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Tag: borrow

  • States won’t borrow to bridge funding gap

    States won’t borrow to bridge funding gap

    …States have ruled out borrowing to bridge their funding gaps

     

    The chairman of the Finance Commissioners Forum, Adamawa State Commissioner for Finance Mahmood Yunusa, yesterday told reporters at the end of the Federation Account Allocation Committee (FAAC) meeting in Abuja that “states are not looking at borrowing to augment the funding gaps.”

    According to him, state governments are now looking at cutting costs and working closely with the federal government to increase non-oil revenue particularly Value Added tax (VAT), withholding tax and stamp duty to make more money.

    Accountant General of the Federation Idris Ahmed said “the total revenue distributable for the month of September including VAT is N558.082 billion.

    From this amount, the federal government took N234.286 billion, states and the Federal Capital Territory (FCT) got N152.739 billion, local government councils received N114.918 billion. Oil mineral producing states got an additional N40.216 billion under the 13 per cent derivation principle.

    Ahmed noted that gross statutory revenue of N423.961 billion received for the month was lower than the N550.992 billion received in the previous month by N127.023 billion.

    The AGF noted that “there was significant increase in revenue from export sales of $176.4 million due to an increase in crude oil production by 4.12 million barrels. However, the average price of crude oil decreased from $50.44 to $46.29 per barrel.”

    Idris Ahmed added that “activities resumed at Forcados Terminal for the first time since February 2016. There were shut-ins and shut-downs at Terminals for maintenance and repairs.”

    Oil royalty, he said recorded significant increase in the month under review but there was considerable decline in revenue from companies Income tax , petroleum profit tax, import duty and VAT.”

    It was also revealed that the balance in the Excess Crude Account (ECA) still stands at $2.309 billion while the balance in the excess Petroleum Profit Tax (PPT) stands at $68 million as at October 20.

    Read Also: Buhari on unpaid workers

  • Nigeria must borrow responsibly – Shehu Sani

    Nigeria must borrow responsibly – Shehu Sani

    The Chairman, Senate Committee on Local and Foreign Debts, Sen. Shehu Sani, says if Nigeria must borrow, it must borrow responsibly.

    Sani gave the advice in a meeting with the Ministers of Transportation; Finance; Budget and National Planning and Power, Works and Housing on Thursday in Abuja.

    The meeting was in connection with President Muhammadu Buhari’s loan request of 5.5 billion dollars.

    Sani said: “the committee has the mandate to examine the merits and otherwise of the current loan request of 5.5 billion dollars of the president.

    “If we must bequeath to the future generation a pile of debt, it must be justified with commensurate infrastructural proof of the value of the debt.

    “The payment plan of this debt will undoubtedly last the length of our lifetimes and possibly beyond.

    “We must leave behind a legacy that will appease and answer the questions the next generation of Nigerians will ask,” Sani said.

    In his submission, Minister of Transportation, Chibuike Amaechi, said that the central rail line project connecting several communities of northern and southern Nigeria would be completed in June, next year.

    According to him, 17 coaches are expected to arrive in November and out of the number, 10 will be deployed to Abuja-Kaduna rail line while the remaining seven will be deployed to the Itakpe-Warri rail line.

    Amaechi said that part of the money being requested now for approval by the senate was to execute the rail projects covering Kano-Kaduna, and Lagos-Ibadan networks.

    He informed the senators that Buhari’s directive was that all the 36 state capitals of Nigeria must be connected by the ongoing rail projects.

    Also providing insight into the loan request, the Director-General, Debt Management Office, Mrs Patience Oniha, explained that the loans have sustainable benefits that would live beyond the present generation of Nigerians.

    “What we should take away is that we are going into projects whose benefits don’t go away.

    “The roads don’t go away, the schools don’t go away, and the hospitals don’t go away but all that we need to do is to maintain them properly and that is the explanation I want to make on that,” she said. (NAN)

  • Ebonyi residents back Umahi to borrow $150m for ring road

    Ebonyi residents back Umahi to borrow $150m for ring road

    Thousands of people in the 13 local government areas of Ebonyi State have held solidarity rallies for Governor David Umahi to take a $150 million loan from African Development Bank (AfDB) and Islamic Bank for the construction of ring roads to link the councils.

