- 18 June 2013
The National Industrial Court sitting in Abuja has dismissed the preliminary objection raised by Belview Airline challenging the competence of the suit filed against the airline it by its former employees.
The airline which shut down operations following several challenges was bought over by First Nation Airways, an airline believed to be owned by the National Leader of the Action Congress of Nigeria (ACN). The First Nation Airways only flew for sometime before going off the skies.
The affected staff were given indefinite leave of absence without pay while the airline was packing up. Now, the staff want the court to declare as illegal, null and void the indefinite leave.
Nine former workers of the airline, led by one Reuben Wada, had sued the company and two others demanding for the payment of their entitlements. They joined the First-Nation Airways Support Services Ltd and its Chairman, Mr Kayode Odukoya, as defendants in the suit.
They are also praying the court to order the defendants to recall them and pay all their salary arrears since May 2009 to date.
In February when the case first came up, the defendant’s Counsel, Mr. A.B Ige, raised a preliminary objection challenging the competence of the suit. He also urged the court to dismiss the suit as according to him, the case did not state any cause of action against the defendants.
At the court on Tuesday, counsel to the claimants, Mr. Emmanuel Audu, told the court that the claimants were in the employ of Belview Airlines until May 2009 when they were sent on an indefinite leave explaining further that this was because there was no operation at the time.
However, according to him, the airline later began operation with the name, First-Nation Airways Support Services Ltd, while the staff were still on leave. The management of the airline refused to recall the claimants or send them away properly.
He therefore urged the court to dismiss the preliminary objection and order for hearing in the case.
Delivering the ruling, Justice Maureen Esowe declared that the action was in order since it concerned the employment of the claimants with the defendant. She also stressed that the service of writ of summons on the defendant outside the jurisdiction was in order and that there was disclosure of cause of action by the claimants.
Declaring that the issues before the court for determination were whether the parties in the suit were properly joined, she added: "the court therefore holds that the provision of sharing and service rules does not beset the case of the claimants in this suit."
Adjoining the case to September 17 for commencement of hearing, the judge declared: "the court so holds that there is disclosure of cause of action since the claimants are seeking for a declaration that they are being owed by the defendants."
- 18 June 2013
A Federal High Court sitting in Lagos has fixed June 20 for hearing a motion filed by human rights lawyer, Ebun-Olu Adegboruwa, against Governor Babatunde Fashola of Lagos State for imposing toll collection on the newly completed Lekki-Ikoyi Suspension Bridge in the State.
The date was fixed on Tuesday by Justice Saliu Saidu after the application was filed by the activist who is seeking for an injunction to stop the Lagos State Government from collecting tolls from motorists on the bridge that was reportedly built with public fund.
At an earlier sitting in the case, Adegboruwa, citing Section 4(5) of the 1999 constitution, argued that since the federal act covered navigable waterways in Nigeria, including the Lekki and Lagos Lagoons, the House of Assembly of Lagos State cannot purport to make laws on the same subject. He therefore asked the court to declare the Lagos State law as null and void, and tolling on the bridge as illegal.
In a counter-argument, the State Attorney-General and Commissioner for Justice, Ade Ipaye, had asked the court to quash the case as the government had not even started collecting any toll.
However, in the application on Tuesday, the plaintiff stated that the respondent had gone ahead to start collecting tolls on the bridge in spite of a pending suit he filed seeking to stop the collection. He further said he was aware that the court had reserved judgment on the substantive suit for July 9.
He recalled that the government inaugurated the bridge on May 29 and started collecting tolls on June 1 even when the case is in court. In an affidavit he tendered before the court, Adegboruwa attached a toll ticket he received on the bridge.
According to him, Governor Fashola "openly declared the bridge a toll bridge, whereby saloon cars will pay N250 per trip and Sports Utility Vehicles N350.00 per trip," claiming that this was abuse of court processes.
The bridge had been a subject of controversy since the State Government announced plans to impose toll collection on the bridge. The contract for the tolling was awarded to the Lagos Tolling Company (LTC) which was specifically registered for the purpose and which is said to be a front for a company in South Africa. It is expected to collect the tolls for 10 years and this could be renewed for another five years.
Many residents of the State have wondered why the bridge should be tolled when it was constructed with tax-payers' fund.
The State House of Assembly had also slammed the executive arm of government for going ahead to toll the bridge even though it was not a public private partnership deal. They also questioned the decision to award the contract to the tolling company when it did not contribute to the construction of the bridge.
In one of its sittings, the House summoned the State Attorney-General and Commissioner for Justice, Ade Ipaye, his counterpart in the Ministry of Works and Infrastructure, Femi Hamzat, and the Special Adviser to Governor Babatunde Fashola on Public Private Partnership, Ayo Gbeleyi, for clarification on why the State Government would announce tolling on the bridge.
They drilled the trio arguing further that the contract was awarded to the LTC without due process. The Leader of the House, Dr. Ajibayo Adeyeye, had told them that he was not comfortable with the clause that the tolling company would further share from an excess profit made from the tolling after getting 27 percent of the net toll revenue on use of the bridge and another 20 percent of revenue from activities around the bridge like advertisements.
It was further discovered that the percentage of the net revenue accruing to the company was for nothing other than to recoup the amount it spent on the tolling equipment and profit.
