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Senate Summons Fashola Over Alleged $35m Spendings

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  • Senate Summons Fashola Over Alleged $35m Spendings

The Senate on Wednesday began an investigation into the alleged plan by the Ministry of Power, Works and Housing to secure the release of $350m domiciled in the Nigerian Sovereign Investment Authority to finance electricity projects.

The lawmakers specifically criticised the ministry for allegedly spending $35m out of the money on power projects without approval by the National Assembly.

The decision followed the adoption of a motion moved by Senator Dino Melaye (Kogi-West), at the plenary on Wednesday, which was entitled, ‘Monumental Fraud in the Power Sector.’

Granting a prayer of the motion, the Senate mandated its Senate committees on Power; and Public Accounts to invite the Minister of Power, Works and Housing, Babatunde Fashola (SAN), “to render a detailed account in terms of public funds spent on the Fast Power Projects (Afam Fast Power Project in particular); evidence of feasibility study indicating the viability of the projects; requisite appropriation by the National Assembly as required by the constitution; and the controversial presidential approval for the projects.”

Another prayer was also granted to mandate same committees “to investigate and consider summoning the Nigerian Sovereign Investment Authority, the Nigeria Electricity Bulk Trading Company, etc., to generally establish the status of the funds ($350m) and to report back to the Senate within two weeks.”

The Senate also unanimously granted the prayer to “direct the Federal Ministry of Power, Works and Housing to stop or suspend all attempts or efforts to pressurise the NSIA to release $350m meant for NBET to the ministry for use on the controversial fast power projects.”

The Senate President, Bukola Saraki, in his remarks, noted that the issues had previously been raised concerning the power sector in the chamber. He also noted that the law establishing the Nigerian Sovereign Investment Authority was due for a review.

Saraki’s suggestion on the review of the NSIA Establishment Act was presented as an additional prayer and it was unanimously granted.

In the motion, Melaye recalled that the Federal Government raised $1bn through a Eurobond issue in July 2013, while the government released $350m out of the sum to the Nigeria Electricity Bulk Trading Company Plc as shareholder contribution to shore up its capitalisation.

Melaye said, “The Senate observes that this fund has been with the NSlA since 2014 and has helped build market confidence especially among new investors in the electricity market who see NBET’s positive balance sheet as a form of security that their investments are safe and that NBET has the wherewithal to meet its payment obligations.

“The Senate is alarmed that there is now a desperate attempt by the Federal Ministry of Power, Works and Housing to retrieve this fund ($350m) and divert same to fund the so-called Fast Power Projects, which the ministry has already spent $35m of public funds not appropriated by the National Assembly.”

“The Senate is further alarmed that since the introduction of the Fast Power Project by the Federal Ministry of Power, Works and Housing, a total sum of $35m has been spent by the ministry on Afam Power Project alone to pay $29m to General Electric as cost for turbines and $6m in consultancy fees to other entities respectively, all without requisite feasibility study of the projects and appropriation by the National Assembly as required by the constitution.”

The senator said “a lot of questions are begging for answers” as regards the $29m paid to General Electric and the $6m paid to other consultants.

He asked who the consultants were and how were they procured. He also asked if there was observance of due process in the award of the contracts. He further asked why the transaction was cloaked in secrecy and what was the true value of Afam Fast Power?

Melaye added, “Why is the ministry engaging in constructing new power plant while the government has several idle plants that is seeking buyers for? Why is the ministry that is supposed to be making policies, dabbling into constructing new power plants that we have all agreed is better handled by the private sector?”

He added, “The Senate is concerned that the Federal Ministry of Power, Works and Housing is determined to persist in this brazen violation of the Constitution and extant laws on due process by insisting that the NSIA should release the $350m meant for NBET on the pretext of acting under a purported presidential approval.

