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$35bn Spent on Fuel Subsidy in Five Years – Ex-NNPC Director

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Falling Oil Prices Illustration

Nigeria spent an estimated $35bn as subsidy on petroleum products out of the $300bn earned from crude oil from 2010 and 2014, a former Acting Group Executive Director of the Nigerian National Petroleum Corporation, Dr. Tim Okon, has said.

This is coming as experts have urged the Federal Government to discontinue its overdependence on oil revenue, noting that it should seriously work towards diversifying the economy away from oil.

Okon and some professors, as well as other stakeholders in the oil and gas sector, spoke during the 6th Emmanuel Egbogah Legacy Lecture Series with the theme, ‘Managing Petroleum Revenue under Volatile Price Dynamics’, organised by the Emerald Energy Institute, University of Port Harcourt, Rivers State, on Wednesday.

While delivering the keynote address, Okon, who is the chief executive officer, International Institute of Petroleum, Energy Law and Policy, and a special adviser on fiscal strategy at the Federal Ministry of Petroleum Resources, stated that the subsidy programme was actually designed for the poor but it benefitted a few rich persons massively.

He said, “In the period when Nigeria earned close to $300bn as revenue from oil, from 2010 to 2014, we were spending approximately $7bn annually on subsidy. Worse than this was that in spite of the huge revenue inflows, we were also borrowing.”

He also decried the magnitude of borrowing by the Federal Government and stressed that Nigeria might be heading towards a situation in which it would sustain its operations mostly on public debts if care is not taken.

“If we continue to borrow, we will be returning to the point where we may seek debt forgiveness. This is why we are concerned about this development,” Okon said.

The ex-NNPC director lauded the halt in the subsidy regime and stated that the billions of dollars spent on subsidising petrol across the country would have been used to fix all the country’s refineries as well as build the Mambilla Power Plant, which has the capacity of generating about 3,000 megawatts of electricity.

He said, “Of course, spending money on consumables versus having productive capacity is another issue. At one point in time, the subsidy programme was worth $7bn a year. This, however, was despite the fact that the total cost of getting our refineries fixed was about $3bn. But the $7bn was spent through the exhaust fumes of our vehicles.”

Okon explained that Nigeria had been in the oil business for several decades and had seen how crude prices fluctuated over the years, adding that it was worrisome that the current fall in crude prices had taken a huge toll on the Nigerian economy.

He said, “Volatility is not new; commodity price changes are not new and, therefore, Nigeria ought to, having being an oil producer for quite some time, have an understanding of this cycle. But the question is, why is it now difficult?”

He frowned on the way and manner in which government’s revenue was managed, noting that efficient planning tools abound that could help in the management of proceeds from oil, particularly in a volatile market.

The ex-NNPC official stated that there was the need to deal with the revenue governance framework, adding that one way was the ability to create adequate buffers.

He said, “Our failure to create enough buffers has resulted in the situation that we have found ourselves. The second approach for most countries who are oil producers is that when the prices are high, you have to save and that is the purpose of the Sovereign Wealth Fund. Nigeria’s SWF, the last time I checked, was about $1.2bn, while that of Saudi Arabia, when I last checked it up, had come down from $783bn to about $600bn.”

He said Nigeria’s SWF had been eroded due to political interferences over the years, as against what was obtainable in 2007/2008 when the fund was used to support the economy during the fall in global crude oil prices at that period.

Proffering solutions to the myriad of challenges confronting the country, particularly in its oil and gas sector, Okon said it was high time Nigeria diversified its revenue-generating sources.

According to him, the country should also undertake resource diversification and the burden on the oil and gas industry should be reduced since it contributes only about 15 per cent to the Gross Domestic Product.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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No Plans To Relocate AFRICOM HQ To Nigeria Or Any Part Of Africa- U.S. Replies Buhari

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AFRICOM HQ

The United States has said there is no plan to relocate its Africa Command from its current base in Germany to Nigeria or any other part of Africa despite the worsening state of insecurity in the region.

The US gave the response barely two weeks after President Muhammadu Buhari appealed to the US government to consider relocating AFRICOM to Africa to assist Nigeria and other adjoining countries to combat worsening terrorism, banditry and other security crises.

