Tag: bailout

  • What manner of bailout?

    Almost all the states of the federation have been boiling for some months over the inability of governors to meet the most basic of their responsibilities- payment of wages of their workers. For as many as eight and nine months, some workers have been going hungry with their families. It is, indeed, a shame. And. last week, the governors, in their cleavages, met to decide on the way forward. Unanimously, they resolved to approach the federal government to bail them out of a situation that has depicted them as unfeeling and incompetent.

    The truth be told, the governors cannot be exonerated from the mess. Managers are expected to think of the day adverse situations may arise, paint scenarios and plan ahead. In Nigeria, governors in particular, are mostly interested in the grandeur of office. Not many would adopt the Peter Obi style- frugal and Spartan. Not many spared thoughts for the future in case the storm arose. Their planlessness has now caught up with them and they are seeking the help of the Big Brother at the centre to bail them out by covering their nakedness.

    How did we arrive at the pass? First, we need to look at the recruitment procedure for leaders. Anyone who indicates interest in any exalted office, is expected to have access to tones of cash and thus procure the support of the powers-that-be in the political parties as well as critical institutions of state. They are consequently handsomely rewarded. In office, they seek to pluck all the ripe fruits at once. Friends and cronies are brought together and offered “juicy” appointments and contracts. Competence, cognate experience, moral fibre count for nothing. This is the time for the voters to rethink their roles in the electoral process. The civil society groups, the few that have not been bitten by the same bug that is, should partner the people in this.

    As was the case at the centre, the governors were profligate. They frittered the resources as if the day of reckoning would never come. It is here now. But we need to chase away the fox before we could rebuke the fowl. The evil day represented by hunger and hard days that have descended on the workers must be upturned first before we consider medium and long-term measures.

    Do the states deserve bailout by the central government? I do not think so. Any self respecting person would not easily pick up the begging bowl at the arrival of adversity. As some of them have suggested, the more dignifying first step is to ask the federal government to refund money expended on federal projects in the states with the approval of the appropriate authorities. The quality and cost being verified, payment should be made forthwith. A second step is to have a quick audit of what was due the states and what was remitted from the Federation Account; what the NNPC, in particular, ought to have remitted into the federal coffers and what it did. The shortfall should be immediately raked in and disbursed.

    Third, the governors, both those returned and those who have just mounted the saddle. should put on the thinking cap. Unsustainable emoluments for political officers should be drastically reduced. Perhaps, this would help in curbing the appetite of those seeking public office at all cost. Frivolous travels by executive and legislative officials should be banned for this emergency period, while jets and other such gadgets should be put out for sale. No state needs it to survive.

    When these are done within the next four weeks and substantial progress is not made with payment of salaries, the big bother wo had cornered a disproportionate portion of the national wealth could then be approached for the bailout.

    In the medium and long term, there must be a campaign within the next six months for a review of the structure of the federation. The powers ceded to the federal government is too huge and, consequently, the allocation is unacceptable. It makes no sense that a tier of government corners 52 per cent of the federally collected revenue, while the 36 states ahare a meager 26 per cent. This must change. The Revenue Mobilisation, Allocation and Fiscal Commission should set at work immediately. A formula that grants the states less than 50 per cent of accruals into the Federation Account would be unjust.

    The civil society groups, too, should be more active in leading the assessment of the candidates during electioneering. Those of us in the media owe a duty to the society to probe the antecedents and explore the suitability of the candidates, discuss application of the democratic principle in the political parties and rescue our ainking states.

    It is surprising that anyone could be suggesting now that new states be created. This is a capital political offence. Many of the states are in dire straits because they were ab initio unviable. Unfortunately, it is impolitic to suggest mergers now.

    This is a time for all to put on the thinking cap. President Buhari must lead the way.

  • Governors seek bailout for states

    Governors seek bailout for states

    All Progressives Congress (APC) governors last night made a strong case for a bailout for cash-strapped states to enable them pay outstanding workers salaries.

    No fewer than 16 governors met at the Imo State Liaison Office in Abuja for over five hours under the auspices of the Progressives Governors’ Forum.

    Imo State Governor Rochas Okorocha is the chair of the Forum.

    The governors in May requested then President-elect Muhammadu Buhari to consider some financial assistance to the states because of their  dwindling allocations caused by falling oil prices.

