The Nation Newspaper

Tag: Oil

  • Dire consequences of declining oil revenue

    That the Nigerian nation has depended only on earnings from crude oil export for the past four or five decades to sustain the business of governance is not in doubt. The Nigerian nation has earned over 80% of its revenue from which the Federal Government, the states, the local governments, the ministries departments and agencies (MDAS) obtain their statutory monthly allocations. But since July 2014, these various organisations have all complained of being underpaid in the usual monthly revenue allocation. We have reached this unfortunate situation because of the dwindling revenues from the crude oil sales upon which the nation has depended over time.

    One is baffled why Nigeria up to this time should be dependent on only one commodity which it has handled for over four decades. It is unfortunate that we have missed the opportunity to utilise the cheap earnings from petroleum resources to diversify the nation’s economy and bring up the development of other resources. These various levels of government to whom these earnings were allocated have failed to diversify the nation’s economy by embarking on large-scale agricultural development, industrialisation, establishment of refineries to refine crude oil for home consumption and also to embark on export of refined oil to other nations. We also missed the opportunity to utilise such cheap money to establish adequate generating power plants to assist in the development of the entire economy, as this would have boosted industrialisation, manufacturing and technological development.

    We are experiencing the consequencesof overdependence on only one source of revenue, as we have failed to utilise the resources accruing from this to diversify the economy which would have resulted in earning revenues from numerous other sources. There are worries now over Nigeria’s diminishing earnings from crude oil export. The outlook for 2015 in respect of funding the future budgetary needs of governments is not only very gloomy but also poses a great deal of fear and pessimism for a number of reasons. As crude oil for export purposes is fast diminishing, the nation is facing prospects of a bleak future for its economic development. The crude oil exploitation has been riddled with large-scale pilfering right from source and most of the stolen items also easily find their way into the world market thereby posing as a competitor to the legitimate supply from Nigeria, just as many nations such as Ghana, South Sudan and Mozambique among others, producing crude oil may further reduce the demand from Nigeria. Facts have even emerged that the U.S.A, the major importer of over 80% of the Nigerian crude oil has reduced its demand from Nigeria to zero level. All countries that are dependent on crude oil export as sources of revenue for their development are already disturbed by the falling demand for this mineral resource in the world market. Therefore the amount of crude oil in demand from now and the following years would be drastically reduced particularly as alternative sources are being developed.

    Just as other countries are discovering the existence of crude oil under their soils, the U.S.A has discovered an alternative source which is through the shale oil and gas revolution. The U.S.A. is working hard on this to reduce or totally eliminate its purchase of crude oil from foreign countries. Even when the shale oil development is still in its formative stages, the U.S.A. has shifted from the import of crude oil supplies from Nigeria in favour of crude oil supplies from other nations. The loss of this important market has resulted in the decline in the crude oil production from 2.48 million barrels per day to less than 1.3 million barrels a day. The price of crude oil which peaked at $114 per barrel has dropped to about $60 per barrel.

    The consequences for Nigeria are serious as the funds accruable to the Federation Account have consequently fallen. Some members of the House of Representatives are already sensitising the nation on the inability of the Federal Government to release adequate statutory allocations to various ministries, departments and agencies (MDAS) since July 2014. In the same manner, the Federal Government, the states and the local governments would henceforth face dwindling monthly revenue allocation, with serious consequences for capital projects and recurrent expenditure.

    We are in this mess because of our total and over-dependence on the revenue accruing from crude oil sales and failure to diversify to develop other resources which are capable of contributing immensely to the development of our people. The failure of our rulers to build functional refineries, in addition to the mal-functioning four, is most unfortunate. Since we harbour the raw materials in the form of crude petroleum in large quantity, there is no reason why we should not build numerous functional refineries to meet our domestic needs and export the surplus to neighbouring countries. But it is unexplainable that while we export crude oil, we import refined oil for domestic use. Now with the dwindling harvest of revenues from crude oil, one wonders where Nigeria will find the financial strength to import and pay the exorbitant fuel subsidies to fuel importers.

    Inspite of the huge sums of money paid as fuel subsidies, citizens in other petroleum exporting countries enjoy cheaper petrol prices compared with Nigeria. These countries possess adequate refineries to satisfy domestic needs and produce extra for export markets.

