₦airaland Forum

WHO welcomes appointment of Chair-elect of Gavi Board Dr Ngozi Okonjo-Iweala

Statement by WHO Director-General, Dr Margaret Chan
22 September 2015

WHO welcomes the appointment of the Chair-elect of the Board of Gavi, the Vaccine Alliance, Dr Ngozi Okonjo-Iweala. She will take up the position of Chair from January 2016.

Dr Okonjo-Iweala is a renowned development economist and former Nigerian Finance Minister. She brings more than 33 years of development and financial expertise to the Gavi Board at a critical period for immunization in developing countries.

Earlier this year, WHO warned that vaccines are not being delivered equitably or reliably and that only 1 out of the 6 key vaccination targets for 2015 is currently on track – the introduction of under-utilized vaccines, a target to which Gavi has contributed significantly.

In taking up the position of Board Chair, Dr Okonjo-Iweala will succeed Dagfinn Høybråten, a former Norwegian Minister of Health and current Secretary General of the Nordic Council of Ministers. She will also work closely with Dr Flavia Bustreo, WHO Assistant Director-General for Family, Women’s and Children’s Health, who is Vice Chair of Gavi.

Since 2000, Gavi has supported the immunization of more than half a billion additional children, leading to 7 million future deaths being averted.

WHO is one of the founding members of Gavi, a public-private partnership formed in 2000, to address global inequities in access to and coverage of available lifesaving vaccines. Over the next 5 years, WHO will continue to lead collective efforts to achieve and sustain universal vaccination coverage as outlined in the Decade of Vaccines Global Vaccine Action Plan. WHO plays a critical role providing global recommendations on immunization, ensuring that vaccines are safe and of assured quality, and providing support to countries to implement immunization programmes.

http://www.who.int/mediacentre/news/statements/2015/gavi-okonjo-iweala/en/

*Elected Chair of the Board of Gavi, a $12 Billion Multilateral Public-Private Partnership on Vaccines

*Appointed Senior Advisor, Lazard Investment Bank

*Ex Minister Thanks Nigerians and International Community for Support

Former Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala has accepted two key international positions.

The first is to serve as Chair of the 28-member Board of the Global Alliance for Vaccines and Immunisation, GAVI, (http://www.gavi.org/about/), an international public-private partnership committed to saving the lives of children and protecting people’s health by improving access to immunization in developing countries, including Nigeria.

Dr Okonjo-Iweala was elected to the position after a competitive international search process.

GAVI is a $12 billion multilateral partnership which disburses grants of upwards of $1.8 billion annually to developing countries for immunization programmes.

GAVI brings together developing countries and donor governments, the World Health Organization, UNICEF, the World Bank, the vaccine industry in both industrialized and developing countries, research and technical agencies, civil society, the Bill & Melinda Gates Foundation and other private philanthropists.

GAVI is funded by governments of Australia, Brazil, Canada, Denmark, France, Germany, India, Ireland, Italy, Japan, the Kingdom of Saudi Arabia, Luxembourg, the Netherlands, Norway, the People’s Republic of China, Republic of Korea, Russia, South Africa, Spain, the State of Qatar, the Sultanate of Oman, Sweden, United Kingdom, and the United States as well as the European Commission, the OPEC Fund for International Development (OFID) and other institutional and corporate partners.

It will be recalled that, from 2000-2015, GAVI disbursed $425m in grants to Nigeria, an average of about $30m per annum for vaccination and immunization of children, including polio vaccines.

Dr Okonjo-Iweala succeeds Dagfinn Høybråten, a former Norwegian Minister of Health and current Secretary General of the Nordic Council of Ministers as Chair of GAVI.

Previous Chairs include Mary Robinson, former President of Ireland and respected education activist and former First Lady of South Africa, Graca Machel.

In the second appointment, the former Managing Director of the World Bank has also joined the highly respected 167-year-old global investment firm, Lazard (https://www.lazard.com/) as Senior Advisor. Her focus will be sovereign advisory.

“We are proud to welcome Dr. Okonjo-Iweala as a Senior Advisor to our world-leading sovereign advisory group,” said Matthieu Pigasse, Global Head of M&A and Sovereign Advisory of Lazard. “She will bring a unique international expertise and experience that will benefit both our sovereign and corporate clients.”

At Lazard, Dr Okonjo-Iweala will work alongside colleagues including former Prime Minister of Australia, Paul Keating; former Special adviser to President Bill Clinton, Vernon Jordan; former Spanish Economy Minister and current Snr Managing Director at Lazard, Rodrigo de Rato; former chair of NASDAQ, Frank Zarb; former Finance Minister of Chile, Andres Velasco; and former British Minister of Parliament/Secretary of State for International Development, Andrew Mitchell.

In her reaction to the two appointments, Dr Okonjo-Iweala who will be working out of Paris, Geneva and London said:

“I am excited to be embarking on this fresh journey. The two appointments will enable me to continue doing what I know best - rendering public service and using my financial and economist skills. I thank the international community for the recognition and continued support. I am also grateful for the prayers and support of many Nigerians”.

For more details, please check the GAVI and Lazard websites. Thank you.



Paul C Nwabuikwu
Media Adviser to Dr Okonjo-Iweala
Abuja, September 21, 2015

By NGOZI OKONJO-IWEALA SEPT. 9, 2015

An innovative business model combining solar power and cellphones is electrifying parts of rural Africa that are far from the grid.

It’s called M-KOPA. The “M” stands for “mobile,” and “kopa” means “to borrow.” The company’s customers make an initial deposit, roughly $30, toward a solar panel, a few ceiling lights, and charging outlets for cellphones — a system that would cost about $200. Then they pay the balance owed in installments through a widely used mobile banking service, based on how much energy they use. The solar units are cheaper and cleaner than kerosene, the typical lighting source, and once they’re fully paid for after about a year the electricity is completely free. More than 200,000 homes in Kenya, Tanzania and Uganda use M-KOPA’s solar systems.

Creative, bottom-up solutions like M-KOPA are emerging across Africa and the developing world. Scaling them, and quickly, is the challenge. Around 1.3 billion people worldwide still lack access to electricity, including two out of three sub-Saharan Africans. An enormous divide exists between the global rich and the global poor, from energy access and technology to wealth and infrastructure. But the divide is not immutable, and momentum for solutions to bridge it are emerging from all over the world.

Later this month, the United Nations will aim to take another important step to close that gap by agreeing on Sustainable Development Goals, including goals on ending extreme poverty and ensuring adequate access to energy. It is important that the word “sustainable” has been given a prominent place in the agenda, because while many global trends are going in the right direction, one is certainly not: the climate. Without acting on climate change, we risk undermining the development gains that we have achieved so far and widening the gap between the rich and the poor. The economic growth we have seen to date will be unsustainable in the face of increasing climate disasters.

Climate change hits the poorest people the hardest. The poor are more likely than the rich to live in places vulnerable to climate-related weather events and more frequently suffer from diseases that can be exacerbated by climate change. The World Health Organization predicted last year that in 2030 climate change will lead to 48,000 additional deaths due to diarrhea, 60,000 from malaria, and 95,000 from childhood undernutrition. The vast majority of these will take place in sub-Saharan Africa and South Asia.

It is clear that we cannot tackle poverty successfully without also tackling climate change. That’s why enterprises like M-KOPA are so important: They help to bridge the divide between the global rich and global poor in a low-carbon way. Small-scale solar is only a start. Africa attracted $8 billion of investment in renewables last year, and the International Renewable Energy Agency estimates that its potential for wind and solar power amounts to more than 1.5 trillion gigawatt hours per year. There’s plenty of room for both bottom-up innovation and top-down support for green energy.

In addition to energy access, better land use can make a real difference as well. For example, farmers in Niger are using new agroforestry techniques to produce more grain than ever before. By interplanting trees on cropland and allowing extra shrubs to grow, the farmers restore degraded land, lower greenhouse gas emissions and increase agricultural productivity. And they are directly reaping economic benefits, with gross annual incomes going up for over a million households by an average of $1,000, more than doubling real incomes.

Today this is in Niger; tomorrow, if this were global, restoring just 12 percent of degraded lands to production could raise farmers’ incomes by $40 billion per year and feed another 200 million people.

Investing in sustainable infrastructure in areas like energy, land use and cities is a no-brainer. But the biggest obstacle is coming up with the initial financing for these investments, even though we know that they will pay for themselves in the long run.

Much of the financing needs can be met through more effective mobilization of private investment. For example, a renewable energy procurement program in South Africa has mobilized $14 billion in domestic and international private financing for sustainable infrastructure. When the market fails in providing private finance, development banks can step in by providing technical assistance and guarantees. Better mobilization of countries’ own domestic resources is also critically important.

Low-carbon investment is gathering momentum around the world, and the founders of M-KOPA aren’t the only ones being creative. Investors are increasingly turning to new, more efficient forms of finance. “Green bonds” that support low-carbon and climate resilient infrastructure more than tripled in 2014 to reach $37 billion.

The global divide between the rich and the poor is far from closed. But with smarter anti-poverty and energy-access measures and a focus on sustainable finance, the future for Africa and the rest of the developing world can be bright, in more ways than one.

Ngozi Okonjo-Iweala is a former finance minister of Nigeria and was a managing director at the World Bank from 2007 to 2011.

http://www.nytimes.com/2015/09/10/opinion/green-energy-for-the-poor.html?_r=1

Abuja, August 29, 2015

AMBASSADOR ADEFUYE:
A DEDICATED, STERLING PATRIOT

I received the news of the passing of Ambassador Ade Adefuye with great sadness. He and my husband developed a warm friendship in Washington.

He was a very dedicated and hardworking man who represented the country with sterling patriotism and passion.

Ambassador Adefuye was much respected in the diplomatic community for his strong intellect and deep knowledge of Nigeria and Africa.

I interacted closely with him in the course of my job as Minister of Finance and I saw firsthand his dedication to the task of helping diplomats and investors understand Nigeria and appreciate the country's many positives. He participated robustly in many sessions with investors especially on infrastructure and agriculture financing.

And of course he was always ever ready to speak up and defend the country whenever necessary. But he also had a great sense of humour and, during tense moments, Ambassador Adefuye could be counted upon to say something to relieve the stress.

A strong family man, he took great pride in his wife and children who always stood by him and gave him strength.

Our thoughts are with the Adefuye family at this difficult time and we pray that the memory of his worthy life would comfort and strengthen them in their grief.

Adieu Ambassador.

Dr. Ngozi Okonjo-Iweala
Abuja, August 29, 2015

ANOTHER LIE FROM SAHARA REPORTERS: THE ALLEGED “MULTI-MILLION DOLLAR OKONJO-IWEALA FAMILY HOSPITAL” DOES NOT EXIST

Having failed to achieve any success after months of unsubstantiated figures and wild allegations against Dr Okonjo-Iweala, the political and corrupt vested interests who have been attacking her have now turned their evil attention on her family.

The false story, “Former Finance Minister Okonjo-Iweala’s Family to open multi-million Dollar Hospital in Abuja” published by the corrupt website, Sahara Reporters is the latest chapter in the anti-Okonjo-Iweala campaign.

The story is totally baseless for a very simple reason: The alleged hospital is non-existent.

Anyone who is in doubt can go to Gwarinpa, Abuja where the hospital is allegedly located or enquire from General Electric and Perkins + Will Global, the two organisations that were mentioned as Consultants to the project in the report as to whether the hospital has been built.

The real facts are as follows:

- Dr Ikemba Iweala, the husband of Dr Okonjo-Iweala is a recently retired neuro-surgeon and emergency physician with over 40 years’ of practice in Nigeria, the United Kingdom and the United States.

- Three of their four children are US trained medical doctors, including Uchechi Iweala who was mentioned in the story. Uchechi has an MD and MBA from Harvard.

