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BIG STORY

Don’t Harm Our Future, Experts Warn As FG Plans More Loans

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The Manufacturers’ Association of Nigeria and economic experts on Wednesday expressed concern about the high deficit in the 2022 budget.

MAN and experts including Prof. Pat Utomi in separate interviews with The PUNCH, warned both the executive and the National Assembly against endangering the future of the country.

Federal Government had on Wednesday said it planned to borrow more funds to finance the N16.45tn 2022 budget.

According to the government, the total money borrowed as of July 22 was ‘only 23 percent’ of the Gross Domestic Product.

The Minister of Finance, Budget, and National Planning, Zainab Ahmed, disclosed these to State House Correspondents after the Federal Executive Council at its meeting on Wednesday approved N16.39tn for the 2022 Appropriation Bill.

The meeting was presided over by the President, Major General Muhammadu Buhari (retd.), at the Presidential Villa, Abuja.

The minister said it was necessary that the government would continue to borrow to in order to fund developmental and infrastructure projects as it does not get enough from its revenues.

She noted that Nigeria’s revenues could barely accommodate services even as she emphasised that despite the concerns, its borrowings were still within acceptable limits.

The minister stated, “If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.

“So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis.

“Nigeria’s borrowing has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits. As of July 2021, the total borrowing is 23 percent of GDP.”

Fielding questions, Ahmed justified the plan for more borrowing, arguing, “Government has been borrowing before this administration and continues to borrow and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power and water for sustainable development in this country.

“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.

“So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis.

“When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola.

‘Increasing staff emoluments difficult to cope with govt funding’

“We do have a problem of revenue. Our revenues have been increasing. We just reported to the council that our revenues from non-oil have performed, as of July, at the rate of 111 per cent, which means outperforming the prorated budget.

“But our expenditure, especially staff emoluments have been increasing at a very fast rate making it difficult to cope with funding of government.”

She said government was doing a combination of cutting cost and increasing revenue to be able to cope with all salaries, pensions debt service, as well as capital expenditure.”

The minister said that council noted the changes in the 2022-2024 fiscal projections based on implementation of the Petroleum Industry Act 2021 and other necessary expenditures that should be accommodated in the 2022 budget.

She also disclosed the key assumptions and targets underlying the budget provisions including oil price – $57 per barrel; oil production – 1.88 mbpd; exchange rate – N410.15/US$; oil revenue – N3.15tn and non-oil revenue – N2.13tn.

Others include Federal Government’s Independent Revenue of N1.82tn; Total Projected Federal Government Revenue of N10.13tn; Debt Service of N3.61tn; Statutory Transfers of N768.28bn (including N462.53bn capital component) and Personnel Costs and Pensions of N4.69tn; (inclusive of N617.72bn for the 63 GOEs).

The rest are overhead costs of N792.39bn (inclusive of N451.0bn for the 63 GOEs); and Capital Expenditure (inclusive of capital component of Social Investment Programme, Capital in Statutory Transfers, capital of 63 GOEs, Capital Supplementation as well as Grants and Donor funding) of N5.35tn (inclusive of N647.08bn for the 63 GOEs).

“The resultant deficit of N6.26tn which will be financed by new borrowings of N5.01tn (of which domestic – N2.51tn and foreign – N2.51tn); drawdowns on project-tied Multilateral/Bilateral loans – N1.16tn; and Privatisation Proceeds of N90.73bn,” she stated.

On the approved 2022 Appropriation Bill for an aggregate expenditure of N16.39tn for 2022, she gave the components as the adjustments to the Medium-Term Fiscal Framework 2022-2024; Statutory Transfers of N768.28bn and Debt Service of N3.61tn and Sinking Fund for Maturing Debts of N292.71bn.

Others are Recurrent Expenditure (Non-Debt) of N6.83tn, inclusive of N350bn for the recurrent component of Social Investment Programme; and Aggregate Capital Expenditure of N5.35tn, inclusive of GOEs’ capital expenditure, multilateral/bilateral loan funded projects, Capital Supplementation, and Grants/Aid funded projects.

According to her, this represents 33 percent of the expenditure budget.

Ahmed said Buhari was intent on leaving improved agriculture production as a legacy, adding, “Currently, the agriculture sector contributes 23 percent of the GDP. We have a record of expanding the agricultural value chain; we’ve had very little or no processing in agriculture until this administration.”

“We now have a very large number of fertilizer blending plants, about 42, that are operating at full capacity. We also have a large number of rice mills that didn’t exist before.

“We have a lot of Nigerians that have taken up agriculture as a business, but apart from agriculture, the President is also rolling out rail lines, some of which had been started several years ago, have been completed.”

She added the Federal Ministry of Works and Housing had a provision of N388bn; the Power sector, N377bn billion; the Ministry of Agriculture, N98bn and the Transportation Ministry N189bn.