    The loss of external markets for our crude petroleum resources will compound the problems of poverty ravaging this country. The Minister of Finance, Dr. Ngozi Okonjo-Iweala has proffered the dependence on excess crude account to solve this problem, this can be a solution for one or two months, it cannot provide the lasting solutions for the serious problems of under-development ravaging this nation.

    How do we solve the problem of inadequate resources to cater for the development of this country? We have failed to solve the problems of poverty, insecurity, unemployment, poor health and educational services, neglect of agriculture, poor rural and urban road networks, Boko Haram and other forms of insecurity ravaging this nation. Nigerian people should take note of the missed opportunities of the past by which the economy should have been diversified with the resources from crude oil. There is no doubt that the discovery of crude oil and its exploitation have ensured the relegation of agriculture.

    Nigeria used to be the greatest producer of palm oil, but we are now trailing hopelessly behind Malaysia which took its seeds from Nigeria. During the First Republic, the three regional governments of Nigeria viz western, northern and eastern regions depended on adequate production of cocoa, groundnut and palm oil respectively, but today all these have been neglected. Nigeria is accused of profligacy in the use of the proceeds from crude oil, yet we import refined petroleum.

    We have also failed to invest in petro-chemical products like fertilizers, grease and so on. Nigeria must buckle up to appraise its development strategy, through agricultural revolution, provision of sufficient electricity to support industrialisation, provide adequate employment opportunities for the teeming unemployed and provide adequate security for its people.

    • Senator Farukanmi writews from Iju, Ondo State.

  • ‘Nigeria’s growth down 5.5% as oil plunges’

    Economic growth in Nigeria, Africa’s biggest crude producer, is projected to slow to 5.5 per cent this year after oil prices plunged, the National Bureau of Statistics (NBS) said at the weekend.

    Gross Domestic Product (GDP) growth is set to decelerate from an estimated 6.2 per cent last year, the NBS said in a report on its website. The economy is forecast to expand 5.8 per cent next year and in 2017.

    “The decline in crude oil prices is a downside to the economy in both the short and medium term. The crude oil price shocks, the resulting declining government expenditure and its multiplier effects are likely to impact businesses,” NBS said.

    Oil prices have plunged more than 50 per cent since June, curbing export revenue in the country, forcing the government to cut back on spending and prompting the central bank to devalue the naira as foreign-currency reserves slumped.

    The weaker currency will probably boost inflation to an average 8.8 per cent this year from 8.1 per cent last year, NBS said. It’s set to reach an average of 8.1 percent in 2016 and 7.5 per cent in 2017.

    The naira has slumped 13 per cent against the dollar on the interbank market in the past three months, the most among 24 African countries tracked by Bloomberg.

    Finance Minister Dr Ngozi Okonjo-Iweala last month proposed cutting this year’s budget by eight per cent and reduced its benchmark oil price to $65 a barrel from last year’s $77.50 a barrel in the face of tumbling crude prices.

  • Before Oil Runs Dry: Options For The Development Of The South-West Of Nigeria

    Before Oil Runs Dry: Options For The Development Of The South-West Of Nigeria

    The Case for Restructuring the Political Economy

    Our incipient economic crisis triggered by declining oil revenues calls into question our entire governance model and political economy which revolves round the distribution  of oil rents. The elite consensus and the political architecture that have informed how Nigeria works (or does not work as the case may be) have long been overdue for review. The current crisis offers us an opportunity to do just that and to restart the stalled conversation about the necessity of a truly productive federal order and create a new template for organizing the republic. In order to begin this conversation from the proper point, we must entertain a brief historical excursion that examines how we got to where we are.

    During the First Republic, regional federalism was the order of the day. Nigeria was divided into three (then subsequently four) regions each with a great degree of autonomy to organize their affairs as they saw fit. The regions enjoyed fiscal autonomy, constructing their social economies based on the taxation of the economic activities carried out within their territories. They had control over the nature and forms of their development and how they could explore latent and evident potentials in their environment to maximize on the most effective ways to deliver the goods of governance to their people.

    The regions had their own constitutions, had total control over and regulated issues relating to education, agriculture, healthcare, taxation, and other significant aspects of their existence. Yet they subscribed to a central authority that held the exclusive right to make decisions pertaining to defence and a few other select issues. The regions were in charge of the resources that they generated, could develop at their own pace and according to the manner that they deemed fit, while contributing a percentage of their revenue towards the keeping of the centre afloat.