    Okorocha told reporters last night that the governors were worried about the state of the economy.

    He said: “We the governors of the progressive party met today to review the state of the economy. We also met to review the issues as they affect our great party.

    “We are concerned and worried by the dwindling revenue of the states which today has affected negatively the lives of our people.

    “It has become so serious and urgent actions must be taken for a bail out for the states.

    “Things are not getting better; we sat down to review what steps could be taken. We are calling for overhaul of the system to block all the leakages in our economy.

    “We have realised that what we are going through today is as a result of the poor management of our economy in the recent time.

    “The APC government met a near empty treasury. This has become very worrisome, not ?just for us, but for the entire nation.

    “We have some natural challenges in the country because of the drop in oil price and the issue of oil theft.

    “There are other issues like the crude swap. We have the gas revenues which have never reflected before. We have the mismanagement of oil subsidy. A few years ago, we paid about N200 million. Today, it is about N1.4 trillion. We are worried”.

    He said further the forum decided to intervene in the crisis starring the party in the face as a result of the election of the leadership of the National Assembly.

    He said: “We also have congratulated the leadership of the National Assembly. That is the leaders of the ?National Assembly. We are aware that the process attracted a lot of disagreements here and there. We, the governors of the party have resolved to embark on a peace process to make sure that we return as members of one family we have always been.

    “We have also discussed how to strengthen our party.

    “This is the party that brought change and that change must stand. We will make the party meet the desires of our great members.

    “We are assuring Nigerians that we will remain focused and address some of the issues”.

    Some of the governors at the meeting apart from Okorocha are: Akinwunmi Ambode (Lagos) Tanko Al Makura (Nasarawa), Rauf Aregbesola (Osun), Aminu Bello Masari (Katsina),  Abdullahi Umar Ganduje ( Kano), and Abiola Ajimobi (Oyo).

  • APC governors’ request for bailout

    SIR: We are in no further need of politicians; we need some statesmen now-Paul Harris.

    Nigeria at this particular time is crying for a statesman who is faithful, a friend to truth and a real promoter of public agenda and we are hoping that this expectation shall receive attention when Buhari finally assumes office.

    The President- elect, Gen Muhammadu Buhari is yet to take over the mantle of leadership; the game has not started yet but some elected officials are already twisting strategies to achieve their hidden agenda.

    The visit of the governors-elect under APC to the President-elect is a positive development but the idea behind the visit has left Nigerians bewildered.  Governor Rochas Okorocha, the Progressive Governors Forum chairman  is reported as requesting the President-elect to “do everything possible to bring about a bailout, not only for the states, but for the Federal Government, at least for the people/ public servant to get their salaries”.

    For God’s sake, it is too early and such shouldn’t be mentioned now.

    Why should Buhari bail the governors out in the first place? It seems a case of the children eating sour grapes while the father’s teeth are set on edge.

    Buhari to my knowledge has not been elected to bear the burden or bail out states that squandered their allocations and revenue on corruption and frivolities; the massive votes he got are not to bail out governors who could not manage their resources.

    I am aware that most states have blatantly refused to conduct local government elections, yet they get allocations meant for their local government, so where does the fund go? States also generate internal revenue aside what is coming from the federal government, how are these spent and for what purpose?

    If Buhari has any thing to bail out, it must be the insecurity, unemployment and shrinking industrial capacity; let him bail out the administration at the federal level where corruption has been handed down and economy comatose; the jumbo pay to the National Assembly members that continues to take a chunk of the national budget; the debt profile said to be N12 trillion and the persistent oil fall that is also affecting the value of naira. All these are serious economic challenges that need urgent bail out from Buhari.

    . Nigerians are yeaning for a true statesman; a leader that could take us to the Promised Land where wailing and gnashing of teeth being experienced as a result of mis-governance at the moment would become a thing of the past.

     

    • Sunday Alifia

    Ibadan, Oyo State

     

  • Euro zone considers three bailout exit options for Greece

    Euro zone finance ministers will consider three options for what happens after Greece exits its bailout at the end of the year, seeking to balance the need to reassure investors with the demands of domestic Greek politics.

    The Greek government has staked its survival on exiting the bailout a year earlier, a move that will please voters hammered by austerity measures imposed by the EU and the IMF, but which has already rattled markets, pushing up Greek bond yields.