On the difference between the price of crude oil and the $57 benchmark for the 2022 budget, the minister said, “The crude oil price in the international capital market is not stable, it goes up and it comes down.

“Our assessment is that $57 per barrel is a safe zone to be in and we did this after extensive consultations with CBN, we checked the research work of the World Bank and other institutions, whose concern is investigating and researching on crude oil prices. But you know, the revenue in the budget for oil and gas is a function of the level of production as well as the price.

“We had suffered some setbacks in terms of the level of production, occasioned by the limits that the OPEC set. But thankfully, OPEC has changed our quota and that will also soon ramp up.

“In the event that revenues from oil and gas outperform the budget, there is always the safeguard that the excess goes into the Excess Crude Account.”

Commenting on the budget, a senior lecturer of economics at the Pan Atlantic University, Dr Olalekan Aworinde, said the government would continue to borrow, thus worsening poverty.

 

 

BIG STORY

National Assembly Passes Life Imprisonment Bill For Nigerian Drug Traffickers

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In a bid to tackle drug-related crimes, the National Assembly has amended the National Drug Law Enforcement Agency (NDLEA) Act, introducing life imprisonment for drug offenders and traffickers.

This comes after the Senate and House of Representatives adopted the harmonised report on the amendment.

Senator Tahir Monguno, Chairman of the Senate Conference Committee, presented the report, highlighting that the amendment introduces stricter penalties to deter drug-related crimes.

“Any person who unlawfully engages in the storage, custody, movement, carriage or concealment of dangerous drugs or controlled substances and, while doing so, is armed with an offensive weapon or disguised in any manner, commits an offence under this Act and is liable, upon conviction, to life imprisonment,” Monguno said.

The Senate approved the amendment through a voice vote during Thursday’s plenary, which was presided over by Deputy Senate President Barau Jibrin.

In addition, the Senate passed the Revenue Mobilisation, Allocation, and Fiscal Commission Bill, 2024, aimed at replacing the 2004 RMAFC Act. Yahaya Abdullahi, Chairman of the Senate Committee on National Planning and Economic Affairs, stressed the need for the commission’s reform, citing Nigeria’s declining revenue and increasing population.

“The Act, last revised over 20 years ago, no longer reflects Nigeria’s evolving economic realities. This bill proposes additional funding and a restructured operational framework for the commission to improve its efficiency,” Abdullahi explained.

He further emphasised the need for adequate funding from the Federation Account for the RMAFC to effectively carry out its constitutional duties.

The bill, passed after deliberations and a majority vote, now awaits President Bola Tinubu’s assent to become law.

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BIG STORY

UPDATE: We’re Ready To Provide Evidence For Trial Of Simon Ekpa — Enugu Government

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The Enugu State Government has expressed its readiness and willingness to provide evidence to assist in the prosecution of Simon Ekpa, who was arrested in Finland on Thursday over allegations of sponsoring terrorism in Nigeria.

Enugu State Government made this offer in a statement released by the Secretary to the State Government, Prof. Chidiebere Onyia, on Friday.

In the statement, the Enugu State Government also commended the Government of the Republic of Finland for the arrest of Ekpa, whom it described as “the Finland-based leader of the criminal gang, Autopilots.”

The Enugu State Government further referred to Simon Ekpa as “a common criminal, con man, and terrorist, who has no interest of Igbo people at heart.”

It added that Ekpa “is a murderer and fraudster, who delights in killing his people and living large off their misery.”

“Enugu State was ready and willing to provide evidence of Ekpa-sponsored atrocities against Ndigbo to aid his trial and conviction, whether in Finland or Nigeria.”

“The Enugu State Government welcomes the arrest of the Finland-based terrorist, Simon Ekpa.”

“His arrest and trial will no doubt go a long way in strengthening peace, security, and stability in all parts of the South East.”

“This arrest is in line with the demand of Governor Peter Mbah Administration, which has repeatedly made it known that Ekpa is a megalomaniac, common criminal, murderer, and fraudster, who takes joy in feeding fat on the manipulated emotions of Ndigbo and inflicting misery on the South East region.”

“Ekpa has for long, and unfortunately from Finland, made a living by creating a siege climate and mentality in the South East, destroying lives, property, and the Igbo trademark of entrepreneurship and hard work.”

“He thrives on manipulating, exploiting, and extorting the people on the pretext of fighting for their interest and for the restoration of Biafra,” the government said.

Ekpa was arrested and detained alongside four other suspects by the government of Finland on charges of sponsoring terrorism in Nigeria, according to local newspapers in the European country.

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BIG STORY

Much Ado About Meddlesome Minions, And Messengers Of Misinformation — By Tayo Williams

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There is a growing phalanx of pseudo-intellectuals parading the social media space with faux and fictitious knowledge of the indigenous oil and gas industry, and it is scary because of the grave danger they portend and present for the average Nigerian.