The House members learnt from the drilling of the cabinet members that the award of the contract did not follow due process as one of the Governor's aides said a selective bidding of only three companies was done without advertising it.
The House had stopped the tolling pending the conclusion of its debate on the issue, an action the executive arm rebuffed with the announcement and commencement of the tolling.
- 17 June 2013
The G8 is meeting in Northern Ireland on 17th June 2013 in an attempt to agree on what to do concerning the civil war in Syria. The world is watching with deep concern as the conflict widens and different countries are beginning to take sides. I urge the Russians, the Chinese and the Iranians to stand firmly against the reckless adventurism of the Americans, the British, the French, the Saudis and the Turks in Syria.
To arm the Syrian islamists and rebels, the majority of whom hate ethnic minorities, secularists, moderate muslims and christians and who kill those that do not share their narrow and primitive world view is utter madness. Bashir Al Assad will NEVER be removed by force and the secular state of Syria where ethnic minorities and those who share other faiths are protected will never fall. The British, the French, the Americans and their allies will not achieve their objectives in this conflict despite all their lies and disinformation about what Al Assad is supposed to have done and is supposed to be doing.
I do not believe for one minute that Al Assad has used chemical weapons against his own people- rather I believe that it is the rebels, armed by the western powers, the Turks and the Saudis, that are doing so to those that are supporting Al Assad. For once the world must not be fooled with lies and they must stand up against the traditional bullies of the world, those that believe in regime change and those that destabilise and destroy the nations of others for economic and pecuniary gain.
I do not blame Al Assad for the 90,000 people that have been killed in Syria since this conflict began but instead I blame the western powers, their allies and the Syrian rebels who are actually arming encouraging and funding Al Qaeda islamist fighters to lead the fight in the battle against Al Assad. How Barak Obama can stomach the stench of those that slit the throats of so-called ''unbelivers'' and commit these atrocities and actually fund and support them I don't know.
Yesterday it was Iraq and Libya. Today it is Syria. Tomorrow it will be Lebanon and Iran. After they have finished with the Middle East they will take the battle to the gates of Russia and China. And of course one day it will be the Sudan, Nigeria and Somalia. Their lust for power and determination to control the entire world is insatiable and it has no end. It is time for people to wake up and stop being taken in by their evil lies and disinformation which is being churned out on a daily basis by the international news networks which they control. It is time for the world to wake up and say "enough is enough". It is time for the truth to prevail.
Oh Lord Jesus return soon and save this world from the evil of those that seek to rule it and wipe out your counsel in the name of the devil. These people are the natural enemies of all believers whether they be christian, jewish or muslim. They do not believe in God. They believe in the power of the devil, the gods of the New Age, the usage of money, brute force, murder, disinformation, lies and deceit. They are the agents of the Illuminati who seek to establish a one world government and a new world order where no monotheic religion and no faith has any relevance and where the Living God is relegated to the background and is described as a powerless relic of history.
It is the duty of every believer, whether christian, muslim or jewish, to resist their evil and their desire to control and dominate the world and its resources. May God open the eyes of the people of the world to their evil and to their sheer callousness and greed. Satan works through them and he seeks to enslave us all by empowering and enthroning them. They have all the power, all the armies, all the money, all the media houses, all the international television networks, all the satellite and space-based spying systems and all the sophisticated telecommunication networks. They control virtually everything on the earth. Yet we have God, who never sleeps and who has never lost a battle.
In the end His counsel alone will stand, His will shall be done, His purpose shall be established and His name will be glorified. Even if they kill half the world's population in their evil quest, at the end of the day the righteous shall be vindicated and the truth shall prevail because God is with us. I weep when I see the innocents that are slaughtered on a daily basis in Syria. I cry when I see children being beheaded and blown apart and when I see the bodies of women being mutilated. I groan when I see deranged and callous men doing the will of America and destroying their own beautiful country and heritage for no just cause. I shudder when I see so-called rebels hacking their compatriots to pieces and eating their hearts and organs with joy.
Vladimir Putin's words to David Cameron during their joint press conference at 10 Downing Street after a meeting on 16th June are instructive. He said ''I think you will not deny that one does not really need to support the people who not only kill their enemies, but open up their bodies, eat their intestines, in front of the public and cameras. Is it them you want to supply with weapons?''. These are wise words indeed and a legitimate question. We should all take a little time out to ponder on them. Another interesting contribution came from the respected American war hero General Wesley Clark who was the Supreme Allied Commander of NATO forces in Europe during the Kosovo war. He said that America had drawn up plans to invade Iraq, Syria, Libya, Lebanon, Somalia, Sudan and Iran as far back as 2001 just a few days after the attack on the Twin Towers in New York on 9/11. It follows that what we are witnessing in Syria today is a script that was written many years ago and which is being effected with ruthless determination and clinical precision. No matter how long it takes and regardless of the cost in terms of loss of civilian lives and the shedding of innocent blood those that believe that it is their manifest duty and destiny to rule and dominate the entire world are determined to effect their sinister purpose and evil agenda and bring Syria down to her knees. This, surely, is not only a traversty of justice but it also a tragedy of monuemental proportions.