- To actualize his desire to give back to the country, Dr Ikemba Iweala for the past few years has been working on establishing a hospital in the Federal Capital Territory. He has used his savings to develop the concept and design of the hospital. So far efforts to source financing for the project are ongoing.

- It is the prototype design and website of the yet to be realized project that Sahara Reporters, doing the bidding of its corrupt pay masters, seeks to turn into a multi-billion dollar evidence of corruption.

Why is Dr Okonjo-Iweala the object of this ceaseless campaign of falsehoods and distortions? The answer is simple: because she refused to steal and share and because she blocked many powerful people, some of whom are now in power, from stealing. That is why they would go to any lengths to tarnish her name.

Dr Okonjo-Iweala has a clean record of two terms in office. As we have consistently maintained, she is not afraid of a transparent investigation of her two terms in office. She supports the anti-corruption drive in Nigeria. No one who has had the privilege of serving his or her country should feel too big to be investigated. It is this very issue of fighting corruption that brought her back in the first place and she has a track record of blocking corruption. It is ironic that it is those same corrupt people who are trying to tarnish her image using corrupt media like Saharareporters.

People should recall that it was her fight against subsidy scammers that led to her mother being kidnapped in 2012 with the demand by the scammers that she should resign and leave the country.

Nigerians should prepare for more attacks because these people are desperate and drunk with power. But they will keep failing because the truth will ultimately prevail.

Incidentally, the hospital idea is still very much alive and anyone who is interested should please come forward to discuss possible investment. But there is a condition: the money must be clean. Corrupt people, especially lying governors, need not apply.


Paul C Nwabuikwu
Media Adviser to Dr Okonjo-Iweala

ALLEGED DIVERSION OF CHINESE RAIL LOAN UNTRUE

- Kano-Lagos rail project not funded by China-EximBank

- China-EximBank keeps and disburses funds for approved projects to contractors based on milestones; funds are not domiciled with Finance Ministry

Since this story was first reported, we have continued to receive media inquiries regarding an allegation reportedly made by the Permanent Secretary, Ministry of Transport, Alhaji Mohammed Bashar, that a substantial part of a $1bn loan obtained from the China-EximBank by the Jonathan administration for a Kano-Lagos rail project was diverted to other projects.

I want to state categorically that there is no truth in the reported allegation. Anyone who is interested can cross-check with the China-EximBank or the Chinese Embassy.

It is noteworthy that even though President Buhari, in his reported comments on the allegation, made no reference to Dr. Okonjo-Iweala but rightly stressed the need for due process and transparency in the execution of public projects, a sponsored media campaign has once again been launched by political elements to make the former Minister the culprit in a non-existent scandal.

The alleged diversion has no substance for the simple reason that the Kano-Lagos project was not even among the projects presented for funding by the China Exim Bank for several strategic infrastructural projects across the country.

In fact, it was the Lagos–Ibadan rail project, not Lagos-Kano rail project that was proposed in the original application to the China-EximBank. But in the end, no funds were assigned for the Lagos-Ibadan rail project by the China-EximBank.

The fact which can be confirmed is that the following projects which are at various stages of progress are being funded from facilities obtained from the China-EximBank:

- $500m for the expansion of four International Airport Terminals in Lagos, Kano, Abuja and Port Harcourt.

- $500m for the Abuja Light Rail project

- $984m for the Zungeru Hydro-electric power project

- $100m for the Galaxy Backbone project

It is also important to note that even if the alleged project was on the list of China-EximBank funded projects, diversion of any Chinese funds would have been extremely difficult because the terms of the contract and the processes would simply not have permitted such action.

The procedure is that funds for approved loans remain in the China-EximBank and are released directly to the Chinese firm executing the contract only after the presentation of duly certified proof of work by the responsible Ministry, in this case it would have been the Federal Ministry of Transport, based on the agreed milestones.

For the sake of emphasis, the China-EximBank does not disburse money directly to government and therefore the issue of diversion does not arise.

This is yet another example of the kind of whispering campaign of calumny, innuendo, misinformation, and outright distortions being perpetrated by certain political elements against Dr. Okonjo-Iweala in a bid to try to damage her reputation.

We are confident that those behind this campaign will continue to fail.

We respectfully request the media to refrain from attaching Dr. Okonjo-Iweala's name and photographs to spurious and unfounded allegations. Dr. Okonjo-Iweala as a Nigerian citizen in a democracy, a citizen who has served her country with honesty and integrity, also has some fundamental rights to justice and fair play.

Thank you.


Paul C Nwabuikwu
Media Adviser to Dr. Ngozi Okonjo-Iweala

SAHARAREPORTERS STORY THAT OKONJO-IWEALA HAS HANDED “DOSSIER OF CORRUPT DEALS” TO PRESIDENT BUHARI IS TOTALLY FALSE

The recent report by the integrity-challenged website, Saharareporters and some other media that former Minister of Finance, Dr Ngozi Okonjo-Iweala has handed over a “dossier of corrupt deals” perpetrated by the Jonathan administration to President Buhari is completely false and without foundation.

This sponsored lie is part of the political attack by the pay masters of Saharareporters against Dr Okonjo-Iweala.

These attacks will continue given that these individuals are bent on a political and personal vendetta against her.

Why are they angry? It is simply because she tried to bring integrity and transparency to the management of Nigeria’s public finances which obviously did not suit their interests.

Saharareporters which has a long history of publishing falsehoods and distortions against Okonjo-Iweala is a paid tool of these individuals.

But the lies of Saharareporters and its cohorts will never stop Okonjo-Iweala from loving her country or make her regret serving it, not once but twice.


As always, we are confident that the truth shall prevail.



Paul C Nwabuikwu
Media Adviser to Dr Okonjo-Iweala

With Nigerian delegates at Addis Ababa Financing for Development Conference.

Focus: Getting additional resources for women empowerment in Nigeria.

Abuja. July 13, 2015

ANOTHER FALSE, BASELESS ALLEGATION AGAINST OKONJO-IWEALA BY GOVERNOR OSHIOMHOLE

The allegation by Governor Adams Oshiomhole of Edo State that former Minister of Finance Dr Ngozi Okonjo-Iweala spent $1 billion out of the Excess Crude Account to fund the re-election bid of former President Jonathan is the kind of ludicrously false statement that has unfortunately become a trademark of the Governor in his public campaign of falsehood against Dr Okonjo-Iweala.

The statement is just another example of the numerical diarrhea that seems to have afflicted His Excellency in recent times in his effort to damage the reputation of the former Minister.

He has, within the last few months, asked Dr Okonjo-Iweala to explain all kinds of totally wild and unsubstantiated figures, ranging from $30 billion, $20 billion, $2.1 billion, N720 billion and now $1 billion.

To say the obvious, the accusations are totally lacking in credibility.

Governor Oshiomhole’s published comments also contain other falsehoods. For instance, he quoted Dr Okonjo-Iweala as saying that she and the Finance Commissioners of the 36 states approved the spending of $2.1 billion out of the Excess Crude Account, adding that the Commissioners had disowned the statement. This is also a complete distortion.

Dr Okonjo-Iweala never said the Federation Accounts Allocation Committee (FAAC) approved spending out of the ECA. Rather as the Commissioners themselves stated, the former Minister of State Finance informed them that former President Jonathan approved the expenditure to end the debilitating fuel queues across the country.

As Nigerians know, the Finance Ministry under Okonjo-Iweala regularly published details of revenue allocations from the ECA in national media. So Oshiomhole’s tortured “calculations” based on his “four figure tables” are mere political numbers conjured to achieve a political purpose. Nigerians can see through the elaborate antics.

Governor Oshiomhole’s latest statement, like earlier ones, labours to give the impression that the entire FAAC process which involves the Federal Government and the 36 states of the Federation is a personal monopoly of Dr Okonjo-Iweala.

This is, of course not true. FAAC is a long standing national platform for allocating revenues chaired by the Minister of State Finance. The governor’s insistence on pushing this clearly fictional narrative underscores his desperation.

It is instructive that Governor Oshiomhole is a key member of the committee set up by the National Economic Council to investigate the ECA spending. His continuing attacks against Dr Okonjo-Iweala seem to suggest that he has lost confidence in this platform which he deployed to make some of his initial false and baseless allegations. The Governor does not seem to appreciate that he is undermining the very credibility of the committee.

Once again, we ask: why are Oshiomhole and his cohorts so ready to sacrifice truth, precedent and decency in this political witch hunt against Dr Okonjo-Iweala?

We are confident that they will fail because truth will triumph.



Paul C Nwabuikwu
Media Adviser to Dr Ngozi Okonjo-Iweala

Abuja, July 7, 2015

NEEDLESS PERSECUTION OF OKONJO IWEALA

We thank the Finance Commissioners for their clarification on the use of the Excess Crude Account (ECA) and for acknowledging that this is not an Okonjo-Iweala issue.

The statement clearly shows that Federation Accounts Allocation Committee (FAAC) is a statutory body which is chaired by the Hon. Minister of State for Finance in which all the states are represented.

Payments made were used for paying for petroleum subsidies for the Nigerian people and were approved by Mr President.

Therefore there is no question of mismanaging any resources here.

For the avoidance of doubt, at no time did Dr. Okonjo-Iweala say that FAAC approved such expenditures. What she said was that all these expenditures were discussed at FAAC meetings attended by Finance Commissioners from the 36 states.

It is therefore clear that there was no misrepresentation by Dr. Okonjo-Iweala.

The question before us is: why is there such an excessive attempt to batter her name in an attempt to damage her reputation? It is clear as I said in my previous statement that the motive is malicious and very political and therefore will not succeed.

If monies were used to pay for subsidies for the Nigerian people and duly approved, why is Okonjo-Iweala’s name being battered in this way?

This persecution should stop.

Paul C Nwabuikwu
Media Adviser to Dr Okonjo-Iweala

Excess Crude Account: 36 States Shared N2.92 Trillion in 4 Years

​Abuja. June 30, 2015

THERE WAS NO “UNAUTHORISED SPENDING” UNDER OKONJO-IWEALA: $2.1 ALLEGATION IS LATEST CHAPTER OF POLITICAL WITCH-HUNT

The allegation by some governors that former Minister of Finance, Dr Ngozi Okonjo-Iweala spent $2.1 billion out of the Excess Crude Account “without authorization” is false, malicious and totally without foundation.

We want to state categorically that no unauthorized expenditure from the ECA was made under Okonjo-Iweala’s watch in the Finance Ministry. Decisions on such expenditure were discussed at meetings of the Federation Accounts Allocation Committee (FAAC) attended by finance commissioners from the 36 states.

It is curious that in their desperation to use the esteemed National Economic Council for political and personal vendetta, the persons behind these allegations acted as if the constitutionally recognized FAAC, a potent expression of Nigeria’s fiscal federalism, does not exist.

But Nigerians know that collective revenues, allocations and expenditures of the three tiers of government are the concern of the monthly FAAC meetings.

It is important to acknowledge the efforts of governors who are working hard to overcome the current revenue challenges facing their states without resorting to character assassination and blame games.

The former Minister is ready and willing to respond to legitimate enquiries about issues under her purview as Finance Minister. But it is clear that this is the latest chapter of a political witch-hunt by elements who are attempting to use the respected National Economic Council for ignoble purposes having failed abysmally in their previous attempts to tar the Okonjo-Iweala name.

It will be recalled that one of such attempts took place in May when some of these governors, hiding under the auspices of the Nigerian Governors Forum asked Okonjo-Iweala to explain $20 billion alleged to be missing from the same ECA.

The Finance Ministry subsequently issued a news release and published an advertorial in national newspapers on May 25, 2015 giving details of what the Federal Government and states received from the ECA in the last four years. It also provided details of the use of the funds for payment of petrol subsidies for the Nigerian public and SURE-P allocations to the three tiers for development purposes.