The President made the plea in a virtual meeting with the US Secretary of State, Antony Blinken, on April 27.

Germany-based Africa Command (AFRICOM) is the US military headquarters that oversees its operations in Africa.

Buhari’s request followed a series of recent military casualties in Nigeria’s decade-long fight against Boko Haram terrorists, fresh expansion of the insurgents’ bases to Niger and Nasarawa States, and heavy waves of abductions and killings by bandits in the North.

Buhari said, “The security challenges in Nigeria remain of great concern to us and impacted more negatively, by existing complex negative pressures in the Sahel, Central and West Africa, as well as the Lake Chad Region.

“Compounded as the situation remains, Nigeria and her security forces remain resolutely committed to containing them and addressing their root causes.

“The support of important and strategic partners like the United States cannot be overstated as the consequences of insecurity will affect all nations, hence the imperative for concerted cooperation and collaboration of all nations to overcome these challenges.

“In this connection, and considering the growing security challenges in West and Central Africa, Gulf of Guinea, Lake Chad region and the Sahel, weighing heavily on Africa, it underscores the need for the United States to consider relocating AFRICOM headquarters from Stuttgart, Germany to Africa and near the Theatre of Operation.”

However, the US government on Thursday ruled out any plan to relocate AFRICOM from its current base in Germany to Nigeria or any part of Africa.

According to the United States Department of Defence’ Pentagon, previous studies have shown that the cost of relocating AFRICOM from Germany to Africa is very huge.

In an emailed response to The PUNCH, the Pentagon said although it would continue to value Nigeria and other countries in Africa as important partners, the American government would not consider relocating AFRICOM to any part of the African continent at the moment.

This newspaper had asked if the US would consider Nigeria’s request to relocate AFRICOM to the continent.

“It would be inappropriate to speculate on any future actions. However, at this time, moving this headquarters (AFRICOM HQ) to Africa is not part of any plans, but USAFRICOM’s commitment to their mission, our African and other partners, remains as strong today as when we launched this command more than a decade ago,” US Pentagon spokesperson, Ms. Cindi King, said.

King also ruled out any plan to consider Buhari’s request in an ongoing global US defence review.

She said, “Although there is an ongoing Global Posture Review, the relocation of Combatant Command headquarters is outside the scope of its assessment. In the case of AFRICOM, previous studies have concluded that the cost associated with the relocation of this headquarters is significant and likely to incur the expense of other engagement opportunities and activities that more directly benefit our valued African partners.

“We greatly value the partnership with Nigeria and appreciate President Buhari’s recognition of the United States’ positive contribution to African peace and security, as well as other regional partners that have made similar past pronouncements. The United States remains committed to continuing our close partnership with African countries and organisations to promote security and stability.”

It’s ‘near impossible’ for America to accept Buhari’s invitation –Campbell, ex-US ambassador

Meanwhile, a former United States Ambassador to Nigeria, John Campbell, has listed reasons why it is “unlikely or near impossible” for the US government to relocate AFRICOM from Stuttgart in Germany to Nigeria or any part of the continent.

He said aside from the fact that the cost of doing so is very huge, the Nigerian military had proved to be a difficult partner for the US over the years.

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China Urges U.N. States Not to Attend Xinjiang Event Next Week

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China - Investors King

China has urged United Nations member states not to attend an event planned next week by Germany, the United States and Britain on the repression of Uyghur Muslims and other minorities in Xinjiang, according to a note seen by Reuters on Friday.

“It is a politically-motivated event,” China’s U.N. mission wrote in the note, dated Thursday. “We request your mission NOT to participate in this anti-China event.”

China charged that the organizers of the event, which also include several other European states along with Australia and Canada, use “human rights issues as a political tool to interfere in China’s internal affairs like Xinjiang, to create division and turbulence and disrupt China’s development.”

“They are obsessed with provoking confrontation with China,” the note said, adding that “the provocative event can only lead to more confrontation.”

The Chinese mission to the United Nations did not immediately respond to a request for comment.

The ambassadors of the United States, Germany and Britain are due to address the virtual U.N. event on Wednesday, along with Human Rights Watch Executive Director Ken Roth and Amnesty International Secretary General Agnes Callamard.

