which all monies or revenues collected by the government agencies shall be paid,” she said. The Accountant-General of the Federation, Mr. Otunla Jonah, who was also taken on the issue, said he was aware of the revenue account. He noted that generally, NNPC makes its remittance to the CBN, which in turn transfers the revenue to the office of the AGF. The committee thereafter summoned the NNPC’s Executive Director (Finance) to appear before it as the hearing continues today. Just like the Farouk Lawan report, the storm is gathering over the recent report released by the Technical Committee on Subsidy. Some petroleum marketers alleged yesterday that the committee did not do a thorough investigation before writing its report. The Chairman and Managing Director, Integrated Oil and Gas Limited, Captain Emmanuel Iheanacho yesterday picked hole in the report, which he said had erroneously presented his company as part of those who collected unmerited subsidy claims. Iheanacho, whose company was cited thrice in the list of 88 firms that were paid subsidies without auditors’ signature said: “This allegation is sadly not correct… The refund was fully validated by signatures of three PPPRA checklists for import documentation, evidencing the submission of the 38 critical importation documents which are routinely required by the PPPRA in considering import documentations from marketers for the payment of PSF refunds.” Oando Plc has also reacted to the report. In a statement signed by the Head, Corporate Communications, Meka Olowola, said the committee ought to have taken adequate steps to ensure the veracity of its report by listing all its queries and inviting the operators to defend themselves. He said: “On the allegation of subsidies paid without auditor’s signature on shore tank receipt documents (10 transactions listed against Oando) - upon the arrival of vessels, government agencies including PPPRA auditors and the Department of Petroleum Resources (DPR), verify quantity on board as well as shore tank volumes prior to the commencement of receipt.” Author of this article: From Bridget Chiedu Onochie (Abuja), Obiora Aduba and Sulaimon Salau (Lagos) ---------------------------------------------------------------------------- Okonjo-Iweala warns against recession By Nduka Chiejina and Vincent Ikuomola, Abuja Okonjo-Iweala NIGERIA got yesterday a wake-up call on the economy. Be prudent or risk a recession, Finance Minister Dr. Ngozi Okonjo-Iweala told the government. She cited the situation in Greece and Spain, which require a bailout from the European Union, to buttress her argument that the economy is not insulated from a recession. She urged the government to be cautious. The Coordinating Minister for the Economy urged the government to be prudent in managing its finances. She spoke yesterday at the Federal Executive Council (FEC) during a debate on the state of the economy. Minister of Information Labaran Maku, who told reporters what transpired at the FEC, however, said Mrs Okonjo-Iweala debunked the rumour that Nigeria is broke. Maku said the government’s delay in meeting its obligation to creditors is not a sign of weakness. Some Federal Government workers do not receive their monthly salaries on time. The minister said this is due to the ongoing Integrated Payroll and Personnel Information System (IPPIS). “Presently, we have no problem in terms of our finance management. There have been rumours here and there, especially because of delay in payment. This is due to the new electronic payment system being implemented by the Federal Ministry of finance. “There has been occasional delay in payments in some departments. But, that has nothing to do with Nigeria’s financial position. “Our economy is sound; our economy is growing, the fastest in the continent and we also know that our external reserve has gone up to about $35billion now.” He said government would continue to improve on the nation’s external reserve through probity and prudent management of the economy. The World Bank also raised the alarm over the ripple effect of the fragile economic situation in Europe on developing economies. It, however, said the economy of countries in sub Sahara Africa is growing. In its Global Economic Prospects (GEP) for June 2012, the World Bank, which urged developing countries to prepare for tougher times, said: “A resurgence of tensions in high-income Europe has eroded the gains made during the first four months of this year, which saw a rebound in economic activity in both developing and advanced countries and an easing of risk aversion among investors.” “Since the beginning of May 2012, developing and high-income country stock markets have lost some seven per cent, giving up two-thirds of the gains generated over the preceding four months. “Most industrial commodity prices are down, with crude and copper prices down by 19 and 14 per cent, respectively, while developing country currencies have lost value against the US dollar, as international capital fled to safe-haven assets, such as German and U.S. government bonds. “So far, conditions in most developing countries have not deteriorated as much as in the fourth quarter of 2011. Outside of Europe and Central Asia and the Middle-East and North Africa, developing country Credit Default Swap (CDS) rates, a key indicator of market sentiment, remain well below their maximums from the fall of 2011”, the report stated. It added that increased uncertainty will add to pre-existing headwinds from budget cutting, banking-sector deleveraging and developing country capacity constraints. The World Bank projects that developing country growth will slow to a relatively weak 5.3 per cent in 2012, before strengthening somewhat to 5.9 per cent in 2013 and 6.0 per cent in 2014. However, growth in high-income countries will also be weak, 1.4, 1.9 and 2.3 per cent for 2012, 2013 and 2014 respectively – with GDP in the Euro Area declining 0.3 per cent in 2012. Overall, global GDP is projected to rise 2.5, 3.0 and 3.3 (1) per cent for the same period. Should the situation in Europe deteriorate sharply, no developing region would be spared. Developing Europe and Central Asia is especially vulnerable because of its close trade and financial ties with high-income Europe, but the world’s poorest countries will also feel the fall out – especially countries that are heavily reliant on remittances, tourism or commodity exports or that have high-levels of short-term debt. Economic growth in Sub-Saharan Africa, the report said, remained robust in 2011 at 4.7 per cent. Excluding South Africa, growth in the rest of the region was stronger, at 5.6 per cent, making it one of the fastest growing developing regions. ----------------------------------------------------------------------- Futility of $7.9 billion proposed loan WEDNESDAY, 13 JUNE 2012 00:00 EDITOR OPINION - EDITORIAL FINANCE Minister, Ngozi Okonjo-Iweala, the other day, urged the National Assembly to quickly approve the Jonathan administration’s 2012-2014 