    A new order commenced in 1966 with the first military intervention that terminated the First Republic. Under the military, governance was centralized, the regions were abolished and their tax-based social economies along with them. What emerged then was a militaristic-unitary state built atop the ruins of the old regional federalism and a new economy based on the proceeds of selling crude oil on the world market. Where regional authorities had previously harnessed their internal resources and the energies of their people to propel development, there arose a federal military government which shared the revenues from crude oil sales to states which were now administered not as autonomous federating units but as subsidiary and subordinate departments.  The primacy of the federal government would be decisively established over the course of decades to the extent that local and regional autonomy became virtually politically incorrect.

    Provoked by the internecine anarchy and violent political conflict that characterized the First Republic’s last days, the military resolved no federating unit should ever be strong enough to threaten national unity. Accordingly, the military literally dismantled most of the First Republic’s federal structures and adopted a new revenue allocation formula. The power to manage all natural resource (oil, gas, solid minerals) was vested exclusively in the Federal Government. Rights over revenues changed. The regions were divided into states which became the new allocative units for sharing the nation’s wealth. Consequently, the more ‘states’ any group could get, the higher their collective ‘share’ of the national cake. The fiscal viability of the states themselves was not an issue. The verdict confronting now confronting us is that this form of oil-dependent unitarism has reached its expiry date.

    Today, we are faced with the crippling limitations of our “feeding bottle federalism.” An obscure and remote federal authority cannot purport to provide these benefits for all the population. It simply lacks the capacity and the reach to do so effectively in a country as heterogeneous and geographically expansive as Nigeria. The scale of demands are simply too great. We cannot manage and address the aspirations and concerns of over 167 million people from Abuja.  This is one of the reasons why developmental efforts authored by the federal government, despite the huge sums committed to them by successive administrations have failed. Real development emanates from the people’s perceptions of their own problems and their willingness to take responsibility for solving them.

    For development policies to work, the people have to take ownership of them and drive their execution. For this to be the case, the development goals have to be generated right at the grassroots by the citizenry and tally with their own needs and aspirations. It is a process that flows from the bottom to the top. The imperative is the restructuring of the Nigerian state in line with the core principles of decentralization – Subsidiarity, Fiscal Federalism and Cooperative Federalism; which provide for governance matters to be handled by the smallest, lowest or least centralized authority capable of addressing the matter effectively. In other words, in the Nigeria of the future, the central government should have a subsidiary function, performing only tasks which cannot be effectively performed at a more immediate or local level. The various levels of government would thus interact cooperatively to solve common problems.

     

    The Necessity of Economic Diversification

    A case can certainly be made that oil wealth has made us lazy and unimaginative given the bountiful resources with which Nigeria is blessed. Consider solid minerals and agriculture, two sectors brimming with potential but which have suffered great neglect because of the obsession with oil. In fact, agriculture is already this country’s biggest employer and could become even more significant if more effort is devoted to it. It could help address the problem of unemployment. Solid minerals are equally largely untouched.

    However, the biggest resource we have is demographic. We have a youthful working age population that needs to have their energies unleashed. The challenge is to take this population and turn it into human capital to drive development. Zero-natural resource economies such as Japan have been able to successfully harness their human capital with great economic advancement to show for it. Already, the informal sectors as well as youth-led economic sectors such as Nollywood have proven that the Nigerian youth need little incentive from government to thrive. We can all therefore imagine what a functional power sector can do in stimulating creativity and industry at the grassroots. The successful reform of the power sector holds the key to unlocking the potential inherent in our country’s youth bulge. On the other hand, our failure to direct the energies of our teeming youth appropriately would keep them undermined and vulnerable to the inducement of being used as fodder in the cannon of fundamentalists who seek to destabilize our great country.

    No country can prosper by being a net exporter of natural resources. Nigeria, like all mono-resource export economies is extremely vulnerable to fluctuations in world commodity prices. However wealthy oil has made us now, we must understand that it is a finite resource. Its exploitation for sale is a primary economic activity that is subject to the laws of diminishing returns because natural resources are exhaustible or can be rendered irrelevant by innovation. Manufacturing is the key. We have to resuscitate our industries. The path of growth lies with value-added economic activities of manufacturing.

