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Senate dumps Buhari’s MTEF

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…Says proposal ‘empty’
Barely two days after it rejected President Muhammadu Buhari’s bid to borrow $29.96 billion, the Senate Thursday dumped the president’s 2017 to 2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The upper chamber described the fiscal document which is a prelude to the presentation of the 2017 budget as “completely empty” not worthy of its consideration.

Senate Leader, Senator Mohammed Ali Ndume, who tore the document into shreds, drew the attention of the Senate to a publication where the Minister of Budget and National Planning, Senator Udoma Udo Udoma reportedly blamed the National Assembly for the inability of the Presidency to present the 2017 budget in October 2016 as promised.
Ndume who relied on Order 42 and 52 of the Senate Standing Rules, prayed the Senate to resolve to call Udoma to order.
He noted that it was unfortunate that the Presidency had started once again the blame game that rubbished the 2016 budget.
He said that it was wrong for the Presidency to give Nigerians the impression that the National Assembly was responsible for the avoidable delay in presentation of the 2017 budget especially when it was obvious that the MTEF submitted to the National Assembly was empty.
The Senate Leader noted that when the leadership of the Senate discovered that the MTEF was empty, Udoma was invited to brief the leadership on grey areas of the MTEF/FSP on Tuesday.
He said that the Senate leadership was stunned when Udoma failed to honour the invitation.
He also said that the minister failed to submit vital documents the Senate requested from him.
The Senate Leader who displayed a copy of the MTEF repeatedly said furiously,“ this document is empty, it is completely empty and you cannot build something on nothing.”
Ndume said, “The report with the headline which says, “Budget 2017: Blame National Assembly for failure to meet to meet October target”.
“The Minister of Budget and National Planning Udoma Udoma stated that the suspension of the debate of the MTEF/FSP which lays the foundation for the budget has stalled the Ministry’s plan to transmit the 2017 budget to the National Assembly.
“As the Leader of this Senate and I am responsible for presenting communications, bills from the Executive. You will recall that we received the MTEF on 30th September. Instead of submitting it according to law not later than 1st of September, that is not even the problem.
“I went through and the copies have been circulated. I talked to some experts. Even in this chamber, we have people that you can call experts. If you look at this document that they call MTEF, it is empty. And it doesn’t contain anything. If you have nothing how do you consider nothing?
“Going through and knowing that it is empty, on October 19, 2016 I wrote to the Minister of Budget and National Planning. I crave your indulgence to highlight some of the contents and in the third paragraph, I stated: “To enable the Senate objectively review the MTEF from holistic perspective, we deem it necessary to invite you to a meeting to brief the leadership of the Senate on Tuesday 1st November. The minister failed to turn up.
“Before then, I said you are requested to please send the following documents ahead of the meeting because that is what will make us have something to consider: draft copy of Medium Term Development Plan upon which the 2017 to 2019 MTEF is founded.
“Secondly, I requested that a comprehensive report on the implementation of 2016 budget as of third quarter. And thirdly, fiscal rates taxes, charges etc used to derive the projected revenue.
“Finally, a report on the structure, composition of the debt, funding, sources, how the borrowed funds are to be spent as well as repayment plan and schedule.
“Up till now, there is no communication to that.
“Finally, I have a copy of the request for approval of the Federal Government 2016 to 2018 external borrowing plan, which was thrown out last.
“This is the document that we received. The first paragraph says: “I wish to refer to the above subject and submit the attached draft of Federal Government 2016-2018 External Borrowing (Rolling) Plan for consideration and early approval by the National Assembly to ensure prompt implementation of the projects”.
“I don’t know whether the Senate President has the attached document that you did not circulate to us. But as far as I’m concerned there is no attachment here.
“We cannot afford to start the 2017 budget process with this blame game. This Senate is Nigerian Senate. We have the opposition that is co-operating with us and we have the majority in this Senate.
“So, it is not like we are working against the government but we know what we are doing. And we should do it right. When they bring nothing and we ask for something so that we will do it properly, they run to the newspaper to start blaming the National Assembly.”
Also a copy of the letter dated October 19, 2016, and signed by the Leader of the Senate, Senator  Ndume, requested Udoma to submit some documents before the scheduled date of briefing the Senate leadership.
Senate President, Abubakar Bukola Saraki, who appeared not to have found the unfolding development funny, informed the Senate that he personally called Udoma over the issue.
Saraki said that the Minister has denied blaming the National Assembly for the delay in presenting the 2017 budget.
He said that the Senate should be mindful of issues that could breed controversy ahead of the presentation of the 2017 budget.
Saraki said, “I saw this article too. I had taken up the Minister and he denied the article. He said he was going to debunk it. Be that as it may, I think the matter should not be stressed.
“The Leader has made the point that this issue of blame game is totally unnecessary. And if he (Udoma) said that he is withdrawing, that means he has said it as well that the National Assembly is not responsible for any delay.”
Deputy Senate President, Senator Ike Ekweremadu, assured that the National Assembly was ready to receive the 2017 budget from the Presidency any day.
Ekweremadu said, “Now that the statement has either been denied or withdrawn, we need to tell Nigerians the truth. We are here on a full job. We are ready to take the budget presentation anytime. In doing so, the executive must be reminded that everything must be done right. All arms of government must live to its responsibility. The issue of blame game should be put behind us.”
Senate spokesperson, Senator Aliyu Abdullahi on his part, wondered “if this government is not padded with people who want to frustrate the government.”
Senator Abdullahi also warned about the danger of starting the 2017 budget with controversy.