“The Senate is convinced that there is an urgent need to bring the .ministry to order regarding its planned diversion of the sum of $350m meant for NBET and further demand a detailed account of unappropriated public funds spent on the controversial fast power projects.”

Seconding the motion, Senator Mohammed Hassan (Yobe-South) noted that apart from the $350m released to NBET, the Transmission Company of Nigeria also got $150m and the Nigerian National Petroleum Corporation got $500m for some gas projects.

He said, “These monies will be maturing and they will be due for return by next year. Our concern is on these contracts that were awarded; I think that is the area that the Senate should look at. I will want to recommend that the Senate Committee on Power should look at that, not only ascertaining the credit balance of the $350m, we need to find out what is the status of the $500m with NNPC and $150m with TCN. I think that is the way to go.”

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.

Economy

Nigeria, Morocco sign MOUs on Hydrocarbons, Others

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The Federal Government and the Kingdom of Morocco have signed five strategic Memoranda of Understanding that will foster Nigerian-Morocco bilateral collaboration and promote the development of hydrocarbons, agriculture, and commerce in both countries.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, led the Nigerian delegation to the agreement signing ceremony on Tuesday at Marrakech, Morocco, while the Chief Executive Officer of OCP Africa, Mr Anouar Jamali, signed for the Kingdom of Morocco, according to a statement by the Nigerian Content Development and Monitoring Board.

Under the agreement between OCP, NSIA and the Nigerian National Petroleum Corporation, Nigeria will import phosphate from the Kingdom of Morocco and use it to produce blended fertiliser for the local market and export.

The statement said Nigeria would also produce ammonia and export to Morocco.

“As part of the project, the Nigerian Government plans to establish an ammonia plant at Akwa Ibom State,” it said.

The Executive Secretary of NCDMB, Mr Simbi Wabote, and the Group Managing Director of NNPC, Mallam Mele Kyari, were part of the delegation and they confirmed that their organisations would take equity in the ammonia plant when the Final Investment Decision would be taken, the statement said.

Sylva said the project would broaden economic opportunities for the two nations and improve the wellbeing of the people.

He added that the project would also positively impact agriculture, stimulate the growth of gas-based industries and lead to massive job creation.

He said the President, Major General Muhammadu Buhari (retd.), had mandated the Ministry of Petroleum Resources and it agencies and other government agencies to give maximum support for the project.

“He mandated me to ensure that at least the first phase of this project is commissioned before the expiration of his second term in office in 2023,” he added.

According to the statement, the MOUs were for the support of the second phase of the Presidential Fertiliser Initiative; Shareholders Agreement for the creation of the joint venture company to develop the multipurpose industrial platform and MOU for equity investment by the NNPC in the joint venture and support of the gas.

Other agreements are term sheet for gas sales and aggregation agreement and MOU for land acquisition and administrative facilitation to the establishment of the multipurpose industrial platform for gas sales and aggregation agreement.

The NCDMB boss described the bilateral agreement as significant to the Nigerian economy as it would accelerate Nigeria’s gas monetisation programme through establishment of the ammonia plant in the country.

The agreement would also improve Nigeria’s per capita fertiliser application through importation of phosphate derivatives from Morocco, he added.

Wabote challenged the relevant parties to focus on accelerating the FID, assuring them that the NCDMB would take equity investment for long-term sustainability of the project.

He canvassed for the setting up of a project management oversight structure to ensure project requirements and timelines are met.

“There is also need to determine manpower needs for construction and operations phase of the project and develop training programmes that will create the workforce pool from Nigeria and Morocco and design collaboration framework between research centres in Nigeria and Morocco to develop technology solutions for maintaining the ISBL and OSBL units of the Ammonia complex,” he said.

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Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

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Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

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Economy

UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?

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Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.

Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.

“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.

“He is raising taxes under the radar.

“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”

Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”

Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.

Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.

“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses.  This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”

He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”

The deVere CEO concludes: “The Chancellor had to perform a tough juggling act.  But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”

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