After the publication, the accusers lost their voice. But the latest allegations show that these persons are still in the business of throwing up wild, unsubstantiated figures to damage Okonjo-Iweala’s name. For instance, within the last few months, Governor Oshiomhole and his fellow travelers have asked Okonjo-Iweala to account for “missing” $30 billion, $20 billion and now $2.1 billion. What they don’t seem to understand is that the strategy has lost all credibility because the falsehood is clear for all to see.

How can some governors who fought FG’s efforts to leave robust savings in the ECA and even took the Federal Government to court over the matter turn around to make such unfounded allegations?

The world knows that it was Okonjo-Iweala who pioneered, during her first stint as Minister of Finance in the Obasanjo administration, the practice of publishing monthly updates of all allocations to different tiers of government in order to empower Nigerians with information and knowledge of government revenues and expenditure. This enabled the Nigerian public to ask questions about the utilization of these resources. Of course many elected and appointed public officials were not happy with this development.

She continued this practice when she returned in 2011 and even added periodic updates on the Excess Crude Account, subsidy payments for verified claims by oil marketers for fuel imports as well as SURE-P payments to the three tiers of government.

Against this background, the idea that she spent $2.1 billion “without authorization” is simply not credible given that details of government receipts and expenditure are public knowledge.

We believe that Nigerians are too smart to be hoodwinked by this partisan desperation to tar the name of Okonjo-Iweala.

In the interest of the country, we advise that public officials should avoid the temptation to politicize economic issues so that balanced analysis can lead to real solutions.

Paul C Nwabuikwu
Media Adviser to Dr. Ngozi Okonjo-Iweala

Posted by Editor on June 19, 2015 Ngozi Okonjo-Iweala Finally Vindicated 2015-06-19T11:24:31+00:00 under EDITORIALS No Comment

By IYKE DURUMBA

"I don’t know why a lot of us Nigerians suffer from a pitiable form of amnesia. Were we not in this country when the then Finance Minister Ngozi Okonjo-Iweala kept harping on the need to save funds in the Excess Crude Account but the state governors insisted on sharing same claiming they had ‘people-oriented’ (more like pocket-oriented) projects to spend on?

Were we not in this country when the FG at a time instituted a Sovereign Wealth Fund which was bitterly opposed by the same governors to the extent that some went to court all in a bid to share whatever accrues to such a fund?

Were we not in this country when Rotimi Amaechi accused the FG of looting the Excess Crude Account but the Ministry of Finance published figures showing that Rivers state among other states had collected billions and billions from the same funds he claimed was looted?
Why don’t we recall basic facts like and tell those governors to do either of these:

1) Produce those funds from wherever they kept them and pay their workers
2) Resign if they’re so helpless or
3) Go to hell and quit irritating our ears with their infantile ejaculations of helplessness.

All this hue and cry about states besieging the FG for bailout simply reinforces the desperate need for the true fiscal federalism some of us have been shouting about for years now’’.

Great news! Nigeria's Akin Adesina has won the AfDB presidency after our strong campaign! Great campaign! Great candidate!

FEDERAL MINISTRY OF FINANCE

News Release. May 28, 2015

OSHIOMHOLE’S BASELESS DIATRIBE AGAINST OKONJO-IWEALA

It is no surprise that a few days after the Federal Ministry of Finance published the details of what the Federal and State governments received from the Excess Crude Account over the past four years, Governor Adams Oshiomhole of Edo State has launched an attack against the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala. His article “Economy: Okonjo-Iweala’s hidden figures” is full of gaping holes, both in facts and logic.

Obviously, for daring to publish how the ECA was shared and showing that governors who cannot pay salaries have no excuses, Okonjo-Iweala is being targeted. It is noteworthy that several of their colleagues have been able to manage their finances reasonably well under these same difficult circumstances.

The release of the ECA details has also demonstrated very clearly that there is no substance in the wild allegations that any money is missing from the account or that finances of the country under Okonjo-Iweala watch have not been well managed.

Like previous baseless allegations by some Governors, the motive behind Oshiomhole’s attack is clear: to deflect public attention away from the manner in which they have run the finances of their states and make Okonjo-Iweala the scapegoat. If it was meant to intimidate the Minister, it has failed abysmally.

How can Governor Oshiomhole claim that state governors were not properly briefed on the status of the ECA when his commissioner of finance attends all the FAAC meetings where decisions are taken and communicated to the nation?

This diversionary tactic will not succeed because Nigerians are too smart to buy into this fiction. Secondly, the Finance Ministry under Okonjo-Iweala, the Minister who started the practice of publishing details of allocations from the Federation Account to all the three tiers of government, has regularly furnished Nigerians with information on the country’s finances.

Governor Oshiomhole’s statement that Okonjo-Iweala “must disclose to the nation the full details of subsidy payments made to oil marketers in the last four years” is therefore astonishing given the fact that EVERY payment made to the marketers has been published in the media and widely disseminated through all news channels.

Oshiomhole’s allegation that Okonjo-Iweala has not been transparent is ridiculous and totally lacking in merit. Apart from the monthly publication of allocations to the federal, state and local governments, the Federal Ministry of Finance under Okonjo-Iweala also publishes SURE-P receipts and distribution to different tiers, details of payments to oil marketers and other information.

Has Governor Oshiomhole demonstrated the same level of openness in his management of the affairs of Edo State? Can Oshiomhole also go public with ALL the information showing what he has received from various sources and the uses to which he has deployed them?

Equally incomprehensible – for a supposedly smart Governor - is Oshiomhole’s claim that the CME has “just woken up from her slumber to realize that oil marketers have been all along falsifying subsidy claims and defrauding the nation of billions of Naira”. This statement underscores the extent to which he is willing to go in his desperation to tar Okonjo-Iweala. When she returned as Finance Minister in 2011, the outstanding fuel subsidy bill was about N1.3 trillion. It was the work done on subsidy fraud by the Aig-Imoukhuede Committee which the Minister set up, later elevated into a presidential panel that determined that over N300 billion of the amount was fraudulent. This eventually led to the prosecution of some persons for subsidy fraud and reduction of the annual subsidy budget to N791 billion, saving the country over a trillion naira in the process. Maybe it is His Excellency who was snoring while this was going on. Such baseless posturing only serves to diminish the credibility of Oshiomhole in the minds of objective Nigerians.

For the record, Dr. Okonjo-Iweala has no apologies for insisting that a claim of N159 billion for forex differentials by the marketers out of a total bill of N200 billion should go through an additional verification process. When 80% of a subsidy claim is made up of forex differentials and not the value of the amount of fuel supplied, the right and proper thing to do is to take extra steps to ensure that the country is not being cheated. That is what Okonjo-Iweala did.

Oshiomhole’s allegation that the Minister is involved in “an unholy alliance” with government agencies and the marketers is therefore manifestly untrue and totally irresponsible. How can a minister against whom the oil marketers have conducted a very public campaign of calumny be in league with them? A decent public official should not make such scurrilous and unsubstantiated statements.

The most laughable part of Oshiomhole’s article is the claim that Okonjo-Iweala has been speaking out lately because of the “fear of Buhari”. Nigerians know this is ridiculous. If there is any minister whose voice has been strong on the right issues over the past four years it is Okonjo-Iweala. Okonjo-Iweala combines a stalwart integrity, a mastery of her mandate and the courage of her convictions. She therefore has no reason to fear. Those who cannot adequately explain what they did with the resources of their states and are begging for bailout are those who should to be scared.

Paul C Nwabuikwu

Special Adviser to the Coordinating Minister of the Economy and Minister of Finance

https://www.youtube.com/watch?v=pI3JfeMzJfY

Pictured are (standing, from left) Jeffrey Friedman, Angelique Kidjo, Peter G. Schultz, Ngozi Okonjo-Iweala, Dean Kamen, (seated, from left) Elon Musk, Janet Yellen, President Peter Salovey, Larry Kramer, and Gayatri Spivak. (Photo by Joy Bush)

CREDIT: http://news.yale.edu/2015/05/15/yale-awards-nine-honorary-degrees-commencement-2015

Thank you, Nigeria, for the opportunity to serve you.

OKONJO-IWEALA MAKES FORTUNE’S 50 GREATEST WORLD LEADERS’ LIST

MINISTER of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala has been named one of the 50 greatest leaders in the world by Fortune Magazine.

Okonjo-Iweala was recognized alongside others such as Liberian President Ellen Johnson-Sirleaf, Pope Francis, Chinese President Xi Jinping, Indian Prime Minister, Narendra Modi, Bill and Melinda Gates, Facebook Founder Mark Zuckerburg and Apple CEO Tom Cook.

The minister was described as “a fearless promoter of sound economic policies.” She was also singled out for working hard to usher in a decade in which the country’s GDP trebled.

She was named 33rd on the list. Fortune Magazine’s annual list celebrates men and women who are transforming lives in all spheres, including government, business and philanthropy. In compiling the 2015 list, the magazine explained that it gathered advice from more than 24 of the world’s best minds.

The leaders were judged by their actions within their professional domains, industries or governance. According to the magazine, “to make this roster, it was not enough to be brilliant, admirable or even supremely powerful.

It continued, “we set out to find singular leaders with vision who moved others to act as well, and who brought their followers with them on a shared quest. “We looked for effectiveness and commitment and for the courage to pioneer.”Okonjo-Iweala graduated from Harvard in 1976 and holds a Ph.D in Development Economics from Massachusetts Institute of Technology (MIT) – 1981.

As two-time Finance Minister of Nigeria, she has helped to lay a solid foundation for the Nigeria economy, which is currently the biggest in Africa at $510 billion.

CREDIT: Guardian

Exercising my right to vote
#NigeriaDecides

Part - 1 State of The Nigerian Economy by Dr. Ngozi Okonjo-Iweala

https://www.youtube.com/watch?v=sGUtr76lanQ

Part 2 - State of The Nigerian Economy by Dr. Ngozi Okonjo-Iweala

https://www.youtube.com/watch?v=BVDyp8MKjAw

How is Nigeria faring in the face of the dwindling oil prices?

I will like to say one thing: there has been some attempt to make people feel that there is no hope; that this situation is so difficult; there is hopelessness. I said from the beginning when oil prices began to fall by 50%. I said that this will be a tough year; but there is hope.

There is light at the end of the tunnel and the reason is because we have worked so hard as a country under this administration to lay the basics for us to exit this situation and get back on a good path. And that is what gives me hope. Why do I say that? First of all, let’s come back to the fact: we now have a Nigeria which is the largest economy on the continent and that is important. We have to keep stressing it because it means we’ve got the sectors. We’ve got the base which will enable us to carry out that diversification and be able to have a stronger economy in the long term that create the jobs and gives our young people hope.

So, it is very important to note that. We didn’t know that before. When you look at the structure of the economy and you see that the growth – all the analyses have shown that the growths from this economy have come from the non-oil sector that Agriculture has been doing well. And that also come to the present situation, because Agriculture has been doing well, we have produced more food than ever before - 21million metric tons more food. We have produced paddy, 1.1million metric tons a couple of years ago to 1.6million metric tons now. In fact, what I am saying about rice is that it is dry season farming, not to talk of paddy. And we are on our way to really reducing our dependency on food imports.

Because we’ve got food, prices have been kept relatively stable and reasonable. You can go round the market. We have gone round from different places to check and the prices of foodstuff are reasonable unlike other oil producing countries. That is helping us manage the situation for the average Nigerian.

What measures are in place to strengthen Nigeria’s reserves?

I know this is of concern to Nigerians, manufacturers looking for more foreign exchange, others paying their school fees and tuition abroad and even ordinary people. But I also feel that with this strong base that we have, if we just keep steady, we will be able to exit and the value of the Naira will strengthen because we have got the different sectors. And there are two ways we have to do it, and I think this is what Nigerians want. Instead of depending on oil, we have to look at the two ways to strengthen our reserves because that is the way we can strengthen the value of our currency. There are two ways: one is to reduce demand for imports and that is why I think our demand for agriculture imports is very important for us to watch that. And then reduce our demand for foreign goods.

