$35bn Spent on Fuel Subsidy in Five Years – Ex-NNPC Director
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.
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.
NIMC: Presidential Council Faults N1000 NIN Fee, Demands Review
The recently announced N1000 National Identification Number (NIN) verification fee for the application, issuance and renewal of international passports by the National Identity Management Commission (NIMC) has been criticised.
The Presidential Enabling Business Environment Council, PEBEC faulted the mandated charge and called for a review.
Investors King had earlier reported that NIMC declared that Nigerians living in the country will pay N1000, while Nigerians residing in other African countries will pay $3 or its equivalent in other currencies and those in other continents across the world will pay $10 or its equivalent in other countries as NIN verification fee for application, issuance and renewal of their international passports.
Reacting to the development, the Special Adviser to the President on Ease of Doing Business/PEBEC Secretary, Jumoke Oduwole, in a statement, emphasised the need for a review to make citizens enjoy quicker and less expensive government services.
Oduwole, who commended the collaboration between NIMC and Nigerian Immigration Service (NIS), said such a partnership will enhance passport services.
She noted that stakeholders are not impressed with the extra charge to be paid for the NIN verification before they can process their passports.
According to her, the outline of the Business Facilitation (Miscellaneous Provisions) Act 2022 signed into law by the President Muhammadu Buhari on February 8, 2023 states that where an applicant requires the service of a ministry, department or agency, the MDA involved is mandated to conduct the necessary verification or certification from relevant MDAs, in respect of the applicant.
Investors King understands that PUBEC was set up in 2016 by President Buhari with the aim of curbing hectic bottlenecks and bureaucratic limitations accompanied with owning and managing business enterprises in Nigeria.
The chairman of the council is the vice president, Prof. Yemi Osinbajo. PUBEC has since its existence periodically issued EO1 Compliance Reports containing monthly reports of Ministries, Departments and Agencies submitted to the council.
INEC Considers Postponement of Governorship and State Assembly Elections Amidst Legal Battles
The Independent National Electoral Commission (INEC) is currently considering the possibility of postponing the upcoming governorship and state assembly elections, following the legal battles that have arisen from the recent presidential and national assembly polls.
INEC is expected to make a decision on the issue during a meeting of its national commissioners, scheduled for Wednesday night.
Investors King understands that the legal battles revolve around the extraction of data embedded in the bimodal voter accreditation system (BVAS) and the inspection of other election materials.
The presidential candidate of the Labour Party (LP), Peter Obi, and the standard bearer of the Peoples Democratic Party (PDP), Atiku Abubakar, have filed similar applications seeking to obtain the certified true copy (CTC) of all the data in the BVAS.
INEC has opposed the applications, arguing that granting them would affect its preparations for the forthcoming elections.
Tanimu Inuwa, counsel to INEC, has asked the court to vary the orders granting permission to Obi and Atiku to inspect all the sensitive materials used in the conduct of the presidential election.
However, the court has refused to grant INEC’s request, stating that the commission failed to specify which of the orders it wished to vary.
The court has clarified that it granted Obi and LP permission to do electronic scanning and/or make photocopies of voter registration and ballot papers used in the conduct of the election, and not permission to access the database of INEC, as misconceived by the electoral body.
Given the legal battles and the possible impact on preparations for the forthcoming elections, INEC is now considering postponing the governorship and state assembly elections.
This decision, if taken, would have significant implications for the electoral process and could further heighten tensions in the country.
The ongoing legal battles highlight the need for all stakeholders to work together to ensure a free, fair and credible electoral process. It is essential that INEC and other stakeholders prioritize the integrity of the electoral process over political expediency and work towards resolving these legal disputes in a timely and transparent manner.
FG Estimates N869bn For 2023 Census, Seeks Financial Aid
The Federal Government has totalled the fund needed for the conduct of the 2023 population and housing census as N869bn.
Investors King reports that Nigerians and organisations have been called upon to donate N327.2bn out of the estimated cost as the government already made provision for N291.5bn.
The Minister of State for Budget and National Planning, Clem Agba, during a dialogue with partners for the census in Abuja on Monday, stated that the FG plans to set up a basket fund to collect donations.
Agba noted that the basket fund will be coordinated by the United Nations Population Fund (UNFPA) who will provide technical and financial support to the National Population Commission (NPC).
He appealed to well-meaning citizens and private sectors to either donate cash or essential materials needed for the national census.
The minister gave the breakdown of the estimated cost; “The total requirement for the census (including post census activities) is N869bn ($1.88bn): census requirement – N626bn ($1.36bn) which is about $6 per capita (just slightly above the threshold of up to $5 per capita); Post-Census (up to 2025) is N243bn ($527m).
“So far, the government has committed N291.5bn ($632m) to the census, making it 46 per cent of total funding for the census. An additional (immediate) sum of N327.2bn ($709.9m) is required to complete the census.”
Agba stated that the national headcount was scheduled to hold in 2022 but was shifted to March, 2023, adding that there is a recommendation for it to be moved to May 2023.
He recalled that the last census was done in 2006 and the next ought to be held in 2016 as recommended by the United Nations for Decennial census.
In her remarks, the Resident Representative, UNFPA, Ms Ulla Mueller, harped on the need to take the census seriously to stop guessing the present population of the country.
She stated that UNFPA will support the census exercise financially and technically to the tune of $10m.
Also, the Chairman, Heirs Holdings Group and Founder, The Tony Elumelu Foundation, Tony Elumelu, on behalf of the Organised Private Sector and African Philanthropic Organisations spoke on the urgent need for the census to accurately plan based on the needs of the citizens to boost the nation’s development.
“For me, this task is critical to our country’s future – if we do not know our population, we cannot properly plot our developmental path, our economic growth, our society’s goals. Credible demographic data is of profound importance for the public and private sectors alike. We all know we live in a data-driven world.
“The upcoming census is a significant milestone in Nigeria’s development, as it provides an opportunity to collect accurate and reliable data on the country’s population and housing, which will serve as a vital tool for policymakers, private sector actors, and civil society organisations,” he said.
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