•As external reserves hit $36.8bn
Written by Gbola Subair, Abuja Friday, 18 May 2012
THE Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, has expressed concern over Nigeria’s daily declining crude oil production and sales, as the external reserves hit $36.8billion in May 2012.
In the month of April, the minister said daily crude oil production decline was at 17 per cent.
Dr Okonjo-Iweala, receiving members of the House of Representatives Committee on Finance, led by its chairman, Honourable Abdul Jubrin in her office in Abuja on Thursday, stated that the greatest challenge facing the Nigerian economy now was the daily decline of crude oil production.
Although, the daily decline output had the tendency of reducing the revenue accruing to the nation, the minister, however, disclosed that the country was not broke as being insinuated in some quarters.
Disclosing that the country had many assets, Dr Okonjo-Iweala said the delay being experienced by the country in receiving money for sold crude oil was nothing new and should be expected in a situation where Nigeria had only one resource for sale.
“Nigeria is not broke; we have many assets; we are liquid. We have delays in money being disbursed. We are depending on a resource we sell in the market; we may not get the money right away. We sometimes have to wait for few days,” she stated.
Attributing the current decline in oil production to theft and smuggling, the minister stated that President Goodluck Jonathan was not folding his arm and was already addressing the situation through improved security measures in the area.
Okonjo-Iweala, who disclosed that Nigeria was recording an average of 7 per cent growth in the economy, however, stated that this type of growth was not inclusive, as it did not lead to job creation in the country.
To address this anomaly, the minister said the Federal Government was now focusing on certain sectors of the economy, such as solid mineral, manufacturing, housing and construction, to broaden the growth.
She said President Jonathan was leading the crusade on direct job creation, such as the ‘you win’ and the community works programmes, which would lead to the creation of 370,000 jobs per year.
However, to ensure that the economy moved forward, the minister solicited the assistance of the committee in ensuring the speedy passage of a Bill on External Borrowing plan and the Customs Reform Acts currently at the National Assembly.
Dr Okonjo-Iweala specifically requested the speedy passage of the External Borrowing Plan Act to enable the government to access the $7.9 billion external loan planned for the 2012 fiscal year.
President Jonathan had written to the Senate and House of Representatives in February seeking approval for the loan to fund key projects in various sectors of the economy.
Nigeria is seeking the loan facility from the World Bank, Africa Development Bank, Islamic Development Bank, Exim Bank of China and India lines of credit.
“We have an external borrowing plan that we have put to the National Assembly, as we are required to do and I am really counting on your help to get out the borrowing plan as quickly as possible.”
The minister said that the loan was required to complete some ongoing projects captured in the 2012 budget.
According to her, government would spend the loan on several projects in agriculture, water resources and power.
On the monthly meeting of Federation Accounts Allocation Committee (FAAC), which distributes money to the three tiers of government, the minister explained that delay in disbursing funds was not an issue of concern.
She said, “We are depending on a resource (crude oil) that sells in the market. Remember, sometimes, when you sell in the market, you do not get the money right away.
“Just like an ordinary seller in the market, there are sometimes when you are selling to your customers they will tell you that I will bring the money later. Please, give me credit for one or two days.''
She, however, conceded that the country was facing a major challenge of drop in the oil production due to ongoing massive theft of crude oil in the Niger Delta region.
Also speaking, the Minister of State for Finance, Dr Yerima Ngama, said the country was not broke, saying that the delay in the payment of the salaries to workers was due to the Integrated Personnel and Payroll Information System (IPPS) being adopted by the government.
According to him, with IPPS in operation in about 374 government institutions, 35,000 ghost workers had been fished out, while a whopping N14 billion had been saved by the government
The chairman, House Committee on Finance, Honourable Jubrin, in his response, expressed fear over the government’s huge deficit budget, stressing that it would not be in the best interest of Nigeria to continue with the trend.
Disclosing that the government had to focus on revenue issues, the House committee chairman, advised the Federal Government to block all loopholes in revenue generation, by looking at the oil and gas sector, and tax evasion by corporate organisations and individuals.
In addition to this, he said the Federal Government should make the revenue collecting agencies like the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service to double their efforts and ensure prompt remittance of funds collected to the appropriate government’s account.
via Tribune: http://tribune.com.ng/index.php/front-page-news/41132-nigerias-crude-oil-sales-declining-daily-okonjo-iweala-seeks-speedy-approval-for-79bn-external-borrowing-plan-as-external-reserves-hit-368bn
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