I have always encouraged Nigerians that even strengthening the value of the Naira is not just government actions alone, it is in our hands. If we buy more of what is made here in our own country and reduce the demand of things made outside, that means we can increase our reserves and the Central Bank does not have to continue giving money to import all those goods that we don’t need. The second way is for us to start exporting things other than oil. And that is where again I feel encouraged because we are laying the foundation for that. You will recall that in the 60s, we were exporting groundnuts, cocoa, cotton, rubber and many agricultural products and suddenly we didn’t keep up. We have the ability to go back to those but not just exporting the raw materials and we already have people in these sectors adding value. What we need to do is to expand growing the cocoa, processing it here for our own internal demand and export it. And then we earn foreign exchange.

There is an area which is unexploited where we can earn foreign exchange which we are not. When I go around the continent, every single African woman wants Nigerian clothes. I know this may sound strange to lots of people. Those of us here, don’t we import shirts, trousers, from the UK? But people are here (in Africa) demanding our own clothes. Yet, we are not able to get together as an industry – the fashion sector - to make clothes we can export.

We will be sitting here and other West African nations will come and exploit it. But there is an opening. I am happy that the Minister of Industry, Trade and Investment is organising and working with the textile industry and the fashion industry to export, because we can earn so much from that. Imagine dressing the whole of Africa and what we can earn from it.

So, those are the two ways. If we now earn foreign exchange and we conserve by using our products, we will be able to add more to our reserve which will underpin the value of our currency.

Would you say the current economic policies are sustainable?

No matter what government there is, there will be a set of policies, institutions that will support this country. And that is what I admire about Mr. President when he talks. You know he talks about how we can put in place something that will last; whether I am here or not here is not the issue. It is about laying in place the building blocks for the Nigerian economy.


What is the impact of the government policies on the economy on the “common man?”

As I said, meeting our salary bill is very important to us and our pensions. The second thing is making sure that the health benefits we have gathered in this economy, we don’t lose it. Children must be immunised. We can’t let down immunisation because we know what that means. Polio vaccination: we are almost close to eradicating polio. This administration has been working towards that. We have eradicated guinea worms and we must make sure that all those medicines and vaccinations are kept. HIV and AIDS, there are treatments and all that. And then, there are very important infrastructures we focus on doing that.

The president promised to build the second Niger Bridge. That work is ongoing. Reporters have gone out there and noticed that the pilling is ongoing. The Lagos-Ibadan road is very important. The rail – completing some of the rail and make sure that they are running. These are ways the average Nigerian can feel the impact of what these governments is doing. I think it means a lot. I encountered some young Nigerians we don’t know what it means to be in a train because the train had never worked in this country. And now they can ride on a train. Very soon now, this Abuja-Kaduna line will be open.

Lagos-Kano line has been operating. Even the line to Makurdi and so on. These are things that impacts and the roads system that have been upgraded constructed in this economy. Yes, there are so many more. But we are on the good path, we should applaud it. When your journey on Benin-Ore road has been made smooth and short, isn’t that impacts?

When you go to some of our rural areas, and you have access to water because boreholes were dug by the MDGs programs and they have solar lightings, that is impact.

And these are some of the things that we have started in this administration that are impacting lives. You see that through all the efforts and support of the private sectors, we have created 1.4million out of the 1.8 million jobs that we need each year. That is impacting. Yes, the 400,000 people who have not yet gotten jobs that year will feel it and you will feel it if they are your relatives, son or daughters still sitting at home. We are not saying that we have met the mark. But we have gone a long way and steadily we have made solid plans on that path. The President has said that he will do two million jobs per year because we are so close to the 1.8 million and we’ve got the specific sectors generating these jobs. Not just the special programs we are doing. Sectorial investments are very critical. And that is what we are focusing on. And I have not mentioned the housing sectors impacts on the average Nigerian.

When you start something, it takes time to grow. We started these housing thing now, and yesterday we have a meeting with the CEOs of the primary mortgage institutions to do a review.


What Role Has Government Played in Institutionalising the Access to Finance?

For small and medium sized businesses in this country which employ the most people (about 66% of the adult population) contributes 45% of our national income. We have opened up several avenues to support them not on ad hoc basis but apart from what the Central Bank has done, the President kicked off two days ago a new development bank. For the first time, when this bank start working by the end of this year SMEs will have access to finance and they can borrow for five years, seven and ten years. We have never had this before in Nigeria. They will have one and half years of grace meaning that when they borrow they won’t worry about paying back for a year and half and that will give them time to organise themselves.

This new development bank is a wholesale bank, its job is to mobilise financing and liquidity for the agriculture bank, bank of industry and for the commercial and micro finance banks to now lend to SMEs.

When you look at this and the situation we are in. And you look at Agriculture and SMEs; you will see that there is hope and that we have laid the platform for this economy to emerge from the present situation.


Are there negotiations on ground to support budget deficit?

We have entered negotiations with the international financial institutions, specifically the African Development Bank and the World Bank. They have resources for us already programmed. We ask them to turn these resources into budget support for us. We are negotiating for $2billion that will come in foreign exchange and remember that the terms for these loans from the World Bank and the African Development Bank are quite reasonable compared to what we can get outside. These are the money that are been set aside for us and we decided to draw on it and we have decided to bring in budget support to come in foreign exchange.

It will disburse in two tranches and we are advance in negotiating with them and these will bring in some needed foreign exchange that will now be available for our private sector people to have access to. It will alleviate the situation and this is something we have started working on. We have been working on it daily and night with them because we need to address the need of manufacturers and others in the population. That will help ameliorate the situation.

The tenure of the loan will be standard. We will probably have about five years grace before we have to repay for about 25 years.


Where Does Nigeria’s Debt Stand?

I can tell you as someone who was central in the negotiation of the forgiveness of our debt cancellation that we are not near the situation we were before in terms of external debt. Our external debt is about 2% of our GDP.

Remember that when we went to negotiate, we were almost at 70% of the GDP and most of it was external. We have hardly any domestic debt at that time. We have been very careful on our debt. We are prudent in terms of the way we borrow.

We have more of domestic debts. What we are trying to do is to reduce the domestic borrowing so that we don’t crowd out the private sector. We have got some foreign borrowings which is just 2% of our GDP. The domestic debt of both federal and states government is about 12% of the GDP. So together, it is about 14% of GDP. And the norm and threshold for a country like Nigeria size is about forty something of the GDP. We are well below that.

However, we also look at something called debt service to revenue; so we can’t just say our debt is low compared to our GDP which is what the world measures. We must look at our ability to repay and that is one of the reason we are very prudent because debt service to revenue, we don’t want it to increase too much. Two years ago, it was 19% of GDP, it has risen to 22% and we don’t want it to go too much beyond that. I think if we get to something like 25%, we will be very strict and we are presently strict. We have been able, in this administration, to repay outright some of the domestic debt we owed. We paid back about N75billion and that was a very good thing instead of just rolling it over.

Countries are coming here to request our assistance in debt management. The UK government named Nigeria debt management system as one of the best in the world. Even as we speak, South Sudan and other countries that are just starting up have come us for expertise in managing debt. We are not complacent at all. We looked very carefully at the risks of what we borrow.


Non Salary Payment has become an issue across states in Nigeria, should we be concerned?

All of us - states and federal government - have experienced a drop in revenue. What we have done is to talk to the states on how do we collectively as a nation get through the difficult times? And what we told them is of course they are fiscally, federally independent but we can share because we have one economy. We told them how we are doing our own things and what we are doing is prioritising payment of salaries to people because their families depend on it. Prioritise that to make sure we pay salaries and pensions. When you look at some of these numbers you will find out that yes revenue has dropped and it’s tough, but what most states receive from FAAC is sufficient to cover their personnel costs. So what we will say is that they should prioritise payment.

In most states, I have to be clear, what they receive is just a little bit short of their personnel costs. But many I have looked through the list now at what their salary bill is and what they receive and so they should be able to cover but the will not be able to do much after that because of the drop in revenue. So we would advise them to first pay salaries and then find a way to manage the other issues. But there are one or there are few that what they receive falls slightly below their personnel cost. And in those cases we wanted a conversation with them some of them that I have seen have internally generated revenue almost quite significant so they should be able to make up for the gap from there. I am looking at those whose IGR is low. I have not yet seen most of them that I have the numbers their personnel bill fall between what they get from FAAC so those ones should be able to cover.

And some of them are managing very well I want to say that some are not owing they’ve been paying their salaries steadily. So we have to commend them for that. I have looked at it and seen that it is largely a question of what is your priority. So what we’ve advised is that with some contractors, the state governments should negotiate with the contractors and explain the situation and schedule the payment. They are likely to be supportive because they are part of the economy.


How is the e-collect policy of government faring?

Many of the MDAs don’t like the idea of the e-collect and the treasury single account. But we are getting them because it is a conversation that we will be having on this issue and we are getting them to see that they need to comply. During this time, our objective is to get as much internal revenue generated with the e-platforms that will put the money in an account at the Central Bank.
This will help us avoid leakages which is what all Nigerians want. With the treasury single account, we have a tool that helps us to see where the balances of governments at one time from all government agencies because we are drawing resources into the Central Bank. Instead of agencies with multiple accounts everywhere which are not being used and the other hand you go borrowing, we will have an overview and it will help us to manage our balances much better.

There is no too much of a choice, everybody has to comply. We don’t want to look as overbearing, so we are discussing with the agencies and the banks. We have already got all the capital accounts into the Central Bank and gradually we are getting the recurrent account. It also helps the Central Bank to manage liquidity.


What would you say about the down grade of Nigeria’s economy by S&P?

I will like to say that two other agencies, Fitch and Moody have maintained us at the same rate as at now. They have not tried to change it.

What S&P did is a special evaluation of all oil producing countries based on the fact that oil prices have fallen. They decided to do it and it is because of that not because of anything else. They look at oil producing countries and I can tell you that we were the last one to be downgraded. All the other oil producing countries from Russia, to Kazakhstan to Venezuela, to Angola, they review them and downgraded them.

It is a strong mark and credit to Nigeria because if you read what S&P actually said. They commended the management of the (Nigerian) economy. They said it was proactive and ambitious, that the policies responded in the right way to the drop in oil price. They are saying that the drop in oil price is not our fault but the issue is how do we manage it? And they said we have managed it well; that we have been pro-active and ambitious. I am quoting them directly. What the issue is why they downgraded us is not because of our management which they have commended, it is because they believe that oil prices will still be soft for a while and because we are having elections.

INSURANCE INDUSTRY HAD ITS FINEST MOMENT UNDER JONATHAN - Fola Daniel

Commissioner for Insurance, Mr. Fola Daniel, in this interview with Festus Akanbi, says the resolve of President Goodluck Jonathan’s administration to make insurance a pivot of economic development has not only underscored the potential of the sector but has also challenged operators to double their efforts

How will you describe the developments brought to bear in insurance industry under President Goodluck Jonathan’s administration?

I think President Goodluck Jonathan’s administration is making insurance the centre point of development and that was highlighted by recent pronouncements. It will be recalled that in the 2015 Budget Speech, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala set the ball rolling by saying that the government is poised to focus attention on the insurance sector.

In his Acceptance Speech when he was returned unopposed by the Peoples Democratic Party to contest for the 2015 Presidential Election, the President devoted prime time to highlight the potentials of the insurance industry. He is a president that is focusing on the totality of the financial services sector which is a tripod. Once you remove insurance, the tripod becomes incomplete. So with insurance being properly brought in, you have a complete tripod to drive with vigour, the economy of this country.