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NNPC educates Senate on NLNG dividend account

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The Nigerian National Petroleum Corporation (NNPC) has shed light on the probe of alleged illegal withdrawal from the Nigerian Liquefied Natural Gas (NLNG) Dividend Account by the Senate, clarifying that there was nothing illegitimate about it.

In a statement, the NNPC Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, said the clarification was made by the corporation’s Chief Financial Officer (CFO), Mr. Isiaka Abdulrazaq, at an interactive session with the media over the weekend in Lagos.

The release stated that in a detailed presentation, the CFO clarified that the Senate probe was not about missing money as was being insinuated in some quarters, but rather an investigation into whether NNPC acted legally in withdrawing the sum of $1.05bn from the NLNG Dividend Account to support fuel importation.

According to the release, while granting the statutory right of the legislators to carryout oversight functions, NNPC CFO said that relevant extant laws such as the Appropriation Act 2018 defines revenue from NNPC as net of cost, indicating that NNPC has the right to defray the cost of its operations from earnings.

He also cited the NLNG Act which explicitly provides that NNPC could defray its cost from the dividends, as one of the legal grounds relied upon for the expenditure without recourse to appropriation by the National Assembly.

Expatiating further on the matter, Mr. Abdulrazaq, according to the release, cited the case instituted by some state governments in 1999 seeking the interpretation of revenue on account of their contention that all accruals from oil and gas operations amount to revenue and should be swept into the Federation Account.

The ruling on that case by the Supreme Court in 2002, according to him, was in tandem with NNPC’s position that revenue is accruals net of cost.

“We have provided the legal authority on which we rely to use funds from the NLNG Dividend Account to the Senate. We believe they will reason with us. But if need be, we will seek legal opinion on it”, the CFO stated.

On the general impression that NNPC and indeed the entire Oil and Gas Industry is opaque, Mr. Abdulrazaq contended that in the light of efforts made by the Management of the NNPC since the inception of the President Muhammadu Buhari administration to entrench a culture of transparency, nothing could be further from the truth.

“NNPC is very open and transparent. We publish our NNPC Monthly Financial and Operations reports in the media. No one does monthly reporting, not even the international oil companies or the publicly quoted companies. The best they do is quarterly reports. But we do monthly reports of revenue (profit and loss for the entire corporation, including the subsidiaries). We do operations report on how much oil and gas was produced, sold and the monetary value; how much products the refineries processed and how much was imported and sold by PPMC. We do all these to defuse the perception of opacity. Yet some people still say we are opaque, and I think that is not fair”, he argued.

Abdulrazak disclosed that as part of the stewardship accounting designed to make NNPC’s operations transparent to the public, the inherited six-year unaudited accounts of the corporation have been audited up to date, stressing that the account for 2017 has been fully audited, approved and forwarded to relevant authorities.

On fuel supply and efforts to ensure zero-scarcity throughout the end of year festivities and beyond, the CFO disclosed that NNPC has 2.6 billion litres of premium motor spirit (petrol) in offshore and onshore storage that could last for 52 days at 50 million litres per day consumption.

Also speaking at the event, the Chief Operating Officer, Upstream, Mallam Bello Rabiu, said the major focus of the Upstream Autonomous Business Unit of the NNPC was to drive down the cost of crude oil production and link the Oil and Gas Industry with the economy.

According to him, bringing down the cost of production would lead to cheaper energy cost which would in turn boost industrial and economic growth.

He said security and funding that used to be the bane of Upstream operations have been largely taken care of by the corporation through practical engagement with stakeholders in the Niger Delta region and the cash-call exit programme.

The COO said that as part of efforts to drive down cost, the NNPC was looking at extending the Escravos-Warri crude oil evacuation pipeline surveillance contract model to downstream pipelines to guarantee efficient crude supply to the refineries post-rehabilitation.

“Before now, it was not possible to get crude to Warri and Kaduna refineries. But with the kind of security contract in place for the Warri-Escravos Pipeline, we now have 99% crude oil recovery rate. The balance is paid for by the contractor. That is why we have replicated that model for the Trans-Forcados Pipeline to guarantee security”, Mallam Rabiu explained.

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FG Excited Over Firm’s $600m Investment In Iron Ore, Steel Production

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…to generate 36MW of power

The Federal Government at the weekend, expressed excitement over firm’s $600 million (N183 billion) investment in an integrated iron ore mining processing and steel production.

