08 Apr

The week ahead – The blame game has worn its course, there is work to be done

Nigerians might have to pay more for petrol in the days ahead, as the Petroleum Products Pricing Regulatory Agency, PPPRA, has announced that it would review the price of petrol next month. Still on energy, the epileptic supply of electricity across the country has persisted and is not likely to improve any time soon as vandalism of pipelines has prolonged the perennial shortage of gas to thermal power plants. This is coming as the System and Market Operation Departments of the Transmission Company of Nigeria, TCN, explained why Nigeria’s current electricity generation has remained quite low in recent weeks. TCN blamed the situation on gas shortages to the generation plants in the south of the country. TCN also explained that each time the country’s electricity generation falls below 3,500MW, some power will be in the dedicated spinning reserve, hence the possibility of a transmission system collapse. Reports suggest that  the country has witnessed persistent power outages in recent weeks after the much-celebrated all-time peak of 5,074MW of electricity generation on February 2, 2016.

The Nigerian National Petroleum Corporation (NNPC) has continued its habit of withholding billions of dollars in oil sale revenues from the treasury even under President Muhammadu Buhari’s administration, a new report said. The report, titled “NNPC still holds blank check”, which was released recently by the Natural Resource Governance Institute, NRGI, said in the second half of 2015, NNPC’s sales of export crude, domestic crude and oil from its subsidiary the Nigeria Petroleum Development Company (NPDC) totaled $6.3 billion. Of this amount, only $2.1 billion entered the Federation Account while $4.2 billion (N827.4 billion) was not remitted, representing 66 percent of proceeds from crude oil sales for the six months. It noted that the figure was 14 percent more than the NNPC’s withholdings under President Goodluck Jonathan in the first half of 2015, and 12 percent higher than the share withheld in 2013 and 2014.

In a matter related to the current petrol scarcity, a female member of the Nigeria Security Civil Defence Corps (NSCDC) shot dead a black market operator and injured three others in the Festac area of Lagos State. Some angry youths attempted to hijack the situation, and set some places ablaze, but policemen quickly bought the situation under control.

Meanwhile President Muhammadu Buhari has blamed the Peoples Democratic Party’s 16-year reign for Nigeria’s prevailing economic woes and said the party failed to save for the rainy day. Speaking at a reception for a delegation of the International Civil Aviation Organization (ICAO), led by its president, Dr. Bernard Aliyu, at Also Rock, President Buhari said Nigeria showed a lot of indiscipline in managing the economy, and that is why the country is comatose today. President Buhari promised that his government would do its best to turn things around.

State governments are spending billions of naira in pension payments to their former governors who are also drawing salaries from the public purse as serving senators and ministers. There are 21 former governors and deputies in the Senate and President Muhammadu Buhari’s cabinet. The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) approved payment of 300 percent basic salary as severance allowances for political office holders on leaving office. However, various state assemblies had approved a wide range of entitlements for ex-governors and their deputies. Though the Code of Conduct Bureau (CCB) Act doesn’t prohibit the former governors from drawing dual remuneration simultaneously, there are concerns on the financial implications on the states.

A lot of voices have been raised in condemnation over the National Assembly’s proposal to remove Host Communities’ funding and local content from the Petroleum Industry Bill. The National Assembly had, among other issues, proposed to remove the host communities’ fund in a new PIB, now known as Petroleum Industry Governance Bill, PIGB. Also, some members of the House of Representatives and prominent citizens from the Niger Delta, who are querying whether the government of the day is trying to cause a renewed crisis in the Niger Delta.

The Defence Head Quarters has announced the capture of Khalid Al Barnawi, one of the most wanted Commanders of the Boko Haram Terrorist Group. The combined operation inter-agency security and intelligence services led to the capture in the North Central region of Nigeria. This is coming on the heels of the military reclaiming dozens of territories under Boko Haram occupation, and freeing hundreds of captives mostly women and children.

Finally, Nigerian public officers named in the Panama Papers leak could face prosecution if the Attorney-General of the Federation (AGF) and Minister of Justice decide to press a case. This came as news emerged that a Swiss attorney, Enrico Monfrini, hired by the Olusegun Obasanjo Administration to track the missing monies stolen by late dictator Sani Abacha in Swiss banks is himself operating over 178 companies in offshore tax havens. The leak of more than 11 million secret documents from the Panama-based law firm, Mossack Fonseca, is causing ripples globally. Ethical and criminal questions are being asked about the stashing away of billions of dollars in tax havens. Sigmundur David Gunnlaugsson, the Prime Minister of Iceland, has resigned over the leaks which exposed his offshore assets. Nigerians named so far, with more to come, are Senate President Bukola Saraki, his predecessor David Mark, former Minister of Defence Theophilus Danjuma, and former governor of Delta State, James Ibori.

COUNSEL

  • In practice, prices of petrol have already gone up, averaging N180 per litre in the North, N230 in the Midwest and South East, and N230 in the Niger Delta. The PPPRA and other such agencies should adjust their pricing templates to suit the realities, and guarantee a smooth supply of these products which are vital to the economy.
  • Nigeria has no choice but to develop alternative sources for electricity generation. While doing that, the country has to reach a pact with the host communities to avert incidences of vandalisation. At the current rate, the country may not have enough to drive businesses and household activities. Nigeria needs to engage the host communities and end gas pipeline vandalism.
  • The NNPC continues to operate as a state within a state in Nigeria, and has carried on with this habit over the course of various governments. From this government, we expect no less than a complete break up of the monster. A single entity plying the roles of regulator and player in the industry breeds room for corruption, and will not work.
  • We condemn in no uncertain terms, the killing of a suspected petroleum black market operator by an operative of NSCDC. There must be a comprehensive investigation of the unwarranted shooting, and the guilty party must be brought to justice. It is very unfortunate that the energy crisis created this situation.
  • There is no doubt that the PDP left Nigeria in a bad state, but the President and his team need to stop blaming the PDP, and actually govern. The APC government was voted in to fix the mess, so they should get on with it. At the moment, President Buhari is sole individual hampering the progress of the economy. Federal Executive Council meetings are not being held and when being held, issues relevant to the well being or direction of the economy are not being discussed. Every one of the President’s aides, and cabinet ministers, appear to look up to him for direction or approval of key macro-economic decisions that can transform the economy, but he has refused to give such signals or even listen to a counter opinions. We are of the view the country will continue to relapse into deep economic crisis until the macro economic environment improves significantly.
  • It is a shame that many of our governors, heads of state, and ex-government officials continue to draw hefty pensions, almost bankrupting their states. We call for a review of this system. A situation where civil servants at the state level are not being paid salaries, meanwhile ex-governors are feeding fat on the treasury is unacceptable. We however, do not expect a Senate, filled with former governors, to change this situation.
  • However the NASS can work on the PIB, and we urge them to pass a workable PIB that would unlock the potentials of the oil and gas industry, and use same avenue to address the restive Niger Delta Community. We believe that a comprehensive Bill that would take into consideration the challenges of the sector and the region would be a welcome development. We must caution against the removal of the Host Communities’ Fund as this can lead to even more restiveness in the region.
  • We salute the Nigerian military and security services for the high profile capture of Khalid Al Barnawi, and encourage the government to continue to provide them with more tactical equipment to get the job done.
  • We call on the Attorney General of the Federation to take a very serious look at the revelations coming out from the Panama Papers, with a view to ascertain if public funds were siphoned abroad by some former and serving public officers being found to have accounts in the tax haven.