external borrowing plan of US$7.9 billion for the execution of its pipelines project. Although the external financing need surfaced two months after the formal presentation of the 2012 budget to the National Assembly, the minister has asserted that: “These resources are very key for our 2012 budget. (They) are mostly soft credits with very low percentage of interest, but with a commitment charge from the African Development Bank and the World Bank, the Islamic Bank and other multilateral donors, including China and India. These are people who want to assist us”. Nigerians will discount at their continued economic peril the catch in these apparently solicitous loan offers. The IMF/World Bank and their direct nominees in key Federal Government agencies have been in charge of the economy since the return to the civilian dispensation without ending the excessive federal fiscal deficits, which alone have prevented national economic turnaround. It may be recalled that commercial credits were offered in the same guise of assistance in the 1970-80s. But despite substantial debt service and interest payments on the loans, the balance continued to attract huge interest charges and penalties, which became problematic external debt burden that defied numerous debt rescheduling agreements. Owing to the debts, the London and Paris clubs of creditor countries through the IMF/World Bank planted their acolytes in key organs of government to manage the economy, a situation that persists till now. In 2006, the creditor countries not only extracted $12 billion as a supposed debt exit cash pay-off, but also gratuitously imposed a World Bank-administered policy support instrument, which, by suborning the apex bank to use the Wholesale Dutch Auction System (WDAS) and bureaux de change (BDCs) for the disbursement of official foreign exchange, made it impossible for the country’s oil earnings to impact positively on the economy. It is instructive that not a single central bank in any of our erstwhile creditor nations employs WDAS and BDCs for managing foreign exchange already in the banking system. Notwithstanding the justifications adduced by the minister for seeking the loan, the lurking danger for the country in dining with an expanded multilateral loan cartel comprising the World Bank and African Development Bank, acting for and on behalf of our erstwhile creditor nations on the one hand, and China, India and Islamic Bank-promoting nations on the other is the foreboding of the ultimate 21st century economic enslavement. The Debt Management Office has explained that the fabled pipelines project involves the Abuja Light Rail Project, Zungeru 700MW Hydroelectric Power Project, 200-bed ultra-modern hospital in a yet unspecified location in Yobe State, erosion watershed management project (Hadeja/Jama’are and Sokoto Rima), Zaria regional water supply project, etc. It is unclear which of the projects is ongoing as claimed and what proportion remains unexecuted. The geographical location of the projects is perhaps aimed at ensuring unquestioned adoption in the present circumstances. It is quite obvious that most of the projects would not generate enough revenue to defray the financial costs. In the meantime, the achievement of multilateral offerings down the years is mixed. Beneath the toga of unsolicited assistance, some 40 per cent of multilateral loans are usually eaten up by consultancy fees and concealed kickbacks for colluding key personnel of the donor agencies and recipient countries. But the core objective is to make the recipient country a puppet state as it is robbed of its independence; inputs for funded projects are tied to or sourced from abroad particularly the donor nation, and as a result such goods are often overpriced while the technology and management is donor country specific. Not unexpectedly, there is a high incidence of partially completed projects just as the completed projects are poorly maintained, mismanaged and function in fits and starts. In the light of the foregoing, government should arrange for those donor agencies that harbour no ulterior motives to choose particular projects, have them fully executed as well as managed for a specific period before handing them over to the states and the Federal Government as the case may be. The proportion of local and foreign workers as well as trained personnel required at the various stages of project execution and management should be clearly spelt out beforehand. In furtherance of the national interest, however, government should put away the demeaning begging bowl for foreign investments and loans. For, even in the unlikely event that the above multilateral agencies settle for the altruistic option, the yearly tranche of the external loan being dangled comes to about N420 billion or just 1.1 per cent of the projected 2012 GDP (and it will probably dwindle in subsequent years). Contrary to official expectation, that amount of investment will neither spur the required economic growth nor dent the pervasive poverty in the land through jobs to be created. Government should instead focus on implementing sound fiscal and monetary measures. Rather than being pontifically dismissive of the chronic fiscal crisis engulfing the economy, the government should stop the pretences, openly acknowledge the fact that it defies the Fiscal Responsibility Act (FRA) and every Appropriation Act by subjecting the economy to about five times the approved fiscal deficit limit of three per cent of GDP yearly, as if the country is extremely broke. The inhospitable economic climate, the futile four-decade-long CBN war against unstable prices, low volume of bank credit to the real sector, and the 55 per cent idle installed manufacturing capacity are full-blown symptoms and enough proof of the prevalence of excessive fiscal deficits. Strict adherence to the FRA deficit limit is intended to enthrone stable and conducive economic conditions in which bank lending rates across-the-board become comparable to the lowest rates available in the focused economies. Such a development would, within a few years, push up the volume of domestic bank credit to the private sector as a proportion of GDP from the lowly 30 per cent or so (one-third of which was non-performing, no thanks to the harsh economic conditions) in 2009, close to 100 per cent as in Malaysia and Singapore, or quondam peer group countries. In terms of the projected 2012 GDP of some N38 trillion, there could be over N20 trillion additional bank credit at world competitive rates (or over 47 times the yearly tranche of the proposed external loan) at the disposal of local investors for financing activities ranging from private-public partnership projects to the full spectrum of private business initiatives. It is when such massive private investments complement the relatively meagre regular government budget spending that jobs will be created in the required numbers, productivity will be enhanced, economic growth will be inclusive and poverty will reduce.