This was disclosed by the Minister of Finance, Zainab Shamsuna Ahmed, during a meeting with the firm, African Natural Resources and Mines Limited, in Kagarko Local Government Area of Kaduna State, led by Mr Raj Gupta.

According to a statement by the Minister’s Spacial Adviser on Media and Communications, Mr Paul Ella Abechi, the investment will boost the solid minerals sector and the entire economy, which will lead to increased revenue generation and job creation under the diversification policy of the Federal Government.

She said, “In a bid to diversify away from oil and increase government revenues, I met this evening with African Natural Resources and Mines Limited led by Mr. Raj Gupta who are investing $600m in an integrated iron ore mining, processing and steel production project in Kagarko Local Government, Kaduna State.

“This is about the first major investment in the mining sector in more than two decades. The project will have a capacity of 5.4 metric tonnes per annum and will create 3,500 direct jobs and thousands of indirect jobs.”

According to her the steel plant will generate 36 megawatts of electricity to the national grid that would boost the already generated megawatts of power for other economic activities.

“About 36 megawatts of electricity is to be generated from the waste heat which will increase power supply to Kagarko Local Government to help develop other industries and urbanize the local area. The surplus will also be added to the national grid.”

The Minister further explained that the company’s steel will carry out beneficiation, pelletizing and convert iron into direct used iron for steel manufacturing and that it will galvanise the industrial space into a hub of production of finished goods for local consumption and export.

“The integrated steel manufacturing project has its focal point in mining iron ore, beneficiating, pelletizing and transforming into Direct Reduced Iron (DRI) which is the primary raw material in steel manufacturing.”

Expressing optimism the Minister said the project will massively impact on the local people and the nation at large based on the potential it has to transform the socio-economic life of Nigerians.

“This project will drive industrial and community development, generate more power, create employment for locals, substitute imports, crude steel production, royalties and reposition the mining sector”, she stated.

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Economist predicts doom for Africa

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Professor Paul Collier, one of the world’s most influential development economists, has warned that Africa’s “easy decade” of accelerated economic growth is coming to an end.

He said that the only accelerated job creation and integration will ensure sustainable growth and development across the continent.

Dr. Collier, Professor of Economics and Public Policy in the Blavatnik School of Government at the University of Oxford, was delivering a keynote at the African Economic Conference 2018, hosted by the African Development Bank in Kigali, Rwanda.

He was spoke on the first day of the Conference at a high-level panel on “Drivers, Opportunities and Lessons for Africa’s integration”, comprising experts as well as high-level policymakers, who provided their reflections and perceptions on regional and continental integration.

“Africa’s easy decade is over; but the last decade of African growth was not sustainable. Now Africa must focus on its big resource – its young people. No other continent has anything like such a huge influx of young labour. Productive jobs are the priority,” Collier said.

“Young people can’t create priority jobs by themselves. Those jobs have to be created, so the prime task of policymakers in Africa over the next decade is to create productive jobs for young people at a rate that has never happened before.”

Collier added that connectivity between African countries will unlock the potential of many countries, and this connectivity has to be in terms of both physical transport and political ideology.

“Small countries are doomed to poverty unless they have open markets and free societies. And yet, the typical African country is small, with closed markets. That is a disastrous combination. So the African Continental Free Trade Area is a very important step forward,” he said.

The African Development Bank has pledged full support to the Continental Free Trade Area as part of its High 5 strategy to Integrate Africa and has invested more than $20 million over the past five years to support the institutional and human capacities of the Continental Free Trade Area Secretariat.

Another high-level panelist, Professor Ademola Oyejide, the Emeritus Professor of Economics, University of Ibadan and Chairman of the Centre for Trade and Development Initiatives, noted that regional integration must drive overall continental integration.

“We should not destroy regional economic communities by protectionism and unnecessary barriers to trade. We as African leaders are not in the business of designing theoretical regional programmes: we expect real progress from the regional blocs,” he said.

Professor Klaus Zimmermann, President of the Global Labor Organization, added, “Africa is now on the right path and has to move in the direction of the AfCFTA. One of the most important playing cards in this game is the people of Africa.”

A common message from other high-level panelists, such as Prof. Emmanuel Nnadozie, the Executive Secretary of the African Capacity Building Foundation, was that governments must adopt policies to enable their countries to achieve economic diversification and reduce their dependence on primary commodities.

The Continental Free Trade Area is expected to boost intra-African trade by up to $35 billion per year, creating a 52% increase in trade by 2022; and a vital $10 billion decrease in imports to Africa.

In addition, the African Development Bank Group is accelerating the impact of its flagship Jobs for Youth in Africa (JfYA) Strategy (2016-2025) designed to support African countries in overcoming youth unemployment and underemployment.

The goal of the strategy is to create 25 million jobs for African youth over the next decade and to equip 50 million youth with employability and entrepreneurial skills.

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