By Joe Brock ABUJA, Aug 24 (Reuters) - http://www.cnbc.com/id/44257498

Nigeria needs to diversify away from a reliance on oil, reduce public spending, boost job creation and finish failing infrastructure projects, the country's top new economic overseer said on Wednesday. Coordinator of the Economy and Finance Minister Ngozi Okonjo-Iweala said Nigeria should try to reduce recurrent expenditure by at least 1 percent a year in the remainder of the administration, which would bring it down to 70 percent of the budget by 2014.

Okonjo-Iweala, a former World Bank managing director, also said fuel subsidies would be ended on a timescale yet to be decided and pledged to keep sub-Saharan Africa's second-largest economy within a 3 percent fiscal deficit target. "We need to work harder. We need to maintain macro-economic stability. We need to manage our fiscal system in a more prudent manner. We can start with recurrent expenditure," she told reporters in the capital Abuja. Okonjo-Iweala, who was sworn into her new role last week, said Nigeria's cumbersome budget process had to be changed. But she said fiscal and budgetary changes would take a long time.

Government offices often spend months without knowing how much money they have for the year. Political wrangling meant President Goodluck Jonathan only signed the 2011 budget into law at the end of May. "We need to change the budget process in this country. We can't bring a budget and then have reservations that go back and forth. The executive has its responsibility and I hope the lawmakers will also take responsibility.

By 2013 we will have a much saner budget process," Okonjo-Iweala said. Nigeria's reliance on oil exports meant fiscal prudence was even more important given the volatility of global oil prices in recent months during the crisis in North Africa, the minister said. Okonjo-Iweala, who has been given broad powers over the economy, was this week made the head of an economic implementation team. She said the president was also keen to diversify the economy with security, entertainment and agriculture sectors that should be targeted for growth. "When one considers the non-oil revenue collection ratio as a share of GDP, Nigeria lags well behind other peer economies," said Razia Khan, head of Africa research at Standard Chartered. SPENDING HIGH "

Any effort to address this might yield faster fiscal consolidation, but it is also clear that spending pressures - with the state at the centre of so much of the reform effort, especially when it comes to infrastructure - will remain intense," Khan added. There are over 150 Nigerian firms outside the oil sector planning to invest 1.5 trillion nigerian naira ($9.6 billion) in the next 12-months, Trade and Investment Minister Olusegun Aganga said in Lagos this week. Former Finance Minister Aganga said investment included 900 billion naira from the conglomerate Dangote Group, 45 billion from Nigerian Bottling Company and 225 million from Guinness Nigeria.

In order to help these businesses grow the economy and boost job creation, the state needs to improve infrastructure and remove barriers for investors, Okonjo-Iweala said. "We need to look at infrastructure as an enabler for the economy. Power, roads, things that will help business, which will drive economic growth. We need to focus on current incomplete projects, not starting too many new ones." The woeful power supply situation in Africa's most populous nation is one of the most pressing issues for most Nigerians and is holding back economic growth. Nigeria has the world's seventh-largest natural gas reserves, yet is blighted by persistent electricity outages which force businesses and individuals who can afford them to rely on diesel generators.

Its focus on making short-term gains on crude exports means that despite being the world's fifth-largest oil exporter last year, Nigeria has to import most of its fuel needs due to a lack of investment in refining infrastructure. The increased costs associated with fuel importation and corruption within the industry means the government pays costly subsidies to temper the price for Nigerians, but these will be removed, Okonjo-Iweala said. Most Nigerians live on $2 a day and ending fuel subsidies is a contentious issue as many believe it is the only benefit they receive from living in an oil-rich country. "

There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on. You have to leave it to us to decide when it is prudent to do so," she told reporters. ($1 = 155.940 Nigerian Nairas) (Additional reporting by Oludare Mayowa; Editing by Marius

The woman admits this will hit the poor hardest - yet still thinks it a good idea.

Agree, [img]http://2.s07.flagcounter.com/count/DymW/bg=E6E6E5/txt=E6E6E5/border=E6E6E5/columns=1/maxflags=1/viewers=3/labels=0/[/img]
[img]http://s07.flagcounter.com/count/DymW/bg=E6E6E5/txt=E6E6E5/border=E6E6E5/columns=1/maxflags=1/viewers=3/labels=0/[/img]

So much for her Harvard degree! How is this going to help the poor masses Is she stupid or what?? I mean remove oil subsidies so the money can go to our ever increasingly corrupt government freakin witch!