Yet the American-made Shakesperean tragedies of the Middle East just keep on unfolding. Let us go back a little. According to George Galloway, the utterly irrepressable, exceptionally intelligent and deeply courageous British Member of Parliament for Bradford, no less than one million Iraqi people, mainly women and children, died as a direct consequence of the economic sanctions and the ''oil for food'' programme that the west imposed on Iraq when Saddam Hussein was still in power. Yet it didn't stop there. When Iraq was eventually invaded and Baghdad was carpet-bombed by George W. Bush's and Tony Blair's ''coalition of the willing'' in 2003 no less than 150,000 Iraqi civilians, again mainly women and children, were slaughtered like flies within the space of just a few days. What a terrible price that had to be paid for the sheer mess that we have in Iraq today where the minority sunni muslims are waging an all out jihad against the majority shia. That is the kind of carnage, confusion and mayhem that America and her allies are spreading all over the Middle East and it appears that Syria is in the process of being consummed by it and of sparking off a major regional conflict which is drawing in many other countries. This beleagured nation has been turned into a blood-soaked arena and blood-filled theater for a proxy war which is bound to spread to the neighbouring Arab countries if care is not taken.
I stand with the Syrian people at this difficult time. I also stand with the legitimate government of their sovereign and independant state. I believe that no matter what the agents of satan say or do God shall defend their noble cause and He shall vindicate them and deliver them from the evil that stalks the world and that seeks to take control of their land.
Femi Fani Kayode
- 17 June 2013
The Economic and Financial Crimes Commission (EFCC) on Monday arraigned one Gift Onyegam before Justice M. Shuaibu of the Federal High Court, Enugu, Enugu State on a four-count charge of obtaining money under false pretence from a visually impaired woman.
The accused who hails from Etche Local Government Area of Rivers State, was working as security guard with Anti Risk Security Company in Port Harcourt, Rivers State when he and three others conspired to defraud Mary Rose Ihekanacho, a visually impaired teacher, of the sum of N830, 000 under the guise of securing a job for her son with an oil company.
One of the charges against the accused read: "that you Gift Onyegam, Sunday Promise (at large), Okon Ayebaye (at large), and Opurum Emeka (at large), sometimes in August 2012, in Enugu within the jurisdiction of the Federal High Court of Nigeria with intent to defraud obtained the sum of five hundred and forty one thousand naira from Rosemary Ihekanacho through a First Bank account number 3050676816 belonging to Okon Ayebaye Susan by false pretence that the said money is meant for securing a job for her son at Shell Petroleum Development Company, which pretence you knew to be false and you thereby committed an offence contrary to Section 1, (1) (a) of Advance Fee Fraud and Other Related Offences Act 2006 and punishable under section 1(3) of the same Act."
The accused pleaded not guilty to all charges when they were read to him.
The case has been adjourned to June 21, 2013 for ruling on the bail application, while the accused is remanded in prison custody.
- 17 June 2013
Thank you very much to the Honourable Minister of Information for that very rousing welcome and for hosting us for this event.
For my colleague, the Honourable Minister of Sports, I don’t think it’s coincidental that Sports and Finance are together today, because I’d always joked that if I was not the Minister of Finance, I’d love to be the Minister of Sports. So, I totally envy him in his job, especially now that we’re winning.
And to my colleagues, the Honourable Minister of State (Finance), the Perm Sec., and all the members of the audience here; I want to say that we’re going to handle our presentation in such a way that I will start up, pass to my minister of state and then he will pass back to me to round off. And I can’t start this without first acknowledging the support of the President to the Ministry of Finance. It’s not an easy ministry to run, as you all know. Nobody likes Finance because everybody likes to say they never have enough. So, we are grateful for the support. We are also very proud of our staff in the Ministry of Finance – the budget office, the Accountant-General’s office; and I want to thank them openly because, without their dedication and good work, we would not be able to accomplish what we have today. So, what I’m going to tell you, some of it you may have heard when Mr President presented his mid-term report and score card, but it bears repeating. And some will be additional expatiation on that; or new information.
I want to begin with what it is that the Ministry of Finance does. I want to remind people of our mission. Our mission is to manage the nation’s finances in an open, transparent, accountable and efficient manner that delivers on the country’s development priorities. There are four basic things we do in managing these finances and helping to manage the economy. The first is macroeconomic management. It’s the job of the Ministry of Finance, working with the Central Bank, to have a stable macro-economy. If there’s no stability, if things are moving, exchange rate is volatile, inflation is high – we have experienced it in this country before – what happens? You cannot even begin to think of development of the economy. So, that’s one of our jobs.
The other, of course, is managing the finances and mobilising finances for the real sector of the economy; meaning the other sectors that create jobs can grow. Then we also have the job of supporting enabling reforms that make this economy move. And finally, we have the job of supporting job creation indirectly and directly. So, we’re going to talk about what the Ministry of Finance does and has achieved in those four areas.
Let me start with something that we said during the mid-term report. The first is, on the macro-economy, I want to report that the economy is strong and stable. But of course, it faces challenge of inequality and inclusion; meaning that even though the economy is strong, we have problems with jobs and unemployment. We have problems with working to eradicate poverty. We need to move faster. We need to grow faster in order to tackle these problems. So, we are not saying that everything is solved, or that everything is great, but it’s strong; and that stability provides the platform on which we can use to solve the other problems.
