Senate yesterday urged the Federal Government to quickly put in place, measures to raise capital from the sale of national assets and other sources to shore up foreign reserves as a means of addressing the current recession.
The lawmakers were of the opinion that the action should include part sale of Nigerian Liquefied Natural Gas, NLNG, Holdings, reduction of government shares in upstream oil joint venture operations, sale of government stakes in some financial institutions like Africa Finance 1Corporation, AFC, as well as privatisation and concession of major/regional airports and refineries.
These measures, according to the lawmakers, will go a long way to calm investors, discourage currency speculation and stabilise the economy.
But Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, disagreed with the position of the Senate, warning that NLNG and other federation assets should not be sold to meet the country’s financial obligations.
The recommendations were contained in the welcome speech delivered by Senate President, Bukola Saraki, as the lawmakers reconvened after their two-month long vacation.
Saraki also used the opportunity of his welcome speech to seek closer partnership and cooperation between the executive and the legislature, even as he urged that the current economic difficulties facing the country should not be politicised.
Saraki said: “The Executive must raise capital from asset sales and other sources to shore up foreign reserves.
“This will calm investors, discourage currency speculation and stabilise the economy.
“The measures should include part sale of NLNG Holdings; reduction of government share in upstream oil joint venture operations; sale of government stake in financial institutions e.g. Africa Finance Corporation; and the privatisation and concession of major/regional airports and refineries.
“I must at the point like to re-emphasise the fact that we need togetherness to tackle this problem and it will be naïve to consider the problem we face today as the problem of the administration alone, or that those who brought us to this situation should see us out.
“That would be doing a disservice to our people who elected us to help them out when they are in need.
“This problem is our collective problem. It does not matter if we are APC, PDP, or whatever affiliation we may have politically or socially.
“As leaders, we must respond positively to the challenge and thinking out of the box. Hence, we cannot allow our personal interest or comfort to becloud our perception.”
The 14-point recommendations contained in the speech by Saraki is expected to form the basis of an elaborate debate that would kick off today by other senators on how to address the current economic challenges.
Other recommendations include the proposal that the executive must immediately put in place leadership-level engagement platform with the private sector, consider tweaking the pension funds policy within international best practice safeguards to accommodate investment in infrastructure and mortgages, the Federal Government and the Central Bank of Nigeria, CBN, must agree on a policy of monetary easing to stimulate the economy and harmonise monetary and fiscal policy until economic recovery is attained.
The Federal Government, Saraki continued, should re-tool its export promotion policy scheme with incentives such as the resumption of the Export Expansion Grant, EEG, and introduce export-financing initiatives, engage in meaningful dialogue with those aggrieved in the Niger Delta and avoid an escalation of the conflict in the region.
Government, he added, should also consider immediate release of funds to ensure the implementation of the budget for the near short term to inject money into the economy, while the agricultural sector and the agro-allied businesses should be directly supported to boost value addition and job creation.
He also called on lawmakers to play their own parts in the area of legislation to ensure that relevant laws were passed.
“We must ensure the passage of the Petroleum Industry Bill as soon as possible to stimulate new investment and boost oil revenue.
“As we all know, this bill is long in waiting and is very crucial for vital investment in the oil and gas sector.
“We will immediately begin the process of accelerating bills aimed at reforming the sub-sector for growth and accessibility. We must also explore the possibility of backing certain key government policies with legislation,” he said.
But, RMAFC, in a statement signed by its Acting Chairman, Alhaji Shettima Abba-Gana, in Abuja yesterday said it would be unwise for the Federal Government to dispose of its crown jewels which were generating revenues and keeping the Federation Account healthy over a long term.
He cited the NEITI 2013 Audit and Financial Report of Nigeria’s oil and gas industry, adding that $12.9bn was received by the NNPC from NLNG over an eight-year period.
He added that the NNPC, however, did not remit the amount to the Federation Account, saying that the audit showed that NLNG paid $1.2bn as dividends for 2013.
“It is the considered view of the commission that Nigeria’s assets like NLNG and other strategic national resources should not be sold to meet short-term financial obligation,” Abba-Gana said.
He said that the amount needed from the sale of the assets could be borrowed from the International Monetary Fund, IMF.
He added that revenue from the assets could be used to amortise the loans over an agreed period.
He further said that after the amortisation of the loans, the assets would still be owned by the federation in addition to their regular dividends and revenue.
Abba-Gana, therefore, advised that instead of selling off such vital assets, wealthy Nigerians should be encouraged to set up their own LNG projects.
In a related development, Ministry of Budget and National Planning said it had designed a fiscal stimulus strategy that would help the country to come out of the recession.
This was contained in a document entitled “Turning a Crisis into an Opportunity: the Economy and the 2017 Budget,” released in Abuja yesterday.
