₦airaland Forum

The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala has refuted media reports which allege that the Federal Ministry of Finance is blocking verified payments to marketers.

According to the Minister, the Finance Ministry made the N161.6 billion supplementary budget for subsidy payments which had been approved by the National Assembly available to the Central Bank of Nigeria since December 31, 2013.

The payments are presently going through the CBN’s processes which include the conversion of the dollar equivalent from the Excess Crude Account and will be concluded soon.

She confirmed that payments totalling N94 billion have been verified for 23 marketers who will be paid in the next few days.

“We are committed to paying all companies who deserve to get subsidy payments just as we will not pay undeserving firms. That is the mandate we have from the President”, Dr Okonjo-Iweala declared.

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

APPRECIATION
My heart is heavy with the news of the passing of my brothers, Governor Patrick Yakowa, General Andrew Aziza and the others who were on that last flight with them. It is indeed a great tragedy. Our sympathy and prayers go to their families. We pray for divine comfort for them in this very difficult time.

I want to start by thanking Almighty God for the miracle of the release of my mother, Professor Mrs Kamene Okonjo. The Almighty has, once again, come through brilliantly for me and my family. Even during the bleakest part of this terrible experience, we believed that he would give us a testimony to his goodness and He did not fail us.

Even as we thank God, we cannot forget so many Nigerians who have gone through the same terrible experience either as victims or families or friends of victims. Words are not enough to describe the sheer horror of the experience. The best way to honour the victims and families is to ensure that there is greater focus on kidnapping and progress in combatting it. Working with the relevant agencies under the leadership of the President, I intend to contribute my quota to helping achieve this.

We also thank Mr President and the First Lady who were absolutely wonderful and first rate in their support and encouragement to me and my family throughout this terrible ordeal. The President took a daily interest in the case and gave directives for appropriate action by the security agencies.

The security agencies also did a good job. They were very professional and enthusiastic in the discharge of their duties. I am hopeful that they will complete the job which they started so well.

As terrible as the experience was, the love and sympathy of Nigerians was constant and overwhelming. It helped us get through the dark moments of this five day ordeal. God heard the prayers of the millions of Nigerians who prayed for the safe return of my mother. From the bottom of my heart, I thank all those who sent messages of support and encouragement by phone, by email and in person. To those who prayed in their homes and organised prayer circles in their churches and mosques and offices, I say: Thank you. Your prayers were heard.

We would also like to register our appreciation for the support of Mr Vice President during this period of trial.

Also very deserving of our thanks are Governor Emmanuel Uduaghan of Delta State who coordinated activities on the ground; Governor Peter Obi of Anambra State and Governor Rotimi Amaechi of Rivers State as well as the majority of the governors who reached out to me and my family.

The Senate President and the Speaker of the House of Representatives as well as the Deputy Senate President and the Deputy Speaker

I am also grateful to members of the international community for their outpouring of support. Notable in this regard are:

- the Prime Minister of the United Kingdom, Mr David Cameron who took the trouble to write a personal note to encourage me;
- the United States embassy and government
- the Secretary General of the United Nations and the entire UN family;
- the President of the World Bank and former Presidents of the World Bank;
- the Managing Director of the IMF;
- the Mo Ibrahim Foundation;
- Bono and the One Foundation;
- Heads of international agencies and dignitaries

This experience has strengthened my faith in the country. The outpouring of love from all over the country has been simply overwhelming. Friends, neighbours, colleagues, acquaintances offered help and encouragement in a myriad ways; even total strangers mobilised prayer groups for the safe return of my mother. We pray that God will reward their selflessness abundantly.


MY MOTHER’S EXPERIENCE
I can’t give all the details because we don’t want to compromise on-going investigations.

But I can tell you one thing: My mother suffered a great deal during this ordeal. It was only the Almighty God that rescued her from a situation that could very easily have ended tragically.

Apart from the emotional trauma of being violently taken away from her family and kept incommunicado for five days in a strange environment, a woman of 83 years was left without food for five days.

We give glory to God that she is alive today to tell the tale.

While she was in their custody, the kidnappers spent much of the time harassing her. They told her that I must get on the radio and television and announce my resignation.

When she asked why, they told her it was because I did not pay “Oil subsidy money”.

They also said I had blocked payment of money to certain components of the SURE-P programme.

These statements are, of course, not true. In the case of subsidy payments, we have been paying all marketers whose claims have been verified by the Aig-Imoukhuede Committee after going through the necessary processes.

For marketers whose transactions are proven to be fraudulent, the position of the Jonathan government is also clear: we cannot and we will not pay. We will not back down on this. We will continue to stand firm.