What do I mean? We talked before that if you notice – everybody follows the exchange rate between the dollar and the naira – it has been relatively stable in these past two years at 155 to 160. At least, that is something you can evidence for yourself and attest to. It has been stable because we have also been able to accumulate reserves. People wonder why we are saving these reserves that are now almost $50 billion – we’re at $48 billion now. It’s very important because the reserves are what make the exchange rate stable. When the reserves are going down, that’s when you experience that instability and people can come and attack your currency. So, we have managed, working with the Central Bank – I also want to give them credit for good monetary policy - to be able to grow these reserves, stabilise, so that now, we have an exchange rate that can allow people to plan and allow people to do their work. As the Honourable Minister of Information said, inflation is coming down; from about 12.4% in May 2011, it has slowed to about 9.1% now and these all form the bedrock of this stability.
We have made savings. Part of our reserves is also the Excess Crude Account savings that we talk about. We have had about $4 billion in May 2011. We grew it to about 9 billion dollars equivalent at the end of 2012, and now we’re about $6 billion. Why are we down? Because the Excess Crude Account helps us to manage the economy and keep growing even when we experience shocks like when oil production comes down because of either oil theft, or leakages from pipelines and so on. You know, the money we have saved enables this country to keep going and we have enough to keep us going even in the face of shocks for another four to five months whilst we try to solve our problems. This is something that Nigeria did not have before and we are very proud of it. In the past, when we experience shocks, what did we do? We would have to go to the IMF or World Bank to go and look for money – the IMF in particular to shore up the economy, to shore up our balance of payments (that’s what economists call it). But now, even through all the ups and downs that we have experienced, have we gone there? No. Because Nigeria has now put itself - with the existence of this Excess Crude Account - in a position where in the event of any shock, we can go there to stabilise ourselves. That’s why Nigerians must support this account, the saving of this money; the Sovereign Wealth Fund. This country like a family must be able to put money aside so that if you experience shock, you don’t go around begging, you can stabilise yourself with your own savings. That’s what we manage to do.
The second thing I want to talk about is about GDP growth. This stability has enabled the economy to grow. Certain sectors are growing – I will come to that. Overall, this economy is growing and growth is projected at 6.75% by us; by the National Bureau of Statistics in 2013. Even the IMF has projected higher growth, but we’re being very cautious. Over there [referring to a slide], you will see how we compare with some other countries; with the whole of sub-Saharan Africa, they are growing at 5.6%, so we are much higher; even the emerging markets, we’re higher than them. And you can see Brazil, China, South Africa – South Africa at 2.8%, we at 6.75% et cetera – so we are doing well!
The GDP Illustration
Now, I want to spend one minute on something very important, because after we talk, people will say, “GDP growth, what is GDP growth? It’s not important; that’s not what we will eat.” But let me explain to you that without that growth, you cannot even begin to solve the problems of this economy. Let me illustrate to you. [She picks up a cake]. This cake symbolises our income, our GDP or your income within your household. GDP is nothing but the income of the country – the amount of cake you have to eat; you and your wife and children – the same with a country. So, let’s say this is the amount of cake we have to eat.
Now, these are four people sharing this cake – four people: a man, his wife and two children, or Nigeria with a population of let’s say 167 million people. So, this is the cake we have. You have this cake. Having this cake does not mean that every problem in your household is solved. Is it? It doesn’t mean that your income can now take care of all your relatives in the family who still have problems. It doesn’t mean that in your household, you don’t have problems of people not being employed, but you have this cake that you’re sharing. Now, what happens if we add three more people? Suppose, as a family, you marry another wife and you add one wife and three more children. How many are you now? (Answer: Seven). This is the cake. What will happen if this cake doesn’t grow? All of you will be suffering. Isn’t it? When you marry that wife and have more children, or even if you have four and you have another three or four; you will want your cake to grow. That is the same way we want GDP to grow – right? So, this is the first cake. What happens if the cake doesn’t grow is that all of you will start suffering. [She takes up another cake].
Supposing you now have a bigger cake; put all the people on top and you now have the seven people; would you not be better off? What if you have an even bigger cake? You see this biggest cake? You can put so many more people on top. [Speaking to assistants to collect illustrative materials: “give me all the people, give them to me, all of them will be there”]. And what will happen? That means you will have even more food. So, is it not false when people say that growing the cake does not matter? It matters; because if you have the same cake and your size is growing, what will happen is that you become even poorer and poorer; isn’t it? If it is not growing, you will suffer even more. Now, Nigeria has a cake - our GDP - and our population is growing at 2.5% per annum. If we don’t grow this, we will stay with the same cake and it will become worse and worse. So what we want to do is grow this cake as fast as possible, as large as we can, while solving the other problems. Note that I didn’t say growing the cake solves all the problems; but if we don’t grow the cake, we are going to suffer.
So, don’t listen to those who say, “What is GDP growth – it doesn’t matter.” It is not true; it matters tremendously. It’s with this growing cake that you can now call those people in your family or village who say you are not helping them. Isn’t it? If your cake is growing, you can call them; help them with their health problems, help them with food, help them with other things. But if you say cake does not matter, then you cannot help them at all. This is what GDP growth is about. I want Nigerians to understand this so that we don’t have this challenge of, “What is GDP?” In fact, we need to grow at almost 8 to 10 percent per year. In fact, Vision 2020 projects 13 percent in order to solve unemployment and other problems that we have. I’m sorry I spent some time on this, but it’s about time for the Nigerian population to stop being deceived by people who are not telling them the truth about what happens in the economy.