The document was presented by the Minister of Budget, Sen. Udoma Udo Udoma, at the recent ministerial retreat, to harvest ideas to come out of the economic crisis.
Udoma said that the Economic Management Team had been working on a plan to generate an immediate large injection of funds into the economy.
He said the team had plans to generate and inject large amount of funds, principally in foreign currency, estimated at $10bn to $15bn into the economy.
The minister said that funds would be generated through Asset Sales, Advance Payment for Licence renewals, infrastructure concessioning, use of recovered funds etc, to bridge the funding gap.
“To achieve this speedily, we will need to fast-track procedures through Presidential directives and legislation; a bill is almost ready for submission to National Assembly,” he said.
The minister, however, emphasised the need for the country to spend its way out of recession through injection of large amount of money into the economy.
“The 2016 budget performance is reflective of the low revenue out-turns attributable to the global and domestic developments earlier highlighted.
“Oil revenues fell significantly in the second quarter compared to the first quarter as a result of increased oil pipeline vandalism and production shut-ins.
“Non-oil revenues also declined due to the acute shortage of foreign exchange,” Udoma said.
The minister said the failure to diversify the economy and implement the national goals due to lack of discipline in the past had made the country witness negative growth.
He said that the government had put measures in place to diversify the economy. Meanwhile, a delegation of the Nigeria Governors’ Forum, NGF, yesterday met with Vice President Yemi Osinbajo behind closed-door to discuss plans to quickly get out of the present recession.
The delegation, which included Akwa Ibom State Governor, Udom Emmanuel, his Bauchi State counterpart, Mohammed Abubakar and NGF Director General, Asishana Okauru, was mandated to meet with Osinbajo on the economic situation, particularly in the states.
At the meeting of NGF last Friday, the governors urged the Federal Government to take urgent steps to lift the country out of recession.
Emerging from yesterday’s meeting with the Vice President, Emmanuel told State House Correspondents that everything would be done to tackle the current economic challenges irrespective of party affiliation and in the best interest of Nigerians.
“I think we will always come here because we were mandated by the Governors Forum to come and discuss some certain issues with the Vice President,” Emmanuel said.
He assured that everything would be done to keep Nigeria together and find solution to the problems confronting the nation.
According to him, issues discussed at the meeting were for the interest of Nigerians and to solve challenges as a developing nation.
“Let me assure Nigerians that there is no developing country that doesn’t go through what we go through and how do we make effort to face the challenges, that’s why you see us putting heads together, trying to appraise and try to find a solution that will be enduring,” he said.
The lawmakers were of the opinion that the action should include part sale of Nigerian Liquefied Natural Gas, NLNG, Holdings, reduction of government shares in upstream oil joint venture operations, sale of government stakes in some financial institutions like Africa Finance 1Corporation, AFC, as well as privatisation and concession of major/regional airports and refineries.
These measures, according to the lawmakers, will go a long way to calm investors, discourage currency speculation and stabilise the economy.
But Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, disagreed with the position of the Senate, warning that NLNG and other federation assets should not be sold to meet the country’s financial obligations.
The recommendations were contained in the welcome speech delivered by Senate President, Bukola Saraki, as the lawmakers reconvened after their two-month long vacation.
Saraki also used the opportunity of his welcome speech to seek closer partnership and cooperation between the executive and the legislature, even as he urged that the current economic difficulties facing the country should not be politicised.
Saraki said: “The Executive must raise capital from asset sales and other sources to shore up foreign reserves.
“This will calm investors, discourage currency speculation and stabilise the economy.
“The measures should include part sale of NLNG Holdings; reduction of government share in upstream oil joint venture operations; sale of government stake in financial institutions e.g. Africa Finance Corporation; and the privatisation and concession of major/regional airports and refineries.
“I must at the point like to re-emphasise the fact that we need togetherness to tackle this problem and it will be naïve to consider the problem we face today as the problem of the administration alone, or that those who brought us to this situation should see us out.
“That would be doing a disservice to our people who elected us to help them out when they are in need.
“This problem is our collective problem. It does not matter if we are APC, PDP, or whatever affiliation we may have politically or socially.
“As leaders, we must respond positively to the challenge and thinking out of the box. Hence, we cannot allow our personal interest or comfort to becloud our perception.”
The 14-point recommendations contained in the speech by Saraki is expected to form the basis of an elaborate debate that would kick off today by other senators on how to address the current economic challenges.
Other recommendations include the proposal that the executive must immediately put in place leadership-level engagement platform with the private sector, consider tweaking the pension funds policy within international best practice safeguards to accommodate investment in infrastructure and mortgages, the Federal Government and the Central Bank of Nigeria, CBN, must agree on a policy of monetary easing to stimulate the economy and harmonise monetary and fiscal policy until economic recovery is attained.