In the case of SURE-P, there is a totally different process that I have no control over.

This is the right thing to do. And this, I believe is what the Nigerian people want.

FEDERAL MINISTRY OF FINANCE

News Release. December 4, 2012

OKONJO-IWEALA DID NOT ADVOCATE MASS SACK IN THE CIVIL SERVICE

Yesterday, some media reports quoted the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala as being in support of mass sack in the civil service.

This statement is absolutely untrue. What the Minister actually said was effectively the opp
osite.

Specifically, she had stated that those canvassing for an increase in the capital budget and a concomitant reduction in recurrent expenditure should realise that the largest component of recurrent expenditure is personnel costs including salaries and wages.

That is why government is careful about the issue because behind those figures are human beings and families whom you cannot just throw away without considering the implications.

She explained that because of this fundamental issue, the government’s immediate strategy has focused on fighting waste and the ghost worker syndrome through mechanisms like biometrics.

Dr Okonjo-Iweala had also explained that implementing the Oronsaye Report on Civil Service Reforms which recommended that agencies performing the same functions be merged will have some effect on the capital-recurrent ratio but perhaps not as much as many Nigerians would like in the short term.

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

by Dr. Ngozi Okonjo-Iweala, CFR
Coordinating Minister for the Economy & Honourable Minister of Finance, Federal Republic of Nigeria,

at the CME’s Conference Room, 7th Floor, Federal Ministry of Finance,

on Monday, December 3, 2012

Protocol Observed
• Distinguished DGs and MDs of Parastatals here present, distinguished ladies and gentlemen of the Press.

• Many of you are aware that activity on the Nigerian Capital Market, particularly the stock exchange, has been very slow in the aftermath of the global financial meltdown and the Nigerian banking crisis. We saw the Nigerian Stock Exchange (NSE) All Share Index (ASI) plummet from a peak of about 66,000 points in March 2008 to less than 22,000 points by January 2009, wiping out over N8 trillion (or around 70 percent) of the total capitalization of the stock exchange within this period. Since then, activity on the stock market has remained sluggish even though there are some signs of recovery, with the index now at about 26,494 points thanks to the efforts of the NSE and the SEC.

• A vibrant capital market is, of course, essential to the government’s Economic Transformation Agenda, especially in terms of raising much-needed long-term financing for critical infrastructure and the housing sector. Research (by the IMF and the World Bank) has shown that solid economic growth in any country is closely linked to the joint development of the banking sector and the capital markets. While the banking sector has already been cleaned-up, the capital market needs some intervention.

• This is why, a couple of months ago, I set up a committee chaired by Dr. Kingsley Moghalu, Deputy Governor of the Central Bank of Nigeria, to make recommendations on measures to resuscitate the capital market. As part of the recommendations of the Moghalu committee, I am happy to announce today, two measures aimed at giving life to our capital markets.

• The first measure is a forbearance of about N22.6 billion on the margin loans of 84 stock brokers, in accordance with Section 6(5) of the AMCON Act. AMCON had purchased these margin loans from banks for about N42.6 billion, but the value of the underlying assets or collateral is worth only N19.96 billion today. In furtherance of AMCON’s cleanup of the banking sector, it is necessary to wipe off the debt overhang in the capital market, as this is dampening market activity. But let me state clearly that this forbearance will be accompanied with sanctions to discourage excessive borrowing behaviour by capital market operators in the future. These sanctions include:

• Prohibition from services to AMCON: Brokers benefiting from forbearance will not be allowed to provide any professional services to AMCON for a period not less than 3 years;

• Greater Disclosure: Firms will be required to reveal to the Securities Exchange Commission (SEC), any dealings in any security valued at a minimum of N25 million executed in a single deal or multiple deals on the same day on behalf of their clients;

• Limit on Debt Financing: As part of their net capital requirement, no broker that has received forbearance shall permit his aggregate indebtedness to exceed 100 percent of his net capital;

• Report to Credit Bureaus: details of the firms will be forwarded to the Credit Bureau Agency;

• Use of Custodians: A strict requirement that imposes separation of assets and control for brokerage services and/or future margin facilities through the use of custodians; and finally,

• Trading Restrictions: The brokers will be prohibited from taking proprietary positions or trade on their own account for one year.
Let me also note that there were some other stock brokers who did not partake in any market infractions, including over-exposure to margin loans, and who managed their stock broking businesses well. The Ministry of Finance and the Central Bank plan to celebrate the good standing of these stock brokers in due course.

