Connect with us

Economy

FG Spends $10bn on Ajaokuta Steel Company

Published

on

Ajaokuta Steel

The Minister of State for Solid Minerals Development, Mr. Abubakar Bawa-Bwari, said on Thursday that the Federal Government had spent over $10bn on the Ajaokuta Steel Company in the last 35 years.

He also said the government escaped paying damages in excess of $525m to Global Infrastructure Holdings Limited by signing a modified concession agreement with the latter to enable the firm to retain the National Iron Ore Mining Company, Itakpe. The modified seven-year concession agreement was signed on August 1, this year.

NIOMCO was designed to feed Ajaokuta Steel Company with the requisite raw materials to produce steel, but both firms have made little progress.

Bawa-Bwari, who appeared before the House of Representatives Committee on Privatisation and Commercialisation in Abuja, said, “The most important thing is that everybody agrees that Ajaokuta should work. We have spent over $10bn over 35 years and we cannot afford to continue to waste more time.

“This modified agreement is the best option available to government today. This agreement will free us from all the legal issues. We will monitor it and ensure that the GIHL too keeps to its promise that they have turned a new leaf.”

The minister spoke amid protests by steel sector stakeholders, including workers, host communities and the Bureau of Public Enterprises.

Bawa-Bwari said that the present administration signed the agreement to free NIOMCO, Ajaokuta Steel Company and the Delta Steel Company, Ovian-Alaja, from the ‘legal encumbrances’ that had stalled the operations of the steel firms for several years since they were first privatised in 2004.

The minister said that it was the administration of former President Goodluck Jonathan that first initiated the modified agreement with the GIHL in 2013 as part of ‘out of court settlement’ for the government’s breach of the original agreement it signed with the Indians in 2004.

He said that the initial concession was to last 25 years with a provision for “automatic renewal.”

However, the minister said the late President Umaru Yar’Adua reversed the privatisation of NIOMCO in 2008 without meeting the requirements of the clauses built into the agreement.

He added that the GIHL reacted by dragging the government before the Court of Arbitration, further crippling the operations of NIOMCO and other steel firms tied to it.

The minister explained how, acting on legal opinion by the Office of the Attorney-General of the Federation, the Jonathan administration opted for an out of court settlement in the form of a modified concession agreement in 2013.

But he noted that the controversy that surrounded the modified agreement again did not allow for its take-off until the current government acted on it on August 1 this year.

But the Chairman of the committee, Mr. Ahmed Yerima; the Chairman, Sub-committee on Steel, Mr. Gabriel Kolawole, and other lawmakers disagreed with the minister.

For instance, Yerima queried why the BPE was not fully involved in the process.

Some members wondered how the same government that spent over $10bn on Ajaokuta Steel was in a hurry to return to the GIHL just to avoid paying $525m damages.

The BPE, through its acting Director-General, Mr. Vincent Akpotaire, said it had not been fully involved in the privatisation of NIOMCO and Ajaokuta since 2004.

Akpotaire recalled that there was only one meeting where the BPE made proposals to the government, but stressed that the agency was not accorded further invitations.

“The way forward is perhaps to unbundle the various plant lines in Ajaokuta, which can all stand independently on their own as against going for a single core investor again,” he stated.

Akpotaire also said records indicated that NIOMCO and Delta Steel did not find their feet after the first privatisation in 2004 because the GIHL “clearly lacked the capacity” to deliver.

Workers of the steel firms and members of the host communities opposed the latest agreement on account of unresolved issues; one of which was the non-payment of outstanding benefits.

Others were calls for the payment of compensation for lives lost in the host communities during the various protests staged by their youths to oppose the privatisation policy.

The committee said it would have to report its findings to the general House.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Economy

Oxford Business Group signs MoU with Lagos Chamber of Commerce and Industry for 2023 Economic Analysis

Nigeria’s plans to put the private sector at the heart of the next phase of its economic development will be explored in a forthcoming report by the global research and advisory company Oxford Business Group (OBG).

Published

on

2023 Economic Analysis

Nigeria’s plans to put the private sector at the heart of the next phase of its economic development will be explored in a forthcoming report by the global research and advisory company Oxford Business Group (OBG).

The Report: Nigeria 2023 will look in detail at the key sectors of the country’s economy with high growth potential, which include agriculture, energy, ICT and industry.

It will also consider the important role earmarked for public-private partnerships in supporting Nigeria’s infrastructure development, with major projects such as the Lekki Free Zone and the Lekki-Epe road among those in the spotlight.

The openings that are expected to emerge from the African Continental Free Trade Area will be another focal point, with in-depth analysis provided of the potential that the initiative holds for boosting exports and fostering new trade partnerships.

Other topics set for coverage include a drive under way to encourage innovation and the introduction of tech solutions across the economic sectors, with the aim of galvanising growth in nascent segments, such as fintech.

OBG has signed a new memorandum of understanding (MoU) with the Lagos Chamber of Commerce and Industry (LCCI) as it begins work on The Report: Nigeria 2023. Under the agreement, the LCCI will team up with OBG to produce the Group’s first post-pandemic analysis of Nigeria’s investment opportunities and economic development, and other related content.

The MoU was signed by Wen Qian Chang, Country Director, OBG, and Chinyere Almona, Director General, LCCI.

Commenting after the signing, Almona said that OBG’s new report comes at a time when Nigeria is looking to the private sector to unlock the potential of key legislative reforms put in place in recent years and spearhead a new era of growth.