The Federal Government, Saraki continued, should re-tool its export promotion policy scheme with incentives such as the resumption of the Export Expansion Grant, EEG, and introduce export-financing initiatives, engage in meaningful dialogue with those aggrieved in the Niger Delta and avoid an escalation of the conflict in the region.
Government, he added, should also consider immediate release of funds to ensure the implementation of the budget for the near short term to inject money into the economy, while the agricultural sector and the agro-allied businesses should be directly supported to boost value addition and job creation.
He also called on lawmakers to play their own parts in the area of legislation to ensure that relevant laws were passed.
“We must ensure the passage of the Petroleum Industry Bill as soon as possible to stimulate new investment and boost oil revenue.
“As we all know, this bill is long in waiting and is very crucial for vital investment in the oil and gas sector.
“We will immediately begin the process of accelerating bills aimed at reforming the sub-sector for growth and accessibility. We must also explore the possibility of backing certain key government policies with legislation,” he said.
But, RMAFC, in a statement signed by its Acting Chairman, Alhaji Shettima Abba-Gana, in Abuja yesterday said it would be unwise for the Federal Government to dispose of its crown jewels which were generating revenues and keeping the Federation Account healthy over a long term.
He cited the NEITI 2013 Audit and Financial Report of Nigeria’s oil and gas industry, adding that $12.9bn was received by the NNPC from NLNG over an eight-year period.
He added that the NNPC, however, did not remit the amount to the Federation Account, saying that the audit showed that NLNG paid $1.2bn as dividends for 2013.
“It is the considered view of the commission that Nigeria’s assets like NLNG and other strategic national resources should not be sold to meet short-term financial obligation,” Abba-Gana said.
He said that the amount needed from the sale of the assets could be borrowed from the International Monetary Fund, IMF.
He added that revenue from the assets could be used to amortise the loans over an agreed period.
He further said that after the amortisation of the loans, the assets would still be owned by the federation in addition to their regular dividends and revenue.
Abba-Gana, therefore, advised that instead of selling off such vital assets, wealthy Nigerians should be encouraged to set up their own LNG projects.
In a related development, Ministry of Budget and National Planning said it had designed a fiscal stimulus strategy that would help the country to come out of the recession.
This was contained in a document entitled “Turning a Crisis into an Opportunity: the Economy and the 2017 Budget,” released in Abuja yesterday.
The document was presented by the Minister of Budget, Sen. Udoma Udo Udoma, at the recent ministerial retreat, to harvest ideas to come out of the economic crisis.
Udoma said that the Economic Management Team had been working on a plan to generate an immediate large injection of funds into the economy.
He said the team had plans to generate and inject large amount of funds, principally in foreign currency, estimated at $10bn to $15bn into the economy.
The minister said that funds would be generated through Asset Sales, Advance Payment for Licence renewals, infrastructure concessioning, use of recovered funds etc, to bridge the funding gap.
“To achieve this speedily, we will need to fast-track procedures through Presidential directives and legislation; a bill is almost ready for submission to National Assembly,” he said.
The minister, however, emphasised the need for the country to spend its way out of recession through injection of large amount of money into the economy.
“The 2016 budget performance is reflective of the low revenue out-turns attributable to the global and domestic developments earlier highlighted.
“Oil revenues fell significantly in the second quarter compared to the first quarter as a result of increased oil pipeline vandalism and production shut-ins.
“Non-oil revenues also declined due to the acute shortage of foreign exchange,” Udoma said.
The minister said the failure to diversify the economy and implement the national goals due to lack of discipline in the past had made the country witness negative growth.
He said that the government had put measures in place to diversify the economy. Meanwhile, a delegation of the Nigeria Governors’ Forum, NGF, yesterday met with Vice President Yemi Osinbajo behind closed-door to discuss plans to quickly get out of the present recession.
The delegation, which included Akwa Ibom State Governor, Udom Emmanuel, his Bauchi State counterpart, Mohammed Abubakar and NGF Director General, Asishana Okauru, was mandated to meet with Osinbajo on the economic situation, particularly in the states.
At the meeting of NGF last Friday, the governors urged the Federal Government to take urgent steps to lift the country out of recession.
Emerging from yesterday’s meeting with the Vice President, Emmanuel told State House Correspondents that everything would be done to tackle the current economic challenges irrespective of party affiliation and in the best interest of Nigerians.
“I think we will always come here because we were mandated by the Governors Forum to come and discuss some certain issues with the Vice President,” Emmanuel said.
He assured that everything would be done to keep Nigeria together and find solution to the problems confronting the nation.
According to him, issues discussed at the meeting were for the interest of Nigerians and to solve challenges as a developing nation.
“Let me assure Nigerians that there is no developing country that doesn’t go through what we go through and how do we make effort to face the challenges, that’s why you see us putting heads together, trying to appraise and try to find a solution that will be enduring,” he said.
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