    The roads will connect about eight local government areas in the state.

    The solidarity rallies followed a suit filed by some unnamed petitioners, stopping the release of the free interest loan, which would be repaid in 30 years.

    All the 13 local government areas’ chairmen and other stakeholders supported the loan to enable the government start work immediately on the roads.

    At Ezillo, headquarters of Ishielu Local Government Area, stakeholders and traditional rulers came out en mass to condemn the petitioners.

    They said the legal action would frustrate the “laudable initiative of Umahi’s administration in intervening on the age-long abandoned roads”.

    The chairman of Ishielu Local Government Area, Sunday Eze, assured the state government that his council supported the governor’s moves to secure the loan, which he said would boost economic activities and the lives of the residents.

    The council chief cautioned his people not to play politics with the future of the state.

    He noted that the governor had displayed enough commitment to transform the state.

    But as Umahi’s administration expressed its preparedness to repair the deplorable ring road, some stakeholders reportedly felt slighted and sued the state government from proceeding with the loan negotiation.

    Addressing reporters in Abakaliki, the state capital, Deputy Governor Kelechi Igwe said the petitioners would soon be unmasked.

    The deputy governor said the rally was for solidarity to the governor on his giant strides in the development of the state and to support him for the construction of the ring roads.

    He said: “We will like to know the petitioners in full. I have told you to approach the court. But very soon, we shall, for the purpose of publication, give you the processes that were served on the Ebonyi State government, where you will see the names of the plaintiffs who took the Ebonyi State government to court because of the ring roads.

    “The rally evolves from the people of the state to show solidarity to Governor Umahi for the good works he is doing and to support the construction of that ring road. The road is very important for an Ebonyi man, whether you are from the Central, North or South because that ring road is a key to unlocking the economic potentials of the state.

    “People have been clamouring and calling on the governor. We learnt that some people went to court to challenge the effort of the government to reconstruct that road. But people of Ebonyi are saying: ‘Governor, please, make yourself available; we want to show you solidarity, we want to show you support.’

    “The people are saying they want to converge on the local government areas to demonstrate their support for the construction of the ring road, and we cannot stop them.

    “What we can do as government officials is that if we have the time, we will go to various local governments areas and see what the people are saying, to see whether they are speaking from their mouths or they are speaking from somewhere else.”

  • Fed Govt ‘ll continue to borrow, says finance minister

    Fed Govt ‘ll continue to borrow, says finance minister

    Nigeria will continue to borrow to fund its budget, Minister of Finance Mrs Kemi Adeosun, said yesterday.

    “Nigeria will continue to borrow. Nothing has changed,” the minister said in a statement to debunk reports that the Federal Government had stopped borrowing.

    She said “the Economic Recovery and Growth Plan provides for an increase in spending over a three-year period, which is reflected in the 2017 budget”.

    She added that “in 2017, the government is committed to spending N7.44 trillion, with a projected fiscal deficit of N2.356 trillion, which will be funded by a combination of domestic and international borrowing.”

    Nigeria’s debt to GDP ratio, the finance ministry noted, “is low when compared to our contemporaries in Africa, and across most of the developed world. We have headroom to borrow and are doing so aggressively in the short to medium term in order to address our infrastructure deficit and to stimulate growth.”

    However, the minister added that “it is vital that Nigeria diversifies its revenue base and builds its revenue profile, as is projected in the ERGP, to ensure that we do not continue to overly rely on debt to fund our budget spending over the long term.”

    To build a sustainable economy, Mrs. Adeosun said Nigeria “must replace the debt that we are incurring in the short to medium term, with strong revenue sources”.

    The Ministry of Finance, she said, remains “focused on expanding our tax base, which we are doing with a range of initiatives which include the Voluntary Asset and Income Declaration Scheme (VAIDS) and recruitment of Community Tax Liaison Officers (CTLOS) to improve tax compliance in the long-term, and we are heavily focused on making government spending more productive and efficient.

    “Nigeria cannot rely on debt indefinitely. We must be focused on a future where we can earn enough internal revenue to spend on the projects that will grow our economy. In the short term, through increased spending, funded by debt, will act as the stimulus we need to grow.”