    Finance Minister Gikas Hardouvelis told Reuters he hoped for an interim period of up to a year after exiting the bailout during which Greece will still be get a financial safety net but would no longer be “micro-managed” by lenders.

    After two international bailouts totalling 240 billion euros since 2010, when private investors refused to lend to Athens any more, Greece wants to switch back to market financing from the start of next year.

    Markets reacted nervously to the plan, worried that Athens would have no longer have any financial back-up. Greek benchmark 10-year bond yields rose to 8.9 percent in late October from 5.6 percent in early September.

    Greece and euro zone finance ministers will therefore discuss  ways to provide Athens with fall-back financing to boost investor confidence, while addressing domestic political sensitivities.

    All three options to be discussed include a financial cushion, using 11 billion euros already granted to recapitalise Greek banks, but which turned out not to be needed, euro zone officials said.

    In the first option, the recapitalisation money, now in European Financial Stability Facility bonds, would be returned to the EFSF and Greece would instead apply for and get an Enhanced Conditions Credit Line (ECCL) from the European Stability Mechanism — the successor of the EFSF.

    This would allow Greece to say it is not longer under a programme, make it possible for euro zone ministers to increase the size of the credit line above the 11 billion if necessary and set clear conditions for the availability of the money, even if it is not drawn upon.

    But obtaining an ECCL would mean Greece has to sign a new “memorandum of understanding”, politically sensitive in Greece where the previous MOU detailed austerity reforms demanded by lenders, resented by Greeks as a loss of sovereignty by Athens.

    This option is also relatively lengthy — it would take a minimum of five weeks to complete — and tougher on conditions because the ECCL could be cancelled if Greece fails to meet reform targets and Athens would then have to apply for new, fully-fledged bailout.

  • IMF team to hold talks on bailout

    IMF team to hold talks on bailout

    Discussions on an economic programme that will be supported by the International Monetary Fund (IMF) to bail the country out of its economic challenges are to be held.

    A team from the IMF is expected to meet the government at the Peduase Lodge, where discussions are expected to open on the bailout negotiations.

    A source at the Presidency said the government was ready to negotiate with the IMF officials and expressed optimism about the outcome, although it declined to proffer details.

    The Deputy Managing Director of the IMF, Min Zhu, had earlier, in a statement, announced that the fund had received a formal request from the country to initiate discussions on an IMF support programme for Ghana.

    It said: “The fund stands ready to help address the economic challenges it is facing. An IMF team will be sent in early September to initiate discussions on a programme.”

    The government announced its decision to seek a bailout from the IMF to help restore stability in the economy, particularly in the areas of strengthening the local currency and reducing the fiscal deficit.

    This was greeted with mixed reactions by the public, including the Minority in Parliament, who blamed the current state of the economy on gross mismanagement.

    Industry stakeholders have expressed the belief that the IMF’s bailout would further burden people with economic hardships since stringent measures would have to be instituted to salvage the economy.

  • Bailout for shippers

    Bailout for shippers

     •In view of our experience, this is not the way to salvage the situation

     

    The Federal Government’s decision to bail out indigenous ship owners to avail them with capacity to undertake international operations must be treated with circumspection. The nation had witnessed bailouts in the aviation, textile and the banking sectors, yet, the performances in these areas are everything but satisfactory.

    This informed our worry when President Goodluck Jonathan, through Olugbenga Oyewole, his Senior Special Assistant on Maritime Services, sounded the public out on the policy move. The president puts it succinctly: “I cannot think of any country that has the kind of cargo that we have and yet, our national vessels are not carrying it. Every other country in the world keeps to their cargo. They carry it by themselves and they are coming to scramble for the ones we have here also…We may not have the capacity but the capacity may not come without government support. What we are trying to do as a government is to create the enabling environment so that they will be able to acquire good vessels. These vessels will fly Nigeria’s flag and will be used as training platforms for our people.”

    It is pertinent to ask: who is again proposing this same initiative that did not yield good dividends in the past? Could it be that the government just realised that ship owners in the country do not have the capacity to undertake international operations, thereby denying them the opportunity to compete globally? Despite the huge ingress and egress of foreign vessels on the nation’s coastal waters, it is sad that indigenous shippers cannot partake in high volume international shipping business.

