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Senate Panel Rejects Ministry’s Budget for Voting N42bn to ‘Private’ Firm

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2018 budget
  • Senate Panel Rejects Ministry’s Budget for Voting N42bn to ‘Private’ Firm

The Senate Committee on Trade and Investment on Monday rejected the 2019 budgetary proposal of the Ministry of Industry, Trade and Investment for voting N42bn to a ‘private’ company.

The panel claimed that the firm, Special Economic Zone Company, was a private company, against the claims by the ministry that it was a government firm.

The development led to the outright rejection of the ministry’s proposal of N15.6bn as its 2019 budget presented to the Senate panel.

Trouble started when the panel confronted the minister, Okechukwu Enelamah, during the budget defence session to explain why his ministry proposed N15bn as its 2019 budget but sought the National Assembly approval of N42bn for a private firm.

The minister had earlier presented a booklet containing the 2019 budget proposals for the agencies under his ministry to the Senator Sabo Mohammed panel.

However, after his presentation, the panel chairman drew the attention of Enelamah to item 2 on page 7 of the booklet which has N42.091bn budgetary allocation for the Nigeria Special Economic Zone Company.

The panel insisted that the firm was not known to be one of the 17 agencies under the ministry.

The minister said the company was established through a presidential initiative and given approval at a cabinet meeting in May 2018.

He said, “One of the areas that this government has focused on is infrastructure. The second area is industrialisation and the two have something in common.

“If the government tries to do it alone, it would be extremely taxing. So, the President directed that we should bring other partners that can contribute to whatever money we have to build world-class infrastructure which led to the establishment of the company in partnership with other investors.”

Meanwhile, when asked to explain the owners of the company, the minister said it was owned by the Federal Government and other shareholders. But the panel disagreed with him.

The chairman of the committee then told him that a document obtained by them from the Corporate Affairs Commission signed by Terver Ayua-Jor, for the Registrar General, did not agree with the minister’s submission.

According to him, the letter from the CAC contains information on how the company was registered.

He also said the letter showed that the firm’s name was Nigeria Sez Investment Company Limited and not Nigeria Special Economic Zone Company in the documents presented by the minister.

He also said the firm, according to the CAC document, was established on June 12, 2018, a week to the signing of the 2019 budget

Mohammed said, “Ownership of the company, as clearly stated in the document obtained from CAC on the 26th of last month, designated as Directors Dr Bakari Wadinga, Mr Olufemi Edun and Ms Oluwadara Owoyemi.

“The document clearly states that the company is a private company and that liability of the members is limited by share which, as also shown, gives the Federal Government 25 per cent and 75 per cent to the private individuals.”

Attempts by the minister to convince the panel failed as the members unanimously directed him to forward detailed written explanation on how the company got into appropriation list, its management staff, its staff strength and statement of account.

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

Nigerians to Pay N417.09bn in 4 Months for Electricity Consumption

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Electricity Consumers to Pay N419.09bn in 4 Months

Following the recent increase in electricity tariffs, the 11 distribution companies in the country are allowed to collect a total of N417.09bn from their customers from September to December.

The Discos had early this month announced what they called ‘new service reflective tariff’, which took effect from September 1, with the tariffs being charged residential consumers receiving a minimum of 12 hours of power supply rising by over 70 per cent.

The amounts recoverable by the Discos through the allowed end-user tariffs range from 61 per cent to 90 per cent of the total revenue required, according to the Nigerian Electricity Regulatory Commission.

The tariff shortfall, which is the difference between the Discos’ revenue requirement and the amounts they are allowed to recover from their customers by the regulator, will be funded by the Federal Government.

The media had reported that the Federal Government would fund a tariff shortfall of N104.5bn that will be recorded by the Discos in the four-month period, according to the Nigerian Electricity Regulatory Commission.

Ikeja Disco is allowed to recover N66.52bn (90 per cent of its total revenue requirement) from September to December, a NERC document showed.

Eko Disco is allowed to recover N48.46bn (86 per cent); Kano Disco, N34.13bn (84 per cent); Abuja Disco, N49.16bn (83 per cent); and Enugu Disco, N38.81bn (82 per cent).

The amounts recoverable by Kaduna Disco is N35.22bn (82 per cent: Ibadan Disco, N54.61bn (78 per cent); Benin Disco, N34.94bn (74 per cent); and Yola Disco, N13.34bn (71 per cent).

Port Harcourt and Jos Discos are allowed to recover N23.63bn (68 per cent) and N18.27bn (61 per cent) respectively.