     

    Diversity and Decentralization as two Sides of the Same Coin

    The need to diversify our economy and the necessity of decentralizing the governance are coterminous imperatives. Indeed, one cannot occur without the other. We cannot diversify the economy without decentralizing governance. In the emergent post-oil-centered dispensation, a regime of fiscal federalism which devolves economic power to states and municipalities is now imperative. States have to depend on internally sourced revenue and taxable productive endeavour as against federal largesse. We must see that our prime economic resource is neither oil nor solid minerals but human capital – productive citizens whose entrepreneurial endeavours create wealth and whose taxes fund governance. The principal task of the government is to create an enabling environment that permits citizens to actualize their economic and entrepreneurial potential.

    Thus, fiscal federalism incentivizes smart governance because unlike the current order in which state governors are judged by their ability to distribute patronage, a new order which offers scant resources for patronage immediately levies a demand on local elites to supply the developmental deliverables that make life meaningful. Fiscal federalism, by its very nature, incentivizes productivity and de-emphasizes patronage. By the same token, a tax-paying citizenry whose hard earned funds oil the machinery of public administration will necessarily motivated to adequately interrogate that administration, to ascertain how their taxes are being spent and to hold politicians accountable. In sum, economic diversification and political decentralization will have the effect of strengthening our democracy.

    Since 1999, it has become increasingly clear that a number of our national developmental objectives now fall within the purview of states rather than the federal government. What we need now is for this recognition to become institutionalized through the devolution of powers and resources from the centre. As states are unshackled from federal control, they will become freer to engage in regional and inter-state collaborations to meet the scale of the demand on the ground.

    We may not be able to re-establish the regional architecture of the First Republic today. State governments and local governments as presently constituted have existed long enough to have developed institutional and political lives of their own. Abolishing or reconfiguring them in order to recreate the regional dynamic of the First Republic will be politically onerous. But this does not mean that we cannot create forms of regional cooperation among political leaders, civil society actors and stakeholders to chart a path forward. Moreover, a confluence of economic, social and political pressures may make the transition towards regionalization a fait accompli. Economically unviable states will cease to exist by merging with others to form new regions and consequently regional hubs that will multiply the economy’s centres of gravity.

     

  • Hedge funds bet on oil decline

    Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001.

    Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.

    US crude supplies rose by 10.1 million barrels to 397.9 million in the week ended Jan. 16 and the country will pump the most oil since 1972 this year, the Energy Information Administration says. Saudi Arabia’s King Salman, the new ruler of the world’s biggest oil exporter, said he will maintain the production policy of his predecessor despite a 58 percent drop in prices since June.

    “There’s been a rush to call a bottom,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone Jan. 23. “The fundamentals are still stacked against a rebound.”

    Bloomberg reported that WTI rose 50 cents, or 1.1 percent, to $46.39 a barrel on the New York Mercantile Exchange during the CFTC report period. The US benchmark fell 44 cents, or 1 percent, to $45.15, the lowest settlement since March 11, 2009. Brent slipped 63 cents, or 1.3 percent, to end the session at $48.16.

    Salman Bin Abdulaziz Al Saud ascended to the throne after King Abdullah died last week. The kingdom pumped 9.5 million barrels a day in December as members of the Organization of Petroleum Exporting Countries exceeded their 30 million-barrel daily target for a seventh month.

    “I don’t see any major catalyst from either the supply or demand side that will send prices higher this year,” Stewart Glickman, an equity analyst at S&P Capital IQ in New York, said by phone Jan 23. “It looks like $50 crude is the new reality that we’ll have to get used to.”

    Production in the US will be slow to decline as improvements in drilling technology boost well output even as companies drill less. Oil production per rig from new wells in the Bakken in February will be double what it was three years ago, the EIA said Jan. 12.

    The nation’s oil boom has been driven by a combination of horizontal drilling and hydraulic fracturing, or fracking, which has unlocked supplies from shale formations including the Eagle Ford and Permian in Texas and the Bakken in North Dakota.

    Drillers idled 49 US oil rigs last week, bringing the total to 1,317, the lowest level in two years, Baker Hughes Inc. (BHI) said on its website Jan. 23. It was the seventh weekly decline.

    “The fundamentals are terrible,” Mike Wittner, head of oil research at Societe Generale SA in New York, said by phone Jan. 23. “The drop in the rig count will have a limited impact. We’re going to see huge builds during the first quarter worldwide.”

    Short positions in WTI increased by 6,262 contracts to 94,203 futures and options in the week ended Jan. 20, CFTC data show. Long positions dropped 0.3 percent. Net-long positions fell 3.3 percent to 216,704. Producers increased net-short positions by 7,623 to 132,143 contracts, the most since December 2011.