Now, let me quickly pass to other things. The first thing this country does, of course, is prepare the budget and everybody knows about it; to manage the finances and we have the DG Budget here. We’ve had problem with getting budget preparation done on time, and I want to say that for the first time, the 2013 Budget was prepared in record time and also passed by the National Assembly in record time on 20th December 2012, just before Christmas. Now, this should give us the year to implement; but of course, you know that we have some challenges with implementation and some things that we need to agree with the National Assembly in order to make the budget hold. For this year, we have been working on it but it has not stopped us from moving forward. We released first quarter capital – 400 billion; didn’t we? And work is going on. We released second quarter capital – 200 billion – so we will continue to implement to the best our ability, and it’s the job of Finance to make sure that we get that money in.
But the money that we get in also depends on what happens with the sectors of the economy. So, Finance does not print money. We don’t manufacture money. We only can disburse money that comes into our coffers; that the country genuinely earns from its oil and gas, from agriculture, from all the other aspects, the money it gets from taxes that it collects even on non-oil revenue and Customs taxes. So, once we get all those in, we disburse them. But if anything happens and we experience a shock, for example, this year, Customs is a little bit down in terms of collection because importation has come down, especially importation of rice; partly because we are growing our own, more of it as we said in the midterm report; but also because people stocked up last year in anticipation of what would happen. So, when we have these things happening, then the income reduces and Finance has to manage whatever comes in. So, I want people to know when they’re feeling very stressed out that there’s not enough money, Finance does not have money hidden somewhere in the safe; it is what it gets that it disburses.
Now, let me move quickly to one of the things we have delivered. Nigerians have complained that the cost of government is too high; we are spending too much on recurrent budget. What have we developed in Finance? With the support of the President and all of you, we’ve managed to take expenditures down from 74% recurrent of the total budget to 68% in 2013, and we’ll continue to take it down to the best of our ability. We have the envelope system. People don’t understand it but it enables us to engage other ministries and agencies in the management and setting of the budget. That allows them to put forward their priorities in a way that we can engage them in a conversation and to prioritise especially in terms of completing uncompleted projects of which we have about six thousand in this country and these are some of the systems that we’ve put in place to make that work. I talked a little while ago about the fact that imports are down. Whilst that means that some of our revenue are down, but we’re happy because we want to diversify this economy. Nigerians don’t want to keep importing. So, non-oil imports have decreased – things like textiles, plastic, rubber – things we’re making here; and those things have even increased in terms of exports. I’m sure that the Minister of Trade and Investment will say more about that. But I also want to mention our waiver and tariff policies to just let you know that Mr President has insisted on a policy of not doing individual waivers. So this ministry is doing sectoral waivers. When we give a waiver now, it is to encourage a whole sector not just to encourage an individual; and those kinds of policies; we’ve done them for aviation, for agriculture, for solid minerals. They can import spare parts and equipments at zero duty. And this is all designed to spur the rest of our economy.
Quickly, let me move on to talk about debt. On Friday, I think it was on the back page of This Day, I wrote an article about our debt because there are so many misconceptions about it. I want you to know that no one in government – neither Mr President nor the Ministry of Finance, the debt management office and the legislature – we don’t support that Nigeria becomes an indebted country again. So, what are we doing? The ministry is delivering a very prudent and strategic debt management approach to the country. I want you to look at some of the numbers. You know, we say that our national debt is low; and that is true because if you measure us against so many indicators you will see. If you look at that, you will see that domestic debt is really the issue. And if you look at the flow of domestic borrowing, you will see that it spiked in 2010 where we increase salary by 53% at once.
Now, I’m not against increase of salary, so don’t let anybody go from here and misquote me. But it has implications; and in order to cover it, domestic borrowing spiked. Bonds had to be floated. It’s not that good to borrow for things like recurrent expenditure and consumption. So, part of our new strategy is not to do that; to start lowering domestic borrowing. One of the things Mr President said to us is, we have to bring it down and we’re doing it. From N852 billion in 2011, we went down to N744 in 2012, and for 2013 budget, I think to N588 billion, and we’ll continue to bring it down. That’s part of the new strategy.
At the same time, we’re slowing down the growth of the debt stock. So, it’s not that the debt stock won’t grow, but it will grow much more slowly than before; and you can see it. The debt stock, total debt is now at about 7.5 trillion naira made up of 6.49 trillion domestic and about 1.0 trillion external and we will slow that down by trying to retire the bonds that are coming due instead of rolling them over at high interest rates. I’m very proud to say that in 2013 we retired 75 billion in bonds and that’s the first time we’ve done it in so many years. That is part of the overall strategy.
The last part is that we have also developed a sinking fund and every year we put in 25 billion in it so that we can continue to retire this debt and not grow it at a very fast pace. We will be borrowing, but it will be for very prudent things that really make a difference on the ground for Nigerians and it will be at a much slower pace. Now, quickly, the ministry has worked hard – Federal Inland Revenue Service, the Customs Service – to try and bring in more revenue into our coffers. And of course, they face challenges. We have to improve in terms of our tax collection and I want to tell you that we are launching a tax drive for non-oil revenue taxes to increase; and you will be seeing very soon, adverts from FIRS to push this on. The Customs is also modernising its operations with an objective to become a modern Customs system that can manage destination inspection and all the things that Customs does by the end of this year.