NERC said the Power Sector Recovery Plan provided for a gradual transition to cost-reflective tariffs with safeguards for the less privileged in the society, adding that full cost-reflective tariffs would be charged by July 2021.

“The Federal Government, under the PSRP Financing Plan, has committed to fund the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs during the transition to cost-reflective tariffs,” it added.

According to the commission, all the Discos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall approved by the commission.

It said the Discos would be liable to relevant penalties/sanctions for failure to meet the minimum remittance requirement in any payment cycle in accordance with the terms of its respective contracts with the Nigerian Bulk Electricity Trading and the Market Operator, an arm of the Transmission Company of Nigeria.

The Discos only collect an estimated 24 per cent of the tariff revenue, while the balance goes to the TCN, generation companies and other industry stakeholders, according to the Association of Nigerian Electricity Distributors.

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Economy

Nigeria Emerges 13th Rice Producer Globally, 1st in Africa

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Nigeria is the 13th Rice Producer Globally and 1st in Africa

Following the series of adjustments made by the federal government to stimulate local production of rice and curb the large inflow of foreign-produced rice, Nigeria has emerged 13th largest rice producer in the world and number one in Africa just two years after President Buhari moved against the importation of rice.

The Minister of Agriculture and Rural Development, Muhammed Sabo Nanono, disclosed this at the commissioning of the Agribusiness Incubation Centre of Federal University Dutse, Jigawa State.

In a statement issued by Ahmed Aminu, the Technical Assistant to Nanono, the minister said the nation has managed to transition from a net importer of the commodity to a sizeable producer that is gradually moving towards self-sufficiency in rice production.

Nanono said president Buhari has consistently pursued agricultural revolution to ensure that Nigeria attains food security and wealth creation from within.

The Minister said “the rice production drive as championed by President Muhammadu Buhari administration has triggered off massive industrialisation with the springing up of countless rice milling facilities across the country generating tremendous job opportunities down the rice value chain as well as creating sizeable wealth for many.

Sabo Nanono further stated that Kano State alone has 14 integrated rice mills with the capacity to produce between 180 and 400 metric tonnes per day. He added that another 32 integrated mills also abound in Kano with a combined production capacity of another 100 to 120 metric tonnes per day.

Thousands of rice milling clusters can also be found all over the federation, especially in the northern part, which adds up towards the attainment of tangible self-sufficiency in the staple food item as would enable Nigeria to sell rice to our neighbours in the not too distant future.

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Economy

FG Establishes New Crime Agency, Proceeds of Crime Recovery and Management Agency

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President Muhammadu Buhari

Proceeds of Crime Recovery and Management Agency Established by Government

The Federal Government has approved the creation of a new crime agency called “The Proceeds of Crime Recovery and Management Agency” to better manage the loots recovered from financial criminals by the growing list of anti-graft agencies established by the government.

The new agency was approved on Wednesday at the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari.

The president said the new agency seeks to move the fight against corruption to the next level as there is no agency of government that “can give you off-head the number of landed assets, number of immovable assets, the amount in cash that are recovered by the federal government by way of interim forfeiture overweigh of a final forfeigture.”

“So, it is indeed overtime a kind of arrangement that is not uniform and consistent.”

He added: “Next level of transparency, next level of accountability in essence, will have in place an agency of government that is exclusively responsible for anything proceeds of crime.

“A one-stop shop arrangement by which all the assests that are recovered arising from crimes that are indeed vested in the federal government, you have a one-stop arrangenet where you can have an information. As it is for example, the Federal Ministry of Justice is only in a position to account and giving comprehensive account of what
recoveries were made by the ministry.

“But any recovery made by the police, DSS, the Ministry of Justice is not in a position to know. So, for the purpose of decision making and policy, the federal government is not in a position to have a wholistic appreciation.

“So, by the bill that is now presented for the consideration of the council, we’ll have a law that establishes an agency, and secondly, an agency.

“And as you rightly know, Mr President has sanctioned ever since he came on board, that there should be a budget line, a budget item for recovered assets.

“So, if you have a budget item for recovered assets, this agency will now be in a position to provide information to the Federal Ministry of Finance, Budget and National Planning on demand as to what amount is available for budget purposes, thereby establishing the desired transparency, the desired accountability which has not been available before now.

“So, it is about a memo that seeks to establish a legal framework, that seeks to establish institutional framework, that seeks to further take the fight against corruption to the next level by way of establishing transparency, accountability and making the possibility of forfeiture a proceeds of crime easy through the sanctioning of non-conviction based forfeiture among others.”

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