    In other markets, bullish bets on gasoline advanced 5.8 percent to 39,418 contracts, the first gain in five weeks. Futures increased 3.5 percent to $1.3128 a gallon on Nymex in the reporting period.

    Retail gasoline, averaged nationwide, slid to $2.033 a gallon Jan. 25, the lowest since March 2009, according to Heathrow, Florida-based AAA, the largest U.S. motoring group.

    Bearish wagers on U.S. ultra low sulfur diesel increased 2.3 percent to 29,943 contracts, the most since the period ended Nov. 4. The fuel slipped 0.4 percent to $1.6266 a gallon in the report week.

    Net-short wagers on U.S. natural gas decreased 32 percent to 11,967 lots. The measure includes an index of four contracts adjusted to futures equivalents: Nymex natural gas futures, Nymex Henry Hub Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry Hub contract.

    Nymex natural gas dropped 3.8 percent to $2.831 per million British thermal units during the report week.

    “We’ve been here before,” said Wittner. “There have been points when it looked like it was stabilizing only to then take another leg lower.”

  • Victims’ support fund: Banking, oil sectors yet to redeem pledges, says Presidential C’ttee

    Victims’ support fund: Banking, oil sectors yet to redeem pledges, says Presidential C’ttee

    More than six months after key sectors in the Nigerian economy pledged more than N50 billion to support victim’s of insurgency in the Northeast, the pledges are yet to be redeemed, The Nation learnt yesterday.

    The largest sectoral donors – the banking,  oil and gas sectors – at the fund raising, which was held at the Presidential Villa,  Abuja, have not paid a dime out of the billions of naira they promised.

    A member of the committee told reporters in Abuja that the N15 billion so far received, came from other donors since August 2014.

    The official, who pleaded not to be named because he was not authorised to speak on the subject, spoke on the sidelines of an event organised by budgIT, a Non-Governmental Organisation (NGO), where it presented a report on Flood Relief and Rehabilitation Fund.

    Asked to state how much was realised after the pledges and how the funds were applied,  the official said: “It is about N15 billion as at August; we are going to publish our account very soon and it will be made available to the press. But in the mean time, we are trying as much as possible to ensure that individuals redeem their pledges, including members of the oil and gas sector as well as key palyers inthe financial sector.

    “We are appealing to them and we are hoping that they’ll redeem their pledges.”

    On how the N15 billion was disbursed,  the official said: “At the moment we are setting up blueprints. We have tried to take a census of the people that have been displaced in terms of military victims, police victims, women, children and all that. So, there’s really not been any disbursement so far except for the intervention that we have done in the three states including Abuja.

    “Apart from these interventions, there had not been much expenditure so far. But we had the flag-off at Waru here in Abuja and we have been to Borno, Adamawa and Gombe states.”

    The official explained that the disbursements would take place in different forms.

     “For example’” he said, “there are people who need educational support and we have to support them until they are up to 18 years. There are also people who need medical support services and there are families that need support in terms of food items.

    “There are entire communities that we are going to relocate and all of these people need to be helped and we have plans to do that especially after the elections.”

    On whether the monies will be given  directly to victims, he said: “Yes, on the advice of the CBN (Central Bank of Nigeria). The bank came up with a proposal for conditional grant transfer scheme for people who need economic rehabilitation. So, when we get there, we hope to work with the CBN to be able to access the IDPs directly.”

  • NECA calls for deregulation of oil and gas

    NECA calls for deregulation of oil and gas

    • Employers praise reduction of fuel price

    The Nigeria Employers’ Consultative Association (NECA) has described government’s reduction of the pump price of petrol as a right action within a wrong policy framework, calling for the proper deregulation of the sector.

    In a press statement signed by the Director General, NECA, Mr. Segun Oshinowo, NECA commended government’s decision to reduce the price of petroleum from N97 to N87, adding that this demonstrated that government is sensitive to the welfare of Nigerians.

    NECA, however, said this action by government is begging the more fundamental issue of appropriate policy framework that will promote investment in the downstream sector of the oil & gas industry and put a stop to the embarrassing and shameful practice of importation of Premium Motor Spirit (PMS), also known as petrol.

    “Our expectation therefore, is that government would seize the opportunity of the current decline in the price of crude oil to commence implementation of the policy on deregulation of the downstream sector of the oil & gas industry. This is a unique timing the government cannot afford to miss as full implementation of deregulation, which in time past had led to price increase and reaction by the labour movement in form of industrial action, does not have any negative effect on the masses.