From X (formerly known as Twitter) to Facebook and even the photos and videos-sharing site, Instagram, they abound, in their inglorious number, lending their platforms to deliberately distort facts and spread misinformation especially to favour the narratives propounded by popular Nigerian businessman Aliko Dangote, owner of the Dangote Petroleum Refinery.

Since the refinery began operations earlier in the year, it has been one week, one controversy allegedly orchestrated by Dangote in a brazen attempt to arm-twist the Nigerian National Petroleum Corporation Limited, NNPCL, into playing by his rules.

Those conversant with the modus operandi of Dangote and his refinery say the long-drawn warfare with every institution and individual in the oil and gas value chain is nothing but a self-seeking and mindless profit maximisation tactic.

Whilst nobody begrudges Dangote’s drive for profit as a businessman, perhaps he needs to be reminded that the NNPC has a mandate to ensure and provide energy security in a way that is affordable and sustainable for the generality of Nigerians. And, the NNPCL management has declared in very unambiguous terms that it would not pander to the din of the market whether orchestrated by Dangote, his rampaging minions or anyone else.

The truth, however, is that there is an increasing army of vacuous, vicious, and vile individuals strutting the social media space defending and propagating outright and outlandish falsehoods. Of particular concern is one Kelvin Emmanuel who has become the unofficial mouthpiece of the Dangote Refinery. Going from one media house to the other, he pulls figures out of the air and projects obnoxious untruths on hapless Nigerians. With the backing of his paymaster’s billions, it is no surprise that this otherwise irrelevant and fatuous character now commands appearances on major television stations.

But it is on X that he has made lying glibly and gratuitously the Holy Grail. He once premised Dangote’s inability to secure feedstock for his refinery on the government and the NNPCL. While peddling this untruth, he conveniently forgets that the refinery had a seven-year window, during its construction phase, to lock in feedstock supplies that could last a minimum of five years. Dangote did none of that. As it would later unfold, his game plan, which Emmanuel glossed over, was to monopolise equity oil and production quotas to serve his business interests.

Another deliberate misinformation from the Dangote camp was the allegation that International Oil Companies (IOCs) and other industry players were trying to sabotage his interests. Apart from being an investor in the Dangote Refinery, the NNPC still supplies gas to various Dangote companies across Nigeria. How can anyone or any institution jeopardise their investment? What further proof of faith does Dangote and his minions need to know that the NNPC is their cheerleader, and is here to make operating in the industry seamless and a win-win for all?

Echoing Dangote’s baseless stance, Emmanuel also called for the sack of Mr. Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), regulators of Nigeria’s midstream and downstream value chain. By Emmanuel’s warped reckoning, Ahmed had no locus to speak against Dangote or his enterprise because the latter questioned the quality of the product from Dangote Refinery and other local refineries in comparison with imported ones. Of course, Emmanuel’s was a lone voice in the wilderness because those who understand the invaluable role that the NMDPRA plays in the industry did not as much as dignify his tirade with a glance.

In a robust response to Emmanuel’s groundswell of egregious lies, Ibrahim Y. Kabo, a petroleum engineer based in Abuja, described him as “Someone who has not seen the inside of a refinery before Dangote built one, let alone understood the mechanism of the energy industry, …(yet) assuming the role of an authority in oil and gas matters.”

He went further to lampoon Emmanuel for stating that only Dangote Refinery’s products meet specifications while others are all sub-standard. “The obvious question is: whose specifications? For a refinery that has barely made four of seven pre-inauguration certifications, it sounds somehow laughable to suddenly assume the role of regulator in an industry you’ve barely entered,” Kabo said.

In the article, entitled, “The Hand of Aliko, the Voice of Kelvin: Inside Dangote Refinery’s Media Stunt Lab”, Kabo declared that from all Emmanuel’s interviews and pretensions to be an industry expert, one thing is obvious: “He lacks an understanding of both the mandate and the reach of NNPC as a national oil company.”

Kabo adds that, “Downstream is the least of NNPC’s business interests. The mandate, as per PIA (Petroleum Industry Act), is to facilitate both the extraction and commercialization of Nigeria’s oil and gas resources. 20 billion dollars may be a lot, but NNPC and industry regulators routinely handle projects of that magnitude. At best, Dangote and (Emmanuel’s) ranting are an irritation. I believe that’s why NNPC openly declared it was not interested in being Dangote’s off-taker.”

Like the Yoruba saying goes, derision does not stop the sweetness of the honey. The meddlesome minions and messengers of misinformation can continue dancing naked in the marketplace, but what is most important is that the NNPCL has assured that it will not cease doing everything in its capacity “to harness the possibilities of oil and gas, address energy demand and drive the national economy, and become the number one oil producer and supplier in Africa.”

 

Tayo Williams is a Lagos-based media executive

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