The current administration has recognised the potential of the insurance industry. They see an insurance industry that can drive the Transformation Agenda which is one of government’s main thrust. They see an insurance industry that is capable of generating employment and a springboard for curbing social discontents. Insurance industry, inclusive of agents and brokers, currently employs about 50,000 persons but insurance industry has the capacity to employ a lot more.

The President modestly calculated that he sees an insurance industry that can generate 300,000 jobs in the next two years. I think that is being modest because there is huge employment potential in the insurance industry. For example, take a look at the Insurance Intermediary, we are selling insurance largely through brokers. The brokers are wholesalers. They are interested in big tickets and I’m sure that is where they derive big commissions or brokerage, whilst the grassroots is largely unexplored and unexploited. We can take some graduates off the street by employing and training them as agents to go to every nooks and crannies of the country to sell insurance thus earning a living. So the President should be given the credit for recognising the potential of the insurance industry and setting a goal for the industry.

What are the measures being put in place to achieve this potential you just talked about?

If you compare our insurance laws with similar laws all over Africa, I think we have the largest number of compulsory insurance such as Motor (Third Party), Group Life, Builders’ Liability, Occupiers’ Liability, Marine Insurance etc. We have 12 compulsory insurances, but these compulsory insurances are just there in the books. They are just there as laws, many people are not even aware of it. So what did we do in the last five years? We tried to create awareness. We sensitised Nigerians first about the existence of these compulsory insurances, how it is best as a means of managing our risks than the Ad-hoc assistance we get from government in times of trouble or turbulence or losses, so we have done that over the last five years and I’m glad to say that there is enhanced awareness amongst the populace. The income of the insurance industry in the last seven years has more than doubled. In fact, in the year 2007, we had an income of slightly N100billion but as at last year, we posted over N300 billion
Even if you look at the insurance sector in the whole of Africa, we ranked number five while South Africa ranked number one up to year 2012. Yet we have the largest population on the continent and a large economic base, so there is no reason for us to be in number five. Happily, last year, we came to number three. So, we are making some progress but I know we can do better.

Are you saying in essence that the pledge by the Coordinating Minister of the Economy and Minister of Finance that insurance will become one of the channels to develop the economy is achievable?

The Coordinating Minister of the Economy and Minister of Finance is a technocrat in government. She is an economist of repute and a woman of honour who is not given to making empty promises. When she makes a pronouncement on issues, she follows it through.

We had an insurance summit in December last year. The conception of that summit commenced on November 26. It was her brain child. She called me on November 26 saying the government needed to support insurance sector having recognised what we had done so far. We subsequently agreed on an agenda that we should brainstorm through a summit.
At the end of the day, we had a very successful summit that even drew participants from outside Nigeria. It was well attended. One of the resolutions that emerged from the summit is that government would focus on insurance to strengthen it to perform its pivotal role in the nation’s economy. Again, within two weeks of that summit, a budget presentation was effected by the Coordinating Minister of the Economy/Minister of Finance and she reiterated Government’s resolve to support insurance growth. Closely followed was Mr. President’s statement on insurance in the course of his acceptance speech as candidate of the ruling party for the coming elections.

Will you say you have achieved much in the area of consumer protection?

I’m very delighted to say that our quest to protect policy holders is succeeding. When I came on board in 2007, on average on weekly basis, we received 15 to 20 complaints from members of the public against insurance companies. We then reinvigorated the Complaints Bureau. We engaged more professionals and strengthened the Bureau. We thought these complaints would have quadrupled but because of the measure we took. Two months after I took over, we sanctioned two insurance companies, which hitherto were considered untouchable and that sent the correct message to insurance practitioners that it is no longer going to be business as usual and they were compelled to improve significantly on claims settlements processes.

We are not done yet because we believe that insurance companies must engender the kind of confidence that you find in insurance industry in United Kingdom, US and South Africa. Therefore we said, even though we saw some improvements, we still decided that we still need to keep on with the pressure.
What we did next was to set up a Call Centre which receives complaints from members of the public real-time. We also believe in self- regulation therefore we are working with the Nigerian Insurers Association to self -regulate as much as possible in the area of consumer confidence. The collaboration with NIA culminated in the setting up of an Ombudsman under the Chairmanship of a retired appeal court judge who is a very reputable gentleman. You will recall that since last January, we have been repeating a publication in newspapers asking insurance consumers that are aggrieved due to denial of genuine claims or delay in settlement to come forward and lodge complaints.

Insurers generally find this pressure discomforting and it has yielded accelerated attention. We will continue with this drive until we are able to achieve zero case of complaints for delayed settlement or denial of genuine claims.

How is NAICOM responding to changes in global insurance market?

The key changes you will find in the global insurance market are mainly centered on improved confidence, trust, depth, capacity and sound business practice. So all the measures we have taken in the last few years are to ensure we are on the same page with international community.

Insurance is an international business and therefore, people should not be in Lagos and want to buy policy in South Africa or UK just because they can afford it. They should have an insurance industry they can trust. They should have an insurance industry that when an accident happens, people can simply exchange their cards and go their different ways with the assurance that the insurance company will not only come and remove those vehicles from the road but will even give you something to use while they effect repairs on the cars.

What is the latest on the collaboration between NAICOM and Securities and Exchange Commission to investigate some alleged diversion of investors’ funds?

The collaboration is not just between NAICOM and SEC. It is amongst financial services regulators namely, CBN, NAICOM, SEC, NDIC, PenCom and CAC, etc. We have regular meetings where we exchange ideas and compare notes about our regulated entities. As for SEC, we have had a very good and robust collaboration and it is working.

Can you give us the progress report on your zero tolerance policy on claims settlement?

I believe I dealt with this sufficiently earlier. Nevertheless, I think you are referring to our Consumer Protection initiatives on claims settlement. If you are a doctor and a patient runs to you to complain, you don’t just give him a painkiller to cure that headache. That may do it but you really need to investigate why this guy is having recurring headache. Why do we have incidence of unpaid claims in insurance industry in the past? The truth of the matter from our investigation and analyses showed that a lot of these premiums are not even paid. Insurance is one of the few products that are bought on credit in this country.

People are taking insurance and owing insurance firms infinitely. We have a situation where an entity is insured for four years and it hasn’t paid premiums at all. So if an insurance company is not receiving premiums, it will not have money to pay claims. Insurance provides mechanism to pool premiums from different persons in order to meet liabilities and claims. Money therefore becomes available to grow the portfolio, run administrative duties and management expenses but when this money is not paid, the insurance industry is rendered incapacitated and that was where we found ourselves, which compelled us to invoke the “No Premium No Cover” provision of Section 50 of the Insurance Act 2003. We don’t enact law because NAICOM is not a parliament but we implement policies as regulators.

The “No Premium No Cover Policy” predated the 2003 Insurance Act. The law was there but it was not being implemented resulting in almost the death of the insurance industry. So when we invoked it from January last year, we saw an upsurge in cash flow of insurance firms. So, if we have removed the major reasons why they were not paying claims, then they no longer have reasons not to pay genuine claims. Therefore, if you look at the financial reports of insurance firms in 2013 and 2014, you will find minimal outstanding premiums.

For the first time, our fellow African brothers came to Nigeria to copy from us. Even though some of them do not have the legal backing, they administratively introduced the policy of No Premium No Cover and it is working for them. All the French speaking African countries have copied the no premium no cover policy. So, I’m glad that the culture is not limited to us but it is spreading all over Africa.

How will you address the issue of rate cutting in insurance industry in Nigeria?

Rate or rating refers to consideration paid by Insureds for their risks carried by insurers. Rates can be viewed from three perspectives.

The first category relates to compulsory insurances such as Motor Third Party Insurance. The approved rates stipulate that the insurer cannot charge beyond a maximum of 10 per cent. This provision became necessary to avoid exploitation of the insuring public. The nemesis of this arrangement is that no minimum is stipulated, leaving Insurers to apply discretion.
The second category of rate falls within what I will call commercial underwriting for domesticated risks. Now what are the factors determining the rates? You look at the risks factors and measure put in place by the insured to determine whether the rates applicable should be reduced or increased. When underwriters reduce rates in defiance of this technical consideration, it is generally referred to as rate cutting.

The third category of rates is big ticket risks such as Oil and Gas, Energy, Aviation etc. Many rates falling within this category are rates that emanate from Lead Reinsurers abroad. Such risks are shared across international borders and Nigerian Insurers may not have the sole prerogative to determine the rates.

So generally speaking, rate cutting in the Nigerian Market affects Motor Underwriting and all other largely domesticated businesses. Where our Insurers are jettisoning the well-tested underwriting considerations of appropriate rating to succumb to rate-based market-driven competition, it is a problem that is as serious as the incidence of nonpayment of premium earlier discussed. It has the potential of eroding the profitability of Insurance companies thus making investment in that Sector unattractive.

I am glad to note that all the stakeholders have realized this issue as a monster that must be curtailed very quickly. I am aware that concerted effort is presently ongoing to inject sanity into the rating regime

We expect that the ongoing effort will culminate in agreed rating standards which NAICOM would be obliged to approve and ensure its enforcement in the interest of all stakeholders.

Why is it difficult for regulators to bail out weak insurance firms like the rescue package we had in the banking industry?
Insurance is a risk transfer mechanism. Therefore unlike bankers, insurers are not deposit takers. Whereas a banking institution could be in possession of Trillions of depositors’ money, insurers who assume risks worth Trillions, keeps only a negligible portion of that risk usually within a proportion of their Shareholders’ Fund. The excess is transferred to Reinsurers whilst a portion to Retrocessionaires. Through this chain of risk spread, the collapse of one particular insurer cannot pose systemic risks.

In addition, recoveries will usually come from those who initially share in the risk. Because the risk which primary insurance firms share is well spread in such a way that even when there is a problem, those who are insured by this firm are not going to suffer irreparable loss because this company that is in crisis has recoverable from the reinsurers and if there is a significant crisis, what the regulator will do is to ring-fence the resources of those insurance companies to enable it to pay the policyholders.

A particularly large loss may, for instance, lead only to a momentary diminution of the Shareholders’ Fund (temporary insolvency) with a window for the Shareholders to fill the financing gap. The AIG crisis did not emanate from its core insurance activities, but from their unregulated activities. A collapse of an insurance entity, though may affect consumer confidence, will not affect the economic system the way the collapse of a major bank will.

Why can’t NAICOM enforce compliance with compulsory insurance using security agencies?

As a regulator, I have to collaborate with law enforcement agencies to enforce compulsory insurances. We however have limitations. For instance, we have to work with the police who are already fully engaged thus making it difficult in addition to the huge resources required to conduct a nationwide enforcement. As part of our strategy, we realized that it is not fair if we do not educate the people before we start to enforce the laws. When people see values, there will be large voluntary compliance and that is what we have done.

The police have been overstretched. We use police on ad-hoc basis. So we are looking at what we can really do; we are looking at the totality of the stakeholders. The law stipulates that 25 per cent of the net premium in respect of compulsory insurance should be set aside for the purpose of providing grant or equipment to institutions engaged in fire fighting services. It means if the rate of compliance is high, then the fire services will get more from the insurance industry.

We are therefore reinvigorating our awareness campaign and stakeholders engagement to engender compliance. We are also happy to note that some state governments have passed laws to support the National Laws on compulsory insurance. Where we have apparent breaches, enforcement remains an option to adopt.

http://www.thisdaylive.com/articles/daniel-insurance-industry-had-its-finest-moment-under-jonathan/202969/

https://www.youtube.com/watch?feature=player_embedded&v=sGUtr76lanQ


https://www.youtube.com/watch?v=BVDyp8MKjAw

Glory be to God. I finally got my PVC today. Now I can vote.