“These have been challenging times for Nigeria, with recession and high inflation weighing on the country’s economic performance. However, higher oil prices and a rise in post-Covid remittances, are combining to improve the outlook,” she said. “Oxford Business Group is known for producing highly regarded, detailed resources on emerging economies and has consistently provided accurate, in-depth analysis of Nigeria’s economic development over the years. I look forward to working closely with its representatives to highlight the latest openings across the economy as the country prepares for a new chapter in its growth story.”

Chang said she was delighted to have the LCCI on board for OBG’s 2023 report on Nigeria, with the country looking to build on its strengths, led by an abundant supply of natural resources, a sizeable workforce and a vibrant business scene, in the recovery phase.

“Long a regional powerhouse, Nigeria is now assessing the impact of measures adopted during the pandemic aimed at strengthening resilience and enabling the economy to withstand future shocks,” she said. “The private sector is recognised as the linchpin of Nigeria’s economic strength, with businesses ably supported by key organisations such as the Lagos Chamber of Commerce and Industry, which provides a broad range of services aimed at encouraging innovation and growth. I’m thrilled that our research into the many investment opportunities emerging in Lagos and beyond will benefit from the local knowledge and expertise of its members.”

The Report: Nigeria 2023 will mark the culmination of more than a year of field research by a team of analysts from Oxford Business Group. It will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments. OBG’s publication will also contain contributions from leading representatives across the public and private sectors.

The Report: Nigeria 2023 will be available online and in print. It will form part of a series of tailored studies that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including ESG and Future Readiness reports, country-specific Growth and Recovery Outlook articles and interviews.

Continue Reading

Economy

IPPIS Helps Uncover 70,000 Ghost Workers, TSA Saves Over N10 Trillion, Says FG

The Federal Government has said its recently enforced Integration Personnel and Payroll Information System (IPPIS) has helped uncovered 70,000 ghost workers in the civil service system.

Published

on

Treasury Single Account

The Federal Government has said its recently enforced Integration Personnel and Payroll Information System (IPPIS) has helped uncovered 70,000 ghost workers in the civil service system.

Dr. Dasuki Arabi, the Director-General, Bureau of Public Service Reforms, stated at the 43rd session of the ministerial briefing organised by the Presidential Communication Team at the Presidential Villa, Abuja on Thursday.

According to the Director-General, the Federal Government has saved at least N220 billion through IPPIS and about N10 trillion via the Treasury Single Account (TSA) since it was fully implemented by President Muhammadu Buhari.

Explaining the advantages of IPPIS, Arabi said the Federal Government can now give an account of the total Federal Civil Service personnel working in the country. He puts the total at 720,000 as of today.

Arabi said, “With the introduction of IPPIS, about 70,000 ghost workers have been eliminated from the payroll. We have a one-shot opportunity to look at IPPIS and say, as of today, we have 720,000 public servants working for Nigeria.

“We’ve been able to reduce more than N220bn wastage through wrong management of IPPIS on payroll by ministries, departments and agencies of government. We have reduced the budget deficits and changed the budget composition.

“We have succeeded in getting the Treasury Single Account deployed in all ministries, departments and agencies of government. Challenges have come in that implementation at the initial stage, but we are overcoming that and the government is able to save over N10tn over the years because whatever you’re generating now goes into a Treasury Single Account that is managed by somebody else, not you.

“And the government, especially at the top, is always able to see what has come into our Treasury Single Account today and what has gone out of that. So planning has been simplified. Budgeting has been simplified.”

The Integrated Financial Management Information System digitised government business and “reduced man-to-man contact and processing payments in ministries, departments and agencies.”

He said, “Transparency has been improved. A lot of things are done even outside the office. But the most important thing is the ability given to central agencies, the Office of the Accountant-General of the Federation, and the Ministry of Finance to see what is happening in all government MDAs because GIFMIS is not controlled by the agencies.

“It is controlled by the central agencies, but every activity you are doing under GIFMIS somebody is watching you and is monitoring that activity. This is a great achievement for us and for all of you and for all Nigerians.”

Continue Reading

Economy

Bread Producers to Commence Strike on July 13, 2022

Published

on

bread

The persistent increase in the price of bakery materials and the Federal Government’s nonchalant attitude towards the situation has forced bread producers across the country to announce a nationwide strike starting on July 13, 2022.

The Association of Master Bakers and Caterers of Nigeria disclosed in a communiqué issued on Friday and obtained by Investors King.

According to the Association, prices of sugar, flour and other production inputs used in the bakery business had increased beyond the reach of many producers.

This is not surprising given Nigeria’s latest consumer price index report released by the National Bureau of Statistics (NBS). The report showed inflation grew at 17.71% in the month of May, the fastest rate of increase in 11 months.

In the report, the NBS attributed the increase in the headline inflation to jump in the prices of bread and cereals, food products, etc.

In the communiqué signed by Mansur Umar, National President and other executives, the association said its National Executive Council (NEC) reviewed the “neglect of the Federal Government in addressing the challenges facing our sector as captured in our letters acknowledged by the Federal Ministry of Industry, Trade and Investment, Federal Ministry of Finance, Central Bank of Nigeria and unproductive intervention of the Secretary to the Government of the Federation.

“Increase in prices of bakery materials especially flour and sugar having reached unprecedented levels, for example, flour is now between N25,000 and N27,500, so also other ingredients.

“The National Wheat Cultivation Committee already constituted is yet to be inaugurated after over one year. NAFDAC, SON, NESREA have turned the bakers into money making machine by charging our members outrageous levies even at this very challenging moment.

“Consequently, the NEC in session resolved that all zones, state, Local Governments and units of our association should commence full mobilisation of our members nationwide to embark on withdrawal of services starting from Wednesday July 13, 2022 for an initial period of two weeks.”

The association, however, urged its “members should await further directives.”

Continue Reading




Advertisement
Advertisement
Advertisement

Trending