The objective is that we shouldn’t only look at the expenditure side all the time, we must also look at growing our revenues in the country; and this is what Finance has done.
I want to spend just one minute before handing over to my colleague on a few things that Finance is delivering to make public financial management more efficient and more transparent. We have to step away from the manual management of our finances whereby, for instance, for payments, we used to send money in bulk to ministries to pay their staff, to pay for their expenses. We have now put in place three electronic platforms that we are introducing and implementing at the moment. The Integrated Personnel and Payroll Management System is in place and it is allowing us to pay staff straight through biometric data means, we can check and pay them directly. Now, we haven’t done all MDAs; we’ve done about 215 and this exercise has helped us weed out about 45,000 ghost workers and save ourselves about 118 billion naira. That’s a lot of money.
Now, people say to me, where are these ghost workers and who is responsible? I just want to say here that we’ve looked and we’ve found that in almost every ministry, department and agency we had series of these ghost workers and it is identifying who to pinpoint, that’s what we’re looking at now. But it is very difficult because with people coming and going within ministries, it is not easy. The important thing we are facing is to get them out so we can save the money and put in place systems to make sure that this does not occur. That’s what Finance is doing.
We still have to complete the rest of the MDAs by the end of this year. We’ve also put in place a government integrated financial management system and, in the beginning, this has slowed down the transfer of resources to ministries. Bear with us, this will improve. But what this means is that transparently we can connect the MDAs, be able to see all our money and be able to pull it back. So, all those who may be contemplating this, I think you should revise your thinking because transparency is on the way.
Now, to stem leakages and improve our finances, we also worked very hard in the ministry to totally change the way we do business in terms of paying subsidies. We audited N1 trillion in subsidy payments under the presidential task force led by Aig Imokhuede, and we found N32 billion questionable. We have recovered N14 billion as we speak and we have tightened the payment process, so that there is more independent verification of how that is being done. The other thing the ministry has delivered is the cleaning up of the contributory pension scheme. This is something very painful to Nigerians that they would work and then people would steal the money that should be for their pension in their old age. This is not acceptable. So, to reform this, the President gave us permission to implement a section of the Pensions Reform Act which had hitherto been blocked; it had not been implemented, to bring all these pensions – the defined benefit systems - under one roof, under a pension transition administration department, and that will enable us to keep a hold on this fraud and to keep it at bay because these things will be managed under one roof transparently. The implementation of this is now underway.
The contributory pension scheme is fine, we have more than N3 trillion there, it’s working well and I want to reassure Nigerians of its good health. So, it’s only people who are still under the old scheme which we are reforming that are affected. We are implementing a more transparent system. Within the next six months, by God’s grace, we’ll have everything together with biometric systems in place so we can also pay our pensioners directly.
So, let me just say to you that all this, as was said by the Minister of Information, have been validated; all these things we’re doing, which amalgamate to underpin a stable economy have been validated outside. You don’t have to listen to me or Mr President or even the Minister of Information. Just check what the rating agencies are doing. Nigeria is one of the few countries being upgraded and rated as stable in an environment where other countries, including some close to us here in Africa, are being downgraded, and I think that Nigerians, even if you’re critical of government, you have to accept external evidence that we have a stable economy. The grading does not say that we’ve solved all the problems of our economy – no country ever does that – but it says that we’ve got the platform with which to do it.
Now, just before I hand over, I want to say one word on SURE-P, the subsidy reinvestment program. We promised Nigerians, at Ministry of Finance, that we will share with them the money that comes into this program transparently and what it is being used for transparently so that they will see because Nigerians were sceptical that this money will be put to good use. You can see on the screen. We have published every single month; we’ve kept faith with Nigerians. Every single month in the newspapers, we publish how much money comes in and you can see that; in 2012, N180 billion came in to Federal Government, the states got N154.6 billion, local governments, N76.4 billion. In January to May 2013, we have received N75 billion, state governments N64.4 billion, local governments N31.8 billion so far, and we have been publishing it.
And what has it been used for? We said, go and check for yourselves. We have used it for social safety nets for our women and children, to strengthen and improve immunisation for our children, to strengthen and improve safe delivery for our women. I know that no man here wants his wife to die; no woman wants to die in child birth. We have the names of every woman in every ward that has benefitted from this scheme. So, for those who say, “Ah, no one in my place has benefitted” you can verify it. We have it. If you want it, ask me. I will give it to you so you can check that people are really benefitting and they’re getting cash transfers.
When they come for pre-natal care, they get cash transfer of two thousand naira. When they come to have attended delivery, when the child is brought for immunisation; that is what we call conditional cash transfer program and, so far, in the present Saving One Million Lives program, more than 400,000 women’s lives and children’s lives have been saved through the money used by SURE-P.
In addition to that, we have been working on transportation and I know you heard from the Minister of Transport on roads and bridges built using this money; so I will not dwell on it. My intent was from the Finance point of view to just show you that we kept faith with Nigerians, we have been transparent, you can verify and we’ll be happy to give you all the information.
Let me now call on the Honourable Minister of State (Finance) to talk about the other things we have been doing in the financial sector.