    Also yesterday, House of Representatives Speaker Yakubu Dogara queried the non-disclosure of interests accruing to Nigeria’s foreign reserve accounts by the Central Bank of Nigeria (CBN).Speaking when a delegation from the Fiscal Responsibility Commission (FRC) visited him in Abuja, he said that agencies, such as the commission, should be in custody of such figures for dissemination to the public when necessary.

    The House on Dec.15, 2015 passed a resolution calling on the CBN to declare interests accruing on the foreign reserves accounts of the federation.

    “We earn interest on foreign reserves, like Botswana. They don’t have oil but the interest on reserve is their second highest revenue source after natural resources.

    “You will see it as a budget item, interest earned from foreign reserves.

    “In Nigeria, we have been asking the question, `are we earning or are we just running charity with it or just leave people to manage it?

    “Are we capitalising the interest and what is the interest? Nobody has ever told us,’’ Dogara said.

    He said that CBN was the custodian of foreign reserves.

    But, he pointed out that if they are not forthcoming with regards to what had been happening with the interest earned on foreign reserves, there should be an agency of government to handle it.

    The speaker also sought to know why the ceiling on borrowing as stated in the FRC Act was not adhered to, adding: “Do we continue borrowing until we have borrowed billions?

    “The Fiscal Responsibility Act speaks to those things; so, why is it that it is not being done?’’ he asked.

    Dogara spoke of an urgent need for the government to properly fund the commission to enable it deliver on its mandate and strengthen its powers.

    According to Dogara, the commission has the capacity to reduce corruption by over 80 per cent.

    In his view, the approach adopted by the government to fight corruption through the EFCC to punish offenders after the crime has been committed should be redirected to checking the root of the problem.

    He said the reason for the establishment of FRC was for Nigeria to have an agency that would ensure that it had efficient allocation of resources.

  • Don’t borrow for states to pay salaries

    *Labour cautions Fed Govt.

    Labour has opposed the Federal Government’s idea to borrow  for states to pay salaries, especially when the governor’s are yet to account for the bailout fund and Paris Club refund.

    President of the United Labour Congress (ULC), Comrade Joe Ajaero, who addressed reporters in Geneva, Switzerland, lamented that many governors have refused to pay workers’ salaries.

    He said it was particularly surprising and sad that after collecting the bailout and money from the Paris club refund, many of them were still unable to pay salaries and pensions.

    He reiterated that borrowing for the states to pay salaries is no solution to the problem.

    Ajaero said: “It is always a sad thing when you keep hearing that workers in the public sector are not being paid, including pensioners who are owed for nine to ten months.

    “Now, you will begin to ask if there are unions in those areas to compel governors to pay workers’ salaries because they create the wealth.

    “Now with the Paris club refund; it is sad that we are still talking about unpaid salaries. Let me say that ULC is worried about it and we were able to push for it in some states. We are committed to partnering the NLC and TUC to see how to move the struggle forward and ensure workers, who work so hard, get their salaries.

    “I don’t think if the Paris club money was given to governors, and it was not judiciously used, the next option is to borrow to give this same people. That will be clearly wrong.

    “ULC is not subscribing to Nigeria taking loan to give to governors to pay workers’ salaries, especially when they have not accounted for the previous money. Even at the sectorial level, the ULC cannot move into any sector if they are not invited because there is demarcation in union practice.”

  • Emmanuel: I won’t borrow at high interest rate for council poll

    Emmanuel: I won’t borrow at high interest rate for council poll

    Akwa Ibom State Governor Udom Emmanuel has said his administration will not borrow from banks to conduct local government election due to high interest rates.

    The governor urged political parties to be patient on the conduct of the poll.

    He said his administration was not in a hurry to conduct the election because of the prevailing tight economic realities.

    Emmanuel spoke on Saturday night while addressing reporters on his second year anniversary in office and this year’s Democracy Day.

    The governor said, Akwa Ibom was not the only state having a challenge with the tier of government.

    He said once the economy improved, the government would conduct the poll.

    Since Emmanuel became governor in May, 2015, he has not conducted a local government election.

    The tier of government has been handled by transition or caretaker chairmen through committees.

    Emmanuel said: “It’s because of the prevailing economic situation, it’s because of recession. Once the economy improves, we will conduct elections. This government will not borrow money with high interest rate to conduct local government elections.