I said it before that Ngozi Iweala will be rubbished by PDP government. Removing fuel subsidy while we are still importing fuel will make life more difficult for Nigerians and trust PDP, they will push Ngozi to the people and you know Nigerians always see anybody that tampers with fuel price as their real enemy.
NGOZI SHOULD BE CAREFUL OOOOOOOO.

Very UGLY WOMAN.

all dis problem on subsidy is becos we dont v our rifineries functioning. we explore and produce d oil den sell it out (export) and buy it back again (import). And dis refineries abroad are owned by our wicked and insincere leaders who will never want to see nigeria grow. God help us and dis country of ours

@OP, you're an idiott. Obviously this report is beyond your comprehension. The subsidies are going to be removed no time soon but until the economy(which includes the citizens) is booming and more defined. Have you ever heard of the "Reform Agenda"? Read the quote below slowly, then read it again. That should help with understanding why there is even a subsidy:

Nigeria has to import most of its fuel needs due to a lack of investment in refining infrastructure. The increased costs associated with fuel importation and corruption within the industry means the government pays costly subsidies to temper the price for Nigerians

I don't understand why everyone is so married to the idea of subsidizing Benin Republic, Cameroon, Niger Republic.

A fuel subsidy isn't the best way to impact the masses. Does even 5% of it reach the "masses" right now?

Chyz*:

@OP, you're an idiott. Obviously this report is beyond your comprehension. The subsidies are going to be removed no time soon but until the economy(which includes the citizens) is booming and more defined. Have you ever heard of the "Reform Agenda"? Read the quote below slowly, then read it again. That should help with understanding why there is even a subsidy:

Stop showing off your ignorance. . . . .

Do we have any functioning refineries in place that can meet the demand of Nigerian consumers?

How about she talks about investing in refineries before she considers removing the subsidies.

That's too hard for her or her colleagues - but its easy to hit the poor through increased living costs.

If we refined our oil we wouldn't need to import petroleum products with foreign currency at extortionate prices.

Hence the need for the subsidies until we have our own refining infrastructure in place.

Chyz*:

@OP, you're an idiott. Obviously this report is beyond your comprehension. The subsidies are going to be removed no time soon but until the economy(which includes the citizens) is booming and more defined. Have you ever heard of the "Reform Agenda"? Read the quote below slowly, then read it again. That should help with understanding why there is even a subsidy:

ekt_bear:

I don't understand why everyone is so married to the idea of subsidizing Benin Republic, Cameroon, Niger Republic.

A fuel subsidy isn't the best way to impact the masses. Does even 5% of it reach the "masses" right now?

chyz and ekt bear

fuel subsidies is needed in Nigeria right now and for the next at least 20-30 years. infact because OBJ raise the fuel price from 20N to 80 N duing his ternue that what makes him unpopular

the masses ie the people don't want to pay extra for the fuel we produce again. The people are already in hard times and yet you people want the FG to increase the price again to further put burden on the people.

increase in fuel price would affect the whole economy from the middle class to the poor, even pupils and students

prices of food would jump up, etc

people i agree with sun-of god here

after all the billions and billlion people like alams have can subsidy our fuel for a year or more not to talk of ibb, tinubu and co

Sun of god:

Stop showing off your ignorance. . . . .

Do we have any functioning refineries in place that can meet the demand of Nigerian consumers?

How about she talks about investing in refineries before she considers removing the subsidies.

That's too hard for her or her colleagues - but its easy to hit the poor through increased living costs.

If we refined our oil we wouldn't need to import petroleum products with foreign currency at extortionate prices.

Hence the need for the subsidies until we have our own refining infrastructure in place.

you have said it all.

people need to know what is going on here. lets not display our ignorance to issues that would affect the country even to dye and pepper sellers

it is that bad

Removal of subsidies on fuel? Again.