Minister of State Takes Over
I am also not going to waste time. I am going to talk about what the ministry has been doing to actually ensure that we have reformed the financial sector. All the banks in Nigeria are fully capitalised. And we’re also happy today that the level of non-performing loan has come down to only 5%. Nigerian banks are the healthiest you can find in Africa and this has been shown. You remember 3–4 years back, most of the banks have reported losses, but today they are reporting profits that they never reported prior to 2008. And for those who have been following, the highest profit ever recorded in the history of Nigerian banking system was reported last year – N97.58 billion made by Guaranty Trust. You look at Zenith making 90 billion. Profitability has returned to the Nigerian financial system and people can now safely go and get finances.
The problem we have is the cost of borrowing. After now, interest rate is relatively high and we need to have lasting solution for it. That’s why we’re now restructuring and strengthening our development financing institutions so that they can give concessional loans to the critical sectors of the economy. To strengthen them again, the President set up a committee to look at how to solve the problem of development lending and we are going to establish a wholesale development finance institution that will be well capitalised which will lend wholesale money to the development institutions so that they can lend to the real sector. We are also inviting the private sector to come and invest in some of our development institutions. As you can see already, our infrastructural bank has some private sector and we are now trying to make sure that we get some private sector capital into that of agriculture.
Back to the capital market, last year, Mr President magnanimously approved forbearance to all our stockbrokers. Our stockbrokers are those who actually make the market perform and all of them have lost their capital. Most of the borrowing they did, they actually put in their money to borrow on the margin. They lost that investment. Yet, as far as the banks are concerned, they have to pay the nominal value of the debt while the real value of the shares that are underlying the debt are almost 20% of the loss they have taken. There is no way the capital market will actually progress with that kind of situation. Mr President magnanimously approved that forbearance and our stockbrokers are now healthy. They are now relieved of all these debts, they are now free to borrow more. And they’ve also regained confidence that yes, the Nigerian government can really support the stock broking companies, and you know that 60% of the money comes from international portfolio investors. Now, what we have done to our own domestic companies told them that we are really out to support our people. Therefore, they have more confidence in our market; money is now flowing.
From last year when we got the forbearance to date, the capitalisation of the market has increased by 70%. This has never been recorded anywhere. Everybody knows that in Nigerian insurance, you only do it under compulsion because people don’t have any confidence in the insurance sector. We know that this is a big problem and we went ahead to strengthen the regulatory authorities in order to bring sanity to the insurance sector. One thing we did in insurance, people just hook policies, report their own premium and declare profits where cash is not collected. So we came with No Premium, No Cover policy. At first, most of the brokers were not happy because the broker wants to make his money whether the man pays his premium or not. But today we say No, if you take insurance cover, nobody should recognise income unless cash is paid. So now, insurance is done on cash basis. Last year, we had a backlog of unpaid insurance of N55 billion; today, it is zero. All insurance are cash covered and that gives confidence to the policy holders.
When we came in, we had only 700 thousand. Now we have about 1.5 million policy holders and more equity is coming from abroad. We now have a lot of FDIs. About 10 companies have come into Nigeria and Nigerian companies can now even give insurance cover to oil and gas sector. There is 48% local retention of all the policies issued in that sector and this has actually improved our insurance industry and it will enable the industry to raise a lot of resources because in some countries, insurance companies have more money than banks. They even fund banks. We are encouraging our own so that they grow and we mobilise enough resources for investment in the real sector.
Another function we do is to ensure that all federally collected revenues are distributed to the three tiers of government according to the revenue sharing formula. In the past, FAC actually made it acrimonious; a lot of issues were there. We actually ensured that all outstanding issues that we met have been cleared. Today, when we come to FAC, we have turned it into committee where problems are solved, to committees where we educate ourselves, where we encourage others to copy the good practices of other states. We do peer comparison and we also ensure that we adopt the best practices and that’s why we’re just introducing the IPSAS – the International Public Sector Accounting Standards which all the states, parastatals and Federal Government are going to adopt so that our accounts are transparent and comparable to others. We have already ensured that we always hold FAC on time because holding FAC on time has a very serious implication on payment of salaries. And you know in Nigeria, unless salary is paid on time, workers are not happy. And you can agree with me that today, our workers are happy because we ensure that at least, Federal Government workers get their salary before 20th of every month and now with the electronic payment system, it is now – at least some get about 18th or 19th of the month and this has brought relative industrial harmony to Nigeria.
We also have a skill in the Federal Ministry of Finance for encouraging export of non-oil products. Before, few people know about the Export Expansion Grant. What we do, is in order to diversify the economy away from oil, all non-oil exporters get a grant based on the export proceed that they expatriated back. So, if you now produce anything non-oil and export, when you bring the money back we calculate based on certain parameters and you can get as much as 20% of the value of your export being given to you free by the government. Why are we doing that? It is because the cost of production in Nigeria is higher than the cost of production internationally. So, we have to make up for the cost of production to make our own manufacturers competitive. We have been doing that, yet we have some glut. We have the glut because growth in export has been growing very fast and we have to revise the system. We have parameters we have actually looked at and we realise that export growth is no more our problem in Nigeria because the target we set for our exporters; 71% of all exporters are growing higher than 10% every year. So, that has been solved. Re-investment of export growth; also 68.9% of our exporters are re-investing the money they get from the bank to develop their own companies. So, that is not also our problem.