    “We are indeed, surprised that government’s announcement was limited to just the reduction in the price of fuel (PMS) as one would have expected a far more holistic announcement of a new policy thrust of deregulation of the downstream sector and privatisation of the four refineries, which have now become sink-holes.

    “We do appreciate the fact that election is around the corner and government is being unusually cautious on the possible backlash which announcement of deregulation of the downstream sector of the oil & gas industry could have on its electoral fortunes. We, however, do not share the sentiment, given the fact that this is one moment when such a policy announcement would not have any damaging impact on the populace,” Oshinowo said.

    According to Oshinowo, it is a common thing for government to weigh economic imperatives against political exigencies at moments of political engagement and political process as the country is currently experiencing. He said government is more likely to accord priority to political exigencies while relegating economic imperatives to the background particularly if the fall-out of the economic imperatives will undermine public perception of the government.

    “The issue, however, is that the government is not faced with that choice under the current circumstance as the economy stands to gain from the deregulation policy. We, therefore, call on the government to do the needful by coming out boldly and courageously to inform the Nigerian populace that it has deregulated the downstream of the oil & gas sector,’’ he said.

  • Mismanagement of oil, gas led to austerity, says TUC

    The Trade Union Congress (TUC) has said that the impunity of politicians and mismanagement of the fortunes of the oil and gas industry by successive governments in the country led to the ongoing austerity measures introduced by the Federal Government, especially following the slump in oil price at the international market.

    TUC also called on the Federal Government to review its policies that would create a conducive working environment for employers of labour and workers in the country, stressing that the nation’s labour movement may have no option than to resist any government policies that would inflict more hardship on workers after next month’s general elections.

    TUC’s President, Comrade Bobboi Bala Kaigama, who made the declarations at an interactive session with newsmen in Lagos on the adverse effects of the ongoing austerity measures on workers, noted that the labour movement is aware that government may pretend not to implement some policies that may affect their political interest in next month’s general elections until March this year.

    He said: “The impunity of politicians and mismanagement of the fortunes of the oil and gas sector by successive governments in Nigeria led to the ongoing austerity measures introduced by the Federal Government on December 17, 2014 as a result of the slump in oil price at the international market.

    “The Congress feels at this time that it is important it calls government’s attention to a number of issues plaguing employers and employees relationship to ensure a friendly working environment this year as we are also aware that Government may pretend not to implement some policies that may affect their political interest in next month’s general elections until march this year.”

    According to Kaigama, Congress laments the way and manner politicians go about their politicking. He said workers’ bravery, doggedness and loyalty to the project Nigeria in the face of gross abuse of human rights, insecurity, terrorism, arson, dislodgment and chaotic situation is an eloquent testimony to the fact that lives of Nigerians are not in the hands of the government nor the Bretton Wood institutions and their perfect policies.

    He noted that what is predominant today in the nation’s democratic governance is government’s use of state’s coercive power, especially the police and resort to use of touts and idle youths to molest political opponents and journalists. “In the 1970s, we had political parties with manifestos, and the likes of Awos, Ziks and Tafawa Balewas’ of this world chronicled what they planned to do and how they planned to achieve them. But what do we have today? Are we wiser now.” he queried.

    In a related development, the Secretary General of TUC, Comrade Musa Lawal stated that government deliberately refused to listen to advice on oil windfall before the oil slump. He said: “The labour movement and some fore-sighted well-meaning Nigerians have on uncountable times called on government to make utmost use of the excess dollar we got by diversifying the economy. Unfortunately, our politicians are only interested in rushing down to Abuja for monthly allocation. Government of allocation, this is certainly not our idea of social contract.”

  • Suspected illegal bunkerers kill two soldiers, policeman in Delta

    Two soldiers, a policeman and a civilian have been shot dead by suspected illegal bunkerers reportedly led by a former militant leader in Delta State.

    It was gathered that the military personnel attached to the Joint Task Force, ‘Operation Pulo (Oil) Shield’ were on a routine patrol when the gang opened fire on them at Egwa,  Warri South West Local Government Area.

    The two soldiers and a mobile policeman as well as the civilian driver of the boat died immediately. Their bodies were evacuated from the water on Sunday afternoon and brought to Warri, Delta State.

    A source said: “The former militant leader from Burutu area brought a 200,000 metric ton vessel to Egwa from where they were stealing crude oil. They had loaded the boat and were returning from the creek when the JTF troops accosted them.