• The second measure is the elimination of stamp duties and VAT on stock market transaction fees. Taxes on stock exchange transactions fees are as high as 12 percent (5 percent in VAT and up to 7 percent in stamp duties) – much higher than in other jurisdictions, and these constitute a major disincentive to invest in the Nigerian capital market. I will like to announce that the Federal Government has consented to:

• waive the 0.075 percent stamp duties payable on stock exchange transaction fees; and,

• exempt from VAT, commissions: (a) earned on traded values of shares, (b) payable to the Securities and Exchange Commission (SEC), and (c) payable to the Nigerian Stock Exchange (NSE) and the Central Securities Clearing System (CSCS); by including these commissions in the list of VAT-exempt goods and services.

Let me thank the Moghalu committee for their work, and also re-emphasize the government’s renewed commitment to making Nigeria’s capital market one of the most vibrant markets in the World.

Thank you.

Fellow Nigerians,

I am delighted to acknowledge the enthusiasm and goodwill with which you have received my book, Reforming the Unreformable: Lessons From Nigeria, which was launched today at the Congress Hall of Transcorp Hilton Hotel in Abuja.

Several comments were made in relation to the book, some of which I have highlighted below:

"The book has given us an incisive analysis for the stage and scope for the reforms needed to turn the economy around. I would like to add my own view: The country’s chances of realizing its economic objectives will come with a major reorganization of its governance strategy:

1.) Reduction in recurrent expenditure
2.) We need to arrest the destructive competition for control of power at the centre (of government) that exacerbates the primordial instincts in our people and fans the flames of ethnic differences and disunity.

NOI is Nigeria’s best advertisement to the international community. I believe this second phase of reforms which NOI is leading will lead Nigeria to greater success and give the country greater cause for hope.”

- Chief Emeka Anyaoku (Former Secretary General of The Commonwealth).


"The reason Germany is the best economy in Europe is because it was at one time the worst in Europe. Let me urge you to use past failure as the foundation for future success...Nigeria should be the best economy in Africa.

It is both an important book and an honest book...not just an analysis of Nigeria’s past, but a prism for understanding Nigeria’s future."

- Paul Collier (Professor of Economics and Director, Centre for the Study of African Economies, University of Oxford).


“This book is about how we balance short term imperatives with long term investments.”

- Pravin Gordhan (Minister of Finance, South Africa).


“This book is about celebrating our best! The most important chapter was the one about bringing the team together and setting an agenda.

We have to save for tomorrow. Without the excess crude account in 2008 when the oil price dropped, we would have been finished. If we did not obtain debt relief, I do not know where we would be as a country today.”

- Peter Obi (Anambra State Governor)


“This book fills the void of literature on the institutional changes since we returned to democracy in 1999.... Now we have a book written by one of our scholars that is candid about our failures and commends us when we have been successful.”

- Vice President Namadi Sambo, representing President Goodluck Jonathan


To underscore the ideals that I espouse in the book, I have decided that a large chunk of the proceeds from the book launch will go to the victims of the flood that ravaged parts of our country recently. The plight of flood victims reminds us that the work of improving the lives of our people is a never ending one.

Fellow citizens, a new Nigeria is possible. I believe that if we all dedicate ourselves to reform; then inch by inch, foot by foot, mile by mile, we will get there. That is the central message of my book.

You can get the book from the local bookstores.

FEDERAL MINISTRY OF FINANCE
News Release, October 30, 2013

PUBLIC PRESENTATION OF “REFORMING THE UNREFORMABLE: LESSONS FOR NIGERIA”

NIGERIA CAN CHANGE AND NIGERIA WILL CHANGE – Okonjo-Iweala

*Donates part of book proceeds to flood victims

Coordinating Minister of Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala has pledged to donate some part of the proceeds from the public presentation of her book, Reforming the Unreformable: Lessons from Nigeria, to flood victims across the country.

Speaking at the well-attended event at the Transcorp Hilton Hotel, Abuja, on Tuesday, the Minister said she was making the gesture because “their plight reminds us that the work of improving the lives of our people is a never ending one”.

Dr Okonjo-Iweala said time was ripe for the de-politicisation of oil price benchmarking. She called for the establishment of a body of experts to determine the appropriate oil price benchmark in the formulation of national budgets, observing that the strategy has worked successfully for Chile which earns huge revenues from copper.

Dr Okonjo-Iweala said she was motivated to write the book to encourage others to tell the Nigerian story by ourselves and not read it from foreigners.