Pic 1 & 2: The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala supported by the Principal of the School Mrs Asabe Kwambura, Director-General, National Emergency Management Agency (NEMA), Mr. Sani Sidi and others as she lay foundation for the rebuilding of Chibok school in Bornu State. photo; Sunday Aghaeze.

L-R; the Principal of the School Mrs Asabe Kwambura, The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala WITH THE PARENTS OF THE ABDUCTED CHIBOK School Girls among whom are Mrs Rifkatu Ayuba, Mrs Kollo Adamu and others as she lay foundation for the rebuilding of Chibok school in Bornu State. PHOTO SUNDAY AGHAEZE MARCH 5 2015

The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala supported by the Principal of the School Mrs Asabe Kwambura, Director-General, National Emergency Management Agency (NEMA), Mr. Sani Sidi WITH THE PARENTS OF THE ABDUCTED CHIBOK School Girls as she lay foundation for the rebuilding of Chibok school in Bornu State. PHOTO SUNDAY AGHAEZE MARCH 5 2015

By Hilary Ndubuisi

The current long queues at petrol stations across the country are not caused by the non-payment of outstanding subsidy claims to marketers, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said on Tuesday.

The clarification came following speculations that marketers had held back supplies of Premium Motor Spirit (PMS) due to outstanding payment issues.

However, the minister, who spoke with journalists in her office, noted that contrary to some unfounded speculations, the queues are not related to payment issues.

According to her, the federal government is very concerned about the fuel queues, which have appeared in Lagos, Abuja and other parts of the country.

“As Nigerians can attest, the Petroleum Ministry and NNPC (Nigerian National Petroleum Corporation) have worked very hard to reduce them to the barest minimum. We sympathise with Nigerians whose lives are being disrupted by the queues and assure them that we are working hard to end them as quickly as possible.

“The situation is due to a mix of factors, including disruption of pipelines and logistical issues and they are being attended to urgently,” he minister said

She recalled that the marketers were paid a total of N320.8 billion from the Excess Crude Account (ECA) in two installments last December, underscoring the fact that the government is taking the payment of marketers very seriously.

The minister said she held a meeting with the marketers last week where assurances and commitments were made to pay the outstanding N185 billion balance of their payment.

According to her, an agreement was reached with the marketers’ union to the effect that government will pay not only the costs they have incurred and their fees but also interest and foreign exchange differentials.

She added that the Debt Management Office (DMO0 has issued Sovereign Debt Notes (SDNs) to cover N100 billion out of the N185 billion agreed upon as balance for the next payments even as the Central Bank of Nigeria ( CBN) has also given approvals for the banks to issue letters of credit (LCs).

The minister thanked the marketers who have already cued into the opening of LCs and have been supportive of the government’s commitment to ensure the availability of PMS and other petroleum products.

“It is clear that while the union and most members have been cooperative, some of their members are not. Some of these people have even refused to open LCs to facilitate their payments. We salute the union and the members who are working hard to end this unfortunate situation. As for those who are working in the other direction, Nigerians should ask them what their motives are.”

Okonjo-Iweala stated that to end the unfortunate situation as quickly as possible, the Petroleum Ministry and NNPC are taking strong action to improve supplies in the elections season.

CREDIT: http://www.thisdaylive.com/articles/okonjo-iweala-fuel-scarcity-not-caused-by-payment-issues/203221/

Nigeria Listed Among 20 Fastest Growing Economies

A new survey released by Bloomberg has projected that Nigeria, China, the Philippines, Kenya, India and Indonesia will rank among the 20 fastest growing economies in world this year.

In an accompanying chart by the New York-based financial newswire service, Nigeria with an expected growth rate of 4.9 per cent was ranked sixth behind China (7 per cent), the Philippines (6.3 per cent), Kenya (6 per cent), India (5.5 per cent) and Indonesia (5.4 per cent).

Other countries that made the list of 20, dominated by emerging economies in Asia and Africa, include: Malaysia in seventh place, Peru, Thailand, United Arab Emirates (UAE), Kazakhstan, Colombia and Saudi Arabia.

Others are Taiwan, Turkey, South Korea, Poland, Mexico, Ireland and Singapore.

According to Bloomberg, “Emerging markets in Asia and Africa still reign supreme: They’re at the top of global growth projections over the next two years.

“The world is expected to grow 3.2 per cent in 2015 and 3.7 per cent next year after expanding 3.3 per cent in each of the past two years," according to a Bloomberg survey of economists.

“China, the Philippines, Kenya, India and Indonesia, which together make up about 16 per cent of global gross domestic product, are all forecast to grow more than 5 per cent in 2015.”

By comparison, the United States (US) and United Kingdom (UK), which combined account for about a quarter of global growth, are expected to grow 3.1 and 2.6 per cent this year respectively, said Bloomberg.

“The euro area probably will expand just 1.2 per cent as European Central Bank President Mario Draghi deals with a fragile Greece and embarks on a bond-purchase programme to stimulate the region's growth.

“China still remains the fastest-growing G-20 nation, even though the Asian economy is no longer expanding at the pace it did a few years ago.

“China's economy grew 7.3 per cent in the fourth quarter of 2014 from a year earlier, and is expected to slow to 7 per cent in 2015.

“To counter that slowdown, People's Bank of China policy makers are boosting monetary stimulus. The central bank cut its benchmark interest rate in November for the first time since 2012. This month officials lowered by 50 basis points the deposit reserve ratio, which is the amount of reserves that banks need to keep on hand,” the survey said.

Continuing, it added that Nigeria, Africa’s largest economy, is projected to expand at 4.9 per cent this year, while Kenya will probably grow by 6 per cent in 2015, even as unemployment and poverty remain stubbornly high, with over 40 per cent of Kenyans living below the poverty line.

“US growth forecasts for 2015 are coalescing around 3 per cent even as the dollar soars to its highest level in more than a decade.

“As growth picks up, the Federal Reserve is weighing whether to raise interest rates for the first time since 2006. Their benchmark federal funds rate has remained near zero since December 2008.”

CREDIT: http://www.thisdaylive.com/…/nigeria-listed-among-2…/202874/

https://www.youtube.com/watch?v=UeJLf9XwPec


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Highlights of Investigative Forensic Audit done by PwC into the Allegations of Unremitted Funds into the Federation Accounts by the NNPC for the period January 2012 to July 2013

[b][/b]Highlights of PwC Findings

Based on the work conducted by PwC, their conclusions are as follows;

Total gross revenues generated from FGN crude oil liftings was $69.34 billion and NOT $67 billion as earlier stated by the Senate Reconciliation Committee for the period from January 2012 to July 2013. Within the $69.34 billion, $28.22 billion was the value of domestic crude oil allocated to NNPC.
Total amount spent as subsidy for PMS amounted to $5.32 billion
Total amount spent as subsidy for DPK (Not appropriated) amounted to $3.38 billion
Total other third party financing arrangement, and equity crude oil processing costs amounted to $1.19 billion
Total cost directly attributable to domestic crude oil amounted to $1.46 billion
Other costs incurred by the Corporation not directly attributable to domestic crude oil is $2.81 billion
Revenue attributable to NPDC as submitted by the former NPDC Managing Director to the Senate hearing (less PPT and Royalty paid) is $5.11 billion. PwC stated that this amount needs to be incorporated into the financial statements of NPDC from where dividend should be declared to the Federation accounts.
Signature bonus, PPT and Royalty yet to be paid by NPDC is $2.22 billion
Total cash remitted into the Federation accounts in relation to crude oil liftings was $50.81 billion and NOT $47 billion as earlier stated by the Senate Reconciliation Committee for the period from January 2012 to July 2013
Based on the information available to PwC, and from the analysis above, the firm submitted that NNPC and NPDC should refund to the Federation Accounts a minimum of $1.48billion.

PwC recommendations:
The PwC report centered on the following three (3) key areas;

NNPC Costs
Ownership of NPDC revenues
DPK subsidy

Below are the highlights as extracted from the report.

NNPC Costs
“The Corporation operates an unsustainable model. Forty six percent (46%) of proceeds of domestic crude oil revenues for the review period was spent on operations and subsidies. The Corporation is unable to sustain monthly remittances to the Federation Account Allocation Committee (FAAC), and also meet its operational costs entirely from the proceeds of domestic crude oil revenues, and have had to incur third party liabilities to bridge the funding gap”.

NNPC provided transaction documents representing additional costs of $2.81 billion related to the review period, citing the NNPC Act LFN No 33 of 1977 that allows for such deductions. Clarity is required on whether such deductions should be made by NNPC as a first line charge, before remitting the net proceeds of domestic crude to the federation accounts.

PwC therefore recommended that the NNPC model of operation must be urgently reviewed and restructured, as the current model which has been in operation since the creation of the Corporation cannot be sustained.

Ownership of NPDC revenues

PwC stated that:

- According to NPDC former Managing Director's (Mr Victor Briggs) submission to the Senate Committee hearing on the subject matter, for the period covered by their mandate, NPDC generated $5.11billion (net of royalties and petroleum profits tax paid).

- They relied on the legal opinion provided to the Senate Committee by the Attorney General (AG) on the subject of the transfers of NNPC’s (55%) portion of Oil leases (OMLs) involved in the Shell (SPDC) Divestments which impacted crude oil revenues in the period. The AG's opinion indicated that these transfers were within the authority of the Minister of Petroleum Resources to make.

- NNPC’s (55%) portion of Oil leases (OMLs) involved in the Shell Divestments related to the eight ( OML’s were transferred to NPDC for an aggregate amount of US$1.85billion. So far, only the amount of US$100m had been remitted. PwC also added that they had expected a transfer basis higher than the US$1.85billion aforementioned

- NPDC had done a self assessment of PPT and Royalty and had unpaid self assessed PPT and Royalty to the tune of $0.47 billion related to the review period. PwC added that they did not obtain any information that suggested that NPDC has been assessed for PPT and Royalty for the review period.

- PwC also stated that NPDC should remit dividend to NNPC and ultimately to the Federation accounts, based on NPDC’s dividend policy and declaration of dividend for the review period.

Kerosine Subsidy
PwC determined from information obtained from PPPRA that $3.38 billion relating to DPK subsidy cost was incurred by the NNPC for the review period. They obtained a letter, dated 19 October 2009 written by the Principal Secretary to the President, to the National Security Adviser, confirming a Presidential directive of 15 June 2009 instructing that subsidy on DPK be stopped. PwC also obtained a letter dated 16 December 2010 from the Executive Secretary PPPRA to the CBN Governor clarifying that PPPRA had ceased granting subsidy on Kerosine since the Presidential directive of 15 June 2009. Furthermore, Kerosine subsidy was not appropriated for in the 2012 and 2013 FGN budget.

However, the Presidential Directive was not gazetted and there has been no other legal instrument cancelling the subsidy on DPK.

PwC therefore recommended that an official directive be written to support the legality of the kerosene subsidy costs. This should also be followed by adequate budgeting and appropriation for the costs.


Ukura T. Samuel, JP, OFR, FCA
Auditor General for the Federation

SOURCE: https://www.oaugf.ng/78-highlights-of-investigative-forensic-audit-done-by-pwc

BEYOND BELIEF:
SOLUDO’S SELF-SERVING ARTICLE ON ECONOMIC MANAGEMENT IS DEFICIT IN FACTS, LOGIC AND HONOUR
(Response to “Buhari Vs Jonathan: Beyond the Election, by Charles Soludo”)

1. For anyone who has not read Professor Charles Soludo’s article in the Vanguard (online version) on January 25 2015, I would encourage them to do so. It is littered with abusive and unbecoming language. It shows how an embittered loser in the Nigerian political space can get so derailed that they commit intellectual harakiri by deliberately misquoting economic facts and maliciously turning statistics on their head to justify a hatchet job. We hope all the intellectuals in the international circles in which Professor Soludo has told us he flies around in will read what a Professor of Economics has chosen to do with his intellect.