    “In their desperate bid to escape, the captain of the vessel drove it aground on the river. It was while the military men were approaching the vessel that the criminals opened fire on them, killing the military men.

    “The bodies of the dead military men and the boat driver, an indigene of Ogbe-Ijoh, have been deposited at the morgue of a government hospital in Warri.”

    Attempts to get the JTF Sector 1 Commander, Effurun Barracks, Lt.-Col. Bassey and the JTF Media Coordinator, Lt.-Col. Anka Mustapha, were abortive. Calls to their phones were unanswered and they were yet to respond to a text message inquiry at press time last night.

    A  military source at the Effurun Barracks confirmed the report, saying: “We are investigating the incident that led to it. At the appropriate time we will make our findings known.”

    The Nation gathered that the attack was one of several by armed gangs, particularly ‘repentant’ militants in the area in recent times.

    Ilaje fishermen from neighbouring Ondo State have been under incessant attacks by sea pirates.

    In one particular incident, over 30 speedboats used by the embattled fishermen were seized by the criminals, who demanded a ransom of N25,000 each before the boats were released.

  • Govt urged to back non-oil exports

    Govt urged to back non-oil exports

    The Federal Government has been urged to initiate policies and incentives to encourage non-oil exports.

    The Senior Consultant/CEO, RTC Advisory Services Limited, Opeyemi Agbaje stated this yesterday in Lagos at a forum titled: ‘Review of 2014 and Projections for 2015,’ organised by the Finance Correspondents Association of Nigeria (FICAN).

    He said: “We have achieved significant diversification in terms of local production and consumption, but we are not competitive in exports.

    He said South Africa’s exports revenue is driven by companies such as MTN, DSTV and South African Breweries, adding that the challenge for the Nigerian economy is for government to create policies and incentives that will allow the private sector to become exporters.

    If our export revenue is earned by thousands of Nigerian companies exporting their services, we would not collapse anytime the price of oil falls, he said.

    “We also need to start refining our oil domestically and exporting it. We should be one of the biggest exporters of refined petroleum products in the world,” he said.

  • Senate warns against recession as oil revenue tumbles

    Senate warns against recession as oil revenue tumbles

    • As 2015 budget passes second reading

    The Senate yesterday warned that the Federal Government should tackle the emerging economic recession facing the country with all the seriousness it demands.

    The recession, the Senate said, is occasioned by the downward trend in oil revenue.

    The warning came as the upper chamber read the 2015 Appropriation Bill for the second time, referring the fiscal policy to its Committees for further legislative actions.

    Senators took turns to debate the general principles of the budget, with Senator Olubunmi Adetunmbi stating categorically that the Senate is processing a deficit budget.

    The All Progressives Party (APC) Ekiti North lawmaker, asked the Senate to demand from the Federal Government how it plans to fund the deficit in the budget.

    Deputy Senate President, Ike Ekweremadeu, who summed up debate on the general principles of the budget, said: “Arising from the  debate on the 2015 Appropriation Bill,  I am happy that we have woken up to our responsibilities and this is also a wake up call to our nation as we face this challenging times of economic recession and the downward trend in our oil revenue.

    “I do believe that this is the time for us as a parliament, to ensure that while considering the appropriation bill for 2015, all the revenue items are captured.

    “Our Committee on Finance will help us to do that.  We need to ensure that all the revenue items are captured in the budget and determine a pool of resources to implement the budget when passed.

    “The federal government should also put up its thinking cap to develop new areas of revenue generation that would help us to drive our economy.

    “We have gone through this way before but eventually the oil price improved but unfortunately we did not learn any lesson while we enjoyed the oil boom.

    “I hope that this period, we will learn our lesson that will help us to be disciplined in our fiscal management and it is also time for us to also take seriously about our fiscal federalism so that states can develop their initiatives in increasing their revenue that would help them to manage themselves,” adding that we need to reflect as a nation on how to manage our economy and everybody will have to make sacrifices, going forward.

    He urged politicians to be mindful of their election expenses, stating that if anybody thinks that he would spend money and would recover it after the election, such would be disappointed because there would be no money to recover.

    Ekweremadu, then waxed philosophical, saying,“it may be that God has designed this way for us in order to make progress in terms of fiscal discipline.”

    He said the National Assembly is prepared to lead the fight to enthrone fiscal discipline in Nigeria.