Today in order to get the EEG (export expansion grant), you have to do well in the area of employment and you have to do well in the area of value addition. We are now reducing the weight for export and retention because we have already succeeded there. I think I will call on the CME to continue.
OK. Let me round off very quickly for Finance, because Minister of Information is telling me we need our own day. Let me just mention a couple of other areas quickly. The ministry supports; we are of finance but we’re also about making sure that the real sectors of the economy work. So in addition to the budget which we manage, we also have the task of mobilising resources for the sectors of the economy and I’m not going to go through all that I wrote; they can quickly roll it through the screen.
I’m very proud to announce that we have been very active to mobilise - sometimes zero interest - very low interest concessional financing for our sectors; money that is zero interest, 40 years to repay, 10 years of grace – the type that you cannot find easily anywhere. So we have been very careful to do that and 12 billion dollars worth, almost every sector. Agriculture – from China Exim Bank, from the World Bank, we have mobilised money. Environment: 450 million from the World Bank for environmental issues; transport. You know, we’re doing even guarantees so that we can have some of our infrastructure developed; for example, a letter of comfort to develop the Lekki deep sea port. So when you see all these things being developed, you know that Finance has done some work to make resources available or guarantees that make it work. Second Niger bridge – we’re now working on a private-public partnership arrangement where we’re going to co-invest with some investors that have been identified from outside with PPP to make sure that this bridge gets built. As we speak, they’re already on site trying to do some of the initial groundwork. We work with the World Bank, the African Development Bank, the Islamic Development bank and other banks to try to make this happen.
So, you can see, in health, in power, we are going to go to the market very soon to raise a Eurobond of about a billion dollars for the power sector. We know that power is what we need in this country; that’s what we have focused on. So, all that money will make gas available to fire the power and the emergency gas plan of the Minister of Petroleum Resources has already been yielding results in terms of making gas available to make our power situation better. But we want to support them to improve even more. So, we raise resources for that.
And the education sector – we’ve also raised money for states that have challenges: Bauchi, Ekiti, Anambra – so many of the states to benefit from that. In ICT we’ve raised resources. And aviation, housing – I can just say almost every sector of the economy – I’m proud to say we’ve done that. The Nexim Bank has also used resources to support trade for our economy; export-import bank which is under the Ministry of Finance. Let me just mention one interesting thing. We have supported the empowerment of women in the ministry through devoting some resources – 3 billion naira – to specific programs in five pilot ministries like Agriculture, Health, Water Resources, ICT and so on that focus on works, focus on delivering for women. For example, the Ministry of Works said that they will make more women contractors, sub-contractors. They will increase the number that will get contracts and jobs because women are not favoured and we have said that when they do it, we will support them with additional disbursement from this N3 billion. So we are encouraging support for women within this budget and that is something that the President really supports. So, these are some of the things we are doing.
Finally, we are supporting job creation. We are managing some job creation programmes apart from what we are doing for the real sectors of the economy, mobilising money for them in addition to the budget to create jobs like the 3.5 million jobs targeted by Agriculture in 2015. It’s the resources we help mobilise that will help them deliver that. But we are also managing some direct job creation being undertaken and implemented by government. Just a couple of examples which you know – we have the program that was mentioned by the Honourable Minister of Information, the YouWIN program of Mr President – this is his program – and I’m happy to tell you this is one of the most popular programs in Nigeria. From the first round we did, we have already created 14,000 jobs all over all parts of the federation. This is just the first survey. The second survey, maybe another 14,000 – that’s almost 30,000. The second round we just launched for women only and the third round we’re going to launch for men and women, the target of 80,000 to 110,000 jobs is easily reachable.
This program is surpassing our expectations in terms of job creation and we’re very proud of our young entrepreneurs who are doing this. We are also managing the Graduate Internship Program. Our objective there is to place 50,000 graduate interns with private sector. Over 1,000 private sector firms have applied. We have placed so far 1,309 graduates and we’re working very hard to speed up to place all the 50,000 who have been processed as qualified to participate in this scheme. And of course, we were previously supporting the community services program designed to create 370,000 jobs a year. We’ve moved that to the ministry of labour now, but I want to tell you that 178,000 jobs have already been created. And people who have seen these people working in the field, building ditches, doing drains, maintaining buildings have reported that they’re there and the jobs are real. So, these are some of the things that we have tried to do within the ministry to support the job creation agenda. I could go on and on.
We actually need more time but let me just stop here and say that Ministry of Finance is a multi-faceted ministry that is delivering day by day on the budget, on the additional finances for the sectors of the country, on managing direct job creation programs and on supporting the sectors – I haven’t even told you the things we do to support power through the bulk trader, to manage the debts of NEMCO, to push the various sectors along. We are doing so much more than we have time to share today and we are achieving results.
Thank you very much.
A TRANSCRIPT OF THE SPEECH OF DR. MRS. NGOZI OKONJO-IWEALA, HONOURABLE MINISTER OF FINANCE AND COORDINATING MINISTER OF THE ECONOMY, NIGERIA, AT THE MINISTERIAL PLATFORM HELD AT RADIO HOUSE, ABUJA ON MONDAY, JUNE 11, 2013