    “What if you set up a local government council and you don’t have money to run the council? In recession, you carefully direct where money should go to. Since the economy is improving, all that will be done.”

    The governor said his cardinal programmee on industrialisation was being pursued with vigour, adding that it had led to the inauguration of some industries and ground-breaking for new ones to mark his second year in office.

    He urged the people to show appreciation to his administration’s efforts at establishing small and medium scale industries.

    According to him, in many developed economies, such ventures drive their economies, create wealth and reduced unemployment.

    Emmanuel said: “In many economies, it is the small and medium scale industries that drive the economy. I keep wondering when I hear people criticising the establishment of the pencil and toothpick industries. Akwa Ibom people should be proud to be the first manufacturers of these products. The Federal Government has been spending millions of naira to import pencils.”

  • FG must borrow to rescue Nigeria from recession — Gbajabiamila

    FG must borrow to rescue Nigeria from recession — Gbajabiamila

    The Majority Leader in the House of Representatives, Femi Gbajabiamila (APC-Lagos) said that Nigeria must go ahead with the plan to borrow 29.9 billion dollars for the country to come out of recession.

    Gbajabiamila said this on Sunday in Abuja while giving the end of year report on the activities of the House of Representatives for 2016.

    According to him the borrowing plan is specific and targeted at pulling the country out of recession and reflate the economy.

    “It is what this government found on ground that informed the quantum and the nature of the borrowing they have to undertake.

    “Now to get out of this recession and the sorry state we have found ourselves, I don’t think we can do it without borrowing.

    “Borrowing is necessary, United States, England, Germany they all borrow, it is an essential feature of democracy especially when you’re running a deficit budget.

    “For now, the borrowing is necessary to pump into the system to inflate activity in the economy, diversify the economy, there is a lot of things we need money for and if the country is not making money, like we used to we have to borrow,” Gbajabiamila said.

    The lawmaker said that former President Olusegun Obasanjo was able to come to an agreement to exit the Paris club because the country was making money.

    He said the country was still within the borrowing regulations as related to the nation’s GDP.

    On the possibility of increasing the salary of workers particularly in the face of soaring inflation and recession, he admitted that salaries at present “are very low,” and that “something has to be done about it”.

    He said the House would never back away from any move to increase salaries of workers.

    “That is the reason we are here, whether government or private workers, we’re here because of the people.

    “And I believe when the issue comes on the floor, I doubt if there will be a dissenting voice.

    “And we will begin to look at that viz- a viz inflation, unemployment. Personally, I believe wages are too low as we stand and I think something has to be done about it.

    “And I think the House will be proactive in making that move.”

    He added that the 8th House introduced 551 bills between January 2016 and December 2016.

    “With 64 cases of consolidation of several bills addressing similar issues, five of the bills were negatived while 179 passed second reading and 47 bills were successfully passed by the House in the year 2016,’’ Gbajabiamila said. (NAN)

  • Govt can borrow, says ex-NACCIMA chair

    • New president to emerge at AGM

    Opponents of  borrowing by the government may have lost a supporter as a former Chairman, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Chief John Odeyemi,  said the government could borrow for development.

    He said the United States (US), which is the highest debtor-nation in the world, is also the most developed, adding that owing is not illegal.

    He spoke at the Building construction and mining mart in Lagos organised by NILE in Lagos,

    Citing the Lagos State Government that was  accused of owing so much, Odeyemi defended the state as having competitive infrastructure and improving the lives of the citizens compared to other states.

    He said as long as what one is doing is viable, acceptable and beneficial to the people, debts accumulation was not  a problem.

    Odeyemi urged the incoming government to focus on the non-oil sector, such as mining and construction.

    The former NACCIMA chair warned of the imminent collapse of the economy with the lingering fuel and electricity crisis that has brought manufacturers to their feet.

    ”We need to take hard and realistic decisions today and next week, the out-going administration should pay the fuel marketers while the incoming government should work on deregulating the petroleum sector and let those who can import do so without government having anything to do with it,” he said.

    Odeyemi said two of the companies he is involved in had a down time of between two and three weeks where staff were asked to stay at home. He advised that if it is left to linger thousands of jobs would be lost.