2. In this one article Soludo has shamelessly pandered to so many past leaders that Nigerians are asking one more time – what position is Soludo gunning for now? He claims in his article that he has had his own share of public service, yet he has failed twice in his attempts to be Governor of Anambra State and Vice Presidential candidate of various parties. There is definitely an issue of character with Prof. Charles Soludo and his desperate search for power and relevance in Nigeria. Nigerians should therefore beware of so-called intellectuals without character and wisdom because this combination is fatal.

3. But let us turn to the main subject of Soludo’s discourse. So much of what is written is outright nonsense and self-seeking aggrandizement that need not be dignified with a response. It is totally remarkable that Professor Charles Chukwuma Soludo, the man who presided over the worst mismanagement of Nigeria’s banking sector as Governor of the Central Bank of Nigeria between May 2004 and May 2009, can write about the mismanagement of the economy.

4. Nigerians must be reminded of his antecedents as CBN Governor, and even prior to that, as the Chief Economic Adviser to the President. The consolidation of the banking sector was a good policy idea of the Obasanjo Administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history. So what did Soludo do?

5. After consolidation, the regulatory functions of the Soludo-led CBN were very poorly exercised. As Governor, he failed to adequately supervise and regulate the now larger banks – an anomaly in Financial Sector Supervision. In fact as every Nigerian knows, in his time there was very little separation between the regulators and the regulated which is a violation of a key requirement of Central Banking success. This led to infractions in corporate governance in many banks as loans and other credit instruments running to hundreds of billions of naira were extended to clients without following due process, and several of these loans could not be paid back. This massive accumulation of bad debts or non-performing loans as they are called in the banking sector meant that our banks were ill-positioned to deal with the global financial crisis when it hit.


6. In fact, the banking sector was brought to its knees and required a massive bailout by Nigerian tax payers. This bailout was done by his successor (now Emir of Kano) who cleaned up all the bad debts and transferred them to the newly-established AMCON, from where they are managed today. So let it be noted for the record books that Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about N5.67 trillion (being the total face value of AMCON-issued bonds) to clean up. Let it be noted also that this amount, which is more than the entire Federal Government 2015 Budget, constitutes the bulk of Nigeria’s “contingent liabilities” mentioned in Soludo’s article. It is only in Nigeria where someone who perpetrated such a colossal economic atrocity would have the temerity to make assertions on public debt and the management of the economy.

7. Let us now look at some of the points he makes. Luckily, Soludo has told us that he has been busy travelling internationally, hobnobbing with his global partners. It is obvious from this article that from the rarefied heights at which he is flying he is completely out of touch with what is happening with the management of this economy. Take his comments on the mismanagement of the economy and the imposition of the austerity measures. The present fall in oil prices, a global phenomenon over which Nigeria has no control, has given every charlatan the opportunity to attack the economy, and by extension the managers of the economy

8. It is true that the economy grew well during the second-term of former President Obasanjo as a result of the reforms supported by the President and implemented by the Economic Management Team. Please note that the Finance Minister under whose leadership that good performance took place, including massive unprecedented debt relief, is still Finance Minister today. But thorough examination of the facts on performance under the Jonathan Administration will also reveal that at a time when global economic performance was mediocre, with GDP growth averaging about 3 percent per annum, Nigeria’s GDP growth – averaging about 6 percent per annum – is indeed remarkable. Even more interesting is the fact that the oil sector did not drive this economic performance but the non-oil sector (Agriculture, Manufacturing, Telecommunications, the Creative Economy, and so on), which shows that the current Administration’s diversification objective under the Transformation Agenda is working. Transformation equals diversification

9. This current government managed to control inflation, which he Soludo, was not able to do during his time at the helm of monetary policy in Nigeria. When he left the Central Bank in 2009, inflation – which hurts the poor and vulnerable in the society the most – was above 13 percent per annum. Now, inflation is at single-digit, at 8 percent per annum. What about exchange rates? Well this administration again managed to stabilize the naira exchange rates, such that between May 2011 and the end of 2014, official exchange rates against the dollar rarely moved out of the N153 to N156 band. It is only with the recent dramatic fall in oil prices and the consequent impact on our foreign reserves that the exchange rate has become quite volatile. The drop in oil price has been heavy and rapid impacting all oil producing nations significantly. Nigeria is no exception and appropriate fiscal and monetary policy measures are being put in place to manage this situation.

10. In fact, history will recall that careless remarks by Prof. Soludo (then Chief Economic Adviser to the President) hypothesizing a possible naira devaluation, condemned the naira to a free fall towards the end of 2003. Ray Echebiri, in his 2004 article in the Financial Standard, wrote that not even the assurances given by the then CBN Governor, Mr. Joseph Sanusi or President Obasanjo that any plans to devalue the naira existed only in the head of Professor Soludo could halt the fall of the naira from N128 to the dollar in the official market to about N140 between September and December 2003.

11. It is true that our foreign reserve accumulation is less than what it should be but the reason for this has been fully given, not as excuses but simply as fact: lower oil production and crude oil theft along with the refusal to save in the Excess Crude Account (ECA) are the reasons. Contrary to what Soludo said, oil production under President Obasanjo was higher than current levels. Quantities produced averaged 2.4 million bdp, 2.22 million bpd, and 2.21 million bpd in 2005, 2006, and 2007 respectively but has declined now to between 1.95 and 2.21 million bdp due to vandalism of the pipelines and the resulting “shut-ins” to fix the problem. It is true that had production been at the previous levels and had there been willingness to save we would have had more money in the ECA and also in the reserves. But the overriding setback to savings is that the State Governors felt it was their constitutional right to share the money. Please recall that even as we speak the States have taken the Federal Government to the Supreme Court on this issue

12. Soludo’s claim that 71 percent of Nigerians live below the poverty line is misleading and disingenuous. He uses 2011 statistics on poverty by the NBS to support his argument while ignoring more recent figures. But as stated in the Nigeria Economic Report 2014 by the World Bank, poverty rate in Nigeria has dropped from 35.2 percent of population in 2010/2011 to 33.1 percent in 2012/2013. By the way, the reason why our poverty numbers have been so wrong is that the National Bureau of Statistics (NBS), under Soludo’s supervision as CEA and Vice-Chair of the National Planning Commission, departed from the international standard method of poverty measurement. Is he now ignoring the right economic statistics to wilfully manipulate information?

13. No doubt we have a problem with unemployment in this country and we must deal with it. Indeed this Administration is dealing with it and stands proud of what it has accomplished so far and is pushing hard to accomplish much more. As a first step, the Administration, through the office of the Chief Economic Adviser to the President and the NBS, worked hard to determine how many jobs we need to create in a year. What you don’t measure you cannot make progress on. Why didn’t Soludo do this when he was CEA?

14. We need to create about 1.8 million jobs a year in this country to cater for the new entrants into the labour market, but we also need to deal with the backlog of the unemployed and the underemployed, e.g. those selling on the streets. Dealing with this global challenge of unemployment is not an easy task for any country, as can be seen from the experiences of developed countries particularly in the euro area. But the Jonathan Administration is making good progress, creating an average of about 1.4 million jobs per year by driving quality growth in key sectors like Agriculture, where the bulk of new jobs are being created, Housing, Manufacturing, Financial Services, and the Creative Industries like Nollywood.

15. In addition we have special programs to promote job creation among the youth and these include:

 Promoting entrepreneurship among the youth through the “Nagropreneurs” program to support 750,000 youth farmers with grants and training, and the YOUWIN program that is directly supporting up to 5,400 young entrepreneurs with grants, training, and mentorship and so far beneficiaries are creating an average of 9 jobs each, for themselves and others. About 22,000 jobs have been created by the first 2,400 youwinners.

 Graduate Internship Scheme: that is reducing the vulnerability of unemployed graduates by enhancing their employability. The Scheme targets up to 50,000 unemployed graduates in the 36 states of the Federation and FCT and about 22,000 graduates have so far been placed by the program.

 Community Services Scheme under SURE-P: developed to empower young unskilled Nigerians, women and people with disabilities. About 120,000 mostly young workers have been engaged across the country

16. On the issue of debt, Nigerians deserve to know the truth and we have said it before. The truth is that the government borrowed in 2010 to pay an unprecedented 53.7 percent wage increase to all categories of federal employees as demanded by labour unions. The total wage bill rose from N857 billion in 2009 to about N1.4 trillion in 2010, and as a result, domestic borrowing increased from N200 billion in 2007 to about N1.1 trillion in 2010 to meet the wage payments. Where was Soludo at the time? Why did he not react to the borrowing then? Was it because he wanted to pander to labour in preparation for his political career?

17. It is noteworthy that since 2011, the Administration of President Goodluck Ebele Jonathan has been prudent with the issue of debt and borrowing. The Economic Management Team not only looks at debt to GDP ratio, where Nigeria has one of the lowest numbers in the world at 12.51 percent but it looks at debt service to revenues. That is why in spite of the rebasing and a larger GDP, the administration has taken a prudent approach to borrowing. The prudent approach helped to drive down domestic borrowing from N1.1 trillion in 2010 to N642 billion in 2014. In fact for the first time in our nation’s borrowing history we even managed to retire N75 billion of domestic bonds outright in 2013.

18. Despite the present tough situation, we do not plan to go on a borrowing spree but to keep borrowing modest at a level sufficient to help us weather the present situation. We have already ramped up efforts to generate more non-oil revenues for the government while cutting costs of governance. Therefore, Soludo’s claim that this Administration is reckless with debt does not hold true.

19. Since Soludo seems so ignorant to what has been achieved by the Jonathan Administration, let us present just a few examples of them here again. This information is easily verified.

• We are improving infrastructure across the country. For example, 22 airport terminals are being refurbished, and five new international airport terminals under construction in Lagos, Port Harcourt, Kano, Abuja, and Enugu. Soludo’s kinsmen in the South East now have an international airport in Enugu, and for the first time in Nigeria’s history can fly direct from Enugu to anywhere in world for which they are very grateful to this Administration. But with Soludo being up in the air with his international travels, he has not touched ground in the Southeast to observe this development for himself.

• Various road and bridge projects have either been completed or are under construction. Those completed include the Enugu – Abaliki road in Enugu/Ebonyi States, the Oturkpo – Oweto road in Benue State, the Benin – Ore – Shagamu highway, and the Abuja – Abaji – Lokoja dualization, and the Kano – Maiduguri dualization. The Lagos – Ibadan expressway and the Second Niger Bridge are under construction.

• Rail from Lagos to Kano is now functional, as is parts of the rail link between Port Harcourt and Maiduguri. All these have brought transport costs down. We recognise that more needs to be done in the power sector, but bold steps (like the privatisation of the GENCOs and DISCOs) have been taken, and our gas infrastructure is being developed to power electricity generation

• In Agriculture, over 6 million farmers now have access to inputs like fertilizers and seeds through an e-wallet system, which is more than the 403,222 that had access in 2011. Rice paddy production took off for the first time in our history, adding about 7 million MT to rice supply. An additional 1.3 million MT of Cassava has also been produced and as a result, the rate of food price increase has slowed considerably, according to the NBS.

• In Housing, we have put in place a new wholesale mortgage provider – the Nigerian Mortgage Refinance Corporation (NMRC) – to provide affordable mortgages to ordinary Nigerians, starting with those in the low-middle income bracket. This sector will help the economy grow as we tap it as an economic driver for the first time. Mortgage applications from 66,000 people are currently being processed and 23,000 have already received mortgage offers

• Our Manufacturing sector is reviving with new automobile plants by Nissan, Toyota, etc. This is in addition to the backward integration policy in key sectors like petrochemical, sugar, textiles, agro processing and cement, which Nigeria is now producing 39,000 MT and exporting to the region.

• The Creative sector is now a factor in our GDP, with Nollywood alone accounting for 1.4 percent, creating over 200,000 direct jobs and nearly 1 million indirect jobs. This is the first Administration to recognise its importance and support its further development with a grant program.