“It is about time we capture our own story. We need to learn from the mistakes of our reform efforts so as not to repeat them. I hope people read it (the book) and capture the spirit of reform because Nigeria can be transformed”.

She appealed to the youth not to succumb to pessimism and hopelessness or to be discouraged by people who argue that Nigeria was a lost case.

“Nigeria can and will change”, she said.

The Minister said the book was written in part to honour the work done by the Economic Management Team in the Obasanjo administration. “They put in a lot of work. What they did should not be lost”, she said.

President Goodluck Jonathan, represented by Vice President Mohammed Namadi Sambo said the book effectively refutes the popular belief that Nigeria’s political and economic institutions can never be reformed.

The President noted that the book’s central message of hope was appropriate at this point of the country’s history and that Nigeria, long given up by cynics as an entity averse to reform, can actually be transformed into one of the most dynamic economies in the world.

President Jonathan commended the Minister for finding time from her tight schedule to write the book which documents the efforts of the Presidential Economic Management Team under President Obasanjo, which Dr Okonjo-Iweala headed.

He described her effort as a manifestation of her patriotism and pledged his administration’s support for any such enterprise aimed at setting the records straight.

The President said his administration’s support for free and credible was the foundation of true reforms and which he said was motivated by an honest desire to improve the lives of the citizenry.

Earlier Professor Paul Collier who reviewed the book described it as an appropriate prism for understanding Nigeria’s economy in the present and the future.

Prof Collier said ten years ago, Nigeria was largely perceived as resource rich but policy poor country. Stressing that though the country still has a long way to go, it has made progress in building a good foundation for economic prosperity. To do this, he said, the country must build a critical mass of understanding.

On the book’s greatest legacy, he said learning from failure was fundamental to reform success and that Nigeria needed to build and consolidate an agenda of reform integrity.

Collier cited Germany as a country which was the worst in Europe in many respects but is today has the best run economy in Europe because the country was smart to learn the right lessons from its disastrous past.

Describing the country’s reform process as a painful struggle, he said the lessons from the book were that it was important for the policy makers to focus on a pragmatic agenda and in reinventing the public sector rather than being sucked into hard ideology ideological positions.

He said the book was timely in documenting the successes and challenges of the Economic Management Team and in explaining the basis for the ground-breaking structural, macroeconomic and reform agendas it pursued with such results as debt relief and the setting up of the Excess Crude Account.

Nigeria, he noted, still needed more reform at this point because while it had got off the slope, it was not yet on top of the mountain in terms of financial and fiscal stability.


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

FEDERAL MINISTRY OF FINANCE
News Release, October 25, 2012

CAPITAL BUDGET: FINANCE MINISTRY RELEASES N300 BILLION FOR 4TH QUARTER

*GAINS OF 2012 BUDGET IMPLEMENTATION INCLUDE IMPROVED POWER SUPPLY, NEW RAIL CORRIDORS, NEW RICE MILLS

To ensure that the momentum on capital budget implementation is maintained as the year comes to a close, the Federal Ministry of Finance has released the sum of N300 billion of the capital budget for the fourth quarter of 2012.

This brings the total capital release for 2012 to N1.01 trillion out of a capital budget of N1.3 trillion for the year.

The amount released so far represents 75% of the capital budget for 2012.

The impact of budget implementation can be seen in various sectors of the economy. A few examples:

POWER SUPPLY
- Power supply in many parts of the country has improved to a consistent level of 15 hours per day

- Rehabilitation of existing power infrastructure has yielded up to 1000 megawatts of additional electricity

- NIPP projects are being fast tracked which will lead to an additional 1055 megawatts by end 2012

- The prospects for progress in power supply have increased significantly with the imminent conclusion of the privatisation programme

AGRICULTURE
- In pursuit of the 3.5 million jobs target by 2015, 13 new private sector rice mills with capacity of 240,000 metric tonnes have been established

- One million metric tonnes of dried cassava chips exported to China

TRANSPORT
- Railway modernisation programme is progressing with the Abuja-Kaduna line now at 46%

- Rehabilitation of Lagos-Kano and Lagos-Ibadan lines has opened up new platforms for passenger traffic

- Abuja Light rail project making progress

JOB CREATION
- The Community Services, Women and Youth Employment Programme of SURE-P was launched in February 2012 and already working in 14 states. Target: 370,000 jobs per year

- The second edition of the YOUWIN job programme which focuses on women entrepreneurs has been launched by President Goodluck Jonathan. YOUWIN targets 80,000-100,000 jobs over three years.

PORTS REFORM
- The clearance time for cargoes in the ports has been reduced from 39 days to seven days.


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