The aim of the event is to “discuss how the U.N. system, member states and civil society can support and advocate for the human rights of members of ethnic Turkic communities in Xinjiang,” according to an invitation.

Western states and rights groups have accused authorities in Xinjiang of detaining and torturing Uyghurs in camps, which the United States has described as genocide. In January, Washington banned the import of cotton and tomato products from Xinjiang over allegations of forced labor.

Beijing denies the accusations and describes the camps as vocational training centers to combat religious extremism.

“Beijing has been trying for years to bully governments into silence but that strategy has failed miserably, as more and states step forward to voice horror and revulsion at China’s crimes against Uyghurs and other Turkic Muslims,” Human Rights Watch U.N. director Louis Charbonneau said on Friday.

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Lawmakers Tensed Over Possible Boko Haram Attack On National Assembly

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Lawmakers have been notified of a possible attack by Boko Haram insurgents on the National Assembly complex and other public buildings in Abuja, The media gathered.

Several members of the House of Representatives, on Wednesday, confirmed to Punch correspondent that they had been notified of the imminent attack by the terrorist group.

One of them, who is from a state in the South-West, said his presence would henceforth be limited on the premises.

“That is the security alert I saw today. I’m already moving out of here. I’ll only be around when there is a major reason to do so. Nowhere is safe in the country anymore,” he said.

Already the notice of the impending attack has been made available to the lawmakers.

The notice, a copy of which our correspondent obtained, was sent to the Speaker, Femi Gbajabiamila, other principal officers and all members of the House.

The ‘security alert’, dated May 4, 2021, was issued by the Chairman of the House Committee on Internal Security, National Assembly, Mr. Usman Shiddi.

It was titled ‘Re: planned insurgent attacks on VIP locations, government facilities and assets in Abuja.’

The alert read, “I refer to the above subject of which a copy of the intelligence report from the Force Intelligence Bureau of the Nigeria Police Force in the National Assembly Complex has been made available to my office.

“The report indicates planned insurgent attacks by some elements of Boko Haram on some VIP locations, government facilities and assets in Abuja, including the National Assembly complex.

“In view of the above intelligence, I have considered it paramount to advise that all members should, henceforth, use the presidential gate for ingress and egress.

“This is to avoid the unforeseen congestions that are sometimes encountered at the main gates since such congestions could easily be the targets for these insurgent elements.

“Security agencies are, however, actively on top of the issue to unravel and to contain the intended menace. Accept the assurances of my highest regards, please.”

Security has been beefed up in and around the complex since Thursday last week.

For the first time, security operatives on that day checked vehicles entering the premises, causing traffic congestion especially at the third (and last) gate, a process that has continued to date.

Before now, the security operatives were only after the identities of drivers and passengers to confirm that they were staff members, legislative aides, journalists, or persons working in private businesses in the complex.

The media correspondent observed that soldiers joined the regular sergeants-at-arms and men of the Nigeria Police Force, Department of State Services, Nigerian Security and Civil Defence Corps and the Federal Road Safety Corps that manned the gates.

Recall that the Governor of Niger State, Sani Bello, had on April 26, 2021, raised the alarm over Boko Haram terrorists taking over a part of the state, hoisting their flag in Kaure village from where they had made incursions into more than 50 villages.

Bello said Abuja was not safe, with Boko Haram’s presence in Kaure – a two-hour journey from the Federal Capital Territory.

He said, “I am confirming that there are Boko Haram elements here in Niger State. Here in Kaure, I am confirming that they have hoisted their flags here.”

The same day, Gbajabiamila had met with the President, Muhammadu Buhari at the Presidential Villa, in company with the Majority Leader, Alhassan Ado-Doguwa.

On the next day, the House held a long executive (closed-door) session to discuss the rising spate of insecurity across Nigeria, calling on Buhari to declare a state of emergency on security.

At the secret session that lasted over three hours, the lawmakers unanimously adopted a series of resolutions, one of which was that “the Federal Government should ensure the protection of national infrastructure and assets, particularly the Shiroro and Kainji Dams in Niger State.”

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