This was one of the key measures of the IMF/World Bank Structural Adjustment Program (SAP) under Babangida. We know that an increase in fuel prices will translate into more hardship for the masses

this is just the beginning - by the time this woman and GEJ finishes with all of you - you will all be suicidal- fresh air abi - fools!!

cap28:

this is just the beginning - by the time this woman and GEJ finishes with all of you - you will all be suicidal- fresh air abi - fools!!

suicide why na?

we rather remove them and start a revolution than commit suicide

This is a dumb move,

This woman is looking for trouble,, hope NLC have seen this.?

cap28:

this is just the beginning - by the time this woman and GEJ finishes with all of you - you will all be suicidal- fresh air abi - fools!!

well,to whom much is given much is xpected, ngozi,ngozi,ngooooooo.aw many times did i call u?b carefull oooo.

You guys are just getting unnecessarily paranoid about the fuel subsidy thing. Read the article before professing doomsday. Fact: She said it is a good thing to remove the subsidy on fuel; Fact: she acknowledges that the poor will be worst hit. But what she didnt say is that they would remove it today, tomorrow, next year or even ten years. She said when the time is right, what this means objectively is that they will find a means of easing the effect of the removal (probably by building more refinaries or increasing production from the existing ones to drop the cost of importation) before considering the removal.

When strategists speak, politicians should not interprete. If you guys are politicians then you have no business interpreting the comments of a strategist because all options are considered before decisions are made and all consequences are considered before pronouncements (such as the one Dr. Ngozi made) are made.

Get your facts right and your brains straight before turning an intellectual analysis of Nigeria's economic problem become a tool for political bickering!!!

asha 80:

     

Where you been dude?
Welcome back.

felix4real:

You guys are just getting unnecessarily paranoid about the fuel subsidy thing. Read the article before professing doomsday. Fact: She said it is a good thing to remove the subsidy on fuel; Fact: she acknowledges that the poor will be worst hit. But what she didnt say is that they would remove it today, tomorrow, next year or even ten years. She said when the time is right, what this means objectively is that they will find a means of easing the effect of the removal (probably by building more refinaries or increasing production from the existing ones to drop the cost of importation) before considering the removal.

When strategists speak, politicians should not interprete. If you guys are politicians then you have no business interpreting the comments of a strategist because all options are considered before decisions are made and all consequences are considered before pronouncements (such as the one Dr. Ngozi made) are made.

Get your facts right and your brains straight before turning an intellectual analysis of Nigeria's economic problem become a tool for political bickering!!!

Nigerians have been so battered by past governments that they have become instinctive sceptics, its hard to blame the man in the street for that attitude. However, in moderate doses, scepticism is a healthy thing, but it should not be overdone to the extent that we end up defeating ourselves. Some of us don't even bother reading articles any more before screaming our heads off at imaginary enemies and dragons, which is a total shame really.

Some of the comments here are indeed shocking! Maybe lack of a reading culture makes a lot of Nigerians to lack basic comprehension skills.

Part of the article:

Sun of god:

By Joe Brock ABUJA, Aug 24 (Reuters) - http://www.cnbc.com/id/44257498

Okonjo-Iweala, a former World Bank managing director, [size=14pt]also said fuel subsidies would be ended on a timescale yet to be decided [/size]and pledged to keep sub-Saharan Africa's second-largest economy within a 3 percent fiscal deficit target.

There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on. You have to leave it to us to decide when it is prudent to do so," she told reporters. ($1 = 155.940 Nigerian Nairas) (Additional reporting by Oludare Mayowa; Editing by Marius

Simple comprehension!

Clearly, common sense will inform us that she meant that the subsidies wouldn't be removed [size=13pt]immediately[/size] but after a while, possibly when there're more infrastructures in the oil sector e.g refineries.

The question we should be asking is, how long will it take to construct refineries capable of refining the required quantity of various fuels required by the citizenry?


[size=13pt]@asha80,[/size]

Nno nwanne. Long time. Welcome back to NL.

beaf and dem people

i decided to lay off nairaland for a while.

@Beaf: I'm with you. I agree that due to the events being witnessed in all spheres of Nigerian politics, there is little hope expressed by the average Nigerian that anything good can come out of Aso Rock. Although it is easy to forgive the pessimism about such moves, considering that when Obasanjo promised better life at the end of the tunnel called Deregulation of the downstream sector, we all thought a magic wand would be waved and we would walk up to a fuel station and purchase a litre of petrol at twenty-one naira from the pre-Abacha days. But we were disappointed.

All that notwithstanding, it is not a necessary outcome to destroy any idea that comes out of the presidency (i don't really care which party is ruling) jusyt because it sounds scary at first and because we have a bad history with tings like this. It's better to live a dream than re-live a nightmare.