    On high interest rate, he said it frustrates people from setting up businesses. “Small and Medium Enterprises (SMEs) can’t cope with high interest rates because they contend with a lot of other factors. Security is also an issue when the economy is down, you can’t manage security when there is no electricity, and things go wrong in dark places,” he lamented.

    According to him, people who otherwise would have been engaged are left unattended to and they will have no choice but to engage in crimes. “If people cultivate their crops and can’t store them because of poor storage and electricity they will be discouraged. Steady electricity supply and good storage facility are ways to check security and poverty,” he added.

    He called for greater private sector participation in all sectors, insisting that the government has no business in business.

    His words: “Until Dangote Cement came into the sector, the cement sub-sector was distraught with government’s cement companies in comatose and moribund. Dangote came, bought over the moribund companies, and turned them around. Now, the company is producing over 30 million metric tonnes, as he brought in technology and expertise into the business against his major competitors that has been here over 50 years and refused to make impact in the sector.”

    Meanwhile, NACCIMA will on next Wednesday hold its Annual General Meeting (AGM) to elect a new president and national officers who will run the affairs of the association in the next two years.

    The 55th AGM has as its theme: Policy consistency in the agricultural value chain: A key to socio-economic development.”It is billed to hold at the Transcorp Hotel, Calabar, Cross River State.

    Highlights of the ceremony would be the investiture of Chief Bassey Edem as the 18th National President. He takes over from Alhaji Abubakar Badaru Mohammed, the new governor of Jigawa State.

  • Kogi to borrow N2b for agriculture

    The Kogi State Government, in collaboration with the Bank of Agriculture, will secure a N2 billion credit facility to support agriculture, Governor Idris Wada has said.

    The governor spoke at the Government House in Lokoja, the state capital, during a discussion on the partnership with the management team of the Bank of Agriculture.

    The fund, the governor said, would be disbursed to farmers as a credit scheme to support and boost agriculture.

    He assured that agricultural development would be accorded priority under his administration.

    Wada said Kogi State was blessed with arable land and abundant natural resources, which could make his agricultural transformation agenda realisable.

    According to him, the agricultural credit scheme will encourage farmers to become more active in their business.

    The governor described agriculture as the main sustenance of the state’s economy, adding that his administration would continue to develop the sector.

    The Managing Director/Chief Executive of the bank, Dr Mohammed Turaki said the bank would provide credit facilities to boost rural agriculture across the country.

    Turaki said the state and the bank would share the responsibility for the scheme on equal basis of N1 billion apiece.

  • Federal Govt to borrow N251b

    Federal Govt to borrow N251b

    MINISTERS will decide today whether the Federal government should borrow N251.6 billion to finance Nigeria’s infrastructure deficit.

    The money will be sourced from the issuance of $1 billion Eurobond, $100 million diaspora bond and N80 billion FGN bonds through syndicated global depository notes.

    The weekly Federal Executive Council (FEC) meeting will get the request for approval for these finances from the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in a memorandum which she will present to the council.

    The minister said last week that the government planned “ to prioritise infrastructure investments and also to leverage additional external financing for infrastructure investments in the country”.

    Mrs. Okonjo-Iweala explained that the government planned “to augment our domestic resources with a proposed $1 billion EuroBond as well as a Nigeria Diaspora Bond, which will harness savings from Nigerians abroad.”

    These additional financial resources she said “will be invested in various infrastructure projects such as building the country’s gas to power infrastructure”.

    The government, she added, plans “to use Public Private Partnerships (PPPs) aggressively, working with the Sovereign Wealth Fund which will attract co-investors from home and abroad, such as pension funds, institutional investors and so on” to finance infrastructure.

    The government’s confidence is buoyed by the fact that “Nigeria’s domestic bonds have gained international prominence, and were recently included in the JP Morgan and Barclays Emerging Market indices”.

    Budget 2013 has some important infrastructure projects in the transportation sector, such as the second Niger Bridge, which may also be financed with these funds.

    Ratification of the President’s anticipatory approval for the selection of concessionaire/ developer for the reclamation and infrastructural development of FESTAC Phase II, Lagos (memorandum EC(2013)21 by minister of Lands, Housing and Urban Development).

    Other matters to be discussed at today’s FEC meeting are the “ review of the Export Expansion Grant (EEG) scheme, which memorandum will be presented by the Minister of Trade and Investment, Mr. Olusegun Aganga.