    Even the Petroleum Products Marketing Company (PPMC), the marketing arm of the Nigerian National Petroleum Corporation (NNPC), is reportedly not patronising local shipping companies in moving its petroleum products within the country’s coastal waters. This is against the Coastal Shipping Act, otherwise known as the Cabotage Act.

    Furthermore, the economic implication of millions of barrels of crude oil and other exportable products being daily ferried out of the country in mainly foreign vessels is unfathomable. A study conducted by Indigenous Ship Owners Association of Nigeria, (ISAN) put the country’s annual loss to this ugly trend of foreign ship patronage at about N2.1trillion.

    Sadly, for as long as this trend continues, Nigeria would be developing the insurance, legal, engineering and maritime sectors of foreign countries to the detriment of hers. For a country like Nigeria with high rate of unemployment, this is quite serious.

    We want Nigerians to own very good ships that meet up with international specifications. But this should not be at the expense of the tax payers, in view of recent unpalatable experience in that regard. Previous bailouts by governments, whether in shipping or outside it, have not come with inspiring results. More importantly, we believe the situation would be better handled by the private sector. Why should the government be involved in such private-commercial ventures by making available to ship owners trillions of naira of tax payers’ money, which when doled out is capable of distorting the economy?

    In our view, loan initiatives with soft conditionality to willing and serious indigenous ship owners that are genuinely interested in broadening, to meet international standards, is by far a better option. So, the indigenous ship owners should approach the banks for loans. Government bailout is out of it; since they could see it as their own share of the national cake.

     

  • How best to run the bailout fund, by Amaka Igwe

    How best to run the bailout fund, by Amaka Igwe

     Mrs. Amaka Igwe is one of Nollywood’s most respected directors. She spoke with VICTOR AKANDE on how the Federal Government should administer the intervention fund for the entertainment industry. Excerpts: 

    What is your opinion on the $200m Federal Government intervention fund?

    It’s a brilliant initiative. Film making is a business, and I am glad the government recognises this fact. So, the intervention fund is a welcome development in the same way that they did for the agricultural sector, the textile industry and others. Film-making is not just a trade; it’s an industry.

     

    But people like Ola Balogun are of the opinion that grant or film fund is more realistic than a loan…

     

    Ola Balogun comes from a culture where funding for film is a way of life for the industry. But here in Nigeria, filmmaking is more commercial oriented. Funding of film projects is more for students or other film makers who make specialised films that address social and environment issues like ecology and what have you. But that is not to say grants are not good. Both are good. At least, such is also supposed to generate and increase activities in the film industry. But what we are doing right now in Nigeria is majorly commercial. The way the Nigerian film industry is structured is commercial. With time, grant issues will happen.

     

    How realistic is return on investment under the present circumstances?

     

    That’s where I have problem with intervention fund. Making a film that will guarantee return right now is difficult, because distribution is largely unorganised in a country where we have 82 per cent piracy. We are not distributing formally. Somebody makes a film in a country of about 168 million people and manages to sell just 20, 000; that’s not distribution. In American, for example, films are sold online for about 19 dollars. Even Ghanaian films sell better than our own films. I think the intervention fund should be geared more towards distribution of films. Censors Board has told us that onle 25, 000 of the video clubs in the country are registered. If truly they regulated these outlets and a film maker is able to make just N2, 000 from each outlet., multiply what he gets and see what we mean… If this happens, then a film maker does not even have to wait for intervention fund. All he needs is to go to the bank, show them the sales record, and get s a loan to do his next movie. How can 40 filmmakers make money from the few cinemas that we have in this country? Nothing can be done until we look at distribution. I am of the opinion that every state should identify the video clubs and regulate them. The issue of video clubs is on concurrent list.

     

    What is your reaction to criticism trailing Tony Abulu as the first beneficiary of the NEXIM Bank loan, in view of the fact that he lives abroad?

     

    I have a different opinion to that. He is a Nigerian. The only reservation I have with that arrangement is that it may not put money back into our economy as envisaged. This is because 70 per cent of that film is shot in New York. But come to think of it again, the money Tony Abulu got was not a grant; it’s a loan, and he is going to pay it back.

     

    Gab Okoye is also pursuing the intervention fund loan to set up distribution outlets…

     

    Fantastic! Those are the people thinking positively for this industry. This is not the question of whether the people who didn’t go to the university can’t make a film.