When people are pushed to the wall, then the result will show. Let them try it!, libya, Egypt, syria na small thing,

damola1:

When people are pushed to the wall, then the result will show. Let them try it!, libya, Egypt, syria na small thing,

forget that line.this is naija.nothin dey happen

felix4real:

You guys are just getting unnecessarily paranoid about the fuel subsidy thing. Read the article before professing doomsday. Fact: She said it is a good thing to remove the subsidy on fuel; Fact: she acknowledges that the poor will be worst hit. But what she didnt say is that they would remove it today, tomorrow, next year or even ten years. She said when the time is right, what this means objectively is that they will find a means of easing the effect of the removal (probably by building more refinaries or increasing production from the existing ones to drop the cost of importation) before considering the removal.

When strategists speak, politicians should not interprete. If you guys are politicians then you have no business interpreting the comments of a strategist because all options are considered before decisions are made and all consequences are considered before pronouncements (such as the one Dr. Ngozi made) are made.

Get your facts right and your brains straight before turning an intellectual analysis of Nigeria's economic problem become a tool for political bickering!!!

Beaf:

Nigerians have been so battered by past governments that they have become instinctive sceptics, its hard to blame the man in the street for that attitude. However, in moderate doses, scepticism is a healthy thing, but it should not be overdone to the extent that we end up defeating ourselves. Some of us don't even bother reading articles any more before screaming our heads off at imaginary enemies and dragons, which is a total shame really.

Ok, understood

@Beaf and felix

but this are my questions and i don't mind if u can answer them. thanks in advice

Is she the minister of works or petroleum. I though she is the minister of finance and as such can not talk of subsides being removed yet. although I acknowledge the good intention she has on the the fuel prices being subsidies free but I don't think she can make such accession yet until there are national functioning refineries then as the minister of finance or so, she can look into the amount of liters the refineries are producing and talk about removing the subsidies

I mean even if the refineries are working, what is the grantee  that the refineries would be up to scratch to measure up to the demand of Nigeria before she can talk of such.

We are in a time in Nigeria where WE THE MASSES (i mean middle class and the poor) don't want to be hearing of such at all.

Let her as a strategist talk of how they can achieve to build refineries that would measure up to half of the imported fuel before she can be talking of removing subsidies.

Or am i saying rubbish because i am willing to learn.

People and their noise, all it takes is less than three minutes of your time, read through the damn article. Reading is one thing, understanding what is being read is another. As for me, I've always been in support of the removal of fuel subsidies after certain engagements are met. Talk about trimming deficit by 3%, that is in a good direction.

manny4life:

People and their noise, all it takes is less than three minutes of your time, read through the damn article. Reading is one thing, understanding what is being read is another. As for me, I've always been in support of the removal of fuel subsidies after certain engagements are met. Talk about trimming deficit by 3%, that is in a good direction.

we read and understood it brother

is she not meant to be concern with budgets of refineries first and how to get half of the fuel imported first before talking about removal of fuel subsidies which must still go through indigenous refineries first before any other thing

what is the cost of building this Our refineries and how much would take Nigeria government to run it. now which is cheaper

then, we can look forward to build more refineriers and laying off the importation before talking of removing subsidies

I like the idea of removing the fuel subsidy so i will want Okonjo-Iweala to like my own idea too,  She has studied abroad under an economy where refineries are working in top form and there was no need for subsidy on fuel( She will fail on that aspect if she wants to treat nigeria like USa on that angle)
Now they are working on a time frame to remove the fuel subsidy,  While they are at that,., they should also be working on the timeframe when all the existing refineries will be overhauled and then new ones built and the license awarded for private refinery investors.,  So by the time they are done with all the time frame,  The fuel subsidy will be removed just as the refineries will be working at top form,  Fuel per litre in nigeria if refineries are working would average 35 naira per litre.
It all shows they are out there to kill the masses,  They just want to kill this Horse called Nigeria

damola1:

When people are pushed to the wall, then the result will show. Let them try it!, libya, Egypt, syria na small thing,

asha 80:


forget that line[b].this is naija.nothin dey happen[/b]

nothing dey happen? isn't that what Gaddafi and Mubarak thought b4 the revolution blew them away? siddon there, e go be like film trick for u when the typhoon hits.