• A new bank – the Development Bank of Nigeria – will soon be operational and this bank will help bridge the access to finance gap, which is a major constraint for the private sector especially SMEs. The bank will provide long-term (5 – 10 years) financing at affordable rates for the first time in our nation’s history.

20. This is the path that the government has been on before this fall in oil prices. The response to the economic shock has been spelled out to the Nigerian public over and over again, and the Administration intends to focus on managing this crisis appropriately. This year will be difficult. To say anything less to Nigerians will be untruthful. It would have been better if there had been a bigger cushion of the Excess Crude Account to manage this situation but despite this the nation can rise to the challenge. More importantly, President Goodluck Ebele Jonathan and the Economic Management Team are seeing this as an opportunity to diversify the revenue sources of an already diversifying economy. In fact let me at this juncture use this opportunity to comment on Soludo’s appalling statement that rebasing brings no policy value. Rebasing has enabled us to better grasp the new diversified nature of our economy. This provides the basis for our present drive to support different sectors with appropriate policy instruments to enhance their development. Rebasing has also enabled the Administration to create the platform from which to drive our work on increasing non-oil revenues. These are areas of critical policy value.

21. Soludo mentioned the issue of the Economic Partnership Agreement with the EU, noting that this Administration has not been vocal or clear on its direction with this agreement. On the contrary, the Administration, particularly the Ministry of Industry, Trade, and Investment, has been clear on this issue but since Soludo has been in the air he probably has not been aware of this. Just recently, the Minister of Industry, Trade and Investment reiterated again to the corporate sector that Nigeria has not signed and does not propose to sign the EPA in its present form.

22. The point is that this government has been pursuing the right economic policies, and its efforts have been acknowledged nationally and internationally. Let me say that there are objective ways to measure performance. There are international institutions globally accepted to do this. They have acknowledged this Administration’s good economic management up to the recent crisis and even now.

23. We cannot go by someone’s subjective view, driven by bitterness and bile. We need to look to the truth and to professionalism. This is where Professor Soludo totally fails. For the other gratuitous, political, and personal attacks, we are sure that those mentioned will respond appropriately. It is a sad day for Nigeria and the economics profession that someone like Soludo, a former CBN governor should write such an article. If Soludo wants to regain respect, he should return to the path of professionalism. He certainly needs something to improve his image from that of someone whose sojourn into National Economic Management ended in disaster for the banking sector, his sojourn in politics, ended in overwhelming rejection by the electorate, and more recently, his sojourn abroad, has put him out of touch with the reality of the Nigerian economy.

Paul C Nwabuikwu
Special Adviser to the Coordinating Minister for the Economy and Minister of Finance

The Economist

African economic growth
The twilight of the resource curse?

Africa’s growth is being powered by things other than commodities

Jan 10th 2015 | From the print edition

FOR decades commodity prices have shaped Africa’s economic growth. The continent is home to a third of the planet’s mineral reserves, a tenth of the oil and it produces two-thirds of the diamonds. Little wonder then that, as a rule, when prices for natural resources and export crops have been high, growth has been good; when they have dipped, so has the continent’s economy (see chart 1).

Over the past decade Africa was among the world’s fastest-growing continents—its average annual rate was more than 5%—buoyed in part by improved governance and economic reforms. Commodity prices were also high. In previous cycles African economies have crashed when the prices of minerals, oil and other commodities have fallen. In 1998-99, during an oil-price fall, Nigeria’s naira lost 80% of its value. African currencies again took a beating during a period of turmoil in commodity markets in 2009.

Since last year the price of oil has fallen by half and many metals such as copper and iron ore have also dropped sharply. With commodity prices plunging, will the usual pattern repeat itself?

In some economies large drops in commodity prices have led to currency falls. At least ten African currencies dropped by more than 10% in 2014. But there have been few catastrophic depreciations. This suggests that investors do not see lower commodity prices as a kiss of death. Ghana’s currency, the cedi, was the continent’s worst-performing currency in 2014, having lost 26% against the dollar. But it tumbled not because investors fret about the impact of lower commodity prices. In fact, Ghana is by African standards not especially commodity-dependent (see map). Rather, it has in recent years run a lax fiscal policy. In 2013 its budget deficit hit 10% of GDP.

The mall, not the mine
One reason currencies have been robust may be because economic growth is starting to come from other places. Manufacturing output in the continent is expanding as quickly as the rest of the economy. Growth is even faster in services, which expanded at an average rate of 2.6% per person across Africa between 1996 and 2011. Tourism, in particular, has boomed: the number of foreign visitors doubled and receipts tripled between 2000 and 2012. Many countries, including Ethiopia, Ghana, Kenya, Mozambique and Nigeria, have recently revised their estimates of GDP to account for their growing non-resource sectors.

Despite falling commodity prices, the outlook also seems favourable. Wonks at the World Bank reckon that Sub-Saharan Africa’s economy will expand by about 5% this year. Telecommunications, transportation and finance are all expected to spur economic growth.

What explains Africa’s increasing economic diversification? A big pickup in investment helps. That has arisen partly because governments have worked hard to make life better for investors. The World Bank’s annual “Doing Business” report revealed that in 2013/14 sub-Saharan Africa did more to improve regulation than any other region. Mauritius is 28th on the bank’s list of the easiest places to do business. Rwanda, which 20 years ago suffered a terrible genocide, is now deemed friendlier to investors than Italy.

After two decades of poor performance, Africa’s total investment as a percentage of GDP increased after 2000. Foreign direct investment (FDI) into Africa rose by 5% in 2012 and 10% in 2013, despite global stagnation.

Ten years ago almost all FDI went to resource-rich African economies; resource-poor economies received very little (see chart 2). Resource-rich countries still receive more FDI in absolute terms; but resource-poor economies outpace them when investment is measured as a share of GDP. Foreign investors from other African countries are especially keen on non-commodity industries: nearly a third of their investments are in financial services.

The most resource-intensive economies are working hard to diversify. For the past three years growth in Nigeria, Africa’s biggest economy, has exceeded 5%. You might think its growth is being powered by oil exports. Nigeria has Africa’s second-largest reserves, it is the fifth-largest exporter and, according to the IMF, oil accounts for 95% of all exports. But in recent years the Nigerian oil industry has stagnated. Growth has instead come from things like mobile phones, construction and banks. Services now represent 60% of GDP.

Angola is similar. It is Africa’s second-largest oil producer and the stuff makes up the vast majority of exports. But its 5.1% expansion in 2013 came mainly from things such as manufacturing and construction. In 2013 fishing expanded by 10%, and agriculture by 9%. About a third of government revenue now comes from non-oil sources, compared with almost nothing a decade ago, economists at Standard Bank reckon.

In Botswana the percentage of GDP made up by the mining and quarrying of goodies like diamonds, gold and copper has fallen from 46% in 2006 to 35% in 2011, according to the “African Economic Outlook”. Other countries that are successfully diversifying are Rwanda—which has thriving banks and business-services firms—and Zambia, which although still copper-dependent has posted growth of 12% a year in financial services. Congo-Brazzaville, where oil makes up 80% of exports, is seeing rapid growth in construction and transport. That may be further fuelled by the All-Africa Games, which are to be held this year in the capital, Brazzaville.

Better fiscal policy also plays an important role. Commodity markets are volatile; government spending smooths out the booms and busts. Until a few years ago, nearly all African economies spent freely when their economies were hot, only to rein in spending when things cooled down. That is the opposite of what most economists would advise a finance minister to do. But in recent years, according to a report from the World Bank published on January 7th, fiscal policies in many African countries have become more sensible. These days a fair number of African economies save money during the good times, in order to spend it in the bad ones.

There is still a long way to go. Africa is still the continent most dependent on commodity exports. Countries such as Tanzania and Nigeria want to develop giant gasfields which, while boosting the economy in the short term, could tie them more closely to commodity cycles. Some worry that investment in infrastructure will fall as mining companies retrench.

Even so, there is reason to think the “resource curse” is losing its power. Despite turmoil in commodity markets, Africa is still one of the world’s fastest-growing regions. With better education systems, investment in infrastructure and sensible regulatory reforms, the continent could completely break the spell that has held it back so often in the past.

From the print edition: Middle East and Africa.

CREDIT: The Economist Magazine
http://www.economist.com/news/middle-east-and-africa/21638141-africas-growth-being-powered-things-other-commodities-twilight?zid=304&ah=e5690753dc78ce91909083042ad12e30

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What The Front Pages Missed: 5 Unsung Leaders Of 2014

As the last hours of 2014 slip away, I find myself musing about all those leaders just “below the fold,” as they used to say back in the heyday of print broadsheet newspapers. Who are some of those non-headline leaders from all walks of life and geographies who are making a difference as they (in the parlance of this column) have demonstrated “capability, reliability and authenticity”?

We spend inordinate amounts of time complaining about our leaders and how they disappoint. Headlines blare every day about political figures unable to solve our problems; about industry leaders unwilling to think beyond the next earnings statement; about some athlete who has abused the fair play principles of competitive sports; about the fall from grace of a newsmaker guilty of shocking behavior. Perhaps there are no more lapses of confidence in our leaders today than has been the case throughout history. But the sun never sets on our leaders, subject as they are to constant scrutiny under today’s klieg lights emitted from larger-than-life TV screens, computer monitors and PDAs.

But maybe we have not looked long or hard enough to find the real leaders right under our gaze. We all know intuitively that none of our institutions would be working at all if there weren’t committed, capable, reliable and authentic leaders delivering on their promises day in and out, and adding value to the lives of the people they serve. We also know the difference a respected leader can make in inspiring broader support for noble humanitarian, peacekeeping, or governmental missions.

To help identify some of these under- or un-sung leaders, I asked my colleagues to join in this “Where’s Waldo” process, urging them to help me come up with the following list of five arguably under-appreciated leaders with the right stuff—capability, reliability, authenticity.

1- Ngozi Okonjo-Iweala—The first woman Finance Minister of Nigeria, the world’s seventh largest country, Okonjo-Iweala has courageously taken on the nation’s endemic corruption, helping to refurbish Nigeria’s image and economic prospects.

2- Pietro Parolin—Pope Francis’s right-hand man, Vatican Secretary of State Cardinal Parolin has been critical to many of the most significant initiatives which have begun to change in fundamental ways one of the world’s oldest (and most change-resistant) institutions.

3- Arati Prabhakar—The Indian-born engineer has used her platform as director of the U.S. Department of Defense’s DARPA (Defense Advanced Research Projects Agency) to speak out on the need to be vigilant about technology’s double edge, taking seriously the agency’s founding mission to create and invest in breakthrough technologies that protect U.S. national security.

4- HRH Prince Feisal Al Hussein—The brother of Jordan’s King, Prince Feisal has been a dogged and indefatigable advocate of peace building and development in this troubled region, especially through sport, as the founder of the non-governmental organization Generations for Peace.

5- Felipe Calderon—Former president of Mexico committed to the rule of law, he has turned his energies and influence to addressing climate change issues by assuming the chairmanship of the Global Commission on the Economy and Climate.

So, public cynicism in our leaders notwithstanding, followers the world over instinctively recognize and appreciate real leadership when it emerges, not blinded by ideology, age or religion. I urge readers to join me in this process by posting the names of those you believe meet the “capability, reliability and authenticity” test and perhaps have been flying under radar. In so doing, hopefully we will not only help generate confidence in the cadre of real leaders we have, but also generate clarity about the kind of leaders we need. More capable, committed, courageous leaders will help usher in a new year filled with the kind of peace and prosperity we all wish for in this season of hope.

CREDIT: http://www.forbes.com/sites/paullaudicina/2014/12/29/what-the-front-pages-missed-5-unsung-leaders-of-2014/